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Career Education Corporation (NASDAQ:PRDO)
Q4 2019 Earnings Call
Feb 19, 2020, 5:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Fourth Quarter 2019 Perdoceo Education Corporation Earnings Conference Call and Webcast. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions].

I would now like to turn the conference over to Brooks Hamilton with Alpha IR. Please go ahead.

Brooks Hamilton -- Investor Relations

Thank you, Sean. Good afternoon, everyone, and thank you for joining us for our fourth quarter and full year 2019 earnings call.

With me on the call today is Todd Nelson, President and Chief Executive Officer; and Ashish Ghia, Chief Financial Officer. This conference call is being webcast live within the Investor Relations section at perdoceoed.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 of 1934. These statements are based on assumptions made by and information currently available to Perdoceo Education and involve risks and uncertainties that could cause actual future results, performance, business prospects and opportunities to differ materially from those expressed in or implied by these statements. These risks and uncertainties include, but are not limited to those factors identified in Perdoceo's Annual Report on Form 10-K for the year ended December 31 2019, 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 accompanies today's call contains financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures and is available within the Investor Relations page of the company's website.

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

Todd S. Nelson -- President and Chief Executive Officer

Thank you, Brooks. Good afternoon, everyone and thank you for joining us on today's call.

We closed 2019 on a positive note with fourth quarter and full-year operating results coming in ahead of our expectations. We are entering 2020 with good momentum and are excited to continue our journey to serve current and prospective students at our academic institutions under the new name Perdoceo Education. We believe our focus on investing in student serving functions and related technology initiatives will continue to have positive impacts on student experiences, retention and academic outcomes for our students.

Here are some key highlights for the year. First, 2019 revenues, operating income and cash flow increase versus the prior year. This increase reflects enrollment growth at both academic institutions that was supported by solid levels of prospective student interest for our program offerings. Two, enrollment trends have remained positive through the fourth quarter and we are entering 2020 with good momentum, which we believe will further contribute to our objective of sustainable and responsible growth.

Three, operating and cost efficiencies have allowed us to continue reinvesting in our student serving functions, including technology and data analytics, which enhance our staff's ability to serve and support our students. Lastly, we are focused on completing the acquisition of Trident University. We expect the transaction to close in early March once the department has added Trident's programs to AIU's authorization and are working diligently toward a smooth integration into AIU. Our focus will be on maintaining and further enhancing academic experiences for students from both universities.

I'll now expand further on some of the successes for the year shortly. Ashish will then cover more details around the financials and 2020 outlook before I add some closing thoughts to end the call.

For 2019, we reported net income of $70 million or $0.97 per diluted share, while adjusted earnings per diluted share, which excludes certain significant and non cash items was $1.37. Full year adjusted operating income was $134.3 million, an increase of 27.7% from $1 million -- $105.2 million in the prior year with the improvement primarily driven by revenue growth at our universities, as well as lower operating expenses associated with our closed campuses.

Student experiences, retention and academic outcomes remain the primary focus across all of our teams. And I believe, we are well positioned, both from a competitive and operating standpoint to serve and educate current and prospective non-traditional students with a focus on adult learners.

Enrollments at both universities continue to experience growth in 2019. As noted previously, enrollment trends have also been supported by consistent levels of prospective student interest for online education, including our program offerings. At CTU, total student enrollment grew 4.4% for the year, primarily supported by new student enrollment growth of 8.5% for the fourth quarter and 7% for the full year as compared to the prior year periods.

We believe CTU's new enrollment growth is primarily attributed to the following efforts. First, a consistent level of prospective student interest that is being well served by our admissions and advising functions. Increased training and improved tenure has enabled our personnel to effectively and efficiently serve prospective students as they evaluate one of our academic institutions, or the program of choice.

Second, leveraging data analytics and integrating technology to provide current and prospective students with more relevant and personalized experiences, whether they are making decisions about starting school or are progressing through their chosen program of study. This includes leveraging the two-way messenger [Phonetic] between advising, faculty and students and using enhanced reporting and data analytics to provide more real-time information to and support for students.

