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Before we begin ITT Educational Services, Inc. wishes to remind you that this conference call may include forward-looking information. Actual results may differ from the information presented during this call. For additional information, please review the section on forward-looking information contained in today’s new release or in the company’s filings with the Securities & Exchange Commission. Thank you. Mr. Modany you may begin sir. Kevin M. Modany Thank you for joining us on our 2011 third quarter conference call to review our results. As usually, Dan Fitzpatrick our executive vice president and chief financial officer will join me on the call this morning. We’ll hear from Dan in a few moments. I’d like to briefly review our agenda for our prepared comments this morning. We will start by providing a review of the third quarter marketing and advertising activity. We’ll then offer additional color on our new student enrollment results in the 2011 third quarter. Next, we’ll discuss student retention and persistence during the quarter. We’ll then update our student outcome metrics including the graduate employment and average annual salary of our 2011 graduates. I will then close out my section of the prepared comments with an update on the execution of our strategic plan.
At that point I’ll turn the call over to Dan and he’ll comment on the financial results included in this morning’s press release. Additionally, Dan will provide you with an update on our efforts to facilitate additional third party private education loan options for our students. Upon the conclusion of Dan’s prepared remarks we’ll open up the call to your questions.Let’s begin with a review of our third quarter advertising results. Advertising expenditures in the third quarter of 2011 increased approximately 12% compared to the same period in 2010. This was below our planned increase of 20% primarily due to our transition from traditional television sources to Internet based alternatives, and our efforts to eliminate sources that do not meet our hurdle rates for return on investments. As we head into the fourth quarter we anticipate that advertising expenditures in the quarter will increase by approximately 15% to 20% as compared to the final quarter of 2010. Consistent with recent trends and primarily due to the adjustments in our advertising strategy, we experienced a decrease in the number of perspective students who expressed an interest in our programs of study during the third quarter of 2011 compared to the same period in the prior year. Much of the year-over-year decrease in inquiries was caused by the purposeful elimination of advertising sources that generated perspective student inquiries that converted to new student enrollment at an unacceptable cost. The decrease in perspective student inquiries coincided with a managed reduction of approximately 20% of our recruiters at September 30, 2011 compared to the same date in the prior year. Recruiter productivity as measured by the number of new student enrollments per recruiter was higher in the third quarter of 2011 compared to the same period in 2010. Additionally, the rate at which perspective student inquiries converted to new students increased in the third quarter of 2011 compared to the same period in the prior year. We believe that most of these trends are likely to continue throughout the remainder of 2011 and into the early part of the new year.
Turning to the programmatic mix, there were a few notable shifts in new student enrollment in the third quarter of 2011 compared to the same period in the prior year. We experienced a more substantial year-over-year decline in new student enrollment in the criminal justice program compared to the year-over-year declines in new student enrollment in other curriculum areas. Additionally, new student enrollment in our drafting and design programs declined more year-over-year in the third quarter than the year-over-year decline in total new student enrollment in the third quarter.On a positive side, new student enrollment in our registered nursing program increased substantially compared to the same period in the prior year as we now have 38 campuses approved to offer this resident based associate degree program. Further, we are pleased to note the new student enrollment in our core information technology and electronics technology programs declined at lower rates than the total new student enrollment in the three months ended September 30, 2011 compared to the same period in the prior year. Read the rest of this transcript for free on seekingalpha.com