CHARLES
TOWN, W.Va., March 14,
2023 /PRNewswire/ -- American Public Education,
Inc. (Nasdaq: APEI) announced financial results for the quarter
ended December 31, 2022.
Fourth Quarter Highlights:
- Consolidated revenue decreased 1.0% year over year to
$152.4 million
- At December 31, 2022, total
unrestricted cash and cash equivalents of approximately
$102.6 million represents a decrease
of $20.0 million from December 31, 2021
- Net loss available to common stockholders for the period was
$6.6 million, compared to net income
of $9.4 million for the three months
ended December 31, 2021, a decrease
in earnings of $16.0 million
- Adjusted EBITDA decreased 48% year-over-year to $15.4 million
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 twelve months ended
December 31, 2022, include results of operations of RU for
four months of 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 December 31, 2022 compared to three
months ended December 31, 2021:
- Total consolidated revenue for 2022 decreased 1.0% to
$152.4 million, compared to total
revenue of $154.0 million in 2021.
The RU Segment revenue decreased by $7.6
million, which was partially offset by the inclusion of
GSUSA revenue for the three months ended December 31, 2022 of $5.7
million, and increased revenue in the APUS and Hondros College of Nursing (HCN) segments. GSUSA
revenue is not included in the prior year periods.
- Total costs and expenses increased to $152.7 million for the 2022 period, compared to
$137.5 million for the same period in
2021. The increase in costs and expenses for the three months ended
December 31, 2022, was primarily due
to an increase in expenses in the RU Segment of $7.9 million, which included a $2.0 million impairment charge on intangible
assets, and the inclusion of GSUSA costs and expenses of
$5.7 million. GSUSA costs and
expenses are not included in the prior year period.
-
- Instructional costs and services expenses increased
$5.5 million in 2022 to $72.9 million, compared to $67.4 million in 2021, primarily due to the
inclusion of the GSUSA instructional costs and services expenses of
$3.6 million, as well as increases in
both the HCN Segment and APUS Segment expenses of $0.9 million and $0.9
million, respectively.
- Selling and promotional expenses increased $5.6 million to $38.6
million, compared to $33.0
million in 2021, primarily due to an increase in the RU
Segment expenses of $4.3 million, and
the inclusion of the GSUSA selling and promotional expenses of
$1.0 million, for the three months
ended December 31, 2022, compared to
the prior year period.
- General and administrative expenses increased $3.4 million to $31.2
million, compared to $27.8
million in 2021 mainly due to an increase in the RU Segment
expenses of $2.0 million and the
inclusion of GSUSA expense of $1.0
million, for the three months ended December 31, 2022, compared to the prior year
period.
- Depreciation and amortization expenses decreased to
$7.9 million in 2022, or 5.2% of
revenue, compared to $8.3 million and
5.4% in 2021, primarily due to the decrease in depreciation expense
in our APUS Segment of $0.5
million.
- Costs and expenses in 2022 also include $4.3 million of M&A-related professional
fees, of which $3.9 million were
transition fees associated with onboarding outsourced marketing
services.
- Interest expense was $7.4 million
in 2022, compared to interest expense of $3.1 million in 2021. The increase was mainly due
to the accelerated amortization of debt issuance costs of
$3.9 million recognized from a debt
prepayment that occurred in the December
2022.
- The net loss available to common stockholders was $6.6 million in 2022, compared to net income
available to common stockholders of $9.4
million in 2021, primarily driven by increases in costs
discussed above.
- The net loss per diluted common share was $0.35, compared to net income per diluted common
share of $0.50 in 2021.
- Adjusted EBITDA was $15.4 million
in 2022, compared to $29.3 million in
2021.
Balance Sheet and Liquidity:
- Total unrestricted cash and cash equivalents as of December 31, 2022 was approximately $102.6 million, compared to $122.6 million as of December 31, 2021, representing a decrease of
$20.0 million. The decrease in cash
was mainly due to net cash utilized for debt repayment of
$34.2 million and cash invested in
capital expenditures of $16.4
million, which was partially offset by an increase in net
cash provided by operating activities to $29.2 million.
- In the fourth quarter, we issued $40.0
million in preferred stock and used the proceeds to prepay
long term debt. Together with the proceeds from the preferred stock
issuance and available cash, $65.0
million in principal was prepaid.
- As of December 31, 2022,
approximately $26.0 million, of which
$16.5 million is older than 60 days
from the course start date, was due from the Army.
