Aspen Group, Inc. · OTC:ASPU
Aspen — Investor Presentation (November 2018)
35 slides from Aspen's investor presentation, Nov 14, 2018
Slide 1: Investor Presentation
Investor PresentationNasdaq: ASPU November 2018 1 Aspen Group, Inc. is an education technology holding company that leverages its infrastructure and expertise to allow its two universities, Aspen University and United States University, to deliver on the vision of making college affordable again.
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement Certain statements in this presentation and responses to various questions include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expected enrollment conversion rates, the expected recu
Slide 3: Aspen Group: Why We Are A Compelling Investment
3 Aspen Group: Why We Are A Compelling Investment Disruptive business model (monthly payment plans, no interest) with outstanding student outcomesBest-in-Class EdTech infrastructure (Proprietary SIS & CRM, integrated with LMS)Recurring revenue model (70% of active students paying monthly, delivering
Slide 4: Disruptive Business Model: Making College Affordable with Outstanding Student Outcomes
Disruptive Business Model:Making College Affordable with Outstanding Student Outcomes 4
Slide 5: Aspen Group's Disruptive Business Model: Making College Affordable
5 Aspen Group’s Disruptive Business Model:“Making College Affordable” Offer world class online education at half the cost of our competitors; committed to cash-based, monthly payment plans (no interest) Online Bachelor-level students pay $250/monthOnline Master-level students pay $325/monthOnline Do
Slide 6: Student Outcomes Key to Our Success: Student Satisfaction
6 Student Outcomes Key to Our Success Student Satisfaction 92.4%*Upon completing their studies, % of alumni that responded they achieved the goals they had when they started the course or program *Aspen University Alumni Survey (http://s3.amazonaws.com/ASPU/Documents/DEAC_Consumer_Information_Disclo
Slide 7: Student Outcomes Key to Our Success: Graduation Rates
7 Student Outcomes Key to Our Success Graduation Rates** RN to BSN Program (Aspen University’s Largest Degree Program) 76%**As reported to DEAC (Aspen University’s accreditor) for CY’2017 (http://s3.amazonaws.com/ASPU/Documents/DEAC_Consumer_Information_Disclosure.pdf)** https://nces.ed.gov/programs
Slide 8: Student Outcomes Key to Our Success: Financial Prudence
8 Student Outcomes Key to Our Success Financial Prudence 84.3%*% of alumni that graduated without taking afederal loan while attending Aspen University *Based on 1,564 Aspen University graduates between 2017-2018
Slide 9: Primarily Targeting the High Growth Nursing Profession
Primarily Targeting the High Growth Nursing Profession 9
Slide 10: RN Employment Projected to Grow 15% in Next Decade
10 RN Employment Projected to Grow 15% in Next Decade It's the best time to be a nurse in the U.S. Melody HahmSenior WriterYahoo Finance August 9, 2018 Being a nurse in the U.S. is a lucrative gig.In the U.S., a nurse earns an average annual salary of $63,000, more than double the global average of
Slide 11: Addressing a $4 Billion Higher Ed Nursing Market Opportunity
11 Addressing a $4 Billion Higher Ed Nursing Market Opportunity
Slide 12: EdTech Infrastructure Driving Industry Leading Operational Efficiency
EdTech Infrastucture Driving Industry Leading Operational Efficiency 12
Slide 13: Best-In-Class EdTech Stack
13 Student Information System Data Warehouse CRM System Classroom (D2L) Best-In-Class EdTech Stack Student Portal Vertically-Integrated Student Acquisition System
Slide 14: Proprietary CRM System Delivers Breakthrough Functionality
14 Proprietary CRM System Delivers Breakthrough Functionality Built to achieve highest enrollment conversion rates through recommendation engine algorithmInnovating in student services to drive higher persistence rates; alert Academic Advisors of ‘At-Risk’ events in real-time (launch mid-2019) Acade
Slide 15: Unprecedented LTV/CAC Ratios
15 Unprecedented LTV/CAC Ratios *As of 10/31/18
Slide 16: Exceptional Unit Economics
16 Exceptional Unit Economics *As of 10/31/18 (assumes $6,000/month/EA)**Assumes $150/course completion for Aspen U, $345/course completion for USU MSN-FNP
Slide 17: Gross Profit/Enrollment Turns Profitable After Three Course Completions
17 Gross Profit/Enrollment Turns Profitable After Three Course Completions
Slide 18: Recurring Revenue Model
18 Recurring Revenue Model 5,588 students at Aspen University & USU are using a monthly payment method; total value of monthly payment plan contracts exceeds $45 million*An additional 418 Aspen University graduates remain on monthly payment programs as of 10/31/18 (~$125,000/mo.) *As of 10/31/18
Slide 19: Proven Business Model – Aspen University AEBITDA Profitable for Past 9 Quarters
19 Proven Business Model – Aspen University* AEBITDA Profitable for Past 9 Quarters Aspen Group AEBITDA profitable from July 2016 (Q1 FY’17) to July 2018 (Q1 FY’19)Following acquisition of USU in December 2017, Aspen University remains AEBITDA profitable *Included corporate overhead until past 3 qua
Slide 20: Proven Management Team
20 Proven Management Team Michael Mathews, Chairman & CEO-Former CEO of Interclick (Nasdaq: ICLK, 2007-2011), sold to Yahoo! in 2011 for $270mm-Former Operating Exec of CKS Partners (Nasdaq: CKSG, 1994-1998), sold to USWeb in 1998 for $344mmDr. Cheri St. Arnauld, Chief Academic Officer -Former CAO o
Slide 21: Equity Snapshot
21 Equity Snapshot Closed $5mm credit facility with Leon Cooperman on 11/5/18 As of 11/9/18 Ticker on Nasdaq: ASPU Share Price: $5.60 52 Week Range: $5.21 - $9.61 Market Cap: $103 Million Shares Outstanding: 18.4 Million Mgmt & BOD Ownership: 19%
Slide 22: Appendix
Appendix 22
Slide 23: Q2 FY'19 KPI Results—Enrollments
Q2 FY’19 KPI Results—Enrollments 23 *Included doctoral enrollments**New enrollments in this program were intentionally limited due to the current wait list Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 EAs Enrolls/Month/EA Aspen (Nursing + Other) 1,044* 972* 980 882 1,104 50 7.4 Aspen (Doctoral) 116 118 133 6 7.4 U
Slide 24: KPI Results—Student Body
KPI Results—Student Body 24 *Active Degree-Seeking Students” are defined as degree-seeking students who were enrolled in a course during the quarter reported, or are registered for an upcoming course.
