Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Sara Gubins - Merrill Lynch Global Securities.
Sara Gubins - Merrill Lynch Global Securities
For your student start growth forecast for the year, could you talk a bit about why you’re expecting start growth to ramp up during the course of the year given the slowed online growth and pretty tough comparisons throughout the year?
Peter C. Waller
We’re giving guidance of 7% to 9% for the full year and 4% to 6% in the first quarter. You’re seeing that ramp up. It’s mainly a function of rollover frankly. We had a particularly strong first quarter a year ago of those 28,000 starts and so we’re rolling over that target in the first quarter and as we go forward through the rest of the year we believe we’ve got some accounts that are helping us. In the first quarter we’ve also got a little bit of phasing going on for WyoTech between the first and the second quarter. So that’s going to give us a little stronger push into the second quarter versus the first quarter. It’s a granular plan that we’ve put together program by program and division by division and this is the level of expectation that we’ve set as we put our plan together for the year. Also, as we go through the year as we’ve explained before Sara, we’re introducing new programs. At the Investor Conference we shared with you that we introduced 80 new programs in fiscal 2008 and at the Investor Conference we shared a projection of 120 new programs during fiscal 2009. Again, those ramp up as the year progresses. So a combination of rollover, new program ramp up, and a little bit of phasing between the first and the second quarter. Does that help you?
Sara Gubins - Merrill Lynch Global Securities
In terms of your marketing costs per start, it looks like you’re expecting that to be up in the first quarter on a year-over-year basis. I’m wondering if that’s because of the additional enrollment reps focused on high school and whether or not you expect to see marketing costs per student down in other quarters during the year on a year-over-year basis?
Peter C. Waller
First of all, we definitely project marketing admissions costs to be down year-over-year on a full fiscal basis as a percentage of revenue. We achieved that quite significantly in fiscal year 2008 and at the investor conference we shared the three year plan of 300 or 400 basis points over the three years and we expect a fair share of that, the corporate share of that to take place in fiscal year 2009. And we expect that to be frankly, fairly linear as the year goes on. We will be showing marketing admissions as a percentage of revenue lower in the first quarter than a year ago. I’ll give you the percent numbers in just a bit. We’re actually confident on where we are from – the two major elements of that are obviously media costs and rep costs. From a rep cost point of view, we’re fundamentally holding our reps at about the same number of reps and gaining more leverage out of them. We’ve got enough leads with those reps so we’re holding those reps apart from the fact that we’re adding high schools which will be an incremental cost in the first quarter which will amortize as their leads start to flow as the year goes on.
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