Zovio Inc
Q4 2017 Earnings Call Transcript

Published: 22 Feb 2018

[Operator:]

Good afternoon and welcome to Bridgepoint Education's Fourth Quarter 2017 Earnings Conference Call. Today’s call is being recorded. At this time, I would like to turn the call over to Ms. Anna Davison, VP of Corporate Communications and Investor Relations for Bridgepoint. Please go ahead.

[Anna Davison:]

Thank you, Christine and good afternoon. Bridgepoint Education's fourth quarter 2017 earnings release was issued earlier today, and is posted on the Company’s website at www.bridgepointeducation.com. Joining me today are Andrew Clark, Chief Executive Officer; and Joe D’Amico, Interim Chief Financial Officer. We would like to remind you that some of the statements we make today may be considered forward-looking, including statements regarding enrollments, student persistence and graduation rates, bad debt, pending legal matters, other financial and related guidance, the impact of our student support efforts, our ability to manage regulatory metrics and commentary regarding the remainder of 2018 and later. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Please note that these forward-looking statements speak only as to the date of this presentation and we undertake no obligation to update these forward-looking statements in light of new information or future events, except to the extent required by applicable securities laws. On the call today, we will also discuss certain non-gap financial measures. In our earnings release, you will find additional disclosures regarding non-gap financial measures, including reconciliations of these measures with US gap. Note that these non-gap financial measures are intended to supplement gap financial information and should not be considered as a substitute for our gap results. Please refer to our SEC filings, including our annual report on Form 10-Q for the quarter ended December 31, 2017, which was filed with the SEC today, as well as our earnings press release we also posted today for a more detailed description of the risk factors that may affect our results. You may obtain copies from the SEC or by visiting the Investor Relations section of our website. At this time, it is my pleasure to introduce Bridgepoint Education's CEO, Andrew Clark.

[Andrew Clark:]

