National American University Holdings, Inc. · OTC:NAUH
National American University — FY2014 Earnings Presentation
37 slides from National American University's earnings presentation, September 2014
Slide 1: Conference Call Presentation
Conference Call Presentation Fiscal 2014 First Quarter and Year-end Financial Results September X, 2014 Investor Presentation | September 2014
Slide 2: Safe Harbor
SAFE HARBOR This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, about National American University Holdings, Inc. and its affiliated entities (the “Company”). Forward-looking statements are statements that are not histo
Slide 3: NAUH Overview
NAUH OVERVIEW NATIONAL AMERICAN UNIVERSITY Ho.pinas, INc.
Slide 4: Key Takeaways
KEY TAKEAWAYS Enrollment Trends (slides 10-13) Focus on Vertical Growth (slides 14-16) Strong Financial Growth (slide 28) Shareholder Friendly (slide 34) 5.7% dividend yield* *At 9/4/2014 4
Slide 5: Company Overview
COMPANY OVERVIEW National American University NAUH At-A-Glance Holdings, Inc., through its wholly owned subsidiary, operates National Industry Education American University (NAU), a regionally accredited, proprietary, multi-campus Headquarters Rapid City, South Dakota institution of higher learnin
Slide 6: Financial Highlights/Valuation Metrics
FINANCIAL HIGHLIGHTS/VALUATION METRICS Select Financial Info for the TTM ended 5/31/2014: Total Revenue $127.8 million Net Income Attributable to NAUH $3.5 million Diluted EPS $0.14 Cash/Short-term Investments $19.6 million (at 5/31/2014) Total Property and Equipment $43.3 million (at 5/31/2014) Sto
Slide 7: Operating Highlights
OPERATING HIGHLIGHTS History of Organic Growth, Education that Caters to the Working Adult NAU is a postsecondary educational institution catering to nontraditional students, typically in their early 30s, seeking to complete a degree either for the first time or in a new field, while also juggling
Slide 8: Investment Highlights
INVESTMENT HIGHLIGHTS Solid Financials, Well Capitalized, Experienced Management FY 2014 annual revenues of $127.8 million, compared to $129.2 million in prior year as a result of decreased enrollment driven by weaker market demand among NAU’s targeted student demographic and a reduction in enroll
Slide 9: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM Dr. Ronald Shape Dr. Jerry L. Gallentine Chief Executive Officer President Dr. Sam Kerr Dr. Robert Paxton Chief Operating Officer President of Strategic Initiatives Ms. Venessa Green Ms. Michaelle Holland Chief Financial Officer President of Campus Operations 9
Slide 10: Enrollment by Credit Hour
ENROLLMENT BY CREDIT HOUR 120,000 102,727 98,385 99,146 98,167 96,745 99,694 100,000 95,792 95,37793,742 88,830 92,106 88,725 89,363 87,010 85,100 81,175 Credit Hours 78,739 80,000 72,424 72,993 70,758 59,095 60,000 53,265 54,205 52,106 38,649 40,000 20,000 0 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Slide 11: Enrollment Breakout
ENROLLMENT BREAKOUT Spring 2014 enrollment decreased 5.4% YoY to 10,857 students May 31, 2014 May 31, 2013 (Spring '14 Qtr) (Spring '13 Qtr) % YoY Number of Students Number of Students Growth Continuing Ed 12 0 -- Doctoral 37 0 -- Graduate 322 397 -18.9% Undergraduate 10,486 11,075 -5.3% Total 10,85
Slide 12: Enrollment Comparison
ENROLLMENT COMPARISON 30.0% 24.3% CPLA YoY Enrollment Growth Rates 24.1% 20.0% National American 14.4% 13.7% EDMC 13.0% 12.0% University 10.5% 10.2% STRA 10.0% 7.2% 4.8% 3.8% 2.2% -3.6% 0.0% -2.6% -5.4% APOL -10.0% -20.0% -30.0% Source of enrollment figures: quarterly earnings releases from CPLA, ED
Slide 13: Factors Affecting Enrollment Growth
FACTORS AFFECTING ENROLLMENT GROWTH Dedicated focus on utilizing existing capacity Continued investment in the expansion of current academic programs and development of new academic programs Improved enrollment management system and recruiting/retention/persistence efforts Experience/trainin
