Q4 2022 Aspen Group Inc Earnings Call
Good afternoon, welcome to Aspen group's fiscal year 2022 fourth quarter earnings call.
On the call today from the company are Michael Mathews, Aspen group's chairman and Chief Executive Officer, and Matt Lavie, Chief Financial Officer.
Please note that the company's remarks made during this call.
<unk> answers to questions include forward looking statements, which are subject to various risks and uncertainties. These statements include anticipated future revenue trends.
<unk> from our new Atlanta campus timing for new campuses to achieve profitability.
Usu growth.
Nursing attrition trends.
Our proposed marketing and other spending trends.
Our future growth and growth strategy bookings growth in fiscal 2023 and L. T V.
Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance.
A discussion of risks and uncertainties related to Aspen group's business is contained in its filings with the securities and Exchange Commission, including the Form 10-K for the fiscal year ended April 32021, our Form 10-Q for the nine months ended January 31, 2022 and in the press release issued this afternoon.
Aspen group disclaims any obligation to update any forward looking statements as a result of future development.
Also I'd like to remind you that during this conference call. The company will discuss EBITDA and adjusted EBITDA, which are non-GAAP financial measures in talking about the company's performance.
Reconciliation to the most directly comparable GAAP financial measures are provided in the tables in the press release issued by the company today.
Please note that the press release is available on Aspen group's website a S. P dot com on the IR calendar page under news and events.
The transcript of this conference call will be available for one year on the company's website.
Note that the earnings slides are available on Aspen group's website E. S. P dot com on the presentation page under company info.
Now I will turn the call over to Mr. Matthews.
Good afternoon, and thank you for joining our call today.
Careful control of our marketing expenses in the fourth quarter reduced reduced our net loss, resulting in positive adjusted EBITDA and reducing our cash burn without compromising our ability to achieve our revenue target for the fourth quarter.
This performance demonstrates the leverage in our business model and our ability to improve operating results with controlled spending.
For the fourth quarter, we've reduced our marketing spend sequentially by $1 million, primarily to ensure sufficient collateral for a surety bond requested by the state of Arizona.
Well, there's tempered overall enrollments in the quarter, we achieved our revenue goal helped by our U S. U F N P program.
Which remained our fastest growing program demonstrating the ongoing demand for this high LTV program.
For fiscal year, 'twenty, two Aspen group's revenue rose by 13%.
Let's dive into the factors that affected our fiscal year results.
Starting with the positives, we initiated Aspen to Dot O one year ago, and it worked well in fiscal year 'twenty to delivering the results we anticipated.
With Aspen to Dot O. We achieved optimal cash management, primarily due to focusing the marketing spending on our new pre licensure campuses.
And high LTV programs that delivered growth for the full year as well as keeping corporate G&A expenses flat year over year.
Another big positive in fiscal year 'twenty, two with the launch of our new Atlanta pre licensure campus.
We are currently enrolling in this mega Metro, which is larger than Phoenix.
Where we are off to a strong start as evidenced by healthy lead generation that is building a pipeline of prospective students.
And our first 120 days of marketing in Atlanta.
We have enrolled just over 81st year P P N or prerequisite students.
And that pace isn't far off from the first 120 days in Phoenix back in 2017, when we enrolled about 120 students during that same timeframe.
As everyone, who follows our industry knows the higher education for profit sector and in particular post licensure nursing schools offering our ends online advanced degree programs.
<unk> significant headwinds in the past 18 months.
Many universities saw lower class starts and compressed enrollments across the board.
In fiscal year 'twenty, two Aspen group's as post licensure degree program enrollments in class starts were impacted by the increased workloads nurses, we're experiencing which severely limited their availability to take classes or required them to delay their enrollment and new degree programs.
In addition, the re prioritization of marketing funds with Aspen to Dot O impacted enrollment in our nursing plus other unit.
With less marketing dollars to drive leads we saw lower enrollments in the Aspen RN to BSN and MSN programs than in prior periods.
We saw two distinct patterns with our Aspen are in students during this timeframe.
First as we discussed in our previous earnings call. Our Rins student body at Aspen took less courses during calendar year 2021, and thus far in 'twenty, two as compared to their historical behavior from 2020 and years prior.
Second we've seen a moderate increase of our ends in graduate programs Aspen's, MSN and DNP programs to be specific.
