CHARLES TOWN, W.V.,
Aug. 10, 2020 /PRNewswire/ --
American Public Education, Inc. (Nasdaq: APEI) (the "Company") –
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 second quarter ended June 30, 2020 that reflected continued momentum
in enrollment growth across both institutions and the ongoing
turnaround at Hondros.
Second Quarter Highlights:
- Net course registrations by new students at APUS increased 30%
year-over-year.
- Total net course registrations increased 18% year-over-year to
89,600.
- New student enrollment at HCN increased 56% year-over-year and
total student enrollment increased 14% year-over-year to
1,750.
- Consolidated revenue increased 16.4% year-over-year to
$82.1 million, compared to the prior
year period.
- Net income increased 35.9% year-over-year to $6.7 million, or $0.45 per share.
"We are incredibly grateful that a growing number of adult
learners seeking affordable, safe and uninterrupted access to
high-quality higher-education experiences recognize the value of
our learning platforms," said Angela
Selden, Chief Executive Officer of APEI. "Our institutions
were built on the belief that quality education should be
accessible to all, not reserved for the few, and this is especially
true during this period of great disruption in our economy and in
higher education."
"The growth in enrollments in the second quarter as compared to
a year ago reflects the ongoing transformation that has been taking
place at APEI over the past year. At HCN, we have improved
curriculum and made pre-licensure degrees more readily available to
individuals interested in the nursing field. At APUS, students
looking to improve their future career prospects chose APUS for its
affordability and high-quality academic programs."
"Moving forward, we will continue to emphasize helping more
adult learners maximize their higher education return on investment
(HEROI) with highly relevant programs of study at affordable
prices," added Selden. "We believe this approach, combined with the
investments we are making in our business operations and in our
ongoing technology transformation, will further strengthen our
ability to serve learners of all backgrounds with great
distinction."
Financial Results:
Total consolidated revenue for the second quarter of 2020
increased by 16.4% to $82.1
million, compared to total revenue of $70.6 million in the second quarter of 2019. The
increase was driven by a $10.1
million, or 15.9%, increase in APEI Segment revenue and a
$1.4 million, or 20.5%, increase in
HCN Segment revenue resulting from increases in student
enrollment.
Consolidated income from operations before interest income and
income taxes in the second quarter of 2020 increased by 59.2% to
$9.0 million, compared to
$5.7 million in the prior year
period. APEI Segment income from operations before interest income
and income taxes increased by $2.5
million, compared to the prior year period. APEI Segment
income includes a $1.9 million
increase in pretax advertising costs as compared to the prior year
period, as well as $1.3 million in
professional fees associated with inorganic growth opportunities,
and $1.0 million in pretax costs
related to APEI's information technology transformation project.
The HCN Segment reduced its loss from operations before interest
income and income taxes to $0.04
million, from a loss of $0.9
million in the prior year period.
Net income for the three months ended June 30, 2020 was $6.7 million, or
$0.45 per diluted share, compared to
net income of $4.9 million, or
$0.30 per diluted share, in the same
period of 2019. The weighted average diluted shares outstanding for
the second quarter of 2020 and 2019 were approximately 14.9 million
and 16.7 million, respectively.
For the six months ended June 30,
2020, total consolidated revenue increased by 8.8% to
$156.7 million, compared to total
revenue of $144.0 million in the
prior year period. The increase was driven by an $11.5 million, or 8.9%, increase in APEI Segment
revenue and a $1.3 million, or 8.4%,
increase in HCN Segment revenue, both resulting from increases in
student enrollment.
Consolidated income from operations before interest income and
income taxes for the six months ended June
30, 2020 was $11.7 million,
compared to $7.1 million in the prior
year period. This increase was driven by a $6.1 million decrease in HCN Segment loss from
operations before interest income and income taxes. The HCN Segment
loss for the prior year period includes a $5.9 million pretax, non-cash goodwill impairment
expense recorded in the first quarter of 2019. APEI Segment
income from operations before interest income and income taxes
decreased $1.5 million, or 10.3%,
compared to the prior year.
