2013 J.P. Morgan Ultimate Services Conference

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2013 J.P. Morgan Ultimate Services Conference

  1. 1. J.P. Morgan 2013 Ultimate Services Conference November 13, 2013
  2. 2. FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements including, without limitation, statements with respect management’s expectations regarding student persistence, institutional accreditation, the results of the Company's initiatives, emerging trends, Q3 2013 campaign, 2013 outlook, financial results and and related commentary. These statements involve risks and uncertainties, and the Company's actual performance may differ materially from those expressed in or suggested by such statements. Risks and uncertainties include, without limitation: • • • • • failure to comply with the extensive regulatory framework applicable to the Company and its institutions, including Title IV of the Higher Education Act and its regulations, state laws and regulatory requirements, and accrediting agency requirements; adverse regulatory or legislative changes affecting the Company's institutions; the imposition of fines or other corrective measures against the Company's institutions; competition in the postsecondary education market and its potential impact on the Company's market share and recruiting costs; and reputational and other risks related to potential compliance audits, regulatory actions, negative publicity or service disruptions. More information on potential factors that could affect the Company's performance is included from time to time in the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company's periodic reports filed with the SEC, including the Company's Annual Report on Form 10K for the year ended December 31, 2012, filed with the SEC on March 12, 2013 and amended on May 17, 2013, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed with the SEC on May 15, 2013, and the quarterly report on Form 10Q for the quarter ended June 30, 2013, filed with the SEC on August 6, 2013. Forwardlooking statements are made on the basis of management's views and assumptions regarding future events and business performance as of the time the statements are made, and the Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates, except as required by law.
  3. 3. RECOGNIZED BRANDS Ashford University University of The Rockies • AA, BA, MA, MBA • MA, PsyD, PhD • 17 NAIA Sports Teams • Social & Behavioral Sciences • Online & Clinton, IA Campus • Colorado Springs Campus • WASC approved -- 5 years* • Denver Instructional Site • Forbes Alliance • HLC Accredited AU and UOR Students AU Programs Doc 1% MA 13% AA 9% Non-D 1% Edu 21% BA 77% 99% Online Hcare 23% Bus 33% 71% Female 48% Minority Lib Arts 23% 37 Years Old *On July 10, 2013, the WASC granted Initial Accreditation to Ashford University for five years, subject to, among other things, approval of U.S. Department of Education.
  4. 4. DIFFERENTIATION… OTHERS TUITION Affordable Innovative AU VALUE Quality “Ashford strategically and thoughtfully reallocated significant resources across the entire student life cycle in order to positively impact student success.”
  5. 5. AFFORDABILITY 47% 35% 40% $ per Equivalent Credit Hour* 25% $500 15% 13% 12% 11% 20% $400 0% -23% -20% $300 -39% -39% -40% $200 -60% $100 $- -80% -100% * $ per credit hour before applicable fees, discounts or scholarships % Difference $600
  6. 6. INNOVATION & R.E.A.L. Dashboard “… these systems hold tremendous promise for ensuring educational quality …“* Ralph Wolff, WASC MOBILE ACCESS & Apple™/ Android™ • • • Constellation Students Classroom • • • *A copy of the WASC action letter and visiting team report from the review of Ashford University is available on the WASC website at www.wascsenior.org Admin Faculty Grade Book
