Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-33810 | |
Entity Registrant Name | AMERICAN PUBLIC EDUCATION, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 01-0724376 | |
Entity Address, Address Line One | 111 West Congress Street, | |
Entity Address, City or Town | Charles Town, | |
Entity Address, State or Province | WV | |
Entity Address, Postal Zip Code | 25414 | |
City Area Code | 304 | |
Local Phone Number | 724-3700 | |
Title of 12(b) Security | Common Stock, $.01 par value | |
Trading Symbol | APEI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,718,641 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001201792 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash, cash equivalents, and restricted cash (Note 2) | $ 136,161 | $ 129,458 |
Accounts receivable, net of allowance of $14,068 in 2023 and $13,328 in 2022 | 37,073 | 42,353 |
Prepaid expenses | 17,434 | 11,409 |
Income tax receivable | 5,189 | 2,871 |
Total current assets | 195,857 | 186,091 |
Property and equipment, net | 100,285 | 100,892 |
Operating lease assets, net | 108,048 | 108,870 |
Deferred income taxes | 34,667 | 35,355 |
Goodwill | 112,593 | 112,593 |
Intangible assets, net | 50,790 | 54,734 |
Other assets, net | 16,282 | 16,521 |
Total assets | 618,522 | 615,056 |
Current liabilities: | ||
Accounts payable | 6,797 | 3,808 |
Accrued compensation and benefits | 16,363 | 15,010 |
Accrued liabilities | 13,783 | 13,784 |
Deferred revenue and student deposits | 28,866 | 23,760 |
Lease liabilities, current | 13,517 | 14,396 |
Total current liabilities | 79,326 | 70,758 |
Lease liabilities, long-term | 102,726 | 101,420 |
Long-term debt, net | 93,557 | 93,151 |
Total liabilities | 275,609 | 265,329 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock, $.01 par value; 10,000,000 shares authorized; 400 shares issued and outstanding in 2023 and 2022, respectively. ($151,905 and $155,587 liquidation preference per share, $60,762 and $62,235 in aggregate, for 2023 and 2022, respectively) (Note 12) | 39,691 | 39,691 |
Common stock, $.01 par value; 100,000,000 shares authorized; 18,978,406 issued and outstanding in 2023; 18,892,791 issued and outstanding in 2022 | 190 | 189 |
Additional paid-in capital | 294,082 | 292,854 |
Accumulated other comprehensive income | 2,627 | 3,102 |
Retained earnings | 6,323 | 13,891 |
Total stockholders’ equity | 342,913 | 349,727 |
Total liabilities and stockholders’ equity | $ 618,522 | $ 615,056 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Accounts receivable, allowance | $ 14,068 | $ 13,328 |
Stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares (in shares) | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 18,978,406 | 18,892,791 |
Common stock, outstanding (in shares) | 18,978,406 | 18,892,791 |
Series A Preferred Stock | ||
Preferred stock, shares outstanding (in shares) | 400 | 400 |
Preferred stock, shares issued (in shares) | 400 | 400 |
Preferred stock liquidation preference (in dollars per share) | $ 151,905 | $ 155,587 |
Preferred stock liquidation preference | $ 60,762 | $ 62,235 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 149,689 | $ 154,747 |
Costs and expenses: | ||
Instructional costs and services | 73,889 | 71,698 |
Selling and promotional | 39,924 | 39,319 |
General and administrative | 33,489 | 29,589 |
Loss on disposals of long-lived assets | 1 | 793 |
Depreciation and amortization | 7,756 | 8,148 |
Total costs and expenses | 155,059 | 149,547 |
(Loss) income from operations before interest and income taxes | (5,370) | 5,200 |
Gain on acquisition (Note 3) | 0 | 4,533 |
Interest expense | (1,779) | (3,355) |
(Loss) income before income taxes | (7,149) | 6,378 |
Income tax (benefit) expense | (1,414) | 1,040 |
Equity investment loss | (5) | (5) |
Net (loss) income | (5,740) | 5,333 |
Preferred stock dividends | 1,457 | 0 |
Net (loss) income available to common stockholders basic | (7,197) | 5,333 |
Net (loss) income available to common stockholders diluted | $ (7,197) | $ 5,333 |
Earnings per common share: | ||
Earnings per common share basic (in dollars per share) | $ (0.38) | $ 0.28 |
Diluted (in dollars per share) | $ (0.38) | $ 0.28 |
Weighted average number of common shares: | ||
Basic (in shares) | 18,982 | 18,805 |
Diluted (in shares) | 19,072 | 18,879 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (5,740) | $ 5,333 |
Other comprehensive (loss) income, net of tax: | ||
Unrealized (loss) gain on hedging derivatives | (28) | 1,761 |
Tax effect | 6 | (437) |
Unrealized gains (losses) on hedging derivatives, net of taxes | (22) | 1,324 |
Reclassification of (gains) losses to net income | (602) | 0 |
Tax effect | 149 | 0 |
Reclassifications of (gains) losses to net income, net of taxes | (453) | 0 |
Total other comprehensive (loss) income | (475) | 1,324 |
Comprehensive (loss) income | $ (6,215) | $ 6,657 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (loss) | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 18,709,171 | ||||
Beginning balance at Dec. 31, 2021 | $ 415,612 | $ 0 | $ 187 | $ 286,385 | $ 108 | $ 128,932 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under employee benefit plans (in shares) | 218,512 | |||||
Issuance of common stock under employee benefit plans | 0 | $ 3 | (3) | |||
Deemed repurchased shares of common and restricted stock for tax withholding (in shares) | (71,331) | |||||
Deemed repurchased shares of common and restricted stock for tax withholding | (1,444) | $ (1) | (1,443) | |||
Stock-based compensation | 2,356 | 2,356 | ||||
Other comprehensive gain | 1,324 | 1,324 | ||||
