The accompanying notes are an integral part of these condensed consolidated financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF THE COMPANY
Perdoceo’s academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. Our accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIUS” or “AIU System”) – provide degree programs from associate through doctoral level as well as non-degree professional development and continuing education offerings. Our universities offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.
As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “the Company,” “Perdoceo” and “PEC” refer to Perdoceo Education Corporation and our wholly-owned subsidiaries.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the quarter and year to date ended June 30, 2022 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022.
The unaudited condensed consolidated financial statements presented herein include the accounts of Perdoceo Education Corporation and our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated.
Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across two reporting segments: CTU and AIUS.
As of January 1, 2022, the Company began recording loss from discontinued operations within other miscellaneous (expense) income on its unaudited condensed consolidated statements of income as future amounts will be immaterial and infrequent. Prior period amounts are also immaterial and have been recast to maintain comparability.
During 2022, the Company paid an advance deposit related to a pending acquisition which is reflected within other current receivables on its unaudited condensed consolidated balance sheets and as a cash outflow from investing activities on its unaudited condensed consolidated statements of cash flows. The fair value of this note receivable approximates carrying value due to its short term nature and will be offset against the final purchase price.
3. RECENT ACCOUNTING PRONOUNCEMENTS
Recent accounting guidance to be adopted in 2023
In June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. For all public business entities, ASU 2022-03 is effective for annual periods and interim periods beginning after December 15, 2024; early adoption is permitted. We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and disclosures.
In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this ASU eliminate the Troubled Debt Restructuring (“TDR”) recognition and measurement guidance and, instead, require that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan (consistent with the accounting for other loan modifications). The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. For all public business entities, ASU 2022-02 is effective for annual periods and interim periods
5
beginning after December 15, 2022; early adoption is permitted. We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and disclosures.
4. FINANCIAL INSTRUMENTS
Investments consist of the following as of June 30, 2022 and December 31, 2021 (dollars in thousands):
|
|
June 30, 2022 |
|
|
|
|
|
|
|
Gross Unrealized |
|
|
|
|
|
|
|
Cost |
|
|
Gain |
|
|
(Loss) |
|
|
Fair Value |
|
Short-term investments (available for sale): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal bonds |
|
$ |
3,037 |
|
|
$ |
- |
|
|
$ |
(1 |
) |
|
$ |
3,036 |
|
Non-governmental debt securities |
|
|
225,682 |
|
|
|
3 |
|
|
|
(2,032 |
) |
|
|
223,653 |
|
Treasury and federal agencies |
|
|
141,106 |
|
|
|
2 |
|
|
|
(957 |
) |
|
|
140,151 |
|
Total short-term investments (available for sale) |
|
$ |
369,825 |
|
|
$ |
5 |
|
|
$ |
(2,990 |
) |
|
$ |
366,840 |
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
Gross Unrealized |
|
|
|
|
|
|
|
Cost |
|
|
Gain |
|
|
(Loss) |
|
|
Fair Value |
|
Short-term investments (available for sale): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal bonds |
|
$ |
5,028 |
|
|
$ |
- |
|
|
$ |
(1 |
) |
|
$ |
5,027 |
|
Non-governmental debt securities |
|
|
168,623 |
|
|
|
27 |
|
|
|
(184 |
) |
|
|
168,466 |
|
Treasury and federal agencies |
|
|
720 |
|
|
|
- |
|
|
|
- |
|
|
|
720 |
|
Total short-term investments (available for sale) |
|
$ |
174,371 |
|
|
$ |
27 |
|
|
$ |
(185 |
) |
|
$ |
174,213 |
|
In the table above, unrealized holding gains (losses) relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year.
Our non-governmental debt securities primarily consist of corporate bonds, certificates of deposit and commercial paper. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities.
Fair Value Measurements
FASB ASC Topic 820 – Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
As of June 30, 2022, we held investments that are required to be measured at fair value on a recurring basis. These investments (available for sale) consist of municipal bonds, non-governmental debt securities and treasury and federal agencies securities. Available for sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
All of our available for sale investments were measured under Level 2 as of June 30, 2022 and December 31, 2021. Additionally, money market funds of $63.9 million and $225.3 million included within cash and cash equivalents on our condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively, were measured under Level 1. Federal agency debt securities of $7.0 million included within cash and cash equivalents on our unaudited condensed consolidated balance sheets as of June 30, 2022 were measured under Level 2.
Equity Method Investment
Our investment in an equity affiliate, which is recorded within other noncurrent assets on our condensed consolidated balance sheets, represents an international investment in a private company. As of June 30, 2022, our investment in an equity affiliate equated to a 30.7%, or $2.6 million, non-controlling interest in CCKF, a Dublin-based educational technology company providing intelligent systems to power the delivery of individualized and personalized learning.
During the quarters ended June 30, 2022 and 2021, we recorded approximately $0.2 million of loss and $0.1 million of loss, respectively, and during the years to date ended June 30, 2022 and 2021, we recorded approximately $0.3 million of loss and $0.2 million of gain, respectively, related to our proportionate investment in CCKF within miscellaneous (expense) income on our unaudited condensed consolidated statements of income.
