Disclosure Policy & University Update
Wilkes University provides information to investors in the form of both covenanted continuing disclosure (posted on EMMA – the Electronic Municipal Market Access website maintained by the Municipal Securities Rulemaking Board: www.emma.msrb.org) and voluntary disclosure of supplementary information of interest to investors, at times offered in the form of Frequently Asked Questions (found below).
On February 19, 2021, Standard & Poor’s published a new rating report for the University. In that report, S&P explains its decision to downgrade the University from BBB (negative outlook) to BBB- (stable outlook).
The University’s current Fact Book is also available for review.
Questions not addressed through information obtained from EMMA or in the FAQs on this site may be posed to the University by email sent to this address: email@example.com. The University makes every effort to respond to inquiries subject to the application of its policies on continuing disclosure. Responses will be included in additional FAQs posted on this website.
Undergraduate enrollment for the 2020-2021 academic year was below levels experienced in recent years but the enrollment goal for the budget, influenced by the pandemic, was met by the University. Unexpectedly strong demand for on campus housing resulted in auxiliary income for the year which exceeded the budget goal and returning student numbers also exceeded budget expectations. Graduate enrollment grew dramatically in 2020-2021 due primarily to a new partnership with Keypath Education that resulted in enrollment increases in many graduate nursing programs; indeed, initial enrollment projection were revised for Spring following matriculation in the Fall of many more graduate students than were expected. All Fall semester enrollment trends were repeated in the Spring semester.
Update on Academic Programs
The academic portfolio of programs offered by the University remains under review by a Task Force formed in December 2019 by the Provost. The Task Force has completed an initial review and evaluation of every academic program to ensure ongoing student interest and each program’s relationship to the University’s mission and competitiveness. The work of the Task Force is now shifting to an engagement of faculty in the review process. Decisions on the possible elimination of programs, and on the development of new programs to address student interest and enhance institutional competitiveness, may be made as early as Fall 2021, as the University’s new Provost begins work on this project with the full-time faculty.
In response to the decision to close residence halls in mid-March 2020, the University joined a majority of other colleges and universities throughout the country in granting pro rata refunds/credits to residential students for housing, meal contracts and parking fees. The total value of those refunds/credits was approximately $3 million. This loss of revenue was largely offset by a reduction in institutional aid, savings in operating expenses (including those related to cancellation of events and food service), and 50% of the University’s HEERF funds (approximately $1.2 million). After these unexpected changes in revenue and expense for FY 2020, the University reported an operating loss of $2.5 million. This loss follows a $1.9 million operating loss sustained in FY 2019; prior years beginning with FY 2011 had produced consistent operating surpluses.
In response to the FY 2019 operating loss, and given the University’s failure to reach its enrollment goals for FY 2020, the University committed during the development of the FY 2021 budget to “right size” its revenue projections to reflect changing demographics in the Northeast that are now impacting admissions.
Given the University’s success in meeting undergraduate enrollment goals, the dramatic growth in graduate programs during the year, and the anticipated receipt of $3.9M in CRRSAA funding (offset by pandemic-related expenses), the University is now forecasting a multi-million dollar unrestricted surplus from operations in FY 2021.
In May 2021, the University’ trustees approved a balanced operating budget for FY 2022.
Update on Impact of COVID-19 Pandemic
Following the WHO pandemic declaration on March 11, 2020, the University joined other colleges and universities in closing residence halls and moving to remote instruction. All courses were delivered remotely for the remainder of the 2019-2020 academic year. The University delivered all undergraduate and graduate summer courses remotely.
Like many colleges and universities throughout the country, Wilkes University developed a detailed and comprehensive plan for managing activities on campus in the interest of minimizing the impact of the pandemic on operations. Those plans included testing, guidelines on face coverings and social distancing, and options available for online instruction. Since the Fall of 2020, the University has utilized a dashboard to track COVID cases; current information may be found here. Through the worst of the pandemic, the University managed the monitoring and, when necessary, the quarantine process, to avoid major disruptions in the delivery of its academic programs throughout the year.
Student recruitment has been exclusively through virtual visits and phone contact with prospective students until the Spring of 2021. The University continues to recruit students internationally but is budgeting for no increase in international enrollment, given current circumstances. The current international student population is primarily limited to students from Central America and the Middle East.
Wilkes University received $2,403,446 under Section 18004(a)(1) of the Higher Education Emergency Relief Fund (HEERF). Fifty percent ($1,201,723) was distributed directly to students impacted by campus disruptions due to the Coronavirus. As of August 31, 2020, all funds were distributed to 896 eligible students. Of the total HEERF funding received, $2.4 million was reported as income in FY 2020.
The University also took advantage of the Employee Retention Credit resulting in a reduction in payroll tax liability of $118,000 and received $3,896,453 in total CRRSAA funding, all of which will be reflected in the FY2021 financial results.
The University was notified that it will receive an additional $6,996,748 in federal stimulus under the American Rescue Plan (ARP), which will be recognized beginning in FY 2022.
The University was ineligible to participate in the Paycheck Protection Program and did not participate in the Main Street loan program for not for profit institutions.
Update on Liquidity
The University’s cash position remains stable but it continues to receive significant attention, given operating losses and capital expenditures in prior years that have impacted liquidity. The anticipated operating surplus in FY21, together with minimal capital expenditures of the past year, have strengthened the University’s cash position.
In November, 2019, the University issued $10 million in taxable bonds to pay off short term debt intended to bridge long term financing for capital projects now on hold, which has enhanced liquidity.
The University has until recently maintained a $3M operating line of credit. This line of credit has not been drawn in the past 10 years. In May, 2021, the University increased the operating line of credit to $5M.
Last Update: 6-2021
Next Update: 1-2022