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Bridgepoint Education, Inc. (NYSE:BPI)

2013 Second Quarter Outlook and Ashford University's Accreditation Approval Conference

July 11, 2013 8:30 am ET

Executives

Paul Goodson - Associate Vice President of Investor Relations

Andrew S. Clark - Co-Founder, Chief Executive Officer, President and Director

Daniel J. Devine - Chief Financial Officer and Executive Vice President

Jane L. McAuliffe - Chief Academic Officer and Executive Vice President of External Affairs

Analysts

Peter P. Appert - Piper Jaffray Companies, Research Division

Alexander P. Paris - Barrington Research Associates, Inc., Research Division

Brandon Burke Dobell - William Blair & Company L.L.C., Research Division

Corey Greendale - First Analysis Securities Corporation, Research Division

Jeffrey Y. Volshteyn - JP Morgan Chase & Co, Research Division

Jeffrey M. Silber - BMO Capital Markets U.S.

Jarrel Price - Height Analytics, LLC

Paul Ginocchio - Deutsche Bank AG, Research Division

Operator

Good morning, and welcome to Bridgepoint Education's Conference Call to discuss the WASC Commission decision for Ashford University. Today's call is being recorded. At this time, I'd like to turn call over to Paul Goodson, Associate Vice President of Investor Relations for Bridgepoint Education. Please go ahead, sir.

Paul Goodson

Thank you, Audra, and good morning, everyone. Bridgepoint Education's press release and Form 8-K discussing the WASC decision regarding Ashford and our comments about our second quarter outlook were issued yesterday and are available on the company's website at www.bridgepointeducation.com. A copy of the WASC action letter and visiting team report from the review of Ashford University will be available on the WASC website at www.wascsenior.org.

Joining me on the call today are Andrew Clark, Chief Executive Officer; Jane McAuliffe, Chief Academic Officer; and Dan Devine, Chief Financial Officer.

Before we begin, we'd like to remind you that some of the statements we make today may be considered forward-looking, including statements with respect to our second quarter outlook, cost reductions and annualized cost savings, accreditation and related approvals, enrollments, student retention, financial and related guidance, as well as commentary regarding the performance of our business for the remainder of 2013. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual performance or results to differ materially, including the risk that the results of our 2013 cost reductions are different than currently anticipated. Please note that these forward-looking statements speak only as of 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.

At this time, it's my pleasure to introduce Bridgepoint Education CEO, Andrew Clark.

Andrew S. Clark

Thank you, Paul, and I'd like to welcome everyone to the call to discuss this important matter involving Ashford University and our financial outlook for the second quarter.

As I have said for the past year, our #1 priority has been to maintain regional accreditation and obtain WASC accreditation. As you can see from our filings and press release, Ashford University received the decision on its WASC accreditation on July 10. We were pleased with the decision of the commission to accredit Ashford University for 5 years, and the University looks forward to becoming an active member in the WASC community of colleges and universities.

Notably, the WASC Commission Action Letter stated, "The commission found that the university has responded to the commission's concerns and judges that it is now in substantial compliance with commission standards." Additionally, the WASC team had this to say in their report, and I quote, "What has resulted are a self reflection and evaluation, significant change and excitement for that which is now occurring. Indeed, the changes that have occurred in such a short time border on being revolutionary. They include what the team considers to be a number of best practices and what can become a model for online higher education for a nontraditional student population."

It's Ashford University's intent to participate in a national dialogue around higher education for nontraditional students and, whenever possible, to put forth what WASC recognized as best practices for a model for online higher education.

The next step in the process now that Ashford has received WASC approval is to receive approval by the Department of Education for the transfer of accreditation from HLC to WASC. The university is working with the department to ensure that it does all that it can to ensure a timely approval. In addition, we have notified the Higher Learning Commission of the WASC decision, and we'll be working with HLC to ensure a smooth transition to WASC accreditation.

I want to take this opportunity to thank the WASC Commission, its professional staff, the visiting team and its member volunteers who have worked with the university over the past 2 years in its effort to transfer its accreditation. All of these constituencies worked diligently in performing a comprehensive review of the university's academic and administrative capabilities. They provided the university with fair and constructive feedback on their view of the alignment between the university's goals and their accreditation criteria. On their most recent visit, they reviewed the university's response to earlier findings and noted the new initiatives that the university had introduced. The team reported, and I quote, "Ashford's accomplishments over the last year have indeed been impressive and significant. And based on the systems in place, the cultural transformation and the evident commitment of the board, administration, faculty and staff, there is reason to believe that these changes are sustainable."

