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Career Education Corporation (NASDAQ:CECO)
Q1 2019 Earnings Call
May. 8, 2019, 5:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Q1 2019 Career Education Earnings Conference Call and Webcast. (Operator Instructions) Please note, this event is being recorded. I would now like to hand the conference over to Mr. Chris Donovan with Alpha IR. Please go ahead.

Chris Donovan -- Investor Relations

(technical difficulty) first quarter 2019 earnings call. With me on the call today is Todd Nelson, President and Chief Executive Officer; and Ashish Ghia, Senior Vice President and Chief Financial Officer. This conference call is being webcast live within the Investor Relations section at careered.com. A webcast replay will also be available on our site, and you can always contact the Alpha IR Group for Investor Relations support. Let me remind you that this afternoon's earnings release and remarks made today include forward-looking statements as defined in Section 21E of the Securities Exchange Act. These statements are based on assumptions made by and information currently available to Career Education and involve risks and uncertainties that could cause actual future results, performance and business prospects and opportunities to differ materially from those expressed and/or implied by these statements.

These risks and uncertainties include, but are not limited to, those factors identified in Career Education's annual report on Form 10-K for the year ended December 31, 2018, and other filings with the Securities and Exchange Commission. Except as expressly required by the securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments or changed circumstances or for any other reason. In addition, today's remarks refer to non-GAAP financial measures, which are intended to supplement, but not substitute, for the most directly comparable GAAP measures. The earnings release that accompany today's call contains financial and other quantitative information to be discussed today as well as the reconciliation of GAAP to non-GAAP measures, and is available within the Investor Relations page on the company's website at www.careered.com.

With that, I'd like to turn the call over to Todd Nelson. Todd?

Todd S. Nelson -- President, Chief Executive Officer, Director

Thank you, Chris. Good afternoon, everyone, and thank you for joining us on today's call. We started 2019 on a strong note, with first quarter financial and operating metrics showing year-over-year growth and coming in ahead of our previously provided outlook. Momentum within our operating processes remains encouraging, and we are executing well against our objective of sustainable and responsible growth. Some key highlights for the quarter include: first, revenue for the quarter was up 6.6%, with both universities contributing to this growth, resulting in operating income growth of 46% and an operating margin of 19%. Second, looking beyond the impact of the academic calendar redesign, we believe university new enrollment growth was the strongest it has been in over 5 years.

Third, based on encouraging trends through the first quarter of 2019, including the consistent levels of student interest for our programs and the industry in general, we have incrementally invested in further optimizing our onboarding and enrollment processes. Lastly, we're excited about the potential acquisition of Trident University International, and are now focusing on our efforts on planning and integration, while working through necessary regulatory approvals. I'll further expand on some of the highlights for the quarter shortly. Ashish will then cover more details around the financials and provide an update of our 2019 outlook before I add some closing thoughts to end the call. First quarter 2019 was a strong quarter, driven by the positive momentum that carried over from 2018. We reported net income of $24.8 million or $0.35 per diluted share. While adjusted earnings per diluted share, which excludes certain significant and noncash items, was $0.36 per diluted share as compared to $0.28 in the prior year quarter.

Adjusted operating income was $33 million as compared to $25.9 million in the prior year quarter, with the improvement primarily driven by revenue growth at our universities and the completion of our teach-out strategy, offset by ongoing initiatives and investments and increased bad debt expense. Student retention, engagement and academic outcomes remain the primary focus across all our operating and support teams. And I believe that we're well positioned both from a competitive and operating standpoint to serve and educate current and prospective nontraditional students, including adult learners. Enrollment growth at both universities was driven by consistent levels of prospective student interest and continued optimization of our onboarding and enrollment processes.

We ended the quarter with total university enrollments up 8.2%, driven by new enrollment growth of 49%. Helping drive this growth were the following: first, strong student interest toward the end of 2018 into 2019 that was supported by a robust nurture strategy, in which we employ staff and technology to help prospective students as they consider an education at our universities. Student-serving teams have further improved the enrollment process by using data and analytics to provide customized and relevant information to prospective students.

