Q3 2020 Earnings Call
Greetings and welcome to the I tell them global education.
Third quarter fiscal year 2020 earnings conference call.
At this time, all participants are in listen only mode.
A question answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Please note this conference is being recorded.
I will now turn the conference over to our host Marine reset Vice President Treasury and Investor Relations. Thank you you may begin.
Thank you and good afternoon with me today from add talent leadership team are we saw Wardell, Chairman and Chief Executive Officer, and Mike Randolfi, Senior Vice President and Chief Financial Officer.
I'd like to remind you that this conference call will contain forward looking statements within the meaning the safe Harbor provision.
Private Securities Litigation Reform Act of 1995 with respect to the future performance and financial condition, a bad talent Global education.
Brett.
Uncertainty.
Actual results may differ materially from those projected or implied by these forward looking statement.
Potential risks uncertainties and other factors that could cause results to differ are described more fully an item one a risk factors and the most recent annual report on form 10-K for the fiscal year ended June Thirtyth 2019.
With the FTC on August 28, 2019, and our other filings with the FCC.
Any forward looking statements made by us.
Based only on information currently available to us and speaks only as of the date on which it with me.
We undertake no obligation to publicly update any forward looking statements, whether written or oral but maybe move from time to time.
As a result of new information future developments or otherwise.
Soft as required by law.
During today's call our commentary will refer to non-GAAP financial measures, which are intended to supplement so not substitute our most directly comparable GAAP measures.
Our press release, which contains the GAAP financial and other quantitative information to be discussed today as well as reconciliation of GAAP to non-GAAP measures is available on our website.
Please note that all financial comparisons made during todays call are in comparison to the prior year period, unless otherwise stated.
It is also important to note that our third quarter results.
The application of discontinued operation.
Our our former business a lot segment as a result of the divestiture of add talent, Brazil, which made up the entire segment.
Telephone and webcast replay of today's call are available for 30 days.
To access the replay please refer to today's press release.
And with that I'll now turn the call over to Lisa.
Good afternoon, and thank you for joining us on today's call I will discuss the highlights from our third quarter as well as provide some context for our business in light of the impact of the coal that 19 pandemic.
I will then turn the call over to Mike to discuss our financial results before opening the call up for questions.
We can all agree that this is an extraordinary crisis driving unprecedented uncertainty in global markets, well I can't predict all of the economic social and cultural implications of the crisis I can tell you why we believe I'd tell him is well positioned to manage through this pandemic.
Let me begin by recounting the journey I town has taken into four years since I have been CEO. This helps provide context for our readiness for the crisis. The nature of our response and the relative advantages we have given our legacy of virtual learning and our streamlined portfolio.
In 2018, we transferred ownership of Deborah University, and Carrington College to focus on serving employer needs in the medical and healthcare and financial services industries. Soon after it became clear that our Brazil institutions, while driving excellent student outcomes diluted our industry focus.
In October of 2019, we announced the transfer of ownership of that talent, Brazil and last month that transaction was closed resulting in approximately 500 million up additional cash that allows us maximum optionality during these uncertain times.
So we now serve students and employers only in industries that are in great demand, producing physicians and nurses in healthcare and elevating the governance risk and compliance and critical financing financial control capabilities, a professional than institutions in financial services.
The World is racing to adopt modalities that add talent has used for decades online learning, including significant faculty interaction virtual events Webinars modular at your own pace education, and adaptive learning our longstanding history with these capabilities as a competitive differentiator for us.
In the new normal.
I should also remind you that add talent has a history of resiliency and successful crisis response appropriately focused on our top priority, which is the health and safety of our students faculty customers and colleagues.
When the 2017 hurricanes caused a full displacement and relocation of both medical schools, we were able to continued student ACA, Jim academic journeys without any delay in the academic year and by strategically taking advantage of the crisis, we developed a UK track for eight you see and permanently relocated.
Ross men to a more attractive island nation home in Barbados strengthening its long term competitive position.
With the benefit of this experience we were able to quickly react to the onset of the cold at 19 pandemic shifting to robust online platforms for students and faculty and transitioning to remote work for our employees in less than a week, we transitioned over 15000 medical and nursing students that were previously on campus to.