Net income for the six months ended June
30, 2020 was $9.1 million, or
$0.61 per diluted share, compared to
net income of $5.9 million, or
$0.36 per diluted share, in the prior
year period. The weighted average diluted shares outstanding for
the six months ended June 30, 2020
and 2019 were approximately 15.0 million and 16.7 million,
respectively.
Total cash and cash equivalents as of June 30, 2020 were approximately $216.0 million, compared to $202.7 million as of December 31, 2019. Capital expenditures were
approximately $1.0 million for the
three months ended June 30, 2020,
compared to $1.4 million in the prior
year period. Depreciation and amortization expense was $3.4 million for the three months ended
June 30, 2020, compared to
$3.9 million in the prior year
period.
Registrations and Enrollment:
American Public
University System1
|
|
|
|
For the three months
ended June 30,
|
2020
|
2019
|
%
Change
|
Net Course
Registrations by New Students
|
12,100
|
9,300
|
30%
|
Net Course
Registrations
|
89,600
|
75,900
|
18%
|
|
|
|
|
For the six months
ended June 30,
|
|
|
|
Net Course
Registrations by New Students
|
22,300
|
19,500
|
14%
|
Net Course
Registrations
|
174,400
|
160,200
|
9%
|
|
|
|
|
As of June
30,
|
|
|
|
APUS Student
Enrollment2
|
83,700
|
80,300
|
4%
|
|
|
|
|
Hondros College of
Nursing3
|
|
|
|
For the three months
ended June 30,
|
2020
|
2019
|
%
Change
|
New Student
Enrollment
|
490
|
315
|
56%
|
Total Student
Enrollment
|
1,750
|
1,540
|
14%
|
|
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 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.
|
3HCN 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.
|
Third Quarter 2020 Outlook:
The following statements are based on APEI'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 third quarter 2020
consolidated revenue to increase between 10% and 14%, compared to
the prior year period. The Company expects diluted earnings per
share to be between $0.05 and
$0.10 in the third quarter of
2020.
American Public Education expects the following results from its
subsidiaries in the third quarter of 2020:
- At APUS, net course registrations by new students are expected
to increase between 10% and 14% year-over-year and net course
registrations are expected to increase between 8% and 12%
year-over-year.
- At HCN, new student enrollment increased approximately 88% and
total student enrollment increased approximately 38% year-over-year
for the three months ended September 30,
2020.
Webcast:
A live webcast of the Company's second quarter 2020 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.
Forward-looking statements can be identified by words such as
"anticipate," "believe," "seek," "could," "estimate," "expect,"
"intend," "may," "plan," "should," "will" and "would." These
forward-looking statements include, without limitation, statements
regarding expected growth, expected registration and enrollments,
expected revenues, earnings and expenses, plans with respect to
recent, current and future initiatives, and future impacts of and
the Company's response to the COVID-19 pandemic.
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
Company's dependence on the effectiveness of its ability to attract
students who persist in its institutions' programs; impacts of the
COVID-19 pandemic; the Company's ability to effectively market its
institutions' programs; adverse 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
Company's ability to maintain strong relationships with the
military and maintain enrollments from military students; the
Company's ability to comply with regulatory and accrediting agency
requirements and to maintain institutional accreditation; the
Company's reliance on Department of Defense tuition assistance,
Title IV programs, and other sources of financial aid; the
Company's dependence on its technology infrastructure; strong
competition in the postsecondary education market and from
non-traditional offerings; and 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,
2019, Quarterly Report on Form 10-Q for the period ended
June 30, 2020, and other filings with
the SEC. You should not place 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:
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
|
|
|
June
30,
|
|
|
2020
|
|
|
2019
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
82,127
|
|
|
$
|
70,560
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Instructional costs and services
|
|
30,744
|
|
|
|
28,725
|
|
Selling
and promotional
|
|
17,056
|
|
|
|
14,087
|
|
General
and administrative
|
|
21,737
|
|
|
|
18,123
|
|
Loss on
disposals of long-lived assets
|
|
158
|
|
|
|
4
|
|
Depreciation and amortization
|
|
3,391
|
|
|
|
3,943
|
|
Total
costs and expenses
|
|
73,086
|
|
|
|
64,882
|
|
|
|
|
|
|
|
|
|
Income from
operations before interest income and income taxes
|
|
9,041
|
|
|
|
5,678
|
|
Interest income,
net
|
|
179
|
|
|
|
1,135
|
|
Income before income
taxes
|
|
9,220
|
|
|
|
6,813
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
2,532
|
|
|
|
1,898
|
|
Equity investment
income
|
|
1
|
|
|
|
6
|
|
Net
income
|
$
|
6,689
|
|
|
$
|
4,921
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
Basic
|
$
|
0.45
|
|
|
$
|
0.30
|
|
Diluted
|
$
|
0.45
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
Weighted average
number of common shares:
|
|
|
|
|
|
|
|
Basic
|
|
14,789
|
|
|
|
16,512
|
|
Diluted
|
|
14,948
|
|
|
|
16,653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Segment
Information:
|
June
30,
|
|
|
2020
|
|
|
2019
|
|
Revenues:
|
|
|
|
|
|
|
|
American
Public Education, Inc.
