Transcription
Spring 2021 Investor PresentationNASDAQ:PRDO1
PERDOCEO: INVESTMENT THESISFAVORABLEINDUSTRY TRENDSINNOVATIVETECHNOLOGY /STUDENT FOCUSInvestmentThesisSCALABLE SHAREDSERVICESSTRONG BALANCESHEET /PROFITABILITYSUSTAINABLEGROWTH(1) Demand for postsecondary education is expected to remain strongOnline platform well accepted and growingContinued demand for skilled professionalsIncreasing participation from non-traditional students, adult learners Utilize technology as an enabler and a differentiator: leveraging mobilityand predictive analytics to enhance student engagement Student first mind-set across our operations Innovative personalized learning technology, powered by intellipath Support organic growth at our Universities Key enabler for inorganic strategies Trident University International integrated into AIU System (1) Capital allocation prioritizes high ROIC project: ROIC Cost of Capital Growth in cash flow from operations in recent years Cash and investments balance of approximately 410 million as ofDecember 31, 2020 Student first priorities and balanced approach to investments Continued execution against our core objective of sustainable andresponsible growth Organic and inorganic growth opportunitiesEffective November 5, 2020, AIU implemented a university system model, the American InterContinental University System, which is comprised of American InterContinental University and Trident University International2
OUR GOALS AND GUIDING PRINCIPLESTo be a leading provider of online postsecondary educationto non-traditional studentsGuiding principles and underlying objectives that govern our operating framework:AcademicOutcomes Student first mindset Improve graduation ratesAcademicQualityandIntegrity Classroom experience andcourse content and design Learner centric modelCompliancewithRegulations Core philosophy acrossour operationsSustainableandResponsibleGrowth Balance financial progresswith student–servinginvestments3
ACCREDITED INSTITUTIONSAmerican InterContinental University System(1)Colorado Technical UniversityPrimarily an online institution2 campus locations– Aurora, CO– Colorado Springs, COTotal Enrollments – 24,600(2)SCALABLESHAREDSERVICESPrimarily an online institutionAIU System now includesTrident University International(1)2 campus locations– Atlanta, GA– Houston, TXTotal Enrollments – 18,100(2)(1)(2)Effective November 5, 2020, AIU implemented a university system model, the American InterContinental University System, which is comprised of American InterContinental University and Trident University InternationalAs of December 31, 20204
(1)CTU AND AIUS BRANDSAIU SystemHOW ARECTU and AIUSALIKE andDIFFERENT?(1)AccreditedInstitutionsVariety ofProgram offerings:Engineering, ComputerScience, Nursing,Doctoral levelDiversity of populationsthrough CorporatePartnershipsScalableshared servicesBlended learning:online and campusbasedNon-traditionalstudents: AdultlearnersEducation built forthe busy adult:CTU Fast Track Modest growth(1)(2)(3)Shared bestpractices(3)(1)High touch studentcentric support modelClassroom built forlearning: easynavigation, learnercentric curriculumTrident UniversityInternational providesadditional programofferings (2)Faster growth(3)Effective November 5, 2020, AIU implemented a university system model, the American InterContinental University System, which is comprised of American InterContinental University and Trident University InternationalTrident University International offers unique doctoral and master’s programs in education, health sciences and business.Refers to recent historical experiences5
STUDENT DEMOGRAPHICSOur students are primarily non-traditional adult learnersTotal Student Enrollments as of December 31, 2020BY AGE GROUPBY DEGREE TYPEBY CORE CURRICULA4%21%13%11%34%62%66%Under 2121 to 30Over 3013%Doctoral & Master'sBachelor'sAssociate76%Business StudiesInformation TechnologyHealth Education6
INDUSTRY OVERVIEWONLINE POSTSECONDARY EDUCATION – VALUE PROPOSITIONGrowth in ‘blendedlearning’ online platform– well acceptedNeed for non-traditionalclassroom format –flexibility for adultlearnersGreater use oftechnologySource: BMO Education Industry Overview 2020Academic outcomesenhance studentmarketability7
PERDOCEO POSITIONING Well-established online educational platform(with ground and hybrid offerings as well)PERDOCEOWELL POSITIONEDWITHIN THEPOSTSECONDARYEDUCATIONLANDSCAPE Mostly serving non-traditional, adult learners with opportunityto further penetrate and expand student demographics Scholarships, grants and corporate partnerships Student first model with focus on student experiences,retention and academic outcomes Supported by innovative technology (AI, intellipath and Mobility) Scalable shared services for student support and generalcorporate functions Focus on quality academic outcomes8
