Aspen Group, Inc. (ASPU) Q4 2018 Earnings Call Transcript
Published at 2018-07-12 16:30:00
Janet Gill - Chief Financial Officer Michael Mathews - Chairman and Chief Executive Officer
Darren Aftahi - ROTH Capital Partners Eric Martinuzzi - Lake Street Capital Mike Malouf - Craig-Hallum Capital Howard Halpern - Taglich Brothers Jamie DeYoung - Goudy Park Capital
Good day ladies and gentlemen, and welcome to the Aspen Group Inc., Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Ms. Janet Gill, CFO. You may begin.
Thank you. Good afternoon. My name is Janet Gill, Aspen's Chief Financial Officer. Thank you for joining us today for Aspen Group's fiscal year 2018 fourth quarter 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 expectations regarding student enrollments and other metrics, revenue guidance, EBITDA and adjusted EBITDA. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. A discussion of risks and uncertainties related to our business is contained in our filings with the Securities and Exchange Commission mentioned in our press release issued this afternoon. Aspen Group disclaims any obligation to update any forward-looking statements as a result of future developments. Also I'd like to remind you that during the course of this conference call, we will discuss adjusted EBITDA and EBITDA, which are non-GAAP financial measures in talking about the company's performance. Reconciliations are 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 a conference call available for one year at the company's Web site. I will begin today by reviewing our financial results for our fiscal 2018 fourth quarter. Then, will turn the call over to the Chairman and CEO of Aspen Group, Mr. Michael Matthews. To open, quarterly revenues were $7,225,029, a 68% increase from the comparable prior year period. As previously announced the company delivered a record 1273 new student enrollments for the quarter with 980 in Aspen's traditional nursing and other programs, 116 was in Aspen's new doctoral program and 177 were in the USU, FNP and other programs. Please note that today we will focus on four types of programs, Aspen University's nursing and other undergraduate and master programs, Aspen University's doctoral program, Aspen University's brand new hybrid online on-campus program, and USU's family nurse practitioner and other programs. From year-over-year perspective, Aspen University had 834 enrollments in Q4 2017 removing conditional excess. Therefore, the 1096 Aspen University enrollments in Q4 2018 represent an increase of 31% over the comparable prior year period including USU enrollments, the company's 1273 new student enrollments for the quarter represented a 53% increase from the comparable prior year period. Aspen University's increase in revenues was primarily a result of new class starts rising by 42% year-over-year. While USU revenues contributed nearly 15% of the quarterly revenues for the company rising at a faster pace than that was previously projected approximately 10% for the quarter. Aspen Group's gross profit for the fourth quarter increased just $3,506,254 or 49% margin representing 36% increase year-over-year. Aspen University gross profit represented 57% of Aspen University revenues for the quarter, while USU gross profit equaled 27% of USU revenues for the quarter. Instructional costs and services for the quarter rose to $1,531,173 or 21% of revenues. Aspen University instructional costs and services represented 18% of Aspen University revenues for the quarter, while USU instructional costs and services equal 38% of USU revenues for the quarter. As USU's revenues grow, we expect that its percentage of instructional costs will decline. Marketing and promotional costs for the quarter were $2,039,832 or 28% of revenues. Aspen University marketing and promotional [cost][ph] represented 23% of Aspen University revenues for the quarter, while USU marketing and promotional [cost][ph] equal 35% of USU revenues for the quarter. Again, as USU's revenues grow, we expect that its percentage of marketing and promotional [costs][ph] will decline. Also included in marketing and promotional [cost][ph], are expenses associated with the AGI outside sales force. G&A cost for the quarter were $5,353,495 compared to $2,859,186 during the comparable prior year period, an increase of $2,494,309 or 87%. Aspen University G&A cost represented 27% of Aspen University revenues for the quarter, while USU G&A cost equaled 103% of USU revenues for the quarter. Clearly, we see this percentage decreasing substantially as USU's revenues grow. Aspen Group Inc's corporate G&A cost for the quarter equals approximately $1.46 million including corporate employees in the New York corporate office, IT employees, rent, non-cash, AGI's stock-based compensation and professional fees. Net loss applicable to shareholders was $3,664,485 or diluted net loss per share of $0.26 for the quarter as compared to a loss of $723,729 for the comparable prior year period, an increase in the loss of $2,940,756. Aspen University generated $900,000 of operating income for the quarter. USU experienced an operating loss of $1.29 million during the quarter, while AGI corporate contributed $3.28 million of operating expenses in the quarter which included the one-time $1.5 million interest expense related to the extinguishment of the $10 million credit facility. Excluding the one-time $1.5 million interest expense, the adjusted diluted net loss per share a non-GAAP financial measure was a negative $0.15. Finally, during April 2018, the company raised $23 million gross through the sale of 3.2 million shares of common stock at $7.15 per share. After operating expenses, the company increased its cash by approximately $21 million. AGI then extinguished the $10 million credit facility. The cash balance at April 30, 2018 was $14.6 million and total assets are now $41.6 million. Total liabilities are $7.9 million of which $6.8 million are current. At fiscal year-end stockholders equity was $33.7 million. Now, I will turn the call over to Michael Matthews to provide additional color on our fourth quarter results and to provide an operational update and guidance for our first fiscal quarter.
