Adtalem Global Education Inc (ATGE) 2009 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the DeVry fiscal 2009 third-quarter conference call. My name is Jeremy, and I will be your coordinator for today. (Operator Instructions). At this time I would like to turn the presentation over to your host for today's call, Ms. Joan Bates. You may proceed.

Thank you. With me today are Daniel Hamburger, President and Chief Executive Officer, and Rick Gunst, Senior Vice President and Chief Financial Officer.

Before we begin, please be advised that statements made on this conference call may constitute forward-looking statements subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by phrases such as DeVry Inc. or its management as a view, objective or outlook or that management believes, expects, anticipates, foresees, forecasts, estimates or other words or phrases of similar import. Actual results may differ materially from those projected or implied.

Potential risks, uncertainties and other factors that could cause results to differ are described more fully in Item 1A Risk Factors in the Company's most recent annual report on Form 10-K for the year ending June 30, 2008 and filed with the Securities and Exchange Commission on August 27, 2008. Telephone and webcast replays of the call are available until May 7. To access the replay, dial 888-286-8010 for domestic or internationally 617-801-6888 using the passcode 19954322.

A replay is also available via webcast through the IR portion of our website. As a reminder, our press release and preliminary financial statements are available in the Investor Relations section of our website located at www.devryinc.com.

I will now turn the call over to Daniel Hamburger.

Thanks, Joan. Thank you all very much for joining us for our third-quarter call.

We are pleased to report that DeVry delivered solid academic results this quarter, and as a result, we saw strong and steady enrollment growth at all of our schools. You know, we are really realizing the benefits of our growth and diversification strategy. This growth and diversification plan focuses on three important objectives -- first, to achieve the full potential of DeVry University; second, to grow through continued diversification across vertical curriculum areas, throughout the horizontal levels of education and in new geographic markets; and third, to build the infrastructure to support this growth. Let me describe some of the benefits we are seeing of this diversified positioning.

Diversification means that we can offset areas of slower near-term growth with more favorable performance in other areas. An example of this is in our Becker division where our clients are more impacted by the economy right now, and this is balanced by improved performance at DeVry University.

A couple of years ago it was the other way around. Despite the economic difficulties, DeVry is weathering the storm better than most with steady growth in enrollment, revenues and cash flows and a solid balance sheet. This performance, together with our diversified platform, gives us the ability to sustain investments in growth and quality for the long-term during good times and bad.

An example, an important example, of how we are executing our diversification strategy is our recent acquisition of a majority stake in Fanor, a leading post secondary provider in northeastern Brazil. Fanor is the parent organization of three institutions that operate five campuses. It serves more than 10,000 students through 28 undergraduate and graduate programs in business law and engineering. Fanor provides a solid platform for DeVry in Brazil with its strong brand recognition, history of growth and academic quality.

As many of you know, DeVry has been seeking the right opportunity to expand in high-growth international markets, particularly within Latin America. Countries such as Brazil have fully embraced the market-funded model of education, and it is easy to see why.

Brazil with nearly 200,000,000 people has the tenth largest economy in the world, and the government there realized years ago that the key to this economic growth is, of course, an educated workforce. Yet the dilemma was how to fund it. With a large and growing college age population and a growing middle-class, they had limited educational opportunities; the government just could not keep up with student demand. So they passed legislation 10 years ago to encourage private sector participation. The result is that while in the US 6% of enrollments are in market-funded schools, in Brazil it is 50%.

So DeVry's diverse array of schools positions us well for bad times as well as good times. As a result of our growth and diversification strategy, we have a steady base of programs that are not tied to economic cycles. If you think about it, DeVry is the only publicly traded education group with a medical school, the only one with a veterinary school. We also have large enrollments in nursing, accounting and other vertical curriculum areas that are not tied to the economic cycle.

We also have a strong set of programs that do receive a bit of a tailwind in a down economy. So over the last couple of months, we have been asked whether we believe we will lose this tailwind when the economy recovers. Given our diverse group of schools, we believe were much better positioned for sustainable growth in both good and bad times relative to others in the industry.

Another distinction that we believe differentiates us is the higher proportion of students that come to our schools directly from high school. Some in the industry focus exclusively on working adults, which is great, especially in a down economy. Again, we have a more diverse model by recruiting high school students and working adults. We believe this distinguishes us during times of economic recovery because high school students go to college regardless of economic cycles.

Now this quarter we also announced that we're planning to relocate our home office operations early next year into two nearby locations in Downers Grove in Oak Brook, Illinois. Both offer energy efficient green facilities, which is good as it will help offset the carbon footprint from my longer commute.

Now our goal is that these new facilities will support our strategy of building our growth infrastructure, including being the employer of choice in education with first-class amenities and a high quality working environment.

On previous calls I have given you a brief update on the situation in student lending. The good news this quarter is basically no news. We have not seen any significant changes in the student loan environment. Our students continue to have access to the financing they require whether it is through federal loans, state grants or the small amount of private loans or institutional loans.

So I would like to focus briefly on one item that received a lot of attention a few weeks ago, and that is the potential switch of Felp to a direct lending program. What is key here is that this is an issue for lenders, not for students or for schools themselves. We are prepared for the switch, and we don't see any operational issues nor do we believe it will have an impact on our enrollments.

And finally, another noteworthy event this quarter was the President's address to a joint session of Congress where he clearly articulated that education is one of this administration's top three priorities. The President laid down a challenge that America will regain the number one position in the world for the percentage of citizens with a college degree by the end of the coming decade.

Sounds almost like John F. Kennedy's challenge to land a man on the moon and return him safely to the Earth within a decade. I think this challenge and this President may have as big an impact on education as JFK had on space exploration. DeVry is excited to be a part of meeting this challenge, and we are excited to work with this administration.

So with that introduction, let me turn the call over to Rick for the financial results.

Thanks, Daniel. We continued to deliver very strong results once again in the third quarter as the excellent results with our DeVry University and medical and healthcare segments offset the continued softness within the professional and training segments.

Revenue hit a record level of $392 million in the third quarter and was up about 35% versus prior year. Revenue was still up about 19%, excluding the impact of US education. Through the first nine months of the fiscal year, revenue was up 31% and again 19% excluding US Ed. Net income was about $51 million in the third quarter, and earnings per share $0.70, up about 32%.

