CHARLES TOWN, W.Va.,
March 12, 2019 /PRNewswire/
-- American Public Education, Inc. (Nasdaq: APEI) – parent
company of online learning provider American Public University
System (APUS) and campus-based Hondros
College of Nursing (HCN) – announced financial results for
the quarter and twelve months ended December
31, 2018.
Selected Financial Data:
- Net income for the fourth quarter of 2018 increased by 8% to
$9.1 million, or $0.55 per diluted share, compared to net income
of $8.4 million, or $0.51 per diluted share, in the same period of
2017.
- Fourth quarter 2018 consolidated revenue decreased by 1% to
$76.9 million, compared to
$78.1 million in the same period of
2017.
Registrations and Enrollment:
- Net course registrations at APUS declined 1% year-over-year in
the fourth quarter of 2018. Net course registrations by new
students decreased by less than 1% year-over-year in the fourth
quarter of 2018.1
- As of December 31, 2018, APUS
student enrollment decreased 2% to 81,400 students, compared to the
prior year. 2
- For the three months ended December 31,
2018, total student enrollment at HCN was flat
year-over-year and new student enrollment decreased by 4%
year-over-year.3
Financial Results:
Total consolidated revenue for the fourth quarter of 2018
decreased by 1% to $76.9
million, compared to total revenue of $78.1 million in the fourth quarter of
2017. Consolidated income from operations before interest
income and income taxes in the fourth quarter of 2018 decreased to
$11.4 million, compared to
consolidated income from operations before interest income and
income taxes of $12.6 million in the
fourth quarter of 2017. Net income for the fourth quarter of 2018
increased to $9.1 million, or $0.55 per diluted share, compared to net
income of $8.4 million, or
$0.51 per diluted share for the
fourth quarter of 2017. The weighted average diluted shares
outstanding for the fourth quarters of 2018 and 2017 were
approximately 16.7 million and 16.5 million,
respectively.
For the twelve months ended December 31,
2018, total consolidated revenue was approximately
$297.7 million, compared to
$299.2 million in the prior year
period. Consolidated income from operations before interest
income and income taxes for the twelve months ended December 31, 2018 was $32.5 million,
compared to $34.9 million in the
prior year period. Net income for the twelve months ended
December 31, 2018 was $25.6
million, or $1.54 per diluted share,
compared to net income of $21.1
million, or $1.29 per diluted
share, in the prior year period. The weighted average diluted
shares outstanding for the twelve months ended December 31, 2018 and 2017 were approximately
16.6 million and 16.4 million, respectively.
Adjusted net income for the twelve months ended December 31, 2018 was $26.9 million, or $1.62 per diluted share. Adjusted net
income for the twelve months ended December
31, 2018 excludes approximately $1.7
million in pre-tax expenses associated with the voluntary
reduction in force program announced on March 12, 2018 as well as the applicable tax
effect of the adjustment. The workforce reduction was substantially
completed on April 1, 2018. For
additional information regarding adjusted net income (a non-GAAP
measure), please refer to "GAAP to Adjusted Net Income
Reconciliation" in the financial tables that follow.
Total cash and cash equivalents as of December 31, 2018 were approximately $212.1 million, compared to $179.2 million as of December 31, 2017. Capital expenditures were
approximately $9.4 million for the
twelve months ended December 31,
2018, compared to $14.8
million in the prior year period. Depreciation and
amortization was $17.5 million for
the twelve months ended December 31,
2018, compared to $18.8
million in the prior year period.
Registrations and Enrollment:
American Public
University System1
|
|
|
|
For the three months
ended December 31,
|
2018
|
2017
|
%
Change
|
Net Course
Registrations by New Students
|
9,800
|
9,900
|
-1%
|
Net Course
Registrations
|
79,400
|
80,300
|
-1%
|
|
|
|
|
American Public
University System1
|
|
|
|
For the twelve months
ended December 31,
|
2018
|
2017
|
%
Change
|
Net Course
Registrations by New
Students
|
40,100
|
41,600
|
-4%
|
Net Course
Registrations
|
320,300
|
325,100
|
-1%
|
|
|
|
|
As of December
31,
|
|
|
|
APUS Student
Enrollment2
|
81,400
|
83,400
|
-2%
|
|
|
|
|
Hondros College of
Nursing3
|
|
|
|
For the three months
ended December 31,
|
2018
|
2017
|
%
Change
|
New Student
Enrollment
|
660
|
690
|
-4%
|
Total Student
Enrollment
|
2,110
|
2,110
|
0%
|
|
|
|
|
1APUS
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.
|
2APUS
Student Enrollment represents the number of unique
active students, including those who take an approved leave of
absence for up to two years, who have reached the eighth day of
their first course or who have completed at least one course within
the last 12 months for which a grade was received.
|
3HCN 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.
|
|
First Quarter 2019 Outlook:
The following statements are based on American Public
Education's current expectations. These statements are
forward-looking and actual results may differ materially. The
Company undertakes no obligation to update publicly any
forward-looking statements for any reason unless required by
law.