Withdrawing or stopping their course work for months at a time.
These attrition trends should moderate over time as nurses regain the ability to continue graduate programs and as we work proactively by offering various promotions to get these nurses to begin their course work again.
Another event in fiscal year 'twenty two was the decline in our first time pass rates for our BSN pre licensure students in Arizona, taking the <unk> are in test, which fell below the minimum standards set by the Arizona Board of nursing in calendar 2021, we.
We discussed this on our last earnings call.
The outcome was Aspen university's suspension of BSN pre licensure enrollments and formation of new cohorts at our two Phoenix pre licensure campuses effective February 2022.
Related to this development the state of Arizona requested an $18 3 million dollar surety bond.
To assure that we had sufficient collateral for the bond we've reduced our marketing spend by $1 million for a 22% sequential decrease in our marketing budget, which further compressed our fourth quarter enrollments.
However, as I stated earlier, our revenue growth in the quarter met expectations, and we reduced our cash burn in the quarter. Additionally.
Additionally, Aspen group's universities raised tuition and fees.
For incoming students in the fourth quarter commensurate with the with the inflation rate.
Targeting the increases at our highest LTV programs Aspen's, BSN pre licensure and DNP programs and the MSN F&B program at Usu.
This will raise our ltvs in these programs over time.
Despite the reduced marketing spend the Usu F N P program remains our fastest growing program.
The Usu F. N. P program has been an ongoing source of growth throughout fiscal 'twenty two as nurses seek this coveted degree that places them in private practice environments and offers an attractive six figure salary.
The family nurse practitioner degree has been an excellent business. It has delivered consistent growth and it's now significantly profitable.
This graduate degree program has not seen an increase in historical attrition as I just described over at Aspen for two key reasons. One the F&B program is structured two year program. So unless the student request to leave of absence, you cannot simply stopped taking courses without a negative consequence.
And second as I just mentioned this is a life changing event once a student graduates both in terms of your occupation as well as the income increase.
Our results with this program reflect how prudent we were in acquiring usu in December of 2017 for less than $10 million.
Last week, we announced that Usu had received notice from its accrediting agency the.
<unk> Senior College, and University Commission or was that.
That is accreditation status had been reaffirmed for eight years.
There are numerous factors cited by <unk> decision, including Usu has commitments to us to our submission the creation of an overall culture of collaboration the high level of board of trustee engagement. The collaborative working relationships established with Agi <unk>.
A significantly improved university financial situation the.
The innovative work of the office of field experience in placing nursing students into clinical.
And the institutional resilience in responding to the COVID-19 pandemic.
I am proud of our usu team and grateful for all their hard work that has resulted in this achievement.
In the long run we anticipate the growth from our new pre licensure campuses and the U S. U F N P program to be the primary drivers of revenue growth.
Our pre licensure campuses that we opened outside of Arizona were launched with curriculum improvements.
<unk> test prep products and <unk> coaches in place and these new cohorts will be required to have higher incoming GPA requirements and stiffer requirements relative to the Hep C. <unk> entrance exam scores.
As a result, these cohorts are expected to deliver pass rates that comply with each state's requirements.
Although three of these campuses are in smaller tier two metros each metro is experiencing high population growth rates that will increase the long term demand for nursing degrees.
Atlanta is our largest metro and continues to have a growing population. We believe the prospects for our Atlanta campus are very bright.
At this time the company is currently considering various growth and financing alternatives. Consequently, we plan to provide guidance and a financing update for the full fiscal year at our next earnings call in September .
More than ever our country recognizes the critical necessity to replace nurses, who have left the field and the need to grow the nursing population to meet the expected demand future demographic trends in.
In addition, more F N piece are needed to meet our country's impending doctor shortage.
Aspen group is well positioned to benefit from these long term macro trends.
Our proprietary tech stack and CRM system, our competitive differentiators that lower our enrollment costs, which we pass on to our students and lower tuition rates and flexible payment options.
These features and the ability to work, while attaining a life changing degree make us very popular with our students.
These are all valuable assets to our long term growth plan to become an industry, leading nursing school with affordable convenient degree programs that enable working adults to achieve their career goals.
I will now hand, the call over to Matt to cover the details of our financial results.
Please go ahead Matt.
