Earnings Call: Q1 2020

Sep 9, 2019

Good afternoon. Welcome to Aspen Group's Fiscal Year 20 2Q1 Earnings Call. Please note that the company's remarks made during this call, including answers to questions, include forward looking statements, which are subject to various risks and uncertainties. These include statements relating to future student enrollments and bookings, campus expansion plans and capital expenditures, adjusted EBITDA forecast, operating metrics, anticipated operating leverage and gross margins, Revenue growth in Q2 leading 3 key targets, expectations from Ashland's monthly payment plan changes, expected G and A trends, expected cash flows and our liquidity. Actual results may differ materially from the results projected and reported results should not be considered as an indication of future performance. A discussion of risks and uncertainties related to Hestan's business is contained in its filings with the Securities and Exchange Commission mentioned in the press release issued this afternoon. Hestan Group disclaims any obligation to update any forward looking statement as a result of future developments. Also, I'd like to remind you that during the course of this conference call, the company will discuss adjusted EBITDA and EBITDA, which are non GAAP financial measures, talking about the company's performance. Reconciliations to the most directly comparable GAAP financial measures are provided in the tables in the press release issued by the company today. There will be a transcript of this conference call available for 1 year at the company's website. Please note that earnings slides are available on Aspen Group's website atastu.com in the presentation section under Company Info. Now I will turn the call over to Michael Matthews, Fasten Group's Chairman and Chief Executive Officer. Good afternoon. I will begin the call today by discussing the positive trends that we're seeing in our operating metrics, and I will discuss our pre licensure BSN campus expansion plan for calendar year 2020, which we released details of this morning. Then I will make a key strategic announcement related to our monthly payment plan at Aspen University. Joe Sedley will then follow with a review of our financial results. Okay. First, let's review our enrollment results in the Q1. This, of course, is our seasonally slowest quarter given it falls during the summer months. But this year, enrollments in USU's FNP program and Athens pre licensure BSN campus business were so strong that on an aggregate basis, we didn't see the seasonal dip that we've seen in previous years. Aggregate enrollments for the company, in fact, rose 24% sequentially and 46% year over year to a quarterly record of 1929 new student enrollments. As we announced last week, the company has now surpassed the 10,000 active student body milestone as Aspen University now has over 8,500 active students while USU now has over 1500 active students. I'd like to express my gratitude to our faculty and employees at both universities for the care and commitment that they exhibit every day to ensure that our students are receiving a world class academic experience. Leading the way with enrollments was USU's FNP program. We achieved 5 14 enrollments in Q1, which was a 62% sequential increase. Enrollments were averaging about $150 per month in the quarter until we announced the monthly payment plan change and subsequent July 31 deadline to sign up for the now discontinued 6 year payment program. That deadline generated approximately 10% more enrollments than we would have otherwise delivered for the quarter. Consequently, on a go forward basis, we're forecasting the enrollment run rate to remain in the 150 per month range. We continue to implement every other month start date for our FNP program and continue to target 150 new FNP students each start date. Because of the spike in enrollments in late July, I'm pleased to announce that we had 243 new students begin our FNP program on our September 3 start date. Congratulations to everyone at United States University for the great work preparing for this very large start date that began last week. As I've stated before, when we acquired USU, we saw the potential for student body growth and composition to mirror Aspen University. USU has grown from 684 to 1491 students year over year or 118%. And the student body composition is even more heavily weighted to nursing students as USU's student body is now composed of 94% degree seeking nursing students, while Aspen University is at 80%. Our newest unit, the Aspen University pre licensure BSN campus business, currently based in the Phoenix metro, delivered record enrollments in the Q1. We achieved 276 enrollments in Q1, which was a 48% sequential increase and an increase of 197% year over year. This quarter, we continued to enroll students in our 2nd campus in Phoenix, the HonorHealth Campus, which is set to begin its 1st semester on September 17, which contributed to the increase in the enrollment growth in the quarter. Our traditional online Aspen Nursing plus other units delivered an enrollment increase of 7% year over year, and our doctoral unit increased enrollment 68% year over year. So those businesses continue to grow as expected. The 3 key takeaways from this quarter's enrollment results are: number 1, how that translates to increases in our marketing efficiency ratio, or MRR, and the related decrease in our cost of enrollment, or CAF number 2, rising average revenue per enrollment, or ARPU and number 3, the increase in total bookings. As a reminder, we define