There were three unique or unusual items that hit in the quarter that I would like to take a couple minutes to explain. First, we recorded a pretax charge of about $4 million or about $0.04 a share in the quarter as a result of our buyout of a portion of our lease at the Long Island city campus in New York. This real estate optimization action results in $1.9 million of annual operating expense savings going forward. Third-quarter earnings per share would have been $0.74 or up 40% excluding this discrete item.

The next two items basically offset one another. In conjunction with signing the agreement to purchase the majority stake in Fanor last month, we locked in the Brazilian currency on the date of signing to avoid potential currency risk prior to closing. This action resulted in a $1.3 million gain from the foreign exchange contract that hit the income statement in the quarter due to the strengthening of the Brazilian Real at the end of the month.

Now this gain was offset by a $1.5 million reserve taken against prepaid clinicals within Ross University. As you may recall, we have prepaid for some clinical rotations in the past to lock in these rates -- to lock in these slots in more favorable rates. Unfortunately a couple of hospitals within a group recently shut down their operations due to financial difficulties. While we have a clear contractual right to utilize other rotations within their system, given the business uncertainty, we found it prudent to record this reserve, which represents less than 20% of the remaining prepaid balance.

On a year-to-date basis, net income was $128.6 million, up 27% versus last year. If you exclude the discrete items from both years, net income would still be up about 27% as detailed in our earnings release.

Also for your reference, third-quarter results include expense related share-based payments of approximately $1.7 million pretax or $1.3 million after-tax. This is slightly higher than last year's expense of approximately $1.4 million pretax or $1.2 million net of tax. Our overall effective tax rate moved up to 30.3% in the quarter and 29.7% year-to-date due to the continued growth in our domestic sourced income.

Cost of education expenses increased by 36% versus prior year in the quarter and up 29% year-to-date, excluding the real estate charge. When you exclude US Education, cost of educational services would have been up 16% in the quarter and 15% year-to-date, both lower than our revenue growth driving improved gross margins.

Student services and administrative expense increase by 26% in the quarter or about 13% excluding US Education. The rate of growth in SS&A expanse came down in the quarter and grew less than revenue with or without US Education. This trend was as expected and as we have discussed quite a bit in our previous calls.

While we were making investments to drive future growth such as marketing, recruiting and new programs, we expect SS&A expense to grow to lower rates than revenue again next quarter.

Now let me shift and walk you through some of the key highlights of our operating results, business segment operating results, which are further detailed in our earnings release.

First, revenue growth within DeVry University segment continued at a strong pace, up 18.7% versus prior year for the quarter and year-to-date. This growth is being driven by continued online expansion and improved on-site enrollments.

DeVry University segment operating income increased by 59% in the quarter and 38% year-to-date, excluding discrete items. This improvement was driven by gross margin and operating expense leverage in the quarter as our rate of growth in marketing and recruiting expense grew at a slower rate than revenue as expected.

Within the medical and healthcare segment, revenue more than doubled in the quarter driven by the addition of US Education, but was still up about 30%, excluding the impact of US Ed. This growth was driven by Ross enrollments, along with Chamberlain's geographic expansion and accelerated growth of the online bachelor's degree completion program.

US Education continued to deliver strong revenue growth of its own, up about 24% in the quarter. Third-quarter operating income for the medical and healthcare segment of $26.1 million was up over 80% versus last year, and income would have been up about 27%, excluding the impact of US Education.

Finally, our professional training segment results continue to reflect the economic downturn and impact that financial firms Becker and Stalla serve with revenue basically flat in the quarter and up about 3% year-to-date. While operating income was down versus last year in the quarter and year-to-date, the segment's year-to-date operating income margin is still quite healthy.

Shifting to our balance sheet, the cash, marketable security and investment balances totaled over $354 million at the end of the quarter compared to $310 million last year. Despite this strong cash balance, interest income in the quarter was only $800,000 compared to $2.8 million last year due to the declining interest rate environment.

Cash flow from operations for the nine-month period was $288 million versus $205 million last year. We continue to use our positive cash flow generation to reduce outstanding debt to $135 million from $155 million at the end of the second quarter.

Our net accounts receivable balance was about $180 million versus $122 million last year. Now remember, about $31 million of this increase was the result of the addition of receivables for US Education. The balance of the increase can be attributed to strong enrollment and revenue growth in the quarter. And I'm happy to say that DeVry University receivables per account are basically back in line with prior year as we addressed our internal systems issues.

Year-to-date capital spending was $51 million versus $26 million last year, excluding last year's Alpharetta purchase and immediate sale-leaseback transaction. Spending has and will continue to pick up during the second half due to Project DELTA, our new student information system; DeVry University and US Education spending on facility improvements and new locations; and continued geographic expansion within Chamberlain College of Nursing, along with others. Capital spending for the full year is expected to be in the $70 million range give or take, excluding US Education.

Finally, during the quarter we repurchased approximately 207,000 shares of our common stock at a total cost of about $10.3 million, bringing the total share repurchase in our current program to date to $15.7 million in average cost about $51.53 per share.

That concludes my overview of the strong results for the third quarter and first nine months of the year. Overall we feel very good about delivering positive results for the remainder of fiscal 2009 and meeting our long-term academic and financial objectives. And as we look for growth opportunities, we continue to focus on maintaining appropriately conservative capital structure.

Now let me turn the call back over to Daniel for some more detail on our operating results.

Thanks, Rick. As I go through this operations review, I will refer to our press release where you will note that we have enhanced the information we provide such as Chamberlain now reporting both new and total enrollments three times per year. Please refer to chart one within this release for a schedule of which schools are reporting enrollments and when.

Let me start here with DeVry University, including our Keller Graduate School of Management where we experienced excellent academic outcomes and very strong enrollment growth this quarter. At DeVry University new undergraduate student enrollment increased 15%, while total student enrollment was up almost 19%.

Our total undergraduate student enrollment of 53,259 students is an all-time record for us, and we are very proud of that. We also saw nice growth across technology, business and healthcare-related programs.

So very strong growth and, as I think everyone already knows given these growth rates, comparisons on a percentage basis for the upcoming periods may be a little tougher. If you recall, new student growth in the last three classes was 12% last spring, 19% in summer and 20% in the fall.

To be clear we believe we will see solid growth in new student enrollments, but as we know everyone understands, it's not high teens or 20% forever. We are confident that the recent strong incoming classes, combined with improved retention, should give us solid total enrollment growth as well. Graduate course takers increased 12% over January last year, and for the March 2009 session, that number increased nearly 14%.

