UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Section 2 – Financial Information
Item 2.02 Results of Operations and Financial Condition.
On March 2, 2022, American Public Education, Inc. issued a press release reporting financial results for the three and twelve months ended December 31, 2021. A copy of American Public Education’s press release is attached to this report as Exhibit 99.1 and is incorporated in this report by reference. American Public Education has scheduled a webcast for 5:00 p.m. ET on March 2, 2022 to discuss its financial results, and slides for that webcast are attached to this report as Exhibit 99.2 and are incorporated in this report by reference.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits | |||
99.1 | American Public Education, Inc. press release dated March 2, 2022, reporting financial results for the three and twelve months ended December 31, 2021. | |||
99.2 | American Public Education, Inc. slides for March 2, 2022 conference call and Webcast for the three and twelve months ended December 31, 2021. | |||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
American Public Education, Inc. | |||
Date: | March 2, 2022 | By: | /s/ Richard W. Sunderland, Jr. |
Richard W. Sunderland, Jr., | |||
Executive Vice President and Chief Financial Officer |
Exhibit 99.1
American Public Education Reports Fourth Quarter 2021 Results
CHARLES TOWN, WV (March 02, 2022) – American Public Education, Inc. (Nasdaq: APEI) announced financial results for the quarter ended December 31, 2021.
Fourth Quarter Highlights:
· | Consolidated revenue increased 79.3% year-over-year to $154.0 million |
· | Net income for the period was $9.4 million, compared to net income of $7.1 million for the three months ended December 31, 2021, an increase of $2.3 million |
· | Adjusted EBITDA increased 85.5% year-over-year to $29.3 million |
· | APEI completed its acquisition of Graduate School USA, a federal workforce training provider, on January 1, 2022 |
Full Year Highlights:
· | Consolidated revenue increased 30.1% year-over-year to $418.8 million |
· | Net income for the period was $17.8 million, compared to net income of $18.8 million for the three months ended December 31, 2021, a decrease of $1.0 million |
· | Adjusted EBITDA increased 27.8% year-over-year to $64.7 million |
Results of operations for the three and twelve months ended December 31, 2021 include the results of Rasmussen University (“RU”) from September 1, 2021 (the “Closing Date”) through December 31, 2021. APEI did not consolidate the financial results of RU prior to the Closing Date. Accordingly, the financial results of each period presented are not directly comparable.
Financial Results:
Three months ended December 31, 2021 compared to three months ended December 31, 2020:
· | Total consolidated revenue for 2021 increased 79% to $154.0 million, compared to total revenue of $85.9 million in 2020, due to: |
o | the inclusion of RU revenue from October 1 through December 31, 2021 of $68.4 million |
o | an increase of $1.9 million, or 18%, in revenue from Hondros College of Nursing (“HCN”), reflecting an increase in enrollment of 17% to 2,500 students |
o | a decrease of $2.2 million, or -3%, in revenue from American Public University System (“APUS”), primarily due to a decline in net course registrations of 2% in 2021 compared to 2020 |
· | Total costs and expenses increased to $137.5 million for 2021, compared to $76.2 million in 2020, primarily due to the inclusion of RU during the quarter. |
o | Instructional costs and services increased $36.3 million in 2021 to $67.4 million, compared to $31.1 million in 2020, primarily due to the inclusion of RU Segment instructional costs and services expenses during the quarter of $36.6 million. |
o | Selling and promotional expenses increased $13.7 million to $33.0 million, compared to $19.2 million in 2020, primarily due to the inclusion of RU Segment selling and promotional expenses during the quarter of $17.4 million. |
o | General and administrative (“G&A”) expenses increased $5.1 million to $27.8 million, compared to $22.7 million in 2020 primarily due to the inclusion of RU Segment general and administrative expenses during the quarter of $5.4 million. G&A expenses includes $1.8 million of M&A-related professional fees, which is an increase of 55% compared to the 2020 period. |
o | Depreciation and amortization expenses increased to $8.3 million in 2021, or 5.4% of revenue, compared to $3.0 million and 3.5% in 2020, primarily due to the addition of the RU segment and the amortization of the associated acquired intangible assets. |
· | Interest expense increased to $3.1 million in 2021, as compared to $0.1 million in interest income in 2020, due to the $175 million senior secured term loan issued in connection with the RU acquisition (the “Term Loan”). |
· | Net income was $9.4 million in 2021, compared to net income of $7.1 million in 2020 |
· | Earnings per diluted share was $0.50, compared to $0.47 per diluted share in the same period of 2020, driven primarily by the same factors impacting the change in net income. |