MIRR as revenue per enrollment or LTV divided by cost per enrollment or CAC. In Q1, our cost of enrollment declined by 10% sequentially in our traditional Aspen Nursing Plus Other unit down to $12.31 delivering a 6.0x MER. Our doctoral units saw similar improvements as our cost of enrollment declined by 31% sequentially, down to $19.87 delivering at 6.3x MER. Our cost of enrollment for our U. S. UFNP program declined by 33% sequentially, down from $10.78 delivering at 16.5x MER. Finally, the cost of enrollment for our pre licensure BSN program remained under $500 $4.70 to be exact, which delivers a whopping 62.8x MER. The second takeaway is that our strategy of investing in our marketing spend to drive enrollment growth in our highest LTV units is working. This has delivered material improvements in our average revenue per user, or ARPU, and our overall bookings. Year over year, our ARPU has risen from $11,185 to $13,919 or 24%. Our total bookings resulting from waiting enrollment growth primarily to our highest LTV businesses increased 83% year over year from $14,700,000 to $26,900,000 This strategy of driving enrollment growth in our highest LTV businesses positions the company for sustained, consistent top line growth of over 30% for the current fiscal year and for next fiscal year. Specifically, we now anticipate fiscal year 2020 revenue growth to be at least 34%. Now I'd like to make 2 announcements. First, we announced this morning that we have signed clinical affiliation agreements with the largest health care organizations in the Austin, Texas and Tampa, Florida metros and plan to launch standalone Aspen pre licensure campuses in those 2 metros next calendar year. We're targeting opening Tampa next summer and Austin next fall, so both will begin after the end of our current fiscal year. Our primary clinical partner in Austin will be Baylor Scott and White, who are in fact the largest not for profit healthcare system in Texas and one of the largest in the United States. Baylor Scott and White Health was born from the 2013 combination of Baylor Healthcare System and Scott and White Health Care. Today, Baylor Scott and White includes 48 hospitals, more than 800 patient care sites, more than 7,800 active physicians and over 47,000 employees. Our primary clinical partner in Tampa will be Bayfront Health. They're a regional network of 7 hospitals and over 1900 medical professionals on staff serving the residents of Florida's Gulf Coast. Campus St. Petersburg and Austin are ideal metropolitan areas for our initial expansion outside of Phoenix as both enjoy population centers of over 2,000,000 people and are expected to be among the top 20 fastest growing metros over the next 2 decades. As we look to maximize return on our invested capital, we've targeted existing campuses that are already substantially built out to reduce the total expenditure for each new location. This will allow the CapEx for each new campus to be in the same range as the cost of Aspen's embedded campus at HonorHealth located in North Phoenix. Locations of each campus will be announced following the execution of long term leases, which are expected to be completed over the next 60 to 90 days. Joe will provide an update on liquidity in a few minutes. As we've previously stated, these 2 new campuses are planned to be funded with our existing liquidity resources. On to our second announcement. If you recall, on the last earnings call, we announced a change to our monthly payment plan program for our USU FNP students. In order to improve our working capital in coming years, while still maintaining our mission of making college affordable and providing innovative payment plans, we are only offering monthly payment plans for the 1st academic year of an FNP student, which is a liability of about $9,000 payable at $3.75 per month over the duration of the 2 year academic program. The 2nd academic year, which is a liability of $18,000 will now need to be paid by students using conventional payment methods. This will allow the company to reduce their operating cash requirements by over $2,000,000 next fiscal year and much more in future years. We are balancing the management of our cash resources with the strategy to grow the business in our highest LTV units. As a result, we are always looking for ways to accelerate the timing of the company achieving free cash flow results. Therefore, effective October 1, all new students at Aspen University that enroll in a bachelor degree program will now pay $300 per month on a go forward basis, up from $2.50 per month. In addition, all new MDP students at Aspen University that enroll in a master degree program will now pay $3.50 per month on a go forward basis, up from $3.25 per month. Assuming we increased our enrollments in our traditional Aspen online nursing plus other programs by 15%, that would equate to approximately 4,400 new student enrollments on an annualized basis that will now pay the company approximately $40 per month in addition on a weighted average basis. Therefore, 12 months out, we would expect to be receiving approximately $175,000 more cash per month as a result of this change, which on an annualized basis is a positive cash flow improvement of over $2,100,000 We've carefully researched this lumpy payment increase both internally and externally and feel confident these changes will not have a detrimental effect on our conversion rate and our overall enrollment forecast. Now I'll turn the call over to our CFO, Joe Cebale, to review our financial results for Q4 and to provide an update on our