STRATEGIC PRIORITIES Enhance Enrollment ProcessesEnroll Enhance Student Experiences & Retention Leverage Scalable Shared EHOLDERVALUE Use Technology as a Differentiator Invest in High ROI ProjectsGraduate9
SHARED SERVICES – PROCESS RE-ENGINEERINGEFFICIENT, EFFECTIVE AND SCALABLE SHARED SERVICESCORPORATE SERVICESSTUDENT / TECHNOLOGY SERVICESStudentSupportInformationTechnology Financial Aid Library Resources Course Development Software and Licenses Network and Infrastructure New SoftwareDevelopment and SupportFinanceReal EstateLegalRegulatoryHR Accounting and Reporting Tax, Risk and Real Estate Corporate Finance Legal Compliance HR and RecruitingPublicCompanyExpenseMarketing Executive Office Board of Directors Treasury and Audit BrandingCreative servicesDigital marketingData analytics10
FINANCIAL HIGHLIGHTS11
THREE YEAR QUARTERLY OPERATING PERFORMANCEPERFORMANCE REFLECTS EXECUTION AGAINST OBJECTIVE OFSUSTAINABLE AND RESPONSIBLE GROWTH( , in millions)Total Revenue( , in millions)Operating Income 36.2 171.2 32.0 158.5 20.2 143.1 145.5 10.7(1)Beginning in Q1’20, figures include Trident University International results commencing on the March 2, 2020 date of acquisition12
KEY METRICS FOR 2020 FULL YEARENROLLMENT GROWTH REFLECTS INVESTMENTS INTECHNOLOGY AND STUDENT-SERVING PROCESSESTotal Student Enrollmentsby Segment (1)2020(2)Full Year18,10042%Revenue 405.5M59%(3)Total Student Enrollments:Revenue 281.4M41%2019Full Year(3)2020 FYvs 2019 FY42,70036,600 16.7%University Revenue: 686.9M 627.6M 9.4%PRDO Operating Income: 142.9M 86.5M 65.3%24,60058%INVESTMENTS IN:(2)AIUS(1)(2)(3)CTU Technology and analytics Employee training and development Graduation teams Trident University integrationTotal student enrollments are as of December 31, 2020 / Revenue provided is for 2020 full year resultsThe AIU System total student enrollments and revenue figures include results from both American InterContinental University as well as Trident University International commencing on the March 2, 2020 date of acquisition2020 and 2019 total student enrollments are as of December 3113
BALANCED CAPITAL ALLOCATION STRATEGYOur goal is to deploy resources in a way that drives long term shareholdervalue while supporting and enhancing the academic value of our institutionsCash & Investment BalancesOrganic Investments Student-serving operations Curriculum and course content Marketing and technologyInorganic Investments Evaluate additionalM&A opportunitiesMaintain StrongBalance Sheetand AdequateLiquidityReturn ofCapital toStockholders14
PERDOCEO: INVESTMENT THESISFAVORABLEINDUSTRY TRENDSINNOVATIVETECHNOLOGY /STUDENT FOCUSInvestmentThesisSCALABLE SHAREDSERVICESSTRONG BALANCESHEET /PROFITABILITYSUSTAINABLEGROWTH(1) Demand for postsecondary education is expected to remain strongOnline platform well accepted and growingContinued demand for skilled professionalsIncreasing participation from non-traditional students, adult learners Utilize technology as an enabler and a differentiator: leveraging mobilityand predictive analytics to enhance student engagement Student first mind-set across our operations Innovative personalized learning technology, powered by intellipath Support organic growth at our Universities Key enabler for inorganic strategies Trident University International integrated into AIU System (1) Capital allocation prioritizes high ROIC project: ROIC Cost of Capital Growth in cash flow from operations in recent years Cash and investments balance of approximately 410 million as ofDecember 31, 2020 Student first priorities and balanced approach to investments Continued execution against our core objective of sustainable andresponsible growth Organic and inorganic growth opportunitiesEffective November 5, 2020, AIU implemented a university system model, the American InterContinental University System, which is comprised of American InterContinental University and Trident University International15
Non-traditional students: Adult learners Shared best practices Variety of Program offerings: Diversity of populations through Corporate Partnerships Education built for the busy adult: CTU Fast Track Modest growth Engineering, Computer Science, Nursing, Doctoral level Faster growth High touch student centric support model