At DeVry University Online, the total number of undergraduate and graduate course takers in March 2009 increased 27% over spring 2008. Here I'm referring to DeVry University Online, but I want to point out that DeVry's central online services group is an important part of our growth infrastructure as it supports all the online programs across all our schools, and I will talk a little bit more about that in a minute. They are doing just an incredible job of delivering high-quality academics, excellent customer service and, as you can see here, terrific growth.

In addition to these strong enrollment results, DeVry University implemented some new initiatives this quarter, and let me mention two of them. Perhaps most notable was the January launch of our new academic structure, which organizes our various disciplines into specific colleges. These colleges are the College of Business and Management, which includes the Keller Graduate School of Management; the College of Engineering and Information Sciences; the College of Liberal Arts and Sciences; the College of Media Arts and Technology, and then the College of Health Sciences. This structure provides a home for all degrees at all levels, and it is an organization that is more familiar to students. So the new structure provides improved flexibility for program growth in the future as well.

Now the other initiative was in the new program area, and this quarter DeVry University successfully launched three new undergraduate tracks in the Computer Information Systems area. And these are Health Information Sciences, Web Game Programming and Enterprise Computing, which we launched jointly with IBM as a part of their Academic Initiative program. The IBM Academic Initiative is part of IBM's commitment to work with leading universities to grow opportunities for Enterprise Systems developers.

So new programs are an accelerating source of growth for us, and we are increasing our investments here. And as you might suspect given the country's recent unemployment statistics, we are beginning to see some early signs of softness in graduate employment rates. In our release today, we included a chart showing graduate employment results for over 30 years. Since 1975 through four recessions and now into a fifth, our graduate employment rates have averaged over 90%. This number has fluctuated over time, falling even into the low 80s during times when nationwide unemployment has risen dramatically.

But what is important to note is that even if graduate employment statistics go down a bit, we don't expect them to have a significant impact on new student enrollment. Also, we are increasing the investments in our career services function to ensure we stay the number one career services university.

I would like to turn now to our medical and healthcare segment, and at Ross University new student enrollment grew 11%, and total student enrollment was up nearly 8% from a year ago. Ross continued to expand our physical presence, and we added additional faculty during the quarter to ensure that our students received the highest quality medical education. The med school's clinical training center opened in January in Freeport, Grand Bahama. I was fortunate to be there for the ribbon cutting ceremony, along with the Bahamas Prime Minister. The feedback from our students there was very, very positive, and we are pleased with the Ross team who has done an outstanding job building an excellent facility in a remarkably short timeframe.

At Ross University Veterinary School, new classrooms are being built to accommodate the increased capacity need there as well. Chamberlain College of Nursing had an extremely busy and productive quarter. I'm very happy to report that achieved a record total enrollment of over 3700 students in the spring. This is a 105% increase over prior year. New students rose 68%. Chamberlain is investing in high school recruiting efforts and now has high school recruiters in each of our markets.

During the quarter we made a key management appointment at Chamberlain. Marie Hallinan has been named to the new position of Vice President of Campus Operations. Marie is a former group vice president at DeVry University, and we are very happy to welcome her over to Chamberlain. Another perfect example of another benefit of our diversification strategy, more career opportunities for our employees as we become the employer of choice in the education industry.

Our program and geographic expansion efforts at Chamberlain remain on schedule. We are adding a new Masters of Science in Nursing, which received approval earlier this month, and we expect to be officially launched in the summer. In March our Columbus campus received a five-year approval for the new Associate Degree program there. And earlier this month Chamberlain received approval for our Jacksonville Florida campus.

Chamberlain's expecting to launch programs in Jacksonville beginning in the summer pending final approval. At the newest addition to our medical and healthcare division, we are pleased to announce a milestone in enrollment for US Education, which comprises, of course, Apollo College and Western Career College. Total student enrollments surpassed the 10,000 mark in the quarter, a record for US education and a 22% increase over prior year. I just could not be more proud of the work that George Montgomery and his team continue to do for our students.

One area, a very exciting area of future growth for US Education, is the launch of online programs. And beginning in July, with the help of DeVry's central online services group, Apollo College will offer two new bachelor's degree completion programs. The Bachelor of Science in Medical Imaging Program is for radiography practitioners to help them strengthen their understanding of research, management and administration. The Bachelor of Science in Respiratory Care prepares their graduates for leadership roles in areas like clinical practice, research and education.

The launch of these new programs at Apollo College is a great example of the synergies we are achieving through our diversification strategy. Apollo College is utilizing DeVry's central online services, including the technology platform, curriculum development and student services. It is just a great example there.

Now I would like to finish up here with the Becker Professional Review where as everyone is aware we are seeing ongoing weakness because of the slowdown in financial markets. So here is a business that is actually procyclical, if you will.

Becker's revenues were basically flat compared with last year, and earnings were down although Becker continues to have healthy operating margins. While we are not anticipating any pickup at Becker for the remainder of this calendar year, we remain confident in the long-term growth potential of this segment of DeVry.

One example of Becker's potential is our strong international presence. During the quarter Becker signed an extension with the Toronto CFA Society to provide our Stalla review for the CFA exam and programs for another three years.

So in summary, we are very pleased with the academic and the financial performance DeVry delivered this quarter. Our diversified positioning allows us to sustain investments in quality and growth over the long-term through both bad times and good times. While we are doing well now, we expect that to continue as the economy recovers.

So we're excited about the future, and we are also excited to take your questions. Joan?

Thanks, Daniel. Before we go to the Q&A, I would like to mention that DeVry's Investor Day which we had originally planned for May has been postponed until November 16 and 17, which will accommodate an ongoing construction project at the Phoenix campus. We really want you to see the Phoenix campus as -- the Phoenix area, be in the Phoenix area as you will be able to see three different schools, including our recently acquired Apollo College, as well as Chamberlain and DeVry University. So we will be providing more details this summer, and you should be on the lookout for more communications about the event later on.

With that, if you would kindly give our callers the instructions, we will begin the Q&A portion of the call.

(Operator Instructions). Andrew Steinerman, JPMorgan.

When you look at the balance of investments that you are doing and obviously very astute ones, do you think the pace of investments will be sustained here for the next couple of quarters, stepped up, and if you could talk sort of by school when speaking about kind of the pace of investments over the next couple of quarters?

I think as we said in previous calls, we picked up the pace quite a bit over the past 12 months, 15 months, and we still intend to continue to make the appropriate investments across our portfolio. But the rate of growth given what we have done in the past I think will subside. We saw it this quarter, and we will see it next quarter. We're going through our detailed planning for the next year, and we see opportunities in all our businesses.

