Q4 2019 Earnings Call
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I'd now like to introduce your host for today's conference for another go to a few as head of IR you may begin.
Thank you I'm pleased to welcome you to watch its fourth quarter 2019 conference call.
With me on the call today is that if he'll be he did you both well she omnicom fearful and leaves on that as long as recently announced will become our new CFO in April.
During today's presentation I realize that seems to be will make forward looking statements.
Forward looking statements generally relate to future events or future financial or operating performance. He involve known and unknown risks uncertainties and other factors that may cause <unk> actual results could differ materially from those contemplated like these forward looking statement.
Forward looking statements. In this presentation include but are not limit to statements related to our business and financial performance.
Hi station in guidance for future periods or expectations regarding our strategic product mix Heath kit.
And the related benefits in our expectations regarding the market.
Did risks include this more fully described it in our filings with the Securities and Exchange Commission.
Forward looking statements in this presentation, our bayes into owning formation I very much worse.
As of today tariff.
You should not rely on Dan it's predictions of future events, and we disclaim any obligation to update any forward looking statements, except as required by law.
In addition management May reference no I have five financial measures on this call you know I as far as financial majors are not intended to be called seen dirt evaluation or as a substitute for our results prepared in accordance with I guess all right.
We have provided I would call affiliation off these no I address financial measures to the most directly comparable I as far as financial measures in his presentation.
And then I'll turn the call over shoving. He does your boat I feel.
Thank you have after and thanks, everyone for joining us today I feel for water and full year 2018 earnings conference call.
Oh began with a discussion of the highlights this year followed by an overview of the key short and medium terms perspective for the company.
I will then discuss our financial results and our 2020 Gardner.
To begin.
We could not be more proud and pleased with office performance Walt its first to your as a public company.
Your telephone I'd seen we didn't give a strong topline growth profitability and cash generation towards the higher end of second house to talk to 19 guidance range. We have made significant progress on our strategic objective.
The foundational for pockets highly predictable and sustainable growth.
Well over.
And just fall a first of all the acquisitions I started to materialize. So Balkan attractive first half 2020 has to be the keeping our annual guide.
We have executed municipal M&A transactions after IPO.
I think that busy shut off I back and only hit them during 2019.
The reached an agreement to acquire when you sell Lukas, which combined contributed 414 additional seats for network.
[noise] you bought into mention that this June last acquisition, we have strengthened Oh, what results in both business units and then less than one new year, we have reaches more than 40% of our target to acquire at least 1000 medical school seat.
He is after IPO.
Our strong operational performance was also driven by organic growth and our ability to successfully integrating recent acquisition extract synergies and cost efficiencies.
Out of the 11 companies acquired over the last two years.
Six of them have already been fully integrate in terms of process systems and curriculum showing our strong kept passive to go inorganically extract synergies fastly.
It can be seen onto slide number four in 2018 only had a strong operational performance across all key metrics.
We have more than tripled our medical student base since 2017 through a combination of organic and M&A. That's a result, we have delivered a strong top and bottom all my my phone line grow coming above the midpoint of the second half the doesn't I can guide.
Our reported that travel for the few your what's up out of 25 year on year, reflecting.
Our medical school maturation.
The consolidation for acquisition completed since 2018.
That's strong growth in that business units you.
There's a strong topline growth combined if the coffin cost efficiencies. There just talk positions was reflected in our just it'd be dot ingredient under 45%.
320 percentage points of margin improvement in 2018.
Our pro forma adjusted EBITDA totaled 320 to meet all high in 2019, Wi Fi margin of 38.8%.
You bring profitability. It's also called me with a strong cash conversion, which showed a ratio of 97% much a ball from the level in 2018 watsco from access capacity to deliver strong topline growth with high margin and cash generation.
On February 11, we raised approximately $87 million for follow on public offering.
Before the unexpected quote on Vito pandemic back to the global markets.
The way the spirit of prices have a strong balance sheet than cash position out of competitive advantage to mundane all cost leverage operation and enabling us to continue its a good tell a growth strategy.
On page five I'd like to highlight our consistent track record.
We have already concluded 11, because he should since 2018.
These acquisitions reinforce our strategies to increase our medical education seat as well, that's Atlanta into new markets.
Recently and equally important as it continues to spread all reckless system and our presence through all through additional seats, new geographic regions in new progress. We are building strong brand recognition and the long term relationship we former student that aluminite.
