CORRECTING and REPLACING American Public Education Reports Fourth Quarter and Full-Year 2013 Results

CHARLES TOWN, W.Va.–(BUSINESS WIRE)–

Seventh bullet point, under Recent Results, should read: …increased
13% to 1,330 students… (sted …increased 9% to 1,290 students…).

The corrected release reads:

AMERICAN PUBLIC EDUCATION REPORTS FOURTH QUARTER AND FULL-YEAR 2013
RESULTS

American Public Education, Inc. (NASDAQ:APEI) – parent company of
online learning provider American Public University System (APUS) and
campus-based Hondros College, Nursing Programs – announced financial
results for the quarter ended December 31, 2013.

Recent Results:

  • Fourth quarter 2013 revenues decreased 4% to $82.9 million, compared
    to $86.0 million in the same period of 2012.
  • Income from operations before interest income and income taxes in the
    fourth quarter of 2013 was $14.5 million, compared to $21.4 million in
    the same period of 2012.
  • Net income for the fourth quarter of 2013 decreased to $9.0 million,
    or $0.51 per diluted share, compared to $13.2 million, or $0.74 per
    diluted share, in the same period of 2012.
  • At American Public University System, net course registrations by new
    students in the fourth quarter of 2013 decreased approximately 10%
    over the same period of 2012. As previously disclosed, the Company
    believes that the temporary suspension of Department of Defense
    tuition assistance programs in October 2013 resulted in fewer
    enrollments from active duty service members than otherwise would have
    been expected.
  • As of December 31, 2013, active student enrollment at American Public
    University System increased 2% to 112,400 students, compared to
    110,300 students at December 31, 2012.
  • American Public University System undergraduate programs recently
    named to U.S. News World Report’s annual qualitative
    ranking of top online degree programs for the second consecutive year.
    APUS ranked #34 nationally out of 283 schools offering online
    bachelor’s degree programs, or in the top 12 percent overall.
  • As of December 31, 2013, student enrollment at Hondros College,
    Nursing Programs (acquired by APEI on November 1, 2013) increased 13%
    to 1,330 students, compared to 1,180 students at December 31, 2012.
  • American Public Education announced the hiring of Paul Humphries to
    lead its international expansion and relationship with New Horizons as
    the Vice President of International Development. Mr. Humphries is a
    business leader with expertise in managing education projects and
    companies in the Middle East, Canada, South Africa and the UK.

Financial Results:

Total revenues for the fourth quarter of 2013 decreased 4% to $82.9
million, compared to total revenues of $86.0 million in the fourth
quarter of 2012. Income from operations before interest income and
income taxes in the fourth quarter of 2013 was $14.5 million, compared
to $21.4 million in the prior year period. Stock-based compensation
expense reduced operating income by approximately $1.0 million in the
fourth quarter of 2013 and $0.9 million in the fourth quarter of 2012.

Net income for the fourth quarter of 2013 was $9.0 million, or $0.51 per
diluted share, which includes $0.03 per diluted share in stock-based
compensation expense, net of tax. This compares to net income of $13.2
million, or $0.74 per diluted share for the fourth quarter of 2012,
including $0.03 per diluted share in stock-based compensation expense,
net of tax. The weighted average diluted shares outstanding for the
fourth quarter of 2013 and for the fourth quarter of 2012 were
approximately 17.8 million in both periods.

For the twelve months ended December 31, 2013, total revenues were
$329.5 million, an increase of 5% compared to total revenues of $313.5
million in the same period of 2012. Income from operations before
interest income and income tax for the twelve months ended December 31,
2013 decreased to $67.4 million, compared to $68.8 million in the same
period of 2012. Stock-based compensation expense reduced each period’s
operating income by $4.0 million and $3.8 million, respectively.

Net income for the twelve months ended December 31, 2013 was $42.0
million, or $2.35 per diluted share, which includes $0.14 per diluted
share in stock-based compensation expense, net of tax. This compares to
net income of $42.3 million, or $2.35 per diluted share, in the same
period of 2012, including $0.13 per diluted share in stock-based
compensation expense, net of tax. The weighted average diluted shares
outstanding for the twelve months ended December 31, 2013 and 2012 were
approximately 17.9 million and 18.0 million, respectively.

Total cash and cash equivalents as of December 31, 2013 were
approximately $94.8 million with no long-term debt. Cash from operations
for the twelve months ended December 31, 2013 was approximately $59.4
million, compared to $52.9 million in the same period of 2012. Capital
expenditures were approximately $20.6 million for the twelve months
ended December 31, 2013, compared to $35.0 million in the prior year
period. Depreciation and amortization was $13.5 million for the twelve
months ended December 31, 2013 and $11.1 million for the same period of
2012.

Enrollments and Registrations:

American Public University System

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended December 31,

2013

2012

% Change

Net Course Registrations by New Students

20,300

22,600

-10%

Net Course Registrations

95,400

105,300

-9%

For the twelve months ended December 31,

Net Course Registrations by New Students

79,300

86,700

-9%

Net Course Registrations

409,700

402,200

2%

As of December 31,

Active Student Enrollment

112,400

110,300

2%

 

Hondros College, Nursing Programs1

As of December 31,

2013

2012

% Change

Total Student Enrollment

1,330

1,180

13%

Net course registrations represent the aggregate number of courses
for which students remain enrolled after the date by which they may drop
a course without financial penalty. Active student enrollment
represents the number of students with an
academic status of Active or Program Hold and who are currently in a
course or completed a course in the last 12 months. Student enrollment
represents the number of students enrolled in one or more courses after
the date by which they may drop the course without financial penalty.