liquidity. Good afternoon. I will begin today by reviewing our financial results for our fiscal 20 21st quarter. I will then make some observations on the key drivers of shareholder value and our expectations for coming quarters. First, quarterly revenue was approximately $10,400,000 a 43% increase from the comparable prior year quarter. Sequentially, revenue increased from $10,200,000 Given that the Q1 is our slowest seasonal quarter with many students not taking classes during the summer months, we were pleased with the sequential increase. Revenue for Aspen's nursing plus other units increased by approximately $1,000,000 or 17% compared to last year's Q1. This is an area with solid economics as opposed to the 17% EBITDA margin in the Q1 and expect in the future over 20% margin on average in this area. Despite those economics, it is the lowest expected margin business within our current mix, and therefore, we have limited its growth in favor of other higher expected margin businesses. USU's revenues more than doubled from a year ago, and the prelicensure BSM programs revenue continue to grow at a rapid pace since the launch a year ago. Sequentially, these two programs' revenues grew 13% 52%, respectively. Together, they now account for 34% of our total revenue, up from 29% last quarter. NetScand Group's gross profit for the Q1 increased to approximately $5,800,000 from $3,300,000 last year, an increase of $2,500,000 or 74%. Gross margin was 56%, which is up from 46% last year, an improvement of 10 percentage points. We expect continued margin expansion as we continue to grow. Aspen University's gross profit represented 59% of Aspen University's revenue for the quarter, while USU's gross profit equaled 55% of its revenue for the quarter. Total instructional costs and services for the quarter rose to approximately $2,100,000 or 21% of revenue. For Aspen University, instructional costs and services represented 18% of revenue for the quarter, while USU's instructional costs and services equaled 28% of its revenue for the quarter. Marketing and promotional costs for the quarter were approximately $2,200,000 or 21% of revenue, declining from 23% as a percentage of revenue in the previous quarter. Aspen University's marketing and promotional costs were 20% of Aspen University's revenue for the quarter, down from 21% in the previous quarter. USU's marketing and promotional costs equaled 17% of USU's revenue for the quarter, down from 19% last quarter. General and administrative costs for the quarter were approximately $7,000,000 compared to approximately $5,800,000 during the comparable prior year quarter, an increase of $1,200,000 or 21%. This is in line with our expectations that G and A will grow at about half the growth rate of revenues, which were up 43% compared to the prior year quarter. Net loss applicable to shareholders was approximately $2,100,000 or diluted net loss per share of $0.11 for the quarter as compared to a net loss of $2,800,000 or $0.15 per share for the comparable prior year quarter. During the Q1, Amgen University generated approximately $900,000 of net income. USU experienced a net loss of approximately $400,000 and AGI Corporate incurred $2,600,000 of expenses. AGI's expenses were up sequentially about $400,000 largely due to expenses that are not expected to recur, including, for example, severance payments and recruiting costs for a new corporate controller. U. S. Used operating loss declined by about $750,000 compared to the Q1 of fiscal year 2019. USU's revenue increased by about $1,400,000 for that same 1 year period. As a result, USU achieved operating leverage of about 53%. We expect strong continued operating leverage on average as USU continues to grow in future quarters. With regard to our liquidity position, cash used in operations for the quarter was approximately $1,700,000 50% less than the amount used in the prior year quarter. Aspen Group ended the quarter with approximately $7,700,000 in cash and restricted cash. Together with our unused revolver of $5,000,000 we ended the quarter with $12,700,000 of liquidity resources, which we believe are adequate. Looking forward, we expect to deliver increased value to our shareholders by achieving 3 important financial targets: continued strong revenue growth, rapidly improving profitability and a path to substantial positive mid cash flow. Let's talk about each of those factors. We have a very strong track record of aggressively growing revenue. And as Mike Matthew said, we expect that to continue with 34% revenue growth or higher this fiscal year and at least 30% annual growth next fiscal year. With regard to profitability, we expect Aspen's nursing plus other units to continue to have double digit revenue growth and moderately improving margins. As noted earlier, this area already has solid profitability. USU is not yet profitable but has experienced strong operating leverage as revenues have increased significantly and expenses have grown at a much slower pace. We expect USU to reach positive net income within the next couple of quarters. We also expect its EBITDA margin to reach the mid-20s. Our pre licensure program is the fastest growing program and has the highest long term expected profitability level. As expected, most units turned profitable in the Q1 of fiscal year 2020, just 1 year after launch. We expect similar timing for the new campuses and also expect each new campus to generate over 30% EBITDA margins once it reaches maturity approximately 2 to 3 years after the launch of each campus. In aggregate for Aspen Group, we