DeVry University we are continuing to look at the real estate front to make sure we have the right footprints, so adding locations where there's opportunities and making adjustments in other places. Chamberlain is continuing to be a growth vehicle. We talked about Jacksonville, so there will be some investment, and that is part of what is falling through the P&L this quarter and next on the startup costs of that location.

US Education, Daniel mentioned the online expansion, and we will also be looking at on-site expansion within US Ed. We are expanding our footprint with Ross with what we have done in the Bahamas, and we will continue to grow that operation. So that gives you sort of a good sense of things.

I would just add and, Andrew, thanks for that question. It is a spot-on question. It's something we think about every day, and I think the way you put it at the beginning of your question was right on the mark. It is a balance. So we're balancing all these wonderful investment opportunities that we see with also performing as we go here in the near-term.

Right. (multiple speakers)

-- opportunities to -- and I think you're starting to see that margin expansion, which is just, as we said, I think Rick outlined that in his prepared comments. It's really just as we have been talking about, very much on track, spot on really with what we have said we would do we have delivered here in this quarter.

Okay. Just one more thing. On the Grand Bahamas opening, obviously the permanent facility you are still moving towards, do you think there is any kind of constraint to growth in Ross before we get the permanent clinical facility opened?

No, Andrew, the ongoing profile of high single digit enrollment growth is still there, and we are adding the capacity that we need across the Grand Bahama location, as well as in our Miami facility.

In Saginaw, Michigan, which is perhaps not quite as glamorous as Miami or Grand Bahama or Domenica, but being a native Michigander, I can tell you it is a great place to go to school as well. We have a wonderful partner there at the Synergy Alliance Group.

So it's really an addition of capacity across the board. A lot of people tend to focus on the first four semesters, the core science of four semesters. But the remaining six semesters of this 10 semester program are just as important to increase capacity. So we are doing that across the board.

Okay. Thanks for all the color.

Amy Junker, Robert Baird.

Daniel, can you touch on just the status of the integration with US Education Corp. and if you have identified any potential co-locations yet or if it is still too soon to start seeing that?

Yes, the status of the integration is excellent. I would say this is literally one of the best if not the best acquisition integration that this team has seen. There is a lot of integration experience across the team here. I'm not just speaking about myself. It has gone really well. I give a lot of credit there to John Roselli's leadership, George Harbison over at US Ed. It has been a cross-functional and a cross-divisional team with joint leadership from the US Ed and the DeVry teams for each functional area, tremendous teamwork, great integration, great meshing of the cultures. I think we started in a good place there because, as we knew and we had identified we talked quite a bit about, the cultures were very compatible, and I think a lot of people's experience with integrations, that is often one of the key success factors. Successful acquisition integration is, do you have compatible cultures? And since both were focused on academic quality and student success, it made it really easy.

In terms of co-locations, yes, we do see opportunities. George Montgomery and the team at US Ed, Bill Clohan as well, are doing the analysis now, but they are pretty far along in that. So I have seen some of the preliminary views of where we think we would like to go. Many of those do overlap with existing facilities, campuses, DeVry University, Chamberlain College of Nursing. So we do expect to execute on co-locations. We are very excited about that. Our experience with the multiple co-locations we have done with Chamberlain College of Nursing and DeVry University have each gone well. In fact, each one has exceeded our expectations. So we're quite excited about that.

And then moving on, further geographic expansion in some case, not just independently on their own for Apollo College, Western Career College of US Ed, online expansion, which I talked about, and programmatic expansion as well, are all part of the growth strategy. So that is maybe more color than you were looking for.

We are just so excited about it. This investment and this merger and coming together has definitely exceeded our expectations.

That is very helpful. Along those same lines, if you can just touch on perhaps the strategy at Fanor as well. Are you looking to take that school and expand it across Brazil? You know, potentially look at joint degrees or exchange programs with DeVry? What are your thoughts as you move further into Latin America?

Yes, thanks for that, and we do see exchange programs for students and also for our employees as part of the Fanor strategy. Further and perhaps maybe even more significant would be geographic expansion in its own right within Brazil for Fanor across a couple of brands focusing across the business, the law and significantly their engineering. They have a very, very strong engineering school and a very strong brand. I'm quite excited about that.

And then a little bit longer term would be online expansion, which is still pretty much in its early days. So there are many opportunities to grow and expand Fanor, and those are some of the highlights.

Jerry Herman, Stifel Nicolaus.

A question about growth or any constraints that you have on growth generally. The reason I ask that question is, and you're probably not going to like this question, but some of your competitors have been posting some really robust volume numbers. I'm wondering if you guys view the front end of the pipeline any differently than they do or if you sense any shifts in market share that might be occurring as well?

Well, Jerry, the market funded segment clearly is increasing its share overall. We don't -- we continue to increase our share, and we are measuring that more carefully than we ever have before. We got some outside help on that last year as we renewed our strategic plan. And so it is really -- I remember a time at the beginning of this decade where that was the case as well and there were others growing faster than DeVry, and it did not always work out so well over the long term.

So we are continuing to pursue very healthy and very sustainable levels of growth that I think are sustainable here in this part of the economic cycle, and we think in the latter parts of the cycle. I think one part of that, and I commented on this is, we did not maybe go up as much as some others as unemployment has increased. And we are less countercyclical than others.

And by the way, at that time in the beginning of the downturn, we've said very, very openly in large forums and small forums, if you're looking for a countercyclical play, you should probably look somewhere else. We are really much less countercyclical than anybody else. We are much more diversified, and that is why I took a minute to go through that a little bit earlier.

And so if we shot up a little bit less than some others in the down time of the economy, as the economy improves, we think we will continue to perform very well, much more steady and perhaps outperform at that time. We will have to see.

But then just to the first part of your question about the constraint on growth, the constraint is people and saying that we have got the people and that we continue to maintain and increase delivering the academic quality to our students. That is really ultimately in the long-term constraint on growth.

Just a follow-up, let me go to the other side of the pipeline. You referenced increased investments in your career services area. Could you maybe be more specific there and then any update on salaries?

Sure. Salaries the last update we had was actually up, even in this economy. Like I said, we have seen some early signs that it could be softening somewhat. Not anything huge but just a little bit. Some of the investments include more people, more career counselors.