I also want to acknowledge the extraordinary effort put forth by Dr. Richard Pattenaude and Ashford University staff, faculty and Board of Trustees in obtaining this accreditation. This was a significant undertaking, and the university's current and future students will benefit from the improvement derived from the ongoing and new initiatives the university has implemented throughout this process. They have all to be commended for a job well done.

I would like to take a moment on today's call to make some operational and financial comments now that Ashford has received initial accreditation from WASC. This effort has put Ashford University through a historic transition, touching all operational aspects from recruiting of students to a greater investment in student support, career, coaching and alumni services. The institution's focus on identifying and recruiting the students who have the best opportunity to persist toward their educational goals has resulted in lower newer enrollments to Ashford. Additionally, the previous issues around accreditation had some negative impact on new enrollment. Because of this, we expect that the decline in new enrollments will continue in the second quarter at a rate similar to the decline in the first quarter. But as we have said previously, we expect to see positive year-over-year new enrollments in the fourth quarter of this year. Consistent with what I said on our first quarter call, we expect that total enrollment at our institutions will decline in 2013 despite the improving retention trends that we expect to see for the remainder of the year.

I also want to comment briefly on the recent expense adjustments that we have made at Bridgepoint and Ashford. Throughout 2013, we have been working with Ashford to determine the optimal level of operating expense for what is now a smaller institution as compared to our approximately 92,000 students at the end of the first quarter of 2012.

During the second quarter of 2013, we determined that we can make meaningful cost reductions in areas that would not sacrifice the commitments and investments we made to improve student learning, success and outcomes. As such, we initiated operating cost adjustments at the end of the second quarter consisting of both labor and other expense savings across both Bridgepoint and its institutions. These reductions will continue to take place throughout the remainder of the year. We expect that these cost savings will be meaningful and will appropriately position the university with a staffing level to serve its students effectively. When fully implemented, we anticipate that the annualized labor and operational cost savings from these changes will be approximately $85 million.

For the second quarter of 2013, the company expects total ending enrollments at June 30, 2013, of between 71,000 and 72,000 students. Revenue for the quarter is expected to be between $195.5 million and $199.5 million, and second quarter earnings per diluted share is expected to be between $0.16 and $0.20.

Earnings for the second quarter include a charge of $6.2 million related to severance from the recent reduction in force. Of course, all of these estimates are preliminary and subject to final review. Bridgepoint will report its final second quarter 2013 results on August 6, 2013.

It's clear to all of us in the Bridgepoint family that Ashford's initial accreditation by WASC is a very positive outcome for all of our stakeholders, from alumni to students, staff, faculty, trustees and shareholders. Today's announcement reaffirms Bridgepoint's and Ashford's collective commitment to student success.

Most importantly, we believe Ashford's already strong value proposition has been further strengthened by the changes and investments we made during the transition to WASC, as well as from the WASC accreditation itself. With this major accomplishment now behind us, it is Ashford's intent over time to communicate the strength and the value proposition to a broader population of prospective students. Ashford's focus will be on better qualified students who can benefit from an affordable, quality college education enabled by innovative technology that improves the student experience and learning outcomes and provides enhanced support for its graduates. We believe the strength and value proposition we offer will resonate all the more strongly with prospective students in the future.

Throughout the history of this organization and its institutions, we have seen numerous examples of the transformative difference education can make in the lives of our students. It is this vision that motivates all of us at Bridgepoint and our institutions to passionately pursue innovative solutions that advance learning, both domestically and internationally.

This concludes our presentation on today's call. At this time, I'll ask our operator to open the phone lines for your questions.

Question-and-Answer Session

Operator

[Operator Instructions] We'll go first to Peter Appert at Piper Jaffray.

Peter P. Appert - Piper Jaffray Companies, Research Division

Do you have any thoughts you can share with us on how you're thinking about the economic model for the new Bridgepoint, right? Smaller company, now accredited, obviously. Now what should we think about in terms of target levels of enrollment growth that you'd be looking at, appropriate level of margins for the business going forward?

Andrew S. Clark

Yes. Well, thank you, Peter. I appreciate your question. I think we'll have obviously more to say about the economic model in August, on the 6th. And I think we'll probably say the more about it as we kind of make our way throughout the remainder of the year. As I've said in previous earnings calls and I said this morning, I mean, this has been a tremendously transformative period for the institution. Lots have changed, and I think all of that means that there will still be a period in the third quarter where the institution is still adjusting to those changes. And we think from a high-level, Peter, that as we move through the fourth quarter, those things should begin to settle in and we should be able to see some trends that we could then share more broadly and be able to describe the overall view that people should hold regarding the economic model of Bridgepoint going forward in 2014.

