A month has gone by since the last earnings report for American Public Education (APEI) . Shares have added about 12% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is American Public Education due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. American Public Q3 Earning ...

Annual Tradition of Service: Rasmussen Gives Back Rasmussen Gives Back, a longstanding tradition, brought together employees across the University the week of Oct. 21st to contribute nearly 900 hours of volunteer service in just one week. Team members partnered with organizations such as Feed My Starving Children, Honor Flight of ND/MN, and Second Harvest Food Bank of Central Florida. Activities ranged from sorting food and stocking shelves to cleaning parks, organizing donations, and raising funds for vete ...

"I am delighted to share that Dr. Carrie Daninhirsch will lead our academic mission as Provost," said President Paula Singer. "As Rasmussen University prepares to enter its 125th year, Dr. Daninhirsch's collaborative, trust-based leadership and her unwavering commitment to positive change within our academic teams make her the ideal choice for this role. Her extensive experience, strategic vision, and deep dedication to our faculty and students ensure that we are well-positioned to continue advancing our mi ...

American Public Education, Inc.’s (APEI) stock plunged 7.6% in the after-hour trading session after it reported mixed results for third-quarter 2024. Its earnings handily beat the Zacks Consensus Estimate and improved from the previous year.Revenues missed the analysts’ expectations but increased year over year on the back of contributions from the American Public University System (“APUS”), Hondros College of Nursing (“HCN”) and Rasmussen University ("RU") segments. Yet, lower revenues from Graduate School ...

For the quarter ended September 2024, American Public Education (APEI) reported revenue of $153.12 million, up 1.5% over the same period last year. EPS came in at $0.04, compared to $0.02 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $153.62 million, representing a surprise of -0.32%. The company delivered an EPS surprise of +300.00%, with the consensus EPS estimate being $0.01.While investors scrutinize revenue and earnings changes year-over-year and how they comp ...

Financial Data and Key Metrics Changes - Overall revenues increased by 1.5% year-over-year to $153 million, marking the fourth consecutive quarter of year-over-year growth [3][9] - Adjusted EBITDA was $12.9 million, exceeding guidance, with a margin of 8.4% [3][9] - Net income was $731,000, equating to $0.04 per diluted share, at the high end of guidance [3][9] Business Line Data and Key Metrics Changes - APUS revenue increased by 0.8% to $77 million, driven by a 0.2% increase in net course registrations [9][10] - Rasmussen's revenue was $62.6 million, up 1% year-over-year, with a notable improvement in EBITDA loss to $4.5 million from $5.3 million [10] - Hondros revenue rose by 12.8% to $15.5 million, with total enrollment growing by 10.4% to approximately 3,100 students [10][11] Market Data and Key Metrics Changes - Fourth quarter total net course registrations for APUS are expected to grow by 4% to 6% compared to last year [4][11] - Rasmussen's fourth quarter total enrollment increased by 4% year-over-year, marking the second consecutive quarter of positive growth [4][11] - Hondros experienced a 19% year-over-year increase in total student enrollment to approximately 3,700 students [4][11] Company Strategy and Development Direction - The company is focused on strengthening its nursing and healthcare educational programs, anticipating significant growth due to high demand for nurses [6][8] - APEI aims to leverage its strong market position in military education and expand its nursing campus footprint to address healthcare demands [8][13] - The company is investing in online curriculum and IT infrastructure to enhance its offerings and improve marketing effectiveness [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about enrollment trends and financial performance, particularly at Rasmussen and Hondros [6][13] - The company anticipates continued growth in the online education market and a strong demand for nursing professionals [8][13] - Full year 2024 revenue guidance is set at $620 million to $625 million, reflecting a 3% to 4% increase from 2023 [4][11] Other Important Information - Total cash and cash equivalents increased to $162.2 million, with no borrowings under the $20 million revolving credit facility [11] - The company expects free cash flow for the full year to be at least $42 million [12] Q&A Session Summary Question: Profitability differences between APUS and other divisions - Management explained that APUS has a different operating model compared to campus-based operations, which affects profitability [15][16] Question: Increase in corporate costs - The increase in corporate costs was attributed to technology transition services and higher compensation costs [17][18] Question: EBITDA margin expectations for Rasmussen in Q4 - Management indicated that Rasmussen's EBITDA will be positive in Q4, but specific margin percentages were not provided [19] Question: Changes in pricing for APUS master's programs - The pricing change was made to align with the core value of no out-of-pocket costs for military students, with minimal impact on overall revenue [21][22] Question: Enrollment growth balance between in-person and online at Rasmussen - Management expects continued positive enrollment momentum in both online and campus-based programs [24][26] Question: Marketing strategy progress at APUS - The marketing team has been strengthened, leading to improved enrollment growth expectations for Q4 [28][30] Question: Long-term profitability targets for Hondros - Management is focused on optimizing campus locations and adding programs to improve profitability at Hondros [32][33]

American Public Education (APEI) came out with quarterly earnings of $0.04 per share, beating the Zacks Consensus Estimate of $0.01 per share. This compares to earnings of $0.02 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 300%. A quarter ago, it was expected that this for-profit education company would post earnings of $0.01 per share when it actually produced earnings of $0.01, delivering no surprise.Over the last four qu ...