The February off this year, we announced deposition since I'm just tied to some Lucas answering another busy mistake in north region.
Operation when approved by the on distressed agency will add 182 medical school seats and potentially other additional fees.
After 11 Cofunds acquired fix up then I have already before you take rate in terms of brought this product and system. We felt very positive student feed it back up all the new environment and the curriculum already implemented.
These results.
Requirement for sustainable growth that enable us with track seen there just in a short time after an acquisition.
Now, let's take a look on the slide number six where we show the track record of <unk> three first acquisition concluded in 2018.
But the image in Minot, yet I state, where we were able to increased revenues by 32% you ever ear, we've not even a bearing effect on EBITDA that was up by 65% a similar trend was noted at the other two companies.
But that locate in spot on I state revenues grew 23% why you'd be tied jumped 75% I left that wasn't enough outside the <unk> be always states revenues went up by 18%.
Weve it'd be dot going up 42%.
So not only we were able to increased revenues by improved Occupancies and average ticket, but we also increased efficiency. All these operations integrate into our after shared services and academic imago as a result, we saw margin improvement of the school buses in 2009.
Now moving on page seven.
You can see our initiatives to drive sustainable long term growth and progress differentiate.
Right.
Number of students.
Driven by maturation of the seats, we expect that 11% Cagar until 2026, a highly predictable volume growth as we feel all seats available every semester.
Second.
Along with debt positions. We also received authorization under demise magical federal problem, which you were awarded 350 seats.
Which translates into seven new campuses.
We expect to begin operation of the first two units in the first half of 2020.
We blend that total for for the current year, but this situation color on of uterus might impact our timeline.
Additional tree I expect that to open in 2021.
Third.
In terms of brought them. Some services. We're also developing new improvements such as Joe terrain mentoring platform and the second season for all magical residents the web series.
The main objective is to help students consider study plan send your goals using that data we collected from each student. The three system is viewed to motivate and help students do engage and a half the best learning experience depending on the stage they are on their Korea.
Number four acquisitions.
Acquisitions I keep component of our growth strategy. This is an ongoing process and today.
We currently have approximately 500 seats covert oh, the animal you contract.
We'll keep the same discipline in terms of pricing I'm. A lies in the market conditions and our capacity to continue integrate new company in order to move into a new what physicians.
Fifth margin improvement.
We still have not duration off magical seats by 2026 and synergistic after now operation.
See long term value creation through margin improvement as a result, upscale cost efficiency and synergies.
Now, let me spend some time discussion not more immediate issue.
Cool nights in global prices.
Like everyone else, our first the men costs aren't as to how and well being a falling for use professors and student.
We're closely monitoring the situation and have fallen, especially executive committee to ensure that after complies with the guidelines from both Ministry of health and administered to patients and this working very hard so minimizing fact, while the students and the floor business.
At this point, we have successfully concluded in most of all at the mission cycle <unk> first half 2020 until halted all on campus activity on March 17.
We are currently operating hours the patient Aptiv is through our online platform for all students and reorganized the schedule for practically the same not to talk about and a significant in fact, well that sub damage calendar for the first semester this year.
Yes, this situation containers for a longer period, we have some flexibility as we may anticipate that need to your vacation in order to replace Brzeczko classes when on campus glasses restriction is over.
In addition, mindful of all medical students in Brazil.
We allow access to office V still platform free of charge for medical education institutions over the next few months extendable for did the race off the been Danny.
We already have more than 40 medical situtions interested and have already 18 medical schools, using our platform and helping their students to maintain their learning process and minimizing big box office prices.
Before turning the call over to Louisiana to present, our financial results as you know, who Seattle has decided to move on.
I want to thank him for all his work doing this past year and wish him. Good luck on the next steps.
At the same time I'm pleased to welcome Louisiana that blown cool as our new CFO.
Which brings over 20 years, all financial management expertise to the role.
He has already started at the company in fact, he's here if us today and we officially assumed as CFO position on the labor tightness.
Not only this presentation Philadelphia.
Thank you you and good morning, everyone.
Moving to slide number 10 for discussion of our key operating metrics by business unit, we delivered strong results in before working as both business units continue to drive rolls into key operating metrics as shown in slide is being driven by a combination of organic growth and acquisition.
Yes.
It is one we have increased the number of medical students by approximately 40% to 6597 enrollments beautiful Fourq of 2019, compared you before warranty on People's needs and we continue to have 100% well, let's see of our regulatory goodbye.