expect positive adjusted EBITDA every quarter going forward. Within a few quarters, we expect EBITDA to turn positive. A few quarters later, we achieve positive net income. So during our next fiscal year, we expect to hit an important milestone of reporting our first positive quarterly net income result. We also expect a strong positive trend with respect to cash flow. Obviously, the expected trends in earnings that I just discussed should contribute to improved cash from operations. In addition, we expect a favorable trend on average for working capital. Historically, our monthly payment plan has been a drag on our working capital to help finance our students' education. What side of that is we have an increasing number of graduates who continue to make MPP payments. In addition, we announced last quarter that we were changing the structure of the FMT of Britain sorry, changing the structure of the MPP program for USU's FNP program. That has now been implemented. It should contribute in the future a much more favorable working capital position. The increase in monthly payments at Aspen that Mike just announced will also improve the working capital position. We plan to continue to grow our pre licensure campus business and add 2 new campuses in calendar year 2020, as Mike also stated. However, as he indicated, we think we can limit the CapEx needed to launch those campuses. Relatively low initial CapEx, a quick path to profitability and a high expected margin all contribute to expectations from positive cash flow. In addition, we do not offer a monthly payment plan for this program, so we won't need working capital funding as we have in our other programs. Also, this should lead to a strong cash flow position for Aspen Group. As I've stated in the past, we continue to expect the company to be generating significant positive EBITDA, cash from operations and free cash flow by the fall of 2021, 2 years from now. And of course, we expect to hit some of those milestones there. That concludes our prepared remarks. I will now turn the call back to the operator for questions. Thank Our first question comes from Eric Martinuzzi with Wedbush Securities. Your line is now open. Yes, first, the comment and then the question. So congratulations to you on the 10,000 total active students. That's definitely a major milestone for you guys. So let me dive in on the question. I want to make sure I have the guidance correct here. You talked about at least 34% growth in fiscal 'twenty and then another 30% on top of that in fiscal 'twenty one. So just a quick back of the envelope math here would be $45,600,000 in 2020 and over $59,000,000 in 2021, is my math correct? Yes. It would be approximately $45,500,000 and then yes $59,000,000 You're correct. Terrific to see that. I'm wondering, the $59,000,000 is certainly well ahead of what I was modeling for fiscal 'twenty one. How much of that is driven by the 2 incremental hybrid campuses? And how much is maybe the price increase related? Bob, we haven't done a price increase. The changes that we made today simply require our new enrollments at Aston University, if they sign up for the monthly payment plan, to pay either $50 or $25 per month, respectively, whether it's a bachelor or a master student. We don't expect our 2 campuses next fiscal year because, of course, we are launching them after this current fiscal year. We don't expect them to have a significant material effect on that $59,000,000 The very strong $89,000,000 of bookings that we're estimating for this fiscal year will deliver that result of $59,000,000 plus. Okay. That's a good point to clarify. So not a change in tuition rates, but a change in the monthly payment plan per month. Is that correct? That's correct. We're simply asking them to pay a little bit more per month. And again, as we said in our earnings remarks today, we don't feel like that's a risk to our fundamental business model. Yes. That to me still seems like a manageable monthly payment for most families. The last thing I wanted to touch on here is the new hybrid campuses. You talked about CapEx there. Could you remind me what was the CapEx for the HonorHealth Hybrid Campus? Yes. HonorHealth ended up being just a touch over $1,200,000 And the agreement we had with that great organization, that great partner of ours, was to split the cost fifty-fifty. So it's slightly more than $600,000 for each of the partners and us. Got you. Okay. Thanks for taking my questions and congrats on the Q1 results. Thank you, Eric. Thank you. And our next question comes from Aaron Aftahi with ROTH Capital Partners. Your line is now open. Hey, guys. Thanks for taking my questions. It's really great to see the growth coupled with the cash burn reducing. If I could think back on Eric's question from a different light. So with Bayfront and Baylor Scott and White, given kind of the footprint of employees, Mike, can you talk about, is there a dynamic where customer acquisition costs is going to kind of under index given there will be a nice fire hose to bring some in terms of potential candidates? And as you think about future campuses in addition to the dynamics like population growth, etcetera, is that something that you are focusing on? Well, I mean, needless to say, there's multiple variables that go into making a decision to enter a major metro market, such as in Austin or Tampa. The first and most important critical variable for us is to ensure that we have a clinical partnership with the gorilla healthcare conglomerate in that metro. And we were able to accomplish that in