Two, ongoing contributions from Illinois and Arizona centers. While investments in these centers have started maturing, especially at CTU, both universities have experienced improved efficiency and execution, primarily driven by increased tenure and more focused training within the organization. And three, specifically at AIU, the academic calendar redesign positively impacted new enrollments for the quarter due to 60% more enrollment days. Moving on to our segments. At CTU, total enrollment grew 4.1% during the quarter, primarily driven by new enrollment growth of 14.3%. CTU ended the quarter with approximately 23,100 students, the highest it has been in 7 years. Corporate partnerships continue to be a meaningful contributor to the enrollment growth of CTU. While new corporate partnerships will take time to nurture, we have a dedicated team that fosters relationships with organizations by codeveloping strategic programs that align with our partners' education goals.

Supporting these drivers are ongoing operational enhancements that we believe will improve student experiences, promote learning and ultimately lead to improved student retention and academic outcomes. We've experienced improved execution across our admissions and advising teams, which have been augmented by leveraging and implementing advanced technology tools. With student experience in mind, academics and advising teams have focused on further optimizing core sequencing to promote greater student engagement and learning. We have also just implemented some reporting and technology enhancements to enable admissions and advising staff to customize their outreach and engaging strategies based on a student's prior college experience, providing a more meaningful and relevant engagement with the students.

Finally, we are seeing some encouraging data points with our student support analytics tool that leverages predictive modeling and past student experiences to enable a more proactive approach to student engagement by reaching the right student at the right time with the most relevant support. Driven by the success of the various initiatives and investments, I just discussed and supported by consistent levels of new student interest for our programs, we expect new student enrollments at CTU to grow in 2019. Turning to AIU. As a reminder, quarterly enrollment results at AIU are impacted by its academic calendar. New student enrollments grew 124.7% for the quarter, while total enrollments increased by 16.5% for the quarter. In addition to the positive impact from the academic calendar redesign, the admissions and advising centers at Arizona and Illinois continue to improve execution around the student onboarding and enrollment processes.

In fact, staffing at our AIU centers is up approximately 10% versus the prior year quarter. And we are experiencing consistent levels of new student interest, which has been supported by improved tenure and execution from our graduation teams. These teams, along with our academic teams, continue to optimize core sequencing based on active student feedback, while redesigning the course content to create a learner-centric model where there is significant focus on step-by-step learning versus assignment completion. In general, we are seeing improved execution within our graduation team model based on session-by-session outcomes, with shared accountability between admissions, advising and financial aid.

Finally, our financial aid teams are focused on getting students financially prepared before they start school with the goal of making their acclamation to school easier. Despite the calendar-driven variability within quarterly enrollments, underlying momentum in key operating metrics continues to progress, with overall performance trending positively as compared to the prior year. Importantly, AIU experienced strong new enrollment growth in addition to the impact of the increased enrollment days in the quarter, which also partially drove the 14.4% increase in revenue for the quarter. Overall, AIU is executing well against its objectives of sustainable and responsible growth. And we expect new student enrollments to experience growth for the full year 2019. Finally, a few observations around our technology investments. Having primarily online academic institutions serving nontraditional students, including adult learners, technology is a key differentiator and an enabler to promote learning for our students.

Our faculty and student mobile apps are fully operational and are being increasingly used by the university teams as a communication tool for our students. App usage is high at both universities, with over 89% adoption rate, plus notifications are used to encourage and highlight student achievements, while the 2-way messaging app is increasingly used for communication with students on a variety of academic-related topics. An updated version of the app will be launched for both universities in the second quarter. Also, advising teams at CTU continue to refine and leverage the use of predictive analytics tools that support student retention and enables a more timely and proactive student outreach with the right message. This tool is now being rolled out to our academic and faculty teams.

And finally, AIU has leveraged Google's artificial intelligence technology and analytics to anticipate and address student questions throughout their life cycle from inquiry and onboarding to ongoing coaching and advising. Once fully launched, we'll be able to provide students with 24/7 support, while providing a better user experience that is more personalized in nature. To conclude, the positive momentum for 2018 has carried into 2019, and both universities are executing well against our objectives of sustainable and responsible growth. These trends have provided reaffirmation around our overall strategy of prioritizing student-serving processes and initiatives, while giving us the necessary financial and operating confidence to continue to invest in our universities.

With that, I'd like to hand the call over to Ashish for a more detailed review of our first quarter 2019 results, balance sheet as well as the outlook for 2019. Ashish?