I see off medical schools and best represents a huge growth. The banks you enter next years for instance, considering this seats that we are allowed to start raising 2020 be in 2021, and yet you should definitely had committed to delever within three years after all ideal.
Yes, you need a potential of approximately 17.6 thousand medical students.
Keep 100% off of ours.
Our average medical school, we should see increased 10% equal Q2 thousand 19 Bastards, you think you're talking to you.
I'm pleased to people, who said considering before we average of spoken mentions after 2018 as a reminder, we increased our two kids in line with heap Leach. Therefore, yeah, Balkanization Reis se lean back Rice ingredients, then you get a few years ago for new students combined we.
Yes that mix with an increasing percentage of student even new price.
The combination of 40% increase the number of students in 23% increase average ticket labs Oh combined these two grew up 86% year over year.
With respect to business units you. We've had 14.4 thousand Oxys big students, an increase of 24% since the last quarter and almost 39% higher than the number in the second walking up you probably much.
We believe we have outpaced the market rules in the period, which we estimate to be growing its 15% to 20% or yet.
Moving onto a discussion of our financial results starting on page 11, <unk> Coleman the main and most significant items that these additional information <unk> earnings press release that you can refer to for more information.
Additionally, along with our reported figures we are older provided pro forma figures for the fourth warden instant beyond 2019 for some key by night vision.
The 2019 pro forma figures include the acquisitions or mid sale bogs, though and you can imagine as you see had the court in the general for some people didn't like.
It does not include hidden jewel as you acquisition did not close that's you already this year.
Starting with revenues.
Our business model enables us to generate highly predictable revenue growth.
If abolished combination of organic and M&A driven growth.
I mean weve before Walker net revenues in the fourth walked in 2019 was to remember it didn't you meet in the eyes, and please oh I'm going to 9% year over year.
The acquisitions itself, but is there anything maybe we're already granted those reported in pro forma figures are saying well before for jobs with all the minutes.
The consolidation, though Ethernet and that sell directly benefit the business unit.
Will you be quarter, what redone by one marked reduction of medco seats, this would be organic growth and consolidation of acquisitions.
I just couldn't be year off 2018.
As all the acquisitions, maybe Beth you were concluded Jim or Sars.
Our readiness for this for 2019 increased 55% to approximately 761 million, we ice we've a contribution.
I think this that immediately eyes. So my confusion as from the date be were acquired.
In 109 million realize from organic growth, which is comprised okay. My British medical school seems an increase of average ticket.
These figures also include the consolidation of you pick which is a greenfield that's started operations in September 2000, and Mike.
Go Siguiri pro forma Fieger's itself, you can imagine inside out these issues were already consolidated into results since January 1st 2019.
Thank you for the full year would have increased to 800 insert median riyadh.
Oh, there right side of the page, we see that you're probably thinking.
This is one country would with 86% off net revenues why this is neutral country, but with 14%.
No movie on the brought the BDC owns like wealth.
Adjusting for told me HM as you all acquisitions made in that year were acquired in January 1st off that you.
Our adjusted to be basketball Gonna 19 increased 7% year on year to approximately 294 million rise. We've adjusted EBITDA margin expanded 330 basis points to 39.6% Nope, that's on a pro forma basis, which includes.
The pro forma results of mix. So you can imagine bogs it.
Adjusted EBITDA for 2019.
Reached 322 million realities in 2019.
Maturation of our medical school combined with senior just from a completions are the main drivers of margin expansion to be more color on the synergies.
Out of 11 company acquired over the last two years.
Six companies have already been integrated.
Three will be integrated by the end up in some asked why the two most recent acquisitions when you get into in San Lucas should be integrated during the second semester of people than 20.
Moving down to like 13 to talk about the piano adjusted net income totaled 72 million realizing before walking up 2019.
Uh-huh, 62% you every year.
For the 12 month skewed.
Adjusted net income totaled 257, neither we eyes.
Hum and 37% you agree you increase.
Moving next to the discussion of balance sheet and cash flow on slide 14.
We have a very strong and healthy balance sheet that was strengthened even further by default one offering we completed early this year.
It is the strength of our balance sheet that enable us to continue to grow the business and support future acquisitions.
Cash and cash equivalents of 980 meeting the high end of 2019 compared to 81 million to be eyes, maybe end of 2018, increasing cash compared with the year handle 2018 reflects the IPO proceeds in a strong.