Thank you Anna, and welcome to Bridgepoint Education's fourth quarter 2017 earnings call. After I discuss our fourth quarter, our Interim CFO, Joe D’Amico, will review our fourth quarter financial results and key operating metrics. After Joe speaks, I will offer my closing comments. I want to begin today's call by saying we are pleased with our performance in the fourth quarter of 2017, and it is consistent with the expectations we had throughout 2017and on our last earnings call. As many of, during 2017, the company made a strategic shift in its marketing strategy so that we could accomplish two key objectives. We wanted to attract prospective students who have a higher probability of being academically successful, and at the same time make meaningful improvements to the efficiency of our advertising admissions, and marketing spend. Partially, as a result of this change and consistent with the view we provided last quarter, our new enrollment for the fourth quarter of 2017 was down by low single digits as a percentage when compared to Q4 of 2016. New enrollments at Ashford from our home grown channels continue to improve. We can also see the strength of our strategy and the fact that while our student inquiries were down 27% in the quarter as compared to the prior year quarter, our new enrollments declined by just low single digits over the same period. Additionally, the percentage of new students who ultimately matriculate, has steadily improved year over year, an early indication that we are attracting students with a higher probability of being academically successful. As many of you know, new enrollments for the past quarter were impacted by Ashford University's voluntary decision to temporarily suspend the enrollment of student veterans on November 14, 2017. So to look at the fourth quarter in an equivalent way, when we remove the enrollments for both Q4 2017 and Q4 2016, we can see that our strategic efforts continue to be affective, and new enrollments would have been flat when compared to the same quarter for the previous year. Additionally, we would have seen greater marketing efficiencies had we not made the voluntary decision to temporarily stop enrolling new VA students during the quarter. For example, in the fourth quarter, student inquiry conversion rates were up approximately 22%, while cost per new enrollment increased slightly by almost 3%. However, if we compare Q4 2017 results to Q4 2016 results, and remove new VA enrollments for each quarter, we see student inquiry conversion increased by approximately 33%, and cost per new enrollment declined by almost 8%, clearly demonstrating the increased effectiveness and efficiency of our marketing strategy. Now I want to update you on the progress we continue to make with our education partnership programs. The Full Tuition Grant programs use tuition assistance benefits provided by our corporate partners to provide a debt free education to their employees. Full Tuition Grant enrollment represents just over 10% of total enrollments as of December 31, 2017, which was an increase from the approximately 6% of total enrollments as of one year ago. During the fourth quarter of 2017, we added eight new corporate Full Tuition Grant partners to the program. Student enrollment in this program continues to increase, and related total enrollments were up by approximately 67% as compared to the same quarter a year ago. These innovative programs are positive examples of the benefits of partnering with employers. We can provide an education to students without requiring them to take on any debt, and employers can develop, retain and grow the skills of their employees. Turning now to student retention. Ashford continues to focus on interventions designed to assure student preparedness, raise academic quality, and improve student outcomes. Ashford’s annual cohort retention rate was 58.7% for the fourth quarter of 2017, as compared to 59.8% for Q4 2016. Although retention was down year over year, it has improved over sequential quarters, increasing by 50 basis points when compared to the third quarter of 2017. We continue to focus on increasing our Full Tuition Grant program students, and our graduate students, who both retain at a higher rate. Despite improving our student mix and implementing innovative intervention strategies, retention has been a challenge throughout 2017. We conducted research to better understand why retention has been so challenging, and we found there’s a strong negative correlation between the number of students who drop and the unemployment rate. It’s apparent that a robust economy and low unemployment throughout 2017, has produced a headwind to our retention efforts. The strong economy has resulted in lower enrollments for many universities throughout higher education. We have data that tells us our retention would have been lower due to the external factors, if not for the various retention strategies we've developed throughout 2017. Despite the current environment, this past quarter, Ashford University has experienced only a small decrease in retention rates, a comparatively flat enrollment rate if you account for changes in our VA enrollments, and the growing percentage of corporate partnerships students, all reasons to be pleased with our performance this last quarter. In addition, as a metric for assessing customer satisfaction with our products and services, we track our net promoter score or NPS. For the year ended December 31, 2017, the NPS score for Ashford was 49.3. We are pleased with this result, and when looking at other companies with NPS scores in the range of 41 to 52, we are in a similar range as companies such as Discover, State Farm, and other schools such as Wharton School of Business and Harvard Business School. Now I will update you on the company's continued focus on our three main goals. First, closing the skills gap. Second, closing the learning gap. And third, closing the transparency gap. First, closing the skills gap, employers and industries have a growing need for skilled workers in high demand jobs. We continue to focus on diversifying our portfolio of program offerings, primarily at the graduate degree level, to help fill these high demand areas. During the fourth quarter of 2017, Ashford received approval from the Department of Education for 16 new programs. Since that time, Ashford has launched nine of those new programs, with students starting in classes during the first quarter of 2018. We will roll out the remaining programs over the rest of 2018. We plan to invest in marketing efforts to support these new programs, and we expect to see growth from these programs in 2019. Another example of our efforts to address the skills gap is our work in aligning programs to industry requirements, which better prepares graduates for employment in these industries. Achievement of specialized accreditation serves as further evidence that programs meet professional and industry standards. 25 of the programs offered through the Forbes School of Business And Technology, FSBT, are currently accredited by the International Accreditation Council for Business Education, IACBE. The FBST was part of a pilot for a new specialized accreditation for its accounting programs, and participated in a reaffirmation of accreditation site visit with IACBE in May of 2017. In December 2017, IACBE notified the college that its business programs had been reaffirmed for seven years, and that its accounting programs had received a specialized accreditation. In addition, Ashford University’s Bachelors of Science in Health Information Management, BSHIM, was accredited by the Commission on Accreditation for Health, Informatics and Information Management Education, CAHIIM on December 4, 2017. Ashford University has also recently become a participating member of the Credential Engine, a nonprofit organization dedicated to the mission of promoting transparency and literacy in the credential marketplace, and sharing relevant information with the public. Schools such as Stanford University and Indiana State, are also participating members. The organization has set the stage for gathering credentialing information from all types of sources, including degrees, certificates, badges, apprenticeships, licenses micro credentials, and PhDs, drastically improving credential transparency. Credential Engine is playing an invaluable role in connecting job seekers and students to credentials that matter in the workforce, by making the US landscape of credentials available through an open, interoperable registry, people will better understand what credentials are available to them and the learning that stands behind each of those credentials. Our second goal is closing the learning gap. In 2017, Ashford University launched its honors college to help attract and retain its highest achieving students. Ashford is seeing good progress with the program, with students who enroll continuing to have an average GPA of 3.90. We recently increased our efforts to reach out to prospective new students who would qualify for the program. We anticipate that the effect of all of these efforts should lead to increased retention over time. I also want to provide an update on our tutoring on-demand program, which was first rolled out at Ashford in 2016. This program is available 24/7 and give students immediate access to tutors who can help them with their assignments via live chat or via a webcam. We have enhanced the student experience and have made tutoring on-demand available for more of our most rigorous courses. The expansion of this benefit to more classes, is the result of an institution wide commitment to the success of our students, as well as collaboration and agreement on which courses are the most challenging and where we can provide the most valuable assistance to our students. Ashford’s College of Education is also working on closing the learning gap by partnering with No Excuses University, which promotes college readiness for K-12 students in more than 250 underperforming or low socioeconomic schools in 22 states. Ashford is the only US institution that is committed to sponsor a classroom in every school in the No Excuses University network. Additionally, Ashford’s College of Education awards two full tuition scholarships annually to both a teacher and a parent of a child participating in the network. Our third goal is closing the transparency gap. As we've discussed previously, there is a need for updated consumer information that can provide a more accurate picture of the complex US higher education landscape, and better enable students to make informed decisions. The National Survey of Student Engagement or NESI, is the leading source of engagement information at colleges and universities, and Ashford has administered a NESI survey five times since 2010. The results are analyzed locally, and in conjunction with the comparative national data, are disseminated widely throughout the institution. The following are some of the findings from a recent study by prior education insights regarding Ashford's NESI results as compared to participating four year institutions. First, Ashford provides an academic challenge that ranks with the top 10% of four year colleges in the United States. Second, Ashford is comparable to the top 10% in higher order learning. And third, Ashford is comparable to the top 10% in reflective and integrative learning. And also, Ashford is comparable to the top 10% in learning strategies. Moving forward, we will continue to implement these initiatives, as well as to find others. I look forward to sharing the progress of our efforts. Now I’ll turn the call over to Joe D’Amico, our interim Chief Financial Officer, to review our financial and operating results.

