ENROLLMENT RELIANCE: ACPHS' high reliance on student revenues, narrow geographic draw and niche programmatic offerings are noted as limiting credit factors, as they subject the college to operational fluctuations based on regional competition and demand for individual programs.
ACPHS was founded in 1881 and is home of the oldest pharmacy program in New York State.
Historically, ACPHS has focused on its pharmacy program and relied on job growth in this field to support its demand base.
These programmatic initiatives have begun to show signs of stabilizing ACPHS' demand profile, following some initial enrollment softness.
Fitch also notes with some caution that as management has expanded its non-pharmacy program offerings, ACPHS' tuition discount rate has increased to 22.5% in fiscal 2017 from 15.6% in fiscal 2013.
ACPHS has consistently generated positive operating margins, which have stabilized following a period of volatility.
Fitch is not concerned with ACPHS' trend of reasonable margin compression and considers a positive margin consistent with the Positive Outlook, especially given the college's much-improved balance sheet, conservative budgeting practices and initial indications of a stabilizing demand profile.
Strategic reinvestment of operating surpluses over the past five fiscal years has resulted in a dramatic increase in ACPHS' available funds (AF), defined by Fitch as cash and investments not permanently restricted.