Q2 2024 American Public Education Inc Earnings Call
Unknown Executive: Current Expectations, Assumptions, Estimates, and Projections. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements may sometimes be identified by words like anticipate, believe, seek, could, estimate, can, may, plan, potentially, project, should, will, would, and similar or opposite words.
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Unknown Executive: Or looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Or looking same statements may sometimes be identified by words like anticipate, believe, seek, code, estimate, expect, can, may, plan potentially, project, should, will, wood, and similar or opposite words. Or looking statements include, without limitation, statements regarding expectations for registrations and enrollments, revenue, earnings, and adjusted EBITDA, and other earnings guidance.
Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements forward looking statements may sometimes be identified by words like anticipate believe seek could estimate expect can.
May plan potentially.
Potentially project should will would and similar or opposite words.
Unknown Executive: Forward-looking statements include, without limitation, statements regarding expectations for registrations and enrollments, revenue, earnings, and adjusted EBITDA, and other earnings guidance, repositioning Rasmussen University for growth, changing market demands, and our ability to satisfy such demands and other company initiatives, including with respect to future competition and demand cost savings efforts. This presentation contains references to non-GAAP financial information. A reconciliation between the non-GAAP financial measures we use and the most directly comparable GAAP measures is located in the appendix to today's presentation and in the earnings release.
Looking statements include without limitation statements regarding expectations for registrations in enrollments revenue earnings and adjusted EBITDA and other earnings guidance.
Unknown Executive: Repositioning Rasmussen University for growth, changing market demands, and our ability to satisfy such demands and other company initiatives, including with respect to future competition and demand, cost savings efforts.
Repositioning Rashmi Houston University for growth changing market demands and our ability to satisfy such demands and other company initiatives, including with respect to future competition and demand cost savings efforts. This presentation.
Unknown Executive: This presentation contains references to non-GAAP financial information. The reconciliation between the non-GAAP financial measures we use and the most directly comparable GAAP measures is located in the appendix to today's presentation and in the earnings release. Management believes that the presentation of non-GAAP financial information provides useful, supplemental information to investors regarding its results of operations and should only be considered in addition to, not as a substitute or superior to, any measure of financial performance prepared in accordance with GAAP.
Speaker Change: <unk> contains references to non-GAAP financial information a reconciliation between the non-GAAP financial measures, we use and the most directly comparable GAAP measures is located in the appendix to today's presentation and in the earnings release management believes that the presentation of non-GAAP financial information provides useful supplemental information to investors.
Unknown Executive: Management believes that the presentation of non-GAAP financial information provides useful supplemental information to investors regarding its results of operations and should only be considered in addition to and not as a substitute for or superior to any measure of financial performance prepared in accordance with GAAP. Now, I'd like to turn the call over to APEI's CEO, Angela Selden. Anjali, Angie, please go ahead.
Brian Prenoveau: Now, I'd like to turn the call over to APEI CEO, Angela Selden. Angela, Angie, please go ahead.
Angela Selden: Thank you, Brian. Good afternoon, and thank you for joining American Public Education's second quarter 2024 earnings call. For those of you new to APEI, our four post-secondary institutions are among the largest in the country in educating adult learners, with an emphasis on educating those in service to others, namely new nurses, active duty military, veterans, first responders, and the federal workforce. On an annual basis, APEI provides online and campus-based post-secondary education and career learning to approximately 125,000 adult learners worldwide. Our mission is to give power, purpose, potential, and prosperity to those in service to others.
Angela Selden: Thank you, Brian. Good afternoon, and thank you for joining American Public Education for the second quarter 2024 earnings call.
Angela Selden: For those of you new to APEI, our four post-secondary institutions are among the largest in the country in educating adult learners, with an emphasis on educating those in service to others, namely new nurses, active duty military, veterans, first responders, and the EI provides online and campus-based post-secondary education and career learning to approximately 125,000 adult learners worldwide. Our mission is to power, purpose, potential, and prosperity to those in service to others. On today's call, we will cover in more detail the following good news highlights. First, in Q2 2024, this marked the seventh consecutive quarter where APEI's adjusted EVEI has met or exceeded guidance.
Angela Selden: On today's call, we will cover in more detail the following good news highlights. First, in Q2 2024, this marked the seventh consecutive quarter where APEI's adjusted EBITDA has met or exceeded guidance. Overall, APEI revenue grew 3.9% year over year to $152.9 million. We saw significant improvement in APEI's adjusted EBITDA, which grew 24% to $10.9 million, primarily driven by year-over-year operating performance at both Rasmussen and APEI Corporate. Adjusted EBITDA margin expanded by 118 basis points to 7.2% when compared to 2Q23. Next, I'm pleased to report that Rasmussen has achieved its first year over year positive revenue and enrollment quarter since our acquisition in 2021. And, as we had signaled earlier this year,
Angela Selden: Overall, APEI revenue grew 3.9% year over year to 152.9 million dollars. We saw significant improvement in APEI's adjusted EVEI, which grew 24% to 10.9 million dollars. Primarily driven by year-over-year operating expense at both Rastocene and APEI corporate. Adjusted EVEI margin expanded by 118 basis points to 7.2% when compared to Q23. Next, I’m pleased to report that Rasmussen has achieved its first year-over-year positive revenue and enrollment quarter since our acquisition in 2021, and as we had signaled earlier this year.
Angela Selden: And finally, we are reiterating our full-year guidance of revenue between $620 and $630 million in revenue and adjusted EBITDA between $60 million and $70 million.
Angela Selden: And finally, we are reiterating our full year guidance of revenue between $620 and $630 million in revenue and adjusted EBITDA between $60 million and $70 million. Now I'd like to provide more detail about the results and trajectory of our education unit, starting first with Rasmussen. I'm very pleased with the progress we have made to stabilize and put Rasmussen back on a trajectory for revenue and enrollment growth and positive EBITDA. Second quarter enrollments, which we shared in our last earnings call, were $13,600, down just 2%.
Angela Selden: Now I'd like to provide more detail about the results and trajectory of our education unit, starting first with Rasmussen. I'm very pleased with the progress we have made to stabilize and put Rasmussen back on a trajectory for revenue and enrollment growth and positive EBITDA. Second quarter enrollment, which we shared in our last earnings call, were $13,600, down to 2%. More importantly, third quarter enrollment, which we are sharing for the first time today, grew slightly on a year-over-year basis to 13,500 students, powered by double-digit growth in our nursing and health sciences online programs. And is the positive turn in the business toward which we've been working.
Angela Selden: More importantly, third-quarter enrollments, which we are sharing for the first time today, grew slightly on a year-over-year basis to 13,500 students, powered by double-digit growth in our Nursing and Health Sciences online program, and is a positive turn in the business toward which we've been working. This is particularly noteworthy as Rasmussen decided to suspend new enrollment in its two Wisconsin campuses, which operate in small markets, while it continues to optimize the campus footprint to improve profitability and to strengthen margins.
Angela Selden: This is particularly noteworthy as Rasmussen decided to suspend new enrollment in its two Wisconsin campuses, which operate in small markets, while it continues to optimize the campus footprint to improve profitability and to strengthen margins. While we don't typically report starts, I think it's important to note that start growth was nearly 10% in the quarter and reflected positive year-over-year start growth in both the Rasmussen online and Rasmussen campus portions of the business. The continued momentum in enrollment also corresponds with growth in revenue, where Rasmussen revenue was up 2%, which is also the first time since APEI's acquisition and is indicative of the past to continued growth and profitability.
