American Public Education, Inc. · NASDAQ:APEI
American Public Education — William Blair 28th Annual Growth Stock Conference (June 2008)
23 slides from American Public Education's conference presentation, Jun 17, 2008
Slide 1: William Blair 28th Annual Growth Stock Conference
William Blair 28th Annual Growth Stock Conference June 17, 2008 AMERICAN PUBLIC EDUCATION, INC.
Slide 2: Safe Harbor Statement
Statements made in this presentation regarding American Public Education, or its subsidiaries, that are not historical facts are forward-looking statements based on current expectations, assumptions, estimates and projections about American Public Education and the industry. These forward-looking st
Slide 3: High Demand for Online Education in Large Military Market
High Demand for Online Education in Large Military Market 2.1 million active duty and reserve members 300,000 new service members enter each year VA and DoD expenditures for postsecondary education exceed $3.5 billion* Possible increase in VA education benefit Frequent moves and deployments (includi
Slide 4: Significant Opportunities in Civilian Markets
4 Significant Opportunities in Civilian Markets Education (1) 3.5 MM Military 2.1 MM Fire and Emergency 1.3 MM (3) Law Enforcement 0.75 MM (2) (1) Source: U.S. Department of Education, National Center for Education Statistics, Digest of Education Statistics 2006 (2) Source: U.S. Bureau of Labor Stat
Slide 5: Well Positioned to Address Market Needs
5 Academic Programs Directly Related to Career Needs Convenient 100% online Monthly starts Asynchronous classes Self-service student support Credit for in-service classes Affordable No out of pocket costs for undergraduates Comparable to “in-state” tuition Well Positioned to Address Market Needs
Slide 6: Our Tuition is Affordable
6 Our Tuition is Affordable Undergraduate Degree Cost Public Universities $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 AMU/APU UMUC Phoenix Strayer Tuition Books Fees (2) (1) Reflects Active Duty Military tuition. Non-resident and other program tuition is higher.. (2) Excludes military sc
Slide 7: APUS Tuition Below Title IV Maximum Loan Limits
7 APUS Tuition Below Title IV Maximum Loan Limits Sources: U.S. Department of Education, Financial Aid Resource Publication, 2007-2008. $9,500 $10,500 $12,500 $7,500 $7,500 $7,500 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 First Year Second Year Third and beyond (each year) Title IV Limi
Slide 8: Affordability Creates Low Reliance on Private Loans
8 Affordability Creates Low Reliance on Private Loans FY 2007 Revenue by Funding Source: Cash & Other Sources 22% TA 66% Private Loans 1% Title IV 11%
Slide 9: APUS at a Glance
9 APUS at a Glance Students by Degree Level: Students by Status: Masters 26% Bachelors 61% Military 67% Civilian 18% Military Affiliated 15% Associates 13%
Slide 10: A Leader in Learning Outcomes Assessment
10 A Leader in Learning Outcomes Assessment Comprehensive outcomes assessment process Alumni survey Student testimonials Graduation rates Retention rates Employer survey Transparency of learning outcomes Member of Transparency by Design initiative Membership in the HLC Assessment Academy and the Nat
Slide 11: 2008 MAPP Scores (Outcomes Assessment), Seniors
11 2008 MAPP Scores (Outcomes Assessment), Seniors Source: 2008 ETS Reports, Institution Reports and Company Estimates APUS Unidentified For-Profit All Institutions 110 112 114 116 118 120 122 Critical Thinking Reading Writing Mathematics Humanities Social Sciences Natural Sciences APUS Seniors Test
Slide 12: High Referral Rates Driven by Strong Customer Satisfaction
12 12 CUSTOMER SATISFACTION: More than 95% of students would recommend AMU or APU to a friend or colleague. 95%+ of alumni indicated their AMU or APU degree met or exceeded their expectations. ONLINE EXPERIENCE: 90%+ indicated that interactions between the instructor and the students were positive.