Slide 14: Geographic Footprint
GEOGRAPHIC FOOTPRINT Current locations Pending approvals 14
Slide 15: Geographic Growth
GEOGRAPHIC GROWTH NAU Locations 37 Current Locations 40 37 37 (includes pending in orange) 35 Colorado – 4 New Mexico – 2 2 35 32 Indiana – 1 Oklahoma – 1 Kansas – 3 Oregon – 1 30 Minnesota – 6 South Dakota – 5 Missouri – 4 Texas – 9 25 22 Nebraska – 1 20 17 35 Locations Pending Approvals 35 35 32 A
Slide 16: Online Growth Strategy
ONLINE GROWTH STRATEGY Online Growth Strategy Support International Strategic Vertical Growth Program Mix Centers Exposure Alliances Strategically Dedicated focus Strategic High-demand Increase placed to on utilizing relationships and programs enrollments and maximize online existing capacity degree
Slide 17: Academics & Student Performance
A CADEMICS & S TUDENT P ERFORMANCE
Slide 18: Academic Highlights/Focus
ACADEMIC HIGHLIGHTS/FOCUS Continued academic program expansion, including business, IT, and allied health at the undergraduate level Launched first cohorts in the doctoral program (Education Doctorate (Ed.D.) in Community College Leadership) in January 2014, 100% retention as of 8/7/2014 2 add
Slide 19: Academic Breakdown for Spring '14 Term
ACADEMIC BREAKDOWN FOR SPRING ‘14 TERM Academic Area Degree Offering CCLP, 0.3% Cont Ed, Doctoral, Non-Credit, 0.1% .3% 0.1% Other, Other, 13.7% 7.5% Master's, Allied Health, 3.0% Nursing, 27.4% 10.5% Associate, Bachelor's, 56.3% IT, 7.1% 32.8% Business, 40.9% 19
Slide 20: Roueche Graduate Center
ROUECHE GRADUATE CENTER Located in Austin, Texas Dr. John E. Roueche President Led by Dr. John E. Roueche, a National Community College Advisory Board Former Professor & Director, Community nationally recognized authority College Leadership Program and Sid W. in community college education
Slide 21: NAU National Community College Advisory Board
NAU NATIONAL COMMUNITY COLLEGE ADVISORY BOARD Dr. Terry O’Banion (Chair) Dr. John E. Roueche Distinguished Professor & Chair, Graduate Faculty, President, NAU Roueche Graduate Center NAU; President Emeritus, League for Innovation in the Community College Dr. George A. Baker III Dr. Christine Johnson
Slide 22: Accreditation & Regulatory Compliance
ACCREDITATION & REGULATORY COMPLIANCE Regional accreditation by the Higher Learning Commission (HLC) and member of the North Central Association of Colleges and Schools Programmatic accreditation and approvals by various national educational and professional associations Continued evaluation o
Slide 23: Accreditation & Academic Quality
ACCREDITATION & ACADEMIC QUALITY Regional Accreditation by The Higher Learning Commission + Third-party Accreditation and Approvals Colorado Board of Nursing Kansas State Board of Nursing Minnesota Board of Nursing Missouri State Board of Nursing New Mexico Board of Nursing South Dakota
Slide 24: Course Completion and Persistence
COURSE COMPLETION AND PERSISTENCE Course Completion* Term-to-Term Persistence 98.0% 84.00% 97.0% 81.92% 96.0% 82.00% 80.25% 94.0% 93.8% 80.00% 78.92% 78.64% 78.50% 78.51% 92.0% 78.00% 90.2% 90.0% 90.0% 76.00% 75.46% 88.0% 74.00% 86.0% 72.00% Undergraduate Graduate Fall to Winter Winter to Spring to
Slide 25: Graduate Placement Rates
GRADUATE PLACEMENT RATES 100% 92% 88% 89% 90% 87% 86% 86% 85% 85% 79% 80% 80% 75% 72% 67% 70% 63% 60% 57% 57% 54% 50% 43% 40% 30% 20% 10% 0% Fall 2011 Winter Spring 2012 Summer Fall 2012 Winter Spring 2013 Summer Fall 2013 2011-2012 2012 2012-2013 2013 Overall Placement Rate Placement Rate (in field
Slide 26: Cohort Default Rate (CDR)
COHORT DEFAULT RATE (CDR) 30.0% 24.6% 25.0% 23.0% 22.9% 21.8% 21.5%* 20.0% 15.6% 15.0% 14.9% 15.0% 14.1% 13.6% 12.9% 11.6% 11.0% 9.7% 9.8% 9.4% 10.0% 9.0% 8.7% 8.6% 8.2% 8.2% 8.0% 8.2% 7.3% 7.5% 7.3% 6.5% 5.8% 5.5% 5.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Proprietary Ins
Slide 27: Financials
FINANCIALS NATIONAL AMERICAN UNIVERSITY Ho.pinas, INc.