One platforms, bringing the total number of online students to 40000 with little disruption.
Student engagement and satisfaction had been high since this transition in large part because we have faculty and institutions across our portfolio, who have deep experience with virtual modalities and know the difference between just simply shifting to online lectures and actually teaching in a distance learning environment to date our enrollment.
And academic outcomes remains strong with more than 920 physician and 850 nurses entering the U.S. and Canadian workforce. This year alone at a time when the need for health care professionals has never been greater.
In addition, we have moved quickly to adapt our programs to the new normal which will require more virtual and more flexible interaction for example in the medical and healthcare vertical we initiated online simulations and in the financial services vertical we launched Cam certification testing online with over 700 certification can.
Todays gray camps scheduled for online exams in the first few weeks.
The cobot 19 pandemic is highlighting the ongoing medical professional shortage across the U.S., which add talent has worked to address for decades, particularly in low resource very urban or very remote areas.
The availability of healthcare workers was already stressed by the demands of caring for an aging U.S. population coupled with the near term retirement of score as the physicians and nurses with more than 1 million registered nurse is expected to reach retirement age within the next 10 to 15 years in the U.S. There was a need for approximately 200000 additional new nurse.
It is each year through 2028 to fill new positions and to replace those who are retiring. This pandemic is exacerbating these trends and bringing the need for more health care professionals into sharp focus as a critical global issue.
The largest provider of health care professionals in the United States. It has been our priorities to expand access to high quality medical education and deliver highly qualified professionals to the workforce.
To further addressed this supply demand imbalance last year, we launched additional night and weekend BSM programs at Chamberlain University to accommodate additional qualified nursing students and provide class schedules conducive to the demands of adult learners.
We also began the development of our hybrid B.S.N. degree utilizing online instruction and in person intensive learning and we'd officially launched marketing for September 2020 cohort expanding the opportunity for learn as to earn a BSN degree will be a crucial step to addressing the nursing shortage. The pandemic has allowed us to bolt.
Celebrate and expand these additional programs and offerings that we already had in development at Chamberlain University.
Despite what we believe our substantial competitive interest advantages in managing through the crisis, we will not escape the situation unscathed, there will be near term negative impact on our business performance as a result of the panned out Dennis there will likely be a continuing impact a clinical weeks until hospital systems are once again able to a comp.
Got it students we value our hospital system partners and we are working with them to solve the clinical issue in a way that is safe burst students and does not further burden hospitals and staff that are already overwhelmed operationally and financially.
Lets Bowman Clinicals is both temporary insolvable, it's an issue that the entire medical education community is facing along with an incredibly motivated student base that is dedicated to obtaining their degrees and filling positions within the health care system as soon as possible.
The largest impacts to our financial services segment are twofold, responding to increase budgetary constraints of banking it enterprise customers and managing cancellations of global conferences.
Realizing that the burdens of governance risk and compliance, but for the finance industry will grow despite and in some cases because of the crisis. We have worked to quickly adapt our offerings to the needs of our members customers and employer partners in this new operating environment.
Well, we recognize that there will be wide macroeconomic effects, such as general dampened consumer confidence, we are well positioned with a focus yet diversified portfolio well see businesses across the medical and healthcare and financial services industry is poised to the long term growth.
Further our student population and the demographics, we serve had the benefit of working towards careers that will be in high demand both during and after the crisis, we're well prepared to meet the potential surge in demand for these skill sets by leveraging existing technology and capabilities to further expand our product and program offerings and to ensure the continued so.
Serious student outcomes to an extent expanded student base.
Despite the challenges we faced late in the quarter from the pandemic, we delivered strong third quarter performance with revenues growing roughly 5% and adjusted EPS growing 27% highlighting that we were well on our way to meeting our financial goals for the full year prior to the crowd crisis.
Growth within our medical and healthcare care vertical reflected the continued success of our investments in marketing ever recruitment, which has been aided by our ability to keep the average cost of student acquisition relatively flat. These efficient investments have led to a new student enrollment growing 11.3% and totals.
And growing 4.6% across the vertical.
Ambulance, new student enrollment increased at a double digit rate for both January and March <unk> sessions with total student enrollment growing mid single digits compared to the prior year.