Third, continued progress within our Corporate Partnerships Program. Corporate partnerships have been a meaningful contributor of enrollment growth over the past few years, and approximately 19% of CTU's total enrollment now come from these partnerships. New and existing corporate partnerships take time to develop and nurture, but as previously discussed, students from these partnerships have relatively higher persistence and are thus becoming a larger percentage of our overall total enrollments.

Fourth, further improvement in productivity and coordination within the admissions and advising teams. We have refined our advising model to differentiate outreach based on student's previous education level and academic needs with our goal being to deliver the right message at the right time, at the right -- to the right student. Based on the continued success of these various efforts I just discussed and consistent levels of professing student interest, we expect CTU to experience positive enrollment growth for the first quarter and full year 2020 versus the prior year. In line with our objective of sustainable and responsible growth.

Now turning to AIU. As a reminder, AIU's academic calendar can significantly impact the number of enrollment days for any given quarter, therefore impacting quarterly enrollment results. We have been working to adjust the academic calendar, so that the magnitude and frequency of this calendar-driven variability is less frequent. Note, that student enrollment days for the fourth quarter were relatively comparable to the prior year period. And we are pleased to share that AIU experienced 12.7% growth in new student enrollments for the fourth quarter as compared to the prior year quarter. Primarily driven by the organic growth initiatives. Similar to the third quarter in 2019, AIU experienced new enrollment growth for the quarter with a comparable number of enrollment days.

Looking past the quarterly variability driven by the academic calendar, operating results and student enrollment trends were positive, as compared to the prior year, with full year new student enrollments up 26.6%, while total student enrollments at the end of the year were up 10.2%.

We believe the strong enrollment growth can be attributed to the following. First, the full-year enrollment growth was positively impacted by 8.2% of more student enrollment days during the year, as compared to the prior year. Second, prospective students interest has remained consistent throughout the year and was well served by AIUs graduate team approach. These graduate teams are pursuing a more holistic student support process by collectively cultivating a student-first mindset across admissions, student advising and financial aid. These teams are also becoming more efficient and effective in their student outreach and support as they gain experience, which we believe is positively impacting student retention and academic outcomes.

Third, we continue to make incremental operational change across various student support processes that focus on enhancing student experiences throughout their academic lifecycle by providing coordinated and customize outreach using data analytics, and more effectively, communication between admissions, student advising and financial aid. Fourth, the academic teams at AIU have continue to optimize core sequencing based on session-by-session learning, while redesigning course content and design to create a learner-centric model, where there is significant focus on step-by-step versus assignment completion. We believe these measures have had a positive impact on student experiences, thereby positively impacting retention.

In general, AIU continues to make solid progress with student enrollments expected to grow in 2020 versus the prior year, in line with its objective of sustainable and responsible growth. However, we expect AIU's new enrollment --new student enrollment to show quarterly variability due to its academic calendar. Ashish will show some more insights around the quarterly academic calendar for 2020 during his discussion.

Before I turn the call over to Ashish, let me quickly comment on some key technology and student retention initiatives to further support and improve academic outcomes and student learning experiences at our universities. First, our faculty and student mobile apps are fully operational and are being increasingly used by student teams as a communication tool for our students. In addition, the two-way messaging app is now deployed and used across all student support functions, including admissions, academics, student advising and financial aid.

Mobile app usage is high at both universities with over 89% adoption rate by students. We continue to update the app based on students [Indecipherable] back to increase its importance to students as an effective means for student communications.

Next, our artificial intelligence powered chat bot, Lucy, is increasingly useful in addressing questions from prospective students during AIU student enrollment process. This has allowed us to reallocate resources to student support functions for our continuing students. We will continue to expand the application of artificial intelligence across the student's academic life cycle. From the initial prospective student inquiry and starting classes to ongoing advising at both of our academic institutions. As we refine and further deploy such tools over the next few years, we hope to provide students with 24/7 support, while providing a better user experience that is more personalized in nature.

Next, machine learning and data analytics have enhance the functionality and effectiveness of our marketing outreach efforts to prospective students. As a result, marketing efforts are more focused, based on a student's propensity to be successful in their academic programs. Also, our faculty and student advising teams across both institution have been using predictive analytics to provide relevant, meaningful and customized support to students as they continuing their programs of study. Teams are updating course design and content and modifying core sequencing between general education and program courses to improve student learning and engagement.