Slide 25: Q1 Fiscal Year 2019 Results
Q1 Fiscal Year 2019 Results 25 For the Quarter Ended July 31, 2018 Revenues $ 7,221,305 Operating expenses Cost of revenues 3,752,392 General and administrative 5,824,132 Depreciation and amortization 498,105 10,074,629 Operating loss from operations (2,853,324) Other income (expense): Other income
Slide 26: Net (Loss)/Income, Adjusted EBITDA and EPS
Net (Loss)/Income, Adjusted EBITDA and EPS 26 Consolidated AGI AU USU Net (Loss)/Income $ (2,837,276) $ (1.90M) $ 0.21M $(1.15M) Adjusted EBITDA $ (1,778,348) $ (1.49M) $ 0.52M $(0.81M) Net Loss Per Share ($0.15)
Slide 27: Subsidiary KPIs—Q1 FY'19
Subsidiary KPIs—Q1 FY’19 Ratios 27 AGI Consolidated AU USU Revenues $7,221,305 70% YOY Ratios as a Percentage of AU Revenue Ratios as a Percentage of USU Revenue Instructional costs $1,564,936 19% 33% Marketing costs $2,187,456 27% 26% Gross Profit $3,309,768 51% 40% General & Administrative expense
Slide 28: Targeting Four Growth Vectors
28 Targeting Four Growth Vectors
Slide 29: Growth Vector 1: RNs - Fully Online
29 Growth Vector 1: RNs - Fully OnlineRN to BSN & MSN RNs (post-licensure):BSN & MSN2.9mm RNs in U.S. Today65,000 Starts per Annum(TAM: - $478mm)**Assumes Aspen’s $7,350 LTV
Slide 30: Aspen University Capturing ~2% Of BSN Completion Starts
30 Aspen University Capturing ~2%Of BSN Completion Starts Approximately 140K RNs currently enrolled in BSN Completion programs; or approx. 50,000 new enrolls/year
Slide 31: Growth Vector 2: Pre-Licensure BSN Hybrid Online/Campus Program
31 Growth Vector 2: Pre-Licensure BSN Hybrid Online/Campus Program Pre-Licensure BSN Program:(Hybrid Online/Campus Program)100,000 Pre-Licensure BSN Startsper Annum(TAM: - $3B)**Assumes an $30,000 LTV
Slide 32: Aspen University Pre-Licensure BSN: Launched
32 Aspen University Pre-Licensure BSN: LaunchedFirst campus in Phoenix in July, 2018 3-Year BSN program is 120 credits – 69% online, 31% on groundApproved by the AZ BON, AZPPSE, State of Colorado, DEACHave clinical partnerships in PHX (Maricopa Integrated Health System, Honor Health, Phoenix Childre
Slide 33: Growth Vector 3: Doctoral Students – Fully Online
33 Growth Vector 3: Doctoral Students – Fully Online Doctoral Programs (Fully Online):55,000 Graduates per Annum14% Online Students or ~8K/yr.(TAM: - $100mm)**Assumes Aspen’s $12,600 LTV
Slide 34: Growth Vector 4: RNs – MSN/FNP Hybrid Online Program
34 Growth Vector 4: RNs – MSN/FNP Hybrid Online Program USU goal to become the university of choice for preparing six-figure Nurse Practitioners ($27K: $375 for 72 months) RNs (post-licensure):MSN-Family Nurse Practitioner (Hybrid Online Program)234,000 NPs in U.S. Today (8% oftotal RNs)30,000 Start
Slide 35: Net Loss to Adjusted EBITDA Reconciliation (Q1 FY'19)
Net Loss to Adjusted EBITDA Reconciliation(Q1 FY’19) Net Loss ($2,837,276)Interest Expense 40,353 Depreciation & Amortization 498,105 EBITDA (2,298,818) Bad Debt Expense 121,805Stock-Based Compensation 209,976Non-recurring Charges 188,689Adjusted EBITDA (Loss) ($1,778,348) 35