This growth was driven by increased recruiting a marketing coupled with restructuring of our HTS team now our workforce solutions team to better serve our hospital system partners and the implementation of an increasingly focused admissions process with an emphasis on proactive outreach from student advisors and improved student experiences.
From inquiry to enrollment.
We continue to deliver strong student outcomes as shown by Chamberlain graduated over 850, new nurses, so far and 2020 and achieving a first time inc. clicks pass rate close to 88% on average in 2019.
In addition, we see strong performance in the market across all of Chamberlain's offerings, particularly the pre licensure BSN family nurse practitioner and BNP programs.
In addition to growing our enrollment we are equally focused on our overall mission and serving our global community, especially in the face of the Cobot 19 pandemic.
As part of this.
In April we kicked off a major support campaign for health care providers using the hashtag care for care givers with over 9 million video views to date and website care for care Givers dotcom to highlight our heroes, our alumni and current students, making an impact in the fight against Cobot 19, as well what others can do to.
Support these caregivers in their lives.
In addition, we announced our partnership with ascend learning to offer acute care readiness, a free online course developed for employer partners, who have licensed registered nurses not currently working in acute care settings, but meeting instruction and skills to feel comfortable advancing in that setting we have over 750 enrollees today.
New student enrollment in the medical and battery schools was up 3.2% and total student enrollment was up 1.7% driven primarily by Ross that.
Yes that enrollment in January 2020 was among the strongest seen in the past seven years, coupled with one of the strongest entrance class GBA rates, we've had to date.
Brand awareness has continued to grow when we expect to capitalize on the strong rate of inquiries. We are seeing for our May in September classes. We also continue to collaborate with strategic partners evidenced by our partnership with Arkansas State University Debride workforce solutions to veterinary shortages.
We have grown our medical in veterinary total enrollment while at the same time generating strong outcomes for our students HCM Ross Med showed very strong results, achieving a 91% and 93.5% residency match rate for graduate graduates respectively. These strong match rates help attract student interest and provides significant.
Competitive advantage, our ability to provide quality medical education that scale will prove to be a valuable differentiator as we work to fill the incremental demand for medical professionals and increase the number of qualified graduates in the healthcare workforce.
It's important to note that our may sessions at all add talent healthcare institutions will start online with no disruption and increased services in connection opportunities for students and faculty.
The financial services segments showed solid growth during the quarter with revenue increasing 23% driven by the addition of encores learning we continue to make strategic progress on multiple fronts within this vertical most notably the appointment of Steve Beard as our group President. In addition to his role as Chief Operating Officer, Steve has played a key.
Key role and repositioning add town for its next phase of growth and the execution of its overall enterprise strategy and he's focused on creating additional synergies and making strategic improvements across the financial services vertical.
Eight cans is enhancing its product set to serve our employer partners with a more comprehensive set solutions that across compliance and risk and broader advisory service services more expansive language and regionalized offerings and more valuable benchmarking through industry engagement and thought leadership.
Our global sanctions certification Cgss, which we launched in Q2 is now available and over 90 countries and will be available in French and simplified Chinese by Q4.
Ken's now has foundations certificate courses and ammo in 11 language languages and sanctions in five languages to provide our employer partners with the ability to train a broader frontline group of employees to bolster their first line of defense against financial crime.
In addition, we have begun presales for our advanced Cam certification, which allows compliance professionals to expand the specialized knowledge, while providing employer partners the ability to retain their key talent.
Last quarter, we announced our partnership with Mastercard for SaaS based risk assessment tool for their card issuer financial institution customers and we expect to go live in Q1 fiscal 2021.
More recently, we have entered into a partnership agreement with I N G to provide a ken's training and qualifications to their employees in 40 countries in which I Angie operates with several qualifications being offered in nine languages.
Less than 2% growth for Q3, it camps is falling short of our expectations, even accounting for cobot 19 disruption, but we have put the organizational changes in place, including accelerating the delivery of solutions directly responsive to current market demand that will yield better results post pandemic and over the long term.
Becker has implemented competitive changes within its core accounting business, including subscription packages targeted marketing efforts and more strategic pricing.
We continue to build our continuing education capabilities and offerings, which have shown initial traction in both the BDC and b to B markets in which we believe have significant long term potential.