1 Hondros College, Nursing Programs was acquired by APEI,
effective November 1, 2013.

As previously disclosed, APEI believes that net course registrations and
revenues in the second quarter and fourth quarter of 2013 were adversely
impacted by the temporary suspension of Department of Defense tuition
assistance programs in March and October 2013, which resulted in fewer
enrollments from active duty service members than otherwise would have
been expected.

While the tuition assistance programs were reinstated, budgetary
pressures remain, and we do not know what future action will be taken
with respect to the tuition assistance programs administered by the
Department of Defense, which could include elimination of the programs,
reduction of the funds and/or benefits available or new restrictions on
participation. Any such changes, or any other reduction in the funding
for these programs, could have a material adverse effect on our
operations. Moreover, ongoing confusion about eligibility requirements
and general uncertainty regarding the availability of the tuition
assistance benefits may have a material adverse effect on our operations.

First Quarter 2014 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 first quarter 2014 consolidated
revenues to increase between approximately 0% and 3% over the prior year
period. The Company expects consolidated net income of between $0.43 and
$0.48 per diluted share in the first quarter of 2014.

American Public Education also expects the following results from its
subsidiaries in the first quarter of 2014:

  • At American Public University System, net course registrations by new
    students are expected to decline between 9% and 7% year-over-year and
    net course registrations are expected to decline between 7% and 5%
    year-over-year.
  • At Hondros College, Nursing Programs, new student starts increased by
    approximately 45% year-over-year to 405 students in the first quarter
    of 2014.

Webcast:

A live webcast of the Company’s fourth quarter and year-end 2013
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
(APUS) and Hondros
College, Nursing Programs
. Together, these institutions serve
over 100,000 adult learners worldwide and offer more than 95 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”, “could”,
“estimate”, “expect”, “intend”, “may”, “should”, “will” and “would”.
These forward-looking statements include, without limitation, statements
regarding expected growth, 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, 2013 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

 

December 31,

 

2013

2012

(Audited)

 

Revenues

$

82,937

$

86,000

 

Costs and expenses:

Instructional costs and services

29,033

29,654

Selling and promotional

17,114

16,485

General and administrative

18,660

15,424

Depreciation and amortization

 

3,613

 

3,015

 

 

Total costs and expenses

 

68,420

 

64,578

 

 

Income from operations before

interest income and income taxes

14,517

21,422

Interest income, net

 

80

 

118

 

 

Income before income taxes

14,597

21,540

Income tax expense

5,640

8,279

Equity investment income (loss), net of taxes

 

40

 

(86

)

 

Net income

$

8,997

$

13,175

 

 

 

Net Income per common share:

Basic

 

0.51

0.73

 

Diluted

 

0.51

 

0.74

 

 

Weighted average number of

common shares:

Basic

 

17,557

 

17,582

 

Diluted

 

17,799

 

17,836

 

 

 

 

American Public Education, Inc.

Three Months Ended

 

Segment Information:

December 31,

 

2013

2012

Revenues:

American Public Education, Inc.

$

79,136

$

86,000

Hondros College, Nursing Programs

$

3,801

$

NA

Income from operations before

interest income and income taxes:

American Public Education, Inc.

$

14,241

$

21,422

Hondros College, Nursing Programs

$

276

$

NA

Net Income:

American Public Education, Inc.

$

8,731

$

13,175

Hondros College, Nursing Programs

$

266

$

NA

 

 

 

American Public Education, Inc.

Consolidated Statement of Income

(In thousands, except per share data)

 

Twelve Months Ended

 

December 31,

2013

2012

(Audited)

 

Revenues

$

329,479

 

$

313,516

 

Costs and expenses:

Instructional costs and services

112,784

110,192

Selling and promotional

65,687

59,761

General and administrative

70,063

63,615

Depreciation and amortization

 

13,508

 

 

11,146

 

 

Total costs and expenses

 

262,042

 

 

244,714

 

 

Income from operations before

interest income and income taxes

67,437

68,802

Interest income, net

 

309

 

 

135

 

 

Income before income taxes

67,746

68,937

Income tax expense

25,645

26,528

Equity investment income (loss), net of taxes

 

(67

)

 

(86

)

 

Net income

$

42,034

 

$

42,323

 

 

 

Net Income per common share:

Basic

$

2.38

 

$

2.38

 

Diluted

$

2.35

 

$

2.35

 

 

Weighted average number of

common shares:

Basic

 

17,656

 

 

17,772

 

Diluted

 

17,921

 

 

18,041

 

 

 

 

American Public Education, Inc.

Twelve Months Ended

 

Segment Information:

December 31,

 

2013

2012

Revenues:

American Public Education, Inc.

$

325,678

$

313,516

Hondros College, Nursing Programs

$

3,801

$

NA

Income from operations before

interest income and income taxes:

American Public Education, Inc.

$

67,161

$

68,802

Hondros College, Nursing Programs

$

276

$

NA

Net Income:

American Public Education, Inc.

$

41,768

$

42,323

Hondros College, Nursing Programs

$

266

$

NA

Contact:

American Public Education, Inc.
Richard W. Sunderland, Jr., CPA
Executive Vice President and Chief Financial Officer
304-885-5371
or
Christopher L. Symanoskie
Vice President, Investor Relations
703-334-3880

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