Thank you, Mike and good afternoon, everyone I will begin with a review of our financial results for the 2022 fiscal fourth quarter and full year and highlight a few balance sheet items in my comments on the quarterly results I will refer to the quarter that ended on April 32022, I'll compare.
<unk> are to the prior year's fourth quarter ended April 32021, unless otherwise stated.
To provide context for the fourth quarter results I'd like to remind everyone that we reduced our marketing spend in the fourth quarter by $1 5 million from our original plan to ensure adequate available funds to collateralize. The surety bond requested by the Arizona State Board of nursing.
As expected with the reduced marketing spend new student enrollments were down in the quarter enrollments decreased by 30% to one 535 in the fourth quarter of fiscal 2022.
New student enrollments at Aspen University, where 1010 compared to 1593 in the year ago quarter, while new student enrollments at United States University, where 525 compared to 589 in the year ago quarter.
Although we reduced spend the size of our active student body was consistent with our initial plan for the quarter, resulting in revenue that met our expectations and positive adjusted EBITDA exceeding our forecast.
As Mike mentioned this demonstrates the leverage in our business model.
I'd also like to remind you that our entire annual EBITDA loss.
Is attributable to our investments in growing our pre licensure business.
On a same store sales basis, excluding the four new pre licensure campuses, our EBITDA would be breakeven for fiscal 2022.
Total revenue for the fourth quarter of fiscal 2022 was $19 4 million, an increase of 2% versus $19 1 million in the year ago quarter.
Fiscal year 2022, total revenue increased 13% to $76 7 million compared to $67 8 million in the prior year.
Gross profit and gross margin for the fourth quarter of fiscal 2022 were $10 3 million and 53% respectively.
$9 9 million and 52% respectively for the year ago quarter the.
The improvement in gross margin was primarily due to the reduction in marketing spend offset by increased instructional costs.
If marketing spend had not been reduced by $1 million sequentially gross margin would've been 48% and in line with the prior quarter.
For fiscal year 2022, gross profit increased by 7% to $39 6 million or 52% gross margin versus $36 9 million or 54% gross margin in the prior year.
If marketing spend had not been reduced by $1 million in the fourth quarter gross margin would have been 50%.
Overall instructional costs for the quarter were $5 2 million or 27% of revenue up from $4 6 million or 24% of revenue in the year ago quarter.
For the full year instructional costs were $19 5 million or 25% of revenue.
Up from $15 3 million or 23% in the prior year.
The increase in instructional cost as a percentage of revenue is primarily due to the addition of full time faculty for the BSN pre licensure program at the new pre licensure campus locations. Additionally.
Additionally.
Higher usu emerging costs were incurred due to the growth in the M. S. N F N P program, which resulted in increased conversions at additional locations.
Total marketing and promotional costs for the fourth quarter were $3 4 million or 18% of total revenue.
Down from $4 1 million or 22% of revenue.
As previously noted our decreased marketing spend was a significant factor in adjusted EBITDA for the quarter exceeding forecast.
And it demonstrates our ability to decrease growth spend to generate positive adjusted EBITDA.
Marketing and promotional costs for fiscal year, 2022 were $15 8 million or 21% of total revenue up from $14 2 million or 21% in the prior year.
The increase in marketing and promotional costs results from Crowe spending and our four new pre licensure metros, which was partially offset by a pullback in marketing spend in the fourth quarter.
First quarter general and administrative costs were $11 2 million or 58% of revenue versus $11 2 million or <unk>, 59% of revenue in the prior quarter.
G&A was flat primarily due to increased G&A spend in our Aspen University BSN pre licensure and Usu MSN and P programs, which is comprised of additional head count and the related increase in compensation and benefits expense.
And increased facilities costs offset by flat G&A spending corporate.
For fiscal year, 2022, general and administrative costs were $45 5 million or 59% of revenue compared to $41 9 million or 62% of revenue during fiscal year 2021, an increase of $3 6 million or 9%.
Total loss for the fourth quarter was $2 1 million or net loss per basic and diluted share of <unk> <unk>.
Compared to a net loss of $2 3 million or net loss per share of <unk> in the prior year quarter.
For fiscal year 2022, total net loss was $9 6 million or net loss per basic share of 38 <unk>.
<unk> is a net loss of $10 4 million or <unk> 44 in the prior year period.
From a unit perspective, Aspen University's net income for the quarter was $1 5 million versus $1 4 million in the prior year period U S. <unk> net income was $1 3 million versus net income of 1 million in the prior year quarter.