Ashish R. Ghia -- Chief Financial Officer, Senior Vice President

Thank you, Todd. I will start with a review of our first quarter results, and then discuss our balance sheet and 2019 outlook before handing the call back to Todd for his closing remarks. All comparisons are versus the comparative prior year period, unless otherwise stated. Before I begin, let me point out a change in our segment presentation effective 1/1/2019. With the responsible completion of our teach-outs, the all other campuses segment, which included these schools is no longer an operating segment. As a result, residual office associated with these closed campuses will now be included within the corporate and other category. Prior periods have been recast to maintain comparability. Now to our results. First quarter delivered a solid start to the year with total company operating income of $30 million, an improvement of 46% as compared to an operating income of $20.5 million. Adjusted operating income, which excludes certain significant and noncash items, is more reflective of the underlying operating performance. This measure was $33 million for the quarter, which was 27.5% higher versus the prior year and above the high-end of our outlook range of $30.5 million to $32 million.

Net income for the quarter was $24.8 million and earnings per diluted share was $0.35, while adjusted earnings per diluted share was $0.36. This improvement in operating performance was primarily driven by revenue growth at both universities as well as reduced losses associated with our closed campuses. Offsetting these positives were costs associated with ongoing investments in technology and student-serving processes and initiatives as well as increased bad debt expense. Now some more specific around our quarter financials. Total company revenue increased 6.6% to approximately $158 million as compared to the prior year quarter. This growth was driven by positive student enrollment trends at both universities that have been supported by the student initiatives that Todd just outlined.

As it relates to our segments, revenues at CTU increased 2.6% for the quarter, while operating income was up 9.2%, supported by total enrollment growth of 4.1%. From an expense perspective, we experienced some operating efficiencies, primarily across various nonstudent-facing processes, which was partially offset with increased bad debt. Revenues at AIU increased 14.4% versus the prior year quarter, primarily driven by new enrollment growth attributable to investments in our Arizona and Illinois centers. Also positively impacting this revenue growth were 4.6% more revenue earning days for the quarter. Operating leverage further improved with operating income for the quarter doubling from the prior year despite increased bad debt expense. As a reminder, any calendar-driven variability in quarterly enrollment trends does not materially impact quarterly revenue trends, which are primarily driven by our underlying operating performance and the number of revenue earning days during the quarter. Moving to enrollments. Total student enrollments at CTU grew by 4.1%, supported by new enrollment growth of 14.3% versus the prior year.

As Todd outlined, this growth is primarily driven by investments at our Illinois and Arizona admissions and advising centers, and supported by consistent levels of prospective student interest. Also contributing to this positive performance was the continued progress and growth within our corporate partnership program. Driven by these initiatives and trends, we expect CTU to experience new enrollment growth for the full year 2019, with second quarter new enrollments expected to grow in the mid-single digits. Total student enrollments at AIU increased 16.5% for the quarter, driven by a 124.7% increase in new enrollments. As previously indicated, there were approximately 60% more enrollment days in the first quarter versus the prior year. Excluding this variability, we believe AIU experienced new enrollment growth for the quarter which also partially drove the revenue growth. Recall that the academic calendar redesign at AIU, specifically the number of enrollment days in any given quarter has a significant impact on the new enrollments for that quarter. As a result of this timing impact, we expect new enrollments at AIU to show a decline for the second quarter, primarily driven by approximately 16% fewer enrollment days as compared to the prior year.

For the full year 2019, we continue to expect new enrollments to grow versus the prior year. A quick update on corporate and other. This category now includes residual operating losses associated with closed campuses and reported an operating loss of $8 million in the first quarter as compared to an operating loss of $10.8 million. This decrease in operating losses was driven by the completion of our teach-out strategy in 2018. Future teach-out losses during 2019 primarily include expenses related to legacy legal matters as well as some residual occupancy-related items. Now to income taxes. We recorded a provision for income taxes of $6.4 million for the current quarter, which resulted in an effective tax rate of 20.3%. The tax rate for the quarter was benefited by approximately 5.6% related to the release of tax reserves and the tax effect of stock-based compensation. For 2019, we expect our tax rate to be between 24% and 25%, with the first quarter being the lowest quarterly rate for the year. Separately, we ended 2018 with approximately $194 million of federal net operating loss carryforwards, which are available to offset future taxable income.

