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Spring 2021 Investor Presentation
NASDAQ:PRDO
2
STRONG BALANCE
SHEET /
PROFITABILITY
• 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 of
December 31, 2020
FAVORABLE
INDUSTRY TRENDS
• Demand for postsecondary education is expected to remain strong
• Online platform well accepted and growing
• Continued demand for skilled professionals
• Increasing participation from non-traditional students, adult learners
INNOVATIVE
TECHNOLOGY /
STUDENT FOCUS
• Utilize technology as an enabler and a differentiator: leveraging mobility
and predictive analytics to enhance student engagement
• Student first mind-set across our operations
• Innovative personalized learning technology, powered by intellipath®
SCALABLE SHARED
SERVICES
• Support organic growth at our Universities
• Key enabler for inorganic strategies
• Trident University International integrated into AIU System(1)
SUSTAINABLE
GROWTH
• Student first priorities and balanced approach to investments
• Continued execution against our core objective of sustainable and
responsible growth
• Organic and inorganic growth opportunities
Investment
Thesis
PERDOCEO: INVESTMENT THESIS
(1) 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 International
3
OUR GOALS AND GUIDING PRINCIPLES
Guiding principles and underlying objectives that govern our operating framework:
To be a leading provider of online postsecondary education
to non-traditional students
Compliance
with
Regulations
• Student first mindset
• Improve graduation rates
Academic
Outcomes
Academic
Quality
and
Integrity
Sustainable
and
Responsible
Growth
• Classroom experience and
course content and design
• Learner centric model
• Core philosophy across
our operations
• Balance financial progress
with student–serving
investments
4(1) 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 International
(2) As of December 31, 2020
ACCREDITED INSTITUTIONS
Primarily an online institution
AIU System now includes
Trident University International(1)
2 campus locations
– Atlanta, GA
– Houston, TX
Total Enrollments – 18,100(2)
Primarily an online institution
2 campus locations
– Aurora, CO
– Colorado Springs, CO
Total Enrollments – 24,600(2)
SCALABLE
SHARED
SERVICES
American InterContinental University System(1)Colorado Technical University
5
CTU AND AIUS(1)
BRANDS
HOW ARE
CTU and AIUS(1)
ALIKE and
DIFFERENT?
Accredited
Institutions
Scalable
shared services
Blended learning:
online and campus-
based
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
Classroom built for
learning: easy
navigation, learner
centric curriculum
Trident University
International provides
additional program
offerings
(1) 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 International
(2) Trident University International offers unique doctoral and master’s programs in education, health sciences and business.
(3) Refers to recent historical experiences
(2)
(3)(3)
AIU System (1)
6
STUDENT DEMOGRAPHICS
Our students are primarily non-traditional adult learners
Total Student Enrollments as of December 31, 2020
BY DEGREE TYPE BY CORE CURRICULA
Business Studies
Information Technology
Health Education
Doctoral & Master's
Bachelor's
Associate
21% 13%
66%
11%
76%
13%
4%
34%
62%
Under 21
21 to 30
Over 30
BY AGE GROUP
7
INDUSTRY OVERVIEW
ONLINE POSTSECONDARY EDUCATION – VALUE PROPOSITION
Growth in ‘blended
learning’ online platform
– well accepted
Need for non-traditional
classroom format –
flexibility for adult
learners
Greater use of
technology
Source: BMO Education Industry Overview 2020
Academic outcomes
enhance student
marketability
8
PERDOCEO POSITIONING
PERDOCEO
WELL POSITIONED
WITHIN THE
POSTSECONDARY
EDUCATION
LANDSCAPE
• Well-established online educational platform (with ground and hybrid offerings as well)
• Mostly serving non-traditional, adult learners with opportunity