Angela Selden: While we don't typically report starts, I think it's important to note that start growth was nearly 10% in the quarter and reflected positive year-over-year start growth in both the Rasmussen Online and Rasmussen Campus portions of the business. The continued momentum in enrollments also corresponds with growth in revenue, where Rasmuson revenue was up 2%, which is also the first time since APEI's acquisition, and is indicative of the path to continued growth and profitability. EBITDA for the Rasmussen segment was negative in the quarter, but the loss narrowed to minus $4.7 million from minus $7.1 million in the prior year period.
Speaker Change: Size acquisition and is indicative of the path to continued growth and profitability.
Angela Selden: Evida for the Rasmussen segment was negative in the quarter, but the loss narrowed to minus $4.7 million from minus $7.1 million in the prior year period. In conjunction with the expected growth in enrollment in the second half, we continue to expect Rasmussen to move into positive Evida territory in the fourth quarter of 2024, which sets us up for a much stronger profit picture in 2025. In terms of student outcomes, we again produced strong and quick pass rates in the second quarter, where 22 of 25 programs are meeting the required threshold year-to-date.
Speaker Change: EBITDA for the <unk> segment was negative in the quarter, but the loss narrowed to minus $4 7 million from minus $7 1 million in the prior year period.
Angela Selden: In conjunction with the expected growth in enrollments in the second half, we continue to expect Rasmussen to move into positive EBITDA territory in the fourth quarter of 2024, which sets us up for a much stronger profit picture in 2025. In terms of student outcomes, we again produced strong NCLEX pass rates in the second quarter, where 22 of 25 programs are meeting the required thresholds year-to-date. Now I'd like to turn our attention to API's online university serving military and veterans, APUS.
In conjunction with the expected growth in enrollment in the second half we continue to expect Rasmussen to move into positive EBITDA territory in the fourth quarter of 2024, which sets us up for a much stronger profit picture in 2025.
Speaker Change: In terms of student outcomes, we again produced strong and collect pass rates in the second quarter were 22 of 25 programs are meeting the required thresholds year to date.
Angela Selden: Now I'd like to turn our attention to APEI's online university serving military and veteran, APUS. In 2Q24, overall net courts registrations increased 1.7% year-over-year, reflecting the strong retention of returning students. Revenue in APUS was higher due to the overall growth in registrations as well as higher average revenue for registration from last year's most tuition and fee increases. As APUS has invested in 2024 to strengthen its online curriculum, implement a faculty pay increase for part-time faculty, invest in IT infrastructure optimization, and better align its marketing spend, 2Q even a margin was slightly lower year over year.
Speaker Change: Now I'd like to turn our attention to Api's online University, serving military and veteran a P U S.
Angela Selden: In 2Q24, overall net course registrations increased 1.7% year-over-year, reflecting the strong retention of returning students. Revenue at APUS was higher due to the overall growth in registrations as well as higher average revenue per registration from last year's moderate tuition and fee increases. As APUF has invested in 2024 to strengthen its online curriculum, implement a faculty pay increase for part-time faculty, invest in IT infrastructure optimization, and better align its marketing spend, 2Q EBITDA margin was slightly lower year over year. Looking ahead to the third quarter, we would expect even the margins at APUS to be similar given those same factors.
Into Q24, overall net course registrations increased one 7% year over year, reflecting the strong retention of returning students.
Speaker Change: Revenue at <unk> was higher due to the overall growth in registrations as well as higher average revenue per registration from last year's modest tuition and fee increases.
Speaker Change: As <unk> has invested in 2024 to strengthen its online curriculum implement a faculty pay increase for part time faculty invest in it infrastructure optimization and better align its marketing spend.
Angela Selden: Looking ahead to the third quarter, we would expect even a margins at APUS to be similar given those same factors.
Angela Selden: At Hondros, as previously reported, 2Q 24 enrollment remained strong. We also saw growth continue in 3Q 24, with enrollment increasing more than 10% year over year to 3,100 students, even against a strong 17% comp a year ago. Demand remained strong for both the PN and ADN nursing program, with the new Detroit campus performing very well. Legacy campus also contributed to growth, including Indianapolis, where we still operate with enrollment cap as a new program despite exceptional and complex pass rates. Starts at Hondros remain robust, and we continue to be pleased with the growth we are seeing.
Angela Selden: At Honduras, as previously reported, 2Q24 enrollment remains strong. We also saw growth continue in 3Q24, with enrollment increasing more than 10% year-over-year to 3,100 students, even against a strong 17% comp a year ago. Demand remains strong for both the PN and ADN nursing programs, with the new Detroit campus performing very well. Legacy Campus also contributed to growth, including Indianapolis, where we still operate with enrollment caps as a new program, despite exceptional NCLEX pass rates. Starts at Honduras continue to remain robust, and we continue to be pleased with the growth we are seeing. In 3Q24, Honduras relocated one of its Ohio campuses and has experienced some unexpected infrastructure setbacks in that location, which we expect will result in some temporary but limited impact on enrollment at that one location.
Angela Selden: In 3Q 24, Hondros has relocated one of its Ohio campuses and has experienced some unexpected infrastructure setbacks in that location, which we expect will result in some temporary but limited impact to enrollment at that one location. Overall, with the stabilization of enrollment and continued improvement in EBITDA at RASCESEN, at APEI we are now delivering positive growth and revenue adjusted EBITDA and margins on a consolidated basis.
Angela Selden: Overall, with the stabilization of enrollment and continued improvement in EBITDA at Rasmussen, at APEI, we are now delivering positive growth in revenue, adjusted EBITDA, and margins on a consolidated basis. Before turning the call over to Rick Sunderland, APEI's CFO, I'd like to frame where we are as an enterprise and provide some specificity as to where we're headed. With the stabilization of Rasmussen well underway, including line of sight to continued enrollment and revenue growth from that unit, we see margins at Rasmussen shifting from negative to positive in the fourth quarter, setting the stage for 2025 and beyond.
Angela Selden: Before turning the call over to Rick Sunderland, APEI CFO, I'd like to frame where we are as an enterprise and provide some specificity as to where we're headed. With the stabilization of RASCESEN well underway, including line of site to continued enrollment and revenue growth from that unit, we see margins at RASCESEN shifting from negative to positive in the fourth quarter, setting the stage for 2025 and beyond. RASCESEN also expects to expand its campus footprint for the first time in over five years, once the Department of Education growth restrictions are lifted, which will allow us to expand our impact in addressing the large demand for nursing and other clinical roles in our overstretched healthcare system.
Angela Selden: Rasmussen also expects to expand his campus footprint for the first time in over five years once the Department of Education growth restrictions are lifted, which will allow us to expand our impact in addressing the large demand for nursing and other clinical roles in our overstretched healthcare system. We fundamentally believe in our vision that education can transform lives, advance careers, and improve communities. Our four education units were built for service-minded students, offering accessible and affordable higher education and training across a diverse range of subjects.
Angela Selden: We fundamentally believe in our vision that education can transform lives, advance careers, and improve communities. Our four education units were built for service-minded students, offering accessible and affordable higher education and training across a diverse range of subjects. At APEI, we have carved out distinctive market positions. American Military University or AMU is the number one provider of higher education to the U.S. military and has been named the top choice nationwide for veterans using their GI Bill benefits. Hundreds College of Nursing focuses on educating pre-licensure nursing students at eight campuses and is the number one provider of pre-licensure PN education in the state of Ohio.
Angela Selden: At APEI, we have carved out distinctive market positions. American Military University, or AMU, is the number one provider of higher education to the U.S. military and has been named the top choice nationwide for veterans using their GI Bill benefits. Honduras College of Nursing focuses on educating pre-licensure nursing students at eight campuses and is the number one provider of pre-licensure PN education in the state of Ohio. Both Hondros and Rasmussen continue to tackle the chronic nursing shortage by graduating thousands of new nurses each year, where the demand for nurses is expected to grow significantly to 3.3 million in 2031, an increase of 195,000 and an additional 203,000 job openings each year when retirement and workforce exits are factored in.
