CHARLES TOWN, W.Va., Aug. 8, 2023 /PRNewswire/ -- American Public Education, Inc. (Nasdaq: APEI) announced financial results for the quarter ended June 30, 2023.
Second Quarter Highlights:
"APEI delivered second quarter adjusted EBITDA above our expectations and revenue at the high end of our expectations. APUS, Hondros, and Graduate School USA continue to show strong growth in both registrations or enrollment and corresponding revenue. Additionally, we have seen some continued improvement in our Rasmussen online enrollments during the last few quarters and have continued to focus on student outcomes, where meaningful progress on NCLEX scores was made in key jurisdictions during the second quarter 2023," said Angela Selden, President and Chief Executive Officer of APEI.
Financial Results:
Three months ended June 30, 2023 compared to three months ended June 30, 2022:
Balance Sheet and Liquidity:
Registrations and Enrollment:
2023 | 2022 | % Change | |
American Public University System1 | |||
For the three months ended June 30, | 88,300 | 83,500 | 6 % |
For the six months ended June 30, | 184,500 | 177,400 | 4 % |
Rasmussen University2 | |||
For the three months ended June 30, | 13,900 | 15,900 | (12) % |
Hondros College of Nursing3 | |||
For the three months ended June 30, | 3,000 | 2,440 | 22 % |
1APUS Net Course Registrations represents the approximate aggregate number of courses for which students remain enrolled after the date by which they may drop a course without financial penalty. Excludes students in doctoral programs.
2Rasmussen Total Student Enrollment represents students in an active status as of the full-term census or billing date
3HCN Total Student Enrollment represents the approximate number of students enrolled in a course after the date by which students may drop a course without financial penalty.
Third Quarter 2023 Outlook:
The following statements are based on APEI's current expectations. These statements are forward-looking and actual results may differ materially. APEI undertakes no obligation to update publicly any forward-looking statements for any reason unless required by law. Refer to APEI's earnings conference call and presentation for further details.
Third Quarter 2023 Guidance | ||
(Approximate) | (% Yr/Yr Change) | |
APUS Net course registrations | 90.5k to 92.5k | 6% to 8% |
HCN Student enrollment | 2,800 | 17 % |
RU Student enrollment | 13,500 | -10 % |
- Nursing | 5,700 | -25 % |
- Non-Nursing | 7,700 | 5 % |
($ in millions except EPS) | ||
APEI Consolidated revenue | $148.3 to $150.3 | -1% to +1% |
APEI Net loss available to common stockholders | -$5.7 to -$4.3 | n.m. |
APEI Adjusted EBITDA | $8.4 to $10.4 | -11% to 10% |
APEI Diluted EPS | -$0.32 to -$0.24 | n.m |
Non-GAAP Financial Measures:
This press release contains the non-GAAP financial measures of EBITDA (earnings before interest, taxes, depreciation, and amortization) and adjusted EBITDA (EBITDA less non-cash expenses such as stock compensation and non-recurring expenses). APEI believes that the use of these measures is useful because they allow investors to better evaluate APEI's operating profit and cash generation capabilities.
For the three months ended June 30, 2023 and 2022, adjusted EBITDA excludes non-cash compensation expense, loss on disposals of long-lived assets, and M&A-related professional fees.
These non-GAAP measures should not be considered in isolation or as an alternative to measures determined in accordance with generally accepted accounting principles in the United States (GAAP). The principal limitation of our non-GAAP measures are that they exclude expenses that are required by GAAP to be recorded. In addition, non-GAAP measures are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses are excluded.
APEI is presenting EBITDA and adjusted EBITDA in connection with its GAAP results and urges investors to review the reconciliation of EBITDA and adjusted EBITDA to the comparable GAAP financial measures that is included in the tables following this press release (under the captions "GAAP Net Income to Adjusted EBITDA," and "GAAP Outlook Net Income to Outlook Adjusted EBITDA") and not to rely on any single financial measure to evaluate its business.