6
We make periodic operating maintenance payments to CCKF related to proprietary rights that we use in our intellipath® personalized learning technology. The total fees recorded during the quarters and years to date ended June 30, 2022 and 2021 were as follows (dollars in thousands):
|
Maintenance Fee Payments |
|
For the quarter ended June 30, 2022 |
$ |
394 |
|
For the quarter ended June 30, 2021 |
$ |
436 |
|
For the year to date ended June 30, 2022 |
$ |
827 |
|
For the year to date ended June 30, 2021 |
$ |
859 |
|
Credit Agreement
On September 8, 2021, the Company and the subsidiary guarantors thereunder entered into a credit agreement with Wintrust Bank N.A. (“Wintrust”), in its capacities as the sole lead arranger, sole bookrunner, administrative agent and letter of credit issuer for the lenders from time to time parties thereto. The credit agreement provides the Company with the benefit of a $125.0 million senior secured revolving credit facility. The $125.0 million revolving credit facility under the credit agreement is scheduled to mature on September 8, 2024. So long as no default has occurred and other conditions have been met, the Company may request an increase in the aggregate commitment in an amount not to exceed $50.0 million. The loans and letter of credit obligations under the credit agreement are secured by substantially all assets of the Company and the subsidiary guarantors.
The credit agreement and the ancillary documents executed in connection therewith contain customary affirmative, negative and financial maintenance covenants. The Company is required to maintain unrestricted cash, cash equivalents and short-term investments in domestic accounts in an amount at least equal to the aggregate loan commitments then in effect. Acquisitions to be undertaken by the Company must meet certain criteria, and the Company’s ability to make restricted payments, including payments in connection with a repurchase of shares of our common stock, is subject to an aggregate maximum of $100.0 million per fiscal year. Upon the occurrence of certain regulatory events or if the Company’s unrestricted cash, cash equivalents and short term investments are less than 125% of the aggregate amount of the loan commitments then in effect, the Company is required to maintain cash in a segregated, restricted account in an amount not less than the aggregate loan commitments then in effect. The credit agreement also contains customary representations and warranties, events of default, and rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans, terminate the commitments and realize upon the collateral securing the obligations under the credit agreement.
Under the credit agreement, outstanding principal amounts bear annual interest at a fluctuating rate equal to 1.0% less than the administrative agent’s prime commercial rate, subject to a 3.0% minimum rate. A higher rate may apply to late payments or if any event of default exists.
As of June 30, 2022 and December 31, 2021, there were no outstanding borrowings under the revolving credit facility.
5. REVENUE RECOGNITION
Disaggregation of Revenue
The following tables disaggregate our revenue by major source for the quarters and years to date ended June 30, 2022 and 2021 (dollars in thousands):
7
|
|
For the Quarter Ended June 30, 2022 |
|
|
For the Quarter Ended June 30, 2021 |
|
|
|
CTU (4) |
|
|
AIUS (5) |
|
|
Corporate and Other(6) |
|
|
Total |
|
|
CTU |
|
|
AIUS |
|
|
Corporate and Other(6) |
|
|
Total |
|
Tuition, net (1) |
|
$ |
94,828 |
|
|
$ |
63,083 |
|
|
$ |
- |
|
|
$ |
157,911 |
|
|
$ |
95,723 |
|
|
$ |
70,123 |
|
|
$ |
- |
|
|
$ |
165,846 |
|
Technology fees |
|
|
4,658 |
|
|
|
2,929 |
|
|
|
- |
|
|
|
7,587 |
|
|
|
5,530 |
|
|
|
2,873 |
|
|
|
- |
|
|
|
8,403 |
|
Other miscellaneous fees (2) |
|
|
263 |
|
|
|
135 |
|
|
|
- |
|
|
|
398 |
|
|
|
389 |
|
|
|
166 |
|
|
|
- |
|
|
|
555 |
|
Total tuition and fees, net |
|
|
99,749 |
|
|
|
66,147 |
|
|
|
- |
|
|
|
165,896 |
|
|
|
101,642 |
|
|
|
73,162 |
|
|
|
- |
|
|
|
174,804 |
|
Other revenue (3) |
|
|
712 |
|
|
|
773 |
|
|
|
303 |
|
|
|
1,788 |
|
|
|
393 |
|
|
|
61 |
|
|
|
281 |
|
|
|
735 |
|
Total revenue |
|
$ |
100,461 |
|
|
$ |
66,920 |
|
|
$ |
303 |
|
|
$ |
167,684 |
|
|
$ |
102,035 |
|
|
$ |
73,223 |
|
|
$ |
281 |
|
|
$ |
175,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year to Date Ended June 30, 2022 |
|
|
For the Year to Date Ended June 30, 2021 |
|
|
|
CTU (4) |
|
|
AIUS (5) |
|
|
Corporate and Other(6) |
|
|
Total |
|
|
CTU |
|
|
AIUS |
|
|
Corporate and Other(6) |
|
|
Total |
|
Tuition, net (1) |
|
$ |
201,755 |
|
|
$ |
128,534 |
|
|
$ |
- |
|
|
$ |
330,289 |
|
|
$ |
195,328 |
|
|
$ |
144,621 |
|
|
$ |
- |
|
|
$ |
339,949 |
|
Technology fees |
|
|
10,100 |
|
|
|
6,039 |
|
|
|
- |
|
|
|
16,139 |
|
|
|
11,013 |
|
|
|
5,668 |
|
|
|
- |
|
|
|
16,681 |
|
Other miscellaneous fees (2) |
|
|
445 |
|
|
|
350 |
|
|
|
- |
|
|
|
795 |
|
|
|
681 |
|
|
|
324 |
|
|
|
- |
|
|
|
1,005 |
|
Total tuition and fees, net |
|
|
212,300 |
|
|
|
134,923 |
|
|
|
- |
|
|
|
347,223 |
|
|
|
207,022 |
|
|
|
150,613 |
|
|
|
- |
|
|
|
357,635 |
|
Other revenue (3) |
|
|
1,309 |
|
|
|
1,529 |
|
|
|
582 |
|
|
|
3,420 |
|
|
|
835 |
|
|
|
87 |
|
|
|
620 |
|
|
|
1,542 |
|
Total revenue |
|
$ |
213,609 |
|
|
$ |
136,452 |
|
|
$ |
582 |
|
|
$ |
350,643 |
|
|
$ |
207,857 |
|
|
$ |
150,700 |
|
|
$ |
620 |
|
|
$ |
359,177 |
|
__________________
|
(1) |
