American Public Education(US:APEI)2024-05-07 20:03Financial Performance - Consolidated revenue for Q1 2024 increased to $154.4 million, up 3.2% from $149.7 million in Q1 2023[125] - Net income for Q1 2024 was $0.5 million, a significant improvement of $6.3 million compared to a net loss of $5.7 million in the prior year[125] - Total revenue for Q1 2024 was $154.4 million, an increase from $149.7 million in Q1 2023, representing a growth of 3.7%[157] Segment Performance - APUS net course registrations rose to approximately 99,000, an increase of 2.8% from approximately 96,300 in the prior year[126] - APUS Segment revenue increased to $80.7 million, up 9.0% from $74.0 million in the prior year[126] - RU total enrollment decreased to approximately 13,500, down 5.6% from approximately 14,300 in the prior year[127] - RU Segment revenue decreased to $53.1 million, down 7.5% from $57.5 million in the prior year[127] - HCN total enrollment increased to approximately 3,300, a rise of 20.5% from approximately 2,700 in the prior year[127] - HCN Segment revenue increased to $16.4 million, up 25.2% from $13.1 million in the prior year[127] Operating Margins - Operating margins for APUS improved to 28.6% in Q1 2024 from 23.1% in the prior year[126] - HCN Segment operating margins improved to negative 1.8% from negative 9.9% in the prior year[127] Costs and Expenses - Total costs and expenses decreased to $149.3 million, a reduction of $5.8 million, or 3.7%, compared to $155.1 million in Q1 2023[146] - General and administrative expenses for Q1 2024 were $36.3 million, an increase of $2.8 million, or 8.3%, compared to $33.5 million in Q1 2023[149] - Consolidated bad debt expense for Q1 2024 was $4.2 million, or 2.7% of revenue, compared to $3.9 million, or 2.6% of revenue in the prior year[149] Cash and Leverage - Cash and cash equivalents increased by $8.9 million, or 6.2%, to $153.2 million as of March 31, 2024, primarily due to higher revenue and operating income at APUS[161] - The Total Net Leverage Ratio decreased to 0.33 as of March 31, 2024, from 0.51 as of December 31, 2023, due to improved results and decreased accounts receivable[166] Investment and Financing Activities - Net cash used in investing activities increased to $6.2 million for the three months ended March 31, 2024, compared to $3.2 million for the same period in 2023, primarily due to campus relocations and increased IT capital expenditures[169] - Net cash used in financing activities rose to $5.7 million for the three months ended March 31, 2024, from $2.8 million in 2023, driven by an increase in common stock repurchases, totaling 251,146 shares for $2.8 million compared to 75,000 shares for $0.4 million in 2023[170] IT and Risk Management - The company incurred approximately $1.9 million in information technology transition service costs in Q1 2024 as part of its technology transformation program[167] - The total minimum expenses for outsourced IT services through September 30, 2024, are approximately $4.7 million[171] - The company has no material derivative financial instruments as of March 31, 2024, and maintains cash and cash equivalents in secure accounts, with no significant credit risk exposure[172] - A 10% change in interest rates would not materially impact the fair value of the company's investment portfolio due to its short-term duration and low yield[172] - For every 100 basis points increase in Term SOFR on variable rate indebtedness, the company would incur an additional $1.0 million in interest expense per year[174] - The company has entered into an interest rate cap agreement to hedge $87.5 million of principal under its term loan, providing protection if the one-month Term SOFR rate exceeds 1.78%[174]