[Joe D’Amico:]

Thank you, Andrew. Let me begin by providing some key financial and operating information for the quarter and year ended December 31, 2017. For the fourth quarter of 2017, revenue was $105 million compared to $119.5 million for the same period in 2016. The decrease is primarily due to lower average weekly enrollment year over year. As of December 31, 2017, total student enrollment was 40,730, compared to 45,087 as of December 31, 2016. For the fourth quarter of 2017, instructional cost and services were $55.3 million, or 52.7% of revenue, compared to $63.8 million or 53.3% of revenue for the comparable period of the prior year. The slight decrease as a percent of revenue was primarily driven by a decrease in bad debt. Bad debt expense in the fourth quarter of 2017 was $7.7 million or 7.3% of revenue, compared to $9 million or 7.5% of revenue for the comparable prior period. We continue to implement changes in our processes, which we believe will help us reach our goal of reducing this expense as a percentage of revenue over time. Admissions, Advisory and Marketing expenses for the fourth quarter of 2017, were $43.3 million or 41.2% of revenue, compared to $45.4 million or 38.0% of revenue for the comparable period. The increase as a percent of revenue, was primarily driven by a decision to increase advertising costs in the quarter to mitigate the impact of our voluntary decision to not enroll VA students, offset by lower enrollment counselor headcount and costs. Overall, the net effect is that costs were down $2.1 million quarter over quarter. General and administrative expenses for the fourth quarter of 2017 were $10.4 million or 9.9% of revenue, compared to $12.1 million or 10.2% of revenue for the comparable period. The decrease in dollars and as a percent of revenue, was primarily driven by lower administrative cost and consulting fees, offset by higher professional fees. Included in our three main expense categories for the fourth quarter of 2017 is approximately $800,000 related to stock based compensation expense, compared to $1.6 million in the comparable period. We recorded $700,000 of restructuring and impairment charges in the fourth quarter of 2017, as compared to $16.5 million in the fourth quarter of the prior year. We also recorded $1.8 million of legal settlement expense in the fourth quarter of 2017, as compared to $200,000 in the fourth quarter of the prior year. Net loss for the fourth quarter of 2017 was $5.7 million, or a loss of $0.20 per diluted share, compared with net loss $13.8 million, or a loss of $0.30 per diluted share for the same period in 2016. The non-GAAP net loss for the fourth quarter of 2017 was $4.4 million, or a loss of $0.16 per diluted share, compared to a non-GAAP net loss of $700,000, or a loss of $0.01 per diluted share for the fourth quarter of 2016. Now let me move to discussing full year results. Revenue for the full year ended December 31, 2017 was $478.4 million, compared to revenue of $527.1 million for the year ended December 31, 2016. The decrease is primarily due to lower average weekly enrollment year over year. Net income for the year ended December 31, 2017, was $10.5 million or diluted income per share of $0.32, compared with a net loss of $30 million or diluted loss per share of $0.65 for the year ended December 31, 2016. Non-GAAP net income for the year ended December 31, 2017 was $19.2 million, or non-GAAP diluted income per share of $0.59, compared to non-GAAP net income of $8.4 million or non-GAAP diluted income per share of eig$0.18 for the year ended December 31, 2016. Income tax benefit for the full year ended December 31, 2017, was $1.2 million. In 2017, the company was in a taxable loss position. The income tax benefit is primarily related to discrete tax benefits. At December 31, 2017, the company had a $5.5 million net operating loss carryforward. During the fourth quarter, Warburg Pincus divested their remaining position in Bridgepoint after having been a strong partner to our company for over a decade. At the time of their divestiture, we made the decision to repurchase 2.1 million shares of our common stock for approximately $16.7 million or $7.90 per share. The company used $4.1 million of cash in operating activities during the 12 months ended December 31, 2017. By comparison, the company had $11.1 million in cash provided from operating activities during the same period in 2016. Capital expenditures for the 12 months ended December 31, 2017 were $3.4 million, as compared to $1.9 million in the comparable period last year. As a December 31, 2017, the company had combined cash, cash equivalents and investments of $187.2 million as compared to $357.2 million as of December 31, 2016. This decrease is due principally to stock repurchases made during the year, as we remain focused on ways of improving shareholder returns within our capital structure and the current industry environment. Now I will turn the call back over to Andrew for his closing comments.

