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ITT Educational Services Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: ESI

With the agenda for the call out of the way, let me begin with a review of our 2012 second quarter marketing and advertising results. Advertising expense decreased 2.9% in the second quarter of 2012 compared to the same prior year period, as we continued to rebalance our spending in an effort to generate efficiencies in our student enrollment process. The rebalanced advertising generated an increase in perspective student increase in the second quarter of 2012 compared to the same period in the prior year. However, the increased number of student increase converted to new students had a lower rate, resulting in a 9.5% decrease in new student enrollment in the second quarter of 2012 compared to the second quarter of 2011. As a result of the conversion rate decline, we have increased our efforts to better convey the value proposition of the investment in a career-based education for graduates of ITT Technical Institute via various communication campaigns directed towards individuals who have indicated an interest in pursuing their studies at our institution.

For the fourth consecutive quarter, we experienced a more material year-over-year decline in new student enrollment in the criminal justice programs in the second quarter compared to new student enrollment in our other curricula, as a result of self-directed changes to program offerings at select campuses. The year-over-year decline in new student enrollment in the School of Criminal Justice during the 2012 second quarter represented approximately 85% of the year-over-year decline in new student enrollment in the second quarter of 2012.

We also experienced a more material year-over-year decline in new student enrollment in our School of Drafting and Design in the second quarter of 2012, principally in graphics design-related programs, compared to all other schools of study. The year-over-year decline in new student enrollment in the School of Drafting and Design in the 2012 second quarter represented approximately 40% of the year-over-year decline in new student enrollment in the second quarter.

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