Slide 13: Experienced Leadership
13 Experienced Leadership PRIOR EXPERIENCE TITLE NAME Wallace E. Boston President, CEO and Director President & COO, NeighborCare Pharmacies CFO, Sun Healthcare Group Harry T. Wilkins EVP, CFO CFO & COO, Strayer Education Dr. Frank McCluskey EVP, Provost Director and Dean of Online Learning, Mercy C
Slide 14: Compelling Financial Attributes
14 Strong top-line growth with good visibility Tuition is paid in advance; attractive working capital dynamics High referral rates drive low student acquisition costs Limited “brick and mortar” costs Variable cost faculty model Technology platform drives scalability and long-term margin expansion Co
Slide 15: Strong Track Record for Increasing Registrations
15 0.0 20.0 40.0 60.0 80.0 100.0 2002 2003 2004 2005 2006 2007 Q1 2007 Q1 2008 (1) Net course registrations represent the total number of course registrations for students that have attended a portion of a course. 59% Growth CAGR 38% (in thousands) Strong Track Record for Increasing Registrations 19
Slide 16: Continued Strong Revenue Growth
16 $23.2 $14.1 $40.0 $69.1 $28.2 $10.7 $17.8 $23.1 $0 $10 $20 $30 $40 $50 $60 $70 2002 2003 2004 2005 2006 2007 1Q2007 1Q2008 CAGR 45% Continued Strong Revenue Growth 65 % Growth ($ in millions) Revenues
Slide 17: Operating Income Growth
17 Operating Income Growth $0 $3 $5 $8 $10 $13 $15 2003 2004 2005 2006 2007 1Q2007 1Q2008 (1) As adjusted to exclude a $3.1 million write-off of capitalized software development costs in 2006. See Reconciliation to GAAP Results at the end of this presentation CAGR 69% 103% Growth ($ in millions) Inc
Slide 18: 1Q2008 Operating Margin Improvement
18 1Q2008 Operating Margin Improvement Revenues 100.0 % 100.0 % Costs and expenses: Instructional costs and services 42.6 43.3 Selling and promotional 9.3 10.2 General and administrative 20.7 23.0 Depreciation and amortization 3.9 4.4 Total costs and expenses 76.5 80.9 Income from operations before
Slide 19: Second Quarter 2008 Outlook
19 2nd Quarter 2008 %Growth Net Course Registrations approx. 32,000 53% Net Course Registrations from New Students approx. 7,600 38% Total Revenue $23.8 to $24.5 million 47%-51% Net Income (1) $2.6 to $2.9 million 30%-45% EPS – Diluted (1) $0.14 to $0.15 (1) Includes stock-based compensation expense
Slide 20: Increased Full Year 2008 Outlook
20 Prior FY 2008 Updated FY 2008 Net Course Registrations 137,000+ 139,000+ Net Course Registrations from New Students 33,500+ 33,500+ Total Revenue $100 to $103 million $102 to $104 million Net Income (1) $11.9 to $12.5 million $12.8 to $13.6 million EPS – Diluted (1) $0.63 to $0.66 $0.67 to $0.72
Slide 21: APEI Positioned for Strong Growth in 2008
21 Enhanced opportunities with the Navy New programs and market segments Master Degrees in Education Associate’s Degrees New degrees in development Affordability, unique programs and quality provide advantages APEI Positioned for Strong Growth in 2008
Slide 22: William Blair 28th Annual Growth Stock Conference
William Blair 28th Annual Growth Stock Conference June 17, 2008 AMERICAN PUBLIC EDUCATION, INC.
Slide 23: Reconciliation to GAAP Results
23 Reconciliation to GAAP Results ($ in millions) 2003 2004 2005 2006 2007 Income (loss) from continuing operations before interest income and income taxes $1.9 $3.6 $2.2 $2.9 $14.7 Adjustments: Add: Write-off of software development project - - - $3.1 - Income from continuing operations before inte
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