Thanks, Janet. Good afternoon everyone. We've been very much looking forward to today's earnings call as this is the first quarter that USU is fully in our numbers and we now have four business units to discuss; our traditional Aspen business which is predominantly nursing, our new Aspen doctoral business, our new USU business which is predominantly FNP, and finally, our new pre-licensure BSN hybrid degree program, which began its first semester two days ago, in our initial campus in Phoenix. When I refer to Aspen Nursing or Aspen, it includes the other undergraduate and graduate programs other than doctoral except when the context otherwise makes clear and when I to refer to USU it includes FNP and their other programs. As mentioned by Janet earlier, our new student enrollments for our traditional Aspen business rose to 980 an increase of 18% year-over-year. Internet advertising spending for that unit was up about 30% year-over-year. So our rolling six month average cost of enrollment, which we describe as COE rose moderately on a sequential basis from a $1051 to $1124. This analysis of course compares unconditional enrollments only. To moderate COE increase is partly due to our conversion rate slightly declining from 13.6% to 12.3% which isn't surprising as the previous January quarter includes one of the best enrollment months of the year, which of course is the month of January. Our LTV projection for the traditional Aspen unit now that we're only enrolling students on an unconditional basis is $7,350. Therefore, our marketing efficiency ratio which is defined as revenue per enrolment over cost per enrollment currently sits at 6.5x. Last quarter with our first full quarter marketing Aspen's doctoral programs and it was staffed with a team of six enrollment advisors or EAs. They enrolled 116 doctoral students for the quarter, so the average, the respectable 6.4 enrollments per month per EA. When you consider that we just started advertising for this program, which means there's little to no organic for referral leads in these early days, the cost of enrollment for the quarter is a pretty respectable $2,159. We expect our COE to decline over the next year as we continue to build [EGAs] [ph] database with doctoral leads and as the organic and/or referral lead counts increase over time. The good news is, we're projecting the LTV to be $12,600 in this doctoral unit, which is a 71% higher LTV than our traditional Aspen business. Assuming our doctoral COE declines in the next year, we're projecting our marketing efficiency ratio for the doctoral business to rise from its current 5.8x to a ratio equal to or higher than our traditional business, which I just indicated sits at 6.5x. Okay, let's move to USU. As this is the most significant unit economic news of the day. Our new USU new unit which is primarily FNP delivered 177 new student enrollments for the quarter given an enrollment staffing level of eight EAs at the strong 7.4 enrollments per month per EA. It's especially noteworthy based on the fact that USU to-date has limited the number of FNP enrollments to 75 every other month. Based on discussions with the California Board of Registered Nursing, which we call the CABRN. Therefore, our initial COE of $1955 is artificially high relative to the potential enrollment demand. Note that USU is in the process of undergoing the standard program review with the CABRN and should that limit the increase allowing us to enroll more than 75 students every other month than the COE would be expected to decline thereafter. Here's the good news. Given the FNP program is a structured two year program, in other words it has to be completed start to finish in two years. And given the tuition fees are approximately 27,000, we're projecting the LTV to be $17,820 in this unit, which is 142% higher than the LTV of our traditional Aspen business. That means our marketing efficiency ratio in this unit is projected to be 9.1x. Our final business update today is our pre-licensure BSN hybrid online/on-campus program as the first semester just started on Tuesday this week. When we announced the program four months ago and discussed the Phoenix market, we mentioned that there were a significant waitlist in Phoenix for qualified students wanting to enter a pre-licensure nursing program. So we predicted that demand for our program would be strong particularly given its innovative nature and the cost effectiveness of our program. Well, that's exactly what we've experienced. In addition to some social media marketing, we spent only about $5000 per week over five weeks for a total of $25,000 on local radio and have enrolled 93 students in our first July semester of which 29 entered with all the prerequisites completed thereby entering the final two year core nursing program. The remaining 64 students are enrolled in general education and prerequisite courses, which must be completed before being admitted into the two-year core nursing program. So our COE for the campus business is literally less than $300. Additionally, 28 of the 64 [gen ed] [ph] students that started in July