Peter P. Appert - Piper Jaffray Companies, Research Division

Okay. Could I ask a follow-up then? Just in terms of the specifics of the second quarter, the revenue numbers would seem to imply that perhaps that persistence of the revenue per student numbers are down on a year-to-year basis. Can you comment on either of those?

Daniel J. Devine

Sure, this is Dan. The revenue per student expected in the models, depending on what's the size range you show or use, is, by my calculation, if you use the midpoint for the quarter, it's down approximately 3% from the previous quarter. And a part of that has to do with if you remember, our technology fee that was changed on January 1, there's an amortization of that in the first quarter, and now you're kind of at the bottom of the trough related to technology fee. And that technology fee will build back up over the next 3 or 4 quarters back to where it was. But you had the amortization in the first quarter that added revenue. You're kind of -- now you have the smallest population being charged that tech fee, and that tech fee will grow as we go forward. And that will bring it back more into line with the previous quarter.

Peter P. Appert - Piper Jaffray Companies, Research Division

Got it. And Dan, how about specifically the persistence this quarter?

Daniel J. Devine

We haven't seen any change in persistence that I'm aware of at this point.

Andrew S. Clark

Yes. And I think we'll comment, Peter, more specifically on persistence for the quarter and our view of it for the remainder of the year in more detail on August 6.

Daniel J. Devine

Right.

Operator

We'll move next to Alex Paris at Barrington Research.

Alexander P. Paris - Barrington Research Associates, Inc., Research Division

Just a couple of quick questions, just to make sure I have this straight. The charge in the -- to be expected in the second quarter, that $6.2 million, that's pretax, do we just tax effect that with the 39.5% tax rate?

Daniel J. Devine

Yes.

Alexander P. Paris - Barrington Research Associates, Inc., Research Division

Okay. Second, the $85 million savings that's also pretax. You say when fully implemented, it'll be an $85 million annual cost savings. When would that be fully implemented? Would we expect the full $85 million in 2014, for example?

Daniel J. Devine

Yes, 2014. It's the middle of the year. A lot of those, well, obviously, labor expense is going to be annualized into next year. You're halfway through the year already, plus you have the charge for the severance. And then the operating expenses were basically just were -- we evaluated our operating expenses, I think, across-the-board that included kind of discretionary and third-party expenses. And that will be annualized, obviously -- 2014 is when you're really going to see the full savings.

Alexander P. Paris - Barrington Research Associates, Inc., Research Division

But we will get a ratable share savings this year?

Daniel J. Devine

Yes.

Alexander P. Paris - Barrington Research Associates, Inc., Research Division

Yes, we'll get some of that savings this year?

Daniel J. Devine

Yes.

Alexander P. Paris - Barrington Research Associates, Inc., Research Division

For perspective, what was the peak in the marketing personnel staff in terms of numbers? And what it is today?

Andrew S. Clark

I think it was approximately about 2,100 folks, Alex. And today, it's about 900 folks.

Alexander P. Paris - Barrington Research Associates, Inc., Research Division

Got you. And then lastly, you said in your prepared comments that the next step, the first of which has been taken, you've informed HLC of the WASC approval, second step is Department of Education approving the transfer. Is there any precedent for them not approving a transfer of regional accreditation? And how long -- I know you can't predict with certainly, but I would assume this is fairly routine. Would you expect it in 1 month or 2, that sort of time frame? Or is it -- could be longer than that?

Andrew S. Clark

Yes. To the beginning of your question, Alex, I'm not aware of a precedent where they've declined to allow an institution to move from one creditor to another. We have been in discussions with the department, so we have had conversations previous to this decision and have been as recently as just this past week. So we're definitely moving forward in the process. I wouldn't want to speculate on how long it takes. I think it's something that can be accomplished in a fairly effective manner, and I don't have any reason to think that it couldn't be. One of the things that we benefit from here at Bridgepoint is our Vice President for Regulatory Affairs worked inside the Department of Education for 13 years, very familiar with the ongoings of the department and is very -- will be very helpful in the transition that Ashford will make from HLC to WASC with the department.

Alexander P. Paris - Barrington Research Associates, Inc., Research Division

Regardless, though, there would be no interruption in Title IV anticipated given that you have regional accreditation, whether it's HLC or WASC? And how long it takes to approve a transfer?