As a result, specifically as it relates to 2019, we do not expect to pay any federal income taxes. Now let me spend a few minutes reviewing our balance sheet. We ended the quarter with approximately $240 million of cash, cash equivalents, restricted cash and available-for-sale short-term investments, which will be referred to as cash balances for the remainder of today's discussion. This represents an increase of $10.7 million over year-end 2018 and was primarily driven by positive cash flows from our core university operations, offset by cash outflows related to attorney general legal settlement payments, annual and long-term incentive payments as well as timing of our Title IV funding. Capital expenditures were approximately $0.5 million in the first quarter as compared to $1.4 million in the prior year. For the full year 2019, we foresee capital expenditures to be in the range of 1% to 2% of revenues. Overall, the company is executing well against its objective of sustainable and responsible growth with investments in student-serving initiatives and technology showing positive results. The improved performance and efficiency of our operations is allowing us to incrementally invest within our 2 universities, helping us create better experiences and academic outcomes for our students.

Finally, our 2019 outlook. Let's start with the full year outlook. Adjusted operating income outlook remains unchanged at $114 million to $119 million as compared to $105 million in 2018, reflecting growth of approximately 8% to 13% versus the prior year. Driving this outlook is our expectation of new enrollment growth for both universities in 2019, which we believe will translate to revenue growth for each university. For 2019, we expect university revenue growth to be in the range of 3% to 4%. We continue to expect year-end cash balances to grow during the year, net of the pending acquisition of Trident University. Adjusted earnings per diluted share to range between $1.11 and $1.15 versus $1.05 in 2018. And for the second quarter, we expect adjusted operating income to be in the range of $30 million to $31.5 million and adjusted earnings per diluted share to be in the range of $0.29 to $0.31.

Please refer to our earnings release filed today for important information about the key assumptions and factors underlying this outlook and other expectations discussed on today's call as well as the GAAP to non-GAAP reconciliations. Before I wrap up, let me quickly comment on our balanced approach to capital allocation. We are focused on building a strong balance sheet, while prudently investing in organic growth projects and now also committed capital to the pending acquisition of Trident University. Ultimately, our goal is to deploy the resources in the most effective and efficient manner that we believe will enhance overall academic outcomes and lead to increased shareholder value.

With that, I will turn the call back over to Todd for his closing remarks. Todd?

Todd S. Nelson -- President, Chief Executive Officer, Director

Thanks, Ashish. We've entered 2019 with good momentum, and we're very proud of the hard work and contributions of the entire Career Education team in supporting our successful transformation to a responsible growth company. Key takeaways as we continue to execute in 2019: first, overall operating metrics and trends are positive. Second, we will continue to balance our operating and financial commitments with investments in student-serving processes and initiatives. Third, there'll be a strong focus on technology and academic delivery as key differentiators and enablers of growth. And finally, we'll continue to invest capital and resources to increase shareholder value, while working to enhance overall student experiences, retention and academic outcomes.

Thanks, again, for joining us today. And we'll now open the call for any analyst questions.

Questions and Answers:

Operator

(Operator Instructions) Your first question comes from Alex Paris from Barrington Research. Please go ahead.

Chris Howe -- Barrington Research -- Analyst

This is Chris House sitting in for Alex Paris. Congrats on the solid quarter.

Todd S. Nelson -- President, Chief Executive Officer, Director

Hi Chris.

Chris Howe -- Barrington Research -- Analyst

I have several questions here. But I guess, starting off with margin expectation. When I look at AIU versus CTU, there is a variance there, a difference in margins, 13.7% in AIU, 30.6% at CTU. As we look at for your outlook for this year and even beyond, how should we look at margin expansion opportunities here, whether it relates to your technology investments or changes in pricing or other initiatives that you have in place or are in progress currently?

Todd S. Nelson -- President, Chief Executive Officer, Director

Yes. Well, the good news is on this is that we're seeing good progress with AIU and their margin expansion. One of the things that does need to be taken into consideration is to some degree is scale. For example, if you look at the academic infrastructure needed for an AIU versus CTU, it's very similar despite the fact that CTU is twice the size of AIU. And that's just -- it's a necessary process you need to go through for, I believe, to have academically staff correctly. And so that's one. The second is that we've been also investing in, which is being displayed by their faster growth right now, in growth, which also takes a little bit of -- also suppresses margin, but in time, our feeling is that AIU has the potential to have margin expansion and some point in time be more similar to CTU.

Chris Howe -- Barrington Research -- Analyst

Great. That's very helpful. And then shifting here to some of my other questions. Ashish highlighted capital allocation and your goals for that moving forward. As we look at the success that you're having in your Illinois and Arizona centers, for perspective, are there other states or territories that would have the same attractive characteristics as far as the talent pool and could be an additional center in the future to support your growth? Or in other words, are Illinois and Arizona, are those centers enough to move you toward your organic goals for 2022?