Angela Selden: Both 100 and 95,000, and an additional 203,000 job openings each year when retirement and workforce exits are factored in. Overall, higher education remains a critical accelerator for anyone seeking employment in the US, with an increasing amount of working adult students driving the higher education market, which is expected to reach approximately $173 billion by 2030. We are proud that APEI's affordable learn-to-earn focus enables students to experience a strong lifelong return on their educational investment.
Angela Selden: Overall, higher education remains a critical accelerator for anyone seeking employment in the U.S., with an increasing number of working adult students driving the higher education market, which is expected to reach approximately $173 billion by 2030. We are proud that APEI's affordable, learn to earn focus enables students to experience a strong, lifelong return on their educational investment. With that, I will turn the call over to APEI's CFO, Rick Sunderland
Rick Sunderland: With that, let me turn the call over to APEI CFO Rick Sunderland.
Rick Sunderland: Thank you, Angie. Total revenue in the second quarter was $152.9 million, up $5.7 million, or 3.9%, from the prior period. Second quarter revenue growth was driven by increased revenue at AQS, Honduras, and Rasmussen, partially offset by a revenue decline at graduate school, which was approximately $1 million less than our guidance. Total cost of expenses in the second quarter decreased $61.8 million, or 29.1%, compared to the second quarter of 2023, which included a non-cash impairment charge of $64 million to reduce the carrying value of the RE segment, goodwill, and intangible assets, and the corresponding tax impact.
Rick Sunderland: Thank you, Angie. Total revenue in the second quarter was $152.9 million, up $5.7 million or 3.9% from the prior period. Second quarter revenue growth was driven by increased revenue at a QS, Honduras, and Rasmussen, partially offset by revenue decline at graduate school, which was approximately one million less than our guidance.
Rick Sunderland: Total cost and expenses in the second quarter decreased $61.8 million or $21.9% compared to the second quarter of 2023, which included a non-cash impairment charge of $64 million to reduce the carrying value of RE segment, goodwill and tangible assets and the car's climate tax impact. Cost and expenses for the second quarter as compared to the prior period, excluding loss on leases, severance costs, and information technology transition services costs in 2024 and goodwill and intangible asset impairment charges in 2023, increased $0.7 million, primarily to increases in other technology and marketing expenses. Second quarter diluted loss for common share improved significantly and was the loss of 6 cents, compared to an adjusted net loss of 25 cents in the prior year quarter, which excludes the 64 million goodwill and intangible asset impairment.
Rick Sunderland: Costs and expenses for the second quarter as compared to the prior period, excluding loss on leases, severance costs, and information technology transition services costs in 2024, and goodwill and intangible asset impairment charges in 2023, increased $0.7 million primarily due to increases in other technology and marketing expenses. Second quarter diluted loss per common share improved significantly and was a loss of $0.06 compared to an adjusted net loss of $0.25 in the prior year quarter, which excludes $64 million. Goodwill and intentional acts of impairment.
Rick Sunderland: For the quarter, adjusted EBITDA increased 24% to 10.9 million compared to 8.8 million in the prior period. The second quarter results were at the high end of guidance and represented an adjusted EBITDA margin of 7.2% as compared to 6% in the prior year quarter. At A2S, second quarter revenue increased 4.7% as compared to the prior year to 77 million due to a 1.7% increase in net course registrations driven by an increase in registrations by military affiliates to utilizing VA benefits. And tuition and fee increases in the second and third quarters of 2023. In total, EBITDA margin at A2S was 25%, compared to 28% in the prior year.
Rick Sunderland: For the quarter, adjusted EBITDA increased 24% to $10.9 million, compared to $8.8 million in the prior period. The second quarter results were at the high end of guidance and represented an adjusted EBITDA margin of 7.2%, as compared to 6% in the prior quarter. At A2S, second-quarter revenue increased 4.7% as compared to the prior year to $77 million due to a 1.7% increase in net course registrations driven by an increase in registrations by military-affiliated students utilizing VA benefits and tuition and fee increases in the second and third quarters of 2023. In total, EBITDA margin at APUS was 25%, compared to 28% in the prior year. The change in margin was primarily due to increased information technology, employee compensation, and advertising costs.
Speaker Change: In total EBITDA margin was 25% compared to 28% in the prior year.
Rick Sunderland: The change in margin was primarily due to increased information technology, employee compensation, and advertising costs. I read some second quarter revenue with 53 million and increase in 2% compared to the prior year due to an increase in tuition in the first quarter of 2024, partially upset by 2.2% decrease in total student enrollment. The decline in total student enrollment was driven by an 8.8% decrease in on-ground enrollment, partially upset by a 4.2% increase in online enrollment, which has a prior year period. As Nancy mentioned, the year-to-year enrollment declined to narrow in each of the past five quarters, and third quarter total enrollment is up slightly.
Speaker Change: The change in margin was primarily due to increased information technology employee compensation and advertising costs.
Rick Sunderland: At Rasmussen, second-quarter revenue was $53 million, an increase of 2% compared to the prior year due to an increase in tuition for the first quarter of 2024, partially offset by a 2.2% decrease in total student enrollment. The decline in total student enrollment was driven by an 8.8% decrease in on-ground enrollment, partially offset by a 4.2% increase in online enrollment, which generated lower revenue for students as compared to the prior year period. As Nancy mentioned, the year-over-year enrollment declines have narrowed in each of the past five quarters.
Speaker Change: <unk> second quarter revenue was $53 million, an increase of 2% compared to the prior year due to an increase in tuition in the first quarter of 2024, partially offset by a two 2% decrease in total student enrollment.
Speaker Change: The decline in total student enrollment was driven by an eight 8% decrease in on ground enrollment, partially offset by a four 2% increase in online enrollment, which has a lower revenue per student as compared to the prior year period.
Speaker Change: And then you mentioned the year over year enrollment declines narrowed in each of the past five quarters and third quarter total enrollment is up slightly and.
Rick Sunderland: In the third quarter, Rasmussen's EBITDA improved to a loss of $4.7 million, compared to an EBITDA loss in the prior period of $7.1 million, representing an approximate 33% year-over-year improvement after adjusting for last year's goodwill impairment and this year's loss on leasing. At Honduras, second quarter revenue was up 15% to $16.4 million as compared to the prior year period due to continued enrollment growth and the 2023 tuition increase. For the quarter, Congress' total enrollment grew 9.4% to approximately 3,300 students, the third consecutive record-setting quarter for enrollment.
Rick Sunderland: In the second quarter, right supposed EBITDA improves to a loss of 4.7 million compared to an EBITDA loss in the prior period of 7.1 million, representing an approximate 33% year-to-year improvement after adjusting for last year's goodwill impairment.
Speaker Change: In the second quarter <unk> since EBITDA improved to a loss of $4 7 million compared to an EBITDA loss in the prior period of $7 1 million, representing an approximate 33% year over year improvement after adjusting for last year's goodwill impairment.
Rick Sunderland: This year's loss on leases. At Honduras, second quarter revenue was up 15% to 16.4 million as compared to the prior year period due to continued enrollment growth and the 2023 tuition increase. For the quarter, Honduras total enrollment grew 9.4% to approximately 3,300 students, the third consecutive record-setting quarter for enrollment. For the quarter, Honduras EBITDA loss was a loss of 0.4 million compared to the positive EBITDA of 0.1 million in the prior year period. Revenue graduate school included in corporate another was 6.5 million compared to 7.5 million in the prior year period. For the quarter, graduate school EBITDA loss was 0.7 million compared to positive EBITDA of 0.8 million in the prior year period.
