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American Public Education Reports Second Quarter 2017 Results

CHARLES TOWN, W.Va., Aug. 8, 2017 /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 ended June 30, 2017.

Selected Financial Data:

  • Second quarter 2017 consolidated revenue decreased 5.9% to $72.2 million, compared to $76.7 million in the same period of 2016.
  • Net income for the second quarter of 2017 decreased to $3.8 million, or $0.23 per diluted share, compared to net income of $6.6 million, or $0.41 per diluted share, in the same period of 2016.

Registrations and Enrollment:

  • Net course registrations at APUS decreased approximately 6% in the second quarter of 2017, compared to the prior year period. Net course registrations by returning students decreased approximately 6% year-over-year and net course registrations by new students decreased approximately 9% year-over-year in the second quarter of 2017. 1
  • APUS active student enrollment decreased 8% year-over-year to approximately 84,300 students as of June 30, 2017.2
  • For the three months ended June 30, 2017, new student enrollment at HCN increased by approximately 31% year-over-year and total student enrollment decreased by 3% to approximately 1,720 students. 3

Financial Results:    

Total consolidated revenue for the second quarter of 2017 decreased 5.9% to $72.2 million, compared to total revenue of $76.7 million in the second quarter of 2016.  Consolidated income from operations before interest income and income taxes in the second quarter of 2017 was $6.3 million, compared to consolidated income from operations before interest income and income taxes of $10.7 million in the second quarter of 2016. Net income for the second quarter of 2017 was $3.8 million, or $0.23 per diluted share, compared to net income of $6.6 million, or $0.41 per diluted share for the second quarter of 2016. The weighted average diluted shares outstanding for the second quarters of 2017 and 2016 were approximately 16.4 million and 16.2 million, respectively.   

For the six months ended June 30, 2017, total consolidated revenue decreased 8.0% to $147.9 million, compared to $160.7 million in the prior year period.  Consolidated income from operations before interest income and income taxes for the six months ended June 30, 2017 was $14.6 million, compared to $26.6 million in the prior year period.  Net income for the six months ended June 30, 2017 was $8.3 million, or $0.51 per diluted share, compared to net income of $16.9 million, or $1.05 per diluted share in the prior year period. The weighted average diluted shares outstanding for the six months ended June 30, 2017 and 2016 were approximately 16.3 million and 16.2 million, respectively.

Total cash and cash equivalents as of June 30, 2017 were approximately $157.1 million, compared to $124.1 million as of June 30, 2016. Capital expenditures were approximately $3.8 million for the six months ended June 30, 2017, compared to $6.9 million in the prior year period. Depreciation and amortization was $9.5 million for the six months ended June 30, 2017, compared to $9.7 million for the same period of 2016.

Registrations and Enrollment:

American Public University System1




For the three months ended June 30,                    

2017

2016

    % Change

       Net Course Registrations by New Students       

9,600

10,500

-9%

       Net Course Registrations                            

77,000

82,000

-6%





For the six months ended June 30,                      

2017

2016

     % Change

       Net Course Registrations by New Students    

20,100

23,100

-13%

       Net Course Registrations                              

163,700

177,800

-8%





As of June 30,




       APUS Student Enrollment2                      

84,300

91,800

-8%





Hondros College of Nursing3




For the three months ended June 30,             

2017

2016

    % Change

       New Student Enrollment                      

460

350

+31%

       Total Student Enrollment                      

1,720

1,770

-3%


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.   

 

Third Quarter 2017 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 third quarter 2017 consolidated revenues to decrease between approximately 5% and 2% year-over-year, compared to the third quarter of 2016. The Company expects consolidated net income of between $0.18 and $0.23 per diluted share in the third quarter of 2017.

American Public Education also expects the following results from its subsidiaries in the third quarter of 2017:

  • At American Public University System, net course registrations by new students are expected to decrease between 18% and 14% year-over-year and net course registrations are expected to decrease between 11% and 8% year-over-year. 1
  • At Hondros College of Nursing, new student enrollment increased by approximately 58% year-over-year and total student enrollment increased by approximately 11% year-over-year for the three months ended September 30, 2017 (Summer 2017).3

Webcast:

A live webcast of the Company's second quarter 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, 2016, Quarterly Report on Form 10-Q for the period ended June 30, 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



June 30,



2017



2016



(Unaudited)





Revenues 

$

72,196



$

76,745


Costs and expenses: 








   Instructional costs and services 


29,834




28,903


   Selling and promotional 


14,008




14,984


   General and administrative 


16,632




16,909


   Loss on disposals of long-lived assets


678




464


   Depreciation and amortization


4,726




4,825


        Total costs and expenses 


65,878




66,085










Income from operations before








  interest income and income taxes


6,318




10,660


  Interest income, net


15




37


Income before income taxes


6,333




10,697










  Income tax expense  


2,525




4,172


  Equity investment income 


21




71


Net income  

$

3,829




6,596








Net income per common share: 






        Basic

$

0.24



$

0.41


        Diluted

$

0.23



$

0.41








Weighted average number of 








   common shares:








        Basic


16,241




16,059


        Diluted


16,360




16,196

















Three Months Ended


Segment Information: 

June 30,



2017



2016


Revenues:








  American Public Education, Inc.

$

64,304



$

69,529


  Hondros College of Nursing

$

7,892



$

7,216


Income from continuing operations 








before interest income and income taxes:








  American Public Education, Inc.

$

5,663



$

10,315


  Hondros College of Nursing

$

655



$

345










 


Six Months Ended



June 30,



2017



2016



(Unaudited)





Revenues 

$

147,884



$

160,711


Costs and expenses: 








   Instructional costs and services 


58,790




58,611


   Selling and promotional 


29,443




31,453


   General and administrative 


34,388




33,578


   Loss on disposals of long-lived assets


1,168




725


   Depreciation and amortization


9,470




9,714


        Total costs and expenses 


133,259




134,081










Income from operations before








  interest income and income taxes


14,625




26,630


  Interest income, net


26




74


Income before income taxes


14,651




26,704










  Income tax expense  


6,374




10,439


  Equity investment income 


61




671


Net income  

$

8,338



$

16,936








Net income per common share: 






        Basic

$

0.51



$

1.06


        Diluted

$

0.51



$

1.05








Weighted average number of 








   common shares:








        Basic


16,214




16,049


        Diluted


16,340




16,155

















Six Months Ended


Segment Information: 

June 30,



2017



2016


Revenues:








  American Public Education, Inc.

$

132,433



$

145,794


  Hondros College of Nursing

$

15,451



$

14,917


Income from continuing operations 








before interest income and income taxes:








  American Public Education, Inc.

$

13,590



$

25,552


  Hondros College of Nursing

$

1,035



$

1,078


 

 

View original content:http://www.prnewswire.com/news-releases/american-public-education-reports-second-quarter-2017-results-300501108.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