Tuition includes revenue earned for degree-granting programs as well as revenue earned for non-degree professional development and continuing education offerings. |
|
(2) |
Other miscellaneous fees primarily include graduation fees. |
|
(3) |
Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue. |
|
(4) |
CTU includes revenue related to an acquisition completed on September 10, 2021. |
|
(5) |
AIUS includes revenue related to an acquisition completed on August 2, 2021. |
|
(6) |
Revenue recorded within Corporate and Other relates to miscellaneous non-student related revenue. |
Performance Obligations
Our revenue, which is derived primarily from academic programs taught to students who attend our universities, is generally segregated into two categories: (1) tuition and fees, and (2) other. Tuition and fees represent costs to our students for educational services provided by our universities and are reflected net of scholarships and tuition discounts. Our universities charge tuition and fees at varying amounts, depending on the university, the type of program and specific curriculum. Our universities bill students a single charge that covers tuition, fees and required program materials, such as textbooks and supplies, which we treat as a single performance obligation. Generally, we bill student tuition at the beginning of each academic term for our degree programs and recognize the tuition as revenue on a straight-line basis over the academic term. As part of a student’s course of instruction, certain fees, such as technology fees and graduation fees, are billed to students. These fees are earned over the applicable term and are not considered separate performance obligations. We bill student tuition upon enrollment for our non-degree professional development and continuing education offerings and recognize the tuition as revenue on a straight-line basis over the length of the offering.
Other revenue, which consists of contract training revenue, bookstore sales and miscellaneous non-student related revenue, is billed and recognized as goods are delivered or services are performed.
Our institutions’ academic year is generally at least 30 weeks in length but varies both by institution and program of study and is divided by academic terms. Academic terms are determined by regulatory requirements mandated by the federal government and/or applicable accrediting body, which also vary by university and program. Academic terms are determined by start dates, which vary by university and program and are generally 8-12 weeks in length. Our non-degree professional development and continuing education offerings are available via subscription –based access for up to 52 weeks or online courses which are generally 12-18 weeks in length.
Contract Assets
For each term, the portion of tuition and fee payments received from students but not yet earned is recorded as deferred revenue and reported as a current liability on our condensed consolidated balance sheets, as we expect to earn these revenues within the next year. A contract asset is recorded for each student for the current term for which they are enrolled for the amount charged for the current term that has not yet been received as payment and to which we do not have the unconditional right to receive payment because the student has not reached the point in the student’s current academic term at which the amount billed is no longer refundable
8
to the student. On a student by student basis, the contract asset is offset against the deferred revenue balance for the current term and the net deferred revenue balance is reflected within current liabilities on our condensed consolidated balance sheets. For AIUS’ Trident and DigitalCrafts programs and CTU’s Hippo programs, students are billed as they enroll in courses, including courses related to future periods. Any billings for future periods would meet the definition of a contract asset as we do not have the unconditional right to receive payment as the course has not yet started. Contract assets related to future periods are offset against the respective deferred revenue associated with the future period.
Due to the short-term nature of our academic terms, the contract asset balance which exists at the beginning of each quarter will no longer be a contract asset at the end of that quarter, with the exception of the contract assets associated with future periods. The decrease in contract asset balances are a result of one of the following: it becomes a student receivable balance once a student reaches the point in a student’s academic term where the amount billed is no longer refundable to the student; a refund is made to withdrawn students for the portion entitled to be refunded under each institutions’ refund policy; we receive funds to apply against the contract asset balance; or a student makes a change to the number of classes they are enrolled in which may cause an adjustment to their previously billed amount. As of the end of each quarter, a new contract asset is determined on a student by student basis based on the most recently started term and a student’s progress within that term as compared to the date at which the student is no longer entitled to a refund under each institution’s refund policy. Contract assets associated with future periods remain as contract assets until the course begins and the student reaches the point in that course that they are no longer entitled to a refund.