|
$
|
73,547
|
|
|
$
|
63,448
|
|
Hondros
College of Nursing
|
$
|
8,602
|
|
|
$
|
7,141
|
|
Intersegment
Elimination1
|
$
|
(22)
|
|
|
$
|
(29)
|
|
Income (loss) from
operations before interest income and income taxes:
|
|
|
|
|
|
|
|
American
Public Education, Inc.
|
$
|
9,077
|
|
|
$
|
6,589
|
|
Hondros
College of Nursing
|
$
|
(35)
|
|
|
$
|
(910)
|
|
Intersegment
Elimination1
|
$
|
(1)
|
|
|
$
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
2020
|
|
|
2019
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
156,743
|
|
|
$
|
144,001
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Instructional costs and services
|
|
59,974
|
|
|
|
56,640
|
|
Selling
and promotional
|
|
35,242
|
|
|
|
29,134
|
|
General
and administrative
|
|
42,740
|
|
|
|
37,188
|
|
Loss on
disposals of long-lived assets
|
|
324
|
|
|
|
130
|
|
Impairment of Goodwill
|
|
—
|
|
|
|
5,855
|
|
Depreciation and amortization
|
|
6,729
|
|
|
|
7,994
|
|
Total
costs and expenses
|
|
145,009
|
|
|
|
136,941
|
|
|
|
|
|
|
|
|
|
Income from
operations before interest income and income taxes
|
|
11,734
|
|
|
|
7,060
|
|
Interest income,
net
|
|
881
|
|
|
|
2,188
|
|
Income before income
taxes
|
|
12,615
|
|
|
|
9,248
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
3,506
|
|
|
|
1,835
|
|
Equity investment
income (loss)
|
|
—
|
|
|
|
(1,481)
|
|
Net
income
|
$
|
9,109
|
|
|
$
|
5,932
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
Basic
|
$
|
0.61
|
|
|
$
|
0.36
|
|
Diluted
|
$
|
0.61
|
|
|
$
|
0.36
|
|
|
|
|
|
|
|
Weighted average
number of common shares:
|
|
|
|
|
|
|
|
Basic
|
|
14,907
|
|
|
|
16,522
|
|
Diluted
|
|
15,026
|
|
|
|
16,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
Segment
Information:
|
June
30,
|
|
|
2020
|
|
|
2019
|
|
Revenues:
|
|
|
|
|
|
|
|
American
Public Education, Inc.
|
$
|
140,641
|
|
|
$
|
129,169
|
|
Hondros
College of Nursing
|
$
|
16,141
|
|
|
$
|
14,888
|
|
Intersegment
Elimination1
|
$
|
(39)
|
|
|
$
|
(56)
|
|
Income (loss) from
operations before interest income and income taxes:
|
|
|
|
|
|
|
|
American
Public Education, Inc.
|
$
|
12,655
|
|
|
$
|
14,111
|
|
Hondros
College of Nursing
|
$
|
(921)
|
|
|
$
|
(7,056)
|
|
Intersegment
Elimination1
|
$
|
—
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
1.The APEI Segment
charges the HCN Segment for the value of courses taken by HCN
Segment employees at APUS. The intersegment elimination represents
the elimination of this intersegment revenue in
consolidation.
|
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SOURCE American Public Education, Inc.