Yes, you region.
The majority of these funds invested in Mobiuss Brazilian real denominated instruments.
Total debt, Indiana, that's probably making was 361 million rise compared with 256 million right at the end of 2018.
Cash flow generation was also strong interest only 19, which resulted in a cash conversion ratio of 97% compared to 72%. He took over an 18.
This performance was due to higher base.
Students improved collections of receivables and synergies from eliminate contributing to while operating leverage.
Now moving on to slide 15.
We have included the stage as is usual reminder of the seasonality or business you not before they just want to called in the Nike.
Business unit, one revenues generally do not exceed significant fluctuations during the year. However, the moderation process. That's generally result, you may strong second half of the year compared with the first house.
This is really two babies are typically recognized in the first and the last quarter lumpy year when printed books in E books are delivered to our students. That's a result in a cheap we're the first quarter normally the strongest fourth quarter is normally this sick and stronger.
Followed by the third and second quarters, respectively.
Finally, the second half a year is normally stronger than this first off.
Moving to slide 16 to conclude our discussion around 2019 results here, we provide a topic do you see the guidance that'd be great for the second half of 2019.
You have a full reconciliation between reported results and the results comparable with the guidance really fair to appraise.
Our net revenue guidance range was 415 to 430 million Rice and dairy reached 400 into it you form didn't rise in the second half a dozen my team, which is at the need to Oh the guidance range.
Our adjusted EBITDA margin guidance range, what led you to 40% Andrew Beach, 39.5 cent, which is above the midpoint of the guidance range.
We are satisfied we thought the form as well it you could the guidance and continue to work hard to improve both our performance as well as acquisition coffee guidance, when we conditions allow that backwards.
Moving to slide 17, and shifting the focus forward to 2020.
We know mutual guidance for the first half of department waning legal situation be high predictability of our business.
Hi, I'm pleased to be created by could be making pandemic.
He's a bounce up due to forces the company concluded that it would do that better service to shareholders by providing a wider guidance range for the first half of consulting maybe what do you fly in the best effort babies.
Served potential impacts of Cobiz 19 that could impact results in the first half of 2020.
We've just got it.
Our guidance range for the first half of 2020 years.
Net revenues between 475 to 500, and then you didn't rise I.
Adjusted EBITDA margin.
Between 45 in 46.5%.
Our guidance includes the impact of the adoption of I ever in 16.
Includes what do you didn't dual starting in February 1st children Wendy.
Excludes any acquisition that may be concluded after the interest of the guidance that for this guidance excludes when you sell Lucas, which had a draws revenue.
27.5 million, we I eat you're talking like.
Well the next two is lights.
We will provide context I'll give guidance considering the fact that oh I ever in 16, and excluding the impact of I phrase exceed so moving to slide 18.
We see that our net revenue guidance for the first half of 2020.
There'd be thoughtful form of net revenues of the first half of 2019 represents a potential growth 18% in the lower end of the guidance.
And 27% the top end.
Our.
The margin range, including being back so I definitely 16 in both 2000 and Twain in 2019, Peanuts represents a potential margin expansion four percentage points in the lower end of the guidance and 5.5 percentage point in the top end.
Finally, moving to slide 19.
Where we compare our guidance pro forma numbers up 2019, excluding the impact on 16, our EBITDA margin range, excluding the doctors I definitely 16 invoked boeckman Twain into talking to my P. roots represents a potential margin expansion.
But at this point the lower end of the guidance and six percentage points in the top end up the guidance.
To conclude my remarks.
I'd like to enforce that when you could you know our efforts to position our company for long term success, we're working really hard to protect our students and employees from the threats of could be thinking.
In our working really hard as well.
In truth and Scott.
While we do not need to explain how unprecedented this situation is for out for our time.
Let me focus and positive you know feature.
Finally, as we move my last conference call results and pocket, Yeah, well I'd like to say thank you.
All the shareholders and sell side analysts for the time that we work together.
Thanks, I see a management and board of directors for the continuous work.
And.
At least the best of luck for OCC is next CFO reasonably Blanco from he likes under word or to make he's a few remarks. We please go ahead.
Think of lithium Hello, it's a pleasure to be participating into first our new school and haven't dope button to connect with all of you.
After 10 years being the CFO of <unk> prep I'm very excited to be drying up at this time a company that has.
Well, it and attractive growth Beth.