  7. 7. QUALITY Quality Initiatives University Advisors • Extend relationship to 26 wks • Learning Problem-solving Focus • Smaller Class Sizes • Continued Technology Investment • InsideTrack • 120 Constellation titles • 2 Advisors thru 4th Course • Waypoint in more than 200 AU courses • Measure Student Engagement • Predictive Modeling • Better Persistence Faculty • More Full-Time Faculty • Faculty Forums: Course, Program Development • Faculty Training, Mentoring • Measure Faculty Effectiveness Student Support Quality Matters • > 85% of AU Courses Certified • Clear Industry Leader
  8. 8. Forbes School of Business  Grad & Undergrad  Forbes Brand Expands AU Corporate Relationships  Growing Digital Presence Reaches Online Students  Unique Speaker Events for Online Students  More than 1200 Forbes Contributors  Unique Learning Material Creates Value for Students
  9. 9. BRAND STRATEGY ASHFORD UNIVERSITY
  10. 10. BRAND STRATEGY • Branding Reinforces the Value Proposition • Combines Traditional & Interactive Media: - Attract learners most likely to persist / graduate • Media Mix Optimization: - Advanced analytics targets effective media channels Increases organic student inquiries • Brand Strength: - Build on and maintain positive momentum, perception and sentiment • Overall Goal: “Organic” Inquiries
  11. 11. BRAND CAMPAIGN TECHNOLOGY CHANGES EVERYTHING. Q3 2013 Campaign -- Early Results Organic channels show continued strength -Since campaign launch:  35% increase in Organic inquiries  41% increase in new enrollments from Organic channels  11% increase in conversion of Organic applications  Even greater increase in Total Conversion (inc. non-Organic)
  12. 12. 2013 FINANCIAL REVIEW
  13. 13. FINANCIAL MODEL HIGHLIGHTS • Highly Competitive Tuition Pricing  One of the lowest in the sector  Below Title IV Loan Limits • Increasing Investment in Student Success • Emerging Trends: - Continued Student Demand Increasing Advisor Productivity Branding: Increasing Organic Interest Improving Persistence No Accreditation Headwind • Strong Cash Position, No Debt
  14. 14. REGULATORY UPDATE • WASC Approval Announced July 10, 2013 “What have resulted are self-reflection and evaluation, significant change, and excitement for that which is now occurring. Indeed, the changes that have occurred in such a short time border on being revolutionary. They include what the team considers to be a number of “best practices” and what can become a model for online higher education for a non-traditional student population.” WASC Visit Team Final Report, May 2013 • DoE Approved WASC accreditation Nov. 8, 2013 -- PPA document in process
  15. 15. CONSISTENT REGULATORY METRICS 2012 2011 2010 2009 Ashford 2-Yr. CDR --- 10.1%* 10.2% 15.3% Rockies 2-Yr. CDR --- 4.9%* 4.0% 3.3% Ashford 3-Yr. CDR --- --- 16.3%* 19.8% Rockies 3-Yr. CDR --- --- 8.0%* 3.3% Ashford 90 /10 Ratio 86.4% 86.8% 85.0% 85.5% Rockies 90 /10 Ratio 87.3% 85.0% 85.9% 84.6% *draft data
  16. 16. CONSISTENT PERFORMANCE HISTORY Enrollments Revenue 105,000 $1,050.0 86,642 85,000 77,892 81,810 $933.3 $850.0 $713.2 68,566 65,000 $968.2 $605.6 $650.0 53,688 $454.3 45,000 $450.0 31,558 $250.0 $218.3 25,000 5,000 $50.0 2008 2009 2010 2011 2012 Q3 2013 2008 2009 2010 2011 2012 YTD 2013
  17. 17. OPERATING MARGIN 40.0% 30.3% 30.0% 29.3% 20.2% 20.0% 18.0% 15.3% 12.0% 10.0% 0.0% 2008 2009 2010 2011 2012 YTD Q3'13
  18. 18. CASH FLOW AND EPS Net Cash Provided By Operating Activities $250.0 $3.50 $220.8 $3.02 $3.00 $189.9 $200.0 Fully-Diluted Earnings Per Common Share $2.50 $150.0 $2.14 $143.2 $131.7 $2.21 $2.00 $1.50 $100.0 $70.7 $54.3 $1.00 $0.74 $0.85 $50.0 $0.50 $0.0 $0.16 $0.00 2008 2009 2010 2011 2012 YTD Q3'13 2008 2009 2010 2011 2012 YTD Q3'13
  19. 19. THANK YOU

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