8-K
AMERICAN PUBLIC EDUCATION INC (APEI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2021
| American Public Education, Inc. | ||
|---|---|---|
| (Exact Name of Registrant as Specified in its Charter) | ||
| Delaware | 001-33810 | 01-0724376 |
| --- | --- | --- |
| (State or other jurisdiction<br><br><br>of Incorporation) | (Commission<br><br><br>File Number) | (I.R.S. Employer<br><br><br>Identification No.) |
| 111 W. Congress Street<br><br><br>Charles Town, West Virginia | 25414 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 304-724-3700
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $.01 par value | APEI | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Section 2 | – Financial Information |
|---|---|
| Item 2.02 | Results of Operations and Financial Condition |
On May 10, 2021, American Public Education, Inc. issued a press release reporting financial results for the three months ended March 31, 2021. A copy of American Public Education’s press release is attached to this report as Exhibit 99.1 and is incorporated in this report by reference. American Public Education has scheduled a webcast for 5:00 p.m. EDT on May 10, 2021 to discuss its financial results, and slides for that webcast are attached to this report as Exhibit 99.2 and are incorporated in this report by reference. A copy of an investor fact sheet is attached to this report as Exhibit 99.3 and is incorporated in this report by reference
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits | |
|---|---|---|
| 99.1 | American Public Education, Inc. press release dated May 10, 2021, reporting financial results for the three months ended March 31, 2021. | |
| 99.2 | American Public Education, Inc. slides for May 10, 2021 conference call and Webcast for the three months ended March 31, 2021. | |
| 99.3 | American Public Education, Inc. fact sheet posted to its website on May 10, 2021. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| American Public Education, Inc. | ||
|---|---|---|
| Date: May 10, 2021 | ||
| By: | /s/ Richard W. Sunderland, Jr. | |
| Richard W. Sunderland, Jr. | ||
| Executive Vice President and Chief Financial Officer |
Exhibit 99.1
American Public Education Reports Strong First Quarter 2021 Results
Year-Over-Year Enrollment Growth Continued for a Sixth Consecutive Quarter at APUS; Record Enrollment at Hondros College of Nursing
CHARLES TOWN, W.V., May 10, 2021 /PRNewswire/ -- American Public Education, Inc. (Nasdaq: APEI) – parent company of online learning provider American Public University System (APUS) and on-ground pre-licensure Hondros College of Nursing (HCN) – announced financial results for the first quarter ended March 31, 2021 that reflect increased profitability and continued enrollment growth across both institutions.
First Quarter Highlights:
- Consolidated revenue increased 18.7% year-over-year to $88.5 million
- Net income more than doubled year-over-year to $0.49 per diluted share, and income from operations before interest income and income taxes increased to $10.6 million, compared to $2.7 million in the prior year period
- Adjusted EBITDA increased 87% year-over-year to $15.9 million
- Net course registrations by new students at APUS increased 14% and total net course registrations increased 10% year-over-year to 92,900 – the sixth consecutive quarter of year-over-year growth
- New student enrollment at HCN increased 45% and total student enrollment increased 45% year-over-year to 2,270 – the highest in school history ****
Angela Selden, APEI's Chief Executive Officer, said, "For the sixth consecutive quarter both APUS and Hondros have delivered year-over-year enrollment growth, improving APEI's operating performance significantly. We believe our enterprise transformation initiatives, continued emphasis on outreach to nursing and military communities particularly during the pandemic, and improved operating efficiencies are delivering top-line growth and solid financial performance this quarter."
"Our excitement continues to build as we approach the completion of the Rasmussen University acquisition, currently planned for the third quarter of this year. As we look to becoming the market-leading national pre-licensure nursing platform, we will prioritize growth initiatives and operating efficiency, all while continuing to deliver on our collective successful track record of favorable student outcomes and high-quality, affordable education. We look forward to welcoming Rasmussen University into the APEI family of institutions," added Selden.
Financial Results:
Total consolidated revenue for the first quarter of 2021 increased by 18.7% to $88.5 million, compared to total revenue of $74.6 million in the first quarter of 2020. The increase was driven by a $10.3 million, or 15.4%, increase in APEI Segment revenue and a $3.6 million, or 47.7%, increase in HCN Segment revenue resulting from increases in student enrollment.
Consolidated income from operations before interest income and income taxes in the first quarter of 2021 increased to $10.6 million, compared to $2.7 million in the prior year period. APEI Segment income from operations before interest income and income taxes increased to $9.9 million, compared to $3.6 million in the prior year period. APEI Segment expenses include $0.5 million in professional fees associated with strategic growth opportunities, including the Rasmussen University acquisition, compared to $0.6 million in professional fees associated with strategic growth opportunities in the prior year period. HCN Segment income from operations before interest income and income taxes was $0.8 million during the three months ended March 31, 2021, compared to a loss of $0.9 million in the same period in 2020.
GAAP net income for the three months ended March 31, 2021 was $8.1 million, or $0.49 per diluted share, compared to net income of $2.4 million, or $0.16 per diluted share, in the same period of 2020. Adjusted EBITDA for the three months ended March 31, 2021 was $15.9 million, compared to $8.5 million in the prior year period. The weighted average diluted shares outstanding for the first quarter of 2021 and 2020 were approximately 16.4 million and 15.1 million, respectively.
Total cash and cash equivalents as of March 31, 2021 were approximately $320.8 million, compared to $227.7 million as of December 31, 2020. Total cash and cash equivalents as of March 31, 2021 reflects that on March 1, 2021, APEI closed its previously announced underwritten public offering of 3,680,000 shares for net proceeds of approximately $86.2 million.
Capital expenditures were approximately $1.5 million for the three months ended March 31, 2021, compared to $1.9 million in the prior year period. Depreciation and amortization expense was $2.7 million for the three months ended March 31, 2021, compared to $3.3 million in the prior year period.
Registrations and Enrollment:
| American Public University System^1^ | |||||
|---|---|---|---|---|---|
| For the three months ended March 31, | 2021 | 2020 | % Change | ||
| Net Course Registrations by New Students | 11,500 | 10,100 | 14% | ||
| Net Course Registrations | 92,900 | 84,800 | 10% | ||
| As of March 31, | |||||
| APUS Student Enrollment^2^ | 91,500 | 82,800 | 11% | ||
| Hondros College of Nursing^3^ | |||||
| For the three months ended March 31, | 2021 | 2020 | %Change | ||
| New Student Enrollment | 644 | 444 | 45% | ||
| Total Student Enrollment | 2,270 | 1,570 | 45% | ^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. | |
| --- | |||||
| ^2^APUS Student Enrollment represents the number of unique active students, including those who are currently on an approved leave of absence, who are currently in class or have completed a course within the past 12 months. Excludes students in doctoral programs. | |||||
| ^3^HCN Student Enrollment represents the approximate number of students<br>enrolled in a course after the date by which students may drop a course without financial penalty. |
Rasmussen University Transaction:
On October 28, 2020, APEI announced plans to acquire Rasmussen University, the largest educator of ADN nurses. Assuming the acquisition, APEI expects to become the #1 educator of pre-licensure nurses (ADN/RN and PN/LPN) with over 10,000 nursing students. The pending acquisition is expected to close by the middle of the third quarter 2021, subject to closing conditions that include review by the Department of Education, approval by the Higher Learning Commission and approval of or notices to other regulatory and accrediting bodies.
Second Quarter 2021 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.
- APEI expects second quarter 2021 consolidated revenue to decline between 5% and 3% compared to the prior year period.
- APEI anticipates net income of between a $0.8 million loss and $0.6 million income or between a loss of $0.04 and $0.03 income per diluted share.
- Adjusted EBITDA is anticipated to be between $7.3 and $9.2 million.
American Public Education expects the following results from its subsidiaries in the second quarter of 2021:
- At APUS, total net course registrations are expected to decline between 8% and 4% year-over-year.
- At HCN, new student enrollment increased approximately 37% and total student enrollment increased approximately 36% year-over-year for the three months ended June 30, 2021.
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 March 31, 2020 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 first quarter 2021 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 EducationAmerican Public Education, Inc . (Nasdaq: APEI) is a leading provider of higher learning dedicated to preparing students all over the world for excellence in service, leadership and achievement. APEI offers respected, innovative and affordable academic programs and services to students, universities and partner organizations through wholly owned subsidiaries: American Public University System and National Education Seminars, Inc., which we refer to in this press release as Hondros College of Nursing. Together, these institutions serve more than 93,800 adult learners worldwide and offer more than 240 degree and certificate programs in fields ranging from homeland security, military studies, intelligence, and criminal justice to technology, business administration, public health, nursing, and liberal arts. For additional information, please visit www.apei.com.
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, expected registration and enrollments, expected revenues, expected earnings, income and EBITDA, benefits of the acquisition of Rasmussen University (the "Acquisition"), the timing of the closing of the Acquisition, expected capital structure, the ability to deliver a return on learners' educational investment, the ability to maintain an attractive risk profile, 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 loss of APEI's ability to receive funds under Department of Defense 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; moderation or decrease in demand as the pandemic abates; risks related to the Acquisition, including the inability to complete the Acquisition on the anticipated timeline or at all, APEI's reliance on financing to fund a portion of the Acquisition, and other events that could impact the Acquisition and its closing; APEI's dependence on the effectiveness of its ability to attract students who persist in its institutions' programs; APEI's inability to effectively market its institutions' programs; 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 inability to maintain strong relationships with the military and maintain course registrations and enrollments from military students; 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; APEI's need to successfully adjust to future market demands by updating existing programs and developing new programs; APEI's dependence on 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 three months ended March 31, 2021 and Annual Report on Form 10-K for the year ended December 31, 2020, 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:**Richard W. Sunderland, Jr., CPA
Executive Vice President and Chief Financial Officer
304.885.5371
Christopher L. Symanoskie, IRC
Vice President, Investor Relations
703.334.3880
| American Public Education, Inc. | ||||
|---|---|---|---|---|
| Consolidated Statement of Income | ||||
| (In thousands, except per share data) | ||||
| Three Months Ended | ||||
| March 31, | ||||
| 2021 | 2020 | |||
| (unaudited) | ||||
| Revenues | $ | 88,541 | $ | 74,616 |
| Costs and expenses: | ||||
| Instructional costs and services | 32,319 | 29,230 | ||
| Selling and promotional | 19,402 | 18,186 | ||
| General and administrative | 23,524 | 21,003 | ||
| Loss on disposals of long-lived assets | 8 | 166 | ||
| Depreciation and amortization | 2,651 | 3,338 | ||
| Total costs and expenses | 77,904 | 71,923 | ||
| Income from operations before | ||||
| interest income and income taxes | 10,637 | 2,693 | ||
| Interest income, net | 114 | 702 | ||
| Income before income taxes | 10,751 | 3,395 | ||
| Income tax expense | 2,639 | 974 | ||
| Equity investment loss | (5) | (1) | ||
| Net income | $ | 8,107 | $ | 2,420 |
| Net income per common share: | ||||
| Basic | $ | 0.50 | $ | 0.16 |
| Diluted | $ | 0.49 | $ | 0.16 |
| Weighted average number of<br><br> common shares: | ||||
| Basic | 16,211 | 15,024 | ||
| Diluted | 16,422 | 15,116 | ||
| Three Months Ended | ||||
| Segment Information: | March31, | |||
| 2021 | 2020 | |||
| Revenues: | ||||
| American Public Education, Inc. | $ | 77,422 | $ | 67,094 |
| Hondros College of Nursing | $ | 11,132 | $ | 7,539 |
| Intersegment Elimination^1^ | $ | (13) | $ | (17) |
| Income (loss) from operations before | ||||
| interest income and income taxes: | ||||
| American Public Education, Inc. | $ | 9,854 | $ | 3,577 |
| Hondros College of Nursing | $ | 783 | $ | (885) |
| Intersegment Elimination^1^ | $ | — | $ | 1 |
| 1.The APEI Segment charges the HCN Segment for the value of courses taken by HCN Segment<br><br>employees at APUS. The intersegment elimination represents the elimination of this intersegment<br><br>revenue in consolidation. | ||||
| GAAP Net Income to Adjusted EBITDA: | ||||
| --- | --- | --- | --- | --- |
| The following table sets forth the reconciliation of the Company's reported<br><br>GAAP net income to the calculation of adjusted EBITDA for the three<br><br>months ended March 31, 2021 and 2020: | ||||
| Three Months Ended | ||||
| March 31, | ||||
| (in thousands, except per sharedata) | 2021 | 2020 | ||
| Net income | $ | 8,107 | $ | 2,420 |
| Income tax expense | 2,639 | 974 | ||
| Interest income, net | (114) | (702) | ||
| Equity investment loss | 5 | 1 | ||
| Depreciation and amortization | 2,651 | 3,338 | ||
| EBITDA | 13,288 | 6,031 | ||
| Stock Compensation | 2,180 | 1,750 | ||
| Loss on disposals of long-lived assets | 8 | 166 | ||
| Goodwill impairment | — | — | ||
| Compensation expense adjustment | — | — | ||
| M&A - related professional fees | 461 | 571 | ||
| Adjusted EBITDA | $ | 15,937 | $ | 8,518 |
| GAAP Outlook Net Income to Outlook Adjusted EBITDA: | ||||
| --- | --- | --- | --- | --- |
| The following table sets forth the reconciliation of the Company's<br><br>outlook GAAP net income to the calculation of outlook adjusted<br><br>EBITDA for the three a months ended June 30, 2021: | ||||
| Three Months EndedJune 30, 2021 | ||||
| (in thousands, except per share data) | Low | High | ||
| Net income | $ | (800) | 600 | |
| Income tax expense | (300) | 260 | ||
| Interest income | (35) | (35) | ||
| Equity investment loss (income) | — | — | ||
| Depreciation and amortization | 2,675 | 2,675 | ||
| EBITDA | 1,540 | 3,500 | ||
| Stock compensation | 2,020 | 2,020 | ||
| Integration expenses | 3,700 | 3,700 | ||
| Adjusted EBITDA | $ | 7,260 | $ | 9,220 |
PRESENTED BY
Angela Selden President and CEO Richard Sunderland, CPA Executive VP and CFO American Public Education, Inc. First Quarter 2021 Results Exhibit 99.2
Safe Harbor Statement Statements made in this presentation 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, expected registration and enrollments, expected revenues, expected earnings, income and EBITDA, benefits of the acquisition of Rasmussen University (the “Acquisition”), the timing of the closing of the Acquisition, expected financial results on a pro forma basis assuming the Acquisition, expected capital structure, the ability to deliver a return on learners’ educational investment, the ability to maintain an attractive risk profile, 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 loss of APEI’s ability to receive funds under Department of Defense 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; moderation or decrease in demand as the pandemic abates; risks related to the Acquisition, including the inability to complete the Acquisition on the anticipated timeline or at all, APEI’s reliance on financing to fund a portion of the Acquisition, and other events that could impact the Acquisition and its closing; APEI’s dependence on the effectiveness of its ability to attract students who persist in its institutions’ programs; APEI’s inability to effectively market its institutions’ programs; 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 inability to maintain strong relationships with the military and maintain course registrations and enrollments from military students; 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; APEI’s need to successfully adjust to future market demands by updating existing programs and developing new programs; APEI’s dependence on 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 three months ended March 31, 2021 and Annual Report on Form 10-K for the year ended December 31, 2020, 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. 2
First Quarter 2021 Operational Highlights 3 APUS Net Course Registrations.
New student registrations increased 14%
Total net course registrations increased 10%
Net course registrations growth was primarily driven by active-duty military students and graduate students, along with continued demand for online education due to COVID-19 Record Enrollment at Hondros.
New and total enrollment increased 45% Total enrollment of 2,300 students – highest in school history
Enrollment growth driven primarily by initiatives launched in 2019, increased demand for nursing education, and a change in the competitive environment due to COVID-19
HCN announced opening of a new campus in Akron, Ohio – its 7th campus location
Sixth Consecutive Quarter of YoY Enrollment Growth at APUS & Record Enrollment at HCN
18.7% Increase in Consolidated Revenue
to $88.5MM 235% Increase in Net Income
to $8.1MM
87% Increase in Adjusted EBITDA
to $15.9MM
First Quarter 2021 Financial Highlights $124MM Increase in Cash and Equivalents
$320.8MM 4 APEI’s Net Income More Than Doubled to $0.49 Per Diluted Share, Compared to Prior Year Capital Structure Further Strengthened: Raised $86.2MM of net proceeds from the sale of 3.68MM shares of common stock APEI completed the syndication of committed financing for $175 million term loan and $20MM revolving loan facility.
5 Licensed Practical Nurse (LPN) through PN Program Registered Nurse (RN) through ADN Program Concept-based curriculum High-definition simulation labs 85+ healthcare partnerships 45+ employer partnerships Campuses1 Nursing Revenue2 7 $40MM 24 $143MM 31 $183MM Enrollment Growth2 45% 20% 24% = APEI’s Nursing Platform1 + Expected with addition of classes at Rasmussen’s Dallas, Texas campus following the closing of Rasmussen acquisition. Trailing twelve months as of 3/31/21 ‘21 PF 10,000+ Nursing Enrollments Leading RN program, comprising 75% of nursing enrollments Partnerships w/ 250+ hospitals and health systems “Full stack” of nursing programs from pre-licensure to Doctoral #1 Provider of pre-licensure ADN nursing education
Building A National Nursing Platform National Nursing Platform Rasmussen University Hondros College of Nursing + = Total enrollment 2,300+ 7 Campuses in 2 States Enrollment split PN/LPN: ~63% ADN/RN: ~37% Average class size 15 students APEI to Become #1 in Creating New Nurses with Rasmussen (Pre-licensure) Hondros enrollment momentum continues with 36% YoY enrollment growth expected in 2Q’21.
Second Quarter ‘21 Update 6 Army Registration Disruption
Army soldiers request tuition assistance (TA) for any institution through the Army education portal.
New portal was scheduled to launch on March 8th and is delayed and not yet operational.
Army’s transition to the new portal has disrupted a soldier’s ability to secure approval for course funding.
As a result, 2Q’21 net course registrations at APUS are negatively impacted: In FY’20 Army active-duty represented 23% of all APUS registrations – largest student segment In April ‘21, Army active-duty registrations declined 25% Army has indicated that the portal (ArmyIgniteED) is expected to reopen in June ’21
We expect this disruption to be a one-time occurrence. 2Q’21 net course registrations at APUS are expected to remain well above 2019 levels, despite the Army registration disruption. *Mid-Point of 2Q21 Outlook for APUS Net Course Registrations 7.0% 2YR CAGR
APEI’s Financial & Operational Outlook 7 These statements are based on current expectations. These statements are forward-looking and actual results may differ materially. APUS Net course registrations represent the approximate aggregate number of courses for which students remain enrolled after the date by which they may drop a course without financial penalty. HCN Student enrollment represents the total number of students enrolled in a course after the date by which students may drop a course without financial penalty. Adversely impacted by the temporary suspension of Army registration portal Represents the highest enrollment in HCN’s history Includes $3.0M - $4.0M of Rasmussen University integration costs Second Quarter 2021 Approximate Y/Y Change APUS Net course registrations1-8% to -4% HCN New student enrollment2 +37% HCN Student enrollment2 +36% APEI Consolidated revenue -5% to -3% APEI Consolidated net income -$0.8M to +$0.6M APEI EPS -$0.04 to +$0.03 APEI Adjusted EBITDA +$7.3M to +$9.2M
Priorities for 2021 – “Maximize Learner HEROITM” A Durable, High-Quality Scale Platform w/ Organic and Inorganic Growth Opportunities; Operating Margin Improvement Driven by Growth, Enterprise Transformation and Shared Services; New Leadership w/ Demonstrated Track Record Growth w/ Emphasis on HEROITM Expand enrollments in large and growing markets - #1 in nursing, military and veterans Continue to capitalize on secular growth in nursing and healthcare Increase investment in marketing with emphasis on affordability message Accelerate offerings in “Right to Win” markets Advance strategic corporate development initiatives
Integration of Rasmussen University Execute integration of key Rasmussen corporate and administrative functions utilizing APEI’s existing shared services model
Expand programmatic and competency-based education opportunities Strong mission alignment and attractive regulatory profiles support effective business integration Newly assembled leadership team experienced at integration and enterprise transformation
Accelerate organic growth through focused investments in marketing and technology Drive greater efficiency and improved student satisfaction and outcomes through technology modernization Elevate human resources processes and capabilities Increased scale to drive strong incremental profit performance – create true operating leverage Transformation Drive Operational Excellence 8
Thank You 9
APPENDIX 10 Three Months Ended March 31, 2021 2020 COSTS AND EXPENSES Instructional costs and services 36.5% 39.2% Selling and promotional 21.9% 24.4% General and administrative 26.6% 28.1% Loss on disposals of long-lived assets — 0.2% Depreciation and amortization 3.0% 4.5% Total costs and expenses 88.0% 96.4%
APPENDIX: DISCLOSURES (Continued) American Public Education is presenting adjusted EBITDA in connection with its GAAP results and urges investors to review the reconciliation of adjusted net income to the comparable GAAP financial measures that is included in the table below (under the caption “GAAP to Adjusted EBITDA”) and not to rely on any single financial measure to evaluate its business. 11 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 months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 2020 (in thousands, except per share data) Net income $ 8,107 $ 2,420 Income tax expense 2,639 974 Interest income, net (114) (702) Equity investment loss 5 1 Depreciation and amortization 2,651 3,338 EBITDA 13,288 6,031 Stock Compensation 2,180 1,750 Loss on disposals of long-lived assets 8 166 Goodwill impairment — — Compensation expense adjustment — — M&A - related professional fees 461 571 Adjusted EBITDA $ 15,937 $ 8,518
APPENDIX: DISCLOSURES (Continued) American Public Education is presenting adjusted EBITDA in connection with its GAAP outlook and urges investors to review the reconciliation of adjusted net income to the comparable GAAP financial measures that is included in the table below (under the caption “GAAP Outlook Net Income to Outlook Adjusted EBITDA”) and not to rely on any single financial measure to evaluate its business. 12 GAAP Outlook Net Income to Outlook Adjusted EBITDA: The following table sets forth the reconciliation of the Company’s outlook GAAP net income to the calculation of outlook adjusted EBITDA for the three a months ended June 30, 2021: Three Months Ended June 30, 2021 Low High (in thousands, except per share data) Net income $ (1,780) (783) Income tax expense 666 278 Interest income 1,622 1,622 Equity investment loss (income) — — Depreciation and amortization 2,675 2,675 EBITDA 3,183 3,792 Stock compensation 2,020 2,020 Integration expenses 3,700 4,000 Adjusted EBITDA $ 8,903 $ 9,812
apei-ex993_52.htm
Exhibit 99.3
APEI AMERICAN PUBLIC EDUCATION, INC. MARCH 2021 TICKER: APEI EXCHANGE: NASDAQ HEROI™ Mission of Helping Learners of all Backgrounds Maximize their Higher Education Return on Investment (HEROI) A leading provider of higher education for adult learners, American Public Education, Inc. (APEI) offers affordable, accessible, relevant and quality academic programs and services to students, universities and partner organizations through its wholly owned subsidiaries American Public University System (APUS) and National Education Seminars Inc., which we refer to as Hondros College of Nursing (HCN). On October 28, 2020, APEI announced the transformational deal to acquire Rasmussen University, the nation’s largest educator of ADN nurses.1 APEI would become the #1 educator of pre-licensure nurses (ADN/RN and PN/LPN), serving over 10,000 nursing students. The acquisition is expected to close by the middle of the third quarter 2021, subject to satisfaction or waiver of certain closing conditions. 97% APUS ALUMNI SURVEYED Respondents indicated that APUS programs met their overall expectations.2 110K+ APUS ALUMNI 6K+ HCN ALUMNI 55+ HCN RELATIONSHIPS with healthcare employers 34% OF APUS STUDENTS returned for a second degree3 Revenue (in thousands) Net Income (in thousands) Total Assets (in thousands) Net Cash Provided by Operating Activities (in thousands) 2017...................$299,248 2017...................$21,121 2017...................$399,038 2017...................$47,938 2018...................$297,687 2018...................$25,639 2018...................$370,958 2018...................$44,179 2019...................$286,270 2019...................$10,013 2019...................$354,897 2019...................$38,370 2020...................$321,785 2020...................$18,822 2020...................$371,018 2020...................$44,810 Chris Symanoskie, IRC, Vice President, Investor Relations 703-334-3880 or csymanoskie@apei.com NOTE: Past performance is not indicative of future results. Additional information, including important details about risk factors, can be found in APEI’s filings with the U.S. Securities and Exchange Commission, www.sec.gov. 1. Integrated Postsecondary Education Data System and APEI analysis. 2. APUS, 2017 End of Program Survey 3. APUS undergraduate students who completed an associate or bachelor’s degree in 2020.
American Public University System An online institution of higher learning serving the needs of military, public service and civilian communities through American Military University (AMU) and American Public University (APU). AMU APU At-A-Glance3 88% of Students Are Working Adults Avg. Age of Students: 32 years Avg. Undergraduate Class Size: 19 students Avg. Graduate Class Size: 10 students Gender Diversity: 62% male / 33% female / 5% unreported Over 220 Degree and Certificate Programs Approximately 1,800 Faculty Members 117,000 conferred degrees and certificates Focus on Affordability APUS programs rank #93 nationally, or in the top 2%, for 20-year return on educational investment or net present value.4 72% of AMU and APU alumni have graduated with no APUS-incurred student loan debt. Student Satisfaction 51% of APUS students were referred by others6 Enrollment and Registrations1 For the three months ended March 31, 2021 2020 % Change Net Course Registrations by New Students 11,500 10,100 14% Net Course Registrations 92,900 84,800 10% As of March 31, 2021 2020 % Change APUS Student Enrollment2 91,500 82,800 11% Registrations by Primary Funding Source For the three months ended March 31, 2021 VA 21% TA 46% Other 14% FSA 19% Enrollment by Degree Level3 Master’s 16% Bachelor’s 58% All Others 9% Associate’s 17% Enrollment by School3 Health Science 13% Security & Global Sudies 23% Business 24% Arts & Humanities 22% Education 2% Science, Technology, Engineering & Math 16% 1. APUS Net Course Registrations represent the approximate aggregate number of courses for which students remain enrolled after the date by which they may drop a course without financial penalty. 2. APUS Student Enrollment represents the number of unique active students, including those who are currently on an approved leave of absence, who are currently in class or have completed a course within the past 12 months. Excludes students in doctoral programs. APUS Student Enrollment as of December 31, 2020 includes 1,900 students whose last 8-week course started October 7, 2019 ended in early December 2019. In the fourth quarter of 2020, year-over-year enrollment growth would have been approximately 9% absent this factor. 3. As of December 31, 2020. 4. Georgetown University Center on Education and Workforce, A First Try at ROI: Ranking 4,500 Colleges, 2019. 5. Includes alumni who graduated with an Associate’s, Bachelor’s or Master’s degree from APUS as of December 31, 2020. Student loan debt is defined as student loans and private education loans and considers tuition, fees, living expenses, and book costs associated with courses taken at APUS. 6. Students starting in 2020.
Logo Hondros College of Nursing Serving the needs of nurses and the healthcare community online and through campus locations in Akron, Cincinnati, Cleveland, Columbus, Dayton, Toledo, and Indianapolis. Student Enrollment1 For the three months ended March 31, 2021 2020 % Change New Student Enrollment 644 444 45% Total Student Enrollment 2,270 1,570 45% Approximate Cost (Tuition) of Degree Completion Licensed Practical Nursing (LPN) $17,568 (Ohio); $17,934 (Indiana) Associate Degree in Nursing (ADN) $25,742 Alumni Tuition is $24,5222 Enrollment by Program3 For the full year ended December 31, 2020. Licensed Practical Nurse 63% Associate’s Degree in Nursing 37% At-A-Glance3 ¢ Avg. Age of Students: 30 years ¢ Gender Ratio: 93% female / 7% male ¢ Avg. Class Size: 15 students Graduates3 ¢ 6,000+ alumni Transformational Acquisition of Rasmussen University* With the pending transaction scheduled to close in the middle of the third quarter of 2021, subject to satisfaction or waiver of certain closing conditions, APEI will become the largest educator of ADN nurses, serving over 10,000 students. Rasmussen University offers degree programs to adult learners through 24 campuses in six states.4 1. HCN Student Enrollment represents the total number of students enrolled in a course after the date by which students may drop a course without financial penalty. 2. Tuition for alumni of HCN’s Practical Nursing program is $23,790. 3. For the twelve months ended December 31 2020. 4. On an annual pro forma basis, assuming the transaction had closed as of January 1, 2021.