Helping Higher Education Prosper Investor Presentation Symbol: ELRN - - PowerPoint PPT Presentation

Helping Higher Education Prosper

Investor Presentation December 2014 Symbol: ELRN www.greenwoodhall.com

The information in this presentation may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding Greenwood Hall’s business strategy as well as other statements that are not historical facts. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements. Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, Greenwood Hall does not have any intention or obligation to publicly update or revise any forward-looking statements after Greenwood Hall distributes this document, whether to reflect any future events or circumstances or otherwise. For a discussion of potential risks and uncertainties, please refer to the risk factors listed in Greenwood Hall’s SEC filings.

Forward-Looking Statements

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Greenwood Hall Snapshot

Greenwood Hall helps public and not-for-profit higher education institutions generate sustainable improvements in operating and financial results while improving student success and satisfaction.

• Education business launched in 2006
• Unique end-to-end, tech-enabled education management solutions
• Focused on public and not-for-profit colleges and universities, planned expansion into

K-12

• Established position – having served > 40 education clients and >70 degree programs
• Approximately 150 employees
• Headquartered in Santa Ana, with facilities in College Station, Texas, Phoenix, Arizona

and Shanghai, China

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Investment Highlights

• Leader in education management solutions for not-for-profit and public universities and

colleges – a market ripe for disruption

• Unique end-to-end technology-enabled solutions
• $2.2+ billion addressable market* with current penetration of less than 1%
• Demonstrated track record of delivering tangible value to clients
• Proven and scalable operating model positions Greenwood Hall for strong growth
• Clearly defined technology roadmap to expand offerings globally and in K-12
• Experienced leadership; distinguished board and advisors

One of a few publicly traded companies in emerging, high-growth education technology sector.

* Company estimate

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Secular Trends Disrupting the Education Market

• Declining enrollments
• Unsustainable economic model
• Increased regulatory and demands for accountability = Focus on Student Success
• Many long-term growth drivers bode well for education market

» Economy will create 55 million job openings by 2020, 65% of which will require postsecondary

education*

» Increasing demand for skilled workers, growing participation of non-traditional students and

acceptance of online programs

• Tech-savvy students expect flexible delivery of education, personalized experience and ROI on

education spend

• Technology, specifically mobile and social, is ubiquitous and a ‘must have’ to stay competitive
• Predictive data analytics and data-based decision making are critical to success

Addressable market of >$2.2 billion in the U.S. alone; >4,700 colleges and universities.

*Georgetown University Center on Education and the Workforce

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Only End-to-End Student Lifecycle Management Solution

Recruitment & Counseling Coaching Student Services Career Placement Alumni Relations

School Focuses

Brand & Value Instruction Competency Academic ROI

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Growing Client List of Prestigious Institutions

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Producing Results for Schools and Students

Since 2006 launch, measured benefits to clients include:

• Generated >31,000 new enrollments
• Secured >27,400 continuing enrollments
• Generated >$9.1 million in marketing budget savings for one client alone
• Reduced cost of student services by an average of 41% (excluding intangible costs)
• Reduced cost of student acquisition by an average of >36%, or up to $8,500 per student
• 35%-50% client ROI

Key Greenwood Hall achievements since 2007 include:

• Served >450,000 traditional and non-traditional students
• Processed >5.6 million student calls
• Answered 95% of all calls for service (admissions, financial aid, student services) compared to the

average for all institutions of <65%

• Supported schools with job placement rates of approximately 90%

Greenwood Hall has generated >$270 million of tuition revenue for its clients.