Registrations and Enrollment:
|
2022
|
2021
|
% Change
|
American Public
University System1
|
|
|
|
For the three months
ended December 31
Net Course Registrations
|
87,200
|
86,600
|
1 %
|
|
|
|
|
For the year ended
December 31
Net Course Registrations
|
350,400
|
345,300
|
1 %
|
|
|
|
|
Rasmussen
University2
|
|
|
|
For the three months
ended December 31
Total Student Enrollment
|
15,600
|
17,100
|
(9) %
|
|
|
|
|
Hondros College of
Nursing3
|
|
|
|
For the three months
ended December 31
Total Student Enrollment
|
2,600
|
2,500
|
4 %
|
|
|
1
|
APUS Net Course
Registrations represents the approximate aggregate number
of courses for which students remain enrolled after the date by
which they may drop a course without financial penalty.
|
|
Excludes students in
doctoral programs.
|
2
|
Rasmussen Student
Enrollment represents students in an active status as of
the full-term census or billing date.
|
3
|
HCN Student Enrollment represents
the approximate number of students enrolled in a course after the
date by which students may drop a course without financial
penalty.
|
First Quarter 2023 Outlook:
The following statements are based on APEI's current
expectations. These statements are forward-looking and actual
results may differ materially. APEI undertakes no obligation to
update publicly any forward-looking statements for any reason
unless required by law. Refer to APEI's earnings conference call
and presentation for further details.
|
First
Quarter 2023 Guidance
|
|
(Approximate)
|
(% Yr/Yr
Change)
|
APUS Net course
registrations
|
96,300
|
2.4 %
|
|
|
|
HCN Student
enrollment
|
2,700
|
10 %
|
|
|
|
RU Student
enrollment
|
14,300
|
-12 %
|
-
Nursing
|
6,800
|
-19 %
|
-
Non-Nursing
|
7,500
|
-4 %
|
|
|
|
($ in millions
except EPS)
|
|
|
APEI Consolidated
revenue
|
$155.1 to
$157.1
|
0% to
2%
|
APEI Net loss available
to common
|
-$9.7 to
-$8.4
|
n.m.
|
APEI Adjusted
EBITDA
|
$2.4 to $4.1
|
-86% to
-76%
|
APEI Diluted
EPS
|
-$0.51 to
-$0.44
|
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 December 31,
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 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 fourth 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 (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 88,900
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 14,300
students across its 22 campuses 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 2,700 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 expectations for APEI's
composite score, impacts of the transition to ArmyIgnitED 2.0,
growth, registration and enrollments, revenues, expenses, net
income, margin, adjusted EBITDA and EBITDA, brand repositioning,
NCLEX pass rates, 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, the inability to
effectively market the Company's programs or expand into new
markets, impacts of the transition to new systems for soldiers to
request tuition assistance or the reduction, elimination, or
suspension of or changes to tuition assistance, effects of changes
the Company makes to improve the student experience and enhance the
ability to identify and enroll students who are likely to succeed,
the inability to adjust to future market demands, continued strong
competition in the education market, failure to comply with
regulatory and accrediting agency requirements or to maintain
institutional accreditation, the loss of eligibility to participate
in Title IV programs or ability to process Title IV financial aid,
the impact of recent regulatory rulemakings, the failure to meet
applicable NCLEX pass rates, difficulties involving business
combinations and acquisitions, obligations related to our debt and
preferred stock, inability to attract, retain, and develop skilled
personnel, impacts of changes in management, dependence on and the
need to continue to invest in the Company's technology
infrastructure, and the risk factors described in the risk factor
section and elsewhere in the Company's annual report on Form 10-K
and in the Company's other SEC filings. You should not place any
undue reliance on any forward-looking statements. The Company
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
|
|
|
December
31,
|
|
|
2022
|
|
|
2021