[Andrew Clark:]

Thank you, Joe. Now let's turn to our view of 2018. We will focus throughout the year on growing new enrollments through investments in new programs, educational partnerships and increased graduate student enrollment. We will continue to refine our marketing strategy throughout the year, with a goal to maximize our marketing efficiency, while attracting prospective students who have a higher probability of being academically successful. This investment in new enrollment growth will be reflected in our admissions, advisory and marketing line, through both an increase in advertising to support new programs, and a meaningful expansion of staff dedicated to our educational partnerships. A significant portion of those investments will be made at the beginning of the first quarter of 2018, and we believe it will produce growth in the second, third and fourth quarters that will equate to low to mid-single digit new enrollment growth for the year. Our first quarter will have new enrollment characteristic similar to our fourth quarter due for volatility in our VA new enrollment during the quarter, and we expect new enrollment to decline similar to what we saw in Q4. As described earlier, we face some stiff macroeconomic headwinds that will make retention challenging throughout the year. In addition, the ongoing VA issue has had a negative impact on our retention of veteran students, which impacts our overall retention. I'd like to remind everyone that Ashford University is currently approved to provide G.I. Bill benefits through both the Arizona State Approving Agency, and the Iowa State Approving Agency. In addition, in January of 2017, we applied for approval with the California State Approving Agency for Veterans Education or CSAAVE, at the request of the Department of Veterans Affairs. We continue to act in good faith in pursuing approval in California. We have cooperated fully with the application process, and provided all the information we believe has been requested of us. However, earlier today we received a letter from CSAAVE stating that they were not satisfied with the information we have provided, and notified us that they intend not to act on our application at this time. A full copy of the letter has been included as an exhibit in our Form 10-K. We will continue to be dedicated to working with the Department of Veterans Affairs towards a resolution, and we hope for a satisfactory outcome. To the extent that efforts to reach a final, positive resolution to our VA situation continues throughout the year, it potentially could provide a similar retention headwind that we’ve seem throughout 2017. However, we were remain committed to trying to improve our retention. We will continue to make investments in data analytics and products that help with early student intervention and improve retention. We will also meaningfully increase the percentages of graduate students and educational partnership students throughout 2018, as both of these groups historically have better retention than our civilian undergraduate student base. Because of the unpredictability of some of the aforementioned external factors, it's difficult to predict when total enrollment will turn positive. Currently, we do not expect total enrollment to turn positive during 2018. However, the negative decline in total enrollment should lessen with each additional quarter throughout the year. As we have said throughout 2017, we will continue to exercise disciplined expense management. To this end, we have hired an industry consultant to help us identify opportunities for additional efficiencies and expense savings. We will begin implementing various recommendations from this work at the beginning of the second quarter, and we’ll continue throughout the year, positioning us for revenue growth and improved operating results in 2019 and beyond. Our priorities throughout 2018 will be to consistently grow new enrollments, improve student retention, grow total enrollments, and work to improve operating costs by creating a more efficient expense structure. We will also continue our ongoing work on strengthening the student experience and student outcomes. We believe these priorities and our focus on them well create a meaningful value for all of our stakeholders throughout 2018 and into the future. At this time, I’ll ask our operator to open the phone lines for your questions.