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited interim consolidated financial statements of American Public Education, Inc. (APEI) for the periods ended September 30, 2024, and December 31, 2023, including balance sheets, statements of income, comprehensive income, stockholders' equity, and cash flows, along with accompanying notes detailing significant accounting policies, revenue disaggregation, leases, goodwill and intangible assets, income per common share, long-term debt, segment information, commitments, concentrations, preferred stock, and subsequent events [Consolidated Balance Sheets](index=4&type=page&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Data (in thousands) | ASSETS (in thousands) | As of September 30, 2024 (Unaudited) | As of December 31, 2023 | |:--------------------------------------|:-------------------------------------|:------------------------| | Cash, cash equivalents, and restricted cash | $162,249 | $144,342 | | Accounts receivable, net | 42,648 | 50,973 | | Total current assets | 236,501 | 217,382 | | Property and equipment, net | 92,861 | 87,503 | | Operating lease assets, net | 97,431 | 100,023 | | Intangible assets, net | 28,234 | 31,539 | | Goodwill | 59,593 | 59,593 | | Total assets | $569,588 | $557,386 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $10,460 | $8,663 | | Accrued compensation and benefits | 22,099 | 16,711 | | Deferred revenue and student deposits | 27,319 | 23,830 | | Total current liabilities | 89,408 | 73,989 | | Lease liabilities, long-term | 96,670 | 96,739 | | Long-term debt, net | 93,092 | 94,682 | | Total liabilities | 279,170 | 265,410 | | Total stockholders' equity | 290,418 | 291,976 | | Total liabilities and stockholders' equity | $569,588 | $557,386 | [Consolidated Statements of Income](index=5&type=page&id=Consolidated%20Statements%20of%20Income) Consolidated Statements of Income Data (in thousands, except per share amounts) | (In thousands, except per share amounts) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:-----------------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Revenue | $153,122 | $150,838 | $460,449 | $447,741 | | Total costs and expenses | 148,993 | 144,438 | 448,918 | 511,979 | | Income (loss) from operations | 4,129 | 6,400 | 11,531 | (64,238) | | Net income (loss) | $2,262 | $(3,328) | $3,149 | $(60,300) | | Preferred stock dividends | 1,531 | 1,525 | 4,597 | 4,469 | | Net income (loss) available to common stockholders | $731 | $(4,853) | $(1,448) | $(64,769) | | Basic income (loss) per common share | $0.04 | $(0.27) | $(0.08) | $(3.55) | | Diluted income (loss) per common share | $0.04 | $(0.27) | $(0.08) | $(3.54) | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=page&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Consolidated Statements of Comprehensive Income (Loss) Data (in thousands) | (In thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:---------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Net income (loss) | $2,262 | $(3,328) | $3,149 | $(60,300) | | Total other comprehensive loss | (677) | (343) | (1,454) | (565) | | Comprehensive income (loss) | $1,585 | $(3,671) | $1,695 | $(60,865) | [Consolidated Statements of Stockholders' Equity](index=7&type=page&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Consolidated Statements of Stockholders' Equity Data (in thousands, except share amounts) | (In thousands, except share amounts) | Balance as of Dec 31, 2023 | Balance as of Sep 30, 2024 | |:-------------------------------------|:---------------------------|:---------------------------| | Preferred Stock Amount | $39,691 | $39,691 | | Common Stock Shares | 17,604,371 | 17,710,887 | | Common Stock Amount | $176 | $177 | | Additional Paid-in Capital | $299,561 | $303,670 | | Other Comprehensive Income (loss) | $1,644 | $190 | | Accumulated Deficit | $(49,096) | $(53,310) | | Total Stockholders' Equity | $291,976 | $290,418 | Consolidated Statements of Stockholders' Equity Data (in thousands, except share amounts) | (In thousands, except share amounts) | Balance as of Dec 31, 2022 | Balance as of Sep 30, 2023 | |:-------------------------------------|:---------------------------|:---------------------------| | Preferred Stock Amount | $39,691 | $39,691 | | Common Stock Shares | 18,892,791 | 17,783,615 | | Common Stock Amount | $189 | $178 | | Additional Paid-in Capital | $292,854 | $297,848 | | Other Comprehensive Income (loss) | $3,102 | $2,537 | | Retained Earnings | $13,891 | $(58,864) | | Total Stockholders' Equity | $349,727 | $281,390 | [Consolidated Statements of Cash Flows](index=9&type=page&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Data (in thousands) | (In thousands) | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:---------------|:-------------------------------|:-------------------------------| | Net cash provided by operating activities | $47,273 | $48,657 | | Net cash used in investing activities | $(17,728) | $(9,382) | | Net cash used in financing activities | $(11,638) | $(13,579) | | Net increase in cash, cash equivalents, and restricted cash | $17,907 | $25,696 | | Cash, cash equivalents, and restricted cash at end of period | $162,249 | $155,154 | [Notes to Consolidated Financial Statements](index=10&type=page&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1. Nature of the Business](index=10&type=page&id=Note%201.%20Nature%20of%20the%20Business) - APEI is a provider of online and campus-based postsecondary education and career learning through its subsidiary institutions: American Public University System (APUS), Rasmussen University (RU), Hondros College of Nursing (HCN), and Graduate School USA (GSUSA)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - The Company's operations are organized into three reportable segments: APUS Segment, RU Segment, and HCN Segment. GSUSA's activities are included in Corporate and Other[23](index=23&type=chunk)[24](index=24&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=page&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) - The interim Consolidated Financial Statements are prepared in accordance with GAAP and include APEI and its wholly-owned subsidiaries, with all material intercompany transactions eliminated[25](index=25&type=chunk)[27](index=27&type=chunk) - Restricted cash includes funds held for students from Title IV programs and a **$25.1 million restricted certificate of deposit** for ED on behalf of RU due to its 2020 composite score being below the minimum required[31](index=31&type=chunk) Cash Type Data (in thousands) | Cash Type (in thousands) | September 30, 2024 (Unaudited) | December 31, 2023 | |:-------------------------|:-------------------------------|:------------------| | Cash, cash equivalents, and restricted cash | $162,249 | $144,342 | | Less: restricted cash | $(26,827) | $(27,682) | | Total unrestricted cash | $135,422 | $116,660 | - The Company recorded an investment loss of **$3.3 million in Q1 2024** on a cost method investment due to dilution from a convertible debt agreement and a **$1.1 million loss in Q2 2024** on the sale of its remaining equity method investment, reducing the book value of equity investments to zero by September 30, 2024[44](index=44&type=chunk)[45](index=45&type=chunk)[47](index=47&type=chunk) Stock-based Compensation Expense (in thousands) | Stock-based Compensation Expense (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:------------------------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Instructional costs and services | $189 | $176 | $609 | $713 | | Selling and promotional | 120 | (25) | 389 | 392 | | General and administrative | 1,452 | 1,582 | 4,504 | 4,920 | | Total stock-based compensation expense | $1,761 | $1,733 | $5,502 | $6,025 | [Note 3. Revenue](index=15&type=page&id=Note%203.