The amount of deferred revenue balances which are being offset with contract assets balances as of June 30, 2022 and December 31, 2021 were as follows (dollars in thousands):
|
|
As of |
|
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
Gross deferred revenue |
|
$ |
67,485 |
|
|
$ |
113,719 |
|
Gross contract assets |
|
|
(31,918 |
) |
|
|
(43,106 |
) |
Deferred revenue, net |
|
$ |
35,567 |
|
|
$ |
70,613 |
|
Deferred Revenue
Changes in our deferred revenue balances for the quarters and years to date ended June 30, 2022 and 2021 were as follows (dollars in thousands):
|
|
For the Quarter Ended June 30, 2022 |
|
|
For the Quarter Ended June 30, 2021 |
|
|
|
CTU |
|
|
AIUS |
|
|
Total |
|
|
CTU |
|
|
AIUS |
|
|
Total |
|
Gross deferred revenue, April 1 |
|
$ |
39,343 |
|
|
$ |
28,507 |
|
|
$ |
67,850 |
|
|
$ |
25,136 |
|
|
$ |
32,886 |
|
|
$ |
58,022 |
|
Revenue earned from prior balances |
|
|
(33,358 |
) |
|
|
(23,850 |
) |
|
|
(57,208 |
) |
|
|
(22,814 |
) |
|
|
(26,977 |
) |
|
|
(49,791 |
) |
Billings during period(1) |
|
|
88,990 |
|
|
|
76,034 |
|
|
|
165,024 |
|
|
|
155,861 |
|
|
|
83,904 |
|
|
|
239,765 |
|
Revenue earned for new billings during the period |
|
|
(66,391 |
) |
|
|
(42,297 |
) |
|
|
(108,688 |
) |
|
|
(78,828 |
) |
|
|
(46,185 |
) |
|
|
(125,013 |
) |
Other adjustments |
|
|
273 |
|
|
|
234 |
|
|
|
507 |
|
|
|
(1,537 |
) |
|
|
21 |
|
|
|
(1,516 |
) |
Gross deferred revenue, June 30 |
|
$ |
28,857 |
|
|
$ |
38,628 |
|
|
$ |
67,485 |
|
|
$ |
77,818 |
|
|
$ |
43,649 |
|
|
$ |
121,467 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year to Date Ended June 30, 2022 |
|
|
For the Year to Date Ended June 30, 2021 |
|
|
|
CTU |
|
|
AIU |
|
|
Total |
|
|
CTU |
|
|
AIU |
|
|
Total |
|
Gross deferred revenue, January 1 |
|
$ |
64,674 |
|
|
$ |
49,045 |
|
|
$ |
113,719 |
|
|
$ |
28,522 |
|
|
$ |
56,880 |
|
|
$ |
85,402 |
|
Revenue earned from prior balances |
|
|
(55,433 |
) |
|
|
(38,066 |
) |
|
|
(93,499 |
) |
|
|
(25,698 |
) |
|
|
(44,809 |
) |
|
|
(70,507 |
) |
Billings during period(1) |
|
|
175,611 |
|
|
|
124,609 |
|
|
|
300,220 |
|
|
|
257,645 |
|
|
|
136,465 |
|
|
|
394,110 |
|
Revenue earned for new billings during the period |
|
|
(156,867 |
) |
|
|
(96,857 |
) |
|
|
(253,724 |
) |
|
|
(181,324 |
) |
|
|
(105,804 |
) |
|
|
(287,128 |
) |
Other adjustments |
|
|
872 |
|
|
|
(103 |
) |
|
|
769 |
|
|
|
(1,327 |
) |
|
|
917 |
|
|
|
(410 |
) |
Gross deferred revenue, June 30 |
|
$ |
28,857 |
|
|
$ |
38,628 |
|
|
$ |
67,485 |
|
|
$ |
77,818 |
|
|
$ |
43,649 |
|
|
$ |
121,467 |
|
______________
|
(1) |
Billings during period includes adjustments for prior billings. |
Cash Receipts
Our students pay for their costs through a variety of funding sources, including federal loan and grant programs, institutional payment plans, employer reimbursement, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments, as well as private loans for our non-degree programs. Cash receipts from government related sources are typically received during the current academic term. We typically receive funds after the end of an academic term for students who
9
receive employer reimbursements. Students who have not applied for any type of financial aid generally set up a payment plan with the university and make payments on a monthly basis per the terms of the payment plan.
If a student withdraws from one of our universities prior to the completion of the academic term, we refund the portion of tuition and fees already paid that, pursuant to our refund policy and applicable federal and state law and accrediting agency standards, we are not entitled to retain. Generally, the amount to be refunded to a student is calculated based upon the percent of the term attended and the amount of tuition and fees paid by the student as of their withdrawal date. In certain circumstances, we have recognized revenue for students who have withdrawn that we are not entitled to retain. We have estimated a reserve for these limited circumstances based on historical evidence in the amount of $2.4 million and $2.1 million as of June 30, 2022 and December 31, 2021, respectively. Students are typically entitled to a partial refund until approximately halfway through their term. Pursuant to each university’s policy, once a student reaches the point in the term where no refund is given, the student would not have a refund due if withdrawing from the university subsequent to that date.
Management reassesses collectability when a student withdraws from the university and has unpaid tuition charges for the current term which the university is entitled to retain per the applicable refund policy. Certain unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue in accordance with ASC Topic 606 when cash is received and the contract is terminated and neither party has further performance obligations. We have no remaining performance obligations for students who have withdrawn from our universities, and once the refund calculation is performed and funds are returned to the student, if applicable under our refund policy, no further consideration is due back to the student. We recognized $0.3 million and $0.5 million of revenue for the quarters ended June 30, 2022 and 2021, respectively, and $0.7 million and $0.9 million for the years to date ended June 30, 2022 and 2021, respectively, for payments received from withdrawn students.
6. STUDENT RECEIVABLES
Student receivables represent funds owed to us in exchange for the educational services provided to a student. Student receivables are reflected net of an allowance for credit losses at the end of the reporting period. Student receivables, net, are reflected on our condensed consolidated balance sheets as components of both current and non-current assets. We do not charge interest on any of our payment plans.