American Public Education anticipates a change in first quarter
2019 consolidated revenues of between a 5% decrease and flat
year-over-year. The Company expects consolidated net income
of between $0.29 and $0.34 per diluted share in the first quarter of
2019. Consolidated net income per share includes
approximately $1.5 million pre-tax in
professional fees associated with an acquisition that the Company
is currently evaluating.
American Public Education also expects the following results
from its subsidiaries in the first quarter of 2019:
- At APUS, net course registrations increased by approximately 1%
year-over-year and net course registrations by new students
increased by approximately 8% year-over-year.1
- At HCN, total student enrollment decreased approximately 15%
year-over-year and new student enrollment decreased by
approximately 30% year-over-year for the three months ended
March 31, 2018 (Winter
2018).3 HCN revenues are expected to be
approximately 10% of APEI's consolidated revenues in the first
quarter of 2019.
Non-GAAP Financial Measure ("Adjusted Net Income"):
This press release contains the non-GAAP financial measure of
adjusted net income for the twelve months ended December 31, 2018, which excludes certain pre-tax
expenses associated with the voluntary reduction in force program
announced on March 12, 2018 as well
as the applicable tax effect of the adjustment. American Public
Education believes that the use of adjusted net income is useful
because it allows investors to better compare results to prior year
periods.
This non-GAAP measure 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 adjusted net income is that it excludes 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.
American Public Education is presenting adjusted net income 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 tables following this
press release (under the caption "GAAP to Adjusted Net Income
Reconciliation") and not to rely on any single financial measure to
evaluate its business.
Webcast:
A live webcast of the Company's fourth quarter and full year
2018 earnings conference call will be broadcast today at
5:00 p.m. Eastern time. This call
will be open to listeners who log in through the Company'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 conference
call. The replay will be archived and available to listeners for
one year.
About American Public Education
American 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. The Company
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 80,000 adult learners worldwide and offer more than 200
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 American Public Education, Inc., or
its subsidiaries, that are not historical facts are
forward-looking statements based on current expectations,
assumptions, estimates and projections about American Public
Education, Inc. 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 such
statements. Forward-looking statements can be identified by words
such as "anticipate," "believe," "seek," "could," "estimate,"
"expect," "intend," "may," "should," "will" and "would." These
forward-looking statements include, without limitation, statements
regarding expected growth, expected registration and enrollments,
expected revenues, expected earnings, and plans with respect to
recent, current and future initiatives, investments and
partnerships. Actual results could differ materially from those
expressed or implied by these forward-looking statements as a
result of various factors, including the various risks described in
the "Risk Factors" section and elsewhere in the Company's Annual
Report on Form 10-K for the year ended December 31, 2018 and other filings with the SEC.
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.
American Public
Education, Inc.
|
Consolidated
Statement of Income
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
|
2018
|
|
|
2017
|
|
|
|
|
Revenues
|
$
|
76,930
|
|
|
$
|
78,085
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Instructional costs and services
|
|
28,441
|
|
|
|
28,648
|
|
Selling
and promotional
|
|
14,038
|
|
|
|
14,252
|
|
General
and administrative
|
|
18,676
|
|
|
|
17,399
|
|
Loss on
disposals of long-lived assets
|
|
—
|
|
|
|
535
|
|
Depreciation and amortization
|
|
4,343
|
|
|
|
4,616
|
|
Total
costs and expenses
|
|
65,498
|
|
|
|
65,450
|
|
|
|
|
|
|
|
|
|
Income from
operations before
|
|
|
|
|
|
|
|
interest
income and income taxes
|
|
11,432
|
|
|
|
12,635
|
|
Interest income,
net
|
|
987
|
|
|
|
142
|
|
Income before income
taxes
|
|
12,419
|
|
|
|
12,777
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
3,294
|
|
|
|
1,825
|
|
Equity investment
income (loss)
|
|
(32)
|
|
|
|
(2,535)
|
|
Net
income
|
$
|
9,093
|
|
|
$
|
8,417
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
Basic
|
$
|
0.55
|
|
|
$
|
0.52
|
|
Diluted
|
$
|
0.55
|
|
|
$
|
0.51
|
|
|
|
|
|
|
|
Weighted average
number of
|
|
|
|
|
|
|
|
common
shares:
|
|
|
|
|
|
|
|
Basic
|
|
16,424
|
|
|
|
16,267
|
|
Diluted
|
|
16,656
|
|
|
|
16,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Segment
Information:
|
December
31,
|
|
|
2018
|
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
American
Public Education, Inc.