Finally, agi incurred a net loss of $5 million for the quarter compared to a net loss of $4 7 million in the prior year quarter.
For fiscal year, 2020 to Aspen University generated $6 1 million of net income.
And usu generated $3 8 million compared to net income of $7 3 million and $2 9 million respectively in the prior year period.
Agi incurred a net loss of $19 5 million compared to a net loss of $20 7 million in the prior year period.
Consolidated EBITDA for the quarter was a loss of 835000 compared to an EBITDA loss of $1 4 million.
Fourth quarter EBITDA period over period for each of the three units was as follows.
Aspen University remained flat at $2 2 million.
Usu was $1 5 million compared to $1 1 million.
Agi corporate was a loss of $4 5 million compared to a loss of $4 7 million.
Consolidated EBITDA for fiscal year, 2022 was a loss of $5 1 million as compared to a loss of $6 million in the prior year period.
Consolidated EBITDA period over period for each of the three units in fiscal 2022 was as follows.
Aspen University generated EBITDA of $9 3 million compared to $9 5 million.
Usu generated EBITDA of $4 2 million compared to $3 1 million.
<unk> corporate remained flat with an EBITDA loss of $18 6 million.
Consolidated adjusted EBITDA for the quarter was 523000 compared to adjusted EBITDA of 639000.
From a unit perspective, Aspen University generated adjusted EBITDA of $2 5 million as compared to $2 6 million.
Usu generated adjusted EBITDA of $1 7 million compared to $1 4 million.
Finally, agi corporate incurred an adjusted EBITDA loss of $3 7 million compared to a loss of $3 3 million.
For the full fiscal year 2022, consolidated adjusted EBITDA was a loss of $1 million compared to $1 3 million in the prior year.
From a unit perspective, <unk> generated adjusted EBITDA of $10 million compared to $11 6 million Usu generated adjusted EBITDA of $4 9 million compared to $3 6 million.
Agi corporate incurred an adjusted EBITDA loss of $15 9 million compared to a loss of $14 million.
Moving onto the balance sheet at April 32022, our unrestricted cash was $6 5 million and restricted cash was $6 4 million compared to unrestricted cash of $12 5 million and restricted cash of $1 2 million at April 32021.
As discussed in the prior quarter earnings call in fiscal Q4, we closed financing agreements, including $10 million of convertible notes and a $20 million revolving credit facility.
$5 million of the convertible note proceeds were restricted as collateral for the Arizona State Board of nursing surety bond.
The remaining $5 million was deposited in our bank account as unrestricted cash.
The $20 million revolving credit facility was committed as additional collateral for the Arizona State Board of nursing surety bond.
We also extended our existing 5 million revolving credit facility by one year to November four 2023.
Cash used in operations for the 12 months ended April 32022 was $11 3 million.
Approximately $1 million of the cash used in operations is attributed to our adjusted EBITA loss and the remaining use of operating cash is primarily attributed to our increased working capital to support growth in our monthly payment plans.
With respect to our share count the weighted average number of common basic shares outstanding at the end of the quarter was $25 million 157608.
Versus 25 million 342 in the year ago quarter.
I'd also like to mention that on July six 2022, we increased our authorized shares of common stock from 40 million shares to 60 million shares.
That concludes our prepared remarks, I will now turn the call back to the operator for questions.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue.
You May press star two if he would like to remove your question from the queue and for participants using speaker equipment. It may be necessary to pick up your handset before pressing any sarkies.
One moment, please while we poll for any questions.
Our first question comes from the line of Jeremy Hamblin Hamblin from Craig Hallum. Please proceed with your question.
Thanks for taking the questions and I wanted to start with.
The U S U unit.
In terms of thinking about it looks like you had pretty nice.
Enrollment growth.
But in terms of the bookings value.
I got it down about 11% on a year over year basis, and I just wanted to get underneath that in.
In terms of it looks like maybe you are who as Paul just a little bit there.
But Mike I was hoping you could share a little bit of color in terms of that unit.
Which now actually two quarters I think in a row in which you've had.
Bookings growth that was down about 10 or 11% any color you could share there.
Yes, so first of all.
Thanks by the way thanks for the question Jeremy Welcome.
So the first thing I would say is that there really has not been an <unk> change whatsoever.