Andrew S. Clark

That's correct, there'll no interruption whatsoever for our students or for the institution.

Operator

And we'll go next to Brandon Dobell at William Blair.

Brandon Burke Dobell - William Blair & Company L.L.C., Research Division

I'm wondering if you could comment on anything within the WASC report around, I guess, whether or not there was any kind of growth restrictions, programmatic directives, those kinds of things to say, we're giving you accreditation, but here are some conditions around that accreditation?

Andrew S. Clark

Yes, sure, Brandon, great question. There was no restrictions. No programmatic restrictions, no growth restrictions, nothing along the lines of anything you described. They do say in their letter that they will hold a follow-up visit in the spring of 2015, but that is really the only thing that's in there other than the initial accreditation for 5 years.

Brandon Burke Dobell - William Blair & Company L.L.C., Research Division

Okay. And to your comments, Andrew, about some best practices, I guess, A, I'm curious kind of what best practices they did point out. And perhaps in a context of all the alternative models that are kind of floating around out there that the department and the different accreditors are trying to kind of figure out how to make work, like some of the self-directed degree programs, hybrid programs, things like that, maybe some comments about kind of where you guys stand there relative to kind of what WASC saw within the organization that they obviously liked a lot?

Andrew S. Clark

Yes. So I'll turn this over to Jane and we'll let her speak to some of the things that WASC saw.

Brandon Burke Dobell - William Blair & Company L.L.C., Research Division

Okay.

Jane L. McAuliffe

I think probably what they highlighted on the most were some of the tools that the university uses to -- whether it's their assessment tools or sort of some of their dashboards that they were very impressed with. And so they thought those would be best practices and probably tools for other institutions to take a look at. So that's sort of where they focused in on with respect to best practices.

Andrew S. Clark

I think they were particularly impressed with Waypoint, Brandon, which I know you're very familiar with.

Brandon Burke Dobell - William Blair & Company L.L.C., Research Division

Right.

Andrew S. Clark

I think they really liked the way in which the institution utilized Waypoint to assess student learning. And I think they felt that, that was something that the university should share when it can at various conferences and with other institutions.

Brandon Burke Dobell - William Blair & Company L.L.C., Research Division

Okay. And then final one for me, back to the cost saves. Obviously, there are some employee-related costs just given the ratios of employment counts or sort of -- enrollment counts or some things like that. But is there a number of that $85 million that is related to kind of marketing or advertising spend or maybe things that were done over the past 12 months around the repositioning and the accreditation process with WASC, all those kind of expenses that are just more expensive batement as opposed to kind of either personnel or facility, things like that, that are going away?

Daniel J. Devine

Well, I mean, you had 2 questions there. One was the marketing spend, I guess, the first part of your question, right?

Brandon Burke Dobell - William Blair & Company L.L.C., Research Division

Right. Yes.

Daniel J. Devine

There were some discretionary expenses across-the-board. So yes, within the marketing area, there were both labor savings as well as kind of discretionary or third-party savings. So it was there. But there was not a strategy change in our marketing area that resulted in some savings. And then the rest of them were spread across-the-board. You're correct, some of those are related to the lower number of students and the ratio of departments, but the ratios remained the same or were enhanced. And then the other ones were in support services, the G&A departments. But every department had some reductions.

Operator

We'll move next to Corey Greendale at First Analysis.

Corey Greendale - First Analysis Securities Corporation, Research Division

A couple of questions actually. Just I wanted to dig in just a little bit more on the cost savings side. So the $85 million is a large number relative to the severance charge. Anyway, I was hoping you might be able to say how many headcount -- how many people you took out of the system. And maybe just get a little bit more granular on where some of the savings are coming from?

Daniel J. Devine

We took approximately 500 people out of the system, so to speak. And I'd say about 1/3 of that $85 million relates to direct labor, directly to labor. Some of it relates to the direct costs serving students is lower because your student count has come down. And then that probably represents about 1/3 of it also. And another third is we basically we went through and adjusted our expenses related to discretionary or kind of third-party contract expenses. We did not close any locations in this scenario, so there was no real infrastructure changes that are factored in there.

Corey Greendale - First Analysis Securities Corporation, Research Division

Okay. So I guess following up on that, so I think it sounds like the changes were implemented after WASC had made its decision. Can you just -- is there some risk that somehow, some of the outcomes that WASC was happy with are going to be somehow impaired by some of these cost reductions, that things will be different when they come back in 2015?