both cases. That's critical for us because when we enter our market, we want to be able to build a very large campus. And you can't do that if you don't have the clinical places available. So that's the first critical component. The second for us is, again, we want a very large metro market, 2,000,000 plus population. And we feel very confident having the what we do is we have conversations with these clinical partners to understand not only what places they have available, but the potential for recruiting various employees within their organization and also their expansion plans. So for example, we talked to Baylor Scott White about not only potentially opening Austin, but other metros in Texas. And they recommended we go to Austin first because they're launching a new hospital there, which is their 3rd or 4th in the metro. So the point I'm making here is that we make these kinds of strategic decisions very carefully and in very close concert with our partners. That's helpful. Then a question on the pre licensure business. Joe, you rattled up a bunch of numbers. Did I hear you correctly saying that the initial clinic campus is already profitable at this point? Yes, that's right. Last quarter, we announced our expectations that it would turn profitable this quarter, and we're now announcing that it did. We expect similar results 4 or maybe 5 quarters after launch, our future campuses should be profitable. Got it. So when we think about kind of the balance of the Phoenix campus and how that can help fund some of these newer campuses, how should we kind of think about that dynamic? Sure. So when a campus gets to maturity, which takes about 3 years, we're expecting it to be generating about $9,000,000 of revenue. And as I said, we expect over 30% EBITDA margins at that point in time. The other end of the spectrum for our newly launched campus, There's we talked about the initial CapEx, Mike mentioned that. Then there's also the operating loss during the 1st year, which is about $500,000 So it is a little bit of a drag during the 1st year. But given that it's, as I said, a low investment, quick turnaround and then a high profitability, it makes a lot of sense to grow that aggressively. Got it. And I'm just kind of curious, one last question for me. The underlying assumption on the margins on pre licensure, I assume that transcends into other campuses. What's kind of the assumed longer term customer acquisition costs that is in that assumption? Well, I mean, right now, since we launched our Phoenix operation, and of course, we've in the last several months, we've begun enrolling students in our HonorHealth, our 2nd campus. As you guys know, it's we've remained under $500 We don't have an expectation that it's going to remain at $500 I mean, I'd love to be here in the next several quarters and tell you that we accomplished that. But we think if we can keep the enrollment cost below $1,000 that, that would be an outstanding result. Thank you. Thank you, Dan. Thank you. Our next question comes from Mike Malouf with Craig Hallum. Your line is now open. Great. Thanks for taking my questions and well done this quarter. Nice to see. Thanks, Mike. Just a question on the USU change that you did last on last quarter you announced. Can you talk a little bit about, are you getting any kind of change in behavior? You commented that you expect still 150 enrollments regularly. And I'm just wondering if how confident are you in that? And have you seen any kind of change? Yes. So we've been averaging about 1 150 enrollments per month for a number of months now. And it wasn't until we announced this monthly payment plan change that we had a flow in of kind of an incremental 10% over the couple of weeks that preceded the end of this quarter. We still continue to believe that, that run rate that we've had for a number of months, $150,000,000 per month, is going to remain in that range. And in future quarters, we'll give you guys some heads up in terms of what our marketing spend plan is and the call center size plan is. We believe that we have some nice room for growth in the FMT program. But at this point, we're still, again, targeting $150 per month. In the future quarters, we could announce somewhat of an increase in that. Got it. Okay. That's helpful. And then as you engaged with these other institutions in Tampa and in Austin, I wondered if you could give us just a little bit of color with regards to your conversations on how the program, as you sort of laid it out, did it change at all? Is it roughly basically sticky cutter thing or is it pretty custom between each entity? I'm just trying to get a sense of how that process went. Yes. Great question. So yes, the our innovative program, which we created in Phoenix, where 69% of the credits are online, And of course, it's a 3 year accelerated BSN, which totals about $47,000 So we're planning to keep that exact same program, which is proving to be very, very successful and very, very attractive to prospective students. We're going to keep that model exactly as is as we expand to these 2 new metros. But we don't plan any changes. And one other thing I wanted to mention is that as we started looking for locations, both in terms of leases, both in Austin as well as in Tampa, one of the things we realized is because the for profit education industry has there's been a number of for profits that have gone out of business or contracted. There are a handful of campuses available in each of these metros that we can pick from that are in some cases fully built out that we can strategically do