<unk> remained pretty consistent for the family nurse practitioner program.
What I would say is as it relates to our.
Our fourth quarter.
Sequentially decreased their marketing spend rate as a company by about $1 million.
And a good chunk of that was reducing our spend rate at usu.
So thats why you saw the decrease of enrollments for Usu.
And the prior quarter before that.
We also had a slightly less.
Less spend rates in that quarter in the third quarter as well so our cost of enrollment it remains very consistent we're in kind of the $900 range approximately and it's been that way for a number of quarters. So theres no degradation in terms of our unit economics Jeremy.
Got it.
And then just switching to the <unk> exam scores.
In terms of.
Improvements that youre going to see or that you are looking to drive in Arizona.
You mentioned curriculum changes.
Things that are being done.
Non Arizona campuses the newer campuses.
But in terms of progress that you're seeing there.
Meeting those paths right thresholds.
The board of nursing is looking.
For you to deliver this year.
Do you feel like you've made the changes necessary where you have.
Some confidence in delivering that.
For calendar 'twenty two.
Yes, Jeremy So I think you guys are all aware that the board of nursing a number of months ago.
<unk>, formerly requested that we don't provide any intra quarter updates because they consider intra quarter information to be nonpublic.
So I'm not going to be making comments kind of on how things are.
How things have improved throughout.
The second quarter relative to the first quarter.
So in the scores for Q2, I don't believe I've been posted yet.
What I would say to you is that we have put a number of improvements into place both curriculum wise in terms of an clicks coaching the Kaplan test prep products.
Are doing everything humanly possible to improve these scores.
At the end of the day, we have about 600 students that are in the system that will continue T. Gina will continue driving for better improve improving rates.
One of the things that I would like to say is that.
We very carefully studied.
Our graduates and for <unk>.
Arizona over the last couple of years and so we have a ton of data to understand.
But the incoming gpas were what their test scores were in the <unk> to the FDA to for those of you that don't know that's the entrance exam that a student takes when they complete their first year of prerequisite courses and they have to pass an entrance exam to go into our final two year program.
We're finding some really interesting correlation data that tells us.
If they achieve a certain score.
What is the potential or what is the likely pass rate on a first time basis when the student ultimately takes the <unk>.
And.
Without giving you a nonpublic information in terms of what we found.
The findings that we did determine over the last several months, we've implemented across all of our new locations. So we have a very very high level of confidence of good <unk> scores in our four new metros. Obviously the students that are in Phoenix. They were already in the system and we can't change.
How the admission criteria was from a GPA and from <unk> perspective, and we're going to do our damnedest to to keep those did you increase those scores.
Over the next couple of years.
Got it. Thanks last one from me. So you are then kind of delicate balancing act of.
Managing your cash flows.
But at the same time pushing ahead with campus development Atlanta.
In particular.
No you are not providing.
Any formal guidance at this point in time waiting until your next quarterly report, but in terms of thinking about you know kind of instructional costs in your marketing.
And promotional cost line items as we look forward.
Given that campus is opening should we expect a little bit more spend.
On both of those line items here as we get into both the July and October quarters.
This is Matt I can I can take that.
Youre right first of all we're not providing guidance. So I can't give you specifics, but you did lay out some levers like marketing that we can pull.
To increase profitability and generate cash we need to and you saw a great example of that just here in the fourth quarter. So we're considering all of our all of our alternatives.
<unk>.
But one thing I can assure you of is that whatever plan, we put into place will ensure adequate cash to get us to a breakeven point of sustained us for the future. So we're triangulating around that specific criteria in order to develop our plan. So.
Well.
As we've said we will have more when we get to our next earnings call.
Got it thanks for taking the questions best wishes.
Thanks.
Thank you. Our next question comes from the line of Eric <unk> with Lake Street Capital. Please proceed with your question.
Yes, I wanted to address a comment that you made regarding the kind of the class taking behaviors for your working nurses, particularly the comment about RMS pausing, taking classing or taking classes or actually an increase in the withdrawal rates.
Have you seen any change in behavior since the closing of FY 'twenty two fiscal year.
Okay.
Good afternoon, Eric It's Mike again.
So we basically so we've been studying the behavior of our registered nursing student body, both at Usu and Aspen very pretty carefully over the last several quarters.
And.
Yeah.
