Perdoceo Education Corporation

Thank you for standing by. My name is Kathleen and I will be your conference operator today. At this time, I would like to welcome everyone to the Pedro Serra Education Corporation First Quarter 2024 Earnings Conference Call. All lines have been placed on mute all throughout the presentation to prevent any background noise. Thank you. I would now like to turn the call over to Mr. Sam Gibbons, Investor Relations. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone, and thank you for joining us for our second quarter 2024 earnings call. With me on the call today is Todd Nelson, President and Chief Executive Officer, and Ashish Gia, Chief Financial Officer. This conference call is being webcast live within the investor relations section at ProdocioEd.com. A webcast replay will also be available on our site, and you can always contact the Alpha IR Group for investor relations support. Let me remind you that this afternoon's earnings release and remarks made today include forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions made by an information currently available to Prodocio Education and involve risks and uncertainties that could cause actual future results, performance, business prospects, and opportunities to differ materially from those expressed in or implied by these statements. These risks and uncertainties include, but are not limited to, those factors identified in Prodocio's most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Except as expressly required by the securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments, or change circumstances, or for any other reasons. In addition, today's remarks refer to non-GAAP financial measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The earnings released that accompanies today's call contains financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures, and is available within the investor relations page of the company's website. With that, I'd like to turn the call over to Todd Nelson. Todd?

Thank you, Sam. Good afternoon everyone and thank you for joining us for our second quarter 2024 earnings call. I'll discuss some key business highlights through the second quarter. Ashish will review our operating and financial performance in more detail and discuss our outlook for the year. However, before we begin, I'd like to thank our faculty, student support staff, and all other employees for their ongoing commitment and hard work in serving and educating our students. We ended the first half of 2024 on a strong note as it relates to student retention and engagement. As a result, second quarter operating results came in ahead of our expectations discussed on the last earnings call, partially due to better than expected revenue results. Let me now review some of the key observations and general business highlights. We continue to experience high levels of student retention and engagement at both CTU and AIUS. with student retention at multi-year highs. Our faculty and student support teams remain dedicated to educating and serving our students, and we anticipate that retention should continue to trend at these levels through the remainder of 2024. Quarter and year-to-date marketing and admission spends and commensurately prospective student inquiry generation was lower during the second quarter as compared to 2023. Aided by data analytics, we continue to adjust marketing strategies to further improve our focus on identifying prospective students who are more likely to succeed at one of our universities, as well as comply and adapt with updated expectations from various federal agencies around prospective student outreach. We are also focused on enhancing the processes that support our corporate engagement programs. These programs are a key priority for our academic institutions and will continue to invest in staff and technology to grow them efficiently and effectively. The Board of Directors just approved an 18.2% increase in the quarterly per share dividend amount of 13 cents per share payable on September 23rd, excuse me, September 13th, 2024. This marks the first increase since our inaugural dividend payment on September 15th, 2023. Additionally, we continue to place an emphasis on utilizing technology to evaluate the academic experiences for our students and improve the efficiency and effectiveness of our institution's support student functions. We view technology as a catalyst and differentiator for us to remain committed to making selective investments that deliver more meaningful and relevant education experience for our learners. Lastly, earlier this month, we were pleased to announce a definitive agreement to acquire the University of St. Augustine for Health Sciences. The university offers quality graduate health science degrees, primarily in physical therapy, occupational therapy, speech language and therapy, and nursing, as well as continuing education programs. This acquisition marks Prodocio's foray into health sciences and will further support and grow the diversification of our academic program offerings. Prodocio is expected to pay approximately $142 million to $144 million in net cash at the time of closing. For the full year 2023, the university had revenues of approximately $170 million operating income of approximately $35 million, and serve roughly 4,500 graduate and postgraduate students. Prodozio expects the transition to be immediately accretive to the company's adjusted operating income beginning in 2025. A quick note on operating results. Second quarter results came in ahead of our expectations. We reported second quarter net income of $38.4 million, or 57 cents per diluted share, while adjusted earnings per diluted share, which includes certain significant and non-cash items, was 60 cents as compared to our outlook of 57 to 59 cents. From a student enrollment perspective, total enrollments for the quarter end grew 14.7% at CTU as compared to the prior year quarter end, driven by a positive timing impact of the academic calendar, as well as growth in corporate engagement programs. As previously discussed, AIUS reverted to normalized operations during the fourth quarter of 2023. And consistent with our expectations, the rate of decline in quarterly total enrollments have continued to moderate through the second quarter. Note, AIUS total enrollment decline for the second quarter was 18.2% as compared to a decline of 22.9 for the first quarter of 2024. Ashish will provide more details on these trends momentarily. In summary, we're pleased with the second quarter operating results and proud of our team's hard work and dedication. Our faculty and student support teams are working tirelessly to provide current and prospective students with quality academic and learning experiences with the goal of improving overall student retention and academic outcomes. With that said, I'd now like to turn the time over to Ashish for a deeper review of our operating and financial performance. Ashish?