Todd S. Nelson -- President, Chief Executive Officer, Director

Good question. And a couple of pieces to answer to your question. First is that we do still feel there is plenty of opportunity for increased staff in Arizona. The profile, the type of folks that are there, given the history of a lot of university that have had advisement centers there. So there is a good labor pool. And so we feel comfortable certainly for the next several years, there's plenty of opportunity to grow and meet our needs there. And we do have plans, as we said in the past, continue to expand there. Having said that, we also have identified other states as well where we actually have a presence. Just to name a couple, both in Georgia as well as Colorado. We look to both of them as potential down the road. But in the short run, the level of qualified candidates to hire as we expanded in Arizona is our main focus as well as we're continuing to see good traction with hiring of quality enrollment and advising staff here in Illinois as well.

Chris Howe -- Barrington Research -- Analyst

It's very helpful. And then my last question is in regard to corporate partnerships in CTU. You mentioned mid- to high-single-digit enrollment growth. For corporate partnerships, should we think along the same lines? Or will that grow even faster? And how should we think about their contribution to the mix in 2019?

Todd S. Nelson -- President, Chief Executive Officer, Director

It's a very good question. And it's not a necessarily a straight-line increase because it is a smaller percentage of our total overall student body, you could expect that to possibly grow at different times faster as a total, not necessarily an aggregate numbers, but as a total percentage of the overall student enrollment. And so we've invested in that significantly in CTU. We've -- not as longer period of time been investing in AIU. And so we really look to that to be a -- continue to be a significant contributor to our growth. But the short answer is, it is -- as a percentage, it's growing faster than the other, simply because it's a smaller base.

Chris Howe -- Barrington Research -- Analyst

Okay. And I do have one more question. You had mentioned the analytics that you're investing in. For my perspective, where are you in the development of that as far as early innings, middle innings, late innings as far as -- what's the potential there to gain further depth for your analytics in converting students?

Todd S. Nelson -- President, Chief Executive Officer, Director

Sure. Chris, we're right in the middle. Right in the middle. We're very pleased with what we've seen thus far. But we're just literally starting to see some of the benefit. But, yes, I would say right in the middle.

Chris Howe -- Barrington Research -- Analyst

That's all I have for right now. Thank you for taking my questions.

Todd S. Nelson -- President, Chief Executive Officer, Director

Thank you.

Operator

Your next question comes from Peter Appert with Piper Jaffray. Please go ahead.

Peter Perry Appert -- Piper Jaffray Companies -- Analyst

Thanks. Good afternoon. So this might be for Ashish. I'm trying to understand better the seasonality of the business, Ashish. And in particular, I guess 2 things, one, can you share with us the change in number of enrollment days for the third and fourth quarter on a year-to-year basis? Actually, that would be the starting point.

Ashish R. Ghia -- Chief Financial Officer, Senior Vice President

Well, that's a great question, Peter. For now, we have not -- consistently with our past practice, what we do is we typically push it over the next quarter out. And so what we have laid out is for the next quarter, we have 16% less enrollment days at AIU. And if you recall, what we have said in the past is, we continue to optimize the calendar to make sure that these variations continue to become less and less. So for now we are working toward that. And as we sit here today, for Q2 specifically, we expect -- we do know that we have approximately 16% less enrollment days.

Todd S. Nelson -- President, Chief Executive Officer, Director

And then Peter, I would just add to that. One other things we talked a little bit about at the Investor Day was we've been working toward smoothing that out going forward. It's still going to take some time to where that becomes a quarter-over-quarter -- year-over-year by those same quarters that they will be more similar in days. But we're not there yet. But as I said, we talked a little bit about that at the Investor Day that I think -- we do understand -- we would like that as well. But as I said, right now we're getting there as quick as we can.

Ashish R. Ghia -- Chief Financial Officer, Senior Vice President

And then Peter, just to, again, call out here is, even with this nuances on the calendar, as our outlook states, we do expect new enrollment growth for the full year at AIU even beyond the nuances of this calendar.

Peter Perry Appert -- Piper Jaffray Companies -- Analyst

And then, I mean I guess related to that, just thinking about the guidance. If I take the 2Q guidance, the 1Q actual, I think just back-of-the-envelope calculations, I may have this wrong, but I think, it would imply that the second half earnings would be below what you did in the first half. I know there is some seasonality, but also potentially below 1 year ago. So any thoughts on that, Ashish?