We think we've got the largest career services office in the country when you add it all up across the several dozen career services offices across the country over 100 career services professionals. But we are adding even, as our enrollments have grown, we need to add more career services professionals, some marketing dollars as we -- this is not student marketing, this is marketing to employers and spreading the good word about our wonderful graduates.

It's those kinds of investments. Not hugely significant, but in the grand scheme of DeVry Inc. but important investments, and we are not going to be shy about that in order to preserve that strong positioning that DeVry University enjoys in the minds of prospective students.

Ariel Sokol, Wedbush Morgan.

Congratulations.

Thanks and welcome to DeVry and to the wonderful world of covering education.

Thank you very much. I do have a couple of marketing-related questions. The first one is, I know you guys provide an advertising expense in your 10-Q, but can you provide it now? The reason why I asked that, I just wanted to go back to the comment regarding counter-cyclicality and understand the trend in acquisition costs per student start in your various programs. And the last question is, if perhaps you can speak to the trade-off you will be doing with respect to margin expansion versus new enrollment growth, particularly as you go against what could be more challenging comparisons?

Yes. Well, thanks and we have seen, as we talked about quite a lot in -- you were not on the calls in quarters past -- that we would expect to see that here in the second half of the year. It is coming out very much in line with expectations. We are seeing very good results coming out of our marketing team in terms of the costs to attract and recruit new students. So those have been favorable trends. We saw some leverage there in the -- it shows up in our student services and administrative, SS&A, expense line, which grew fairly significantly slower than revenues. But I don't think I can give you a specific breakout to your specific question about ad expenses until the Q comes out.

Yes (multiple speakers) I have got the numbers. Advertising expense in the quarter was about $46 million and year-to-date about $130 million. But keep in mind, when you compare that to last year, we have got US Ed in there. If you take US Ed out, it's about $121 million year-to-date and about $42 million for the quarter.

Trace Urdan, Signal Hill.

Dan, I just want to check on those nonrecurring items that you described in the quarter, all of those are included in the segment data that you provided us? Is that correct?

Yes.

So in that circumstance, the Long Island city write-off and the Brazil gain would be both in the DeVry segment?

Well no, it is true about the real estate charge, but the investment gain is shown in interest -- in the section of interest and other on the P&L. So it is below operating income.

Okay. Got it. All right. That is helpful. But then the reserve against the prepaid clinicals --?

That is within [the medical and] healthcare segment results.

Okay. Great. That is helpful in terms of understanding what seems to be sustainable there. So it really does look as though we are seeing a pretty significant increase in the rate of margin improvement even this quarter versus the prior quarter. I gather from your statements that -- you said the level of investment is slowing a bit?

I mean it is spot on with what we said it was going to be. (multiple speakers)

Right, I know what it is. I'm just trying to draw a circle around that and make sure that I have got that right.

Let me help you out a little bit there. I think if you look at our operating margin -- or excuse me, our pretax income margin on a year-to-date basis, we are at 17.6% when you exclude that real estate charge year-to-date nine months for this year, and last year I think we were at 17.5%.

Last year we did not have US Education. This year we do, and it has inherently a little bit lower margins although growing. So we continue to make margin improvements. In the quarter we saw, as evidenced by the greater than 40% increase in operating income, nice movement in margin this quarter, and we expect to see another nice move in the upcoming quarter.

Okay. Then it looked as though -- I'm not -- it's nothing that I think is a big concern, but it looked like that sequentially in the DeVry University segment in terms of new student starts, it looked like sequentially there was maybe a bigger dip than we have seen at least for the last couple of years in terms of the number of students you enroll in the fall quarter versus the spring quarter. I just wondered if there is anything -- if there is anything to note in that observation at all. Either because the prior quarter was particularly strong for some reason or you know, or is this just kind of noise in the machine?

I think it is noise in the machine.

Yes, we have a chart that is attached in the press release that gives you the absolute and the growth rates on new students, as well as total students, and I think the seasonality really is what you're looking at. The growth rate is 15% in this term on top of a 19% growth the previous year. So I think the rate of growth is the same, and it has been pretty consistent.

Yes, okay. I hear you. It looks like that sequentially versus the prior quarter you have not seen as large a move down as you did this quarter. But I hear what you're saying. It is not a concern?

Yes, we don't really see that as -- (multiple speakers)

Look at the visual on the chart and the numbers I think hang together. It is pretty consistent.

Kelly Flynn, Credit Suisse.

I have one quick one and then kind of a more detailed follow-up. On the [replacement rates] that you mentioned for DeVry, did you give the actual number or just said it was down?

No, yes, it is in the press release.

I'm sorry.

Let me give you that. Well it is -- the latest number (multiple speakers) yes, 92.1%, and that is the three term period, the October '07 grants, February '08 and then the June '08 grants. The number goes six months, so that closed out at the end of December '08. And so the next time we will report the subsequent class.

Okay, great. Then just on the impact of the economy, I know you've touched on it a couple of times. But could you just kind of go through the puts and takes on that? I mean how is it helping you and how is it hurting you and particularly touch on -- I'm talking about just DeVry University, but particularly touch on corporate reimbursement in there if you could, too? Thanks.

Well, at DeVry University there is -- the puts and takes are -- some of the programs have a little bit of countercyclicality to them. The MBA program I think we all can probably relate to that just in our daily observation. You know, people going back maybe for an MBA if they are unemployed or maybe underemployed. There is a little bit, but I think you have seen it in our graduate results. You know, it is a fairly minor effect. So it's really much more noncyclical than countercyclical but a little bit.

Some of the shorter programs, DeVry University does have a few associate degree programs, and those seem to be getting the benefit. So I would say we are getting a little bit of a tailwind there at DeVry University overall. But it is not nearly like what you would see at some of the more career college focused operations, including now most recently the addition of US Ed to the DeVry Inc. world.

So when you look at DeVry Inc., then you start to look at -- we have now added that to the portfolio, which is somewhat counter. Then you have some pro cyclical areas like Becker, which tends to move with the economy. Advanced Academics, the high school program, is a little bit of actually procyclical, although probably masked by just its overall very large rate of growth with its small size. And then you have some noncyclical -- the medical school, the veterinary school, the nursing program. Accounting degrees at the undergraduate level tend to sort of move at their own pace, not really correlates to the economic cycle.

That is why I say that when you look at the overall DeVry Inc., it is much more noncyclical, much less countercyclical than any of the other publicly traded players.

And what about the corporate reimbursement? I know you don't get a lot, but what are you seeing there?