%20Revenue) Revenue Type Data (in thousands) | Revenue Type (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:----------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Instructional services, net | $141,358 | $140,001 | $424,881 | $413,676 | | Graduation fees | 794 | 381 | 1,913 | 1,138 | | Textbook and other course materials | 9,934 | 9,503 | 30,579 | 30,098 | | Other fees | 1,036 | 953 | 3,076 | 2,829 | | Total Revenue | $153,122 | $150,838 | $460,449 | $447,741 | - Deferred revenue at September 30, 2024, was **$27.3 million**, comprising **$16.8 million for in-progress courses/terms** and **$10.5 million in student deposits**, representing the Company's performance obligation for future instructional services[62](index=62&type=chunk) [Note 4. Leases](index=16&type=page&id=Note%204.%20Leases) - The Company's principal leasing activities include operating leases for facilities (office space, campuses) and finance leases for copiers and printers[66](index=66&type=chunk)[68](index=68&type=chunk)[74](index=74&type=chunk) - Lease expense for operating leases was **$4.7 million for the three months** and **$14.2 million for the nine months** ended September 30, 2024, a decrease from the prior year periods[71](index=71&type=chunk) - During the nine months ended September 30, 2024, the Company recorded a total loss on leases of **$3.7 million**, primarily due to a **$2.1 million loss** from terminating an RU Segment lease for a planned Dallas campus and a **$0.4 million impairment** from the planned closure of two Wisconsin campuses[72](index=72&type=chunk)[73](index=73&type=chunk) Lease Liabilities (in thousands) | Lease Liabilities (in thousands) | September 30, 2024 | |:---------------------------------|:-------------------| | Operating lease liabilities, current | $13,324 | | Finance lease liabilities, current | 214 | | Operating lease liabilities, long-term | 96,383 | | Finance lease liabilities, long-term | 287 | [Note 5. Goodwill and Intangible Assets](index=18&type=page&id=Note%205.%20Goodwill%20and%20Intangible%20Assets) - Goodwill for the RU and HCN Segments remained at **$33.0 million** and **$26.6 million**, respectively, as of September 30, 2024, with no impairment charges recorded during the nine months ended September 30, 2024[78](index=78&type=chunk)[87](index=87&type=chunk) - In Q2 2023, the Company recorded non-cash impairment charges of **$53.0 million for RU Segment goodwill** and **$11.0 million for RU Segment indefinite-lived intangible assets** (trade name, accreditation, licensing, Title IV) due to underperformance against internal targets and market conditions[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) Intangible Assets (in thousands) | Intangible Assets (in thousands) | Gross Amount | Accumulated Amortization | Impairment | Net Carrying Amount (Sep 30, 2024) | |:---------------------------------|:-------------|:-------------------------|:-----------|:-----------------------------------| | **Finite-lived intangible assets** | | | | | | Student roster | $20,000 | $20,000 | — | $— | | Curricula | 14,563 | 14,550 | — | 13 | | Total finite-lived intangible assets | $40,826 | $40,813 | — | $13 | | **Indefinite-lived intangible assets** | | | | | | Trade name | 28,498 | — | 8,000 | 20,498 | | Accreditation, licensing, and Title IV | 26,186 | — | 18,500 | 7,686 | | Total indefinite-lived intangible assets | 54,721 | — | 26,500 | 28,221 | | Total intangible assets | $95,547 | $40,813 | $26,500 | $28,234 | [Note 6. Income (Loss) Per Common Share](index=21&type=page&id=Note%206.%20Income%20(Loss)%20Per%20Common%20Share) Income (Loss) Per Common Share Data (in thousands, except per share amounts) | (In thousands, except per share amounts) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:-----------------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Net income (loss) available to common stockholders | $731 | $(4,853) | $(1,448) | $(64,769) | | Basic weighted average shares outstanding | 17,679 | 17,778 | 17,604 | 18,230 | | Basic income (loss) per common share | $0.04 | $(0.27) | $(0.08) | $(3.55) | | Diluted weighted average shares outstanding | 18,247 | 17,820 | 18,076 | 18,294 | | Diluted income (loss) per common share | $0.04 | $(0.27) | $(0.08) | $(3.54) | Antidilutive Securities (in thousands) | Antidilutive Securities (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:---------------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Stock options | 104 | 163 | 110 | 163 | | Restricted shares | — | 895 | 22 | 896 | | Total antidilutive securities | 104 | 1,058 | 132 | 1,059 | [Note 7. Long-Term Debt](index=21&type=page&id=Note%207.%20Long-Term%20Debt) - APEI has a senior secured term loan facility of **$175.0 million** maturing September 1, 2027, and a **$20.0 million revolving loan facility** maturing September 1, 2026. The Term Loan is presented net of deferred financing fees[94](index=94&type=chunk)[95](index=95&type=chunk) - The Credit Agreement was amended in June 2023 to transition the floating index rate from LIBOR to Term SOFR, with a borrowing rate of **10.86%** as of September 30, 2024[96](index=96&type=chunk) - The Company made a **$2.6 million principal payment** on the Term Loan during Q2 2024 and was in compliance with all debt covenants as of September 30, 2024[98](index=98&type=chunk)[99](index=99&type=chunk) Long-Term Debt (in thousands) | Long-Term Debt (in thousands) | September 30, 2024 | December 31, 2023 | |:------------------------------|:-------------------|:------------------| | Credit agreement | $96,425 | $99,063 | | Deferred financing fees | (3,333) | (4,381) | | Total debt | 93,092 | 94,682 | | Long-Term Debt | $93,092 | $94,682 | - The Company uses an interest rate cap agreement to hedge against variable interest rate risk, transitioning from LIBOR to Term SOFR in June 2023, providing protection if Term SOFR exceeds **1.78%** until December 31, 2024[103](index=103&type=chunk)[104](index=104&type=chunk) [Note 8. Segment Information](index=23&type=page&id=Note%208.%20Segment%20Information) - The Company operates through three reportable segments: APUS, RU, and HCN. GSUSA's activities are included in Corporate and Other[108](index=108&type=chunk) Segment Revenue (in thousands) | Segment Revenue (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:-------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | APUS Segment | $76,981 | $76,406 | $234,685 | $223,941 | | RU Segment | 52,604 | 52,073 | 158,773 | 161,511 | | HCN Segment | 15,493 | 13,741 | 48,349 | 41,147 | | Corporate and Other | 8,044 | 8,618 | 18,642 | 21,142 | | Total Revenue | $153,122 | $150,838 | $460,449 | $447,741 | Segment Income (Loss) from Operations (in thousands) | Segment Income (Loss) from Operations (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:-----------------------------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | APUS Segment | $20,765 | $21,948 | $62,143 | $57,963 | | RU Segment | $(7,609) | $(10,570) | $(25,401) | $(100,708) | | HCN Segment | $(771) | $(641) | $(1,819) | $(2,179) | | Corporate and Other | $(8,256) | $(4,337) | $(23,392) | $(19,314) | | Total income (loss) from operations | $4,129 | $6,400 | $11,531 | $(64,238) | Segment Assets (in thousands) | Segment Assets (in thousands) | As of September 30, 2024 (Unaudited) | As of December 31, 2023 | |:------------------------------|:-------------------------------------|:------------------------| | APUS Segment | $101,767 | $108,749 | | RU Segment | 214,749 | 220,901 | | HCN Segment | 76,115 | 60,270 | | Corporate and Other | 176,957 | 167,466 | | Total Assets | $569,588 | $557,386 | [Note 9. Commitments and Contingencies](index=25&type=page&id=Note%209.%20Commitments%20and%20Contingencies) - The Company accrues for costs related to contingencies, including regulatory compliance and legal matters, when probable and estimable, adjusting accruals as new information becomes available[113](index=113&type=chunk) - As of the reporting date, the Company has no material legal proceedings pending[114](index=114&type=chunk)[239](index=239&type=chunk) [Note 10. Concentration](index=25&type=page&id=Note%2010.