Speaker Change: As to your thoughts on leases.
Speaker Change: At <unk> second quarter revenue was up 15% to $16 4 million as compared to the prior year period due to continued enrollment growth and the 2023 tuition increase for.
Speaker Change: For the quarter Congress total enrollment grew nine 4% to approximately 3300 students.
Speaker Change: Third consecutive record setting quarter for enrollment.
Rick Sunderland: For the quarter, Congress's EBITDA loss was a loss of $0.4 million compared to positive EBITDA of $0.1 million in the prior period. Revenue at Graduate School, included in corporate and other, was $6.5 million compared to $7.5 million in the prior period. For the quarter, graduate school's EBITDA loss was $0.7 million compared to positive EBITDA of $0.8 million in the prior year period.
Speaker Change: For the quarter Congress EBITDA loss was a loss of <unk> 4 million compared to positive EBITDA of $1 million in the prior year period.
Speaker Change: Revenue in graduate school included in corporate and other was $6 5 million compared to $7 5 million in the prior year period.
Speaker Change: For the quarter graduate school EBITDA loss was <unk> 7 million compared to positive EBITDA of $8 million in the prior year period.
Rick Sunderland: At June 30, 2024, total cash, cash equivalent, and restricted cash was 156.2 million, an increase of 11.8 million from year-end 2023. For the six months ended June 30, 2024, cash flow from operations increased 16% to 33.2 million compared to the prior year. CapEx for the first six months was 11.4 million, and free cash flow, defined as the adjusted EBITDA of less CapEx, was 16.6 million compared to 9.2 million in the year ago. Principle on API's term loan at June 30 was $96 million. With unrestricted cash of 130 million, API continues to be net cash positive.
Rick Sunderland: At June 30, 2024, total cash, cash equivalents, and restricted cash was $156.2 million, an increase of $11.8 million from year-end 2023. For the six months ended June 30, 2024, cash flow from operations increased 16% to $33.2 million compared to the prior year. CapEx for the first six months was $11.4 million, and free cash flow, defined as adjusted EBITDA less CapEx, was $16.6 million, compared to $9.2 million a year ago. Principal on API's term loan at June 30th was $96 million.
Speaker Change: At June 32020 for total cash cash equivalents and restricted cash was $156 2 million an increase of $11 8 million from year end 2023.
Speaker Change: For the six months ended June 32024 cash flow from operations increased 16% to $33 2 million compared to the prior year.
Speaker Change: Capex for the first six months was $11 4 million and free cash flow defined as adjusted EBITDA less Capex was $16 6 million compared to $9 2 million.
Speaker Change: A year ago.
Speaker Change: Principal on API term loan at June 30 was $96 million with unrestricted cash of $130 million API continues to be net cash positive.
Rick Sunderland: With unrestricted cash of $130 million, API continues to be net cash positive. Additionally, there are no barrings under API's $20 million revolving credit facility, which remains fully available. Turning now to the third quarter of 2024 Outlook, APUS total net course registrations are expected to be flat to slightly down compared to the prior year, between 90,500 and 92,300 registrations. We believe the softness in third-quarter A2S registrations is largely attributable to changes in marketing spend in late 2023, which typically has a 2 to 3 quarter lag in registration numbers.
Rick Sunderland: Additionally, there are no borrowings under API's 20 million revolving credit facility, which remains fully available.
Speaker Change: Actually there are no borrowings under $20 million revolving credit facility, which remains fully available.
Rick Sunderland: Turning now to the third quarter, 2024 outlook. APS total debt course registrations are expected to be flat to slightly down compared to the prior year, between 90,500 to 92,300 registrations. We believe that the softness and third quarter, APS registration is largely attributable to changes in marketing spend in late 2023, which typically have a two to three quarter lag in registration numbers. Appropriate adjustments are being made to marketing spend to correct this decline. At Rasmussen and Hondras, third quarter student enrollments are actual because of the quarterly start of these schools. At Rasmussen, third quarter on-ground enrollment decrease minus 5% to approximately 6,030 students, while total online student enrollment increased 4.7% year-over-year to approximately 7,440 students for an aggregate enrollment of approximately 13,500 students.
Rick Sunderland: Adjusted EBITDA is expected to be between $9 million and $12 million in the third quarter of 2024. I will now pass it back to Angie to offer some closing remarks, after which we will begin our question and answer session.
Speaker Change: Turning now to the third quarter 2020 for outlook.
Speaker Change: Apus total net course registrations are expected to be flat to slightly down compared to the prior year.
Speaker Change: Between 9500 to 92300 registrations.
Speaker Change: We believe the softness in third quarter HOS registrations is largely attributable to changes in marketing spend in late 2023.
Speaker Change: Typically have two to three a two to three quarter lag and registration stock registration numbers.
Speaker Change: Appropriate adjustments are being made to marketing spend to correct. This decline.
Speaker Change: At Ross Austin in Honduras third quarter student enrollments are actual because of the quarterly starts with these schools are rasmussen third quarter on ground enrollment decreased minus 5% to approximately 6030 students while total online student enrollment increased four 7%.
Speaker Change: Year over year to approximately 7440 students for an aggregate enrollment of approximately 13500 students.
Rick Sunderland: This represents a slight increase compared to the third quarter of 2023 and is the first quarter of a positive year of year enrollment growth since the acquisition. At Fondro's third quarter, total student enrollment increased 10% year of year to approximately 3,100 students. In the third quarter of 2024, consolidated revenue is expected to be between 152 million and 155 million. The company expects net income to common shareholders to be between a loss of 1.2 million and income of 1 million, or between a loss of 6 cents and income of 5 cents for the limited share. Adjustive EBITDA is expected to be between 9 million and 12 million in the third quarter of 2024.
Speaker Change: This represents a slight increase when compared to the third quarter of 2023, and it's the first quarter of positive year over year enrollment growth since the acquisition.
Speaker Change: At <unk> third quarter total student enrollment increased 10% year over year to approximately 3100 students.
Speaker Change: In the third quarter of 2024 consolidated revenue is expected to be between $152 million and $155 million.
Speaker Change: The company expects net income to common shareholders to be between a loss of $1 2 million, an income of $1 million or between a loss of <unk> <unk> and.
Speaker Change: And income of <unk> <unk> per diluted share.
Speaker Change: Adjusted EBITDA is expected to be between $9 million and $12 million in the third quarter of 2024.
Rick Sunderland: Our full year guidance is unchanged, with anticipated consolidated full year 2024 revenue in a range of 620 to 630 million. We expected our adjusted EBITDA to be between 60 million to 70 million in a year. The second and third quarter tend to be seasonally low quarters with a notable increase in adjusted EBITDA in the fourth quarter. Specialist Rasmussen continues ramping in the fourth quarter.
Speaker Change: Our full year guidance is unchanged with anticipated consolidated full year 2020 for revenue in a range of $620 million to $630 million.
Speaker Change: We expect our adjusted EBITDA to be between 60 million to.
Speaker Change: The $70 million full year.
Speaker Change: The second and third quarters tend to be seasonally low quarters with a notable increase in adjusted EBITDA in the fourth quarter.
Speaker Change: Rasmussen continues ramping in the fourth quarter.
Angela Selden: I will now pass the fact that energy to offer some closing remarks, after which we will begin our question and answer session.
Speaker Change: I'll now pass it back to Andy to offer some closing remarks, after which we will begin our question and answer session Angie.
