On March 5, 2024, American Public Education Inc (APEI, Financial) released its 8-K filing, announcing its financial results for the fourth quarter and full year of 2023. The company, which provides online and on-campus postsecondary education through its American Public University System, Rasmussen University, and Hondros College of Nursing segments, reported a net income of $13.0 million for the quarter, a notable turnaround from the net loss of $6.5 million in the same period last year.
Financial Performance and Challenges
Despite a challenging environment, APEI managed to keep its revenue stable at $152.8 million for the fourth quarter, mirroring the revenue from the previous year's quarter. The company's net income available to common stockholders increased to $11.5 million, or $0.64 per diluted share, compared to a loss of $6.6 million, or $0.35 per share, in the fourth quarter of 2022. This improvement was attributed to a decrease in costs and expenses as a percentage of revenue to 89.6% from 100.2% and a reduction in selling and promotional expenses.
However, the company faced challenges, including a 10% decline in enrollment at Rasmussen University for the quarter. This contrasted with a 4% increase in net course registrations at the American Public University System and a 19% rise in total student enrollment at Hondros College of Nursing. The mixed enrollment figures reflect the competitive and dynamic nature of the education sector, which can impact future revenue and profitability.
Strategic Financial Moves and Outlook
Angela Selden, President and CEO of APEI, expressed optimism about the company's leadership and enrollment momentum. She emphasized the company's commitment to academic excellence and operational efficiency, which are expected to enhance student outcomes and enable the company to serve more students and communities.
"Reflecting on 2023, I’m encouraged by the leadership team we have assembled, the enrollment momentum we’ve gained, and the strengthening of our business we’ve delivered– all while extending the reach and impact of our value proposition to our over 107,000 students," said Angela Selden.
In December 2022, APEI made significant debt prepayments of $65.0 million, leading to a write-off of unamortized debt issuance costs amounting to $3.9 million. This proactive approach to debt management is crucial for maintaining financial flexibility and reducing interest expenses.
For the first quarter of 2024, APEI expects net course registrations at APUS to grow by 1% to 3%, while projecting a 22% increase in student enrollment at Hondros College of Nursing. However, Rasmussen University is anticipated to see a 6% decrease in student enrollment. The company forecasts consolidated revenue to increase by 1% to 2% and adjusted EBITDA to grow by 14% to 43% for the first quarter. For the full year 2024, APEI projects a 2% to 3% increase in consolidated revenue and a -8% to 9% change in adjusted EBITDA.
Non-GAAP Measures and Webcast Information
APEI also provided non-GAAP financial measures, such as EBITDA and adjusted EBITDA, to better evaluate its operating profit and cash generation capabilities. The company urges investors to review the reconciliation of these measures to GAAP financial measures included in the earnings release.
The company held a live webcast of its earnings conference call, which is available for replay through APEI's investor relations website for one year.
Overall, APEI's mixed results for the fourth quarter and full year 2023 highlight the company's resilience in a challenging market. With strategic financial management and a focus on academic excellence, APEI aims to continue its growth trajectory and enhance value for students and shareholders alike.
Explore the complete 8-K earnings release (here) from American Public Education Inc for further details.