Our students pay for their costs through a variety of funding sources, including federal loan and grant programs, institutional payment plans, employer reimbursement, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments, as well as private loans for our non-degree programs. Cash receipts from government related sources are typically received during the current academic term. We typically receive funds after the end of an academic term for students who receive employer reimbursements. Students who have not applied for any type of financial aid generally set up a payment plan with the institution and make payments on a monthly basis per the terms of the payment plan. For those balances that are not received during the academic term, the balance is typically due within the current academic year which is approximately 30 weeks in length. Generally, a student receivable balance is written off once a student is out of school and it reaches greater than 90 days past due.
Our standard student receivable allowance is based on an estimate of lifetime expected credit losses for student receivables. Our estimation methodology considers a number of quantitative and qualitative factors that, based on our collection experience, we believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors include, but are not limited to: internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trend analysis and comparing estimated and actual performance.
We have an immaterial amount of student receivables that are due greater than 12 months from the date of our condensed consolidated balance sheets. As of June 30, 2022 and December 31, 2021, the amount of non-current student receivables under payment plans that are longer than 12 months in duration, net of allowance for credit losses, was $1.3 million and $1.4 million, respectively.
10
Allowance for Credit Losses
We define student receivables as a portfolio segment under ASC Topic 326 – Financial Instruments – Credit Losses. Changes in our current and non-current allowance for credit losses related to our student receivable portfolio in accordance with the guidance under ASU 2016-13 for the quarters and years to date ended June 30, 2022 and 2021 were as follows (dollars in thousands):
|
|
For the Quarter Ended June 30, |
|
|
For the Year to Date Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Balance, beginning of period |
|
$ |
43,657 |
|
|
$ |
43,785 |
|
|
$ |
39,255 |
|
|
$ |
42,147 |
|
Provision for credit losses |
|
|
10,664 |
|
|
|
12,448 |
|
|
|
24,379 |
|
|
|
26,172 |
|
Amounts written-off |
|
|
(11,258 |
) |
|
|
(14,253 |
) |
|
|
(21,522 |
) |
|
|
(27,320 |
) |
Recoveries |
|
|
723 |
|
|
|
896 |
|
|
|
1,674 |
|
|
|
1,877 |
|
Balance, end of period |
|
$ |
43,786 |
|
|
$ |
42,876 |
|
|
$ |
43,786 |
|
|
$ |
42,876 |
|
Fair Value Measurements
The carrying amount reported in our condensed consolidated balance sheets for the current portion of student receivables approximates fair value because of the nature of these financial instruments as they generally have short maturity periods. It is not practicable to estimate the fair value of the non-current portion of student receivables, since observable market data is not readily available, and no reasonable estimation methodology exists.
7. LEASES
We lease most of our administrative and educational facilities under non-cancelable operating leases expiring at various dates through 2032. Lease terms generally range from five to ten years with one to four renewal options for extended terms. In most cases, we are required to make additional payments under facility operating leases for taxes, insurance and other operating expenses incurred during the operating lease period, which are typically variable in nature.
We determine if a contract contains a lease when the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Upon identification and commencement of a lease, we establish a right of use (“ROU”) asset and a lease liability.
Quantitative information related to leases is presented in the following table (dollars in thousands):
11
|
For the Quarter Ended June 30, 2022 |
|
For the Year to Date Ended June 30, 2022 |
|
Lease expenses (1) |
|
|
|
|
|
|
Fixed lease expenses - operating |
$ |
2,695 |
|
$ |
5,462 |
|
Variable lease expenses - operating |
|
1,079 |
|
|
1,894 |
|
Sublease income |
|
(269 |
) |
|
(545 |
) |
Total lease expenses |
$ |
3,505 |
|
$ |
6,811 |
|
|
|
|
|
|
|
|
Other information |
|
|
|
|
|
|
Gross operating cash flows for operating leases (2) |
$ |
(4,263 |
) |
$ |
(8,818 |
) |
Operating cash flows from subleases (2) |
$ |
279 |
|
$ |
553 |
|
|
|
|
|
|
|
|
|
For the Quarter Ended June 30, 2021 |
|
For the Year to Date Ended June 30, 2021 |
|
Lease expenses (1) |
|
|
|
|
|
|
Fixed lease expenses - operating |
$ |
2,806 |
|
$ |
5,821 |
|
Variable lease expenses - operating |
|
1,239 |
|
|
2,752 |
|
Sublease income |
|
(335 |
) |
|
(834 |
) |
Total lease expenses |
$ |
3,710 |
|
$ |
7,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other information |
|
|
|
|
|
|
Gross operating cash flows for operating leases (2) |
$ |
(4,313 |
) |
$ |
(9,534 |
) |
Operating cash flows from subleases (2) |
$ |
353 |
|
$ |
883 |
|
|
|
|
|
|
|
|
|
As of June 30, 2022 |
|
As of June 30, 2021 |
|
Weighted average remaining lease term (in months) – operating leases |
|
67 |
|
|
72 |
|
Weighted average discount rate – operating leases |
|
4.8 |
% |
|
4.9 |
% |
|
|
|
|
|
|
|
__________________
|
(1) |
Lease expense and sublease income represent the amount recorded within our unaudited condensed consolidated statements of income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability. Fixed lease expenses and sublease income are recorded on a straight-line basis over the lease term and therefore are not necessarily representative of cash payments during the same period. |
|
(2) |
Cash flows are presented on a consolidated basis and represent cash payments for fixed and variable lease costs. |
Subleases
Historically, for certain of our leased locations we have vacated the facility and have fully or partially subleased the space. As of June 30, 2022, we have one sublease with a remaining term of 11 months, for which we remain the guarantor under the lease and therefore become the intermediate lessor. We have recognized sublease income of $0.3 million for each of the quarters ended June 30, 2022 and 2021 and $0.5 million and $0.8 million for the years to date ended June 30, 2022 and 2021, respectively, as an offset to lease expense on our unaudited condensed consolidated statements of income.