|
$
|
66,853
|
|
|
$
|
67,928
|
|
Hondros
College of Nursing
|
$
|
10,077
|
|
|
$
|
10,157
|
|
Income from
operations before
|
|
|
|
|
|
|
|
interest income and
income taxes:
|
|
|
|
|
|
|
|
American
Public Education, Inc.
|
$
|
10,030
|
|
|
$
|
10,428
|
|
Hondros
College of Nursing
|
$
|
1,402
|
|
|
$
|
2,207
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
December
31,
|
|
|
2018
|
|
|
2017
|
|
|
|
|
Revenues
|
$
|
297,687
|
|
|
$
|
299,248
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Instructional costs and services
|
|
115,280
|
|
|
|
116,161
|
|
Selling
and promotional
|
|
57,042
|
|
|
|
58,335
|
|
General
and administrative
|
|
74,456
|
|
|
|
69,024
|
|
Loss on
disposals of long-lived assets
|
|
882
|
|
|
|
2,093
|
|
Depreciation and amortization
|
|
17,501
|
|
|
|
18,776
|
|
Total
costs and expenses
|
|
265,161
|
|
|
|
264,389
|
|
|
|
|
|
|
|
|
|
Income from
operations before
|
|
|
|
|
|
|
|
interest
income and income taxes
|
|
32,526
|
|
|
|
34,859
|
|
Interest income,
net
|
|
2,915
|
|
|
|
185
|
|
Income before income
taxes
|
|
35,441
|
|
|
|
35,044
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
9,287
|
|
|
|
11,493
|
|
Equity investment
income (loss)
|
|
(515)
|
|
|
|
(2,430)
|
|
Net
income
|
$
|
25,639
|
|
|
$
|
21,121
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
Basic
|
$
|
1.56
|
|
|
$
|
1.30
|
|
Diluted
|
$
|
1.54
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
Weighted average
number of
|
|
|
|
|
|
|
|
common
shares:
|
|
|
|
|
|
|
|
Basic
|
|
16,404
|
|
|
|
16,236
|
|
Diluted
|
|
16,634
|
|
|
|
16,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Segment
Information:
|
December
31,
|
|
|
2018
|
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
American
Public Education, Inc.
|
$
|
260,062
|
|
|
$
|
265,246
|
|
Hondros
College of Nursing
|
$
|
37,625
|
|
|
$
|
34,002
|
|
Income from
operations before
|
|
|
|
|
|
|
|
interest income and
income taxes:
|
|
|
|
|
|
|
|
American
Public Education, Inc.
|
$
|
28,561
|
|
|
$
|
30,873
|
|
Hondros
College of Nursing
|
$
|
3,965
|
|
|
$
|
3,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP to
Adjusted Net Income Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
sets forth the reconciliation of the Company's reported GAAP net
income to the calculation of adjusted net income for the twelve
months ended December 31, 2018 and 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
|
|
|
2018
|
|
2017
|
|
|
|
$
|
|
|
Per
Share
|
|
$
|
|
|
Per
Share
|
|
|
|
|
|
|
|
|
Net
income:
|
$
|
25,639
|
|
|
$
|
1.54
|
|
$
|
21,121
|
|
|
$
|
1.29
|
|
|
Add
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
reduction in force expenses
|
|
1,714
|
|
|
|
0.10
|
|
|
—
|
|
|
|
—
|
|
|
Tax effect
of non-GAAP adjustment
|
|
(447)
|
|
|
|
(0.02)
|
|
|
—
|
|
|
|
—
|
|
|
Adjusted net
income:
|
$
|
26,906
|
|
|
$
|
1.62
|
|
$
|
21,121
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of diluted
|
|
|
|
|
|
|
|
|
|
|
|
common
shares outstanding:
|
16,634
|
|
16,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/american-public-education-reports-fourth-quarter-and-full-year-2018-results-300811175.html
SOURCE American Public Education, Inc.