Josh Bronstein was appointed President of of course learning at a critical juncture in the company's grow Josh has a wealth of experience in strategically growing market share and expanding offerings to core customers and he will be instrumental in growing wholesale market share within the mortgage education segment Q3 traction was driven by a comedy.
And of course is training platforms for loan officers, including signing enterprise renewals with major b to b customers such as quicken loans.
Increased content through Webinars, a focused effort on government regulation and compliance office offerings and strategic pricing initiatives.
Alan continues to maintain a strong balance sheet with ample liquidity and flexibility supported by additional cash on hand with the completion of the sale of our Brazil assets. This divestiture demonstrates our team's ability to close a transaction under crisis circumstances, and further positions us to execute on our strategy and drive value for our shares.
Holders, while our position on the use of transaction proceeds have always been a three pronged balance of efficient return of capital to shareholders prudent investments in our business to accelerate growth.
In the near term, we will balance those priorities with the need to preserve liquidity and optionality in this uncertain and complex global environment.
Prior to the Cobot 19 pandemic, we strongly believe that add talent had been undervalued, even prior to <unk> current valuations and accordingly, we continue to execute our share repurchase program prior to the onset of the pandemic, which caused us to stop the share repurchase activity on March 12.
We have the liquidity to resume share repurchases. When we think the time is right to do so when we do so we will be disciplined in our approach as we have always been but leaving aside the world economy and the effects on the U.S. equity market. We continue to believe that we are undervalued as a company.
In conclusion, I am confident that add talent has a fully streamlined portfolio serving needs in critical industries I'm. So proud of the entire add talent team for not only their unwavering commitment to our education mission, but for their profound demonstration of our values teamwork energy accountability.
Community and heart always but particularly during this crisis add talent will emerge from this crisis stronger and prepared to outperform with new revenue sources and a more streamlined operation that can capitalize on the inherent strengths the portfolio.
With that I will now turn the call over to Mike to discuss our financial highlights.
Thank you Lisa and good afternoon, everyone as Lisa mentioned walk through a good 19 has created global disruptions to which we responded we believe we're well positioned to whether this and ultimately drive for long term growth.
Yes.
Which will be well supported by underlying demand for health care professionals and financial expertise.
For the third quarter Kogan like he had a minimal impact on our financial results.
While we expect that who've been nice he will have a more material negative impact on our business in the quarter, it's too early yet Herman sense of that impact.
As Lisa mentioned, the two biggest variables or the ability for graduate level nursing students and medical students to fully complete their clinical rotations.
Financial services to both who conferences.
Well as help either be customer prioritize needed training in the face of budgetary constraints.
The whole boss.
Headwinds created by Cobrand, I mean, we're being mindful costs.
Typically making efforts constraints spending we are increasing efficiency and reducing discretionary expenses.
As a result of these efforts and the nature of our portfolio ended the third quarter solid operating income growth supported by our investments.
Fiscal year, 20, Twond, mboe marketing and student recruitment.
In addition to these investments ongoing prudent cost management group.
Earnings per share growth of 27%, which was above all expectations.
Prior to the disruption from Cobot, Nike, we're well on the path of achieving our full year revenue and earnings expectations.
Providing more detail on the third quarter, we grew revenue 4.9% to $271.5 million.
This increase was driven by growth across both segments, including double digit growth in our financial service segment.
Cost of educational services was $118.7 million in the third quarter, a 1.2% decrease.
An increase related to the addition of encore flooring was more than offset by increased cost efficiency out our medical and veterinary school.
Student services and administrative expenses were $96.4 million in the third quarter compared with $90.7 million a six point reports that increase driven by $6 million inorganic fall.
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Due to the Encore learning acquisition and approximately 5 million dollar increase marketing and student recruiting expenses support you through enrollment growth.
These increases were partially offset by cost.
Sure.
Operating income from continuing operations, excluding special items.
$56.3 million compared with $47.8 million.
Net income from continuing operations, excluding special item was $43.2 million compared with $37.4 million.
Diluted earnings per share.
In doing operations, excluding special items was 81 cents compared to 64 cents in the prior year.
Turning to our segment results.
Starting with medical and healthcare revenue increased 1.7% to $227.3 million.