Finally, we are testing a new orientation framework, which is designed to streamline navigation and content to increase relevance to each student. Qualitative feedback is indicating a positive initial response and we will continue to refine this important piece of the student journey in the coming months.

To conclude, our efforts and progress in 2019 provide us with the ability to continue investing in student serving functions and technology additions in 2020. Both CTU and AIU continues to execute well against our objective of sustainable and responsible growth, providing reaffirmation around our overall strategy of prioritizing student serving processes and initiatives, while giving us the financial and operating confidence to continue investing in universities.

With that, I'd like to turn the call over to Ashish for a more detailed review of our fourth quarter results and full-year 2019 results and balance sheet, as well as the 2020 outlook. Ashish?

Ashish R. Ghia -- Chief Financial Officer

Thank you, Todd. I will start with a review of our full year and fourth quarter results, and then discuss the balance sheet and 2020 outlook before handing the call back to Todd for his closing remarks.

Please note that all comparisons I discuss are versus the comparative prior-year period, unless otherwise stated. As a reminder, effective Jan 1st of 2019 we changed our segment presentation after the responsible completion of our teach-outs. Thus, the all other campuses segment, which included these schools is no longer an operating segment. As a result, residual losses associated with these closed campuses have now been included within the corporate and other category. Prior periods have been recast to maintain comparability.

Now a quick overview of our results. For the full year 2019, total company operating income increased to $86.5 million, as compared to an operating income of $71.3 million. We believe adjusted operating income, which excludes certain significant and non-cash items is more reflective of the underlying operating performance. This measure came in at a $134.3 million for the year, exceeding our latest outlook range of a $130 million to $132 million and reflecting an increase of approximately 27.7% versus the prior year.

Net income for the year was $70 million or $0.97 per diluted share, while adjusted earnings per diluted share, which again, we believe is more indicative of the underlying operating performance was up 30.5% to $1.37. Overall, we ended the year on a good note with the fourth quarter operating income of $32 million and earnings per diluted share of $0.38.

Adjusted operating income for the quarter was $34.6 million versus $29.7 million, and adjusted earnings per diluted share was $0.33 versus $0.30. These positive operating results reflect efficiency and effectiveness across our student enrollment and student serving processes that supported new enrollment growth and retention as current students continue to progress through their program of study.

Our fourth quarter 2019 results also reflect lower than expected expenses for employee related insurance programs and other non-student serving functions, as well as better-than-expected prospective student interest in the final academic term of the year, which contributed to the results exceeding our outlook.

Before I go into the segment details, a quick comment on the adjusting items for the full year 2019. During the year, we recorded a $30 million settlement charge relating to the resolution of the FTC inquiry and a $7.1 million charge related to the settlement of the individual arbitration claims in Oregon. We are pleased to have resolved our significant outstanding legal matters. Another adjusting item is the $1.6 million of lease expenses for our vacated locations related to closed campuses.

Excluding these items, the improvement in operating performance was primarily driven by revenue growth at both universities, as well as reduced losses associated with our closed campuses. Partially offsetting these positives were, additional costs associated with the compliance and monitoring efforts related to the FTC and the Multistate AG agreements, investments in marketing as well as increased bad debt expense that I will provide more color on shortly.

Moving on to some more details around the 2019 financials. Total company revenue was $627.7 million for the year and increased 8% from $581.3 million, with fourth quarter revenue up 8.9% versus the prior year quarter. Both universities contributed to the revenue growth, primarily driven by consistent levels of prospective student interest, which are being well served by our admissions and advising teams, as well as improving student retention trends. Also positively impacting full year revenue was 4.2% more revenue earning days at AIU.

As it relates to our segments, revenue at CTU was up 4.4% to $392.3 million for the year, supported by positive enrollment trends, which also drove CTU's fourth quarter revenue up 8.3% to $102.6 million. Full-year operating income of $108.6 million was $3 million or 2.7% below prior year, but includes an $18.6 million charge for the portion of the FTC settlement recorded within CTU. Excluding this charge, operating income improved by approximately 14% or $15.6 million, primarily driven by revenue growth, while operating expenses were slightly higher with increased marketing and bad debt expenses, offsetting efficiencies across various student serving processes.

