2011 bmo back to school conferences1.q4cdn.com/...presentations/...bmo_sept12_pdg.pdfthis...

2011 BMO BACK TOSCHOOL CONFERENCE

This presentation may include “forward-looking statements” within the meaning of

Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange

Act of 1934. Forward-looking statements are subject to risks and uncertainties and

actual results may differ materially from those reflected in the forward-looking

statements. Important factors that could cause actual results to differ materially include,

but are not limited to, those risk factors discussed in Bridgepoint’s filings with the

Securities and Exchange Commission, including the Annual Report on Form 10-K for

the year ended December 31, 2010 (filed on March 2, 2011) and the Quarterly Report

on Form 10Q for the quarter ended June 30, 2011 (filed on August 2, 2011). Forward-

looking statements speak only as of the date the statements are made. Bridgepoint

assumes no obligation to update forward-looking statements to reflect actual results,

changes in assumptions or changes in other factors affecting forward-looking

information, except to the extent required by applicable securities laws.

FORWARD-LOOKING STATEMENTS

INNOVATIVE SOLUTIONS THAT ADVANCE LEARNING

LARGE MARKET OPPORTUNITY

BA or Higher43 MM

AA13 MM

No College Degree 98 MM

US Workforce > 25 Years OldEmployed Population: 154 MM2

Private Sector

Enrollment:

1.4 MM


1 Source: BMO Capital Markets, Education and Training, Equity Research, September 2011

2 Source: Labor Force Statistics, Current Population Survey, Employment status by educational attainment, 2010 annual averages

Private Sector Market Share1

5.8%

6.9%7.3%

8.2%

10.0%

11.9%

0%

2%

4%

6%

8%

10%

12%

0

250

500

750

1,000

1,250

2004 2005 2006 2007 2008 2009%

of

To

tal E

nro

llm

en

t

En

rollm

en

t (0

00s)

Private-Sector Market Share


11.5m

13.7m

15.4m

17.8m

21.6m

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

1980 1984 1986 1988 1990 1992 1994 1996 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Fall Enrollment

10 million in Last 30 years

Source: The College Board’s Annual Survey of Colleges, IPEDS, and Eduventures analysis

GROWTH IN HIGHER EDUCATION

TUITION VASTLY OUTPACED ENROLLMENT GROWTH:

THREATENS STUDENT

ACCESS AND ACHIEVEMENT

+258% between 1980

& 2010 at 4Y Publics

+177% at Private

4Y Nonprofits


6,91678,332

229,363

1,260,605

1,537,151

1,783,095

2,139,714

2,482,068

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Est. Online Headcount

Source: IPEDS/NCES, SEC filings, school data, Sloan-C and Eduventures analysis

PRIVATE SECTOR:~40% of the wholly online market;

~10% of U.S. Higher Ed

ONLINE IS MAINSTREAM:Online is ~12% of total headcount

in U.S. Higher Ed

~30% of adult and graduate

headcount (Fall 2010)

ONLINE PROGRAMS EMBRACED BY ADULTS

SEEKING ACCESS

1.0 1.1 1.2

1.6

2.0

2.4

0.0

1.0

2.0

3.0

High School Grads

Some College

AA BA MA Dr.

2009 Median Earnings Relative to H.S. Grads 1 9.7%

8.6%

6.8%

5.2%

3.9%

2.5%

0.0%

3.0%

6.0%

9.0%

12.0%

High School Grads

Some College

AA BA MA Dr.

2009 Unemployment Rate 2

$300,000

$1,100,000

$1,500,000

$2,600,000

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

AA BA MA Dr.