are anticipated to be ready to enter the two year core nursing program for our upcoming semester starting on November 13. Therefore, we anticipate having a waitlist for our final two year core nursing program for the remainder of the academic year, which includes both our November and March semesters because of the overwhelming demand for our nursing program in Phoenix, the company several weeks ago began assessing alternative approaches that would allow Aspen University to open a second campus in Phoenix during calendar year 2019. Stay tuned for an announcement related to this in the near future. I'll end my prepared remarks today by providing the seasonality briefings and top-line guidance for the first quarter. As I discussed at length a year ago and as we continue to scale, seasonality has become more pronounced specifically our first fiscal quarter May through July is the seasonal low point because it falls during the summer months and therefore our primarily working professional students tend to take less courses in that quarter relative to the other three quarters. By way of example, a year ago in Q4 of fiscal '17 revenues were $4,289,230. In the following quarter fiscal Q1 2018, revenues sequentially declined by 1% or $46,344 to $4,242,886. The following quarter fiscal Q2 2018, revenues rose sequentially by 14% or $608,753 to a total of $4,851,639. The company expects the same seasonality effect to occur in the first quarter of the fiscal year 2019. Specifically Aspen University revenues are expected to decline in Q1 relative to Q4 similar to the prior fiscal year. However, overall company revenues are expected to be flat in Q1 relative to Q4 given the revenue contribution from USU. Although revenues are expected to be flat sequentially on a year-over-year basis the company growth rate in Q1 is in fact forecasted to accelerate to approximately 70% year-over-year. That ends our prepared comments for the afternoon. Now we'd like to open the call to address any questions.
[Operator Instructions] Our first question is from Darren Aftahi from ROTH Capital Partners. Your line is now open.
Yes. Hi, Mike. Hi, Janet. Thanks for taking my questions and appreciate all the detail on the release. So I just had a handful, first just on the delta between the compositions for monthly payments for Aspen core and then USU as well as the gross margin. Can you just speak to those kind of 2 numbers, I understand USU is kind of ramping up but should we see the monthly payment numbers and gross margins on those two businesses start to mirror Aspen over time? Then, I've got a couple of follow ups.
Yes. Good afternoon, Darren. Mike Matthews. First of all, we announced in our press release earlier today that USU students that are on the monthly payment plan represent 53% of the active student body. As you know Aspen is significantly higher than that in the 70% range. So, the only reason those percentages aren't similar is because we just began the monthly payment plan for USU three, four quarters ago and it's going to take time to get into that 70% range, but we fully expect that's in fact going to happen. The other question you're asking is about gross margin of USU versus Aspen. And as you could tell by the announcement we just made that we believe that our MER, our marketing efficiency ratio for USU is projected to be 9.1x versus our traditional business which sits at 6.5x. So we expect gross margins for USU to be materially higher than the history of Aspen because of the higher -- the higher MER as a result of the FNP program which is a structured two year program we earned 27,000 in a very rapid 2 year period versus our traditional Aspen business where students, they finished in two years on average but many, many students finished in year three and four.
Great. And then, on your cost of enrollment and LTV, so if I just going to handicap the numbers you have in the release and use kind of 25% organic referrals my math works out, I guess in another way if I'm diluting your cost of enrollment by that amount for doctoral and USU, I sort of come up with a 8x to maybe 12x for those two segments. I guess is there anything that would be a potential headwind to my logic. And then, just beyond that if you are able to expand the enrollment within USU away from the 75 every other month, does that 12 number at the cap have upside? And then, my last question, this relates to bad debt it looks like sequentially that number jumped sequentially. I'm just kind of curious if you could speak to what was the cause of that? Thanks.
Sure. Hi, Darren. During this year, we did a very detailed review of every balance. As you know, we completed a program review -- was completed about 18 months ago and so we've done a lot of collection effort based on that and we made a decision that at the end of the day any balances -- a good load of those balances are quite old, we wrote them all off and we just felt that it was cleaner moving forward. Yes, we did collect a lot of it, exactly, but so we did write it off and then we evaluated what we would need for going forward for reserve.
