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American Public Education Reports Fourth Quarter and Full Year 2017 Results

CHARLES TOWN, W.Va., Feb. 27, 2018 /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 year ended December 31, 2017.

Selected Financial Data:

  • Fourth quarter 2017 consolidated revenue decreased 1% to $78.1 million, compared to $78.6 million in the same period of 2016.
  • Net income for the fourth quarter of 2017 increased to $8.4 million, or $0.51 per diluted share, compared to net income of $6.9 million, or $0.42 per diluted share, in the same period of 2016.

Registrations and Enrollment:

  • Net course registrations at APUS decreased approximately 3% in the fourth quarter of 2017, compared to the prior year period. Net course registrations by returning students decreased approximately 3% year-over-year and net course registrations by new students decreased approximately 4% year-over-year in the fourth quarter of 2017.1
  • APUS student enrollment decreased 6% year-over-year to approximately 83,400 students as of December 31, 2017.2
  • For the three months ended December 31, 2017, new student enrollment at HCN increased by approximately 29% year-over-year and total student enrollment increased by 23% to approximately 2,110 students.3

Financial Results:    

Total consolidated revenue for the fourth quarter of 2017 decreased 1% to $78.1 million, compared to total revenue of $78.6 million in the fourth quarter of 2016.  Consolidated income from operations before interest income and income taxes in the fourth quarter of 2017 was $12.6 million, compared to consolidated income from operations before interest income and income taxes of $11.3 million in the fourth quarter of 2016. Net income for the fourth quarter of 2017 was $8.4 million, or $0.51 per diluted share, compared to net income of $6.9 million, or $0.42 per diluted share for the fourth quarter of 2016. The weighted average diluted shares outstanding for the fourth quarters of 2017 and 2016 were approximately 16.5 million and 16.3 million, respectively.   

For the twelve months ended December 31, 2017, total consolidated revenue decreased 4.4% to $299.2 million, compared to $313.1 million in the prior year period.  Consolidated income from operations before interest income and income taxes for the twelve months ended December 31, 2017 was $34.9 million, compared to $38.3 million in the prior year period.  Net income for the twelve months ended December 31, 2017 was $21.1 million, or $1.29 per diluted share, compared to net income of $24.2 million, or $1.49 per diluted share in the prior year period. The weighted average diluted shares outstanding for the twelve months ended December 31, 2017 and 2016 were approximately 16.4 million and 16.2 million, respectively.

Total cash and cash equivalents as of December 31, 2017 were approximately $179.2 million, compared to $146.4 million as of December 31, 2016. Capital expenditures were approximately $10.9 million for the twelve months ended December 31, 2017, compared to $13.8 million as of December 31, 2016. Depreciation and amortization was $18.8 million for the twelve months ended December 31, 2017, compared to $19.4 million as of December 31, 2016.

Registrations and Enrollment:

American Public University System1




For the three months ended December 31,

2017

2016

% Change

      Net Course Registrations by New Students 

9,900

10,300

-4%

      Net Course Registrations 

80,300

83,000

-3%





For the twelve months ended December 31,

2017

2016

% Change

      Net Course Registrations by New Students  

41,600

45,800

-9%

      Net Course Registrations 

325,100

345,400

-6%





As of December 31,




      APUS Student Enrollment2   

83,400

88,700

-6%





Hondros College of Nursing3




For the three months ended December 31, 

2017

2016

% Change

      New Student Enrollment

690

533

+29%

      Total Student Enrollment  

2,110

1,710

+23%


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 2018 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 2018 consolidated revenues of between a 3% decrease and a 1% increase year-over-year, compared to the first quarter of 2017. The Company expects consolidated net income of between $0.29 and $0.34 per diluted share in the first quarter of 2018.

American Public Education also expects the following results from its subsidiaries in the first quarter of 2018:

  • At APUS, net course registrations by new students are expected to decrease between 9% and 12% year-over-year and net course registrations are expected to decrease between 3% and 5% year-over-year. 1
  • At HCN, new student enrollment increased by approximately 11% year-over-year and total student enrollment increased by approximately 19% year-over-year for the three months ended March 31, 2018 (Winter 2018).3

Webcast:

A live webcast of the Company's fourth quarter and full year 2017 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 85,000 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, 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, 2017 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,



2017



2016



(Unaudited)





Revenues 

$

78,085



$

78,625


Costs and expenses: 








   Instructional costs and services 


28,648




30,045


   Selling and promotional 


14,252




14,503


   General and administrative 


17,399




17,963


   Loss on disposals of long-lived assets


535




100


   Impairment of goodwill  






   Depreciation and amortization


4,616




4,760


  Total costs and expenses 


65,450




67,371










Income from operations before








  interest income and income taxes


12,635




11,254


  Interest income  


142




5


Income before income taxes


12,777




11,259










  Income tax expense  


1,825




4,416


  Equity investment income (loss)


(2,535)




50


Net income  

$

8,417



$

6,893








Net income per common share: 






     Basic

$

0.52



$

0.43


        Diluted

$

0.51



$

0.42








Weighted average number of 








   common shares:








     Basic


16,267




16,099


        Diluted


16,466




16,290

















Three Months Ended


Segment Information: 

December 31,



2017



2016


Revenues:








  American Public Education, Inc.

$

67,928



$

71,082


  Hondros College of Nursing

$

10,157



$

7,543


Income from operations before








interest income and income taxes:








  American Public Education, Inc.

$

10,428



$

10,705


  Hondros College of Nursing

$

2,207



$

549



















Twelve Months Ended



December 31,



2017



2016



(Unaudited)





Revenues 

$

299,248



$

313,139


Costs and expenses: 








   Instructional costs and services 


116,161




117,013


   Selling and promotional 


58,335




59,095


   General and administrative 


69,024




68,666


   Loss on disposals of long-lived assets


2,093




5,970


   Impairment of goodwill 





4,735


   Depreciation and amortization


18,776




19,384


  Total costs and expenses 


264,389




274,863










Income from operations before








  interest income and income taxes


34,859




38,276


  Interest income  


185




116


Income before income taxes


35,044




38,392










  Income tax expense  


11,493




14,940


  Equity investment income (loss)


(2,430)




703


Net income  

$

21,121



$

24,155








Net income per common share: 






     Basic

$

1.30



$

1.50


        Diluted

$

1.29



$

1.49








Weighted average number of 








   common shares:








     Basic


16,236




16,068


        Diluted


16,380




16,214

















Twelve Months Ended


Segment Information: 

December 31,



2017



2016


Revenues:








  American Public Education, Inc.

$

265,246



$

283,941


  Hondros College of Nursing

$

34,002



$

29,198


Income (loss) from operations before 








interest income and income taxes:








  American Public Education, Inc.

$

30,873



$

41,916


  Hondros College of Nursing

$

3,986



$

(3,640)


 

Cision View original content:http://www.prnewswire.com/news-releases/american-public-education-reports-fourth-quarter-and-full-year-2017-results-300605039.html

SOURCE American Public Education, Inc.

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