Turning to AIU. Revenue increased 14.9% to $235.4 million for the year, primarily driven by positive enrollment trends, as well as 4.2% more revenue earning days compared to the prior year. Full-year operating income of $16.4 million was $8.2 million above prior year, but includes an $11.4 million charge for the portion of the FTC settlement recorded within AIU. Excluding this charge, operating income improved by approximately $19.6 million, primarily driven by revenue growth.

Operating leverage was decent with the revenue growth being partially offset with increased bad debt and marketing expenses. Let me briefly touch on some of the factors that relate to bad debt expense. Recall that bad debt in any given quarter is impacted by quarterly variability that can be associated with this expense. Quarterly variability positively impacted bad debt expense in the third quarter, but negatively impacted the fourth quarter, resulting in bad debt expense increasing sequentially over the third quarter.

There are several factors impacting quarterly bad debt variability, including the AIU academic calendar, student account balances, timing of cash collections and increasingly complex Department of Education Financial aid requirements to name a few. Collectively, these factors can disproportionately impact bad debt in any given quarter. However, even though bad debt expense in the fourth quarter increased as compared to the prior year quarter, the rate of increase as compared to the prior year periods improved during the second half of 2019, as compared to the first half of 2019 as we continue to focus on further improving retention and financial aid processes for our students.

Our student support teams have increased their focus on financial aid documentation collection and are counseling students through the Title IV process so that they are better prepared to start school. We are also focused on emphasizing employer paid and other direct pay education programs, such as our corporate partnerships. Note, that these programs typically have lower bad debt associated with them.

Now let me spend a few minutes discussing student enrollments. Total student enrollments at CTU grew by 4.4% for the year, primarily supported by new enrollment growth, as well as improving retention trends in the second half of the year. New student enrollment growth increased 7% for the full year and 8.5% for the fourth quarter. As Todd outlined, we believe these positive enrollment trends reflect the investments across our student enrollment and support functions, which are allowing us to effectively serve the prospective student interest we are experiencing, as well as the continued progress within our corporate partnership program.

Driven by these trends and further supported by investments planned for 2020, we expect new enrollments for CTU to grow in the first quarter and for the full year 2020. Total student enrollments at AIU increased 10.2% for the year, supported by new enrollments growth, which was 26.6% for the full year and 12.7% for the fourth quarter.

In addition to the initiatives discussed earlier, full year new student enrollments were positively impacted by 8.2% more enrollment days for the year, pursuant to AIU's academic calendar. But note, that the number of enrollment days in the fourth quarter was relatively comparable to the prior year quarter, and the fourth quarter new enrollment results for the most part reflect organic growth.

Recall, that the academic calendar at AIU, specifically, the number of enrollment days in any given period has a significant impact on the new student enrollments for that period. Excluding this variability, we believe AIU is experiencing organic enrollment growth, as evidenced by the second-half enrollments where the number of enrollment days was comparable, and has been supported by various operating initiatives and investment Todd discussed.

Looking ahead to 2020, on a full year basis, AIU's academic calendar is relatively comparable to 2019, with a consistent number of revenue and enrollment days for each year, and we expect AIU to experience enrollment growth for the year 2020. However, there will be quarterly variability, especially as it relates to enrollment days, such that, the first quarter of 2020 will have approximately 31% less enrolment days, while the second quarter will have approximately 50% more enrollment days as compared to the respective quarterly periods in 2019. As a result, we expect AIU's new enrollments to decline in the first quarter, but this decline will be more than offset by growth in the second quarter. For the third and fourth quarters of 2020, we expect the enrollment days to be comparable for each quarter, as compared to the respective prior year quarter.

A quick update on corporate and other, this category now includes residual operating losses associated with closed campuses due to the completion of our teach-outs. Excluding losses associated with closed campuses, operating losses for the year were $8.2 million higher, primarily due to the recognition of $3.5 million of stock compensation expenses during the fourth quarter, relating to performance based stock awards, for which the performance conditions were previously estimated to not likely be achieved, compliance and monitoring costs associated with the FTC and the Multistate AG agreements and certain operating recoveries that reduced prior year expenses. Also note, that for the fourth quarter, operating losses associated with the closed campuses were approximately $1 million.