Lifetime Earnings Advantage

Over High School Grads 3

COLLEGE BENEFITS:HIGHER PAY +

LOWER UNEMPLOYMENT


1Source: Bureau of Labor Statistics, Current Population Survey (posted 5/27/2010)

2Source: 2009 annual averages for persons age 25 and over, earnings are for full-time wage and salary works

3Source: U.S. Census Bureau, Current Populations Survey, 2009 Annual Social and Economic Supplement

Tim

es H

.S. E

arn

ing

s

* 43 States Cut Assistance1

* Reductions in Faculty

* Tuition Increases

* More to Come?

Public Sector

Independent Private Sector

Net Taxpayer Cost Per Student2

$15,500

$2,400

Do

llars

$7,100

1 Source: Center on Budget and Policy Priorities, February 9, 2011

2 Source: Robert J. Shapiro and Nam D. Phan, Sonecon September 2010

TRADITIONAL COLLEGES: FEWER SEATS,

HIGHER COSTS


2011 OUR APPROACH TO QUALITY EDUCATION

• MA, PsyD, PhD

• Social & Behavioral Sciences

• Colorado Springs Campus

• HLC Accredited

BA 74%

AA14%

MA11%

Dr1%

Degrees

99% Online

71% Female

50% Minority

35 Years Old

University of The RockiesAshford University

• AA, BA, MA, MBA

• 17 NAIA Teams

• Clinton, IA Campus

• HLC Accredited; WASC Pending

Edu 17%

Hcare21%

Lib Arts 24%

Bus 39%

Programs

RECOGNIZED BRANDS


• More Affordable

Apple™/ Android™

• Better Student Benchmarking Data

• Rich Data on Outcomes

• Used By 40 Institutions

• Assessment of Learning Data

MOBILE ACCESS

• Proprietary Learning Platform

• 80% of Students by 2012

• Constellation

• Students

• Grade Book

• Admin

• Classroom

• Faculty

INNOVATION DIFFERENTIATES US

}


• Patent Pending


• Recognized - 2011 Horizon Report

“technology to watch”

- Finalist for the

SIIA’s 2011 CODIE Award

• Impactful - 89% of AU students say

Constellation™ is reliable and

“hassle-free”

- 78% say it improves their learning

• Feature-rich- Quizzing for self assessment,

interactive timelines, simulations

and animations

- Create & review highlights,

annotations, and more

CONSTELLATION™ PLATFORM


• Versatile- Downloadable to many

different devices

- E.g. iPad app, audio files

to their MP3 players and

iPods

• Professionally Vetted - Manuscripts developed

by professional authors,

peer-reviewed by experts,

and guided by an editorial

staff

CONSTELLATION PLATFORM


• First mobile app in the private sector

-- (debuted in April 2011)

• Free for students

• Users can:

-- Participate in online discussions,

-- Contact key University support staff

-- Check grades and more

• In its first month:

-- Over 40,000 visits and more than 500,000 page views

• iPhone app:

-- Downloaded in 37 countries and every state in the U.S.

SUCCESSFUL MOBILE LAUNCH


• Ashford University’s learning model

- A rigorous course/program development process

- Encapsulates instructional design advances of the past 40 years

- Student-centered

- Course and program learning outcomes with aligned assessments

• University of the Rockies embodies a similar learning model

- Plus a specific disciplinary perspective and Practitioner-Scholar Model

• Faculty

- Extensive training in technology and teaching methodology

- Rubrics

- Faculty mentoring

EXEMPLARY LEARNING MODELS


Ashford and Rockies: Robust data disclosure

– On student characteristics, satisfaction and performance,

and alumni data

– Ashford and Rockies: committed to transparency

• Informed prospective student decision-making

• Institutional continuous improvement

• Accountability for public and private funds

– Exceeds federal requirements

EMBRACING TRANSPARENCY & ACCOUNTABILITY


- Student and faculty characteristics

- Student retention and course completion

- Intended learning outcomes:

• Institution overall

• General education

• By program

- Student performance on 3rd party General Ed assessments

- Benchmarked against national student engagement and satisfaction data

- Alumni satisfaction and career progression

- Outlines of curricula and instructional reform in response to student feedback

ASSESSMENT SITE ASHFORD

BENCHMARKINGPERFORMANCE

ASHFORD


VALIDATION

• Ashford outperforming national benchmarks:

- SAILS test of information literacy (Kent State University)

• AU students exceeded 7of 8 benchmarks set by other baccalaureate institutions

- NSSE 2010 survey of student engagement

• AU student responses surpassed national average in numerous categories

- Ashford alumni

• 97% reported overall satisfaction with their experience, and 95% said they would recommend Ashford to others

- UniLOA survey of critical skills development (Indiana St. University)

• AU students outperformed national average on 6 of 7 benchmarks

Source: Ashford University 2010 Assessment Data for 2009 cohort

Source: Ashford University Internal Data

ENHANCED ASHFORD PERFORMANCE

• BA students attempting more than 12 courses exhibited annual

retention of 83.9%

• BA students who transfer in 60+ credits have a 78% retention rate


PROGRAM INTEGRITY

• Compliant with rules effective July 1st

IMPACT ON COMPANY

• In Q3, we have observed a positive trend in Admission

Counselor productivity vs. previous expectations

WE EXPECT THE FOLLOWING GOING FORWARD

• New enrollment growth will begin to turn positive year

over year in Q2

• Total enrollment growth will be positive in the second half

of 2012

• For the year 2012 new enrollments, total enrollments,

and revenue will be positive over 2011

CURRENT REGULATORY ENVIRONMENT


Gainful Employment:

• Programs expected to meet new requirements

• No material changes expected

WASC Migration

• Ashford has met all eligibility criteria

• Self study will be submitted in Q4

• Visit by WASC expected in March 2012

CURRENT REGULATORY ENVIRONMENT


1.4%

2.9%

4.0%

5.3%

0.0%

2.0%

4.0%

6.0%

2007 2008 2009 2010

Bridgepoint

Education’s Market

Share Based on

Enrollment

Percentage1

STEADY GROWTH IN MARKET SHARE

1 BMO Equity Research 2011

2011 FINANCIALREVIEW

12,623

31,558

53,688

77,892

84,545

5,000

25,000

45,000

65,000

85,000

2007 2008 2009 *2010 1H 2011

Enrollments

$85.7

$218.3

$454.3

$713.2

$469.3

$50.0

$250.0

$450.0

$650.0

$850.0

2007 2008 2009 *2010 1H 2011

Revenue

CAGR

*72.2%

CAGR

*102.6%

($MM)


HISTORY OF CONSISTENT PERFORMANCE

34.8%

28.8%26.4% 26.3%

25.1%

10.0%

25.0%

40.0%

2007 2008 2009 2010 1H 2011

Instructional Costs and Services

42.0%

37.1%

32.1%29.7%

25.8%

10.0%

25.0%

40.0%

55.0%

2007 2008 2009 2010 1H 2011

Marketing and Promotional

18.5% 18.8%

23.5%

13.7% 13.2%

5.0%

15.0%

25.0%

2007 2008 2009 2010 1H2011

General and Administrative

4.6%

15.3%18.0%

30.3%

35.9%

3.0%

15.0%

27.0%

39.0%

2007 2008 2009 2010 1H 2011

Operating Margin

-- % of Revenue --


CONSISTENT IMPROVEMENT IN OPERATING

LEVERAGE

$10.4

$70.7

$131.7

$189.9

$0

$100

$200

2007 2008 2009 2010

Net Cash Provided By Operating Activities

($ MM)

*Mid-point of guidance

$0.01$0.16

$0.74

$2.14

$2.62*

$0.00

$1.00

$2.00

$3.00

2007 2008 2009 2010 2011

Fully-Diluted Earning Per Common Share


STRONG CASHFLOW AND EPS

2011 bmo back to school conferences1.q4cdn.com/...presentations/...bmo_sept12_pdg.pdfthis...

Documents