%20Concentration) - The Company's students primarily finance education through DoD tuition assistance, VA education benefits, federal Title IV programs, and cash/other sources[115](index=115&type=chunk) APUS Segment Revenue by Funding Source | APUS Segment Revenue by Funding Source | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:---------------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | DoD tuition assistance programs | 42% | 46% | 45% | 47% | | VA education benefits | 25% | 23% | 24% | 22% | | Title IV programs | 19% | 18% | 17% | 17% | | Cash and other sources | 14% | 13% | 14% | 14% | RU Segment Revenue by Funding Source | RU Segment Revenue by Funding Source | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:-------------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Title IV programs | 78% | 76% | 76% | 75% | | Cash and other sources | 20% | 22% | 22% | 23% | | VA education benefits | 2% | 2% | 2% | 2% | HCN Segment Revenue by Funding Source | HCN Segment Revenue by Funding Source | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:--------------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Title IV programs | 85% | 79% | 84% | 79% | | Cash and other sources | 14% | 20% | 15% | 20% | | VA education benefits | 1% | 1% | 1% | 1% | [Note 11. Preferred Stock](index=25&type=page&id=Note%2011.%20Preferred%20Stock) - APEI issued **$40 million of Series A Senior Preferred Stock** in December 2022, with cumulative dividends accruing daily at SOFR plus **10.00% (14.60% as of September 30, 2024)**[119](index=119&type=chunk)[120](index=120&type=chunk) - Dividends declared and paid on preferred stock were **$1.5 million for the three months** and **$4.6 million for the nine months** ended September 30, 2024[120](index=120&type=chunk) - The Series A Senior Preferred Stock has no stated maturity, is not convertible, and is redeemable at the Company's option at a liquidation preference that includes an early redemption premium and a make-whole payment (e.g., **$6.0 million make-whole payment** as of September 30, 2024)[121](index=121&type=chunk)[122](index=122&type=chunk) Liquidation Preference (in thousands) | Liquidation Preference (in thousands) | September 30, 2024 (Unaudited) | December 31, 2023 | |:--------------------------------------|:-------------------------------|:------------------| | Series A Senior Preferred Stock | $40,069 | $40,072 | | Make whole payment | 6,038 | 12,266 | | Early redemption premium | 2,915 | 2,915 | | Liquidation Preference | $49,022 | $55,253 | [Note 12. Subsequent Event](index=26&type=page&id=Note%2012.%20Subsequent%20Event) - On November 7, 2024, APUS agreed to sell excess real and personal property in Charles Town, West Virginia, for **$16.6 million**, expecting a pre-tax loss of **$1.6 million to $1.8 million**, with closing anticipated in early 2025[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on APEI's financial condition and results of operations for the three and nine months ended September 30, 2024, compared to the prior year periods. It covers overall financial performance, segment-specific results, critical accounting policies, and liquidity, highlighting revenue growth, net income improvement, and key operational and regulatory developments [Forward-Looking Statements](index=27&type=page&id=Forward-Looking%20Statements) - The report contains forward-looking statements regarding regulatory compliance, business growth, cash needs, student enrollment, technology infrastructure, marketing, and financial performance, which are subject to various risks and uncertainties[127](index=127&type=chunk)[128](index=128&type=chunk) [Overview](index=28&type=page&id=Overview) - APEI provides online and campus-based postsecondary education to approximately **104,300 students** and career learning to **24,000 individuals** through APUS, RU, HCN, and GSUSA[131](index=131&type=chunk) - APUS serves approximately **87,700 adult learners**, primarily military-affiliated (**66%**), while RU focuses on nursing and health sciences with **13,500 students** (**6,000 on-ground, 7,500 online**). HCN provides nursing education to **3,100 students**[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - APUS implemented modest tuition increases for master's level students in April 2024, later returning military rates to **$250/credit hour**. RU and HCN also implemented modest tuition increases to remain competitive[136](index=136&type=chunk) - The Company completed a reduction in force in Q3 2023, terminating **74 employees** and eliminating **57 open positions**, incurring **$3.0 million in severance costs**[137](index=137&type=chunk) - RU consolidated two Minnesota campuses and plans to voluntarily close two Wisconsin campuses by December 2025 and 2026, impacting approximately **90 students**[138](index=138&type=chunk) - APUS received a Provisional Program Participation Agreement (PPPA) from ED effective July 2024, imposing new reporting requirements due to an open program review. APUS also received **408 borrower defense to repayment (BDTR) claims totaling $6.6 million**, which it disputes[140](index=140&type=chunk)[141](index=141&type=chunk) - RU's ADN programs at Tampa, Ocala, and Fort Myers, Florida, were placed on probationary status by the FBN due to not meeting NCLEX pass rate standards. FCIE placed RU on a provisional license due to financial stability concerns and NCLEX pass rates[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - HCN's PN programs in Cleveland, Columbus, Dayton, Toledo, and Akron, and Akron ADN program were below the **70% retention benchmark** for FY2023, requiring reports to ABHES. OBN restored HCN's PN program to full approval status in July 2024 after 18 months of provisional approval[149](index=149&type=chunk)[152](index=152&type=chunk) - Consolidated revenue increased by **1.5% to $153.1 million** for Q3 2024 and by **2.8% to $460.4 million** for the nine months ended September 30, 2024. Net income improved significantly from a loss in prior periods[160](index=160&type=chunk)[161](index=161&type=chunk) [Critical Accounting Policies and Use of Estimates](index=33&type=page&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) - Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if indicators exist. The process involves subjective judgment and estimates, including qualitative and quantitative assessments[168](index=168&type=chunk) - Fair value in quantitative analysis is estimated by weighting discounted cash flow and guideline public company approaches, using three-year financial forecasts and market participant-based assumptions[169](index=169&type=chunk)[171](index=171&type=chunk) - No impairment charges were necessary for RU and HCN Segment goodwill and indefinite-lived intangible assets during Q3 2024, following a qualitative assessment[172](index=172&type=chunk) - In Q2 2023, the Company recorded a **$53.0 million non-cash impairment charge for RU Segment goodwill** and an **$11.0 million charge for RU Segment indefinite-lived intangible assets** due to underperformance and market conditions[173](index=173&type=chunk)[174](index=174&type=chunk) [Results of Operations](index=35&type=page&id=Results%20of%20Operations) - APUS net course registrations increased by **0.2% for the three months** and **1.6% for the nine months** ended September 30, 2024, primarily due to military-affiliated students utilizing VA benefits[179](index=179&type=chunk) - RU total enrollment was flat for the three months but decreased by **2.7% for the nine months** ended September 30, 2024, driven by a **9.1% decrease in on-ground enrollment**, partially offset by a **3.3% increase in online enrollment**[180](index=180&type=chunk) - HCN total enrollment increased by **10.4% for the three months** and **13.3% for the nine months** ended September 30, 2024, primarily due to growth at the Detroit, Michigan campus[181](index=181&type=chunk) Statement of Income Data as % of Revenue | Statement of Income Data as % of Revenue | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | |:-----------------------------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Revenue | 100.0% | 100.0% | 100.0% | 100.0% | | Instructional costs and services | 49.2% | 48.5% | 48.7% | 49.6% | | Selling and promotional | 21.9% | 22.1% | 21.7% | 23.7% | | General and administrative | 22.9% | 20.5% | 23.0% | 21.6% | | Depreciation and amortization | 3.3% | 4.7% | 3.4% | 5.1% | | Impairment of goodwill and intangible assets | — | — | — | 14.3% | | Loss on leases | — | — | 0.8% | — | | Total costs and expenses | 97.3% | 95.8% | 97.5% | 114.3% | | Income (loss) from operations | 2.7% | 4.2% | 2.5% | (14.3)% | | Net income (loss) | 1.5% | (2.2)% | 0.7% | (13.5)% | [Analysis of Consolidated Statements of Income](index=36&type=page&id=Analysis%20of%20Consolidated%20Statements%20of%20Income) - Consolidated revenue for Q3 2024 increased by **$2.3 million (1.5%) to $153.1 million**, driven by increases in HCN (**12.8%**), APUS (**0.8%**), and RU (**1.0%**) segments, partially offset by a decrease in GSUSA[185](index=185&type=chunk) - Total costs and expenses for Q3 2024 increased by **$4.6 million (3.2%) to $149.0 million**, including **$1.1 million in IT transition services costs**. Excluding these, expenses increased by **$3.5 million** due to higher employee compensation and professional fees[186](index=186&type=chunk) - Instructional costs and services increased by **3.0% to $75.4 million** in Q3 2024, primarily due to increased employee compensation in APUS and HCN, professional fees in RU, and course materials in HCN[187](index=187&type=chunk) - General and administrative expenses increased by **13.4% to $35.0 million** in Q3 2024, including **$1.1 million in IT transition costs**. Consolidated bad debt expense decreased to **$4.2 million (2.7% of revenue)** from **$4.5 million (3.0%)** in the prior year[188](index=188&type=chunk) - Depreciation and amortization expenses decreased by **$1.9 million to $5.1 million** in Q3 2024, mainly due to the full amortization of certain definite-lived intangible assets in the RU Segment in 2023[189](index=189&type=chunk) - Net income for Q3 2024 was **$2.3 million**, an increase of **$5.6 million** from a net loss of **$3.3 million** in Q3 2023, with no equity investment loss in the current period compared to a **$5.2 million loss** in the prior year[194](index=194&type=chunk)[195](index=195&type=chunk) - For the nine months ended September 30, 2024, consolidated revenue increased by **$12.7 million (2.8%) to $460.4 million**. Net income improved by **$63.4 million to $3.1 million** from a **$60.3 million net loss** in the prior year[197](index=197&type=chunk)[210](index=210&type=chunk) - Total costs and expenses for the nine months decreased by **$63.1 million (12.3%) to $448.9 million**, primarily due to the absence of a **$64.0 million goodwill and intangible asset impairment charge** from the prior year[198](index=198&type=chunk)[204](index=204&type=chunk) - Equity investment loss for the nine months ended September 30, 2024, was **$4.4 million**, including a **$3.3 million non-cash loss** from a convertible debt agreement and a **$1.1 million loss** on the sale of an equity investment[209](index=209&type=chunk) [Analysis of Operating Results by Reportable Segment](index=40&type=page&id=Analysis%20of%20Operating%20Results%20by%20Reportable%20Segment) - APUS Segment revenue increased by **0.8% to $77.0 million** in Q3 2024 and by **4.8% to $234.7 million** for the nine months, driven by higher net course registrations and tuition increases[213](index=213&type=chunk)[214](index=214&type=chunk) - RU Segment revenue increased by **1.0% to $52.6 million** in Q3 2024 due to tuition increases, despite a **6.3% decrease in on-ground enrollment**. For the nine months, revenue decreased by **1.7% to $158.8 million** due to a **2.7% decrease in total student enrollment**[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) - HCN Segment revenue increased by **12.8% to $15.5 million** in Q3 2024 and by **17.5% to $48.3 million** for the nine months, primarily due to a **10.4% and 13.3% increase in total student enrollment**, respectively, and a **5% tuition increase**[218](index=218&type=chunk)[219](index=219&type=chunk) [Liquidity and Capital Resources](index=41&type=page&id=Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents increased by **$17.9 million (12.4%) to $162.2 million** at September 30, 2024, primarily due to higher revenue and operating income at APUS and decreased common stock repurchases[220](index=220&type=chunk) - ED notified the Company that its 2022 consolidated composite score was **1.1**, placing its institutions in the 'zone' and requiring participation under the 'zone alternative,' which includes heightened cash monitoring (HCM1) for Title IV disbursements[224](index=224&type=chunk) - The Company's Total Net Leverage Ratio under the Credit Agreement decreased to **0.17** at September 30, 2024, from **0.51** at December 31, 2023, due to improved operating results and reduced accounts receivable[225](index=225&type=chunk) - Net cash provided by operating activities was **$47.3 million** for the nine months ended September 30, 2024, a decrease from **$48.7 million** in the prior year, mainly due to changes in working capital[228](index=228&type=chunk) - Net cash used in investing activities increased to **$17.7 million** for the nine months ended September 30, 2024, from **$9.4 million** in the prior year, driven by higher capital expenditures for campus relocations and IT[229](index=229&type=chunk) - Net cash used in financing activities decreased to **$11.6 million** for the nine months ended September 30, 2024, from **$13.6 million** in the prior year, primarily due to a decrease in common stock repurchases (**$2.8 million vs. $8.0 million**)[230](index=230&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, primarily interest rate risk, and its strategies for managing these risks. It highlights the absence of material derivative financial instruments and the use of an interest rate cap agreement to mitigate variable rate indebtedness exposure - The Company has no material derivative financial instruments and maintains cash and cash equivalents in low-risk investments like bank deposits, money market funds, and short-term U.S. Treasury bills[234](index=234&type=chunk) - To manage interest rate risk on its variable rate indebtedness, the Company uses an interest rate cap agreement hedging **$87.5 million of principal**, providing protection if the one-month Term SOFR rate exceeds **1.78%** until December 31, 2024[236](index=236&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the period - Management, including the principal executive and financial officers, concluded that the Company's disclosure controls and procedures were effective as of September 30, 2024[237](index=237&type=chunk) - There were no material changes in internal control over financial reporting during the period covered by the report[238](index=238&type=chunk) [PART II – OTHER INFORMATION](index=44&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the Company is involved in various legal proceedings in the normal course of business but currently has no material legal proceedings pending - The Company is involved in various legal proceedings in the normal course of business but currently has no material legal proceedings pending[239](index=239&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section updates and reiterates key risks to the Company's business, including the potential negative impacts of failing to meet financial responsibility standards, significant liabilities from borrower defense to repayment (BDTR) claims, challenges in marketing and expanding APUS, and adverse effects from campus closures or non-compliance with extensive regulatory requirements - The Company's 2022 consolidated composite score of **1.1** placed its institutions in the 'zone,' requiring participation under the 'zone alternative' with heightened cash monitoring (HCM1) and additional reporting requirements, which could negatively impact cash flow[243](index=243&type=chunk)[244](index=244&type=chunk)[247](index=247&type=chunk) - APUS received **408 BDTR claims totaling $6.6 million**, which it disputes. The Company faces potential significant liability if ED grants BDTR relief and seeks recoupment, impacting financial condition and reputation[250](index=250&type=chunk) - APUS's marketing strategy faces challenges in attracting