Sure Timberland revenue increased 5.4%.
As new student enrollment increased 11.2, and 12.7% in the January and March sessions respectably.
Paul Hodel student enrollments increased 4.6, and 5.1% in the January and March.
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It is important to note that our new enrollment growth in both January and March was aided by double digit year over year growth in our RN to BSN program.
Revenue in the third quarter for the medical and Veterinary school decreased 3.3% from the prior year.
With the majority of that impact driven by cobot, Nike and the resulting reduce clinical weeks in March.
Excluding special items, the medical and healthcare segment operating income for the third quarter increased 8.7%.
You $7.6 million.
The increase in segment operating income is the result of strong Chamberlain enrollment trends and efforts to increase efficiency and reduce travel and discretionary spend.
Partially offset by corporate costs that were previously allocated to our former business and lost segment.
Turning now to our financial services segment third quarter revenue increased 22.8%.
$44.1 million.
Third quarter revenue included $8.5 million from the Encore learning acquisition more than offsetting the 1.4 million dollar decrease in revenue from the sale of Becker's healthcare assets.
Operating income in the third quarter declined 17.6%.
$4.2 million.
The decrease in operating income is the result of marketing investments.
Corporate costs that were previously allocated to a warmer business in law segment.
As we turn to our balance sheet liquidity, a few points than though.
First I tell them generated over $100 million of free cash flow in the third quarter.
Yeah.
Hello overall level.
Fairly modest.
And third we had a significant cash balance as of March 30, Onest prior to the closing of at column, Brazil, which provides additional liquidity.
Net cash provided by continuing operations for the third quarter total $116 million, the 10.3% increase compared with the prior year.
Our capital expenditures for the third quarter totaled $11.6 million.
As a result free cash flow in the third quarter was $104.4 million at we define free cash flow to be cash provided by.
Continuing operations less capital expenditures.
On a trailing 12 month basis, we generated free cash flow of $125.7 million.
We closed the third quarter with cash and cash equivalents of $167.8 million, an outstanding bank borrowing a 455 million dollar which includes $160 million drawn on our revolver.
Our strong balance sheets ensures we have ample liquidity successfully operate and continue to execute on our strategic priorities in a challenging external environment.
Prior to suspension of our share repurchase program on March 12, due to the cobot 19 crisis, we repurchased approximately 1.2 million shares at an average price of $31.67 per share for a total of $36.9 million during the third quarter.
As Lisa mentioned on April 24.
Why the divestiture of our Brazil assets was completed with $424 million in Mexico proceed further supporting our balance sheet and bolstering liquidity.
In addition, about $73 million of Caf previously residing in discontinued operations is now available to us.
As a reminder, our hundred $68 million Inc. as of March 30, Onest does not include these additional proceeds with the sale of at olive, Brazil, or the caf residing in discontinued operations.
In addition, as of March 31st we had $72 million undrawn on our revolving credit facility.
But suffice it to say our liquidity position a solid with over half a billion dollars of cash on hand. In addition to the ability to draw on our revolver.
During the third quarter, we recorded a pretax unrealized gain of $111.8 million on the deal contingent hedge arrangement entered into in connection with the sale of the Brazil assets as the Brazilian real has depreciated relative to the U.S. dollar.
Preserving financial flexibility is a critical priority however, investing in our future to drive long term growth.
Fulfilling the needs of our students and customers remains equally important.
Moving to our view on the remainder of the fiscal year.
During these uncertain times, we recognize that there was a range of potential outcomes as we enter the fourth quarter and while we're confident in our ability to this period of disruption.
Position of strength, we're not providing full year guidance and withdraw and he previously issued guidance.
We look forward to providing more context regarding the landscape and trends we're seeing on our next earnings call with that I will now turn the call over to the operator for QNX.
Thank you.
At this time, we will conduct our question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad.
A confirmation tomo indicate that your line is in the question Q.
You May press Star followed by the number two if you would like to remove your question from the Q.
For participants are you using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
My first question comes from Henry Chan with BMO. Please state your question.
Hey, good afternoon, everyone, yeah understanding that.
So the uncertainty.
Ah preventing any kind of guidance or estimates I was wondering if you could share perhaps maybe trends in April.