a deal with the landlord to put a lot of the FF and E into the TI. And as a consequence, we've come up with a really interesting strategy about sort of CapEx light approach. And so we're pretty pleased with that. And it's again, it's an opportunity that we started to uncover as we started to do tours of those metros. Thank you. And our next question comes from Austin Moldow with Canaccord. Your line is now open. Hi, congrats on the quarter and thanks for taking my questions. My first one is on your new student enrollment growth guidance that you gave last quarter. Just wondering if you could comment on where you stand on those rates that you threw out there given that you have 1 quarter under your belt now? Yes. I mean, so we called for enrollment growth in each of our 4 units, and we sort of specified for each of those last quarter. We expect to overachieve at a minimum in our USU FNP unit as well as in our pre licensure VFN unit. The other two units, I would sort of keep the forecast in the same range that we've had before. Our plan would be next quarter to provide some more details once we complete the enrollment for the current Q2 and give an update on the full year enrollment plans. But right now, we'd like to keep the forecast as is where it's $89,000,000 total of bookings. Got it. And then turning to marketing. I know you'll be committing more marketing dollars towards your higher LTE programs. But wondering if you could give anything more specific on your outlook for spending in marketing expenses in the 3 program segments? Yes. So our Aspen Online Nursing Plus Other, our traditional Aspen post licensure online business, we mentioned previously that we're looking to increase our enrollments year over year by about 15%. And that's going to be more the increase in that business is going to be more heavily weighted toward the second half of the fiscal year as we need time to increase the call center. As you probably noticed, our CAC for our traditional business actually went down this quarter, which we're very pleased about. And so at this point, we are planning that 15% increase. But as we continue to increase the call center, we may decide to spend more in that area. As we've mentioned before, the primary increases are going to be in our pre licensure business and our USU FNP business. And you'll see us continuing to increase that on a material basis sequentially, probably by, I would say, 15% to 20%. Got it. And I want to ask one more maybe more philosophical question on the pace that you're building the pre licensure campuses at. Is the reason for the 2 campuses a year based more on finding the time it takes to find the right metro and the leases? Or is it mainly a cash constraint? And are there variables that, if they changed, would lead you to maybe get more aggressive in your rollout strategy? If you could just talk through your general thoughts on that. Yes, that's a great question, Austin. I have to tell you that I'm a big believer in focus and operational execution. So I don't know if we had the liquidity resources available. I don't know if we do more than 2 a year because I want to make sure when I go to a new metro that we are very successful. But yes, I mean, to be honest, we have 3 metro markets kind of in mind already following Austin and Tampa. So yes, we could go quicker. And again, at this point in time, quick deal like we'd like to do these 2 in this next calendar year, and we want to make sure we're operationally effective, and then we'll take it from there. Got it. That's really helpful. And then my last question, if I can, is just on the competition. The for profit industry has faced a lot of headwinds, but there are a couple that have survived and some have been more flexible and converted back to non profits. Wondering if you're what you're seeing in terms of competition as maybe in the marketing environment, are things are prices going up because you're more people are crowding into the market? Or do you find yourself going up against peers when you look at leases? Yes. So yes, great questions. So first of all, I mean, I'll capture the first question first. We there are not many competitors in the Austin and Tampa metro market. That's again one of the variables we look at when we make a decision. There are a handful, but the competition in those markets is not significant. So we're pretty confident in these two metros are going to be very, very effective for us. What's the second question? Sorry. Leases, if you're running into peers there. Oh, yes, not at all. Yes, we're from a lease point of view, we're kind of locking in on one specific location in Austin, and it is a existing university that's downsizing. And the Tampa location is a situation where we have a couple of different opportunities and one of them is actually both of them are universities that are looking to expand beyond the space that they have. So Tampa is a unique metro where there's not a ton of commercial real estate occupancy supply in that market. So both the markets are a little bit different in terms of how we're strategizing and with the leases that we're going to complete. Thank you. Ladies and gentlemen, this concludes your question and answer session. I would now like to turn the call back over to Michael Matthews, CEO, for any closing remarks. Thank you, everyone. Look forward to having an earnings call in 90 days, and appreciate everyone's attendance today and the great questions that we received from the analysts. Talk soon. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone, have a wonderful day.