Ashish R. Ghia -- Chief Financial Officer, Senior Vice President

I mean, sure. So that's a great point, Peter. But the whole concept here is about the balance. As you know, as we continue to find incremental opportunities, we will invest in our students. We will invest in the business for the long term. So it is part of this whole balance that we talk about. And as you know, from the momentum we've had and the trends that we're seeing, we are encouraged by that. And so we will continue to invest in the business. So without going specifically into the quarters and the ranges at this point, we found it prudent and appropriate to hold our full year outlook. And then as we get more details, we will continue to update that.

Peter Perry Appert -- Piper Jaffray Companies -- Analyst

Okay. And then lastly, I understand you're moving the residual campus losses into corporate expense because the number's, obviously, gotten quite small. But any estimate, Ashish, you can share in terms of how big the shutdown cost -- the residual shutdown cost should look over the next few quarters?

Ashish R. Ghia -- Chief Financial Officer, Senior Vice President

Yes. I think in the last call, Peter, we said that approximately in 2018, our adjusted losses for the teach-out groups was about $10 million. And in the last call, we said that for 2019, we expect that to be approximately half. So I think that's a good range to work with. And keep in mind, most of those costs are, as we said, are legacy legal matters and some residual occupancy costs. So that's the nature of the costs.

Peter Perry Appert -- Piper Jaffray Companies -- Analyst

Got it. And Todd, would you call out anything in terms of programmatic areas of interest? I mean, the starting enrollment performance has been obviously improved significantly. What a great momentum in the business. So anything that you would call out in terms of new program offerings, specific programmatic offerings or other things to help us just better understand what's driving the performance?

Todd S. Nelson -- President, Chief Executive Officer, Director

Yes. The good news is Peter, is that we've had pretty across-the-board good enrollment trends. And so we haven't -- having said that, it doesn't mean that we are not continuing to -- we haven't called any out, by the way, but we are continuing to develop and identify more programs. But right now because of the strength across the board, we haven't really -- this particular quarter had a lot of development in that area. One other things that we have a high interest level of with Trident was because of the number of doctoral programs they have. So obviously we're keenly focused on graduate programs right now. Going forward, we think that's an opportunity for some expansion for us.

Peter Perry Appert -- Piper Jaffray Companies -- Analyst

Great. Thank you.

Todd S. Nelson -- President, Chief Executive Officer, Director

Thanks Peter.

Operator

Thank you. Your next question comes from Greg Pendy with Sidoti. Please go ahead.

Greg Pendy -- Sidoti & Company -- Analyst

Hey guys, thanks for taking my question. I just wanted to dig into the corporate partnerships. And I think you shared with us at the Analyst Day some of the increased corporate grants. And just kind of curious, what type of year-over-year bump do you see when you see some of your larger corporate partnerships maybe increase their grant? And how much does that kind of fuel the overall sort of corporate enrollment growth?

Todd S. Nelson -- President, Chief Executive Officer, Director

Well, I think the bump typically is incremental as you have more students. It's not necessarily on a year-over-year increase on the size of the discount or the scholarship that's given. It's really more a function of when you're adding more people at that particular company, you tend to see that go up. But other than that, Ashish, I don't know for sure if it's just...

Ashish R. Ghia -- Chief Financial Officer, Senior Vice President

And from a discount or a grant perspective, Greg, once the relationship is developed, we don't typically see much changes in the grants. So once the grant is there, typically, we don't see corporations changing that or we changing that for the corporations.

Todd S. Nelson -- President, Chief Executive Officer, Director

We would certainly consider, but Ashish is not asked that often, but the reason it goes up in total amount is simply because you have more students that are taking advantage of it.

Ashish R. Ghia -- Chief Financial Officer, Senior Vice President

Got it. That's helpful, thanks.

Operator

That concludes our question-and-answer session. I would like to turn the conference back over to Mr. Todd Nelson for any closing remarks.

Todd S. Nelson -- President, Chief Executive Officer, Director

We just appreciate you, again, joining us and look forward to giving you an update next quarter. Thank you.

Duration: 38 minutes

Call participants:

Chris Donovan -- Investor Relations

Todd S. Nelson -- President, Chief Executive Officer, Director

Ashish R. Ghia -- Chief Financial Officer, Senior Vice President

Chris Howe -- Barrington Research -- Analyst

Peter Perry Appert -- Piper Jaffray Companies -- Analyst

Greg Pendy -- Sidoti & Company -- Analyst

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