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
152,438
|
|
|
$
|
154,000
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Instructional costs and services
|
|
72,868
|
|
|
|
67,365
|
|
Selling
and promotional
|
|
38,567
|
|
|
|
32,967
|
|
General
and administrative
|
|
31,173
|
|
|
|
27,800
|
|
Loss on
disposals of long-lived assets
|
|
214
|
|
|
|
1,100
|
|
Impairment
of goodwill and intangible assets
|
|
2,000
|
|
|
|
—
|
|
Depreciation and amortization
|
|
7,878
|
|
|
|
8,271
|
|
Total
costs and expenses
|
|
152,700
|
|
|
|
137,503
|
|
Income from operations
before
|
|
|
|
|
|
|
|
interest and
income taxes
|
|
(262)
|
|
|
|
16,497
|
|
Interest (expense)
income
|
|
(7,389)
|
|
|
|
(3,110)
|
|
Income before income
taxes
|
|
(7,651)
|
|
|
|
13,387
|
|
Income tax
expense
|
|
(1,124)
|
|
|
|
4,002
|
|
Equity investment
loss
|
|
(8)
|
|
|
|
(4)
|
|
Net (loss)
income
|
$
|
(6,535)
|
|
|
$
|
9,381
|
|
Preferred stock
dividends
|
|
48
|
|
|
|
-
|
|
Net (loss) income
available to common shareholders
|
(6,583)
|
|
|
9,381
|
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
Basic
|
$
|
(0.35)
|
|
|
$
|
0.50
|
|
Diluted
|
$
|
(0.35)
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
Weighted average number
of
|
|
|
|
|
|
|
|
common
shares:
|
|
|
|
|
|
|
|
Basic
|
|
18,892
|
|
|
|
18,712
|
|
Diluted
|
|
18,976
|
|
|
|
18,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Segment
Information:
|
December
31,
|
|
|
2022
|
|
|
2021
|
|
Revenues:
|
|
|
|
|
|
|
|
APUS
Segment
|
$
|
73,399
|
|
|
$
|
73,379
|
|
RU
Segment
|
$
|
60,719
|
|
|
$
|
68,351
|
|
HCN
Segment
|
$
|
12,642
|
|
|
$
|
12,297
|
|
Corporate and
other1
|
$
|
5,678
|
|
|
$
|
(27)
|
|
Income (loss) from
operations before
|
|
|
|
|
|
|
|
interest and income
taxes:
|
|
|
|
|
|
|
|
APUS
Segment
|
$
|
19,114
|
|
|
$
|
20,081
|
|
RU
Segment
|
$
|
(12,996)
|
|
|
$
|
2,629
|
|
HCN
Segment
|
$
|
(993)
|
|
|
$
|
481
|
|
Corporate and
other
|
$
|
(5,387)
|
|
|
$
|
(6,694)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
December
31,
|
|
|
2022
|
|
|
2021
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
606,328
|
|
|
$
|
418,803
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Instructional costs and services
|
|
288,472
|
|
|
|
172,622
|
|
Selling
and promotional
|
|
154,649
|
|
|
|
93,317
|
|
General
and administrative
|
|
120,352
|
|
|
|
103,379
|
|
Loss on
disposals of long-lived assets
|
|
1,176
|
|
|
|
1,282
|
|
Impairment
of goodwill and intangible assets
|
|
146,900
|
|
|
|
—
|
|
Depreciation and amortization
|
|
32,127
|
|
|
|
17,832
|
|
Total
costs and expenses
|
|
743,676
|
|
|
|
388,432
|
|
(Loss) income from
operations before
|
|
|
|
|
|
|
|
interest and
income taxes
|
|
(137,348)
|
|
|
|
30,371
|
|
Gain on
acquisition
|
|
3,828
|
|
|
|
—
|
|
Interest (expense)
income
|
|
(17,728)
|
|
|
|
(4,277)
|
|
Income before income
taxes
|
|
(151,248)
|
|
|
|
26,094
|
|
Income tax
expense
|
|
(36,276)
|
|
|
|
7,511
|
|
Equity investment
loss
|
|
(21)
|
|
|
|
(831)
|
|
Net (loss)
income
|
$
|
(114,993)
|
|
|
$
|
17,752
|
|
Preferred stock
dividends
|
48
|
|
|
-
|
|
Net (loss) income
available to common shareholders
|
|
(115,041)
|
|
|
|
17,752
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
common share:
|
|
|
|
|
|
Basic
|
$
|
(6.10)
|
|
|
$
|
0.98
|
|
Diluted
|
$
|
(6.08)
|
|
|
$
|
0.97
|
|
|
|
|
|
|
|
Weighted average number
of
|
|
|
|
|
|
|
|
common
shares:
|
|
|
|
|
|
|
|
Basic
|
|
18,859
|
|
|
|
18,085
|
|
Diluted
|
|
18,914
|
|
|
|
18,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Segment
Information:
|
December
31,
|
|
|
2022
|
|
|
2021
|
|
Revenues:
|
|
|
|
|
|
|
|
APUS
Segment
|
$
|
285,128
|
|
|
$
|
283,700
|
|
RU
Segment
|
$
|
253,257
|
|
|
$
|
89,483
|
|
HCN
Segment
|
$
|
47,078
|
|
|
$
|
45,803
|
|
Corporate and
other1
|
$
|
20,865
|
|
|
$
|
(183)
|
|
(Loss) income from
operations before
|
|
|
|
|
|
|
|
interest and income
taxes:
|
|
|
|
|
|
|
|
APUS
Segment
|
$
|
58,452
|
|
|
$
|
51,050
|
|
RU
Segment
|
$
|
(166,557)
|
|
|
$
|
1,630
|
|
HCN
Segment
|
$
|
(4,011)
|
|
|
$
|
1,829
|
|
Corporate and
other
|
$
|
(25,232)
|
|
|
$
|
(24,138)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The RU Segment reflects
the operations of RU, which was acquired on the RU Closing Date.