non-military students cost-effectively and its rebranding initiative to a global digital university may not yield desired enrollment increases or could impact 90/10 Rule compliance[251](index=251&type=chunk)[253](index=253&type=chunk) - RU's planned and actual campus closures (e.g., Lake Elmo, Minnesota; Green Bay and Wausau, Wisconsin) and program terminations (e.g., Bloomington, Minnesota ADN program) may adversely impact enrollments, reputation, and financial condition[254](index=254&type=chunk)[255](index=255&type=chunk)[257](index=257&type=chunk) - Failure to comply with extensive regulatory requirements from accrediting agencies, state bodies, and the federal government (ED, DoD, VA) could lead to penalties, operational restrictions, loss of federal funding eligibility, and substantial costs[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's common stock repurchase programs and activities, including shares repurchased and remaining authorization Repurchase Program Details | Repurchase Program Details | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares Yet to Be Purchased Under the Plans or Programs (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | |:---------------------------|:---------------------------------|:-----------------------------|:---------------------------------------------------------------------------------|:-----------------------------------------------------------------------------|:---------------------------------------------------------------------------------------------| | July 1, 2024 | — | — | — | 539,789 | 5,979,68 | | July 1, 2024 - July 31, 2024 | — | — | — | 539,789 | 5,979,68 | | August 1, 2024 - August 31, 2024 | — | — | — | 539,789 | 5,979,68 | | September 1, 2024 - September 30, 2024 | — | — | — | 539,789 | 5,979,68 | | Total | — | — | — | 539,789 | $5,979,68 | - The Board approved a stock repurchase program in December 2011 for annual purchases up to cumulative shares issued under equity incentive plans. Additional authorizations of **$35.0 million** (May 2019), **$25.0 million** (December 2019), and **$10.0 million** (November 2023) allow for open market or privately negotiated transactions[266](index=266&type=chunk)[267](index=267&type=chunk) - During Q3 2024, **5,651 shares of common stock** were deemed repurchased from employees to satisfy tax-withholding requirements for restricted stock grants, which were not part of the Board-authorized programs[268](index=268&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the reporting period[268](index=268&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures to report - There are no mine safety disclosures to report[268](index=268&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section reports on Rule 10b5-1 trading arrangements adopted or terminated by directors or officers during the third quarter of 2024 - During Q3 2024, James Kenigsberg, a Director, adopted a Rule 10b5-1 trading arrangement on August 8, 2024, to sell up to **6,969 shares** upon vesting of equity awards, with a duration until August 29, 2025[270](index=270&type=chunk)[271](index=271&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications, XBRL documents, and the cover page interactive data file Exhibit List | Exhibit No. | Exhibit Description | |:------------|:--------------------| | 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) | | 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) | | 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | | EX-101.INS | Inline XBRL Instance Document | | EX-101.SCH | Inline XBRL Taxonomy Extension Schema Document | | EX-101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | EX-101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | | EX-101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | | EX-101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | 104 | Cover Page Interactive Data File | [SIGNATURES](index=51&type=section&id=SIGNATURES)

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Key Third Quarter 2024 Highlights](index=1&type=section&id=Key%20Third%20Quarter%202024%20Highlights) American Public Education, Inc. reported a 1.5% year-over-year consolidated revenue increase to $153.1 million for Q3 2024, achieving net income of $731 thousand ($0.04 diluted EPS) compared to a net loss in the prior year, with Rasmussen University showing its first significant enrollment increase since acquisition, and narrowed full-year guidance Q3 2024 Key Financial Highlights | Metric | Q3 2024 | Q3 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Consolidated Revenue | $153.1 million | $150.8 million | +1.5% | | Net Income (Loss) | $731 thousand | ($4.9 million) | N/A | | Diluted EPS | $0.04 | ($0.27) | N/A | | Adjusted EBITDA | $12.9 million | $18.1 million | -28.7% | - Q4 enrollments at Rasmussen increased **3.5%** compared to Q4 2023, marking the first significant increase since its acquisition[4](index=4&type=chunk) - Full year revenue guidance narrowed to **$620 million to $625 million**, and Adjusted EBITDA updated to **$64 million to $67 million**[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Angela Selden highlighted continued progress towards annual goals, noting Rasmussen's positive year-over-year enrollment comparison and expected continued momentum, with Hondros College of Nursing also showing improvement and further enrollment growth anticipated, keeping the company on track to achieve its financial outlook for 2024, including Rasmussen being EBITDA positive in the second half - Rasmussen University achieved its first positive year-over-year enrollment comparison since its acquisition in Q3 2024, with continued momentum expected[5](index=5&type=chunk) - Hondros College of Nursing continues to show improvement in Q3, with expectations for further enrollment growth in Q4[5](index=5&type=chunk) - Management is confident in delivering on 2024 revenue, net income, and Adjusted EBITDA outlook, including Rasmussen being EBITDA positive in the second half of 2024[5](index=5&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) [Third Quarter 2024 Financial Results](index=2&type=section&id=Third%20quarter%202024%20Financial%20Results) In Q3 2024, APEI's consolidated revenue increased by 1.5% to $153.1 million, driven by growth across HCN, APUS, and RU segments, while total costs and expenses rose by 3.2%, primarily due to increases in general and administrative expenses and instructional costs, resulting in a net income of $731 thousand, a significant improvement from a net loss in Q3 2023, despite a decrease in Adjusted EBITDA Q3 2024 Consolidated Financial Highlights | Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (YoY) | | :--------------------------------------- | :--------------------- | :--------------------- | :----------- | | Revenues | $153,122 | $150,838 | +1.5% | | Total Costs and Expenses | $148,993 | $144,438 | +3.2% | | Net Income (Loss) available to common stockholders | $731 | ($4,853) | N/A | | Diluted EPS | $0.04 | ($0.27) | N/A | | Adjusted EBITDA | $12,923 | $18,102 | -28.7% | - Revenue increase was primarily due to a **$1.8 million** increase in HCN Segment, **$0.6 million** in APUS Segment, and **$0.5 million** in RU Segment[7](index=7&type=chunk) - General and administrative expenses increased by **13.4%** (**$4.1 million**) due to higher IT costs, employee compensation, and professional fees[10](index=10&type=chunk) [Consolidated Revenue](index=2&type=section&id=2.1.1%20Consolidated%20Revenue) Q3 Segment Revenues (in thousands) | Segment | Q3 2024 | Q3 2023 | Change (YoY) | | :------------------- | :------ | :------ | :----------- | | APUS Segment | $76,981 | $76,406 | +0.8% | | RU Segment | $52,604 | $52,073 | +1.0% | | HCN Segment | $15,493 | $13,741 | +12.8% | | Corporate and other | $8,044 | $8,618 | -6.6% | [Costs and Expenses](index=2&type=section&id=2.1.2%20Costs%20and%20Expenses) Q3 Costs and Expenses (in thousands) | Expense Category | Q3 2024 | Q3 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Instructional costs and services | $75,401 | $73,228 | +3.0% | | Selling and promotional | $33,459 | $33,315 | +0.4% | | General and administrative | $35,030 | $30,885 | +13.4% | | Depreciation and amortization | $5,080 | $7,026 | -27.7% | | Loss (gain) on disposals of long-lived assets | $23 | ($16) | N/A | | Total Costs and Expenses | $148,993 | $144,438 | +3.2% | - Costs and expenses for Q3 2024 included **$1.1 million** of information technology transition services costs[8](index=8&type=chunk) [Net Income and EPS](index=2&type=section&id=2.1.3%20Net%20Income%20and%20EPS) Q3 Net Income and EPS | Metric | Q3 2024 | Q3 2023 | | :--------------------------------------- | :------ | :------ | | Net income (loss) available to common stockholders | $731,000 | ($4.9 million) | | Net income (loss) per diluted common share | $0.04 | ($0.27) | - Q3 2023 included a **$5.2 million** net loss on equity investment, which, if excluded, would have resulted in a net income per diluted common share of **$0.02**[3](index=3&type=chunk)[11](index=11&type=chunk) [Adjusted EBITDA](index=2&type=section&id=2.1.4%20Adjusted%20EBITDA) Q3 Adjusted EBITDA (in thousands) | Metric | Q3 2024 | Q3 2023 | Change (YoY) | | :-------------- | :------ | :------ | :----------- | | Adjusted EBITDA | $12,923 | $18,102 | -28.7% | - Adjusted EBITDA excludes adjustments for impairment of goodwill and intangible assets, severance costs, loss on leases, stock compensation, loss on disposals of long-lived assets, and transition services costs[12](index=12&type=chunk)[20](index=20&type=chunk) [Year-to-Date 2024 Financial Results](index=8&type=section&id=Year-to-Date%202024%20Financial%20Results) For the nine months ended September 30, 2024, APEI's consolidated revenue increased by 2.8% to $460.4 million, with the company significantly improving its net income position, reporting a net income of $3.1 million compared to a substantial net loss in the prior year, largely due to the absence of goodwill impairment charges, and Adjusted EBITDA also saw a notable increase YTD 2024 Consolidated Financial Highlights | Metric | YTD 2024 (in thousands) | YTD 2023 (in thousands) | Change (YoY) | | :--------------------------------------- | :---------------------- | :---------------------- | :----------- | | Revenues | $460,449 | $447,741 | +2.8% | | Total Costs and Expenses | $448,918 | $511,979 | -12.3% | | Net Income (Loss) available to common stockholders | ($1,448) | ($64,769) | N/A | | Diluted EPS | ($0.08) | ($3.54) | N/A | | Adjusted EBITDA | $40,905 | $33,901 | +20.6% | [Consolidated Revenue](index=8&type=section&id=2.2.1%20Consolidated%20Revenue) YTD Segment Revenues (in thousands) | Segment | YTD 2024 | YTD 2023 | Change (YoY) | | :------------------- | :------- | :------- | :----------- |\n| APUS Segment | $234,685 | $223,941 | +4.8% | | RU Segment | $158,773 | $161,511 | -1.7% | | HCN Segment | $48,349 | $41,147 | +17.5% | | Corporate and other | $18,642 | $21,142 | -11.8% | [Costs and Expenses](index=8&type=section&id=2.2.2%20Costs%20and%20Expenses) YTD Costs and Expenses (in thousands) | Expense Category | YTD 2024 | YTD 2023 | Change (YoY) | | :-------------------------------- | :------- | :------- | :----------- | | Instructional costs and services | $224,042 | $222,115 | +0.9% | | Selling and promotional | $99,753 | $106,205 | -6.1% | | General and administrative | $105,733 | $96,907 | +9.1% | | Depreciation and amortization | $15,440 | $22,735 | -32.1% | | Impairment of goodwill and intangible assets | - | $64,000 | N/A | | Loss on leases | $3,715 | - | N/A | | Loss (gain) on disposals of long-lived assets | $235 | $17 | N/A | | Total Costs and Expenses | $448,918 | $511,979 | -12.3% | [Net Income and EPS](index=8&type=section&id=2.2.3%20Net%20Income%20and%20EPS) YTD Net Income and EPS | Metric | YTD 2024 | YTD 2023 | | :--------------------------------------- | :------- | :------- | | Net income (loss) available to common stockholders | ($1,448) | ($64,769) | | Net income (loss) per diluted common share | ($0.08) | ($3.54) | [Adjusted EBITDA](index=9&type=section&id=2.2.4%20Adjusted%20EBITDA) YTD Adjusted EBITDA (in thousands) | Metric | YTD 2024 | YTD 2023 | Change (YoY) | | :-------------- | :------- | :------- | :----------- | | Adjusted EBITDA | $40,905 | $33,901 | +20.6% | [Balance Sheet and Liquidity](index=2&type=section&id=Balance%20Sheet%20and%20Liquidity) APEI's total cash, cash equivalents, and restricted cash increased by **12.4%** to **$162.2 million** at September 30, 2024, compared to the end of 2023, indicating improved liquidity Cash and Cash Equivalents | Metric | September 30, 2024 | December 31, 2023 | Change | | :------------------------------------ | :------------------- | :------------------ | :----- | | Total cash, cash equivalents, and restricted cash | $162.2 million | $144.3 million | +12.4% | [Operational Metrics: Registrations and Enrollment](index=3&type=section&id=Operational%20Metrics:%20Registrations%20and%20Enrollment) [Q3 2024 Enrollment Performance](index=3&type=section&id=Q3%202024%20Enrollment%20Performance) In Q3 2024, American Public University System (APUS) net course registrations saw a slight increase, while Rasmussen University's total student enrollment remained flat, and Hondros College of Nursing demonstrated strong growth with a **10.4%** increase in total student enrollment Q3 2024 Registrations and Enrollment | Institution | Q3 2024 | Q3 2023 | % Change | | :------------------------------------ | :------ | :------ | :------- | | APUS Net Course Registrations | 92,500 | 92,300 | 0.2% | | Rasmussen University Total Student Enrollment | 13,500 | 13,500 | 0% | | Hondros College of Nursing Total Student Enrollment | 3,100 | 2,800 | 10.4% | [Financial Outlook](index=3&type=section&id=Financial%20Outlook) [Fourth Quarter 2024 Outlook](index=3&type=section&id=Fourth%20Quarter%202024%20Outlook) APEI projects strong enrollment growth for Q4 2024 across its key institutions, with Hondros College of Nursing leading with an anticipated **19%** increase, consolidated revenue expected to grow between **4%** and **8%**, while net income and diluted EPS are projected to decrease year-over-year, and Adjusted EBITDA is expected to range from a **10%** decrease to a **2%** increase Q4 2024 Enrollment Guidance | Institution | Q4 2024 Guidance | % Yr/Yr Change | | :-------------------------- | :--------------- | :------------- | | APUS Net course registrations | 94,400 to 96,100 | 4% to 6% | | HCN Student enrollment | 3,700 | 19% | | RU Student enrollment | 14,600 | 4% | | - On-ground Healthcare | 6,300 | -3% | | - Online | 8,300 | 9% | Q4 2024 Financial Guidance (in millions, except EPS) | Metric | Q4 2024 Guidance | % Yr/Yr Change | | :--------------------------------------- | :--------------- | :------------- | | APEI Consolidated revenue | $159.0 – $164.0 | 4% to 8% | | APEI Net loss/income available to common stockholders | $9.0 – $11.0 | (20%) – (4.0%) | | APEI Adjusted EBITDA | $23.0 – $26.0 | (10%) to 2% | | APEI Diluted EPS | $0.47 – $0.56 | (26%) to (13%) | [Full Year 2024 Outlook](index=4&type=section&id=Full%20Year%202024%20Outlook) For the full year 2024, APEI anticipates consolidated revenue growth of **3% to 4%**, reaching **$620 million to $625 million**, Adjusted EBITDA is projected to increase by **7% to 12%**, while capital expenditures are expected to rise significantly, between **37% and 58%** Full Year 2024 Financial Guidance (in millions) | Metric | Full Year 2024 Guidance | % Yr/Yr Change | | :--------------------------------------- | :---------------------- | :------------- | | APEI Consolidated Revenue | $620 – $625 | 3% to 4% | | APEI Net income available to common stockholders | $7-$9 | n.m. | | APEI Adjusted EBITDA | $64 – $67 | 7% to 12% | | APEI Capital Expenditure (CapEx) | $19 – $22 | 37% to 58% | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) [Definition and Rationale](index=4&type=section&id=Definition%20and%20Rationale) APEI utilizes non-GAAP financial measures, specifically EBITDA and Adjusted EBITDA, to provide investors with a clearer evaluation of its operating profit and cash generation capabilities, with Adjusted EBITDA excluding non-cash and non-recurring expenses such as stock