Andrew S. Clark

Yes, Corey. No, these changes actually occurred before we were aware obviously of any kind of WASC decision. Dr. Pattenaude, of course, communicated proactively with WASC regarding any kinds of adjustments that he made and how those adjustments reflected a commitment to any of the initiatives that the institution had made to WASC, especially around faculties. Kind of -- and that's probably a great example. Our -- the institution's objectives for full-time faculty and the hiring of faculty, none of those were impacted by these cost adjustments. It's one kind of very good example of how this was done in a very strategic manner by Dr. Pattenaude. And then on the Bridgepoint side, we did something similar and made sure that our reductions were also strategic. It didn't impact any of the services that support the institution and its goals.

Corey Greendale - First Analysis Securities Corporation, Research Division

Okay. And then speaking to kind of the longer-term goal, so clearly, as WASC said, there have been some pretty monumental changes made at Ashford. In light -- and I realize at some point some of those changes anniversary and probably that starts to help the enrollment side. But given those changes, can you just give us a little bit more on the level of visibility and what gives you confidence that new students will start growing in Q4?

Andrew S. Clark

Yes. Well, I mean, as you know, Corey, I've kind of shared that view since, I think, the fourth quarter earnings call or the first quarter earnings call and now this call and this outlook of what we think the second quarter will be like. There's continued underlying demand from prospective students for the value proposition of Ashford University. And as I mentioned this morning, I think a little bit of the demand has been impacted by the fact that prospective students had some concerns over Ashford's accreditation and kind of what its status currently was over the past year. And so I believe that with that status now being very clear to prospective students as well as to continuing students, that, that should both positively impact new student enrollment in the fourth quarter as well as retention.

Corey Greendale - First Analysis Securities Corporation, Research Division

Okay. And then just one last quick one for me. I think, Andrew, in your prepared remarks, you said something about getting the word out about the value proposition to a broader array of students. But just a little bit more on what you're referring today. Are you talking about kind of changes in the marketing channels? Are you saying just the change in messaging or what specifically?

Andrew S. Clark

Well, yes, it's a great question. I think specifically, the institution is looking at a real branding effort throughout the third quarter of this year and maybe early into the fourth quarter. That will just allow the institution to continue to build upon some of the branding that it did in 2012 and to continue to establish the brand of Ashford University.

Corey Greendale - First Analysis Securities Corporation, Research Division

Okay. Then I lied. In light of that answer, I just had one more then. Are you talking about kind of a normal sequential step-up in marketing and promotional expense in Q3? Or could it even be above and beyond what we'd ordinarily see?

Daniel J. Devine

I think it will be -- well, in Q3, you're going to see a step-up compared to -- well, Q2, which you haven't seen yet. But you'll see it will be similar to last year. If you remember last year, there was a increased investment in the third quarter. And that will occur again in this quarter, in the third quarter.

Operator

We'll go next to Jeff Volshteyn at JPMorgan.

Jeffrey Y. Volshteyn - JP Morgan Chase & Co, Research Division

I only like have a few small questions. Will you be reinstating guidance on the second quarter call?

Andrew S. Clark

No, Jeff, we won't be providing guidance on the second quarter call.

Jeffrey Y. Volshteyn - JP Morgan Chase & Co, Research Division

Okay. If I could ask another one, on $85 million savings. How would that be broken down between various expense line items, maybe in percentage terms and portions?

Daniel J. Devine

I don't have that detailed out in front of me at this point. I think we'll give you more color on that on August 6. It is in all areas. I don't have the specific breakout between G&A and sales and marketing and instructional costs and services.

Jeffrey Y. Volshteyn - JP Morgan Chase & Co, Research Division

Okay. And in the second quarter numbers, what are you assuming for bad debt expense? And how has bad debt expense been trending through this quarter and going into the third quarter?

Daniel J. Devine

Yes, I think, again, on August 6, we're going to give more color on that operating expense. On operating expense detail, it's not complete yet, and I don't want to speculate and change my comments in August.

Operator

We'll go next to Jeff Silber at BMO Capital Markets.

Jeffrey M. Silber - BMO Capital Markets U.S.

I just was wondering how all this is going to be communicated to current and potential students.

Andrew S. Clark

Yes, Jeff, great question. We've already -- the institution has already made sure to communicate it primarily through Facebook and other social networking sites. So we tried to make sure that we got the word out that way. And it seems to have been very effective so far. Of course, it's very early. We just were notified yesterday. But there's been a lot of excitement on Ashford's Facebook page amongst our students.