I have been here for only one week and I'm early in the process of getting to know where everyone already from me from and importantly, the funny for Tim.
Do you know removed weight, yes, we are all in home office do compete 19 for the C off everybody.
My main focus for these you're used to contribute with my background pre Bruce the funny for process supporting the growth through M&A and the Sox implement the for profit.
The next three weeks until the April 20 went off peacefully Dick office as the CFO I'm looking forward to.
The opportunity to start connecting to our shareholders sell side analysts and be to wall as soon as possible.
Ladies and gentlemen, if he'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.
To withdraw your question press the pound T I.
Against that Star then one if you'd like to ask a question at this time.
Please standby won't be compiled acuity roster.
[laughter].
<unk>.
Our first question comes from the line up my fellow Santos with Jpmorgan. Your line is open.
Hi, Thanks for the question I couldn't <unk>.
He was here and not Andrews.
First question would be about competing Mike.
You will tell you made efforts to Cook roots in fact, I'm speaking your guide.
Keep expanding it could be more on on maybe conceptually.
What kinds of.
How are you incorporate that diverse revenue London has and how do you incorporate can call.
Could be the first question. The second question you know more about them itself. So you showed impressive sequential improvement from students, but when I compare.
Your newer foods, which was also like real well.
Indeed.
1000 now.
Consider that they just for twin when your revenues or more like the normal seasonality if you'd expect itself in Q.
Good morning, Marcello. This is a set of speaking oh, such as the first question.
Deep.
King.
You know points that could lead can bring into first half of 2000 and twinkie.
ER is our ability to.
To Delever service and then recognize revenues, okay as had been communicating we have already implemented.
Online solutions.
For continuation of TV because of the nonprofit cool.
Education.
Activities that are required in our curriculum.
And we are reorganizing do you.
Bracketed core TV keys for when our campuses and hospital partners are allowed to recede and Whos those activities again, okay. The balance of things here is if we will be able to delever older service or have.
Its ability to win the food service something first half of the would be deliverable. If you can have visibility that we could be in a situation of recognized on the percentof. The revenues that would normally recognize.
In the first semester.
If the situation changed in a way.
Lock down last that long and not all a these these activities can be delivered or have visibility or when do would be fully delivered at some point. Some revenues can then no.
Be transferred a two part of the second half of the year one of the things that these important to mention here is that you know as long as we delivered.
Service and as long as we have the students are those revenues would just be recognized in another time, probably within 2020, that's not been a change or they're going to kick off of a time period.
You know the service and the revenues would be there <unk>. That's the main point a affecting what can happen.
In the first half of 2020.
Okay. So let me now.
Second question, Oh, we have only met celebration myself or 12000 students or we will almost 24% or when you compare a this is a business you can see people last year. So that was a very strongly the company on the fourth quarter.
This is not just because of the seasonality we have a strongly they also be recognizing that trend is doing to fall water Oh Wow, that's used to how the peak for US is poor during the first walk through a bit said good trends that we will have a a health student b.
During 2012.
Oh.
Perfect. Thank you can follow up on skim sensor. So are you might not be able to recognize everything but on a test will be can purchase through them.
Thank you for ever communities becomes Oh, my life like a a weapon to prepaid.
Something like two or already student go through them.
Diplomats or no.
In that situation, where you think.
Am I going into second half.
Hi, My fellow we're not changing anything in the schedule restricted payment that means you're not changing the time.
Did that the deletions are doing okay, and you're not changing prices anything of that nature. We are are you know communicating you folks trying to meet.
Community that continuation is the best.
Hi, everyone, which means that we are also paying all professors you're paying our partners.
In a way that we continue and to be always into person should be continued work to resume the maliki as soon as possible. So.
We are collecting that Oh do you.
Two you should do and we are we've made then you said that happens is that we cannot recognize revenues second feud you're right our balance sheet chew up repayment of Oh solutions as we have like advancements from clients that we already have spent almost.
Situation, you know Wall Street.
It's a terrific your country.
Our next question comes from a line of Suzanne SLR with you tell your line is open.
Hi, Thank you put picking our pricing.
Our first question.
You can use picks to be they did you book, so you're not going to cross sell along with her.
Most of the problem and then bumps, replacing okay classes for just come from plant.
How does it apply score Med school.
All My school students that's a Miller first question.
And the second question is maybe the then.
Because it's like lineup of completion for actually the environment. Ultimately you guys saw them [laughter] <unk> it didn't happen in mountain Dot com.