Yes, we have some exposure there, but not nearly as much as again some other players you might be thinking of. But we are seeing steadiness there. We have not seen -- I think we mentioned last time that there was one employer that we were aware of who suspended their program, and I am not aware of any new news in that regard since that time.

And again, our long-term history and we had a lot of history here going back to when Dennis and Ron founded Keller Graduate School of Management in 1973. What we found is that this is an employee benefit that is one of the last areas that any employer wants to cut. It is very important to employees, sort of just not worth it. There's not enough money there to cut that benefit for most employers. So we've found that it is pretty steady.

By the way, when corporations are feeling flush, they don't tend to raise it either. It just tends to be pretty steady.

Kevin Dougherty, Bank of America.

Could you just touch a little more about your M&A appetite going forward? I know you mentioned wanting to maintain an appropriate capital structure. Maybe if you could just elaborate there.

Yes, sure. Feel free to jump in here, Rick, as well. Our appetite for M&A continues in accordance with our strategic plan. We, I think, have been extremely open over the last couple of years here about our strategy and where acquisitions fit into that. So it is not so much at DeVry University, but it is very much as part of this growth and diversification strategy across new vertical curriculum areas. And so as we have moved into health and medical, we have used acquisitions as platforms to execute that strategy and then typically organic growth thereafter.

Although some -- keeping an open eye to opportunities to accelerate our growth by buying versus building and also diversifying across the levels, the horizontal levels of education. So we wanted to move into pre-baccalaureate level in a bigger way. We were previously 90% Bachelor's, Masters and Doctoral level degrees, and then we acquired US Education and Advance Academics, giving us that, and then geographic expansion. So Fanor being an obvious example in Brazil.

So we continued to look at international markets, particularly Latin America. And longer-term I think Asia will fit into the picture, and these are opportunities where we have the right combination of quality programs, strong management teams, and it's got to be the right price. And, frankly, that is one of the opportunities that we have seen present itself in the last few quarters. You know, prices have come down a little bit. So that is how we are thinking about M&A.

Okay. And then just your comment on the capital structure, should we read anything into that in terms of size of deals?

No, it is just a fact I think that in times like this where there is a lot of uncertainty in the market place, having a conservative capital structure and good liquidity I think is important.

So think about it. We've done a couple of acquisitions over the past eight months over $300 million, like $330 million in fact. But we still have $350 million of cash and marketable securities on the balance sheet. We have been able to pay down our debt. So we're able to do some of these deals and still at the same time keep the liquidity, keep what I think is still a pretty conservative capital structure in place.

And could you just touch real quickly on pricing maybe at DeVry and with some of the newer schools like US Ed?

Sure. Price increases at DeVry University at the undergraduate level will net out to about 5.5%. A little higher on a headline basis, but we are lowering fees. When you net it out it effectively would be about 5.5%. At the graduate level, it would be about 4.5%, just to give you a feel.

Suzi Stein, Morgan Stanley.

One of the issues that got a lot of attention last quarter was course load per students. I was just wondering if you could give us an update on that.

Yes. It continues to be something that we are working on managing. What we have seen, for anyone who did not refer -- isn't familiar with what you're referring to from last time. You know, for example, a student who might have taken four courses in a semester maybe is enrolling in three courses. And when you add that up across the base, it adds up to a little bit lower revenue per student.

So what that means when you're doing your models and everything is if you've got an X percent tuition increase, plus a Y percent enrollment increase, it takes a little bit away from X plus Y. Not a huge factor, not an issue with a capital I but a small I, but something that we're watching and working to continue to manage.

What are we doing about it? We are adding more resources to schools, campuses, as well as online to counsel students on the benefits of taking a full course load in order to graduate sooner. So we are confident we will be able to manage that. But that is kind of where we are with that particular --

But if you look at it relative to last quarter, would you characterize it as stable, or has it gotten worse? I mean I guess can you just compare it to where you were last quarter?

As far as we have, and we are still analyzing and sorting out the data from this semester, but it looks about stable.

Okay. And then can you just comment on your view of the regulatory environment? I mean that has gotten a lot of press recently, and I'm just wondering what your take is on it.

Yes, my take is it is I was going to say overblown, but it is not overblown so much as it is wrong. I mean this administration is incredibly supportive of education. And also, we at DeVry in particular are quite excited to work with many friends from Chicago -- (inaudible) from Chicago is going to Washington DC.

So many folks at DeVry know [Bob Steinerman] well, going way back to his days working with the late great Senator Paul Simon of Illinois. A huge friend to education, supportive of education, and many of our people know him very well and have ongoing dialogue with him. I had the opportunity to meet with him as he headed up the transition team for Arnie Duncan. So what I observed was a whole lot of listening going on. So we are excited to work with Bob Shireman.

We're excited to work with Arnie Duncan, who was the CEO of the Chicago Public Schools and pioneered with DeVry University and Mayor Daley as well, the DeVry University Advantage Academy, a wonderful public-private partnership away ahead of its time because everyone now is talking about public-private partnerships to increase access to higher education. We have been doing it for six years with 89% high school graduation rates compared to 56% for the city as a whole.

And by the way, most of those students are graduating with an associate degree at no additional costs to their families. So we started that up in Columbus, Ohio, and we look forward to working with the administration and the department on promulgating that concept further across the country, and these are things that are doing well by doing good. I mean it is certainly good for DeVry, but it is more importantly doing good things for society.

But we don't get it. I think there's just a lot -- maybe there's a lot of people who are not familiar, sort of come -- just new to this world, which is a regulated world of education. But the people that we have talked to who have observed this area for a long period of time have seen, tended to see these things as opportunities, frankly.

Paul Ginocchio, Deutsche Bank.

Can you just talk about US Education margins versus the medical division as a whole and what your outlook is for the near and long term?

Sure, Paul, and likewise, welcome to the sector.

It was quite a welcome I got.

When we purchased US Education back about eight months ago, we noted that it is coming in with margins that are lower than our existing businesses that make up the medical and healthcare segments. And I think last year in the pro formas that we showed it had about a 14% operating income margin.

But with the opportunity to see some growth in that margin going forward through leverage of their existing facilities, enrollment growth as we are seeing today, as well as co-locations, online development, etc. So we think just on a standalone basis, it can improve, and being part of DeVry now it is a further opportunity.

And have you seen -- you have already probably seen some of that, correct?

Definitely.

If I could just sneak another one in about persistence at DeVry undergrads, it seems like it has been doing very well. Is that the economy or something company specific, thanks?