[Operator:]

[Operator Instructions] Your first question comes from line of Alex Paris from Barrington Research. Your line is open.

[Alex Paris:]

Morning guys, or afternoon. I’ve got a number of questions. I think I’ll first of all jump in on new student enrollment. You were - your ability to forecast student enrollments has proven pretty good this year. You had said that Q2 and Q3 would be the worst and Q4 would approach flat to a slight decline, excluding VA students. And it looks like we got to flat. Just to make sure I understood, Andrew, your final closing comments there, including VA, we expect it to be down at a similar rate than in the fourth quarter, which was low single digit. And then because of the increased advertising and stuff associated with your corporate programs, you expect growth in Q2, Q3 and Q4, including the impact of VA, correct?

[Andrew Clark:]

Yes, that's correct. So we do expect to see positive new enrollment growth because of the investments, Alex, that we're making in the first quarter in educational partnerships, as well as in advertising. A significant portion of our increased advertising for 2018 as is being invested in the first quarter. This quarter, new enrollment characteristics in general will kind of mirror what we saw in the fourth quarter.

[Alex Paris:]

Okay. And then you made a comment that VA retention was hurt also given the issues that you've had on the VA front. So it wasn't just new enrollment, which you’ve suspended, but it impacted retention, which is not a surprise given the negative press associated with that. Have you noticed any negative impact on retention or new student stats on the DOD side of things active PA?

[Andrew Clark:]

Yes. We got - there was an email that was sent out by Department of Defense to students. And that email had some dated, very dated information on it that they had pulled off of a VA website that hadn’t been updated. And that did cause a few students to drop or not enroll, but it was - I wouldn't describe it certainly as a material number. And once we were able to get the correct information out, that seemed to correct itself and be fine. But the VA - but VA retention, throughout 2017 there's been a lot of confusion about the VA in some of the information. And so that definitely has contributed to an erosion in our VA retention that is higher than what we would expect or normally see without that kind of confusion out there.

[Alex Paris:]

Yes, makes sense. The - given the letter you received from CSAAVE today on their view of your application, does this change anything in your opinion with regard to the federal VA’s stay of action so long as you make application to CSAAVE?

[Andrew Clark:]

No, I don't think it changes anything because as I mentioned in the script, we've conducted ourselves in good faith with California, and we will continue to do so. We just got the letter literally a few hours before this call, Alex. And so as you would expect, we'll take some time to further analyze what was said in the letter and then kind of decide a course of action with regards to California after we have that opportunity.

[Alex Paris:]

Okay. And then the last one related to the VA at this point. You've only stopped recruiting VA students. You haven't stopped recruiting DOD students, I'm assuming first off.

[Andrew Clark:]

No. we never stopped DOD students. And also just so you're clear, we did voluntarily stop recruiting VA students as I mentioned November 14 I think it was of 2017. And then we subsequently decided to begin recruiting VA students in early February. I don't have the exact date off the top of my head. So we are currently accepting applications from prospective new VA students.

[Alex Paris:]

Okay, good. Well, that was my next question. Given that we have a pattern here, for mid 16 when you had the issue with Iowa and then an injunction, you recommenced VA recruiting and it sounds like you're doing the same thing again here today.

[Andrew Clark:]

Yes, that's correct.

[Alex Paris:]

Okay. And then again, we're still expecting low single digit decline in new student enrollment in the first quarter, including everything. And again, you didn't start VA recruiting until halfway through the quarter. And then we expect increases in Q2 in Q3, and then an increase in the aggregate for the whole year, right? Just confirming that's what you said.

[Andrew Clark:]

An increase in the aggregate new enrollment for the full year, yes. Despite first quarter being as you described it, we still see an aggregate increase for the full year in new enrollments.