8. CONTINGENCIES
An accrual for estimated legal fees of $2.9 million and $1.1 million at June 30, 2022 and December 31, 2021, respectively, is presented within other current liabilities on our condensed consolidated balance sheets.
We record a liability when we believe that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least quarterly, developments in our legal matters that could affect the amount of liability that was previously accrued and make adjustments as further information develops, circumstances change or contingencies are resolved. Significant judgment is required to determine both probability and the estimated amount. We may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among others: (1) if the damages sought are indeterminate; (2) if the proceedings are in early stages; (3) if there is uncertainty as to the outcome of pending appeals, motions or settlements; (4) if there are significant factual issues to be determined or resolved; and (5) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any.
12
On April 8, 2022, the Company received a Civil Investigative Demand (“CID”) from the Department of Justice (“DOJ”). The CID requests information and documentation from CTU regarding compliance with federal financial aid credit hour requirements for five of its entry-level courses as well as information regarding CTU’s learning management system. The information sought covers the time period from January 1, 2017 to the present. The Company is cooperating with the DOJ with a view towards resolving this inquiry as promptly as possible.
We receive from time-to-time requests from state attorneys general, federal and state government agencies and accreditors relating to our institutions, to specific complaints they have received from students or former students or to student loan forgiveness claims which seek information about students, our programs, and other matters relating to our activities. These requests can be broad and time consuming to respond to, and there is a risk that they could expand and/or lead to a formal action or claims of non-compliance. We are subject to a variety of other claims, lawsuits, arbitrations and investigations that arise from time to time out of the conduct of our business, including, but not limited to, matters involving prospective students, students or former students, alleged violations of the Telephone Consumer Protection Act, both individually and on behalf of a putative class, and employment matters. Periodically matters arise that we consider outside the scope of ordinary routine litigation incidental to our business. While we currently believe that these matters, individually or in aggregate, will not have a material adverse impact on our financial position, cash flows or results of operations, these matters are subject to inherent uncertainties, and management’s view of these matters may change in the future. Were an unfavorable outcome to occur in any one or more of these matters, there exists the possibility of a material adverse impact on our business, reputation, financial position and cash flows.
Contingent Consideration for Business Acquisitions
We have an accrual for contingent consideration amounts related to the DigitalCrafts and Hippo acquisitions in the aggregate fair value amount of $3.2 million as of June 30, 2022. Pursuant to the acquisition agreements, post-closing contingent consideration payments are expected to be paid in early 2024 based upon the achievement of certain financial metrics, with an aggregate maximum amount of $6.5 million.
9. INCOME TAXES
The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which we operate and the ongoing development of tax planning strategies during the year. In addition, our provision for income taxes can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.
The following is a summary of our provision for income taxes and effective tax rate:
|
|
For the Quarter Ended June 30, |
|
|
For the Year to Date Ended June 30, |
|
(Dollars in Thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Pretax income |
|
$ |
34,715 |
|
|
$ |
35,968 |
|
|
$ |
78,549 |
|
|
$ |
76,966 |
|
Provision for income taxes |
|
$ |
8,948 |
|
|
$ |
9,319 |
|
|
$ |
20,704 |
|
|
$ |
19,564 |
|
Effective rate |
|
|
25.8 |
% |
|
|
25.9 |
% |
|
|
26.4 |
% |
|
|
25.4 |
% |
As of December 31, 2021, a valuation allowance of $32.2 million was maintained with respect to our foreign tax credits not supported by an Overall Domestic Loss (“ODL”) account balance, state net operating losses, and capital loss carryforward. After considering both positive and negative evidence related to the realization of the deferred tax assets, we have determined that it is necessary to continue to maintain a $32.2 million valuation allowance against our non-ODL supported foreign tax credits, state net operating losses, and capital loss carryforward as of June 30, 2022.
The effective tax rate for the quarter and year to date ended June 30, 2022 was impacted by the tax effect of stock-based compensation and the release of previously recorded tax reserves. The net effect of these discrete items decreased the effective tax rate for the quarter and year to date by 1.2% and 0.3%, respectively. The effective tax rate for the quarter and year to date ended June 30, 2021 was impacted by the tax effect of stock-based compensation and the release of previously recorded tax reserves. The net effect of these discrete items decreased the effective tax rate for the prior year quarter and year to date by 0.4% and 0.7%, respectively.
We estimate that it is reasonably possible that the gross liability for unrecognized tax benefits for a variety of uncertain tax positions will decrease by up to $1.6 million in the next twelve months as a result of the completion of various tax audits currently in process and the expiration of the statute of limitations in several jurisdictions. The income tax rate for the quarter and year to date ended June 30, 2022 does not take into account the possible reduction of the liability for unrecognized tax benefits. The impact of a reduction to the liability will be treated as a discrete item in the period the reduction occurs. We recognize interest and penalties related to unrecognized tax benefits in tax expense. As of June 30, 2022, we had accrued $2.0 million as an estimate for reasonably possible interest and accrued penalties.
13
Our tax returns are routinely examined by federal, state and local tax authorities and these audits are at various stages of completion at any given time. The Internal Revenue Service has completed its examination of our U.S. income tax returns through our tax year ended December 31, 2014.