Now to income taxes, for the fourth quarter we recorded provision for income tax of $6.1 million. This resulted in an effective tax rate of 18.1% for the period. The quarters' tax rate was positively impacted by approximately 10% to adjust the previously recorded year-to-date tax provision, which lowered the full year tax rate due to an additional $23 million of the $30 million FTC settlement, meeting the criteria for tax deductibility in the fourth quarter.

With this change, $29.7 million of the $30 million FTC settlement recorded in the second quarter satisfies the criteria for tax deductibility. For the full year, we recorded a tax provision of $22.4 million, resulting in an effective tax rate of 24.1%. Please note, that for the full year 2019 our tax rate was positively impacted by approximately 2.1% related to the settlement of a state audit, amended state income tax return filings and the tax effect of stock based compensation. For 2020, we expect our tax rate to be between 25.5% and 26.5%, which does not assume any material benefit from the tax effect of stock based compensation.

Importantly, we ended 2019 with approximately $108.5 million of federal net operating loss carry forward, which are available to offset future taxable incomes. As a result, specifically, as it relates to 2020, 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 $294.2 million of cash, cash equivalents and available for sale short-term investments. This represents an increase of $65 million over year-end 2018, and was primarily driven by positive cash flows from our university operations, and reduced operating losses associated with our closed campuses.

Net cash provided by operations was $73.1 million for the year, as compared to cash provided of $57 million for the prior year. The current year cash flow was primarily driven by the factors I just mentioned, partially offset with the cash outflows related to the legal settlement payments of $35 million for the FTC and the Multistate Attorney General matters. Capital expenditures were approximately $5.2 million for the year, as compared to $6.7 million in the prior year. For the full year 2020, we foresee capital expenditures to be approximately 2% of revenues.

A quick note on the pending acquisition of Trident University. As Todd noted, we expect the acquisition to close in early March 2020, and are already diligently working toward a smooth integration for the incoming students and employees. We expect the transaction to be accretive to our 2020 earnings. Trident's operating performance continues to be strong, and as a result, we now expect to pay a cash purchase price at the high end of our previously provided range of $35 million to $44 million, along with the reimbursements of certain employee related expenses of approximately $1 million.

Finally, let us discuss the organic growth outlook for the full year 2020. This outlook reflects among other things, the company's expectation of growth in new and total student enrollments at both universities for the full year 2020. Our outlook for the full year consists of the following. $147 million to $152 million in total company adjusted operating income, as compared to $134.3 million in 2019. This is consistent with our overall objective of sustainable and responsible growth. This outlook contemplates investments to further improve student experiences, retention and academic outcomes. Please note, that this outlook excludes the impact of Trident acquisition.

Adjusted diluted earnings per share is forecasted to range between $1.44 and $1.49 per share, versus $1.37 in 2019. As it relates to our first quarter outlook, our first quarter 2020 outlook reflects the company's expectation of growth in first quarter new student enrollments at CTU. However, for the first quarter of 2020, AIU will have approximately 31% less enrollment days, while the second quarter will have approximately 50% more enrollment days as compared to the respective quarterly periods in 2019. As a result, we expect AIU's new enrollments to decline in the first quarter, but this decline will be more than offset by growth in the second quarter. For the second-half of 2020, we expect the enrollment days to be comparable for each quarter as compared to the respective prior year quarter.

We expect adjusted operating income for the first quarter of 2020 to be in the range of $37.5 million to $39 million and adjusted earnings per diluted share to be in the range of $0.38 to $0.40. 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.

Lastly, we will continue to maintain a balanced capital allocation strategy, that focuses on maintaining a strong balance sheet and adequate liquidity, while prudently investing in organic growth projects, such as students learning initiatives and evaluating diverse strategies to enhance shareholder value, including share repurchases and acquisitions of quality educational institutions and progress. Ultimately, our goal is to deploy resources in a way that drives long-term shareholder value, while supporting and enhancing the academic value of our institutions.

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

Todd S. Nelson -- President and Chief Executive Officer

Thanks Ashish. Our positive results in 2019 and the progress we've made thus far demonstrate the success of our operating strategy that focuses on student experiences, retention and academic outcomes. We're experiencing sustainable and responsible growth at both universities and are staying true to our core focus of investing in students serving processes, with a goal of positively impacting academic outcomes and student experiences.