Webcast:
A live webcast of the APEI's second quarter 2023 earnings conference call will be held today at 5:00 p.m. Eastern Time. This webcast will be open to listeners who log in through the APEI's investor relations website, www.apei.com.
A replay of the live webcast will also be available starting approximately one hour after the conclusion of the live webcast. The replay will be archived and available to listeners through APEI's investor relations website for one year.
About American Public Education
American Public Education, Inc. (Nasdaq: APEI), through its institutions American Public University System (APUS), Rasmussen University, Hondros College of Nursing, and Graduate School USA (GSUSA), provides education that transforms lives, advances careers, and improves communities.
APUS, which operates through American Military University and American Public University, is the leading educator to active-duty military and veteran students* and serves approximately 89,300 adult learners worldwide via accessible and affordable higher education.
Rasmussen University is a 120-year-old nursing and health sciences-focused institution that serves approximately 13,900 students across its 22 campuses in six states and online. It also has schools of Business, Technology, Design, Early Childhood Education and Justice Studies.
Hondros College of Nursing focuses on educating pre-licensure nursing students at eight campuses (six in Ohio, one in Indiana, and one in Michigan). It is the largest educator of PN (LPN) nurses in the state of Ohio** and serves approximately 3,000 total students. Graduate School USA is a leading training provider to the federal workforce with an extensive portfolio of government agency customers. It serves the federal workforce through customized contract training (B2G) to federal agencies and through open enrollment (B2C) to government professionals.
Both APUS and Rasmussen are institutionally accredited by the Higher Learning Commission (HLC), an institutional accreditation agency recognized by the U.S. Department of Education. Hondros is accredited by the Accrediting Bureau of Health Education Schools (ABHES). GSUSA is accredited by the Accrediting Council for Continuing Education & Training (ACCET). For additional information, visit www.apei.com.
*Based on FY 2019 Department of Defense tuition assistance data, as reported by Military Times and Veterans Administration student enrollment data as of 2023.
**Based on information compiled by the National Council of State Boards of Nursing and Ohio Board of Nursing.
Forward Looking Statements
Statements made in this press release regarding APEI or its subsidiaries that are not historical facts are forward-looking statements based on current expectations, assumptions, estimates and projections about APEI and the industry. In some cases, forward-looking statements can be identified by words such as "anticipate," "believe," "seek," "could," "estimate," "expect," "intend," "may," "plan," "should," "will," "would," and similar words or their opposites. Forward-looking statements include, without limitation, statements regarding expected growth, registration and enrollments, revenues, income and adjusted EBITDA and EBITDA, benefits of the acquisition of Rasmussen University and plans with respect to recent, current and future initiatives.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, among others, risks related to: APEI's dependence on the effectiveness of its ability to attract students who persist in its institutions' programs; changing market demands; APEI's inability to effectively market its institutions' programs; APEI's inability to maintain strong relationships with the military and maintain course registrations and enrollments from military students; the loss or disruption of APEI's ability to receive funds under tuition assistance programs or the reduction, elimination, or suspension of tuition assistance; adverse effects of changes APEI makes to improve the student experience and enhance the ability to identify and enroll students who are likely to succeed; APEI's need to successfully adjust to future market demands by updating existing programs and developing new programs; APEI's failure to comply with regulatory and accrediting agency requirements and to maintain institutional accreditation and the impacts of any actions APEI may take to prevent or correct such failure; APEI's loss of eligibility to participate in Title IV programs or ability to process Title IV financial aid; economic and market conditions and changes in interest rates; difficulties involving acquisitions; the Company's indebtedness and preferred stock; APEI's dependence on and the need to continue to invest in its technology infrastructure; the inability to recognize the intended benefits of APEI's cost savings efforts; and the various risks described in the "Risk Factors" section and elsewhere in APEI's Quarterly Report on Form 10-Q for the period ended June 30, 2023 and Annual Report on Form 10-K for the year ended December 31, 2022, and in other filings with the SEC. You should not place undue reliance on any forward-looking statements. APEI undertakes no obligation to update publicly any forward-looking statements for any reason, unless required by law, even if new information becomes available or other events occur in the future.