10. SHARE-BASED COMPENSATION
Overview
The Perdoceo Education Corporation Amended and Restated 2016 Incentive Compensation Plan (the “2016 Plan”) became effective (as the Career Education Corporation 2016 Incentive Compensation Plan) on May 24, 2016, and the amendment and restatement of the 2016 Plan became effective on June 3, 2021, upon its approval by the Company’s stockholders. Under the 2016 Plan, Perdoceo may grant to eligible participants awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock, performance units, annual incentive awards, and substitute awards, which generally may be settled in cash or shares of our common stock. The vesting of all types of awards is subject to possible acceleration in certain circumstances. If a plan participant terminates employment for any reason other than by death or disability during the vesting period, the right to unvested awards is generally forfeited.
Restricted Stock Units
For the quarters ended June 30, 2022 and 2021, the Company granted less than 0.1 million restricted stock units in each period which are not “performance-based” and which have a grant-date fair value of approximately $0.8 million for each period. For the years to date ended June 30, 2022 and 2021, the Company granted approximately 0.4 million restricted stock units in each period which are not “performance-based” and which have a grant-date fair value of approximately $3.7 million and $4.4 million, respectively.
For the years to date ended June 30, 2022 and 2021, the Company granted approximately 0.4 million restricted stock units in each period which are “performance-based” and which have a grant-date fair value of approximately $4.0 million and $4.2 million, respectively. The performance-based restricted stock units are subject to performance conditions which are determined at the time of grant and typically cover a three-year performance period. These performance conditions may result in all units being forfeited even if the requisite service period is met.
All restricted stock units granted in 2022 and 2021 are to be settled in shares of our common stock.
Stock Options
There were no stock options granted during each of the quarters or years to date ended June 30, 2022 and 2021.
Share-Based Compensation Expense
Total share-based compensation expense for the quarters and years to date ended June 30, 2022 and 2021 for all types of awards was as follows (dollars in thousands):
|
|
For the Quarter Ended June 30, |
|
|
For the Year to Date Ended June 30, |
|
Award Type |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Stock options |
|
$ |
- |
|
|
$ |
96 |
|
|
$ |
89 |
|
|
$ |
256 |
|
Restricted stock units settled in stock |
|
|
1,897 |
|
|
|
3,577 |
|
|
|
4,220 |
|
|
|
7,165 |
|
Total share-based compensation expense |
|
$ |
1,897 |
|
|
$ |
3,673 |
|
|
$ |
4,309 |
|
|
$ |
7,421 |
|
As of June 30, 2022, we estimate that total compensation expense of approximately $16.0 million will be recognized over the next four years for all unvested share-based awards that have been granted to participants. This amount excludes any estimates of forfeitures.
11. STOCK REPURCHASE PROGRAM
On January 27, 2022, the Board of Directors of the Company approved a new stock repurchase program for up to $50.0 million which commenced March 1, 2022 and expires September 30, 2023. The other terms of the new stock repurchase program are consistent with the Company’s previous stock repurchase program which expired February 28, 2022.
The timing of purchases and the number of shares repurchased under the program will be determined by the Company’s management and will depend on a variety of factors including stock price, trading volume and other general market and economic
14
conditions, its assessment of alternative uses of capital, regulatory requirements and other factors. Repurchases will be made in open market transactions, including block purchases, conducted in accordance with Rule 10b-18 under the Exchange Act as well as may be made pursuant to trading plans established under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The stock repurchase program does not obligate the Company to purchase shares and the Company may, in its discretion, begin, suspend or terminate repurchases at any time, without any prior notice.
During the quarters ended June 30, 2022 and 2021, we repurchased 1.1 million shares and 0.4 million shares of our common stock, respectively, for approximately $11.8 million at an average price of $10.60 per share during the quarter ended June 30, 2022 and $5.4 million at an average price of $12.23 per share during the quarter ended June 30, 2021. During the years to date ended June 30, 2022 and 2021, we repurchased 1.5 million shares and 0.4 million shares of our common stock, respectively, for approximately $15.7 million at an average price of $10.59 during the year to date ended June 30, 2022 and for approximately $5.4 million at an average price of $12.23 per share during the year to date ended June 30, 2021.
As of June 30, 2022, approximately $34.3 million was available under our authorized stock repurchase program to repurchase outstanding shares of our common stock. Shares of stock repurchased under the program are held as treasury shares. These repurchased shares have reduced the weighted average number of shares of common stock outstanding for basic and diluted earnings per share calculations.
12. WEIGHTED AVERAGE COMMON SHARES
Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares assuming dilution. Dilutive common shares outstanding is computed using the Treasury Stock Method and reflects the additional shares that would be outstanding if dilutive stock options were exercised and restricted stock units were settled for common shares during the period.
The weighted average number of common shares used to compute basic and diluted net income per share for the quarters and years to date ended June 30, 2022 and 2021 were as follows (shares in thousands):
|
For the Quarter Ended June 30, |
|
|
For the Year to Date Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Basic common shares outstanding |
|
68,341 |
|
|
|
70,299 |
|
|
|
68,542 |
|
|
|
70,224 |
|
Common stock equivalents |
|
841 |
|
|
|
1,380 |
|
|
|
834 |
|
|
|
1,392 |
|
Diluted common shares outstanding |
|
69,182 |
|
|
|
71,679 |
|
|
|
69,376 |
|
|
|
71,616 |
|
For the quarters and years to date ended June 30, 2022 and 2021, certain unexercised stock option awards are excluded from our computations of diluted earnings per share, as these shares were out-of-the-money and their effect would have been anti-dilutive. The anti-dilutive options that were excluded from our computations of diluted earnings per share were 0.3 million and 0.4 million shares for the quarters ended June 30, 2022 and 2021, respectively, and 0.3 million and 0.4 million shares for the years to date ended June 30, 2022 and 2021, respectively.
