Perdoceo Education Corporation · NASDAQ:PRDO
Perdoceo Education — Career Education — Investor Presentation (November 2014)
23 slides from Perdoceo Education's investor presentation, Nov 13, 2014
Slide 1: Investor Presentation November 2014
Exhibit 99.1 Career Education Investor Presentation November 2014 Confidential – For Internal Use Only
Slide 2: Cautionary Statements & Disclosures
Cautionary Statements & Disclosures This presentation contains “forward-looking statements,” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, that reflect our current expectations regarding our future growth, results of operations, cash flows, performance and business pr
Slide 3: Key Investment Highlights
Key Investment Highlights • Diverse business model with both online and campus based portfolio of assets. • Turnaround strategy in place with execution progressing. • Favorable industry dynamics in terms of market size and employer demand for skilled workers. • Strong balance sheet and cash position
Slide 4: U.S. Macro Education Market Drivers
U.S. Macro Education Market Drivers • U.S. population has low level of educational attainment. “The Skill Gap” • Approximately 3 million jobs are unfilled due to a worker skills gap(1). • Proprietary segment serves an under served demographic with a higher concentration of minority students and olde
Slide 5: Earnings Power of Postsecondary Education
Earnings Power of Postsecondary Education • Meaningful correlation between post secondary education and lifetime earnings. • For-profit college students that earned a Bachelor’s degree earn an average salary greater than those students that earned their degrees from public and private colleges (2).
Slide 6: Business Overview
Business Overview Dynamic educational services company committed to quality, career-focused learning to a diverse student population through online, on-ground and hybrid learning program offerings. • Approximately 30,250 students, or 63% of total enrollments, are online students. • Focus on improvin
Slide 7: Segment Geographic and Strategy Overview
Segment Geographic and Strategy Overview 6 Confidential – For Internal Use Only
Slide 8: A Summary of Career Education's History
A Summary of Career Education’s History • Company founded in 1994 and went public in 1998. • Business built through a series of acquisitions. • Company and industry have experienced two market downturns – the most recent one being more severe. 7 Confidential – For Internal Use Only
Slide 9: Key Investor Objectives to Turnaround Strategy
Key Investor Objectives to Turnaround Strategy • Strengthen Academic Outcomes, Enhance Regulatory Compliance and Simplify Business Model. • Generate Modest University Total Student Enrollment Growth. • Neutralize Negative Impact of Career Schools as Soon as Practical. • Reduce Organizational Cost St
Slide 10: Improving Academic Outcomes, Enhanced Regulatory Compliance and Simplification
Improving Academic Outcomes, Enhanced Regulatory Compliance and Simplification • IntelliPath is a competitive differentiator. • For the 2014 cohort, 100% of our 32 nationally-accredited ACICS schools (that are not in teach out) achieved a campus placement rate that met or exceeded ACICS’ compliance
Slide 11: Generate Modest University Total Student Enrollment Growth
Generate Modest University Total Student Enrollment Growth Change in Total Student Enrollments vs. Prior Year Quarter Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 10 Confidential – For Internal Use Only
Slide 12: Neutralize Negative Impact of Career Schools as Soon as Practical
Neutralize Negative Impact of Career Schools as Soon as Practical Total Student Enrollments – Career Schools (1) Culinary Arts had a shift in start dates as compared to the prior year, therefore Q3 2014 had an additional start which was reflected in Q4 2013 in the prior year. 11 Confidential – For I
Slide 13: Reduce Organizational Cost Structure – Progress Underway
Reduce Organizational Cost Structure – Progress Underway Operating Expenses ($ millions) $1,542 $1,272 $899 $814 Reduced by $212 million Reduced by $80 million FY 2012 & FY 2013 data as reported in the Company’s 2013 10-K and based on schools that were in continuing operations at 12/31/13. YTD 3Q 20
Slide 14: Reduce Organizational Cost Structure – Additional Opportunities
Reduce Organizational Cost Structure – Additional Opportunities % of YTD 3Q % of 3Q 2014 Revenue 2014 Revenue Total Revenue $227,452 $697,391 OPERATING EXPENSES Educational services and facilities $82,892 36.4% $243,690 34.9% General & Administrative Advertising $70,897 31.2% $198,780 28.5% Admissio
Slide 15: Successfully Complete Teach Out of Transitional Schools
Successfully Complete Teach Out of Transitional Schools • Transitional Schools operating losses in FY 2013 were approximately ($77) million which was primarily cash outflow. • This fiscal year (through September 2014), we closed 16 campuses, divested one campus and are scheduled to close an addition
Slide 16: Financial Overview – Profitable University Segment
Financial Overview – Profitable University Segment University Revenue & Operating Income - (in $000) $545,188 $134,299 $138,469 $55,381 $6,504 $3,685 Trailing 12-Months Quarter Revenue Quarter Operating Revenue and Income Operating Income • CTU financially strong with trailing twelve month operating
Slide 17: Future Real Estate Lease Obligations are Declining
Future Real Estate Lease Obligations are Declining 2020 & (2) 2014 2015 2016 2017 2018 2019 Thereafter Total (1) Gross operating lease obligations Ongoing operations $ 61,024 $ 60,148 $ 55,194 $ 46,199 $ 45,203 $ 35,389 $ 43,985 $ 347,142 Transitional & Discontinued operations 38,024 31,541 24,045 2
Slide 18: Financial Overview – Strong Cash Position
Financial Overview – Strong Cash Position (In 000’s) (1) Balances presented above are quarter end balances and include both Continuing and Discontinued Operations. (2) The increase in 4Q 2013 is attributed to proceeds from the sale of the Company’s International segment. • Recently increased the bor
Slide 19: Financial Overview – Improving Adjusted EBITDA
Financial Overview – Improving Adjusted EBITDA Trailing Twelve Month (TTM) Adjusted EBITDA – Ongoing Quarterly Adjusted EBITDA – Ongoing Operations (in $000) Operations (in $000) TTM 3Q TTM 2Q 2Q 2014 1Q 2014 4Q 2013 3Q 2014 3Q 2013 2014 2014 • Ongoing Adjusted EBITDA exhibits seasonality fluctuatio
Slide 20: Adjusted EBITDA – Transitional & Discontinued Operations
Adjusted EBITDA – Transitional & Discontinued Operations Trailing Twelve Months Adjusted EBITDA ($ in millions) Projected • Negative Adjusted EBITDA from Transitional and Discontinued Operations continues to decline. (1) Numbers exclude significant items (including International segment) as disclose
Slide 21: Key Investment Highlights
Key Investment Highlights • Diverse business model with both online and campus based portfolio of assets. • Turnaround strategy in place with execution progressing. • Favorable industry dynamics in terms of market size and employer demand for skilled workers. • Strong balance sheet and cash position
Slide 22: Reconciliation of GAAP to Non-GAAP Items
Reconciliation of GAAP to Non-GAAP Items CAREER EDUCATION CORPORATION AND SUBSIDIARIES (1) UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ITEMS (In thousands, except per share amounts) Adjusted EBITDA Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Ongoing Operations: Pre-tax loss from continuing operations $
Slide 23: Reconciliation of GAAP to Non-GAAP Items – con't
Reconciliation of GAAP to Non-GAAP Items – con’t (1) The Company believes it is useful to present non-GAAP financial measures which exclude certain significant items as a means to understand the performance of its ongoing operations. As a general matter, the Company uses non-GAAP financial measures
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