In terms of your other question Darren. Yes, I think you've analyzed that properly. Aspen today has the benefit because we started marketing Aspen in a significant way in 2012. And then, we really upped the budget when we got the CCNA accreditation for our BSN -- are into BSN program in November of 2014. So we have a good 3 to 4 years of advertising and of course enrolling thousands of students. And when you get to that size you're going to naturally have a fairly significant increase in organic and referral enrollments. And you're correct, we're in that sort of 20% to 25% range today. It's going to take quite a bit of time for those brand new programs to get to anywhere near that level. So we do expect that, if we're able to work with the California BRN this month and if we lift that 75 enrollment cap which is over every other month currently then clearly we think the cost of enrollment for FNP could decline quite appreciably.
Thank you. Our next question is from Eric Martinuzzi from Lake Street Capital. Your line is now open.
Thanks. I'm curious, I want to sort of pick apart the organic growth rate of the April quarter. And you talked about USU being about 15, just under 15% of revenue. So if I do some quick math there, I'm coming up with -- on the legacy business about 43% organic growth rate. So just subtracting about $1.1 million from the 7.2 and then comparing it to a year ago. Does that 43% organic number sound correct?
Yes. That's in the right range.
And understand that our spend rate on a marketing basis for our traditional business is and in like the 30% to 35% range. So we obviously shifted budgets recently into the doctoral category as well as of course spending significant investment dollars with USU.
Yes. That makes sense. And then --
I mean if I could just add one other thing I'm sorry to interrupt there, but historically last fiscal year we averaged about $320,000 spend rate per month. And we're over $600,000 now if you look at all of our program. So the overall spending increase is quite significant. I didn't want anyone on the call to think that we're being conservative because we're certainly not.
The color by segments appreciate it, just taking a look at that EBITDA obviously, or may be EBITDA, I think you broke it out by operating income loss on the USU. Going back to the kind of where does that USU need to get to, to get to breakeven as far as the revenue run rates of that business again $1.1 million last quarter roughly $350,000 a month, if we double that, it seems to me we're still given the gross margin assumption, we're still probably not breakeven. But what's your own -- give an internal forecast as to when that it's going to self-sustaining from an operating income perspective?
Yes. We're looking at our operating income to be about breakeven on USU by around the end of our fiscal year this year.
The revenues should be at least double what they are in terms of run rate today.
Okay. As I look at my own model given your commentary on the seasonality of Q1 versus Q4 and Q2 versus Q1, I'm probably just a little bit high for both those quarters. I don't know if you care to comment. The consensus number for 2019 is $39 million. Is that something that I'm just wondering, is this just a question of the back half is going to be that much stronger and then the front half has its seasonality issues or is that -- are you comfortable with that $39 million?
Well, I mean as a company, we have 3 new business units, now we were a business the last several years of having essentially one business and now we have four including of course the campus business. So for us, we've decided that we're just going to provide revenue guidance quarter-by-quarter at this point because there's so many new and different moving parts. So anyway, so we're just providing the guidance for this quarter and then in our next call we will provide guidance for the following.
Understand. Okay. And then, last question for me. The second to last question, you added a Chief Nursing Officer, Anne McNamara that news was, I guess it's end of May you put the news out. But, the implication there was -- we are going to be expanding beyond Phoenix. I know in your prepared remarks today you talked about potentially having another campus in the Phoenix metro. What about other campuses outside of Phoenix Metro. What's the growth expectation and the reason that you brought on a new Chief Nursing Officer?
Yes. You are reading the tea leaves very well there. So number one, I expect us to make an announcement relatively soon about a second campus in Phoenix because we knew that we're going to have overwhelming demand in Phoenix than even we were. Our great expectations were actually surpassed in a very short period of time only five weeks of marketing. We have a very innovative approach to expanding beyond our existing campus in Phoenix and then we'll of course talk about that in detail when we're able to make the announcement. We also have employed a third-party to do some consulting work on our behalf to very carefully study the major metros in the United States from a supply and demand and waitlist analysis point of view. And we expect to make some announcements over the coming quarters as to any other market that we might -- that we might look to enter over some given timeframe. So we are looking to expand outside of Arizona, yes.