With respect to different businesses.
Yeah, I mean, you could share.
Sure sure. Thanks to the question so starting with minimal health care, obviously, we talked about January and March enrollments as we look across those institutions for may our add new student enrollment trends are in line with our expectations free Colvin likely aided by.
The fact that our May sessions are a at all in institutions I have already now I'll start on lives. We have no disruption in terms of learning into students who have gone to online who were previously in on campus Chamberlain as an example, we've had good success and good feedback from those programs as well as the medical school.
From an enrollment perspective may is that it is right in line with our prior expectations in terms of Matt Health and then we'll just address it here the uncertainty right that we mentioned is really around clinical let me break that into three pieces, what our priority is Uh huh.
Potential impact in terms of sort of bookends, there and then what I'm mitigation plan. So have you first think about and in terms of our priority. We have to help it's our responsibility to keep our students on track for their kind of clinical weeks. So that they don't Miss there you don't have any delaying their academic journey.
So I don't where we have not had any impacts such as Ross that those kind of calls are are in place and moving forward and then Chamberlain undergraduate programs were able to use tele health problems et cetera, where we do obviously need physical chronicles as does the rest of.
The medical education is in the medical school, our clinical AD revenue there is about 20% of the vertical our revenue.
Oh for of pop into school, but obviously that is broken into core and and lack of Clinicals and in this case and went to clinical we've been able to transition quite successfully opt to tell a house through our channel, our clinicals et cetera, and so our mitigation.
On a FERC third piece is really around how we cannot students back into those clinicals for their core I programs and from our perspective, we've got a couple of things that we are continuing to work on that at that time working quite well out we have five days, we have a UK track it has.
Okay Elective hospital said assistance with current capacity.
That we are hoping them off the U.S. clinical capacity for AMC, and and a as well as expand and you see an Ross car complaint clinical capacity and then just in terms of API offerings as I have to do like tweaks and then there's some policy modifications on for us as well as for those on state and federal requirement.
It's too to just give greater optionality to the students so that would be the biggest challenge in terms of may and Q4, but in terms of new enrollments up we are on track and financial services. We mentioned basically there's the physical conference is primarily a chance we.
Do I then also have I'd be solved for example him in eight cams, where we provide the certification testing for cam's, we've been able to transition that online I and we have a lot faster. So all in 1000 students students who are kind of to continue and get their certification.
And then back or the CPA exam, a way of exam don't control than they do not yet have the tasking centers open about we are following that closely obviously in in conversations with with that don't a industry and associations that do hold back testing so we antenna.
Eight more impact in Q4, apples cynical perspective, as well as I, just you know budget.
Challenges for some of the financial services side, but as we as we mentioned you know certainly we've been able to.
Transition a lot of our certification that wasn't online to online as well as per my virtual and hybrid conferencing as we've done for for some time, so long answer, but I think they're probably answered quite a few questions in the Q as we think about our greatest challenges going into Q4 Q1.
Got it okay, great. Thank things like color and just real quick on.
And claims just just in that it can you just now budgets.
Well, what sort of exposure for the company in that respect.
I'm sorry, the key tab.
Oh, sorry can you repeat business.
Yeah, there the like there was.
Just press release about the and ceiling of to.
Made enough announcing right QQ future.
Okay.
Yeah.
[laughter] related to <unk>.
Oh, yeah, there in the I, probably an acute disclosures I apologize I couldn't that I'm here, what you were saying, we don't see any additional concerns or our risk associated with that in in terms of on our litigation update a at all.
Okay.
Okay great.
[laughter].
Yeah, They say panic.
Thanks.
Our next question comes from just Mueller with Baird. Please state your question.
Oh good evening.
A couple of clarifying question from your your answer there at least the first one.
So when you said that medical and healthcare is took your expectations.
They are you, saying new enrollment trends on plan or med that began chamberlain in may.
[noise], yeah, so and sorry, I only really talk about medifast that I guess at that at that point, yes. We are at Chamberlain, our pre licensure, new enrollment is very strong and we're seeing we're seeing year over year growth and we're seeing those traits trying to move into a entry.
That may fashion and as you know obviously July is is online we're seeing some pressure understandably on RN to BSN right nurses have a few things to do but I certainly in terms of I you know, it's inline with our our or our forecast, but down from prior year, but that's a again expect.