Angela Selden: Thank you, Rick. During the quarter, we continue to execute our strategic initiative to grow enrollment at APS and stabilize and increase profitability at our other units. We are further encouraged by the performance at Rasmussen as enrollment numbers have stabilized and had the first year-over-year improvement since our acquisition. Market fundamentals continue to support our business strategy with increasing growth in higher education and online education markets, and significant government education benefits for military and veterans. With our number one market position in active duty military investments and focus on high demand sectors like nursing, we are well positioned to capitalize on this growth.
Andy: Thank you Rick.
Andy: During the quarter, we continued to execute our strategic initiatives to grow enrollment in April.
Andy: Stabilized and increased profitability at our other units.
Andy: Further encouraged by the performance at Rasmussen as enrollment numbers have stabilized and had the first year over year improvement since our acquisition.
Andy: Market fundamentals continue to support our business strategy with increasing growth in higher education, and online education market and significant government education benefits for military and veteran.
Andy: With our number one market position in active duty military and veteran and focus on high demand sectors like nursing, we are well positioned to capitalize on this growth.
Angela Selden: As we move ahead in 2024 and continue to execute on our key milestone, I believe that we have built a foundation of a business that can continue to deliver to its students value. To its stakeholders' value and to their communities' value for years to come.
Angela Selden: As we move ahead in 2024 and continue to execute on our key milestones, I believe that we have built a foundation for a business that can continue to deliver value to its students.
Andy: As we move ahead in 2024 and continued to execute on our key milestones.
Andy: Believe that we have built the foundation of our business that can continue to deliver to its students value too.
Andy: To its stakeholders value and to their communities value for years to come.
Angela Selden: And with that, I would now like to hand the call back to you.
Speaker Change: And with that I would now like to hand, the call back greater to begin our question and answer session operator.
Unknown Executive: Thank you, Angie.
Speaker Change: Thank you Angie if you would like to ask a question. Please press star one on your telephone keypad to withdraw your question simply press Star One again please.
Unknown Executive: If you would like to ask a question, please press star one on your telephone keypad to withdraw your questions, and please press star one again. Please ensure that your line is not on mute when called upon.
Speaker Change: Please ensure that your line is not on mute when called upon.
Rajiv Sharma: Your first question comes from the line of Raj Sharma with B. Riley. Your line is open.
Operator: Your first question comes from the line of Raj Sharma with B. Riley. Your line is open.
Speaker Change: Your first question comes from the line of Raj Sharma with B Riley Your line is open.
Rajiv Sharma: Yeah, thank you for taking my questions. I wanted to understand a little bit, maybe get some color on Rasmussen. I see the improvement in the enrollment is now almost flat and projected to be almost flat next quarter.
Raj Sharma: Yes, Thank you for taking my questions.
Raj Sharma: I wanted to understand.
Raj Sharma: A little bit maybe get some color on the Rasmussen I see I see the improvement in the enrollment is now almost flat and projected to be almost flat next quarter.
Raj Sharma: Where, you know, can this business, what can this business do, and what it is capable of specifically, not as much in the year-on-year growth from here, but really on the EBITDA margins, you know, you had a negative nine this quarter in the EBITDA margins, you know, what could these get to in the second half? And more sort of longer term fiscal 25-26 relative to where they were. You know when you purchased Rasmussen or what the original capability of the operation was. Thank you.
Rajiv Sharma: Where, you know, can this business, what can this business do and is capable of specifically not as much in the year on your growth. But really, on the even done margins, you know, you're getting you had negative nine. This quarter in the bottom margins, you know, what could these get to in the second half.
Raj Sharma: When.
Speaker Change: Can this business and what can this business do and is capable of.
Speaker Change: Specifically.
Speaker Change: Not as much in the year on year growth from <unk>, but really on the EBITDA margins you are getting you had negative nine.
Speaker Change: This quarter in EBITDA margins.
Speaker Change: These get too in the second half.
Angela Selden: and more sort of longer term, fiscal 2526, relative to where they were, you know, when you purchased Rasmussen or what the original capability of the operation is. Thank you. Raj, thank you very much for that question. That's lengthy. Question with many component parts to it. So let me start by saying, as we signal, we believe 2824 is where Rasmussen will turn to positive adjusted EBITDA, and we see line of sight to that. We're excited about that. Several of the things that we believe will have a positive effect on 2025 include the completion of our exiting of the third party IT agreement with Colleges, and we expect to see meaningful savings on a full year run rate basis in 2025 as a result.
Speaker Change: And.
Speaker Change: And more sort of longer term.
Speaker Change: 25, 26 relative to where they were.
Speaker Change: When you purchased rasmuson or what's the original capability of the operation is thank you.
Speaker Change: Okay.
Speaker Change: Brian. Thank you very much for that question.
Speaker Change: Lengthy question with many component parts to it. So let me start by saying is we think now we believe <unk> 24 is where they will turn to positive adjusted EBITDA and we see line of sight to that we're excited about that.
Speaker Change: Several of the things that we believe we will have a positive effect on 2025 include the completion of our exiting of the.
Speaker Change: Third party agreement with Collegium and we.
Speaker Change: To see meaningful savings.
Speaker Change: On a full year run rate basis in 2025, as a result, and certainly as we turned the corner on.
Unknown Executive: And certainly, as we turn the corner on the enrollment to positive momentum in the fourth quarter and in 2025. And we believe that that will have a meaningful improvement in our adjusted EBITDA for each new dollar of revenue. We're now more than covering the fixed cost, and that has a very significant effect on our adjusted EBITDA in 2025 and beyond.
Speaker Change: The enrollment.
Speaker Change: Two positive momentum at <unk>.
Speaker Change: In the fourth quarter and in 2025.
Speaker Change: We believe that that will have a meaningful improvement in our adjusted EBITDA for each each new dollar of revenue. We are now more than covering the fixed cost and that has a very significant.
Speaker Change: <unk> on our adjusted EBITDA in 2025, and beyond we're not presently giving guidance on 2025, but I'll turn it over to see with.
Unknown Executive: We're not presently giving guidance on 2025, but I'll turn it over to Steve with any other comments he'd like to share. Yeah, Roger. I'm just saying some concepts around there. Right in the industry, in general nursing schools and schools similar to Rasmussen, operate in that, you know, 10, 15, 15 plus percent range. We're obviously working to improve that quarter-to-quarter Angie signal that we're going to be profitable in terms of EBITDA in the fourth quarter. So I think it's reasonable. I think that, you know, over time, we can get to, you know, 510 percent margins over the next one to two years. As you think about us inside the industry, that would be very consistent.
Speaker Change: Any other comments you'd like to share, yes, Raj I'll, just add some context around there right and the industry in general nursing schools and school similar Rasmussen operate in that.
Speaker Change: $10 $15 15, plus percent range, we're obviously working to improve that quarter to quarter <unk> signaled that we're going to be profitable in terms of EBITDA in the fourth quarter. So I think it's reasonable to think that over time, we can get to 5% to 10% margins.
Speaker Change: Next one to two years as you think about us inside the industry that would be very consistent.
Unknown Executive: And, you know, I think as you look forward to the third, I think you asked about the second half as well, the third quarter and then the fourth quarter, right? Will still be negative in the third quarter. But on a two-age basis, we would expect it to be positive overall for the second half and the fourth quarter itself. So what if that gives you a little bit of context around, you know, and I think the trend that has been in place for the last 12 plus months is sort of directing in that in that general zone.
Speaker Change: And I think as you look forward to the third I think you asked about the second half as well in the third quarter and then the fourth quarter rate will still be negative in the third quarter, but.
Speaker Change: On a <unk> basis, we would expect to be positive overall for the second half and the fourth quarter itself.