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Case Study: Saint Leo University

Client: Founded in 1889, Saint Leo University is a leading Catholic teaching institution that enrolls a total of more than16,000 students annually across its traditional Florida campus, more than 40 education center and office locations, and online degree programs. Challenge: Cost-effectively, efficiently increase enrollments for online MBA program Solution: Greenwood Hall comprehensive enrollment management & marketing support over 5-year engagement Marketing/Lead Generation, Recruitment and Student Success:

• Increase year-to-year lead volume by 118%
• Improved lead-to-enroll conversion by 41%
• Reduced lead cost by 32%
• Developed presence on major social networks; grew Facebook members from 140 to 10,000
• Created largest following on Twitter of any private non-profit institution

Recruiting/Enrollment Management:

• Increase likelihood of student enrolling by 296%
• Increased year-to-year enrollment in 1 program by >300%
• Improve enrollment counselor efficiency by >45%
• Reduce cost per enrollment by >31%

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Growth Strategy

• Expand direct sales and marketing to generate growth from new and existing

clients

» Targeting 45 client accounts in 2015 and >100 by year-end 2017

• Develop strategic partnerships to expand reach
• Introduce new technology-based offerings that focus on student success and

enhanced experiences, making our solution even more valuable

» Targeting deployment of enhanced educational technology offering in at least 7

institutions in 2015

• Expand into the K-12 and international markets by year-end 2015
• Build on industry and thought leadership position to create visibility and demand

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Recent Operational Progress

• Continuing to expand client roster with new contracts over past 6 months

» Florence-Darlington Technical College » Tennessee Temple University » Embry-Riddle Aeronautical University – Worldwide » Saint Mary’s University of Minnesota » Woodbury University

• Announced agreement to acquire state-of-the-art learning management platform
• Opened new facilities in Phoenix, Arizona, College Station, Texas, and Shanghai, China
• Appointed high-caliber board members

» Matt Toledo, Publisher and CEO, Los Angeles Business Journal » Jonathan Newcomb, Former Chairman & CEO of Simon & Schuster; education industry

heavyweight

• Raising awareness and thought leadership through recent media coverage and

speaking engagements

» TechOut LA and TechWeek LA » Coverage in Orange County Business Journal

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Platform and Technology Roadmap

My24/7 Campus

» First-of-its-kind, interactive

student services mobile app

EduDrive

» Dashboard, analytics,

artificial intelligence capabilities, and seamless integration to all sources of student data

HigherMastery

» Integrated learning

management and content distribution platform

• Current technology platform capable of managing entire student lifecycle
• Roadmap in place for development of SaaS- and cloud-based technology leveraging internal

resources, partnerships and agreement to acquire Gambassa learning management technology

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The Goal: Real-Time Student Lifecycle Engagement

Recruitment & Counseling Coaching Student Services Career Placement Alumni Relations

Program Delivery

Content Distribution

Predictive Analytics

Immersive Student Engagement

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Experienced Leadership

John Hall, Ed.D. CEO and Co-Founder, Chairman of the Board

» >20 years of experience in the education management, direct response and

customer relationship management industries

» Founded enCircle Media (built revenue to $20 million before successful sale) » Trusted advisor to university presidents across the U.S. on various higher

education issues; Member, Roosevelt University Board of Trustees, USC Pullias Center For Higher Education, Governor Appointed Member, State of California Interagency Coordinating Council

» MBA, Pepperdine University; Doctorate of Education, University of Southern

California Brett M. Johnson President

» >16 years of executive leadership in the high-tech and financial industries,

Forward Industries, Benevolent Capital and Targus; board member of Blyth, (NYSE: BTH) David Ruderman Chief Marketing Officer

» >25 years of direct marketing experience with a focus on education marketing, 10

years as CMO of Chapman University Barbara M. Avakian Chief Technology Officer

» >15 years of experience, including CTO, development and senior product

management; founded multiple SaaS and social technology companies Tina Gentile Interim CFO

» >17 years of experience in finance, operations, relationship development and

management, business development and strategic planning and infrastructure building

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Distinguished Board and Advisory Board

John Hall, Ed.D. CEO and Co-Founder, Chairman

» >20 years of experience in the education management, direct response and customer

relationship management industries

» Founded enCircle Media (built revenue to $20M before successful sale) » Trusted advisor to university presidents across the U.S. on various higher education issues;

Member, Roosevelt University Board of Trustees, USC Pullias Center For Higher Education, Governor Appointed Member, State of California Interagency Coordinating Council

» MBA, Pepperdine University; Doctorate of Education, University of Southern California

Brett M. Johnson President

» >16 years of executive leadership in the high-tech & financial industries, Forward Industries,