Jeffrey M. Silber - BMO Capital Markets U.S.

All right, great. And then just a -- another modeling-related question. I hope you'll be able to answer this one. Under, I guess, what we'll call the new and revised Ashford, from a variable or incremental cost perspective, how do things change? What percentage impact will it be on every dollar of incremental revenue? It's either both up or down?

Daniel J. Devine

On the incremental, it's -- I'm trying to think historically what we used to say on that and then going forward. So I do have that number kind of sketched out. I don't have it 100% complete. I think we can discuss that probably again on the 6th. It's a little more -- it's kind of a detailed question because you have to -- there's a difference, obviously, revenue going up and then revenue going down.

Jeffrey M. Silber - BMO Capital Markets U.S.

Right. Let me...

Daniel J. Devine

And I prefer to -- I prefer to discuss that on the 6th to have a little more information.

Jeffrey M. Silber - BMO Capital Markets U.S.

I understand. But maybe you can just give us order of magnitude. Does it change dramatically either one way or another? Are there more or less fixed costs in the new model?

Daniel J. Devine

I don't think there's more. There's no more or less components of fixed costs. And I think over the last year, the investments that we've made at a kind of component level have remained the same. And they've increased at the instructional cost and services line, but we've been able to make some adjustments in other areas. So I think it's better if I kind of have more information in front of me to tell you kind of specifically. They're kind of forward-looking questions, so we'll talk about it more on the 6th. I'll have to noodle on your question a little bit.

Operator

We'll go next to Jarrel Price at Height Analytics.

Jarrel Price - Height Analytics, LLC

I have a 2-part question regarding some of the quality initiatives that Ashford has implemented over the past year. I was wondering if you could discuss what types of tweaks, if any, you would be considering to these existing initiatives. And then second, I'd also ask whether you might consider any new quality improvement initiatives over the next year.

Andrew S. Clark

Yes, sure. Well, I think the institution has done an exemplary job of really examining the various kinds of quality initiatives that help them select a prospective student that's more likely to succeed. Certainly, from the orientation to the Ashford Promise, I mean, both of those, as I've indicated in previous calls, are having the desired positive impacts that the institution was hoping for. And I don't think that there's any desire to really tweak any of those initiatives at this point. I think in the spirit of continuous improvement, I'm sure the institution will review their effectiveness and will consider tweaks well out into the future if it becomes clear from institutional research that those are things that are needed. In terms of adding anything new, I really don't think at this point that there's any new initiatives that need to be added. I think this is really a great opportunity for the university to kind of settle in now after going through such a historic transformation and really focus in on its students and student success and the learning and the overall vitality of the institution.

Operator

And we'll go next to Paul Ginocchio at Deutsche Bank.

Paul Ginocchio - Deutsche Bank AG, Research Division

It's been 1 year maybe you've been a bit more internally focused. But in that year, new enrollment trends have been -- come under pressure for a lot of your peers, and it seems like there's a lot of pricing pressure now and lots of price cuts have been announced. Just wondering what you think of your -- in general, your $400, roughly, slightly more than that, cost per credit hour? Do you think it still gives you the same advantage that it did 5 or 6 years ago when you launched it? And what you think of the competitive landscape today versus 1 year ago?

Andrew S. Clark

Yes, sure. Appreciate the questions, Paul. I think that definitely, price has been a focus for consumers for the past several years, and I think Ashford University and its value proposition certainly benefited from that in terms of our affordability. I think there continues to be a focus on affordability. I think that, that focus is building. I think what we've seen in terms of Ashford University is that the demand for our value proposition remains very strong. Really, the decline in new enrollment for us, unlike other institutions, has been around the admission standards and the selectivity of the university when it comes to prospective students rather than external factors or environmental factors that might be affecting some of the other institutions. So I would say that we view the value proposition as being -- continuing to be competitive, and I think that's why I made the comments, Paul, that Ashford will be working pretty diligently over the next 4 or 5 months to focus its branding and make sure that prospective students are aware of Ashford and its value proposition. And I think the university will benefit from that.

Operator

And that does conclude today's question-and-answer session. At this time, I'd like to turn the conference back over to Mr. Clark for any closing remarks.

Andrew S. Clark

Yes, thank you. I want to thank everybody for joining us on the call today. We will report our second quarter earnings via a press release at 7 a.m. Eastern Time on August 6, followed by a conference call at 11:30 a.m. Eastern. And I invite you to join us again at that time. Thank you, everybody.

Operator

And that does conclude today's conference. Again, thank you for your participation.

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