What we're really what we're seeing Eric is that our students that are in our RN to BSN programs. So these are our ends that have two year degrees that are looking to bridge our program to obtain the BSN we're not.
Not seen any unusual attrition activity.
In that area and we believe the reason for that is that if you get a BSN theres an immediate hourly pay bump.
And so most of those students from our point of view of kind of pull.
Pushed through even given the terrible.
No.
<unk> that they've had to had to incur throughout the COVID-19 pandemic. However.
However, we did see an increase over the past I would say 12 months or so.
Our graduate students at Aspen. So these are our masters of science in nursing MSN students and our doctoral students are DNP students.
Debt.
We saw an increase in students just stopping their coursework.
And so for example for us if a student's stops their course work for lower for longer than a 120 days, we have to drop them from the University.
And so so we saw a significant increase.
Over the last year versus our pre Covid attrition.
So in addition to.
What we call. These admin drops which are students has stopped taking courses. We also did see an increase in voluntary withdrawals.
Students that just decided to stop their program and they proactively withdraw from the University. So.
So yes, so we felt that was important to discuss that today.
That's part of the reason why we've seen lower class starts than we've historically seen in previous years.
But no I wouldn't say Eric that we've seen an increase as we've entered calendar 'twenty two I think it's similar to 'twenty, one where we're seeing still.
Okay.
And then on your plans kind of Big picture plans for your pre licensure BSN campus is in Phoenix.
Both of the campuses. There are we are we essentially in a teach out mode. Because we're not we're not a tricky awaiting new students.
Into the nursing core and then we've got to build Sn.
Essentially we've got to come up with four quarters in a row of 80% plus on the <unk> pass rates.
Let's assume the negative scenario, where we're not able to do that but we're looking at a teach out scenario for Arizona.
Well, Eric again, we have round about 600 students currently and.
We have you know call. It 300 students over the next year that will that will graduate or most of them graduate and then 300 the year after that as you correctly point out the way that the consent agreement is outlined we would need to complete 80% <unk> pass rates for four quarters.
<unk> four calendar quarters in a row.
And so if we were to achieve that over the next four quarters than we would have approximately one year of students left and then as we would essentially then restart new cohorts.
So it's really it's highly dependent upon how quickly we get to those 480% scores in a row as to where we are when we begin cohorts again.
But if we don't achieve it over the next four calendar quarters. Then yeah. You are essentially in a scenario where two years from now you're you've taught all your students yes for sure yes.
Okay, and then and obviously I know that I was asking the pessimistic scenario. There is a more optimistic scenario and we certainly hope that comes to pass.
It would just we'll have this kind of.
A drag on the business and our.
With the expenses being there.
Less than efficient business model as we teach out that tail of the reason I asked it.
So the other thing I wanted to ask about was the enrollments in bookings in Q4.
How quickly can the spigot being turned back on here, we throttle back on the marketing spend to deliver.
The charity guarantee.
When do we turn that spigot back on to get the enrollment numbers back in the right direction.
Yes. Good question, Eric So after we posted a surety bond last quarter.
We did increase our marketing spend right back to the previous quarterly spend rate, which would have been our fiscal Q3.
So we don't expect enrollments to snap back immediately because it typically takes a good quarter for those new leads to mature.
So we're forecasting perhaps some modest sequential enrollment decrease in Q1, and remember Q1 is typically a seasonally weaker quarter. So.
I would think things that will probably go back to normalcy, when we get into our fiscal Q2.
If I can add one thing.
I previously referred to the surety bond is being required by the Arizona Board of nursing, it's actually the Arizona Board education. So just wanted to put that correction out there.
Got it okay. Thanks for taking my questions.
Thanks, Eric.
Thank you as a reminder, if you would like to ask a question. Please press star one on the telephone keypad, a confirmation tone will indicate that your line is in the queue.
Our next question comes from the line of Owen Richard with Northland Securities. Please proceed with your question.
Hi, guys. This is owen on for Mike Grondahl.
I was wondering if you can provide us with an update on the timelines to break these down in Tampa, Austin, and Nashville and Atlanta.
As well as enrollment numbers for each besides Atlanta, which I believe you said with that 80 during the call. Thank.
Thank you.
Hi, This is Matt Yeah, I can take that.
Each location has its own unique.
Our financial profile and of course, they've all come online at different times. So the breakeven path is a little bit different but just in general terms.