Benevolent Capital and Targus; board member of Blyth, (NYSE: BTH) Mike Sims Director

» Held senior executive management positions in diverse industries such as commercial banking,

publishing, graduate business education and high profile business federations

» 13 years as Executive Officer, Corporate & External Relations for the Graziadio School of

Business and Management at Pepperdine University Matt Toledo Director

» 15 years as Publisher and CEO of Los Angeles Business Journal » Previously served as chairman for various business organizations, including the Los Angeles

County Economic Development Corporation, Los Angeles Area Chamber of Commerce and the Alliance of Area Business Publications Lyle Green Director

» 20 years of executive management positions within the telecommunications and direct marketing

industry

» Partner at MarkeTouch Media since 2002; Vice President of Sales/Marketing

Jonathan Newcomb Director

» Managing director at Berenson & Company, LLC » Former Chairman of Simon & Schuster and >40 years in financial, education and publishing

industries

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Financial Highlights

($ in millions)

CY 2013 CY 2012

Revenue $11.2 $15.3 Cost of Goods Sold $3.6 $2.5 Gross Profit $7.6 $12.8 Operating Expenses $11.7 $12.9 Income from Operations $(0.4) $2.4 Adjusted EBITDA $1.3** $3.2** Other Income (Expense) $(0.4) $(0.2) Net Income (Loss) $(2.9) $0.6

• Positioned to capitalize on

greenfield market opportunity following 2014 corporate restructuring

• Targeting annual revenue

growth of 20-25% for CY 2015

• Restructured and

refocused operations

• Expanded sales team

and new customer wins

• Enhanced offering, new

technology features

In process of changing year end to 12/31. CY 2013 and CY2012 are audited numbers (excluding Adjusted EBITDA) * Adjustments include restructuring and transaction costs ** Adjustments include costs associated with company restructuring and discontinuing certain operations.

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• Public market is rewarding high-growth EdTech companies

» 2U (NASDAQ: TWOU): Trading at premium (>6x EV/Revenue) due to growth, visibility and

focus on public and not-for-profit institutions

• Private investment in EdTech companies is also on the rise

» $1.1 billion of VC investments in EdTech YTD as of 3Q14; $315 million in 3Q alone (EdSurge)

• Large, high-profile transactions with leading VCs in last 12 months showcase

significant interest from early- and late-stage investors

» Several late-stage rounds >$50 million for potential IPO candidates » Valuations reported to be $800 million and $1 billion for Unext.com and Pluralsight, respectively

Sector Attracting Significant Investor Interest

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• Active strategic and private equity EdTech M&A market with 43 acquisitions in 1H14
• Validating market for EdTech products and lifecycle management services

Notable Education Technology Transactions

Insight Venture Partners and GIC Acquire iParadigms

»

June 2014

»

$752M

• J. Wiley & Sons Acquires CrossKnowledge

»

April 2014

»

$175M (4.7x revenue)

Weld North Acquires Imagine Learning and Truenorthlogic

»

April 2014

»

Not disclosed

Hellman & Friedman Acquires Renaissance Learning

»

March 2014

»

$1.1B

Summit Partners Acquires RuffaloCody

»

May 2013

»

$220M (2.9x revenue)*

Pearson Acquires EmbanetCompass

»

October 2012

»

$650M (5.0x revenue)

John Wiley & Sons Acquires Deltak

»

October 2012

»

$220M (4.1x revenue)

Strategics and Private Equity Also Active in EdTech

*Management estimates

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Key Takeaways

• Leader in student management solutions for not-for-profit and public universities and

colleges – a market ripe for disruption

• Unique end-to-end technology-enabled solutions
• $2.2+ billion addressable market with current penetration of less than 1%; expanding

into K-12 and global opportunities

• Demonstrated track record of delivering tangible value to clients
• Proven and scalable operating model positions Greenwood Hall for strong growth
• Clearly defined technology roadmap to expand service offerings
• Experienced leadership; distinguished board and advisors

One of a few publicly traded companies in emerging, high-growth education technology sector.

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