· | Adjusted EBITDA was $29.3 million in 2021, compared to $15.8 million in 2020, driven primarily by the factors impacting the change in net income, excluding depreciation and amortization expense and interest expense. Additionally, the 2021 period included $1.8 million of M&A-related professional fees and $1.7 million of stock-based compensation expense, an increase of 55% and a decrease of 7%, respectively, compared to 2020. |
Twelve months ended December 31, 2021 compared to twelve months ended December 31, 2020:
· | Total consolidated revenue for 2021 increased 30.1% to $418.8 million, compared to total revenue of $321.8 million in 2020, primarily due to the inclusion of RU Segment revenue from the Closing Date through December 31, 2021, as well as an increase in student enrollment at HCN during that period, partially offset by a decrease in APUS net registrations. |
· | Total costs and expenses increased to $388.4 million for 2021 compared to $297.0 million in 2020, primarily due to the inclusion of RU from the Closing Date through December 31, 2021. |
o | Instructional costs and services increased $50.4 million in 2021 to $172.6 million, compared to $122.2 million in 2020, primarily due to the inclusion of the RU Segment instructional costs and services expenses from the Closing Date through December 31, 2021 of $49.0 million. |
o | Selling and promotional expenses in 2021 were $93.3 million, an increase of $20.3 million, compared to $73.0 million in 2020. The increase in selling and promotional expenses was primarily due to the inclusion of RU Segment selling and promotional expenses from the Closing Date through December 31, 2021 of $23.2 million. |
o | General and administrative expenses in 2021 were $103.4 million, an increase of $15.4 million, compared to $88.0 million in 2020. The increase in general and administrative expenses was primarily due to the inclusion of RU Segment general and administrative expenses from the Closing Date through December 31, 2021 of $7.6 million. G&A includes $7.6 million of M&A-related professional fees. |
o | Depreciation and amortization expenses increased to $17.8 million in 2021, compared to $13.0 million in 2020, primarily due to the addition of the RU Segment and the amortization of the associated acquired intangible assets. |
· | Interest expense increased to $4.3 million in 2021, compared to $1.1 million in interest income in 2020, due to the Term Loan. |
· | Net income was $17.8 million in 2021, compared to net income of $18.8 million in 2020 |
· | Earnings per diluted share was $0.97 compared to $1.25 per diluted share in the same period of 2020, driven primarily by the same factors impacting the change in net income. |
· | Adjusted EBITDA was $64.7 million in 2021 compared to $50.6 million in 2020, driven primarily by the factors impacting the change in net income, excluding depreciation and amortization expense and interest expense. Additionally, the 2021 period included $7.6 million of M&A-related professional fees and $7.7 million of stock-based compensation expense, an increase of 53% and an increase of 8%, respectively, compared to 2020. |
Acquisition of Rasmussen University
On the Closing Date, APEI completed the acquisition of Rasmussen University. The final purchase price was $325.5 million, subject to post-closing working capital adjustments, and net of cash acquired, and was funded by $170.5 million of cash and cash equivalents and the net proceeds from the Term Loan.
Balance Sheet and Liquidity:
· | Total cash and cash equivalents as of December 31, 2021 were approximately $149.6 million, compared to $227.7 million as of December 31, 2020, a 34% decrease. The decrease in cash was due to the acquisition of Rasmussen University on September 1, 2021, partially offset by net proceeds of approximately $86.2 million from the underwritten public offering of 3,680,000 shares of our common stock completed on March 1, 2021. |
· | In conjunction with the issuance of the Term Loan, APEI also entered into a revolving credit facility (the “Credit Facility”) on the Closing Date. The Credit Facility has an aggregate commitment amount of $20 million, all of which remained undrawn at year end. |
Registrations and Enrollment:
2021 | 2020 | % Change | ||||||||||
American Public University System1 | ||||||||||||
For the three months ended December 31, Net Course Registrations | 86,600 | 88,400 | -2 | % | ||||||||
For the twelve months ended December 31, Net Course Registrations | 345,300 | 353,100 | -2 | % | ||||||||
Rasmussen University2 | ||||||||||||
For the three months ended December 31, Total Student Enrollment | 17,100 | 17,700 | -3 | % | ||||||||
Hondros College of Nursing3 | ||||||||||||
For the three months ended December 31, Total Student Enrollment | 2,510 | 2,140 | 17 | % |
1APUS Net Course Registrations represents the approximate aggregate number of courses for which students remain enrolled after the date by which they may drop a course without financial penalty.