Austin.
As looking to breakeven sometime in the latter part of fiscal 'twenty four.
Tampa and Nashville are there are there other those are either tier two locations. In addition to.
So Austin, they're looking they are on track to breakeven in fiscal 'twenty five.
And then Atlanta.
As you know Thats, our new tier one location, that's just started up the.
Tier one locations tend to tend to ramp toward breakeven a bit faster than tier two there's more efficiency in the marketing spend and the rate in which we bring in students that gets them to breakeven quicker. So even though Atlanta just started Atlanta would be breakeven in fiscal 2025.
Great and then did you have the enrollment numbers for camp.
Austin and Nashville.
We don't we don't provide exact enrollment numbers by quarter by location never have.
So yes, no I wouldn't I wouldn't offer that.
For competitive reasons. Thanks for taking that got you guys. Thanks for taking my question.
Thank you.
Thank you and the next question comes from Raj Sharma with B Riley Securities. Please proceed with your question.
Hi.
Thank you for taking my question.
I wanted to just understand I know you spoke about enrollments at.
Atlanta could you also talk about the enrollments on Tampa and Austin, the other new pre licensure campuses.
And the trends there I mean thats progressing.
Yeah, I mean, so we did give an indication today that.
Atlanta in its first 120 days.
We were able to achieve about 80 prerequisite enrollments in those first 120 days, which is not far off from Phoenix switched back in 2017, we had about 120 and the first 120 days.
So Atlanta, while its not at the same level as Phoenix.
It's very strong much stronger than that.
In Austin and the other two tier twos Nashville and Tampa.
So, but enrollments are pretty consistent in in Austin, and Nashville, Tampa continues to be slow for us relative to comparing the other locations.
But yes, we're not going to give exactly enrollment numbers as I mentioned before but.
Atlanta is off to a terrific start and Nashville, and Austin are humming along pretty good.
So also.
Have you seen any sort of fallout from that.
The negative headlines in.
As Pete on Phoenix, and the two campuses that probation.
At any of your other.
Pre licensure campuses.
Yeah, no there's been no fallout whatsoever.
We had.
We had a meeting with the board of nursing of one of the states that we're that we work in and they specifically communicated to us that they care about the <unk> scores and their state not in any other state.
Well, we haven't had conversations with every board of nursing across the country, where we compete I think thats the prevailing opinion is.
Just do good in my state So there's been no negative fallout at all.
Great.
And then just wanted to understand the no.
Clearly.
Great for you to be able to turn the spigot off.
Marketing expenses.
How do we look at that going forward. You said you brought it back you brought the marketing expenses back so you should see a recovery.
No you were talking about the recovery in the S&P or you're also talking about recovery in D.
Au online.
Via set of Emerson businesses could you talk a little bit about that all that is that dynamic.
When should we see how should we see enrollment in the next four quarters.
Yes, so as I mentioned before we snapped back our marketing spend rate in the first quarter similar to what our third quarter spend rate was so are our decrease of spend was only one quarter the fourth quarter.
And so.
The snapback in spending was pretty much right back to where we were in Q3 in terms of the spend rate in each of our units.
Alright.
So then you can surmise, we can surmise that.
Enrollments would pick up.
Sure.
In all of your units.
Other than Phoenix of course.
Yes, you are correct correct rush.
I think youll see youll see that Youll see youll see it normalize likely in the second quarter.
Theres always a lag between marketing spend and then the actual enrollment.
Pushed out a quarter.
Great and then is the focus again on sort of staying breakeven on trying to be breakeven.
As possible.
Or as long as possible.
Yeah, We've previously stated.
Golar have deep breakeven before the end of fiscal 'twenty for that is still the objective.
We've also discussed we're assessing various business plans for the next couple of years.
So if anything well will either meet or beat that expectation depending upon the path we take.
Alright, great. Thank you so much for answering my questions and I'll take it offline. Thanks.
Thanks Raj.
Okay.
Thank you at this time, we have reached the end of the question and answer session and I would now like to turn the floor back over to Mike Matthews for any closing comments.
Thanks, everyone for attending our fourth quarter earnings call today, we're looking forward to.
Talking again in a very quick two months period or in the first quarter earnings call is in mid September and again look forward to speaking with you at that time and have a good afternoon.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.
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Understood.
Sure.
Okay.
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