Our negotiations and bonding Paula we can be quite.
Thanks.
Okay.
Hi, Susan or things sort of a question about the medical a two week alone.
And directions that we see Yusuf indications you need.
Let me or do you use a start paying 100%.
And I'm pretty sure classes, Oh, no practical no content on them in school classes.
This should be something that we can do around 60, 70% for the for instance.
Thank you Susan you still have internships student the fused into six years.
Most of them, 100% a practical inside the hospitals.
That we need to meet their on campus activities to continue a the Greek on older. The.
Requires that we have to from a few DRC ministers. So lots of your thinking that you can consider that we have 30 40 days are completed without any on campus activity. We still have the conditions complete and replaced this last night. The end of June and also use in July.
It was the vacation viewed to.
To replace always glasses.
On the M&A pipeline.
Are you you must have seen not that we have already 500 feet on the anymore. You can try so the pipeline huge.
And what have you had always be more conservative comes on time Youre cost.
To conclude that transaction right now considering all these are long block leashes or do you must be school. So.
We are getting more conservative themselves timing Uh huh.
In addition of staff me before to conclude all these acquisitions, but nothing changes or at least and the shorter in terms of the pipeline to put to use that we have all of us but can be what can happen imagined small players. They can struggle the shots or maybe you can change some negotiation but.
Uh huh.
It's not something that we didn't see yet.
Perfect. Thank because as you know, but again.
Yes.
Our next question comes from finishes Revera with yes. Your line is now open.
Hi, guys. Good morning thing, we're taking a question I hope everyone. It takes.
Two questions from our side here first of all like to to get if you guys could chairs a level off of since occupancies that you're heading into the first half of 220 intake and the tuition dynamics for new enrollment so what's the price and what should we expect for for ever distribution and my second.
It's more related more long term question, we're seeing some several changes into healthcare sector dynamics with increasing technology Tele health and everything else. So do they see an opportunity here for the business unit two to like increase or expand the presents a little bit a aside from from from the current.
Formal education because.
And if yes, or what kind of capabilities have you been developing to tackle these opportunities.
Thanks.
Hi been users' needs with CNO take the first question you know as we have observed the until March two now we continued to have heard at the sick or Percy Afar Medical school seats.
We don't have any change on that and the pricing dynamic or remains exactly as we have been doing no. In 2019, we have fast inflation to our medical schools are tuition for new and existing shooting.
And as you see yeah, that's stupid schools considerably above inflation, just because of price increase mistaken back in 2017, when we introduced our new curriculum and repriced for new students at that moment, so far no change at all and that's.
Diffusion off the company not change price this environment.
On the second question, the Nuisances, Virginia, and I think it's a huge opportunities that can change the dynamic industry and we won't change into mutant alone.
Can see the telemedicine, that's it's being allowed to cheat. All these filings you zoo, yeah, there's bennett present, a bit we almost having the defense operation right now.
Any our glasses or 30000 students or is this something that we Uh huh.
Mr happens at the other players.
The D.S., we have a fully integrated curriculum, all foam institution from north to south.
We are offering must be I talk with the Afghan Tony using the telepresence to discuss key clinical keys, usually our best professors and Oh students.
Oh.
Yeah. This national class. So there is a digitalization articles on the learning process.
I think that much ahead have a stronger but you did he used to do some she's also like to who you are you can add something a lot of you're doing weekends or hologram Olympic knowledge that we are putting all the platform I think it to be worth.
Hey, guys Junior here think of it you do.
Yeah. So as we mentioned or are you in other calls we've now put together the team for a as a corporate vision.
To offer on solution do you know the platform is built not only for the students. But also you know for other people and doctors and that it could there of course.
The content that we developed what are we developed with our professors are on a healthcare sector. So the team is now working not only with competitions we thought.
Institutions education institutions, but also with leaders in the healthcare industry. So that we can offer solutions for them. So this is underway and we see a lot of potentially especially you know one moment like this is really on Saturday just wanted to reports or.
We have a couple of activities on the way to help actually yeah companies that they need for example training in this you know this situation that we have to pay and I will announced very soon or some of these efforts you know we're putting together.
Not only in I would like to to add here for example that we opened a platform for a fraud institutions or to help them with interruption of the classes.
But also we will add to that offer courses that we can't help healthcare professionals into sometimes.
Very clear, who do that as you do and so I think sort of question. Thanks for answering my questions.