Excludes students in doctoral programs.
2Rasmussen Student Enrollment represents students in an active status as of the full-term census or billing date.
3HCN Student Enrollment represents the approximate number of students enrolled in a course after the date by which students may drop a course without financial penalty.
Acquisition of Graduate School USA:
On August 11, 2021, the Company announced that it had entered into an agreement to acquire substantially all of the assets of Graduate School USA, or Graduate School, one of the largest providers of training to the federal government workforce, for approximately $1.0 million. On January 1, 2022, the Company completed its acquisition of Graduate School.
First Quarter 2022 Outlook:
The following statements are based on APEI’s current expectations. These statements are forward-looking and actual results may differ materially. APEI undertakes no obligation to update publicly any forward-looking statements for any reason unless required by law.
First Quarter 2022 Guidance | ||||||||
(Approximate) | (% Yr/Yr Change) | |||||||
APUS Net course registrations | 92,900 to 95,700 | 0% to 3% | ||||||
HCN Student enrollment | 2,500 | 8 | % | |||||
RU Student enrollment | 16,200 | -7 | % | |||||
- Nursing | 8,400 | 2 | % | |||||
- Non-Nursing | 7,800 | -14 | % | |||||
($ in millions except EPS) | ||||||||
APEI Consolidated revenue | $155 to $159 | 75% to 80% | ||||||
APEI Consolidated net income | $2.3 to $3.3 | -72% to -59% | ||||||
APEI Adjusted EBITDA | $17.7 to $19.8 | 10% to 23% | ||||||
APEI Diluted EPS | $0.12 to $0.17 | -76% to -65% |
Non-GAAP Financial Measures:
This press release contains the non-GAAP financial measures of EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA (EBITDA less non-cash expenses such as stock compensation and non-recurring expenses). APEI believes that the use of these measures is useful because they allow investors to better evaluate APEI’s operating profit and cash generation capabilities.
For the three months ended December 31, 2020 and 2021, adjusted EBITDA excludes non-cash compensation expense, loss on disposals of long-lived assets, and M&A-related professional fees.
These non-GAAP measures should not be considered in isolation or as an alternative to measures determined in accordance with generally accepted accounting principles in the United States (GAAP). The principal limitation of our non-GAAP measures are that they exclude expenses that are required by GAAP to be recorded. In addition, non-GAAP measures are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses are excluded.
APEI is presenting EBITDA and adjusted EBITDA in connection with its GAAP results and urges investors to review the reconciliation of EBITDA and adjusted EBITDA to the comparable GAAP financial measures that is included in the tables following this press release (under the captions “GAAP Net Income to Adjusted EBITDA,” and “GAAP Outlook Net Income to Outlook Adjusted EBITDA”) and not to rely on any single financial measure to evaluate its business.
Webcast:
A live webcast of the APEI’s fourth quarter 2021 earnings conference call will be held today at 5:00 p.m. Eastern time. This webcast will be open to listeners who log in through the APEI’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 webcast. The replay will be archived and available to listeners through APEI’s investor relations website for one year.