compensation, impairment of goodwill, severance costs, and transition services costs, offering a supplementary view to GAAP results - EBITDA is defined as earnings before interest, taxes, depreciation, and amortization[19](index=19&type=chunk) - Adjusted EBITDA is EBITDA less non-cash expenses (e.g., stock compensation) and non-recurring expenses (e.g., severance costs, loss on leases, transition services costs)[19](index=19&type=chunk)[20](index=20&type=chunk) - These non-GAAP measures are considered useful for evaluating operating profit and cash generation but should not be viewed in isolation from GAAP results due to inherent limitations[19](index=19&type=chunk)[21](index=21&type=chunk) [Reconciliation Tables](index=9&type=section&id=Reconciliation%20Tables) The report provides detailed reconciliations of GAAP net income to Adjusted EBITDA for both the three and nine months ended September 30, 2024 and 2023, as well as for the Q4 and full-year 2024 outlook, with these tables itemizing specific adjustments, including preferred dividends, income tax expense, interest expense, equity investment loss, depreciation and amortization, impairment charges, severance costs, loss on leases, other professional fees, stock compensation, and transition services costs, to derive Adjusted EBITDA GAAP Net Income to Adjusted EBITDA Reconciliation (Q3 & YTD, in thousands) | Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :--------------------------------------- | :------ | :------ | :------- | :------- | | Net income (loss) available to common stockholders | $731 | ($4,853) | ($1,448) | ($64,769) | | Preferred dividends | $1,531 | $1,525 | $4,597 | $4,469 | | Net income (loss) | $2,262 | ($3,328) | $3,149 | ($60,300) | | Income tax expense (benefit) | $1,236 | $3,712 | $2,433 | ($12,839) | | Interest expense, net | $631 | $792 | $1,542 | $3,668 | | Equity investment loss | - | $5,224 | $4,407 | $5,233 | | Depreciation and amortization | $5,080 | $7,026 | $15,440 | $22,735 | | **EBITDA** | **$9,209** | **$13,426** | **$26,971** | **($41,503)** | | Impairment of goodwill and intangible assets | - | - | - | $64,000 | | Severance Costs | $25 | $2,959 | $530 | $2,959 | | Loss on leases | - | - | $3,715 | - | | Other professional fees | $813 | - | $813 | - | | Stock compensation | $1,761 | $1,733 | $5,502 | $6,025 | | Loss (gain) on disposals of long-lived assets | $23 | ($16) | $235 | $17 | | Transition services costs | $1,092 | - | $3,139 | $2,403 | | **Adjusted EBITDA** | **$12,923** | **$18,102** | **$40,905** | **$33,901** | GAAP Outlook Net Income to Outlook Adjusted EBITDA Reconciliation (Q4 & Full Year, in thousands) | Metric | Q4 2024 Low | Q4 2024 High | FY 2024 Low | FY 2024 High | | :--------------------------------------- | :---------- | :----------- | :---------- | :----------- | | Net income available to common stockholders | $8,575 | $10,735 | $7,127 | $9,287 | | Preferred dividends | $1,503 | $1,503 | $6,100 | $6,100 | | Net Income | $10,078 | $12,238 | $13,227 | $15,387 | | Income tax expense | $4,425 | $5,265 | $6,858 | $7,698 | | Interest expense | $458 | $458 | $1,750 | $1,750 | | Loss on minority investment | - | - | $4,408 | $4,408 | | Depreciation and amortization | $4,860 | $4,860 | $20,300 | $20,300 | | **EBITDA** | **$19,820** | **$22,820** | **$46,542** | **$49,542** | | Stock compensation | $1,898 | $1,898 | $7,400 | $7,400 | | Other professional fees | $1,050 | $1,050 | $1,813 | $1,813 | | Loss on leases | - | - | $3,950 | $3,950 | | Transition services cost | $651 | $651 | $4,295 | $4,295 | | **Adjusted EBITDA** | **$23,419** | **$26,419** | **$64,000** | **$67,000** | [Company Overview](index=4&type=section&id=Company%20Overview) [Business Description](index=4&type=section&id=Business%20Description) American Public Education, Inc. (APEI) is a portfolio of education companies providing online and campus-based postsecondary education and career learning to over 125,000 students through four subsidiary institutions, with a mission to provide education that transforms lives, advances careers, and improves communities - APEI is a portfolio of education companies serving over **125,000** students through online and campus-based postsecondary education and career learning[1](index=1&type=chunk)[23](index=23&type=chunk) - The company's mission is to provide education that transforms lives, advances careers, and improves communities[23](index=23&type=chunk) [Subsidiary Institutions](index=4&type=section&id=Subsidiary%20Institutions) APEI operates through four main subsidiary institutions: American Public University System (APUS), Rasmussen University, Hondros College of Nursing, and Graduate School USA (GSUSA), each serving distinct student populations with specialized educational offerings, ranging from military and veteran students to nursing and federal workforce training, all holding relevant institutional accreditations - American Public University System (APUS) is a leading educator for active-duty military and veteran students, serving approximately **88,000** adult learners globally[23](index=23&type=chunk)[24](index=24&type=chunk) - Rasmussen University is a 120-year-old institution focused on nursing and health sciences, serving about **13,500** students across 20 campuses and online[23](index=23&type=chunk)[25](index=25&type=chunk) - Hondros College of Nursing educates pre-licensure nursing students at eight campuses, primarily in Ohio, and is the largest educator of PN (LPN) nurses in Ohio, serving approximately **3,100** students[23](index=23&type=chunk)[26](index=26&type=chunk) - Graduate School USA (GSUSA) is a leading training provider for the federal workforce, offering customized contract training and open enrollment programs[23](index=23&type=chunk)[27](index=27&type=chunk) - APUS and Rasmussen are accredited by the Higher Learning Commission (HLC), Hondros by the Accrediting Bureau of Health Education Schools (ABHES), and GSUSA by the Accrediting Council for Continuing Education & Training (ACCET)[28](index=28&type=chunk) [Forward-Looking Statements & Disclaimers](index=5&type=section&id=Forward-Looking%20Statements%20%26%20Disclaimers) This section clarifies that statements regarding APEI's future path, growth, enrollments, revenues, income, EBITDA, and capital expenditures are forward-looking and subject to various risks and uncertainties, including regulatory compliance, student attraction and retention, market demands, legislative changes, and economic conditions, among others, which could cause actual results to differ materially from projections - Forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially[30](index=30&type=chunk)[31](index=31&type=chunk) - Risks include failure to comply with regulatory requirements, dependence on student attraction and persistence, changing market demands, declines in enrollments, adverse legislation, and economic conditions[31](index=31&type=chunk) - Investors are cautioned not to place undue reliance on forward-looking statements, and APEI undertakes no obligation to update them unless required by law[31](index=31&type=chunk) [Contact Information](index=6&type=section&id=Contact%20Information) This section provides contact details for American Public Education, Inc.'s Public Relations and Investor Relations departments, including names, titles, email addresses, and phone numbers for inquiries - Company Contact: Frank Tutalo, Director, Public Relations, ftutalo@apei.com, 571-358-3042[32](index=32&type=chunk) - Investor Relations: Brian M. Prenoveau, CFA, MZ North America, Direct: 561-489-5315, APEI@mzgroup.us[32](index=32&type=chunk)

Net Income & Adjusted EBITDA Performance Driven by Further Stabilization and Improvement in Rasmussen and Hondros SegmentsCHARLES TOWN, W.Va., Nov. 12, 2024 /PRNewswire/ -- American Public Education, Inc. (Nasdaq: APEI), a portfolio of education companies providing online and campus-based postsecondary education and career learning to over 125,000 students through four subsidiary institutions, has reported unaudited financial and operational results for the third quarter ended September 30, 2024.Key Third Q ...