That's a reminder, ladies and gentlemen, if you would like to ask a question at this time that is star then one.
Our next question comes from the line of Irma Sgarz with Goldman Sachs. Your line is now open.
Hi, good morning.
And do so.
And thanks for taking my question to me, it's two questions. Firstly I want to applaud your decision to open up then you met so platform to them to other schools in its students in this critical moment. My question is too when you think about met cell and I think is incredible platform and and actually.
Syncring can you can I say relatively small pieces of students considering the market. Overall do you think there's opportunities you to almost them change a little bit of the sort of the go to market approach with myself in the sense of the opening opening up the products, Dan <unk>, two or to a broader set of potential clients.
You're not charging right now, but then as maybe we look beyond the current timeframe to I mean to maybe continue some partnerships with with schools and and sort of leverage that in into the future.
But part of that question is also how do you think you do see any potential.
Downside risk to your pricing power of this products to the students that are firing that all the data tended to be high ticket and and to some extent known sito pretty being made available for free.
And and then second question for me.
It's just in relation to mice, maybe Chris if you see any any signs where any direction from.
Talks in a going on with the Ministry of Education at this point regarding potentially accelerating or changing something on the time lines here.
The current situation. Thank you.
Uh huh, okay. Thanks for the fashion.
The first one with medical platform.
Lucky to sizes to offer a to open our platform.
For these situations, it's not for the B to C. B to B. So today, we have almost 50 medical schools are interested get connected Gordon 18 already preparing to platform for long on their students. So.
Besides a dozen back testing for its very very important to keep their learning process a life not only hear me not to go to that kind of country are doing this moment.
Yes, I think this can be a beautiful Kim opportunity to here as we are having these leads and show a platform to.
Diary markets, so yes every quarter.
And therefore, no strategies to spreads or about platform and so the price well for the B to C. I think it's.
It's not it's not.
Not really come here, because a lot of year, how pieces internship content.
And for the beauty of see a busy students the concern about the breath residence approvals.
It's another.
Another project. So we are not see athletes at this moment any pricing ration.
Coming from this wrong, Okay. Yeah. Your second question about them I've managed schools schedule.
We are expecting to open to new campuses during the first semester, we have the visits we how do we bought 100%. Okay and then moving that brought the only thing is the formal authorization and the signatory coming from industry so ever fees.
I'll stop.
I didn't know how old is real crappy, a a step are going to be.
Managed by the Ministry of Education doing just that the other we still have to visit downbeat they'd have to schedule to visit.
So it's difficult to say that we'll be able to open a for the four new campuses by deals. This year I think this supposed to it's much more likely to happen as a we are not we visit and he is just the.
Your next true and utilization to standard for Sunday.
Super helpful. Thank you usually you maybe justice I mean, it and it Didnt are the two companies is included in your first half guidance or did you either.
Prudent.
Hi, you might yesterday on their speaking it is included in the guidance that we have expenses associated with a you know the preparedness southeast units, but no revenues. Okay. So the short answer is yes, the aren't any guidance.
They do not country with revenues in the first off the country with Weve Ics be operation expenses that did not exclude.
Because we do expect them to be recurring as we actually Pierre.
But to do.
The initiation of operations of them as soon as munis or could the can you just get to the last.
Action of approval, which is just a document everything else has been done okay. Just to follow up as well in your question, Jim Zorn My magic with schedule.
In in moments like this what did Ministry of Health and Ministry of Education are doing is to take care of their short term related.
Challenges you know trying to respond as fast as he can the challenge. This could be 19 anything about another wave of mice Magic was mentioned that would take a any impact maybe seven eight years from now to get a new physicians in the market. So you do not see.
Any change on decisions related to another wave of my magic was or equivalent program.
In a moment like this as a part to start dealing with very extreme and short term challenges okay.
Okay.
And that will conclude today's question and answer session I'd like to turn the call back to Mr. coupon for closing remarks.
[noise]. Thank you we're very pleased we fall performance last year, our team successfully executing our strategic priorities and we continue to focus on medical School Grove, creating long term value for all our stakeholders.
Yeah Disruptor challenges, we are very well positioned to feed the could be my team for.
A very strong balance sheet in cash position.
Our business as deep into Scott highly predictable and domestic student base is 100% few allowing us to really just strong guidance well first how it's done between Eva under the surface coming from.
Thank you again for joining us today look forward to speak a few the next one.
Right.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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