It is -- there is a little bit of a lift that we're getting from the economy. It is, like my main point of hey, we are not as countercyclical as you think. That is a little bit of a lift there, but it is far superseded by the internal efforts of our team to do a better job of packaging students properly upfront, to help with the student finance issues, which are one of the root causes of dropouts, and academic advising with better resources. We have changed some aspects of the curriculum, some of the early courses, to improve retention. There is just a whole multipoint plan for improving retention, and we are seeing some good results of that, and there's still more opportunity in front of us.

Thank you.

Sure. Thank you, Paul. It's just a blip. Just remember, it's just a blip in a long-term career that you're going to have -- (multiple speakers)

It is an opportunity.

Jeff Silber, BMO Capital Markets.

I know it is late. Just a quick question on (inaudible) maybe just to help us model. Are you going to be detailing that separately, or is that going to be in the DeVry University segment? If you can also give us a base to work from roughly in terms of trailing 12-month revenues and margins and growth, that will be great.

You kind of cut out at the beginning of that. What was it that you were wondering if we are --?

I'm sorry. On the Fanor acquisition, how are you going to be segmenting that out, or is that going to be buried in the DeVry University business?

Sure. As you know, we acquired Fanor on April 1, so it is not anywhere in the third-quarter results. And as we issue our year-end financials and our fourth-quarter results, our anticipation is that we are going to make a separate fourth segment for international and other as we go forward, and any other juxtapositions will be restated at that time.

As far as the size of the business, as we said when we acquired it, its revenues are less than $25 million, right around that area and pretty healthy margins.

And when you say healthy compared to your core business, good, the same, worse?

I would say compared to our core business, you mean with DeVry University, maybe a little bit better.

Okay. I'm sorry, you mentioned the fourth segment being international. Is Ross now going to be part of that fourth segment, or is that still going to be embedded?

Sorry, no, Ross will be part of the medical and healthcare segment is our thinking right now, and then there will be an international/other to capture Fanor and maybe a few other movements.

Fantastic. Thanks so much.

Yes, we are trying to be responsive, and I think we will -- we will just be able to provide more information on that question for sure on the next call.

Gary Bisbee, Barclays Capital.

A little bit more question about Brazil. What is the strategy here? Obviously the size of the deal is not material. Are you content to operate this for awhile, get to know the market, get to know competitors, and then maybe look to expand later, or would you consider other deals to sort of build this up so it becomes material over the next, I don't know, 12 to 18 months?

Yes, the strategy is to grow it, and I would expect there would become material over time. And our strategy is to make a contribution to the huge need -- there is a huge unmet need for education in Brazil. I think that will come through a combination of geographic expansion, also programmatic, as well as adding online as I mentioned before.

In the geographic, adding new campuses. There it could be a combination of both organically adding new campuses, as well as keeping our eyes open to acquisitions, follow-on acquisitions there in Brazil. We are quite mindful of the opportunities there and have a good team -- and the team that we have just brought on board is outstanding and very knowledgeable about the other opportunities down there. So that is sort of a nutshell version of what we think the strategy is.

Okay. And then given the cash balance where it is and what will likely be continued strong cash flow, how do you think about buybacks in the context of the recent weakness in the stock price? Would you be willing to make a bigger move then you have made to date there? Particularly -- well, I will let you answer.

It has been an interesting period of time. If you look at our performance and our results, you would expect that our buyback program would have been much more effective than it has been over the past few months. But the market has been very volatile, as you well know. But we still feel very bullish about our future and intend to continue to buy back. We have got a structured program in place where as the stock goes down, we are actually more aggressive in the marketplace. As the stock moves up, we will continue to buy, but maybe not at the same level. So we continually evaluate that and open windows, and we will do so as we go forward.

If I could sneak just one more in, can you give us a ballpark figure on CapEx for fiscal 2010? I assume with the new student information system project, it probably is up quite a bit. Is that a reasonable way to think about it?

Yes, it is up this year. Last year we spent around $50 million. This year we're going to be, as I said, in the $70 million range give or take. We are actually going through that process as we are doing our operating planning right now. But you hit on it. We have got project delta that is going to be a sizable investment next year. We've got more expansion in facilities planned, Bahamas investment. We've got this new office that Dan referred to that will have some capital associated with it. So it will likely add up more than the $70 million range this year, but I don't know if it is going to be that much materially more. But we will be able to shed a little bit more specific light on that with better information next call.

Scott Schneeberger, Oppenheimer.

Dan, you mentioned at the beginning of the call the strength of DeVry is that you have very successful recruiting out of high school. Could you provide quantification or any type of color on the success you are seeing there?

Sure. And, of course, we cannot give numbers for what is going to happen in the summer, but we are seeing improved performance in our high school recruiting efforts and increase opportunities to do that. I was not just referring to DeVry University. I also have to -- I know you know this -- but remind everybody DeVry is more than DeVry University, and we have high school efforts going on at Chamberlain College of Nursing which I think I mentioned, also at US Education schools, Western Career College, and Apollo College.

So when you put that together, and plus our efforts in high schools at Advanced Academics who works with 200 school districts around the country -- when you put all that together, we have got a strategic platform to approach the high school, which is, frankly, I'm not happy that we're even scratching the surface of the opportunities there.

But I would say just steady progress, not anything that is lighting people on fire. But that is kind of the nature. That is what we like about the high schools. It is good, steady. It is not going to cycle or be countercyclical like the working adult population can be a little bit more.

Brandon Dobell, William Blair.

As a follow-on to the previous question, any sense within DeVry University of the mix of let's call it high school or high school age students versus working adults? Is there any change you see in that with kind of the changing mix in business, or are you changing the mix of programs based on what you're seeing from a demand perspective?

Okay. The high school is about a third, and working adult is about two thirds. And in terms of the change -- and then the change in that mix, a little bit more toward the working adult with the advent of online, but still a nice healthy base of high school enrollments within the mix and continued investment there to keep that going.

And then in terms of the programmatic mix, we are actually seeing nice growth in technology programs as well as in business. That was not the case just maybe six, seven, eight, nine quarters ago where it was really being driven more by the business. The technology and engineering programs are kicking in, and I'm including within that computer science, computer information systems. I highlighted those in the call earlier, electronics, engineering programs as well. And then there's also the health and medical-oriented programs like Health Information Technology and Biomedical Informatics.