Good as a as we're trying to support those nurses on the front line S&P. The MTR graduate programs on track right now how many enrollment.
That's helpful.
And then you hit on it isn't easy answer in terms of physical in person Clinicals for medical and seeing some disruption there but on the Ministry sorry is that also.
Disruptive through you or are you able to accommodate fully with the digital experiences or tele health or other options.
Sure Great question, so our pre licensure on completely virtual online I'm getting good in terms of the clinical experiences and getting really good feedback there from the students. So when we have that once all dot on how obviously this is an ability to go back and.
[laughter], Pete our family nurse practitioner would be where we obviously need that direct patient care. We have solved I would say probably about 25% or so about a quarter hockey Tallahassee Tele medicine, I see that growing as obviously, a where all experiencing that how this is just becoming.
Much more utilize a popular as as folks just can't wait.
You know for far unlocked and then other other non coal that 19 things and so we're actually seeing good a good traction there and then finally <unk>, we're starting to have the conversation with the hospital systems I mean, they want don't know some students back in there to convey they need to helping so our focus there is obviously I'm, making showing.
That theres all the P.E. that we've got all the safety controls et cetera, but that one on the Chamberlain side, we don't we see as as having my I'm sure. The president of Chamberlain would not say easy, but easier on solutions I forget those clinicals that back on track so not not as much impact at all.
[noise] okay.
And then.
What's the.
Campus.
Revenue for the the Caribbean universities.
I guess not intuition.
Revenue is it at all meaningful for you I didn't hear you called that out as a headwind.
Yes, so the only the rock that housing really that's affected with that with the students transitioning to online that fab I want to three and $4 million that that is that as I had one for us obviously until until that campus opens which will when she will be based on obviously.
Yeah and trajectory into a crisis.
Okay. Thank you.
Yeah.
[noise]. Thank you just reminded house a question press Star one.
Our next question comes from Greg Pendy with Sidoti. Please state your question.
Hi, guys. Thanks for taking my question I.
I think earlier in the call you mentioned, maybe this quarter had about a 5 million bump up in marketing, but on the percent your but could you just kind of remind us and this has been a step up in marketing to kind of improved the value message of or the Chamberlain programs. How much year to date was a step up in marketing or is there a learning process from this.
You know something you that's going to be the new more malls. We think about next year or was this just kind of a onetime or that thanks.
[noise] I'll start and then last a and that might have been show what it will certainly continuing to make those marketing and that's why we're actually seeing really good results from that far step forward program. As an example, I has really turned on some good campus our pre licensure.
Our enrollment as you know we had not only allocated marketing, but also shifted our marketing expense I'm really focused and a specific channels for our marketing for RN to BSN out one of the I guess negatives Oh <unk> I just from a business.
Perspective for US is and we had been seeing really good growth in traction on that are in the viasat in and out for obvious reasons I'm you know that can be the most challenged area of nursing and in general. So we expect continued to tribunals marketing dollar spot and well, we're certainly certainly seeing.
More efficiency as we now have rounded out that pricing strategies that we put in place I guess, the Q1, Oh up this year.
Yeah.
Doug on some.
Since the tag on I think you're asking approximately how much we're spending and what the trend was we've been.
Spending approximately $5 million more per quarter.
This year than we did last year.
And you know a disproportionate amount not all but a disproportionate amount has been to support Chamberlain and obviously.
I mean, when you look at the joint or enrollment figures. The March enrollment figures you really see that bearing fruit you know, we're also investing as well in defense services space.
On the soccer side to support continuing education, and the potentially growing business over there over time.
Well as well as they come so overall, we're pleased with the investments, we're making and we're certainly seeing good traction on those investments.
That's very helpful. Thanks, a lot.
[noise]. Thank you [noise].
And gentlemen, there no further questions at this time I'll turn it back to marine Restock vehicle for closing remarks, I just one moment when we do have one question that just came up a question comes from just Mueller with Baird. Please state your question.
Yeah, Thanks for taking the follow up so.
I understand you have the mitigating stuff.
For the person clinical requirement.
What what happens in the instances, where you're not able to.
To mitigate as it does it delayed there.