to 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 general
corporate functions
• Focus on quality academic outcomes
9
STRATEGIC PRIORITIES
QUALITY
ACADEMIC
OUTCOMES
INCREASE
SHAREHOLDER
VALUE
Enroll Educate
Graduate
• Enhance Enrollment Processes
• Enhance Student Experiences & Retention
• Leverage Scalable Shared Services
• Use Technology as a Differentiator
• Invest in High ROI Projects
10
• Branding
• Creative services
• Digital marketing
• Data analytics
• Legal
• Compliance
• HR and Recruiting
• Executive Office
• Board of Directors
• Treasury and Audit
• Accounting and Reporting
• Tax, Risk and Real Estate
• Corporate Finance
• Software and Licenses
• Network and Infrastructure
• New Software
Development and Support
• Financial Aid
• Library Resources
• Course Development
SHARED SERVICES – PROCESS RE-ENGINEERING
EFFICIENT, EFFECTIVE AND SCALABLE SHARED SERVICES
STUDENT / TECHNOLOGY SERVICES
Student
Support
Information
Technology
CORPORATE SERVICES
Finance
Real Estate
Legal
Regulatory
HR
Public
Company
Expense
Marketing
11
FINANCIAL HIGHLIGHTS
12
THREE YEAR QUARTERLY OPERATING PERFORMANCE
PERFORMANCE REFLECTS EXECUTION AGAINST OBJECTIVE OF
SUSTAINABLE AND RESPONSIBLE GROWTH
$143.1$145.5
$158.5
$171.2
Total Revenue
$10.7
$20.2
$32.0
$36.2
Operating Income($, in millions) ($, in millions)
(1) Beginning in Q1’20, figures include Trident University International results commencing on the March 2, 2020 date of acquisition
13
KEY METRICS FOR 2020 FULL YEAR
ENROLLMENT GROWTH REFLECTS INVESTMENTS IN
TECHNOLOGY AND STUDENT-SERVING PROCESSES
(1) Total student enrollments are as of December 31, 2020 / Revenue provided is for 2020 full year results
(2) The 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 acquisition
(3) 2020 and 2019 total student enrollments are as of December 31
• Technology and analytics
• Graduation teams
INVESTMENTS IN:
• Employee training and development
• Trident University integration
Total Student Enrollments
by Segment
AIUS CTU
24,600
58%
18,100
42%Revenue
$405.5M
59%
Revenue
$281.4M
41%
2020
Full Year
2019
Full Year
2020 FY
vs 2019 FY
Total Student Enrollments: 42,700 36,600 +16.7%
University Revenue: $686.9M $627.6M +9.4%
PRDO Operating Income: $142.9M $86.5M +65.3%
(3) (3)
(1)
(2)
(2)
14
BALANCED CAPITAL ALLOCATION STRATEGY
Organic Investments
• Student-serving operations
• Curriculum and course content
• Marketing and technology
Cash & Investment Balances
Inorganic Investments
• Evaluate additional
M&A opportunities
Maintain Strong
Balance Sheet
and Adequate
Liquidity
Return of
Capital to
Stockholders
Our goal is to deploy resources in a way that drives long term shareholder
value while supporting and enhancing the academic value of our institutions
15
STRONG BALANCE
SHEET /
PROFITABILITY
• 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 of
December 31, 2020
FAVORABLE
INDUSTRY TRENDS
• Demand for postsecondary education is expected to remain strong
• Online platform well accepted and growing
• Continued demand for skilled professionals
• Increasing participation from non-traditional students, adult learners
INNOVATIVE
TECHNOLOGY /
STUDENT FOCUS
• Utilize technology as an enabler and a differentiator: leveraging mobility
and predictive analytics to enhance student engagement
• Student first mind-set across our operations
• Innovative personalized learning technology, powered by intellipath®
SCALABLE SHARED
SERVICES
• Support organic growth at our Universities
• Key enabler for inorganic strategies
• Trident University International integrated into AIU System(1)
SUSTAINABLE
GROWTH
• Student first priorities and balanced approach to investments
• Continued execution against our core objective of sustainable and
responsible growth
• Organic and inorganic growth opportunities
Investment
Thesis
PERDOCEO: INVESTMENT THESIS
(1) 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 International