Those are programs that are very likely to see strong growth, especially given the administration's emphasis on health information and also with the huge coming wave of genomics that is going to be driving the delivery of healthcare over the next five or 10 years. We are all going to be -- you know, we are going to have our DNA mapped out, and that is going to drive personalized healthcare and increased quality and lowering the cost of healthcare.

The biggest single issue with that is the informatics. It is how to deal with the 3 billion coded pairs of DNA that you have and how you deal with the informatics. So we think that those programs are going to be long-term growth opportunities for our students.

Okay. And then I want to go back to I think it was Trace's question about the pace or the -- yes, the pace of enrollment costs.

I guess from my perspective enrollments are a function of demand or lead flow, combined with enrollment accounts or recruiter productivity and then kind of scheduling issues. In the last couple of quarters, I would imagine you saw good demand and good productivity. With this term enrolling -- I don't know -- somewhere in the neighborhood of 500 or 800 less students than the previous two quarters, when I would think the demand and the productivity or your yield would be pretty much the same, I'm just trying to figure out how to reconcile those two different perspectives. I would think this term should have seen the same gross number of students, regardless of the percentages, the gross numbers of students, (multiple speakers)

No, what you see there -- and actually I would refer everyone to chart two which it sounds like you're looking at in the press release -- what you can see there is the seasonality. And then if we extended that to the left to the dawn of time, you would see that same sort of summer, fall, spring pattern at DeVry University undergraduate. So that is really just a seasonal effect because we enroll more high schools, way more high school students in the summer and fall periods as defined here than we do in the spring.

Okay. All right. Thanks a lot.

No drop in recruiter productivity. Let me just be very clear about that.

Okay. That is helpful. Thank you.

Mark Marostica, Piper Jaffray.

Actually it's Mark [Skitovitch] for Marostica. Just maybe if I could tag onto Brandon's last question there. Can you just comment in general on the quality of lead flow that you are seeing from the perspective of the credit profile, those leads, and if this has had any just general impact on your intake of students? I guess where I'm going with this, is there a slightly more conscious effort to be more deliberate in your uptake?

Yes, what I would say is in terms of inquiries from prospective students, the quality of the inquiry flow is good and I would say up. And that is across both those overall segments of working adult and high school students, and there's not a specific credit quality that I'm talking about. Just overall quality in terms of more interested or I would say fewer inquiries that are really not that interested, and that has been helpful, and the marketing team has done a very nice job there. Still see many opportunities to improve that further, and that is helpful in the overall productivity of the process.

And then in terms of the credit quality again with us, given that private loans and institutional ones are such a small piece of the pie, there's really no material change there that I can cite.

Okay. Great. Thank you.

Let's go with one last question.

Jeff Marsh, Marsh Capital.

Congratulations on the quarter. (multiple speakers) The results look very good to me. I just want a couple of questions. Did I hear right that ex-US EC that the operating income in the medical division was up 27% year over year? Is that right?

Yes, that is what I said.

Okay. I guess what that implies is the operating margins for Ross/Chamberlain were fairly comparable with last year. I just wanted to get your guy's thoughts on how we should be thinking about the profitability of Ross and Chamberlain going forward. I know you have been making an increased level of investments, particularly at Ross, but at the same time, you're continuing to demonstrate very good enrollment growth. So how should we be thinking about the profitability of Ross and Chamberlain going forward?

Yes, Jeff, I think your comment is right on as far as Ross. And then when you look at Chamberlain into that flow, we are now giving the enrollment data on Chamberlain on a more frequent basis. You can see the strong numbers there. And as we get the benefit of getting into years two, three on some of these new expansion sites, those go from actually a loss to a nice profitability. You add to that the benefit of online, that Chamberlain business is starting to generate some pretty good margins. So bringing that into the mix with Ross helps to offset any startup costs that Ross has in the Bahamas.

And then the third piece is US Ed coming in, that is coming in with lower margins to start out with but growing.

And those investments in Ross and building the capacity there, those started was it about three quarters ago now, so we should be anniversarying those shortly? Is that right?

Well, yes, except that we started with a temporary location and we are going to be making capital investments in the next several quarters to get a permanent site ready probably sometime at the end of 2010, early 2011.

Okay. Did I also hear that in terms of receivables that USEC added about $31 million? If that is accurate, that would imply that receivables were up about 22% year over year, which is consistent with the growth in revenue. If that is accurate, I would certainly love to get a sense as to how you guys are doing such a good job in managing receivable levels and bad debt expense, if there's any specific items there influencing that?

Well, it has been really the focus for the past several years, a concerted effort. I have been here three years almost now, and it has been a big focus working with the campuses, working with the centers within DeVry University, and really communicating with the students, staying abreast with what is going on, and making sure that we are not letting these things age. And that is paying dividends today because we have seen the improvements in managing our Accounts Receivable per account pretty consistent with prior year, even with price increases, even with enrollment increases and the like, so we are pretty proud of that.

Absolutely, you should be.

The bad debt as a result has stayed pretty consistent in the 2.5% to 3% range that we have seen historically.

And your private loan exposure really has not changed much? It is still less than what 5% of growth (multiple speakers)?

Yes. If anything it is going down a bit because of the increases in the Stafford and the Pell grants.

Okay. I guess the last point really is not a question; it is more of a comment. I would certainly as a shareholder love to see you guys take advantage of this craziness in the marketplace and take advantage of the share price. You know, I have been following education for quite some time as you guys well know. I cannot recall a time when the valuation has been at this level. So certainly I would endorse you guys using some of this exceptional growth and free cash flow and allocating that towards a higher level of sheer repurchases. I think you have a great opportunity here.

It is pretty remarkable when you think back to our last call when we were going through our results which were very good in the second quarter. I think our stock was in the high 50s, close to 60. Maybe even broke through 60, and here we are a quarter later given the earnings going up 32%, and our stock is down in the 40s somewhere. So --

So who knows? I think again people who have followed us for a long period of time can look at these -- look at those charts and see each one of those as a bit of a blip and a bit of an opportunity. But Jeff, thank you for that comment, and as always, we are listening and we are seeking input and feedback and comments.

Absolutely. Good job, guys. Good luck going forward.

Thanks a lot.

Thank you, and I guess it's to me to say thanks to everyone for your questions and just to let you know that DeVry's next conference call will be August 13. We will announce fourth-quarter results and also enrollment at DeVry University, Ross University, Chamberlain and US Education. Thanks again and talk to you in August. Bye, everybody.

Thank you for your participation in today's conference, ladies and gentlemen. This does conclude the presentation, and you may now disconnect. Have yourselves a wonderful evening.