13. SEGMENT REPORTING
Our segments are determined in accordance with FASB ASC Topic 280—Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment is comprised of an accredited postsecondary education institution that offers a variety of academic programs. As of June 30, 2022, our two segments are:
|
♦ |
Colorado Technical University (CTU) is committed to providing quality and industry-relevant higher education to a diverse student population through innovative technology and experienced faculty, enabling the pursuit of personal and professional goals. CTU is focused on serving adult, non-traditional students seeking career advancement, as well as addressing employer’s needs for a well-educated workforce. CTU offers academic programs in the career-oriented disciplines of business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of June 30, 2022, students enrolled at CTU represented approximately 65% of our total enrollments. Approximately 96% of CTU’s students are enrolled in programs offered fully online. Students at CTU’s ground-based campuses take both in-person and virtual classes. |
|
♦ |
The American InterContinental University System (AIUS or AIU System) is comprised of two universities: American InterContinental University (“AIU”) and Trident University International (“Trident” or “TUI”). AIUS is committed to |
15
|
|
providing quality and accessible higher education opportunities for a diverse student population, including adult and other non-traditional learners and the military community. AIUS places emphasis on the educational, professional and personal growth of each student. AIUS offers academic programs in the career-oriented disciplines of business studies, information technologies, education, health sciences and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of June 30, 2022, students enrolled at AIUS represented approximately 35% of our total enrollments. Approximately 97% of AIUS’ students are enrolled in programs offered fully online. Students at AIUS’ ground-based campus take both in-person and virtual classes. |
Summary financial information by reporting segment is as follows (dollars in thousands):
|
|
For the Quarter Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
Operating Income (Loss) |
|
|
|
2022 |
|
|
% of Total |
|
|
2021 |
|
|
% of Total |
|
|
2022 |
|
|
2021 |
|
CTU (1) |
|
$ |
100,461 |
|
|
|
59.9 |
% |
|
$ |
102,035 |
|
|
|
58.1 |
% |
|
$ |
33,008 |
|
|
$ |
35,398 |
|
AIUS (2) |
|
|
66,920 |
|
|
|
39.9 |
% |
|
|
73,223 |
|
|
|
41.7 |
% |
|
|
10,733 |
|
|
|
9,218 |
|
Corporate and Other (3) |
|
|
303 |
|
|
|
0.2 |
% |
|
|
281 |
|
|
|
0.2 |
% |
|
|
(9,795 |
) |
|
|
(8,654 |
) |
Total |
|
$ |
167,684 |
|
|
|
100.0 |
% |
|
$ |
175,539 |
|
|
|
100.0 |
% |
|
$ |
33,946 |
|
|
$ |
35,962 |
|
|
|
For the Year to Date Ended June 30, |
|
|
|
Revenue |
|
|
Operating Income (Loss) |
|
|
|
2022 |
|
|
% of Total |
|
|
2021 |
|
|
% of Total |
|
|
2022 |
|
|
2021 |
|
CTU (1) |
|
$ |
213,609 |
|
|
|
60.9 |
% |
|
$ |
207,857 |
|
|
|
57.9 |
% |
|
$ |
76,034 |
|
|
$ |
71,541 |
|
AIUS (2) |
|
|
136,452 |
|
|
|
38.9 |
% |
|
|
150,700 |
|
|
|
42.0 |
% |
|
|
20,256 |
|
|
|
20,541 |
|
Corporate and Other (3) |
|
|
582 |
|
|
|
0.2 |
% |
|
|
620 |
|
|
|
0.1 |
% |
|
|
(18,651 |
) |
|
|
(15,503 |
) |
Total |
|
$ |
350,643 |
|
|
|
100.0 |
% |
|
$ |
359,177 |
|
|
|
100.0 |
% |
|
$ |
77,639 |
|
|
$ |
76,579 |
|
|
|
Total Assets as of (4) |
|
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
CTU |
|
$ |
152,602 |
|
|
$ |
153,072 |
|
AIUS |
|
|
179,288 |
|
|
|
151,407 |
|
Corporate and Other (3) |
|
|
524,171 |
|
|
|
542,954 |
|
Total |
|
$ |
856,061 |
|
|
$ |
847,433 |
|
(1) |
CTU results of operations include the Hippo acquisition commencing on the September 10, 2021 date of acquisition. |
(2) |
AIUS results of operations include the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition. |
(3) |
Corporate and Other includes results of operations and total assets for closed campuses. Revenue recorded within Corporate and Other relates to miscellaneous non-student related revenue. |
(4) |
Total assets do not include intercompany receivable or payable activity between institutions and corporate and investments in subsidiaries. |
14. SUBSEQUENT EVENT
The Company completed the acquisition of substantially all of the assets and academic programs of California Southern University (“Cal Southern”), a regionally accredited university, effective July 1, 2022. The initial cash purchase price, net of cash received, was approximately $40 million. For the trailing twelve months ended June 30, 2022, Cal Southern had unaudited revenues of approximately $17.8 million. Cal Southern offers non-Title IV online associate, bachelors, masters and doctoral degrees, with a focus primarily in psychology, business management and risk management.
16