American Public Education, Inc. · NASDAQ:APEI

American Public Education — Q3 2023 Earnings Presentation

18 slides from American Public Education's earnings presentation, Nov 7, 2023

1. Slide 1: American Public Education, Inc. Third Quarter 2023 Results

   American Public Education, Inc. Third Quarter 2023 Results November 7, 2023 PRESENTED BY Angela Selden President and CEO Richard Sunderland, CPA Executive VP and CFO

2. Slide 2: Safe Harbor Statement

   Safe Harbor Statement Statements made in this presentation regarding American Public Education, Inc. or its subsidiaries (“APEI” or the “Company”) that are not historical facts are forward-looking statements based on current expectations, assumptions, estimates and projections about APEI and the ind

3. Slide 3: 3Q23 APEI Executive Summary

   3Q23 APEI Executive Summary Key Take-Aways 4Q23 Guidance Summary  APEI Revenue: $150.8 million – exceeding high end of third quarter guidance  Net loss available to common stockholders: $(4.9) million and EPS loss per diluted common share of $(0.27)  Includes a $5.2 million non-cash investment lo

4. Slide 4: Education Unit Updates

   Education Unit Updates

5. Slide 5: APUS Summary

   APUS Summary Guidance Guidance Period Period Mid-point Mid-point  Net course registrations grew +7.6% in 3Q23 vs. 3Q22  Continued positive 3Q23 enrollment growth driven by military (+12%) and veteran students (+5%)  Continued margin expansion due to higher enrollments, tuition and fee increases e

6. Slide 6: Hondros Summary

   Hondros Summary  15 consecutive quarters of yr/yr enrollment growth  3Q23 EBITDA slightly negative due to higher bad debt  4Q23 enrollment guidance is approximately 3,100 (+19% vs. expense, and ongoing new campus start-up costs 4Q22)  Hondros NCLEX-RN score continued to improve in 3Q23 6

7. Slide 7: Rasmussen Summary

   Rasmussen Summary  Strong growth in BSN enrollments and other on-ground  Took further cost savings actions in 3Q23 to align cost programs offset by continued declines in ADN program structure to current revenue levels  NCLEX scores continue to improve sequentially  3Q23 financial results driven

8. Slide 8: Financial Results

   Financial Results

9. Slide 9: Revenue Summary by Education Unit

   Revenue Summary by Education Unit APEI Revenue % YTD YTD % ($ in millions) 3Q22 3Q23 Change 9/30/2022 9/30/2023 Change $ 68.7 $ 76.4 11% $ 211.7 $ 223.9 6% $ 61.5 $ 52.1 -15% $ 192.5 $ 161.5 -16% $ 11.4 $ 13.7 20% $ 34.4 $ 41.1 19% 1 $ 7.8 $ 8.6 10% $ 15.2 $ 21.1 39% $ 149.5 $ 150.8 1% $ 453.9 $ 447

10. Slide 10: Education Unit Operating Income and Margin Profile

    Education Unit Operating Income and Margin Profile Operating Income ($ in millions) 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 APUS $ 13.2 $ 13.6 $ 12.5 $ 19.1 $ 17.1 $ 18.9 $ 21.9 Margin 18% 19% 18% 26% 23% 26% 29% Rasmussen1 $ 0.9 $ (146.6) $ (7.9) $ (13.0) $ (12.9) $ (77.3) $ (10.6) Margin 1% -229% -13%

11. Slide 11: Education Unit EBITDA and Margin Profile

    Education Unit EBITDA and Margin Profile EBITDA ($ in millions) 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 APUS 14.9 15.2 14.1 20.6 18.5 20.2 23.3 Margin 20% 22% 21% 28% 25% 28% 30% Rasmussen 1 7.0 4.5 (1.9) (5.0) (6.9) (7.1) (5.3) Margin 10% 7% -3% -8% -12% -14% -10% Hondros (0.8) (0.4) (1.1) (0.7) (1.0) 0

12. Slide 12: Capitalization & Liquidity

    Capitalization & Liquidity ($ in millions) 12/31/2022 9/30/2023 Cash $ 129 $ 155 (-) Restricted cash (27) (27) ($ in millions) Unrestricted cash $ 103 $ 128 Annualized Outstanding Annualized (1) Financing Costs Amount Rate Term Loan (principal) $ 99 $ 99 Interest expense $ 9.6 $ 99 9.7% Revolver, dr

13. Slide 13: APEI's 4Q23 Outlook

    APEI’s 4Q23 Outlook 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 th

14. Slide 14: Thank You

    Thank You

15. Slide 15: Education Unit Overview – Operating Income to EBITDA Reconciliation

    Education Unit Overview – Operating Income to EBITDA Reconciliation APEI Revenue Full Year ($ in millions) 1Q22 2Q22 3Q22 4Q22 2022 1Q23 2Q23 3Q23 Revenue 73.1 69.9 68.7 73.4 285.1 74.0 73.6 76.4 Operating Income (1) 13.2 13.6 12.5 19.1 58.5 17.1 18.9 21.9 (+) D&A 1.7 1.6 1.6 1.5 6.4 1.4 1.3 1.3 EBI

16. Slide 16: Enrollment and Registration Summary

    Enrollment and Registration Summary 3Q 2023 3Q 2022 % Change APUS Registrations 92,300 85,800 8% Total Nursing Enrollment 8,500 10,110 -16% Rasmussen Nursing Enrollment 5,700 7,700 -26% HCN Nursing Enrollment 2,800 2,410 16% Rasmussen Non-Nursing 7,700 7,300 5% 16

17. Slide 17: Non-GAAP Disclosures

    Non-GAAP Disclosures 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 measure that is included in the table below (under the caption “GAAP Net Income to

18. Slide 18: Non-GAAP Disclosures (continued)

    Non-GAAP Disclosures (continued) American Public Education is presenting adjusted EBITDA in connection with its GAAP outlook and urges investors to review the reconciliation of projected adjusted net income to the comparable GAAP financial measure that is included in the table below (under the capti

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