Condition are they I guess I, just don't I understand that revenue had deal.
Well you can just try and understand what the implication as ultimately on the student and at what point to comes due ahead.
Yes, sure I'm and and really that last kind of question has a question that what when it comes to do I have right. So as an example, and it also depends on how vis vis vis pandemic plays out probably as an example, so students who had to you know I don't know I could go to four weeks left on their Quinn.
Oh, Hey, we're able to coming up for accreditation and a regulator standpoint, obviously, we don't make those decisions they weren't able to graduate ankle and intake are matched places golf intend to match, even though they didn't have a don't don't don't weeks that would impact decision was made football.
Positions of which 920 on graduated from Ross I Havent seen are now in the system. A question then is and you know again as you know many people are contemplating as they're gonna be another wave in the fall et cetera, et cetera, what will the decisions be that arent going to be made by the accreditor.
Our cutting bodies at that time in the meantime, if there are not exceptions main in terms of policies to allow them to do graduate short and of course this real education that they need to get we need to need to mitigate from our perspective, where we really have a couple of them.
Month until we get to a point that we can't van channel into electives, you know ship to Electus first don't have how how et cetera, and we're already seeing don't hospital systems in several of the states, where we are preparing to have those students back. So for this trend that trajectory that we're currently.
On.
With the you know sort of three phases, and containment and the recovery and the new normal yet at least she really you often Canada. Then we will we we won't be able to mitigate and have them them a graduate on time.
If not and their something crisis related not definitely a controllable for us and we would have to re look at that but my guess is that Pat LPMI and others. What all help then I'll look at what what is missing from there academic I training and and what they could do to help those students stay on track because it's really.
That 2021 residency match in March.
Okay.
Helpful and then.
I I heard you that you're not satisfied with D.A. cam's gross revenue growth figure, but I guess I'm not totally clear on the underlying drivers and what.
You're changing to improve it.
Yeah, Okay. So let me flip that one into sort of.
Recall that execution, and then Paul's comments, so pretty calm and and we talk about this couple of times, but.
On a we've done a couple of things one we have made it hasn't changed at the leadership level and we have a new green on President and Steve plant Beard, who is not a new to a ACAMS orphan services because he's been the chief operator operating officer for some time show and doing a deep dive over the last few months, we have further identified.
Some things that we can put in place and in fact, our putting in place to work we are seeing traction, but how about timing perspective later than we would have like so as an example, we had a wholesale team structure shift all those folks were supposed to be a in and on the ground in and.
Our driving sales by December they actually started in in February our right before the the crisis it and we're seeing traction there we have product and program offering changes that we need to do across a cams to sort of put it in one easy sentence, we need weighed more heavily.
They should own courses. So we've got a cancer certification, but we need those courses and we're being told our customers that they want courses that are shorter and more introductory so that they can I train all many many more thousands versus hundreds oh I'm their employees as evidenced by the fact that we just closed.
I N G partnership, which I actually the team closed during the height of call then in Europe, So kudos to them.
But that just sort of significant multiyear and it includes a broader solutions that so those types of things are in place an execution that frankly, we started before the crisis. We will continue and we know we need to do in order to see this kind of growth trajectory from Oh in 19 perspective, it's really ever.
Around temporal shifts so.
Intellectually helpful thing about and actually operationally powerful thing about a camp is that we have Asia European and you last businesses as you now Asian now out while it did not have the girls that we had had planned for this quarter national.
And the attraction as they come out I'm moving through they moved obviously through the containment phase away before the U.S. in Europe and were now seeing on some of those deals that we've been working on it and we're expecting in Q3 in Q4, so I expect that that will be temporal and shift through Asia, Europe, and the U.S. not that not that we're not doing.
Business as usual, but it's sort of business as new normal new usual and obviously all remote in a chance I think there's a bit of that but I absolutely would not sit on this call and say that there are not execution things that we are driving very very hard.
Because we just see show much opportunity there in terms of grocery cans.
Okay. Thank you so.
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Thank you I'll now turn it back to marine restock for closing remarks.
Thanks. Thank you everyone for joining us today as always if you have follow up question. Please contact me directly.
Thank you. This concludes todays conference all parties may disconnect have a great evening.