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CHARLES TOWN, W.Va., Nov. 8, 2022 /PRNewswire/ -- American Public Education, Inc. (Nasdaq: APEI) announced financial results for the quarter ended September 30, 2022.
Third Quarter Highlights:
We completed the acquisitions of Rasmussen University ("RU") and Graduate School USA ("GSUSA") on September 1, 2021 and January 1, 2022, respectively. Our financial results do not include the financial results of these companies prior to their respective acquisition closing dates. Accordingly, the financial results for the three and nine months ended September 30, 2021, include results of operations of RU for the month of September 2021 and do not include the results of operations of GSUSA. Therefore, the prior year period presented is not directly comparable to the current period.
Financial Results:
Three months ended September 30, 2022 compared to three months ended September 30, 2021:
Balance Sheet and Liquidity:
Registrations and Enrollment: | |||
2022 | 2021 | % Change | |
American Public University System1 | |||
For the three months ended September 30, | 85,800 | 83,100 | 3 % |
For the nine months ended September 30, | 263,200 | 258,700 | 2 % |
Rasmussen University2 | |||
For the three months ended September 30, | 15,000 | 16,300 | (8) % |
Hondros College of Nursing3 | |||
For the three months ended September 30, | 2,410 | 2,320 | 4 % |
1 | APUS Net Course Registrations represents the approximate aggregate number of courses for which students remain |
Excludes students in doctoral programs. | |
2 | Rasmussen Total Student Enrollment represents students in an active status as of the full-term census or billing date. |
3 | HCN Total Student Enrollment represents the approximate number of students enrolled in a course after the date |
Fourth Quarter 2022 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.
Fourth Quarter 2022 Guidance | Full Year 2022 Guidance | |||
(Approximate) | (% Yr/Yr) | (Approximate) | (% Yr/Yr) | |
APUS Net course registrations | 84,000 to 87,500 | -3% to +1% | 347,300 to 350,800 | 1% to 2% |
HCN Student enrollment | 2,600 | 4 % | 2,600 | 4 % |
RU Student enrollment | 15,600 | -9 % | 15,600 | -9 % |
- Nursing | 7,600 | -12 % | 7,600 | -12 % |
- Non-Nursing | 8,000 | -5 % | 8,000 | -5 % |
($ in millions except EPS) | ||||
APEI Consolidated revenue | $151.2 to $154.2 | -2% to 0% | $605.1 to $608.1 | 44% to 45% |
APEI Consolidated net income | -$3.9 to -$2.4 | -141% to -126% | -$112.3 to -$110.9 | n.m. |
APEI Adjusted EBITDA | $13.9 to $16.7 | -53% to -43% | $55.2 to $58.0 | -15% to -10% |
APEI Diluted EPS | -$0.20 to -$0.13 | -140% to -126% | -$5.94 to -$5.87 | 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 September 30, 2022 and 2021, 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 are 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 third quarter 2022 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, educate the service-minded student by providing career-focused higher education and career learning.
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 88,000 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 15,000 students across its 23 campuses and student service centers in six states and online. It also has schools of Business, Technology, Design, Early 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 2,410 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 and Veterans Administration student enrollment data, as reported by Military Times, 2020.
