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American Public Education Reports Second Quarter 2016 Results

CHARLES TOWN, W.Va., Aug. 9, 2016 /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 (HCON) – announced financial results for the quarter ended June 30, 2016.

American Public Education, Inc.

Recent Results:

  • Second quarter 2016 consolidated revenue decreased 4.5% to $76.7 million, compared to $80.3 million in the same period of 2015.
  • Consolidated income from operations before interest income and income taxes decreased 7.8% to $10.7 million in the second quarter of 2016, compared to $11.6 million in the same period of 2015.
  • Net income for the second quarter of 2016 decreased to $6.6 million, or $0.41 per diluted share, compared to $7.1 million, or $0.42 per diluted share, in the same period of 2015.
  • Net course registrations at American Public University System decreased approximately 8% in the second quarter of 2016, compared to the prior year period. Net course registrations by returning students decreased approximately 5% year-over-year and net course registrations by new students decreased approximately 22% year-over-year in the second quarter of 2016.
  • Active student enrollment at American Public University System decreased 12% year-over-year to 91,800 students as of June 30, 2016.
  • Total student enrollment at HCON decreased approximately 8% to 1,770 students for the three months ended June 30, 2016.

Financial Results:    

Total consolidated revenue for the second quarter of 2016 decreased 4.5% to $76.7 million, compared to total revenue of $80.3 million in the second quarter of 2015.  Consolidated income from operations before interest income and income taxes in the second quarter of 2016 decreased 7.8% to $10.7 million, compared to $11.6 million in the second quarter of 2015.  Net income for the second quarter of 2016 was $6.6 million, or $0.41 per diluted share, compared to net income of $7.1 million, or $0.42 per diluted share for the second quarter of 2015. The weighted average diluted shares outstanding for the second quarter of 2016 and 2015 were approximately 16.2 million and 16.9 million, respectively.

For the six months ended June 30, 2016, total consolidated revenue decreased 3.0% to $160.7 million, compared to $165.7 million in the prior year period.  Consolidated income from operations before interest income and income taxes for the six months ended June 30, 2016 was $26.6 million, compared to $26.0 million in the prior year period.  Net income for the six months ended June 30, 2016 was $16.9 million, or $1.05 per diluted share, compared to net income of $15.9 million, or $0.93 per diluted share in the prior year period. The weighted average diluted shares outstanding for the six months ended June 30, 2016 and 2015 were approximately 16.2 million and 17.1 million, respectively.

Total cash and cash equivalents as of June 30, 2016 were approximately $124.1 million with no long-term debt.  Capital expenditures were approximately $6.9 million for the six months ended June 30, 2016, compared to $12.8 million in the prior year period. Depreciation and amortization was $9.7 million for the six months ended June 30, 2016, compared to $9.3 million for the same period of 2015.

Registrations and Enrollment:

American Public University System1

For the three months ended June 30,

2016

2015

% Change


Net Course Registrations by New Students

10,500

13,500

-22%


Net Course Registrations

82,000

89,000

-8%





For the six months ended June 30,

2016

2015

% Change


Net Course Registrations by New Students

23,100

28,300

-18%


Net Course Registrations

177,800

188,600

-6%





As of June 30,





Active Student Enrollment2

91,800

104,400

-12%





Hondros College of Nursing3




For the three months ended June 30,

2016

2015

% Change


New Student Enrollment

350

400

-13%


Total Student Enrollment

1,770

1,930

-8%

 

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 Active Student Enrollment represents the number of unique students who remain enrolled in a course past the first week of class or who have completed at least one course for which a grade was received within the last 12 months.

3HCON Student Enrollment represents the total number of students enrolled in a course immediately after the quarter's add/drop period.   

 

Third Quarter 2016 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.

American Public Education anticipates third quarter 2016 consolidated revenues to decrease between approximately 6% and 3% year-over-year, compared to the prior year period of 2015.  The Company expects consolidated net income of between $0.26 and $0.31 per diluted share in the third quarter of 2016.   

American Public Education also expects the following results from its subsidiaries in the third quarter of 2016:

  • At American Public University System, net course registrations by new students are expected to decrease between 27% and 23% year-over-year and net course registrations are expected to decrease between 13% and 10% year-over-year.
  • At Hondros College of Nursing, new student enrollment decreased by approximately 20% year-over-year and total student enrollment decreased by approximately 11% year-over-year for the three months ended September 30, 2016.3

Webcast:

A live webcast of the Company's second quarter 2016 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.AmericanPublicEducation.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 90,000 adult learners worldwide and offer approximately 100 degree 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 http://AmericanPublicEducation.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, and expected earnings. 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, 2015, Quarterly Report on Form 10-Q for the period ended June 30, 2016 and other filings with the SEC. The Company undertakes no obligation to update publicly any forward-looking statements for any reason, 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



June 30,



2016



2015



(Unaudited)





Revenues 

$

76,745



$

80,263


Costs and expenses: 








   Instructional costs and services 


29,186




29,696


   Selling and promotional 


14,984




16,152


   General and administrative 


17,090




18,141


   Depreciation and amortization


4,825




4,698










Total costs and expenses 


66,085




68,687










Income from operations before








  interest income and income taxes


10,660




11,576


  Interest income, net


37




31










Income before income taxes


10,697




11,607


  Income tax expense 


4,172




4,548


  Equity investment income/(loss)


71




14










Net income

$

6,596



$

7,073
















Net Income per common share: 






    Basic

$

0.41



$

0.42


        Diluted

$

0.41



$

0.42








Weighted average number of 








   common shares:








    Basic


16,059




16,820


        Diluted


16,196




16,923

















Three Months Ended


Segment Information: 

June 30,



2016



2015


Revenues:








  American Public Education, Inc.

$

69,529



$

72,578


  Hondros College of Nursing

$

7,216



$

7,685


Income from continuing operations before








interest income and income taxes:








  American Public Education, Inc.

$

10,315



$

10,815


  Hondros College of Nursing

$

345



$

761











Six Months Ended



June 30,



2016



2015



(Unaudited)





Revenues 

$

160,711



$

165,707


Costs and expenses: 








   Instructional costs and services 


58,894




59,956


   Selling and promotional 


31,453




33,171


   General and administrative 


34,020




37,246


   Depreciation and amortization


9,714




9,287










Total costs and expenses 


134,081




139,660










Income from operations before








  interest income and income taxes


26,630




26,047


  Interest income, net


74




41










Income before income taxes


26,704




26,088


  Income tax expense 


10,439




10,198


  Equity investment income/(loss)


671




(24)










Net income

$

16,936



$

15,866
















Net Income per common share: 






    Basic

$

1.06



$

0.93


        Diluted

$

1.05



$

0.93








Weighted average number of 








   common shares:








    Basic


16,049




16,972


        Diluted


16,155




17,102

















Six Months Ended


Segment Information: 

June 30,



2016



2015


Revenues:








  American Public Education, Inc.

$

145,794



$

150,030


  Hondros College of Nursing

$

14,917



$

15,677


Income from continuing operations before








interest income and income taxes:








  American Public Education, Inc.

$

25,552



$

24,131


  Hondros College of Nursing

$

1,078



$

1,916


 

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/american-public-education-reports-second-quarter-2016-results-300311171.html

SOURCE American Public Education, Inc.

Richard W. Sunderland, Jr., CPA, Executive Vice President and Chief Financial Officer, 304.885.5371, or Christopher L. Symanoskie, IRC, Vice President, Investor Relations, 703.334.3880