Speaker Change: So whether that gives you a little bit of context around.
Speaker Change: The trend has been in place for the last.
Speaker Change: 12, plus months is sort of.
Speaker Change: Directing and that and that.
Speaker Change: And that general zone.
Rajiv Sharma: Got it.
Speaker Change: Got it.
Rajiv Sharma: And then could you talk a little bit about the APIs enrollment trends and is this, is this sort of slap to down a little expected? Is that seasonal? And where do you see overall those trends in enrollment?
Speaker Change: And then could you talk a little bit about the apus enrollment trends.
Speaker Change: Is this.
Speaker Change: Is this sort of flat to down a little expected is that seasonal.
Speaker Change: And where do you see overall those trends.
Speaker Change: And enrollment.
Angela Selden: I'll start rising, and then I'll have Rick provide more. In Rick's remarks, he did discuss the decision in the fourth quarter of '23 to dial back investments in marketing in certain segments of APS. And there's a two-quarter lag that we see in terms of those investments turning into enrollment. So as we approach Q3, we are seeing the effect of that reduction in marketing spend, which has since been course corrected, and we expect in the future quarters for that enrollment momentum to return.
Speaker Change: I'll start raws and then I'll have Rick provide more detail Gary.
Rick: In <unk> remarks, he did discuss the decision in the fourth quarter of 'twenty three to dial back investment in marketing in certain segments of <unk>.
Rick: And there is a two quarter lag that we see in terms of those investments turning into enrollment.
Speaker Change: As we as we approach Q3, we are seeing.
Rick: Effect of that reduction.
Rick: A reduction in marketing spend which has since been of course corrected and and.
Rick: And we expect in the future quarters.
Rick: For for that enrollment momentum to return so Rick I'm going to turn it over to you for more detail, yes, that's exactly right Raj.
Rick Sunderland: So, Rick, I'm going to turn it over to you for more detail. Yeah, that's a copyright rush. And there is that lack, so I would suggest that if things function as we expect, and we expect they will, the course correction we're making now or have. and making recently will play out in the numbers over the two or three quarter lag. That's just the way the business functions. We remain strong in my comments. I talked about the strength of the military affiliates. We remain strong in the veterans community. And quite frankly, our market share in active duty military is the highest it's ever been.
Rick: And there is that lag so I would say.
Rick: Jeff.
Jeff: If things function as we expect and we expect they will of course correction. We're making now are have been making recently will play out in the numbers over.
Jeff: Two or three quarter lag, that's just the way the business.
Rick: Functions.
Angela Selden: We remain strong. In my comments, I talked about the strength of the military affiliation. We remain strong in the veterans community. And quite frankly, our market share in active duty military is the highest it's ever been. And so we have continued strength there. The marketing will resolve over one to two quarters, maybe three.
Jeff: We remained strong in my comments.
Rick: Talked about the strength of the military affiliated and we remained strong.
Rick: The veterans community and quite frankly, our market share.
Rick: <unk>.
Rick: Active duty military is the highest it's ever been.
Rick Sunderland: So we have continued strength there. The marketing will resolve over one to two quarters, maybe through it. Yeah, I think what I'll also say is that the, you know, the margin optimization efforts that were underway last year help us now understand the sensitivity around marketing spend. And so now that we understand that we can be a lot more thoughtful in how we invest our marketing against certain channels and segments going forward. And so we've tested that, and we now know where those boundaries are. And, you know, we also are seeing, in particular, growing strength in the veterans market.
Rick: So we have continued strength there the marketing will will resolve.
Rick: Over.
Rick: One to two quarters, maybe three.
Rick: Yes, I think what I'll also say is that the.
Angela Selden: Yeah, I think what I'll also say is that the, you know, the margin optimization efforts that were underway last year help us now understand the sensitivity around marketing spend. And so now that we understand that, we can be a lot more thoughtful about how we invest our marketing against certain channels and segments going forward. And so we've tested that, and we now know where those boundaries are. And, you know, we are also seeing, in particular, growing strength in the veteran market. It's something that we've been leaning into and wanting to see momentum built. And so we're quite pleased with the results we're seeing with veterans.
Rick: Margin optimization efforts that were underway last year.
Rick: Help us now understand the sensitivity around marketing spend and so now that we understand that we can be a lot more thoughtful.
Rick: And how we invest our marketing against certain channels and segments going forward and so we've tested that.
Rick: And we now know where those boundaries are.
Rick: And we also are seeing in.
Rick: In particular.
Rick: Growing strength in the veterans market, it's something that we've been leaning into and wanting to see momentum built and so we're quite pleased with the results we're seeing with veteran.
Rick Sunderland: It's something that we've been leaning into and wanting to see momentum built. And so we're quite pleased with the results we're seeing with veterans.
Rajiv Sharma: Great. Thanks for answering my questions. Very helpful.
Speaker Change: Great. Thank you for answering my questions is very helpful. I'll take it offline. Thank you.
Unknown Executive: I'll take it offline. Thank you. Thanks, Josh.
Raj Sharma: Thanks Raj.
Matthew Filek: Once again, if you have a question, it is star one. Your next question comes from the line of Steven Sheldon with William Blair. Your line is open.
Speaker Change: Once again, if you have a question it is star one.
Speaker Change: Our next question comes from the line of Stephen Sheldon with William Blair. Your line is open.
Matthew Filek: Hey, team, you have Matt Phylic on for Steven. Thank you for taking my questions. Wanted to start with one on the full year guidance. I'm wondering if you could talk about some of the factors that would need to play out to push you toward the upper end of the guidance range, particularly for the revenue guide, which seems to assume the decent quarter-over-quarter step up in the fourth quarter based on the three queue guide. No, there's some seasonality at play there, but any additional color would be helpful.
Matthew Filek: Hey, team. You have Matt Filek on for Steven. Thank you for taking my questions. I wanted to start with one on the full year guidance. I'm wondering if you could talk about some of the factors that would need to play out to push you toward the upper end of the guidance range, particularly for the revenue guide, which seems to assume a decent quarter over quarter step up in the fourth quarter based on the 3Q guide. I know there's some seasonality at play there, but any additional color would be nice.
Rick: Hey team you have Matt <unk> on for Stephen. Thank you for taking my questions I wanted to start with one on the full year guidance I'm wondering if you could talk about some of the factors that would need to play out to push you towards the upper end of the guidance range, particularly for the revenue guide, which seems to assume a decent.
Speaker Change: <unk> over quarter step up in the fourth quarter based on the <unk> Guide.
Speaker Change: There is some seasonality at play there, but any additional color would be helpful.
Rick Sunderland: This is Rick. I'll start, and then Angie can fill in. You bet. Well, if you want to push up through that range, things that would have to go favorably would be
Rick Sunderland: Yeah, I'll go over to Rick. Well, if you want to push up through that range, things that I think would have to go favorably would be a quicker, call it, uptake on the marketing spend at APS. We talked about what has been observed is a typical lag between altering a spend is total dollars or allocation among segments and then the resulting improvement in registrations that that accelerates. Then, of course, that would push revenue up higher in the range. We're seeing, you know, strength is at rat system, right? We've got to turn a slight, slight improvement year over year, and that momentum will continue. I think, as you commented on the strengths of the start numbers, right, which is a leading indicator as a release to total enrollment.
Rick: I'll turn it over to Rick This is Eric I'll start and then Andrew can fill that you bet.
Rick: Well, if you want to push up to that range things that would.
Rick: I'd have to go favorably would be.
Speaker Change: A quicker uptake on the marketing spend.
<unk>: At <unk>, we talked about what has been observed is.
Andrew: Typical lag between alter your spend is.