Contacts:
Ryan Koren
AVP, Investor Relations & Corporate Development
(610) 428-7376
American Public Education, Inc. Consolidated Statement of Income (In thousands, except per share data)
| ||||||
Three Months Ended | ||||||
June 30, | ||||||
2023 | 2022 | |||||
(unaudited) | ||||||
Revenues | $ | 147,214 | $ | 149,608 | ||
Costs and expenses: | ||||||
Instructional costs and services | 74,998 | 72,089 | ||||
Selling and promotional | 32,966 | 35,846 | ||||
General and administrative | 32,533 | 29,923 | ||||
Impairment of goodwill and intangible assets | 64,000 | 144,900 | ||||
Loss on disposals of long-lived assets | 32 | (9) | ||||
Depreciation and amortization | 7,953 | 8,119 | ||||
Total costs and expenses | 212,482 | 290,868 | ||||
(Loss) income from operations before | ||||||
interest income and income taxes | (65,268) | (141,260) | ||||
Gain on acquisition | ? | (705) | ||||
Interest (expense) income | (1,097) | (3,390) | ||||
(Loss) income before income taxes | (66,365) | (145,355) | ||||
Income tax (benefit) expense | (15,137) | (35,332) | ||||
Equity investment (loss) income | (4) | (6) | ||||
Net loss | $ | (51,232) | $ | (110,029) | ||
Preferred stock dividends | 1,487 | ? | ||||
Net loss | $ | (52,719) | $ | (110,029) | ||
Net loss per common share: | ||||||
Basic | $ | (2.94) | $ | (5.83) | ||
Diluted | $ | (2.93) | $ | (5.82) | ||
Weighted average number of | ||||||
common shares: | ||||||
Basic | 17,932 | 18,865 | ||||
Diluted | 17,991 | 18,907 | ||||
Three Months Ended | ||||||
Segment Information: | June 30, | |||||
2023 | 2022 | |||||
Revenues: | ||||||
APUS Segment | $ | 73,557 | $ | 69,904 | ||
RU Segment | $ | 51,971 | $ | 63,891 | ||
HCN Segment | $ | 14,266 | $ | 11,486 | ||
Corporate and other1 | $ | 7,420 | $ | 4,327 | ||
Income (loss) from operations before | ||||||
interest and income taxes: | ||||||
APUS Segment | $ | 18,941 | $ | 13,624 | ||
RU Segment | $ | (77,274) | $ | (146,553) | ||
HCN Segment | $ | (235) | $ | (630) | ||
Corporate and other | $ | (6,700) | $ | (7,701) | ||
Six Months Ended | ||||||
June 30, | ||||||
2023 | 2022 | |||||
(unaudited) | ||||||
Revenues | $ | 296,903 | $ | 304,355 | ||
Costs and expenses: | ||||||
Instructional costs and services | 148,887 | 143,787 | ||||
Selling and promotional | 72,890 | 75,165 | ||||
General and administrative | 66,022 | 59,512 | ||||
Impairment of goodwill and intangible assets | 64,000 | 144,900 | ||||
Loss on disposals of long-lived assets | 33 | 784 | ||||
Depreciation and amortization | 15,709 | 16,267 | ||||
Total costs and expenses | 367,541 | 440,415 | ||||
(Loss) income from operations before | ||||||
interest income and income taxes | (70,638) | (136,060) | ||||
Gain on acquisition | ? | 3,828 | ||||
Interest (expense) income | (2,876) | (6,745) | ||||
(Loss) income before income taxes | (73,514) | (138,977) | ||||
Income tax (benefit) expense | (16,551) | (34,292) | ||||
Equity investment (loss) income | (9) | (11) | ||||
Net loss | $ | (56,972) | $ | (104,696) | ||
Preferred stock dividends | 2,944 | ? | ||||
Net loss available to common shareholders | $ | (59,916) | $ | (104,696) | ||
