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ITT Educational Services, Inc. CEO Discusses Q4 2011 Results - Earnings Call Transcript

Stocks in this article: ESI

Reallocation of media expenditures resulted in a reduction in the number of prospective student increase received in the fourth quarter 2011 compared to the same period in the prior year. However, we experienced an increase in the rate of which prospective student increase converted to new students in 2011 fourth quarter compared to the same prior year period.

As of December 31, 2011, we had 22% fewer admission representatives than we had at the same date in the prior year. However, the productivity of the recruitment staff increased during the fourth quarter of 2011 compared to the same period in the prior year.

We do not believe that the number of our admissions representatives at the end of 2012 will be materially higher compared to the end of 2011. For the second consecutive quarter as a result of self-directed changes to program offerings at select campuses, we experienced a more mature year-over-year decline in new student enrollment in the criminal justice programs in the fourth quarter compared to new student enrollment and other curricula.

The year-over-year decline in new student enrollment in the school of criminal justice represented approximately 80% of the year-over-year decline in total student enrollment for the quarter. The combination of the events I just described led to the 14.7% decrease in new student enrollment in the fourth quarter of 2011 compared to the same period in the prior year.

Moving onto a discussion of student persistence, the 270 basis points decline in our persistence rate as of December 31st, 2011 compared to the same date in 2010 was primarily due to an anticipated increase in the number of graduates in the fourth quarter of 2011 compared to the same academic period in 2010. The number of graduates in the three months ended December 31, 2011 increased approximately 20% compared to the same three-month period in the prior year. Student retention in the academic period that concluded in December 2011 was substantially similar to the student retention in the academic period that concluded in December 2010.

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