About American Public Education
American Public Education, Inc. (Nasdaq: APEI) educates the service minded student by providing career-focused higher education and training that enable pathways to employment and career advancement. APEI operates through four wholly owned subsidiaries and delivers corporate businesses services to each. American Public University System, which operates through American Military University and American Public University, is the leading educator to active-duty military and veteran students and serves approximately 89,000 adult learners worldwide. APUS is regularly cited as one of the most affordable universities in the United States. Rasmussen University is a 120-year-old institution that serves approximately 17,100 students across its 23 campuses and student service centers in six states and online. It is a Nursing and Health Sciences-focused institution, also with schools of Business, Technology, Design, Early Education and Justice Studies. Hondros College of Nursing "creates new nurses" by educating pre-licensure nursing students at its six campuses in Ohio and one in Indiana and is the largest educator of PN (LPN) Nurses in the state of Ohio with approximately 2,500 students. Graduate School USA is a leading training provider to the federal workforce with an extensive portfolio of government agency customers. It serves the federal workforce through customized contract training (B2G) to federal agencies and through open enrollment (B2C) to government professionals. Both APUS and Rasmussen are institutionally accredited by the Higher Learning Commission with Open Pathway designation. HCN is accredited by the Accrediting Bureau of Health Education Schools. GSUSA is accredited by ACCET. For additional information, visit www.apei.com.
Forward Looking Statements
Statements made in this press release regarding APEI or its subsidiaries that are not historical facts are forward-looking statements based on current expectations, assumptions, estimates and projections about APEI and the industry. In some cases, forward-looking statements can be identified by words such as “anticipate,” “believe,” “seek,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “should,” “will,” “would,” and similar words or their opposites. Forward-looking statements include, without limitation, statements regarding expected growth, registration and enrollments, revenues, income and EBITDA, benefits of the acquisition of Rasmussen University and plans with respect to recent, current and future initiatives.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, among others, risks related to: the effects, duration, and severity of and APEI’s response to the COVID-19 pandemic; moderation in demand as the pandemic abates; changes to and expectations regarding enrollment, registrations and composition of APEI’s student body; APEI’s dependence on the effectiveness of its ability to attract students who persist in its institutions’ programs; actions taken by the Department of Defense or branches of the U.S. Armed Forces, including ongoing impacts related to the disruption and suspension of Department of Defense tuition assistance; APEI’s inability to effectively market its institutions’ programs; adverse effects of changes APEI makes to improve the student experience and enhance the ability to identify and enroll students who are likely to succeed; APEI’s inability to maintain strong relationships with the military and maintain course registrations and enrollments from military students; APEI’s failure to comply with regulatory and accrediting agency requirements and to maintain institutional accreditation; APEI’s loss of eligibility to participate in Title IV programs or ability to process Title IV financial aid; APEI’s need to successfully adjust to future market demands by updating existing programs and developing new programs; entering into and integrating acquisitions, including the integration of Rasmussen University and Graduate School; APEI’s dependence on its technology infrastructure; and the various risks described in the “Risk Factors” section and elsewhere in APEI’s Annual Report on Form 10-K for the year ended December 31, 2021, and in other filings with the SEC. You should not place undue reliance on any forward-looking statements. APEI 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.
Contacts:
Ryan Koren
AVP, Investor Relations & Corporate Development
(610) 428-7376
###
American Public Education, Inc.
Consolidated Statement of Income
(In thousands, except per share data)
Three Months Ended | ||||||||
December 31, | ||||||||
2021 | 2020 | |||||||
(unaudited) | ||||||||
Revenues | $ | 154,000 | $ | 85,909 | ||||
Costs and expenses: | ||||||||
Instructional costs and services | 67,365 | 31,103 | ||||||
Selling and promotional | 32,967 | 19,224 | ||||||
General and administrative | 27,800 | 22,729 | ||||||
Loss on disposals of long-lived assets | 1,100 | 109 | ||||||
Depreciation and amortization | 8,271 | 3,029 | ||||||
Total costs and expenses | 137,503 | 76,194 | ||||||
Income from operations before | ||||||||
interest and income taxes | 16,497 | 9,715 | ||||||
Interest (expense) income | (3,110 | ) | 90 | |||||
Income before income taxes | 13,387 | 9,805 | ||||||
Income tax expense | 4,002 | 2,729 | ||||||
Equity investment loss | (4 | ) | (5 | ) | ||||
Net income | $ | 9,381 | $ | 7,071 | ||||
Net income per common share: | ||||||||
Basic | $ | 0.50 | $ | 0.48 | ||||
Diluted | $ | 0.50 | $ | 0.47 | ||||
Weighted average number of | ||||||||
common shares: | ||||||||
Basic | 18,712 | 14,863 | ||||||
Diluted | 18,854 | 15,084 |
Three Months Ended | ||||||||
Segment Information: | December 31, | |||||||
2021 | 2020 | |||||||
Revenues: | ||||||||
APUS Segment | $ | 73,379 | $ | 75,562 | ||||
RU Segment | $ | 68,351 | $ | — | ||||
HCN Segment | $ | 12,297 | $ | 10,409 | ||||
Corporate and other1 | $ | (27 | ) | $ | (62 | ) | ||
Income (loss) from operations before | ||||||||
interest and income taxes: | ||||||||
APUS Segment | $ | 20,081 | $ | 13,653 | ||||
RU Segment | $ | 2,629 | $ | — | ||||
HCN Segment | $ | 481 | $ | 1,177 | ||||
Corporate and other | $ | (6,694 | ) | $ | (5,115 | ) |
Twelve Months Ended | ||||||||
December 31, | ||||||||
2021 | 2020 | |||||||
(unaudited) | ||||||||
Revenues | $ | 418,803 | $ | 321,785 | ||||
Costs and expenses: | ||||||||
Instructional costs and services | 172,622 | 122,161 | ||||||
Selling and promotional | 93,317 | 72,989 | ||||||
General and administrative | 103,379 | 88,043 | ||||||
Loss on disposals of long-lived assets | 1,282 | 851 | ||||||
Depreciation and amortization | 17,832 | 12,984 | ||||||
Total costs and expenses | 388,432 | 297,028 | ||||||
Income from operations before | ||||||||
interest and income taxes | 30,371 | 24,757 | ||||||
Interest (expense) income | (4,277 | ) | 1,092 | |||||
Income before income taxes | 26,094 | 25,849 | ||||||
Income tax expense | 7,511 | 7,020 | ||||||
Equity investment loss | (831 | ) | (7 | ) | ||||
Net income | $ | 17,752 | $ | 18,822 | ||||
Net income per common share: | ||||||||
Basic | $ | 0.98 | $ | 1.27 | ||||
Diluted | $ | 0.97 | $ | 1.25 | ||||
Weighted average number of | ||||||||
common shares: | ||||||||
Basic | 18,085 | 14,876 | ||||||
Diluted | 18,255 | 15,047 |
Twelve Months Ended | ||||||||
Segment Information: | December 31, | |||||||
2021 | 2020 | |||||||
Revenues: | ||||||||
APUS Segment | $ | 283,700 | $ | 285,938 | ||||
RU Segment | $ | 89,483 | $ | — | ||||
HCN Segment | $ | 45,803 | $ | 36,091 | ||||
Corporate and other1 | $ | (183 | ) | $ | (244 | ) | ||
Income (loss) from operations before | ||||||||
interest and income taxes: | ||||||||
APUS Segment | $ | 51,050 | $ | 43,438 | ||||
RU Segment | $ | 1,630 | $ | — | ||||
HCN Segment | $ | 1,829 | $ | 722 | ||||
Corporate and other | $ | (24,138 | ) | $ | (19,403 | ) |
The RU Segment reflects the operations of RU, which was acquired on the Closing Date, through December 31, 2021. The Company did not consolidate the financial results of the RU Segment prior to the Closing Date.
1. The APUS Segment charges the HCN Segment and corporate employees for the value of courses taken at APUS. The intersegment elimination represents the elimination of this intersegment revenue in consolidation.
GAAP Net Income to Adjusted EBITDA:
The following table sets forth the reconciliation of the Company’s reported GAAP net income to the calculation of adjusted EBITDA for the three and twelve months ended December 31, 2021 and 2020:
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(in thousands, except per share data) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Net income | $ | 9,381 | $ | 7,071 | 17,752 | 18,822 | ||||||||||
Income tax expense | 4,002 | 2,729 | 7,511 | 7,020 | ||||||||||||
Interest expense (income) | 3,110 | (90 | ) | 4,277 | (1,092 | ) | ||||||||||
Equity investment loss | 4 | 5 | 831 | 7 | ||||||||||||
Depreciation and amortization | 8,271 | 3,029 | 17,832 | 12,984 | ||||||||||||
EBITDA | 24,768 | 12,744 | 48,203 | 37,741 | ||||||||||||
Stock Compensation | 1,685 | 1,810 | 7,654 | 7,075 | ||||||||||||
Loss on disposals of long-lived assets | 1,100 | 109 | 1,282 | 851 | ||||||||||||
M&A and integration - related professional fees | 1,791 | 1,153 | 7,574 | 4,956 | ||||||||||||
Adjusted EBITDA | $ | 29,344 | $ | 15,816 | 64,713 | 50,623 |
GAAP Net Income to Adjusted EBITDA:
The following table sets forth the reconciliation of the Company’s reported GAAP net income to the calculation of adjusted EBITDA for the three months ending March 31, 2022:
Three Months Ending | ||||||||
March 31, 2022 | ||||||||
(in thousands, except per share data) | Low | High | ||||||
Net income | $ | 2,260 | $ | 3,310 | ||||
Income tax expense | 970 | 1,420 | ||||||
Interest expense (income) | 3,370 | 3,370 | ||||||
Equity investment loss (income) | - | - | ||||||
Depreciation and amortization | 7,940 | 7,940 | ||||||
EBITDA | 14,540 | 16,040 | ||||||
Stock Compensation | 2,450 | 2,450 | ||||||
M&A and integration - related professional fees | 700 | 1,300 | ||||||
Adjusted EBITDA | $ | 17,690 | $ | 19,790 |
Exhibit 99.2
PRESENTED BY Angela Selden President and CEO Richard Sunderland, CPA Executive VP and CFO American Public Education, Inc. Fourth Quarter and Full Year 2021 Results March 2, 2022
Safe Harbor Statement Please note that statements made in this presentation regarding American Public Education and its subsidiaries (the “Company”) that are not historical facts may be forward - looking statements based on current expectations, assumptions, estimates and projections about the Company 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 those expressed or implied by such statements . Forward - looking statements may be able to be identified by words such as anticipate, believe, seek, could, estimate, expect, intend, may, plan, should, will, would, and similar words or their opposites . Forward - looking statements include, without limitation, statements regarding the impact of recent disruption to the Army’s tuition assistance programs, expected growth, registrations and enrollments, revenues, net income, earnings per share and EBITDA, expected benefits of the acquisition of Rasmussen University, the closing of the acquisition and its timing, expected financial results for Rasmussen, future impacts of the COVID - 19 pandemic, the ability to transform the student experience and deliver a return on learners’ educational investment, the impact of organizational changes, the ability to maintain an attractive risk profile, plans with respect to recent, current and future initiatives, and future demand for online and nursing education . Actual results could differ materially from those expressed or implied by forward - looking statements as a result of various factors, including risks related to the effects of and the Company’s response to the COVID - 19 pandemic, including impacts on the demand environment as the pandemic abates, changes to and expectations regarding enrollment, registrations and the composition of the student body of the Company’s institutions, the Company’s dependence on the effectiveness of its ability to attract students who persist in its institutions’ programs, actions taken by the Department of Defense or branches of the U . S . Armed Forces, including ongoing impacts related to the disruption and suspension of Department of Defense tuition assistance, the Company’s inability to maintain strong relationships with the military and maintain course registrations and enrollments from military students ; the Company’s failure to comply with regulatory and accrediting agency requirements and to maintain institutional accreditation ; the Company’s loss of eligibility to participate in Title IV programs or ability to process Title IV financial aid ; the Company’s need to successfully adjust to future market demands by updating existing programs and developing new programs, entering into and integrating acquisitions, including the integration of Rasmussen University and Graduate School USA, and the risk factors described in the risk factor section and elsewhere in the Company’s annual report on Form 10 - K and in the Company’s other SEC filings . You should not place any undue reliance on any forward - looking statements . 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 . 2
3 Table of Contents 1. APEI and Education Unit Enrollment Updates 2. 4Q and Full Year 2021 Financial Results & 1Q 2022 Outlook
Market Leading Positions with Service - Minded Students HEROIC TM Affordable High - Quality Outcomes - Focused #1 Educator of Active - Duty Military and Veterans #1 Educator in Creating New Nurses HEROIC TM : Higher Education Return on Investment for Customers 4 Leading provider of Federal workforce training Only Educator with a Full Ladder of Nursing Curriculum 1 APEI is the largest educator of ADN and PN pre-licensure nurses in the United States
APEI: Building a National Nursing Platform to Address Chronic Issue 1. Pro forma trailing twelve months 12/31/21 Hondros Rasmussen Future Campuses Current Campuses 5 Chronic Nursing Shortfall » BLS annual job projections: RNs: 9% increase from 2020 to 2030; 195k annual openings PNs: 9% increase from 2020 to 2030; 61k annual openings » More than 40% of nursing population is age 55+ » Healthcare systems experiencing depressed margins on elevated temporary and overtime labor costs » APEI’s curriculum gets new LPNs to work in as little as 15 months and new RNs to work in as little as 2.5 years. » Significant barriers to entry exist due to regulatory, state board, and accreditation requirements; clinical partnership needs; and physical campus locations needed in pre - licensure space APEI’s National Nursing Platform 30 campuses $204MM in revenue 1 RU APUS HCN Doctor of Nursing Practice (DNP) ● Family Nurse Practitioner (Masters) 2022 ● Master of Science in Nursing (MSN) ● ● RN to MSN ● RN to BSN ● ● Accelerated (ABSN) and Traditional (BSN) Bachelor of Science in Nursing ● Associate Degree Nurse (RN) ● ● Direct Entry Associate Degree Nurse (RN) ● Practical Nursing Diploma (LPN) ● ● APEI’s Full Nursing Curriculum Ladder Post - Licensure Online Pre - Licensure Campus, online x Laddered program that encompasses nursing education lifecycle x RN program has significant enrollment due to market demand x Attractive multiple entry points for diverse populations x 15 additional programs in Allied Health and Healthcare Administration
• 1Q22 Total nursing student enrollment growth of 4% versus prior year comparable period, comping to tough growth periods • Enrollment caps raised again at HCN Indianapolis campus APEI Nursing Enrollment Update 4Q 2021 1Q 2022 6 • 4Q21 nursing enrollment reached record number • 10% growth in nursing in total, record enrollment levels at both Rasmussen and HCN • 50+% of Rasmussen Total Enrollments are in Nursing Education • 100% of Hondros Enrollments are in Nursing Education 6,700 1,600 8,300 8,000 2,140 10,140 8,700 2,510 11,210 Rasmussen HCN Total Nursing Nursing Enrollment 4Q 2019 4Q 2020 4Q 2021 + 8% + 17% + 10%
Significant rebound in Army registrations at APUS • 4Q21 APUS military registrations strong, offsetting broader education sector enrollment headwinds • 1Q22 APUS registrations of approximately 0 - 3% growth versus prior year period or between 92.9K and 95.7K enrollments • Strong military registrations, partly offset by non - military and veteran broader market decline APUS and Rasmussen Non - Nursing Enrollment Update APUS Rasmussen Non - Nursing 7 Rasmussen continues to direct marketing resources toward nursing vs non - nursing enrollments • 4Q21 Rasmussen non - nursing enrollment was impacted by the broader economic environment leading to enrollment performance in - line with the broader peer group • 1Q22 Rasmussen non - nursing enrollments of 7,800 • Down roughly 14% from 1Q21 +4% 2 Yr CAGR - 8% 2 Yr CAGR 84.8K 89.6K 90.3K 88.4K 353.1K 92.9K 82.6K 83.1K 86.6K 345.3K 1Q 2Q 3Q 4Q YTD APUS Net Course Registrations 2020 2021 + 10% - 8% - 8% - 2% Army IgniteED Portal Issue - 2%
Table of Contents 8 1. APEI and Education Unit Enrollment Updates 2. 4Q and Full Year 2021 Financial Results & 1Q 2022 Outlook