Rick: Total dollars or allocation amongst segments and then the resulting.
Rick: Improvement in registrations if that accelerates.
Rick: Then of course that we push revenue up hiring the range.
Rick: We are seeing.
Rick: <unk>.
Rick: Strength rasmuson right.
Rick: We've got the term a slate.
Rick: Improvement year over year and that momentum.
Rick: We will continue and I think as you commented on the street.
Rick: <unk> start numbers, right, which is a leading indicator as it relates to total enrollment.
Rick Sunderland: And that strength could accelerate or build on itself to push us up. Then you drop down the Hondros. They've got a new program that they're introducing at the new program.
Rick: And that strength could.
Rick: Accelerate or build on itself.
Rick: Pushed us up.
Rick: Then you drop down to Honduras, they've got a new program that they're introducing a new program.
Rick Sunderland: We don't have any. and the observable experience in medical assisting us to how that enrollment pattern will ultimately play out. That could go up or go down, right? It's just a new program.
Speaker Change: We don't have any.
Speaker Change: Observable experience in medical assisting as to how that enrollment pattern will ultimately play out.
Speaker Change: It could go up or go down right.
Speaker Change: Program and then graduate school, we've got the summers who's in the room here is back.
Rick Sunderland: And then graduate school, we've got Steve Somers, who's in the room here, who's back, and while at the smaller piece of the overall enterprise, it certainly had an impact on the Q2 reported results. And then, of course, the office could be true. An uptake of a million or two there in the federal workforce would obviously be very helpful against the range.
Rick: It's a smaller piece of the overall enterprise it certainly had an impact on the Q.
Rick: Q2 reported results and then of course, the opposite could be true.
Speaker Change: And uptake of a $1 billion or two there in the federal workforce.
Speaker Change: Obviously be very helpful.
Matthew Filek: It's all paused there on the end of the comments. So I think that's a pretty good synopsis. You know, the last thing I would say is that we passed all on price increases, certain segments across APS, Honduras, and Rassistan, and assuming that those price increases continue to hold without degradation in our student enrollment, that'll also play favorably in the overall revenue that we would expect for the full year. Got it. That's a helpful color.
Speaker Change: The rage, so I'll pause there.
Speaker Change: Add to the comments.
Speaker Change: So I think that I think that's a pretty good synopsis. The last thing I would say is that we passed on price increases.
Speaker Change: Certain segments across eight U S Congress, <unk> and assuming that those price increases continue to hold.
Speaker Change: Without degradation in our student enrollments.
Speaker Change: Also at play favorably.
Speaker Change: In the okra on overall revenue that we would expect for the full year.
Angela Selden: Got it. That's a helpful color. Thank you, Angie and Rick. And then...
Speaker Change: Got it that's helpful color. Thank you Angie and Rick and then.
Angela Selden: Thank you, Angie and Rick. And then, had another one on NCLEX scores. Imagine this is tougher to call. But do you have any rough estimate on when you might have all of your nursing programs with first-time NCLEX pass rates that exceed state nursing board standards? I know you continue to make good progress on that with the variety of initiatives you have underway. But any sense of timing on completely resolving those first-time NCLEX pass rate issues at the remaining campuses.
Speaker Change: I had another one on <unk> scores.
Speaker Change: This is tougher to call, but do you have any rough estimate on when you might have all of your nursing programs with first time <unk> pass rates that exceed state nursing Board standards.
Speaker Change: We continue to make good progress on that with a variety of initiatives you have underway, but any sense of timing on completely resolving those first time <unk> pass rate issues at the remaining campuses.
Angela Selden: Sure. The one campus that we are paying attention to is in Illinois where we have done a significant amount of renewing of faculty. We are upgrading the curriculum that campus was operating with an older version of the curriculum that was not aligned with the Next Gen NCLEX testing. And so we believe that the turn on NCLEX scores in Illinois will be slower than the two other remaining campuses. But we are incredibly happy with the NCLEX results that we are posting now. All of our BSN programs, all of them are above the state standards. All but one in our ADN program, which had been an area of challenge force in the past, and two of our PM programs. And so we are just very pleased with the incredible terms that RACIS has demonstrated in terms of improving its NCLEX and CLACS pass rates.
Angela Selden: Sure. The one campus that we are paying attention to is in Illinois, where we have done a significant amount of recruiting. We're upgrading the curriculum. That campus was operating with an older version of the curriculum that was not aligned with the next-gen NCLEX testing. And so we believe that the turn on NCLEX scores in Illinois will be slower than the other remaining campuses, but we are incredibly happy with the NCLEX results that we're posting now.
Speaker Change: Sure.
Speaker Change: I see.
Speaker Change: One campus that we are paying attention to is in Illinois.
Speaker Change: Where we have.
Speaker Change: Done significant amount of of renewing of faculty.
Speaker Change: We're upgrading the curriculum that campus was operating with an older version of the curriculum that was not aligned with the nexgen and collect testing and so we believe that the turn on and click scores in Illinois will be slower than the.
Speaker Change: Two other remaining campuses so.
Speaker Change: But we are incredibly happy with the results that we're that we're posting now all of our BSN programs all of them are above the state standards, all but one in our ADN program, which had been an area of challenge for us in the past and two.
Angela Selden: All of our BSN programs, all of them are above the state standards, all but one in our ADN program, which had been an area of challenge for us in the past, and two of our PN programs. And so we're just very, very pleased with the incredible turn that RASMUS has made in terms of improving its NCLEX pass rates. Matt, Steve, let me just
Speaker Change: RPM programs.
Speaker Change: So we're just very very pleased with the incredible turn that <unk> demonstrated in terms of improving at Sunquest and <unk> pass rates, Matt Steve Let me just add one more comment to that if you went back.
Angela Selden: Let me just say one more comment to that. If you went back in terms of the number of programs that are passing today, year to date, 22 out of 25, that is now higher than it was in the prior two years before we acquired the business.
Speaker Change: In terms of the number of programs that are passing today year to date 22 out of 25 that is that is now higher than it was in the prior two years.
Speaker Change: Before we acquired the business. So we've obviously made a lot of improvement in the near term, but now we are on a path to a.
Matthew Filek: So we've obviously made a lot of improvement in the near term, but now we are on a path to a better result on a longer term basis as well. Perfect. That's great color, and yet great to see the continued progress there. Thanks.
Speaker Change: A better result on a longer term longer trend basis as well.
Speaker Change: Okay.
Matthew Filek: Perfect. That's a great color. And yeah, great to see the continued progress there.
Speaker Change: Perfect that's great color and great to see the continued progress there. Thank you.
Unknown Executive: Thank you.
Speaker Change: Thank you.
Jasper Bibb: Your next question comes from the line of Jasper Bibb with True Securities. Your line is open.
Speaker Change: Your next question comes from the line of Jasper Bibb with tourists Securities. Your line is open.
Speaker Change: Yes.
Unknown Caller: Hey everyone. Apologies if anything has been answered already. I joined a little bit late from another call. Just wanted to ask about Rasmussen Nursing. I guess, is there any update on the Florida RU campuses from last quarter? And I think there's also potentially a bill in Illinois to help you a bit with the campus you mentioned in the last answer. Any change there?
Jasper Bibb: Hey everyone, apologies if anything has been answered already. I joined a little bit late from another call. Just one of the asked about Rasmussen; they're saying, I guess, is there any update on the floor that are you campuses from last quarter? And I think there's also potentially a bill in Illinois to help you a bit with the coffee you mentioned on the last answer. Any change there? Sure, so Jasper, not exactly sure what specifically you mean relative to the Florida campuses. So I'll start with NCLEX results where we have all program campus combinations meeting the state standard for the year-to-date measurement period.
