XML 23 R12.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Goodwill and Intangible Assets
 6 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
    In connection with its acquisitions of RU and HCN, the Company applied FASB ASC 805 and recorded goodwill of $217.4 million and $38.6 million, respectively, representing the excess of the purchase price over the fair value of assets acquired and liabilities assumed, including identifiable intangible assets. The Company later recorded non-cash impairment charges for RU and HCN Segment goodwill reducing the carrying value to $33.0 million and $26.6 million, respectively. There was no goodwill recorded in connection with the acquisition of GSUSA. There is no goodwill recorded in the APUS Segment.

In addition to goodwill, in connection with the acquisitions of RU and HCN, the Company recorded identified intangible assets with an indefinite useful life in the aggregate amount of $51.0 million and $3.7 million, respectively, which include trade name, accreditation, licensing, and Title IV, and affiliate agreements. The Company later recorded non-cash impairment charges reducing the carrying value of RU Segment indefinite-lived intangible assets to $24.5 million. There were no indefinite-lived intangible assets recorded in conjunction with the acquisition of GSUSA. There are no indefinite-lived intangible assets in the APUS Segment.

The Company recorded $35.5 million, $4.4 million, and $1.0 million of identified intangible assets with a definite useful life in connection with the acquisitions of RU, HCN and GSUSA, respectively. There are no definite-lived intangible assets in the APUS Segment. The Company recorded amortization expense related to definite-lived intangible assets of $1.3 million and $2.5 million for the three and six months ended June 30, 2024, respectively, compared to $4.0 million and $7.9 million for the three and six months ended June 30, 2023, respectively.

The Company accounts for goodwill and intangible assets with an indefinite life in accordance with FASB ASC 350, Intangibles Goodwill and Other, and ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The Company annually assesses goodwill and indefinite-lived intangible assets for impairment, or more frequently if events or changes in circumstances indicate that goodwill and indefinite-lived intangible assets might be impaired. Impairment testing consists of an optional qualitative assessment as well as a quantitative test. The quantitative test compares the fair value of the reporting unit to its carrying value. If the carrying value of the reporting unit is greater than zero and its fair value is greater than its carrying amount, there is no impairment. If the carrying value is greater than the fair value, the difference between the two values is recorded as an impairment.

During the three months ended June 30, 2024, in connection with the preparation of this Quarterly Report, the Company performed a qualitative assessment for potential impairment of the RU and HCN Segment goodwill and indefinite-lived intangible assets. As part of the assessment, the Company considered the events and circumstances expressly required by ASC 350, in addition to other entity-specific factors. Factors considered included RU and HCN’s financial and enrollment performance against internal targets, economic factors, and the continued favorable growth outlook for nursing education. After completing the qualitative review of goodwill and indefinite-lived intangible assets for the RU and HCN Segments, the Company concluded it was more likely than not that the fair value of each of the RU and HCN Segments was more than the respective carrying value, and therefore no quantitative impairment test and no impairment charge was necessary.
During the three months ended June 30, 2023, the Company completed a qualitative assessment of RU and HCN Segment goodwill to determine if an interim goodwill impairment testing was necessary. This evaluation included consideration of enrollment trends and financial performance, as well as industry and market conditions. The Company concluded it was more likely than not the fair value of the RU Segment was less than its carrying amount resulting from RU’s underperformance when compared to 2023 internal targets, projected enrollment trends, the decline in financial performance projected for the remainder of 2023, as compared to prior projections, and the Company’s market value. There were no indicators of impairment at HCN. As a result, the Company completed a quantitative impairment test related to the valuation of its RU Segment goodwill during the second quarter of 2023. The implied fair value of RU Segment goodwill was calculated and compared to the recorded value. As a result, the Company recorded a non-cash impairment charge of $53.0 million and the corresponding tax impact of $15.8 million to reduce the carrying value of RU Segment goodwill to $33.0 million during the three months ended June 30, 2023. The impairment charge recorded eliminated the difference between the fair value and book value of RU Segment goodwill.

The Company also evaluated events and circumstances related to the valuation of its intangible assets recorded within the RU and HCN Segments to determine if there were indicators of impairment. The Company concluded there were indicators of impairment during the three months ended June 30, 2023 of the RU Segment intangible assets. There were no indicators of impairment at HCN. As a result, the Company recorded a non-cash impairment charge of $11.0 million to reduce the carrying values of the RU Segment trade name and RU Segment accreditation, licensing and Title IV indefinite-lived intangible assets during the second quarter of 2023 to $18.5 million and $6.0 million, respectively. The impairment charge recorded eliminated the difference between the fair value of the trade name and accreditation, licensing, and Title IV indefinite lived intangible assets, and their book values.

In total, the Company recorded non-cash impairment charges of $64.0 million during the three months ended June 30, 2023 related to RU Segment goodwill and intangible assets, and the corresponding tax impact.

The Company’s 2023 annual quantitative assessment for impairment concluded that the fair value of RU and HCN Segments exceeded their carrying values by approximately $32.4 million, or 25%, and $7.4 million, or 21%, respectively.

The following table summarizes the changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2024 (in thousands):

APUS SegmentRU SegmentHCN SegmentTotal Goodwill
(Unaudited)
Goodwill as of December 31, 2023$— $33,030 $26,563 $59,593 
Goodwill acquired— — — — 
Impairment— — — $— 
Goodwill as of June 30, 2024$— $33,030 $26,563 $59,593 
The following table represents the balance of the Company’s intangible assets as of June 30, 2024 (in thousands):

Gross Carrying AmountAccumulated AmortizationImpairmentNet Carrying Amount
(Unaudited)
Finite-lived intangible assets
Student roster$20,000 $20,000 $— $— 
Curricula
14,563 13,759 — 804 
Student and customer contracts and relationships4,614 4,614 — — 
Lead conversions1,500 1,500 — — 
Non-compete agreements
86 86 — — 
Tradename35 35 — — 
Accreditation and licenses28 28 — — 
Total finite-lived intangible assets$40,826 $40,022 $— $804 
Indefinite-lived intangible assets
Trade name
28,498 — 8,000 20,498 
Accreditation, licensing, and Title IV26,186 — 18,500 7,686 
Affiliation agreements37 — — 37 
Total indefinite-lived intangible assets
54,721 — 26,500 28,221 
Total intangible assets
$95,547 $40,022 $26,500 $29,025 


The following table represents the balance of the Company’s intangible assets as of December 31, 2023 (in thousands):

Gross Carrying AmountAccumulated AmortizationImpairmentNet Carrying Amount
Finite-lived intangible assets
Student roster$20,000 $20,000 $— $— 
Curricula14,563 11,400 — 3,163 
Student and customer contracts and relationships4,614 4,465 — 149 
Lead conversions1,500 1,500 — — 
Non-compete agreements86 86 — — 
Tradename35 35 — — 
Accreditation and licenses28 22 — 6 
Total finite-lived intangible assets$40,826 $37,508 $— $3,318 
Indefinite-lived intangible assets
Trade name28,498 — 8,000 20,498 
Accreditation, licensing, and Title IV26,186 — 18,500 7,686 
Affiliation agreements37 — — 37 
Total indefinite-lived intangible assets
54,721 — 26,500 28,221 
Total intangible assets$95,547 $37,508 $26,500 $31,539 

For additional information on goodwill and intangible assets, see the Consolidated Financial Statements and accompanying notes in the Annual Report.