Fourth Quarter and Full Year 2021 Financial Highlights Financial Summary Capitalization and Liquidity (1) During the third quarter of 2021, we revised our reportable segments and updated the results for the prior period to conform to the current period presentation. (2) EBITDA plus stock comp, loss on disposal of long - lived assets, and M&A - related professional and integration fees. Please refer to appendix for GAAP to Non - GAAP reconciliation. 9 Solid liquidity position: • $123 million of unrestricted cash • $20 million undrawn revolver Three Months Ended Year Ended December 31, December 31, 2021 2020 % Change 2021 2020 % Change ($ in millions) APUS Revenue (1) 73.4 75.6 -3% 283.7 285.9 -1% Rasmussen Revenue 68.4 - N/A 89.5 - N/A HCN Revenue 12.3 10.4 18% 45.8 36.1 27% Corporate, other, and Eliminations (1) (0.0) (0.1) NM (0.2) (0.2) NM Total revenue 154.0 85.9 79% 418.8 321.8 30% Net income (loss) 9.4 7.1 33% 17.8 18.8 -6% Adjusted EBITDA (2) 29.3 15.8 86% 64.7 50.6 28% EPS (diluted) 0.50 0.47 6% 0.97 1.25 -22%
These statements are based on current expectations. These statements are forward - looking and actual results may differ materially. (1) APUS 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. (2) HCN and Rasmussen 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. (3) Please refer to appendix for GAAP to Non - GAAP reconciliation APEI’s 1Q 2022 Outlook 10 First Quarter 2022 Guidance Full Year 2021 Guidance (Approximate) (% Yr/Yr Change) APUS Net course registrations 1 92,900 to 95,700 0% to 3% HCN Student enrollment 2 2,500 8% RU Student enrollment 2 16,200 -7% - Nursing 8,400 2% - Non-Nursing 7,800 -14% ($ in millions except EPS) APEI Consolidated revenue $155 to $159 75% to 80% APEI Consolidated net income $2.3 to $3.3 -72% to -59% APEI Adjusted EBITDA 3 $17.7 to $19.8 10% to 23% APEI Diluted EPS $0.12 to $0.17 -76% to -65%
Thank You
Appendix: Enrollment and Registration Summary 12 4Q 2021 4Q 2020 % Change APUS Registrations 86,600 88,400 -2% Total Rasmussen Enrollment 17,100 17,700 -3% Rasmussen Nursing Enrollment 8,700 8,000 8% Rasmussen Non-Nursing Enrollment 8,400 9,700 -13% HCN Enrollment 2,510 2,140 17%
American Public Education is presenting adjusted EBITDA in connection with its GAAP results and urges investors to review the reconciliation of adjusted net income to the comparable GAAP financial measures that is included in the table below (under the caption “GAAP Net Income to Adjusted EBITDA”) and not to rely on any single financial measure to evaluate its business . Appendix: Disclosures 13 GAAP Net Income to Adjusted EBITDA: (in thousands, except per share data) Net income $ 9,381 $ 7,071 17,752 18,822 Income tax expense 4,002 2,729 7,511 7,020 Interest expense (income) 3,110 (90) 4,277 (1,092) Equity investment loss 4 5 831 7 Depreciation and amortization 8,271 3,029 17,832 12,984 EBITDA 24,768 12,744 48,203 37,741 Stock Compensation 1,685 1,810 7,654 7,075 Loss on disposals of long-lived assets 1,100 109 1,282 851 M&A - related professional fees 1,791 1,153 7,574 4,956 Adjusted EBITDA $ 29,344 $ 15,816 64,713 50,623 Twelve Months Ended December 31, 2021 2020 The following table sets forth the reconciliation of the Company’s reported GAAP net income to the calculation of adjusted EBITDA for the three and twelve months ended December 31, 2021 and 2020: Three Months Ended December 31, 2021 2020
American Public Education is presenting adjusted EBITDA in connection with its GAAP outlook and urges investors to review the reconciliation of adjusted net income to the comparable GAAP financial measures that is included in the table below (under the caption “GAAP Outlook Net Income to Outlook Adjusted EBITDA”) and not to rely on any single financial measure to evaluate its business . Appendix: Disclosures (continued) 14 GAAP Net Income to Adjusted EBITDA: (in thousands, except per share data) Net income $ 2,260 $ 3,310 Income tax expense 970 1,420 Interest income, net 3,370 3,370 Equity investment loss (income) - - Depreciation and amortization 7,940 7,940 EBITDA 14,540 16,040 Stock Compensation 2,450 2,450 M&A and integration - related professional fees 700 1,300 Adjusted EBITDA $ 17,690 $ 19,790 March 31, 2022 Low High The following table sets forth the reconciliation of the Company’s reported GAAP net income to the calculation of adjusted EBITDA for the three months ending March 31, 2022: Three Months Ending
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