Okay. And then, the last question is a housekeeping item for Janet. You had the equity raise kind of mid-quarter, curious to know what the current basic shares outstanding are. I assume the number will be on the front page of the 10-K whenever that gets filed. But, where are we at and…
It's $18.3 million today and today will be $18.3 million. So…
Eric, when we filed the K tomorrow, you will see that their share count is 14.2 million. That was what it was for the fourth quarter that goes back to the EPS this quarter and we just announced. And then, for the quarter that we're in, now we have the rise in place, our current outstanding share count for the full quarter will be 18.2. Sorry, 18.3, I apologize, 18.3.
Okay. That's helpful. Thank you for taking my questions.
Thank you. Our next question is from Mike Malouf from Craig-Hallum Capital. Your line is now open.
Great. Thanks for taking my questions. I wonder if you could just focus a little bit more on the doctoral program. Can you give us a little bit of sense of how big you think that that opportunity is? What's the competition like in there and what as you look at over the next couple of years? How big that could that be for you?
Good afternoon, Mike. Mike Matthews. How are you?
So the doctoral program is a relatively significant sized business. Just to give you a kind of a feel for addressable market. Our RN to BSN program, as I think you're aware there's about 50,000 nurses that begin or RN to BSN programs every year. The FNP category is -- there is about 30,000 nurse practitioners, sorry nursing students that enter nurse practitioner programs each year. The doctoral category is about 15,000 per year. Now please understand that the doctoral start in the United States is much higher than that. But the programs that we offer are addressable market is in that 15,000 per year range. So it's 50,000, 30,000 and then 15,000, if you look at our three major programs that are online.
Great. So then when you take a look at the difference in costs, it's bumping up against the BSN program in size. And what about competition?
Yes. There's excellent competition across all categories of higher education. So we compete against your traditional non-profit public. We of course compete with traditional private non-profit universities and of course, the four profits. And most recently accredited schools offer doctoral programs.
Okay. And then with regards to the FNP program, you're obviously limited to 75 every other month and I know you're trying to get higher. What could that number go to or what are you asking for?
Well, it's not really, it doesn't work that way. So the California BRN asked us for as part of the process. They asked us for a growth plan and we provide them an idea of how many students that we'd like to enroll over a five year period both in the state of California as well as across the United States. And they don't really come back to us and say yes or no, it's more of discussion and somewhat of a negotiation. So, but to answer your question specifically, we'd like to see that enrollment level lifted from 75 to 150.
So it'd be basically 75 a month. So that's what you are sort of thinking?
Yes. That we double our current run rate. Yes.
Got it. Okay, great. And then, just a final question, I know that you had talked about taking USU kind of national and really addressing that need for a number of people out there that are sitting on credits but that don't have degrees. And I'm just wondering if you can give us an update with regards to those plans?
Yes, sure. No problem. One of the limitations of USU when we acquired them which we knew going in was that they only had a couple of undergraduates what's called Bachelor Completion Programs within the university. So they obviously have a nursing program undergraduate. They have an education program undergraduate and they have a nice business program with a series of excellent specializations. But that's all they had other than health sciences. So we are in the process of working with the regional accreditor WASC to begin a very significant technology degree program with a number of specializations. And we're also then going to subsequently look to launch a professional study school which would include programs like psychology and criminal justice and a number of others. In order to prepare ourselves to have -- we need a very broad suite of bachelor completion programs in order to go to the mass market in an effective manner. So it's going to take us a little bit of time before we'll be ready.
Okay, great. Thanks. Thanks for the color. Appreciate it.
Thank you. Our next question is from Howard Halpern from Taglich Brothers. Your line is now open.
Hi Mike. Thanks for taking my question.
Just well to start off, I don't know if you had mentioned it earlier, but what is the annual value of a monthly payment plan now.
So the total contractual value of the approximately 4000 students today is $35 million. That's the [indiscernible] of full tale that if you took every monthly payment plan student and ran the math is to how many payments are left. That would be your total.
Okay. And moving to the enrollment advisors, could you breakdown I guess how many total you have and then for each segment or each business unit now?
Yes. Again, I don't have the numbers right in front of me, but the previous numbers that I gave were as we ended April 30 and we've increased the center since then. So I believe we have 6 enrollment advisors in our doctoral group today. We have I believe 12 enrollment advisors in our USU unit. And I want to say we're in the high 50s range could be as high as 60 today in terms of the traditional Aspen business. Again Howard, I don't have the numbers exactly in front of me, I apologize.