I believe, we're well positioned both from a competitive and operating standpoint to serve and educate current and prospective nontraditional students with a focus on adult learners, and to build a leadership position in online postsecondary education. We are entering 2020 with momentum, and I want to thank the entire team for their hard work, commitment and dedication.

Thank you again for joining us today. And we will now open the call for any analyst questions.

Questions and Answers:

Operator

We will now begin the question-and-answer session for analysts. [Operator Instructions] Our first question will come from Dan Moore with CJS Securities. Please go ahead.

Daniel Moore -- CJS Securities -- Analyst

Thank you. Good afternoon. Thanks for taking the questions.

Todd S. Nelson -- President and Chief Executive Officer

Hey, Dan.

Ashish R. Ghia -- Chief Financial Officer

How are you doing, Dan?

Daniel Moore -- CJS Securities -- Analyst

Very well. Thank you, Todd and Ashish. I want to start with, I guess, corporate partnership programs. Last quarter, I think you mentioned incrementally increased investment in that area in 2020, is that still the case built into guide? And if so, what might those incremental investments look like?

Todd S. Nelson -- President and Chief Executive Officer

Okay. Well, the good news is, as we mentioned that with CTU now up to 19% of the enrollment, so that's been a nice increase. And as you know, we've made some investment in that. And this coming year, we're also making incremental investment. We haven't given any outlook on where our projection would be. But we know this is a very -- it's a very needed program within not just academia, but also in these companies, again, their ability to have a partnership with an institution that's focused on helping them. So our plan is going forward to not only invest, obviously, in CTU, but AIU as well in this area.

Daniel Moore -- CJS Securities -- Analyst

Very helpful. Maybe just talk a little bit about -- obviously, Trident, sounds like you expect it to close here imminently. And it is trending toward the higher end of the purchase price. So just any more color, detail on how they're performing, number one? And number two, beyond that acquisition update on the pipeline of additional potential M&A as we look out to 2020?

Todd S. Nelson -- President and Chief Executive Officer

Okay. Well, as we said, we do hope that it will be in the first part of March, we are pleased with the results thus far. And as Ashish said, based on those results it will be at the high end of what we've said the purchase price would be. Beyond that, probably can't comment anymore on it. We would hope that as things continue to progress that we would then be able to provide an update on a new outlook at our next earnings call that would include the performance of Trident as well. So at that point we'll be able to give more color than we can today.

And then, as far as the -- I'm sorry. Then as far as the second part of your question on the pipeline. Yeah, we continue to be very active in that area. There are a lot of -- not only schools, universities, but there are also other companies that are involved in the education area that look very appealing. We want to -- as we did this, we're very strategic, very disciplined in our approach to that. But we continue to be looking for the best ways to enhance overall Perdoceo but also, provide good shareholder value on those types of acquisitions.

Daniel Moore -- CJS Securities -- Analyst

And lastly, as a corollary to that in terms of capital allocation, any commentary on how aggressive you might be with the repurchase authorization that you do have in place if the stock were to stay in and around current levels?

Todd S. Nelson -- President and Chief Executive Officer

Well, again, I don't want to really give any projection on what that would be. But, we have a lot of faith in the company and we think that is -- as we mentioned, when we were able to get the buyback approved, that continues to be something that we will continue to utilize.

Ashish R. Ghia -- Chief Financial Officer

Yes, and we will continue to make sure we evaluate on a daily basis, and just make sure that we allocate capital in the best interest of the company and the shareholders.

Daniel Moore -- CJS Securities -- Analyst

I appreciate the color. I'll jump back with any follow-ups. Thank you.

Todd S. Nelson -- President and Chief Executive Officer

Thanks, Dan.

Operator

Our next question will come from Alex Paris with Barrington Research. Please go ahead.

Alexander Paris -- Barrington Research -- Analyst

Hi, guys. Congratulations on a strong fourth quarter and 2019. I got a few questions on Trident. you -- again, just to reiterate, you expect to close that in early March. Do you have all the requisite approvals that you need? You're just waiting on the Department of Education now, is that correct?

Todd S. Nelson -- President and Chief Executive Officer

Yeah. As you know, there's multiple approvals you need from, whether it's the state, obviously, you're accreditor and then the department and we're just waiting on the finals with the department, and that's it.

Alexander Paris -- Barrington Research -- Analyst

Got you. And is this a preapproval for the acquisition? Or is this kind of a more thorough approval? I know the Department of Education does it for a couple of different ways?

Todd S. Nelson -- President and Chief Executive Officer

Well, I can't -- I'm not really sure what that -- again, how to answer that part of the question, I don't understand it fully. But I know, once you have the accreditation approval, that's when you actually look for the formal approval of the Department. Anything before that like a pre-act that you're probably referring to, yeah. But again, that after you have your accreditation approval, which is necessary before then you're actually looking for then the final approval.

Alexander Paris -- Barrington Research -- Analyst

I got you. Okay. And then with regard to the performance, you said performance at Trident has been good. I guess, the last data point we had was the fiscal year ended June 30, 2018 when revenues were $46 million and EBITDA was $9 million as I recall.

Ashish R. Ghia -- Chief Financial Officer

That is correct, Alex.

Alexander Paris -- Barrington Research -- Analyst

Okay. Good. And then you did say Ashish, that you expect Trident to be accretive to adjusted operating income in 2020?

Ashish R. Ghia -- Chief Financial Officer

Accretive to our earnings in 2020, that is correct. And as Todd mentioned, as we move forward, we will give you more updates as deem appropriate.

Alexander Paris -- Barrington Research -- Analyst

Most likely on the next conference call, that will be first quarter conference call?

Todd S. Nelson -- President and Chief Executive Officer

Yeah. The sequence would be what we would hope is that, once we get all of the final approval in place, and then possibly issue an 8-K around that, and a little bit about their performance, but then would not be able to provide an outlook at that time, because it would be -- well, just in a couple of weeks, you wouldn't have a chance to do that. But then, we would hope to be ready by the May call.

Ashish R. Ghia -- Chief Financial Officer

May call.

Alexander Paris -- Barrington Research -- Analyst

Well, I think we all take comfort in the outlook that it's going to be accretive. So, it could --

Todd S. Nelson -- President and Chief Executive Officer

And that's why, again, without -- again, we want to be careful with the information we provide, but as you know, from the prior information that was out there, if we're paying at the high end of that, that gives you a pretty good indication of at least what we're hearing where they are.

Alexander Paris -- Barrington Research -- Analyst

Got you. Shifting gears a little bit. Your corporate relationships at CTU up to 19% of total population, up from 16% in 2018. That's a number you give just once a year. Do you have an update on the AIUs corporate partnership? I know that they kind of started that process after CTU.

Todd S. Nelson -- President and Chief Executive Officer

They did and we continue to invest in that. We're actually very hopeful this year. They've got some very talented people that they brought into the process. The investment has been made and so we're again -- although, we haven't provided any update on where they are from a total student count, we're very optimistic about this year. They have a lot of good things in place.

Alexander Paris -- Barrington Research -- Analyst

Great to hear. Just to follow-up on the repo question. I don't have the press release in front of me. Did you do any share repurchasing in 2019 or in the fourth quarter?

Ashish R. Ghia -- Chief Financial Officer

Yes, we did. We did purchase in the fourth quarter on just about under 250,000 shares at an average price of $16.49. [Speech Overlap]

Alexander Paris -- Barrington Research -- Analyst

Great. And then what is -- pardon me?

Ashish R. Ghia -- Chief Financial Officer

Which was about $4 million.

Alexander Paris -- Barrington Research -- Analyst

Okay. And then, what was -- just remind me, what was the total authorized amount by the board?

Ashish R. Ghia -- Chief Financial Officer

$50 million.

Alexander Paris -- Barrington Research -- Analyst

So that means you got $56 million left -- $46 million left.

Ashish R. Ghia -- Chief Financial Officer

$46 million. That is correct.

Alexander Paris -- Barrington Research -- Analyst

Okay. And then at your Investor Day, you had given organic growth goal for 2022. You said mid-single digit revenue growth, high single digit to low double digit adjusted operating income growth, adjusted operating income margins of 22% plus by 2022, driven by mid-single digit new student enrollment growth. Has anything changed there? Are you giving an update to that at all anytime soon?

Todd S. Nelson -- President and Chief Executive Officer

No. Again, at this point, obviously, the outlook we gave today is the outlook and then, obviously, if there are future Investor Days, we would hope to update that. But at this point, the outlook we provided today is that.

Alexander Paris -- Barrington Research -- Analyst

Okay, that's great. And then last little nitpick sort of question. The arbitration settlement for $7.1 million, has that been paid yet? Or is that going to get paid in the first quarter? I think you had said previously in the first quarter subject to certain approvals and so on.

Ashish R. Ghia -- Chief Financial Officer

Yes, we expect to pay that in the first quarter.

Alexander Paris -- Barrington Research -- Analyst

Okay, but the others have been paid, the State Attorney General's and the FTC that's all been paid off?

Ashish R. Ghia -- Chief Financial Officer

That's right.

Todd S. Nelson -- President and Chief Executive Officer

That's correct. Yeah.

Ashish R. Ghia -- Chief Financial Officer

The State Attorney Generals was paid early last -- early last year, and then the FTC was paid in the fourth quarter of 2020 -- 2019. Sorry.

Alexander Paris -- Barrington Research -- Analyst

Okay, great. And then let me just throw one last one here. In your response to the first question on M&A, you continue to be very active, looking at most schools and universities, but other education companies. Can you give us some sort of idea what other education companies could look like?

Todd S. Nelson -- President and Chief Executive Officer

Sure. I mean, I think if you look out there, those things that are related to what we do. So for example, certain educational technology initiatives that we're seeing, but also those that are offering certification type programs there. We educate a lot of students that are looking for those types programs. So the ability to connect those two, I think would be some real synergy, not just maybe in cost savings, but also I think, as far as future revenue growth because of the connection there.

Alexander Paris -- Barrington Research -- Analyst

Great. Well, that's helpful. I appreciate that additional color. And again, thanks for answering my questions, and congratulations on the quarter.

Todd S. Nelson -- President and Chief Executive Officer

Thanks Alex.

Ashish R. Ghia -- Chief Financial Officer

Thank you.

Operator

Our next question will come from Greg Pendy with Sidoti. Please go ahead.

Gregory Pendy -- Sidoti -- Analyst

Hey, guys, thanks for taking my questions. Just one, Ashish, could you just clarify, I think you said AIU would be down in 1Q and up in 2Q, was that new or total student enrollments or both?

Ashish R. Ghia -- Chief Financial Officer

No, new student enrollments. We do not talk about total student enrollments on a quarterly basis. So, what I referred to down Q1 up Q2 was new student enrollments and on a combined basis, we expect that to grow.

Gregory Pendy -- Sidoti -- Analyst

Got it. That's helpful. And then also could you just kind of talk about the marketing plan in 2020? I know a lot of peer companies are sort of shifting to more of a focus online. Do you feel that -- what you achieved last year, it's pretty much going to be a consistent plan in 2020?

Todd S. Nelson -- President and Chief Executive Officer

Yes, in fact, again, we've had good success this past year in our process. And so, we're going to continue with that. But we've also had meetings with some of our providers that I believe are going to also enhance that. It's hard to give any outlook on would that reduce marketing costs or that nature. But again, we think improving on the quality of the lead, but also continue to provide the pipeline of those leads. But again, good success in the past year, but we -- some of the things we're working on the marketing team we think should be and could have some positive results for this coming year.

Gregory Pendy -- Sidoti -- Analyst

Okay. Great. Thanks a lot.

Todd S. Nelson -- President and Chief Executive Officer

Thanks, Greg.

Ashish R. Ghia -- Chief Financial Officer

Thank you.

Operator

This will conclude our question-and-answer session. I would like to turn the conference back over to Todd Nelson for any closing remarks.

Todd S. Nelson -- President and Chief Executive Officer

Again, thank you for joining us and we look forward to speaking with you next quarter.

Operator

[Operator Closing Remarks]

Duration: 45 minutes

Call participants:

Brooks Hamilton -- Investor Relations

Todd S. Nelson -- President and Chief Executive Officer

Ashish R. Ghia -- Chief Financial Officer

Daniel Moore -- CJS Securities -- Analyst

Alexander Paris -- Barrington Research -- Analyst

Gregory Pendy -- Sidoti -- Analyst

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