**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, impacts of the upgrade to ArmyIgnitED 2.0 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: the impacts of inflation, increases in labor costs, and enrollment trends, including on APEI's operating margins; 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; APEI's loss of its ability to receive funds under tuition assistance programs or the reduction, elimination, or suspension of tuition assistance; the effects, duration, and severity of and APEI's response to the COVID-19 pandemic; adverse effects on demand as the pandemic abates; 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; APEI's loss of eligibility to participate in Title IV programs or ability to process Title IV financial aid; business combinations and acquisitions, including the integration of RU and GSUSA and APEI's inability to realize the expected benefits of their acquisition; incurring substantial debt, the cost of servicing that debt, and APEI's inability in the future to service that debt; APEI's dependence on and the need to continue to invest in its technology infrastructure; 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 September 30, 2022 and Annual Report on Form 10-K for the year ended December 31, 2021, 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 | |||||||||||||
September 30, | |||||||||||||
2022 | 2021 | ||||||||||||
(unaudited) | |||||||||||||
Revenues | $ | 149,535 | $ | 98,248 | |||||||||
Costs and expenses: | |||||||||||||
Instructional costs and services | 71,817 | 42,544 | |||||||||||
Selling and promotional | 40,917 | 23,458 | |||||||||||
General and administrative | 29,667 | 26,598 | |||||||||||
Impairment of goodwill and intangible assets | — | — | |||||||||||
(Gain) loss on disposals of long-lived assets | 178 | — | |||||||||||
Depreciation and amortization | 7,982 | 4,386 | |||||||||||
Total costs and expenses | 150,561 | 96,986 | |||||||||||
(Loss) income from operations before | |||||||||||||
interest and income taxes | (1,026) | 1,262 | |||||||||||
Gain on acquisition | - | — | |||||||||||
Interest (expense) income | (3,594) | (1,305) | |||||||||||
(Loss) income before income taxes | (4,620) | (43) | |||||||||||
Income tax (benefit) expense | (860) | 224 | |||||||||||
Equity investment loss | (2) | - | |||||||||||
Net (loss) income | $ | (3,762) | $ | (267) | |||||||||
Net (loss) income per common share: | |||||||||||||
Basic | $ | (0.20) | $ | (0.01) | |||||||||
Diluted | $ | (0.20) | $ | (0.01) | |||||||||
Weighted average number of | |||||||||||||
common shares: | |||||||||||||
Basic | 18,885 | 18,700 | |||||||||||
Diluted | 18,927 | 18,855 | |||||||||||
Three Months Ended | |||||||||||||
Segment Information: | September 30, | ||||||||||||
2022 | 2021 | ||||||||||||
Revenues: | |||||||||||||
APUS Segment | $ | 68,735 | $ | 65,906 | |||||||||
RU Segment | $ | 61,548 | $ | 21,132 | |||||||||
HCN Segment | $ | 11,409 | $ | 11,240 | |||||||||
Corporate and other1 | $ | 7,843 | $ | (30) | |||||||||
Income (loss) from operations before | |||||||||||||
interest and income taxes: | |||||||||||||
APUS Segment | $ | 12,532 | $ | 7,825 | |||||||||
RU Segment | $ | (7,900) | $ | (999) | |||||||||
HCN Segment | $ | (1,392) | $ | 448 | |||||||||
Corporate and other1 | $ | (4,266) | $ | (6,012) | |||||||||
Nine Months Ended | |||||||||||||
September 30, | |||||||||||||
2022 | 2021 | ||||||||||||
(unaudited) | |||||||||||||
Revenues | $ | 453,890 | $ | 264,803 | |||||||||
Costs and expenses: | |||||||||||||
Instructional costs and services | 215,604 | 105,257 | |||||||||||
Selling and promotional | 116,082 | 60,350 | |||||||||||
General and administrative | 89,179 | 75,579 | |||||||||||
Impairment of goodwill and intangible assets | 144,900 | — | |||||||||||
Loss on disposals of long-lived assets | 962 | 182 | |||||||||||
Depreciation and amortization | 24,249 | 9,561 | |||||||||||
Total costs and expenses | 590,976 | 250,929 | |||||||||||
(Loss) income from operations before | |||||||||||||
interest income and income taxes | (137,086) | 13,874 | |||||||||||