The Company did not consolidate the financial results of the RU
Segment prior to the RU Closing Date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Corporate and Other
includes tuition and contract training revenue earned by GSUSA from
the GSUSA Closing Date through December 31, 2022. Contract training
revenue represents both individual and customized training programs
and is recognized when the services are performed. Additionally,
the APUS Segment charges the HCN Segment and corporate employees
for the value of courses taken by HCN Segment employees and
corporate employees at APUS. The elimination of this intersegment
revenue is included within Corporate and Other.
|
|
|
|
|
|
|
|
|
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
twelve months
ended December 31, 2022 and 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
(in thousands,
except per share data)
|
2022
|
|
|
2021
|
|
2022
|
|
|
2021
|
Net (loss)
income
|
$
|
(6,535)
|
|
|
$
|
9,381
|
|
|
(114,993)
|
|
|
|
17,752
|
Income tax expense
(benefit)
|
|
(1,124)
|
|
|
|
4,002
|
|
|
(36,276)
|
|
|
|
7,511
|
Interest expense
(income)
|
|
7,389
|
|
|
|
3,110
|
|
|
17,728
|
|
|
|
4,277
|
Equity investment
loss
|
|
8
|
|
|
|
4
|
|
|
21
|
|
|
|
831
|
Depreciation and
amortization
|
|
7,878
|
|
|
|
8,271
|
|
|
32,127
|
|
|
|
17,832
|
EBITDA
|
|
7,616
|
|
|
|
24,768
|
|
|
(101,393)
|
|
|
|
48,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill
and intangible assets
|
|
2,000
|
|
|
|
-
|
|
|
146,900
|
|
|
|
-
|
Adjustment to gain on
acquisition
|
|
-
|
|
|
|
-
|
|
|
(3,828)
|
|
|
|
-
|
Stock
Compensation
|
|
1,306
|
|
|
|
1,685
|
|
|
8,009
|
|
|
|
7,654
|
Loss on disposals of
long-lived assets
|
|
214
|
|
|
|
1,100
|
|
|
1,176
|
|
|
|
1,282
|
M&A - related
professional and integration fees
|
|
4,264
|
|
|
|
1,791
|
|
|
5,866
|
|
|
|
7,574
|
Adjusted
EBITDA
|
$
|
15,400
|
|
|
$
|
29,344
|
|
|
56,730
|
|
|
|
64,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income to
Adjusted EBITDA:
|
|
|
|
|
|
|
The following table
sets forth the reconciliation of the Company's forecast
GAAP net income to the calculation of adjusted EBITDA for the three
months
ending March 31, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ending
|
|
March 31,
2023
|
(in thousands,
except per share data)
|
Low
|
|
|
High
|
Net loss available to
common
|
$
|
(9,680)
|
|
|
$
|
(8,388)
|
Preferred
dividends
|
|
1,455
|
|
|
|
1,455
|
Net loss
|
|
(8,225)
|
|
|
|
(6,933)
|
Income tax expense
(benefit)
|
|
(2,597)
|
|
|
|
(2,189)
|
Interest expense
(income)
|
|
2,355
|
|
|
|
2,355
|
Depreciation and
amortization
|
|
6,793
|
|
|
|
6,793
|
EBITDA
|
|
(1,674)
|
|
|
|
26
|
|
|
|
|
|
|
|
Stock
Compensation
|
|
1,771
|
|
|
|
1,771
|
Integration
Expenses
|
|
2,335
|
|
|
|
2,335
|
Adjusted
EBITDA
|
$
|
2,432
|
|
|
$
|
4,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE American Public Education, Inc.