[Alex Paris:]

Okay. And then the increased investment in marketing for new programs to ensure growth for the full year for increased staff related to your corporate initiatives, do you want to quantify that at all, Joe? I mean what's the difference year over year? I mean we would expect that number to be up. Is the AANM number up year over year as well yes?

[Andrew Clark:]

So I don't think we want to quantify it for you, but the AANM number in the first quarter will definitely be up year over year. And again, I think our AANM number should look kind of similar to last year throughout the remaining three quarters of the year. So I think it's really - you're going to - again, as I said in my script, Alex, you'll see the investment made right upfront in the first quarter.

[Alex Paris:]

Good. And then I guess two last ones then I’ll get back in the queue. Given tax reform and so on, Joe, what's your expectation for the tax rate in 2018?

[Joe D’Amico:]

Well, as I said in the script, we have a $5.5 million dollar net operating loss carryforward. And for the year, we had effectively a taxable loss. So I don't have a forecast for you because I’d have to give you our 2018 numbers to do that. But we do have continued tax savings through that carry forward. And if you look at our footnote on taxes, you'll see we have some sizable tax deductions as well throughout the year.

[Alex Paris:]

Okay. I’ll look at the 10 K. I hadn't seen that yet. Then with Warburg Pincus now out, do they still have representation on the board, or will they be leaving the board at some point?

[Andrew Clark:]

So they don't - I mean they don't have a board seat just to be technical. Pat Hackett, our board chair who was with Warburg Pincus, is still our board chair. He retired though from Warburg Pincus. So he no longer works for the firm.

[Alex Paris:]

I got you. Okay. And then lastly - and then again, as I said, I'll rejoin the queue. You repurchased 2.1 million shares from Warburg. In the fourth quarter you repurchased 18 million shares earlier on in the year. You also announced a share repurchase of $20 million to be executed between now and the end of 2018. Have you acted on that yet? Do you anticipate acting on that in 2018?

[Andrew Clark:]

Yes. I think there's a chance that we could act on it in 2018. The only stipulation is, because we don't have a plan for that repurchase, we have to do it during our open windows.

[Alex Paris:]

Okay. Great. Well, thanks very much and I'm really pleased with the new enrollment numbers for the fourth quarter. Quite a relief.

[Andrew Clark:]

All right. Thanks, Alex. Appreciate it.

[Operator:]

[Operator instructions]. Your next question comes from the line of Kevin Estok from Piper Jaffray. Your line is open.

[Kevin Estok:]

Hey guys. This is Kevin Estok in for Peter Appert. How are you guys doing?

[Andrew Clark:]

Great, Kevin.

[Kevin Estok:]

So my first question is basically trying to get some color on the status of STEM related program fields that you guys mentioned about rolling out in the next - I think you said at the time, maybe 18 months. I guess I was wondering, any updates on specific programs and I guess how you - I guess any kind of momentum that you think, at least enrolment wise, that you think that those programs could provide would be helpful. Thanks.

[Andrew Clark:]

Yes, Kevin. Thanks for the question. Yes, we've released nine of our programs already. Some of those are STEM related programs, and we have more approved STEM related programs that are kind of coming online so to speak in each quarter, in the second and the third and the fourth quarter. Just to set your expectations, I think overall the new program growth that we get from these 16 programs will kind of build through ’18, but then kind of be materially contributing to new enrollment growth numbers in ’19. So I think more of our new enrollment growth throughout ’17 will come from existing programs, with just maybe a tiny bit coming from new programs.

[Kevin Estok:]

Okay. Thank you. And then my second question is regarding the tuition grant programs that you guys are rolling out. I guess I was wondering, in 2018, how large of - at least percentage wise - percentage of enrollment numbers, how large do you see that program becoming in relation to the entire enrollment?

[Andrew Clark:]

Yes, that's a great - another really good question, Kevin. I think this year I would expect that it would kind of get us out into the kind of mid-teens, closer to the mid-teens for - as a percentage of enrollment for 2018, and probably work its way into the high teens in 2019.

[Kevin Estok:]

Okay. Thank you for that. Those are all the questions that I have for now.

[Operator:]

This concludes our question and answer session. I will now turn the call over to Andrew Clark for any closing remarks.

[Andrew Clark:]

Thank you operator. We’d like to thank all of you today for calling in and for your interest in Bridgepoint Education, and for your participation in our call.

[Operator:]

This concludes today’s conference call. You may now disconnect.