Okay. And for the doctoral program, how do you envision I guess that referral program building as I guess built for the traditional Aspen business?
Well, so we have three doctoral programs. Okay. So we have a doctorate in computer science, doctorate in education and of course our BNP, our doctorate of nursing practice. And so there's -- we use our traditional marketing methods, which is Internet advertising as well as social media. And we also are now using our outside sales force which we launched in January to help call on in the case of the education sector to call on K through 12 districts and of course hospitals for potential BNP students. So it's a combination of our traditional Internet advertising supported by the umbrella outside sales force.
Okay. Well, thanks and keep the great work.
Thank you. Our next question is from Jamie DeYoung from Goudy Park Capital. Your line is now open.
Good afternoon, Mike, Janet. Congratulations on a strong quarter, really impressed, it has got Aspen -- core Aspen back to profitability, sub-20 million in revenue. So that's a really impressive feet congratulations.
Just had a couple of questions for you. Can you give us an update on what the addressable nursing market is today that Aspen and USU are targeting?
Yes, sure. There's approximately 2.7 million RNs employed in the U.S. today with about 234,000 or nearly 10% are nurse practitioners. The AACN reported recently that there's about 450 magnet hospitals in the U.S. which is only 10% of all hospitals. Of course to become a magnet Hospital, one of the parameters is that you have to employ at least 80% of your nurses have to be BSN prepared. So we see our largest program Aspen's RN to BSN program will continue to enjoy very strong demand for the coming years. It's been reported I mentioned earlier that about 50,000 starts occur each year for RN to BSN completion program and we see no slowdown to that demand in the coming years. Nurse practitioners start, I mentioned to Howard earlier projected average about 30,000 per year, while doctoral starts as I just mentioned are projected to be about 15,000 per year for the three degree programs that we offer in that category. Finally I know you didn't ask about this, but in terms of the BSN pre-licensure addressable market there's just over 6500 pre-licensure students in Arizona today which represents about 3.5% of the pre-licensure enrollments in the U.S.
Great. That's helpful. Thank you. You exited fiscal year 2018 with approximately 6500 enrollments at Aspen and 557 at USU. Can you give me a sense of what the revenue run rate would look like for the company when you're at 12000 enrollments at Aspen and 3000 at USU?
What Jamie, you couldn't get a more specific question if you tried. All right, well. Okay well let me try to break it down for you. Aspen's traditional business, which has an annual run rate today of about $25 million what's about as you said 6500 students. That implies an annual revenue per active student of about $3850. Again that's annualized. So assuming we have 10,000 enrollments in Aspen's traditional business then we would project an annual run rate for the traditional business of about 38 million. If we had an additional 1000 doctoral students at Aspen and another 1000 BSN pre-licensure students, I would project those two businesses would increase the annual run rate by an additional $20 million. USU is expected to have an annual revenue per active student at least double Aspen's $3850. So your question I think was 3000 USU students. So, if you have 3000 USU students which is more than double the $3850, you're looking at approximately what $23 million, I think that math. So all told if the breakout is, as you described is 15,000 total students, then I think you're implying that the revenue run rate at that point would be -- if I'm doing my math right, that would be over 80 million.
Got you. Actual booked revenue of over $80 million, but a run rate of approximately twice that, right.
I think it's the other way around. In other words the annualized revenue run rate would be over 80. But the booked revenue would be around about twice of that. Yes.
Okay. And so then suffice to say that when you reach that level of enrollments you'll still be capturing less than 10% of your addressable market in each of these three categories on an annualized basis?
Yes. Oh, yes. Of course, yes. Because again you're only talking about what is it 10,000, 1000, 1000 and then 3000, so, yes, there is none of those would be anywhere near 10% correct.
Got it. All right. That's helpful. Sounds like you've got a long runway still to go here. Thanks so much Mike.
Thank you. Our next question is from Darren Aftahi from ROTH Capital Partners. Your line is now open.
Yes. I just want to ask a follow up, read in the release. But when you say adding a new potential campus in calendar year 2019 or fiscal year '19 I just want to clarify that calendar?
If there is a possibility exists we could do it by the end of the fiscal. But I just didn't want to project that yet.
Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to Michael Mathews CEO for closing remarks.
Thank you everyone especially for your questions today. I want to thank everyone for joining us this afternoon and our team here looks forward to talking with you again soon. Have a good afternoon.
Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect.