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 theSecurities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2022
American Public Education, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-33810 | 01-0724376 |
|---|---|---|
| (State or other jurisdiction<br><br> of<br> incorporation) | (Commission<br><br> File Number) | (IRS Employer<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
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, $0.01 par value per share | 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 andFinancial Condition.
On May 10, 2022, American Public Education, Inc. issued a press release reporting financial results for the three months ended March 31, 2022. 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, Inc. has scheduled a webcast for 5:00 p.m. ET on May 10, 2022 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.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements andExhibits.
| (d) | Exhibits | |
|---|---|---|
| 99.1 | American Public Education, Inc. press release dated May 10, 2022, reporting<br>financial results for the three months ended March 31, 2022. | |
| 99.2 | American Public Education, Inc. slides for May 10, 2022 conference<br>call and Webcast for the three months ended March 31, 2022. | |
| 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, 2022 | By: | /s/ Richard W. Sunderland, Jr. |
| Richard W. Sunderland, Jr. | |||
| Executive Vice President and Chief Financial Officer |
Exhibit 99.1
American Public Education Reports First Quarter2022 Results
CHARLESTOWN, WV (May 10, 2022) – American Public Education, Inc. (Nasdaq: APEI) announced financial results for the quarter ended March 31, 2022.
First Quarter Highlights:
| · | Consolidated revenue increased 75% year-over-year to $154.7 million |
|---|---|
| · | Net income for the period was $5.3 million, compared to net income of $8.1 million for the three months<br>ended March 31, 2022, a decrease of $2.8 million |
| --- | --- |
| · | Adjusted EBITDA increased 8.5% year-over-year to $17.4 million |
| --- | --- |
| · | APEI completed its acquisition of Graduate School USA (“GSUSA”), a federal workforce training<br>provider, on January 1, 2022 |
| --- | --- |
We completed the acquisitions of Rasmussen University (“RU”) and GSUSA on September 1, 2021, and January 1, 2022, respectively. We did not consolidate the financial results of these companies prior to their respective acquisition closing dates. Accordingly, the financial results for the three months ended March 31, 2021 do not include the results of operations of RU and GSUSA, and therefore the prior year period presented is not directly comparable to the current period.
Financial Results:
Three months ended March 31, 2022 comparedto three months ended March 31, 2021:
| · | Total consolidated revenue for 2022 increased 75% to $154.7 million, compared to total revenue of $88.5<br>million in 2021, due to: |
|---|---|
| o | the inclusion of RU Segment revenue and GSUSA revenue for the three months ended March 31, 2022 of $67.1<br>million and $3.1 million; |
| --- | --- |
| o | an increase of $0.4 million, or 3.7%, in revenue from Hondros College of Nursing (“HCN”),<br>reflecting an increase in enrollment of 8.1% to 2,500 students; and |
| --- | --- |
| o | a decrease of $4.4 million, or 5.7%, in revenue from American Public University System (“APUS”).<br>While enrollments increased 1.2%, revenue declined primarily due to the timing of registrations within the quarter and lower revenue per<br>net course registrations due to a change in mix to military registrations, which generate lower revenue per registration than non-military<br>registrations. |
| --- | --- |
| · | Total costs and expenses increased to $149.5 million for 2022, compared to $77.9 million in 2021, primarily<br>due to the inclusion of our RU Segment and GSUSA costs and expenses for the three months ended March 31, 2022 of $66.2 million and<br>$4.7 million, respectively. |
| --- | --- |
| o | Instructional costs and services increased $39.4 million in 2022 to $71.7 million, compared to $32.3 million<br>in 2021, primarily due to the inclusion of RU Segment and GSUSA instructional costs and services expenses of $35.9 million and $2.9 million,<br>respectively, as well as increases in faculty costs in our HCN Segment. |
| --- | --- |
| o | Selling and promotional expenses increased $19.9 million to $39.3 million, compared to $19.4 million in<br>2021, primarily due to the inclusion of RU Segment and GSUSA selling and promotional expenses of $18.1 million and $0.8 million, respectively. |
| --- | --- |
| o | General and administrative (“G&A”) expenses increased $6.1 million to $29.6 million, compared<br>to $23.5 million in 2021 primarily due to the inclusion of RU Segment and GSUSA G&A expenses of $6.2 million and $0.9 million, respectively,<br>as well as an increase in employee compensation costs and professional fees in Corporate and Other, partially offset by decreases in employee<br>compensation costs, professional fees, and legal costs in our APUS Segment. |
| --- | --- |
| o | Depreciation and amortization expenses increased to $8.1 million in 2022, or 5.3% of revenue, compared<br>to $2.7 million and 3.0% in 2021, primarily due to the addition of the RU Segment and the amortization of the associated acquired intangible<br>assets. |
| --- | --- |
| o | Costs and expenses in 2022 include M&A-related professional fees of $0.9 million and loss on disposals<br>of long-lived assets of $0.8 million. M&A-related professional fees, which are included within G&A expenses, were associated with<br>the GSUSA acquisition in 2022 compared to $0.6 million of M&A-related professional fees associated with the RU acquisition in 2021.<br>Loss on disposals of long-lived assets were primarily related to the sale of excess facilities in 2022 and were immaterial in the 2021<br>period. |
| --- | --- |
| · | Interest expense increased to $3.4 million in 2022, as compared to $0.1 million in interest income in<br>2021, due to the $175 million senior secured term loan issued in connection with the RU acquisition. |
| --- | --- |
| · | Net income was $5.3 million in 2022, compared to net income of $8.1 million in 2021, primarily driven<br>by higher amortization of intangible assets and interest expense as a result of the RU acquisition, partially offset by the gain on acquisition<br>related to the GSUSA acquisition. |
| --- | --- |
| · | Earnings per diluted share was $0.28, compared to $0.49 per diluted share in the same period of 2021 |
| --- | --- |
| · | Adjusted EBITDA was $17.4 million in 2022, compared to $16.0 million in 2021. The 2022 period included<br>$2.4 million of stock-based compensation expense, $0.9 million of M&A-related professional fees, $0.8 million of loss on disposals<br>of long-lived assets, and a gain of $4.5 million related to the GSUSA acquisition, all of which were excluded from adjusted EBITDA. |
| --- | --- |
Balance Sheet and Liquidity:
| · | Total cash and cash equivalents as of March 31, 2022 was approximately $170.9 million, compared to $149.6<br>million as of December 31, 2021, a 14.2% increase. The increase in cash was due to cash provided by operating activities and $1.4 million<br>of net cash received as a result of the GSUSA acquisition, partially offset by increases in capital expenditures and payments of principal<br>and interest on our debt obligations. |
|---|---|
| · | During the three months ended March 31, 2022 we saw improvement in Army’s processing of invoices<br>and payments to APUS. During the period Army paid approximately $20.6 million to APUS. As of March 31, 2022, approximately $19.4<br>million in accounts receivable, of which $10.5 million is older than 60 days from the course start date, was due from the Army as a result<br>of the disruption associated with the transition to ArmyIgnitED, a new system used by soldiers to request tuition assistance. |
| --- | --- |
Registrations and Enrollment:
| 2022 | 2021 | % Change | |||||
|---|---|---|---|---|---|---|---|
| American Public University System^1^ | |||||||
| For the three months ended March 31, <br> Net Course Registrations | 94,000 | 92,900 | 1.2 | % | |||
| Rasmussen University^2^ | |||||||
| For the three months ended March 31, <br> Total Student Enrollment | 16,200 | 17,300 | -6.4 | % | |||
| Hondros College of Nursing^3^ | |||||||
| For the three months ended March 31, <br> Total Student Enrollment | 2,500 | 2,300 | 8.1 | % |
^1^APUSNet 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^RasmussenStudent Enrollment represents students in an active status as of the full-term census or billing date.
^3^HCNStudent Enrollment represents the approximate number of students enrolled in a course after the date by which students may drop a course without financial penalty.
Acquisition of Graduate School USA:
On January 1, 2022, the Company completed the GSUSA acquisition pursuant to an Asset Purchase Agreement dated August 10, 2021 for an aggregate purchase price of $1.0 million, subject to working capital adjustments. At closing, the Company transferred an initial cash payment to the Seller of $0.5 million, which is the purchase price less $0.5 million retained by the Company to secure the indemnification obligations of GSUSA and received approximately $1.9 million from GSUSA based upon the estimated net working capital at closing. The purchase price reflects the $0.5 million due to GSUSA post-closing, and additional adjustments to the estimated net working capital at closing.
The Company applied the acquisition method of accounting to the GSUSA acquisition, whereby the assets acquired and liabilities assumed were recognized at fair value on the closing date of the acquisition. There was no goodwill recorded as a result of the GSUSA acquisition, but an approximate $4.5 million noncash, non-taxable gain on the acquisition was recorded and is included as a separate line item on the Consolidated Statements of Income for the three months ended March 31, 2022.
Second 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.
| APUS Net course registrations | 80,900 to 83,400 | -2% to 1% |
| HCN Student enrollment | 2,400 | 3% |
| RU Student enrollment | 15,900 | -6% |
| - Nursing | 8,200 | -2% |
| - Non-Nursing | 7,700 | -10% |
| ( in millions except EPS) | ||
| APEI Consolidated revenue | 150 to 154 | 92% to 97% |
| APEI Consolidated net income | 0.1 to 1.4 | -81% to 164% |
| APEI Adjusted EBITDA | 14.3 to 16.2 | 44% to 63% |
| APEI Diluted EPS | 0.00 to 0.07 | -100% to 133% |
All values are in US Dollars.
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, 2022 and 2021, adjusted EBITDA excludes the gain on acquisition, 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 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 90,000 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 15,900 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 its six campuses in Ohio and one in Indiana. It is the largest educator of PN (LPN) nurses in the state of Ohio** with approximately 2,400 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 VeteransAdministration student enrollment data, as reported by Military Times, 2020.
**Based on information compiled by the National Council of StateBoards of Nursing and Ohio Board of Nursing.
ForwardLooking 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: the effects, duration, and severity of and APEI’s response to the COVID-19 pandemic; adverse effects on demand as the pandemic abates; 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; 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; entering into and integrating acquisitions, including the integration of RU and GSUSA; 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 period ended March 31, 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 | ||||||
|---|---|---|---|---|---|---|
| March 31, | ||||||
| 2022 | 2021 | |||||
| (unaudited) | ||||||
| Revenues | $ | 154,747 | $ | 88,541 | ||
| Costs and expenses: | ||||||
| Instructional costs and services | 71,698 | 32,319 | ||||
| Selling and promotional | 39,319 | 19,402 | ||||
| General and administrative | 29,589 | 23,524 | ||||
| Loss on disposals of long-lived assets | 793 | 8 | ||||
| Depreciation and amortization | 8,148 | 2,651 | ||||
| Total costs and expenses | 149,547 | 77,904 | ||||
| Income from operations before interest and income taxes | 5,200 | 10,637 | ||||
| Gain on acquisition | 4,533 | — | ||||
| Interest (expense) income | (3,355 | ) | 114 | |||
| Income before income taxes | 6,378 | 10,751 | ||||
| Income tax expense | 1,040 | 2,639 | ||||
| Equity investment loss | (5 | ) | (5 | ) | ||
| Net income | $ | 5,333 | $ | 8,107 | ||
| Net income per common share: | ||||||
| Basic | $ | 0.28 | $ | 0.50 | ||
| Diluted | $ | 0.28 | $ | 0.49 | ||
| Weighted average number of common shares: | ||||||
| Basic | 18,805 | 16,211 | ||||
| Diluted | 18,879 | 16,422 | ||||
| Three Months Ended | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| Segment Information: | March 31, | |||||
| 2022 | 2021 | |||||
| Revenues: | ||||||
| APUS Segment | $ | 73,090 | $ | 77,476 | ||
| RU Segment | $ | 67,099 | $ | — | ||
| HCN Segment | $ | 11,541 | $ | 11,132 | ||
| Corporate and other^1^ | $ | 3,017 | $ | (67 | ) | |
| Income (loss) from operations before interest and income taxes: | ||||||
| APUS Segment | $ | 13,182 | $ | 14,031 | ||
| RU Segment | $ | 891 | $ | — | ||
| HCN Segment | $ | (995 | ) | $ | 783 | |
| Corporate and other | $ | (7,878 | ) | $ | (4,177 | ) |
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.
- Corporate and Other includes tuition and contract training revenue earned by GSUSA from the GSUSA Closing Date through March 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 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 months ended March 31, 2022 and 2021:
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | ||||||
| (in thousands, except per share data) | 2022 | 2021 | ||||
| Net income | $ | 5,333 | $ | 8,107 | ||
| Income tax expense | 1,040 | 2,639 | ||||
| Interest expense (income), net | 3,355 | (114 | ) | |||
| Equity investment loss | 5 | 5 | ||||
| Depreciation and amortization | 8,148 | 2,651 | ||||
| EBITDA | 17,881 | 13,288 | ||||
| Gain on acquisition | (4,533 | ) | - | |||
| Stock Compensation | 2,356 | 2,180 | ||||
| Loss on disposals of long-lived assets | 793 | 8 | ||||
| M&A - related professional fees | 908 | 559 | ||||
| Adjusted EBITDA | $ | 17,405 | $ | 16,035 |
GAAP Outlook Net Income to Outlook Adjusted EBITDA:
The following table sets forth the reconciliation of the Company’s projected GAAP net income to the calculation of projected adjusted EBITDA for the three months ending June 30, 2022:
| Three Months Ending | ||||
|---|---|---|---|---|
| June 30, 2022 | ||||
| (in thousands, except per share data) | Low | High | ||
| Net income | $ | 80 | $ | 1,410 |
| Income tax expense | 40 | 610 | ||
| Interest expense, net | 3,340 | 3,340 | ||
| Equity investment loss (income) | - | - | ||
| Depreciation and amortization | 8,330 | 8,330 | ||
| EBITDA | 11,790 | 13,690 | ||
| Stock Compensation | 2,460 | 2,460 | ||
| Adjusted EBITDA | $ | 14,250 | $ | 16,150 |
Exhibit 99.2
PRESENTED BY Angela Selden President and CEO Richard Sunderland, CPA Executive VP and CFO American Public Education, Inc. First Quarter 2022 Results May 10, 2022
Safe Harbor Statement Please note that statements made in this presentation regarding American Public Education and its subsidiaries (the “Company”) that are not historical facts may be forward - looking statements based on current expectations, assumptions, estimates and projections about the Company and the industry . These forward - looking statements are subject to risks and uncertainties that could cause actual future events or results to differ materially from those expressed or implied by such statements . Forward - looking statements may be able to 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, expected growth, registrations and enrollments, revenues, net income, earnings per share, adjusted EBITDA and EBITDA . Actual results could differ materially from those expressed or implied by forward - looking statements as a result of various factors, including risks related to the effects of and the Company’s response to the COVID - 19 pandemic, including impacts on the demand environment as the pandemic abates, the Company’s dependence on the effectiveness of its ability to attract students who persist in its institutions’ programs, changing market demands, the Company’s inability to market its programs, the loss of the Company’s ability to receive funds under tuition assistance programs or ability to process tuition assistance financial aid, the Company’s inability to maintain strong relationships with the military and maintain course registrations and enrollments from military students, the Company’s failure to comply with regulatory and accrediting agency requirements and to maintain institutional accreditation, the Company’s loss of eligibility to participate in Title IV programs or ability to process Title IV financial aid, the Company’s need to successfully adjust to future market demands by updating existing programs and developing new programs, entering into and integrating acquisitions, including the integration of Rasmussen University and Graduate School USA, 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 . 2
3 Table of Contents 1. APEI and Education Unit Enrollment Updates 2. 1Q 2022 Financial Results & 2Q 2022 Outlook
Market Leading Positions with Service - Minded Students HEROIC TM Affordable High - Quality Outcomes - Focused #1 Educator of Active - Duty Military and Veterans #1 Educator in Creating New Nurses 1 HEROIC TM : Higher Education Return on Investment for Customers 1 APEI is the largest educator of ADN and PN pre - licensure nurses in the United States 4 Leading Provider of Federal Workforce Training Only Educator with a Full Ladder of Nursing Curriculum
• 2Q22 total nursing student enrollment growth of - 1% versus prior year comparable period, comping to tough growth periods; still represents +14% 2 year CAGR APEI Nursing Enrollment Update 1Q 2022 Forecast 2Q 2022 5 • 1Q22 nursing enrollment reached record number • 3% growth in nursing in total • ADN/RN growth increased ~4% 6,700 1,600 8,300 8,200 2,300 10,500 8,400 2,500 10,900 Rasmussen HCN Total Nursing Nursing Enrollment 1Q 2020 1Q 2021 1Q 2022 + 2% + 8% + 3% +15% 2 Yr CAGR
• 1Q22 military registrations strong, +7% compared to 1Q21 • 2Q22 registrations of approximately - 2 to +1% growth versus prior year period or between 80.9K and 83.4K enrollments • Strong military registrations, offset by non - military and veteran broader market decline APUS and Rasmussen Non - Nursing Enrollment Update APUS Rasmussen Non - Nursing 6 • 1Q22 Rasmussen non - nursing enrollment continued to be impacted by the broader challenging economic environment • Early education accounted for ~25% of decline from 1Q20 to 1Q22, sharply affected by COVID • 2Q22 Rasmussen non - nursing enrollments of 7,700 • Down roughly 11% from 2Q21 +5% 2 Yr CAGR - 11% 2 Yr CAGR 84.8K 92.9K 94.0K APUS Net Course Registrations +1% 1Q 2020 1Q 2021 1Q 2022
Table of Contents 7 1. APEI and Education Unit Enrollment Updates 2. 1Q 2022 Financial Results & 2Q 2022 Outlook
First Quarter 2022 Financial Highlights Financial Summary Capitalization and Liquidity (1) During the third quarter of 2021, we revised our reportable segments and updated the results for the prior period to conform to the current period presentation. Additionally, during the first quarter of 2022, we added Graduate School USA to Corporate and Other. (2) EBITDA plus stock comp, loss on disposal of long - lived assets, and M&A - related professional and integration fees. Please refer to appendix for GAAP to Non - GAAP reconciliation. 8 Solid liquidity position: • $145 million of unrestricted cash • $20 million undrawn revolver Three Months Ended Year Ended March 31, December 31, 2021 2022 % Change ($ in millions) APUS Revenue (1) 77.5 73.1 -6% Rasmussen Revenue - 67.1 N/A HCN Revenue 11.1 11.5 4% Corporate and Other (1) (0.1) 3.0 NM Total revenue 88.5 154.7 75% Net income (loss) 8.1 5.3 -34% Adjusted EBITDA (2) 16.0 17.4 9% EPS (diluted) 0.49 0.28 -43%
These statements are based on current expectations. These statements are forward - looking and actual results may differ materially. (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) HCN and Rasmussen 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. (3) Please refer to appendix for GAAP to Non - GAAP reconciliation APEI’s 2Q 2022 Outlook 9 • Rasmussen Nursing enrollments impacted in northern region due to limited access to adjunct faculty to support now in - person clinicals • Broader inflation pressures have increased faculty and staff wages, impacting costs and expenses and pressuring margins • Tight labor market resulting in wage inflation, is putting downward pressure on higher education interest Second Quarter 2022 Guidance (Approximate) (% Yr/Yr Change) APUS Net course registrations 80,900 to 83,400 -2% to 1% HCN Student enrollment 2,400 3% RU Student enrollment 15,900 -6% - Nursing 8,200 -2% - Non-Nursing 7,700 -10% ($ in millions except EPS) APEI Consolidated revenue $150 to $154 92% to 97% APEI Consolidated net income $0.1 to $1.4 -81% to 164% APEI Adjusted EBITDA $14.3 to $16.2 44% to 63% APEI Diluted EPS $0.00 to $0.07 -100% to 133%
Thank You
Appendix: Enrollment and Registration Summary 11 1Q 2022 1Q 2021 % Change APUS Registrations 94,000 92,900 1% Total Rasmussen Enrollment 16,200 17,300 -7% Rasmussen Nursing Enrollment 8,400 8,200 2% Rasmussen Non-Nursing Enrollment 7,800 9,100 -14% HCN Enrollment 2,500 2,300 8%
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 measure that is included in the table below (under the caption “GAAP Net Income to Adjusted EBITDA”) and not to rely on any single financial measure to evaluate its business . Appendix: Disclosures 12 GAAP Net Income to Adjusted EBITDA: (in thousands, except per share data) Net income $ 5,333 $ 8,107 Income tax expense 1,040 2,639 Interest expense (income), net 3,355 (114) Equity investment loss 5 5 Depreciation and amortization 8,148 2,651 EBITDA 17,881 13,288 Gain on acquisition (4,533) - Stock Compensation 2,356 2,180 Loss on disposals of long-lived assets 793 8 M&A - related professional fees 908 559 Adjusted EBITDA $ 17,405 $ 16,035 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, 2022 and 2021: Three Months Ended March 31, 2022 2021
American Public Education is presenting adjusted EBITDA in connection with its GAAP outlook and urges investors to review the reconciliation of projected adjusted net income to the comparable GAAP financial measure 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 . Appendix: Disclosures (continued) 13 GAAP Outlook Net Income to Outlook Adjusted EBITDA: (in thousands, except per share data) Net income $ 80 $ 1,410 Income tax expense 40 610 Interest expense, net 3,340 3,340 Equity investment loss (income) - - Depreciation and amortization 8,330 8,330 EBITDA 11,790 13,690 Stock Compensation 2,460 2,460 Adjusted EBITDA $ 14,250 $ 16,150 June 30, 2022 Low High The following table sets forth the reconciliation of the Company’s projected GAAP net income to the calculation of projected adjusted EBITDA for the three months ending June 30, 2022: Three Months Ending