Slide 28: History of Financial Growth
HISTORY OF FINANCIAL GROWTH Total Revenue $140,000 $129,176 $127,753 $118,894 $120,000 $106,808 $100,000 $89,796 $ in USD thousands $80,000 $62,584 $60,000 $40,000 $20,000 $- FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 28
Slide 29: FY 2014 Q4 Revenues and Cost of Educational Services
FY 2014 Q4 REVENUES AND COST OF EDUCATIONAL SERVICES Q1 Results FY 2014 Q4 Revenue for FY 2014 Q4 (in USD thousands) Q4 2014 Q4 2013 (in millions) (unaudited) (unaudited) $35.0 $33.2 $32.0 Revenue $31,968 $33,162 $30.0 $25.0 Cost of $20.0 educational $7,643 $7,493 services $15.0 $10.0 $5.0 SG&A $20,
Slide 30: FY 2014 Q4 Net Income and EBITDA
FY 2014 Q4 NET INCOME AND EBITDA FY 2014 Q4 Results EBITDA for FY 2014 Q4 (in USD thousands) Q4 2014 Q4 2013 (in millions) (unaudited) (unaudited) $4.5 $4.0 Income before $4.1 non-controlling $3.5 $2,253 $2,055 $3.8 interest and taxes $3.0 $2.5 Net income $2.0 attributable to $1,335 $1,146 $1.5 NAUH
Slide 31: FY 2014 Revenues and Cost of Educational Services
FY 2014 REVENUES AND COST OF EDUCATIONAL SERVICES FY 2014 Results Revenue for FY 2014 (in millions) (in USD thousands) FY 2014 FY 2013 (audited) (audited) $140.0 $129.2 $127.8 $120.0 Revenue $127,753 $129,176 $100.0 Cost of $80.0 educational $29,478 $29,188 services $60.0 $40.0 $20.0 SG&A $85,286 $8
Slide 32: FY 2014 Net Income and EBITDA
FY 2014 NET INCOME AND EBITDA FY 2014 Results EBITDA for FY 2014 (in USD thousands) FY 2014 FY 2013 (audited) (audited) $16.0 Income before $15.8 non-controlling $14.0 $5,774 $9,184 interest and $12.8 $12.0 taxes $10.0 $8.0 Net income attributable to $3,485 $5,446 $6.0 NAUH $4.0 $2.0 EBITDA* $12,758
Slide 33: Strong Balance Sheet
STRONG BALANCE SHEET May 31, May 31, (in USD thousands) 2014 2013 Cash and cash equivalents/available for $ 19,589 $ 31,878 sale investments Working capital $ 25,714 $ 23,843 Long-term debt $ 0 $ 0 Stockholders’ equity $ 51,195 $ 50,788 33
Slide 34: Shareholder Friendly
SHAREHOLDER FRIENDLY Dividend-paying company Quarterly Dividends $0.045 $0.045 $0.045 $0.045 $0.045 $0.05 $0.04 $0.04 $0.04 $0.04 $0.04 $0.0325 $0.0325 $0.0325 $0.03 $0.03 $0.03 $0.03 $0.03 $0.02 $0.01 $0.00 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
Slide 35: Key FY 2014-2015 One-Time Impacts
KEY FY 2014-2015 ONE-TIME IMPACTS Timing of cash received for student receivables shifted to June/July 2014, from March/April 2013 − $13.8 million cash on the balance sheet Rapid City campus sale − $3.2 million cash on the balance sheet − $1.8 million cash gain on the income statement Tenant i
Slide 36: Key Takeaways
KEY TAKEAWAYS Enrollment Trends (slides 10-13) Focus on Vertical Growth (slides 14-16) Strong Financial Growth (slide 28) Shareholder Friendly (slide 34) 5.7% dividend yield* *At 9/4/2014 36
Slide 37: Thank You
THANK YOU National American University Holdings, Inc. Dr. Ronald Shape 605-721-5220 rshape@national.edu Investor Relations Counsel The Equity Group Inc. Carolyne Y. Sohn 415-568-2255 csohn@equityny.com Adam Prior 212-836-9606 aprior@equityny.com 37
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