Gain on acquisition | 3,828 | — | |||||||||||
Interest (expense) income | (10,339) | (1,167) | |||||||||||
(Loss) income before income taxes | (143,597) | 12,707 | |||||||||||
Income tax (benefit) expense | (35,152) | 3,509 | |||||||||||
Equity investment income (loss) | (13) | (827) | |||||||||||
Net (loss) income | $ | (108,458) | $ | 8,371 | |||||||||
Net (loss) income per common share: | |||||||||||||
Basic | $ | (5.75) | $ | 0.47 | |||||||||
Diluted | $ | (5.74) | $ | 0.46 | |||||||||
Weighted average number of | |||||||||||||
common shares: | |||||||||||||
Basic | 18,854 | 17,874 | |||||||||||
Diluted | 18,906 | 18,048 | |||||||||||
Nine Months Ended | |||||||||||||
Segment Information: | September 30, | ||||||||||||
2022 | 2021 | ||||||||||||
Revenues: | |||||||||||||
APUS Segment | $ | 211,729 | $ | 210,321 | |||||||||
RU Segment | $ | 192,538 | $ | 21,132 | |||||||||
HCN Segment | $ | 34,436 | $ | 33,506 | |||||||||
Corporate and other1 | $ | 15,187 | $ | (156) | |||||||||
(Loss) income from operations before | |||||||||||||
interest income and income taxes: | |||||||||||||
APUS Segment | $ | 39,338 | $ | 30,969 | |||||||||
RU Segment | $ | (153,562) | $ | (999) | |||||||||
HCN Segment | $ | (3,017) | $ | 1,348 | |||||||||
Corporate and other1 | $ | (19,845) | $ | (17,444) | |||||||||
The RU Segment reflects the operations of RU, which was acquired on the RU Closing Date. The Company did not consolidate the | |||||||||||||
1. Corporate and Other includes tuition and contract training revenue earned by GSUSA from the GSUSA Closing Date through |
GAAP Net Income to Adjusted EBITDA: | ||||||||||||||
The following table sets forth the reconciliation of the Company's reported GAAP net income to the calculation of adjusted EBITDA for the three and nine months ended September 30, 2022 and 2021: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
(in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | ||||||||||
Net (loss) income | $ | (3,762) | $ | (267) | (108,458) | 8,371 | ||||||||
Income tax (benefit) expense | (860) | 224 | (35,152) | 3,509 | ||||||||||
Interest expense (income) | 3,594 | 1,305 | 10,339 | 1,167 | ||||||||||
Equity investment loss | 2 | - | 13 | 827 | ||||||||||
Depreciation and amortization | 7,982 | 4,386 | 24,249 | 9,561 | ||||||||||
EBITDA | 6,956 | 5,648 | (109,009) | 23,435 | ||||||||||
Impairment of goodwill and intangible assets | - | - | 144,900 | - | ||||||||||
Adjustment to gain on acquisition | - | - | (3,828) | - | ||||||||||
Stock compensation | 1,997 | 1,804 | 6,703 | 5,969 | ||||||||||
Loss on disposals of long-lived assets | 178 | - | 962 | 182 | ||||||||||
M&A and integration | 329 | 1,816 | 1,602 | 5,783 | ||||||||||
Adjusted EBITDA | $ | 9,460 | $ | 9,268 | 41,330 | 35,369 |
GAAP Outlook Net Income to Outlook Adjusted EBITDA: | |||||||||||||
The following table sets forth the reconciliation of the Company's projected | |||||||||||||
Three Months Ending | Twelve Months Ending | ||||||||||||
December 31, 2022 | December 31, 2022 | ||||||||||||
(in thousands, except per share data) | Low | High | Low | High | |||||||||
Net income | $ | (3,855) | $ | (1,727) | $ | (112,313) | $ | (110,185) | |||||
Income tax expense | (1,217) | (545) | (36,369) | (35,697) | |||||||||
Interest expense, net | 3,931 | 3,931 | 14,270 | 14,270 | |||||||||
Equity investment loss (income) | - | - | 13 | 13 | |||||||||
Depreciation and amortization | 8,318 | 8,318 | 32,567 | 32,567 | |||||||||
EBITDA | 7,177 | 9,977 | (101,832) | (99,032) | |||||||||
Impairment of goodwill and intangible assets | - | - | 144,900 | 144,900 | |||||||||
Adjustment to gain on acquisition | - | - | (3,828) | (3,828) | |||||||||
Stock compensation | 2,712 | 2,712 | 9,415 | 9,415 | |||||||||
Loss on disposals of long-lived assets | - | - | 962 | 962 | |||||||||
M&A and integration | 4,017 | 4,017 | 5,619 | 5,619 | |||||||||
Adjusted EBITDA | $ | 13,906 | $ | 16,706 | $ | 55,236 | $ | 58,036 |
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SOURCE American Public Education, Inc.