Speaker Change: Everyone apologies if anything has been answered already I joined a little bit late from another call.
Jasper Bibb: Just wanted to ask about Rasmussen nursing.
Speaker Change: I guess is there any update on the Florida argue campuses from last quarter and I think there's also potentially a bill in Illinois.
Speaker Change: Kathy you mentioned.
Speaker Change: On the last answer any change there.
Speaker Change: Sure So Jeff I'm not exactly sure.
Speaker Change: What specifically you mean relative to the Florida campuses. So I'll start with <unk> results, where we have all program campus combination.
Speaker Change: Meeting the state standard for the year to date.
Speaker Change: Measurement period. So we're very very pleased with the incredible turnaround that we've had in <unk> performance in Florida.
Angela Selden: So we're very, very pleased with the incredible turnaround that we've had in NCLEX performance in Florida. Can you repeat that? If that doesn't answer your question, is there something more specific here you had in mind? No, no, that's helpful. I think last quarter there was basically a technical thing where you had a really old cohort that triggered some of those campuses going on probation, and it sounded like everything was. Yeah, that's right. We've been really happy with the results of pushing through and putting every single program-campus combination in the green.
Speaker Change:
Angela Selden: Can you repeat that? If that doesn't answer your question, is there something more specific here?
Speaker Change: Can you repeat that if that doesn't answer your question is there something more specific here you had in mind.
Unknown Caller: No, no, that's helpful. I think last quarter there was basically a technical thing where you had a really old cohort that triggered some of those campuses going out on probation, and it sounded like everything was moving in the right direction. Yeah, that's right. We've been really happy with the results of pushing through and putting every single program campus combination in the green. Okay, great. And the second part of the question was, I think there was a bill in Illinois that could give you some relief on a bench on campus, a little bit longer turnaround time there.
Speaker Change: No no. That's helpful. I think last quarter. There was basically a technical thing where you had a really old cohorts that triggered some of those campuses going on probation and it sounded like everything yeah. That's correct.
Speaker Change: We've been really.
Speaker Change: Happy with the results of pushing through and and putting every single program campus combination in.
Speaker Change: In the Green.
Angela Selden: Okay, great. The second part of the question was, I think there was a bill in Illinois that could give you some relief on a bench of campus. A little bit longer turnaround plan there. I think that bill might have before they do, you know, a little longer time to set up a relevant threshold, which is kind of curious if there's only update there or that's still kind of in the works through their legislature. Yes, that still remains in place. And so that relief affords us a two-year measurement period. We certainly aren't going to wait until the end.
Speaker Change: Okay great.
Speaker Change: Second part of your question was.
Bill: Bill in Illinois that could give you some relief on.
Speaker Change: Catherine.
Speaker Change: The longer turnaround plan there.
Unknown Caller: I think that bill might have afforded you, you know, a little more time to get that up to the relevant threshold. Just kind of curious if there's any update there or if that's still kind of in the works through their legislature.
Speaker Change: I think that bill might've before they do.
Speaker Change: I'll just.
Speaker Change: That's irrelevant thresholds just kind of curious if there was any update there or that's still kind of in the works through their legislature.
Angela Selden: Yes, that still remains in place, and so that relief affords us a two-year measurement period. But we certainly aren't going to wait until the end.
Speaker Change: That still remains in place and so that.
Speaker Change: Relief affords us a two year measurement period.
Speaker Change: We certainly arent going to wait until the end, where we're working very aggressively and as I did mentioned I think before you joined the call here. We've done two major thing in Illinois to accelerate our performance in that in those campuses, including.
Angela Selden: We're working very aggressively, and as I did mention, before you joined the call here, we've done two major things in Illinois to accelerate our performance on those campuses, including basically a replacement revitalization of several of the faculty there. And importantly, we are modernizing the curriculum. Illinois, for a technical reason, a Board of Nursing reason, had required us to be operating with a curriculum that was older than the version of the curriculum we had been offering at our other campuses.
Angela Selden: We're working very aggressively. And as I did mention, I think before you join the call here, we've done two major things in Illinois to accelerate our performance in that in those campuses, including basically a replacement revitalization of several of the faculty there. And importantly, we are modernizing the curriculum, Illinois, for a technical reason, a board of nursing reason, that had required us to be operating with a curriculum that was older than the version of curriculum we had been offering in our other campuses. We were able to work with the Board of Nursing to allow them have them allow us to modernize that curriculum.
Angela Selden: We were able to work with the Board of Nursing to have them allow us to modernize that curriculum, so now we are moving that curriculum to the next-gen version, which is the version for the new exam, and we have a high degree of confidence that the new faculty, the dedicated attention from our nursing leadership, and the new curriculum will allow us to see significant improvements on our Illinois campuses in the future.
Speaker Change: Basically a replacement revitalization of the several of the faculty there in.
Speaker Change: And importantly, we are modernizing the curriculum, Illinois for a technical reason.
Speaker Change: Board of nursing reason had required us to be operating with a curriculum that was older than the version of curriculum, we had been offering and our other campuses, we were able to work with the board of nursing to allow them.
Speaker Change: Have them allow us to modernize that curriculum. So now we're moving that curriculum too.
Angela Selden: So now we are moving that curriculum to the next gen version, which is the version for the new exam. And we have a high degree of confidence that the new faculty, dedicated attention from our nursing leadership, and the new curriculum will allow us to see significant improvements in our Illinois campuses in the future.
Speaker Change: The next Gen version, which is the version for the new exam and we have a high degree of confidence that the new faculty the dedicated attention from our nursing leadership and the new curriculum will allow us to see significant improvements in.
Speaker Change: In our Illinois campuses in the future.
Unknown Caller: Well, that's very helpful. Thanks for taking the time to ask the question.
Speaker Change: All right very helpful. Thanks for taking the question.
Jasper Bibb: Thank you.
Speaker Change: Thank you.
Unknown Executive: This concludes our question and answer session.
Operator: This concludes our question and answer session. I'd now like to turn the call back over to Angie for closing remarks.
Speaker Change: This concludes our question and answer session I would now like to turn the call back over to Andy for closing remarks.
Angela Selden: I now like to turn the call back over to Angie for closing remarks. Thank you, operator. I'd like to thank each of you for joining our earnings conference call. We look forward to continuing to update you on our ongoing progress and growth as we continue our rapid pace of operational execution.
Angela Selden: Thank you, operator. I'd like to thank each of you for joining our earnings conference call. We look forward to continuing to update you on our ongoing progress and growth as we continue our rapid pace of operational execution. If we were unable to answer any of your questions, please reach out to our IR firm, Emsi Group, who would be more than happy to assist.
Andy: Thank you operator.
Speaker Change: Like to thank each of you for joining our earnings conference call.
Andy: Look forward to continuing to update you on our ongoing progress in growth as we continue our rapid pace of operational execution.
Unknown Executive: If we were unable to answer any questions, please reach out to our IR firm, MC Group, who would be more than happy to assist.
Speaker Change: If we were unable to answer any questions. Please reach.
Speaker Change: Out to our IR firm MZ group, who would be more than happy to assist.
Unknown Executive: Ladies and gentlemen, this does conclude today's conference. Thank you for your participation. You may now disconnect your lines and have a wonderful day.
Operator: Ladies and gentlemen, this does conclude today's conference. Thank you for your participation. You may now disconnect your lines and have a wonderful day.
Speaker Change: Ladies and gentlemen, this does conclude today's conference. Thank you for your participation you may now disconnect your lines and have a wonderful day.
Speaker Change: Thank you.
Speaker Change:
Speaker Change:
Speaker Change: Yeah.