Net loss per common share: | ||||||
Basic | $ | (3.25) | $ | (5.56) | ||
Diluted | $ | (3.23) | $ | (5.54) | ||
Weighted average number of | ||||||
common shares: | ||||||
Basic | 18,457 | 18,835 | ||||
Diluted | 18,531 | 18,893 | ||||
Six Months Ended | ||||||
Segment Information: | June 30, | |||||
2023 | 2022 | |||||
Revenues: | ||||||
APUS Segment | $ | 147,535 | $ | 142,994 | ||
RU Segment | $ | 109,438 | $ | 130,990 | ||
HCN Segment | $ | 27,406 | $ | 23,027 | ||
Corporate and other1 | $ | 12,524 | $ | 7,344 | ||
(Loss) income from operations before | ||||||
interest income and income taxes: | ||||||
APUS Segment | $ | 36,015 | $ | 26,806 | ||
RU Segment | $ | (90,138) | $ | (145,662) | ||
HCN Segment | $ | (1,538) | $ | (1,625) | ||
Corporate and other1 | $ | (14,977) | $ | (15,579) |
1. Corporate and Other includes tuition and contract training revenue earned by GSUSA and the elimination of intersegment revenue for courses taken by employees of one segment at other segments. |
GAAP Net Income to Adjusted EBITDA: | ||||||||||||||
The following table sets forth the reconciliation of the Company's reported GAAP net | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
(in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Net loss available to common shareholders | $ | (52,719) | $ | (110,029) | $ | (59,916) | $ | (104,696) | ||||||
Preferred stock dividends | 1,487 | - | 2,944 | - | ||||||||||
Net loss | $ | (51,232) | $ | (110,029) | $ | (56,972) | $ | (104,696) | ||||||
Income tax benefit | (15,137) | (35,332) | (16,551) | (34,292) | ||||||||||
Interest expense | 1,097 | 3,390 | 2,876 | 6,745 | ||||||||||
Equity investment loss | 4 | 6 | 9 | 11 | ||||||||||
Depreciation and amortization | 7,953 | 8,119 | 15,709 | 16,267 | ||||||||||
EBITDA | (57,315) | (133,846) | (54,929) | (115,965) | ||||||||||
Impairment of goodwill and intangible assets | 64,000 | 144,900 | 64,000 | 144,900 | ||||||||||
Adjustment to gain on acquisition | - | 705 | - | (3,828) | ||||||||||
Stock Compensation | 2,068 | 2,350 | 4,292 | 4,706 | ||||||||||
Loss on disposals of long-lived assets | 32 | (9) | 33 | 784 | ||||||||||
M&A - related professional | - | 437 | - | 1,273 | ||||||||||
Transition services | - | - | 2,403 | - | ||||||||||
Adjusted EBITDA | $ | 8,785 | $ | 14,537 | $ | 15,799 | $ | 31,870 |
GAAP Outlook Net Income to Outlook Adjusted EBITDA: | ||||||
The following table sets forth the reconciliation of the Company's outlook | ||||||
Three Months Ending | ||||||
September 30, 2023 | ||||||
(in thousands, except per share data) | Low | High | ||||
Net loss available to common stockholders | $ | (5,681) | $ | (4,281) | ||
Preferred dividends | 1,488 | 1,488 | ||||
Net loss | (4,193) | (2,793) | ||||
Income tax benefit | (1,797) | (1,197) | ||||
Interest expense | 2,555 | 2,555 | ||||
Depreciation and amortization | 7,222 | 7,222 | ||||
EBITDA | 3,787 | 5,787 | ||||
Stock compensation | 1,796 | 1,796 | ||||
Severance expense | 2,800 | 2,800 | ||||
Adjusted EBITDA | $ | 8,383 | $ | 10,383 |
SOURCE American Public Education, Inc.
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