Other comprehensive loss | 1,324 | |||||
Net income (loss) | 5,333 | 5,333 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 0 | 18,856,352 | ||||
Ending balance at Mar. 31, 2022 | 423,181 | $ 0 | $ 189 | 287,295 | 1,432 | 134,265 |
Beginning balance (in shares) at Dec. 31, 2022 | 400 | 18,892,791 | ||||
Beginning balance at Dec. 31, 2022 | 349,727 | $ 39,691 | $ 189 | 292,854 | 3,102 | 13,891 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Preferred Stock dividends | (1,457) | (1,457) | ||||
Issuance of common stock under employee benefit plans (in shares) | 245,638 | |||||
Issuance of common stock under employee benefit plans | 0 | $ 3 | (3) | |||
Deemed repurchased shares of common and restricted stock for tax withholding (in shares) | (85,023) | |||||
Deemed repurchased shares of common and restricted stock for tax withholding | (995) | $ (1) | (994) | |||
Stock-based compensation | 2,224 | 2,224 | ||||
Repurchased and retired shares of common stock (in shares) | (75,000) | |||||
Repurchased and retired shares of common stock | (371) | $ (1) | 1 | (371) | ||
Other comprehensive gain | (22) | |||||
Other comprehensive loss | (475) | (475) | ||||
Net income (loss) | (5,740) | (5,740) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 400 | 18,978,406 | ||||
Ending balance at Mar. 31, 2023 | $ 342,913 | $ 39,691 | $ 190 | $ 294,082 | $ 2,627 | $ 6,323 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities | ||
Net (loss) income | $ (5,740) | $ 5,333 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 7,756 | 8,148 |
Amortization of debt issuance costs | 431 | 654 |
Stock-based compensation | 2,224 | 2,356 |
Equity investment loss | 5 | 5 |
Deferred income taxes | 688 | 901 |
Loss on disposals of long-lived assets | 1 | 793 |
Gain on acquisition | 0 | (4,533) |
Other | 0 | 5 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net of allowance for bad debt | 5,280 | 6,644 |
Prepaid expenses | (6,025) | (3,623) |
Income tax receivable/payable | (2,318) | 537 |
Operating leases, net | 1,277 | 1,218 |
Other assets | (268) | 241 |
Accounts payable | 2,989 | (2,492) |
Accrued compensation and benefits | 1,353 | 2,401 |
Accrued liabilities | (1) | 2,492 |
Deferred revenue and student deposits | 5,106 | 4,175 |
Net cash provided by operating activities | 12,758 | 25,255 |
Investing activities | ||
Cash received from acquisition, net of cash paid | 0 | 1,932 |
Capital expenditures | (3,206) | (2,965) |
Proceeds from the sale of real property | 0 | 754 |
Net cash used in investing activities | (3,206) | (279) |
Financing activities | ||
Cash paid for repurchase of common stock | (1,366) | (1,444) |
Preferred stock dividends paid | (1,455) | 0 |
Cash paid for principal on borrowings and finance leases | (28) | (2,216) |
Net cash used in financing activities | (2,849) | (3,660) |
Net increase in cash, cash equivalents, and restricted cash | 6,703 | 21,316 |
Cash, cash equivalents, and restricted cash at beginning of period | 129,458 | 149,627 |
Cash, cash equivalents, and restricted cash at end of period | 136,161 | 170,943 |
Supplemental disclosure of cash flow information | ||
Interest paid | 2,511 | 2,700 |
Income taxes paid | $ 62 | $ 41 |
Nature of the Business
Nature of the Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | Nature of the Business American Public Education, Inc., or APEI, which together with its subsidiaries is referred to herein as the “Company,” is a provider of online and campus-based postsecondary education, and career learning through Graduate School USA, to students through the following subsidiary institutions: • American Public University System, Inc., or APUS, provides online postsecondary education directed primarily at the needs of the military, military-affiliated, public service and service-minded communities through American Military University, or AMU, and American Public University, or APU. APUS is institutionally accredited by the Higher Learning Commission, or HLC. • Rasmussen College, LLC, which is referred to herein as Rasmussen University, or RU, provides nursing- and health sciences-focused postsecondary education to students at its 22 campuses in six states and online. RU is institutionally accredited by the HLC. • National Education Seminars, Inc., which is referred to herein as Hondros College of Nursing, or HCN, provides postsecondary nursing education to students enrolled at its eight campuses in three states. HCN is institutionally accredited by the Accrediting Bureau for Health Education Schools, or ABHES. • American Public Training LLC, which is referred to herein as Graduate School USA, or GSUSA, provides career learning and leadership training in-person and online to the federal workforce. GSUSA is accredited by the Accrediting Council for Continuing Education and Training, or ACCET. The Company’s subsidiary institutions are licensed or otherwise authorized by state authorities to offer education programs to the extent the institutions believe such licenses or authorizations are required, and APUS, RU, and HCN are certified by the United States Department of Education, or ED, to participate in student financial aid programs authorized under Title IV of the Higher Education Act of 1965, as amended, or Title IV programs. The Company’s operations are organized into the following three reportable segments: • American Public University System Segment, or APUS Segment. This segment reflects the operational activities of APUS. • Rasmussen University Segment, or RU Segment . This segment reflects the operational activities of RU. • Hondros College of Nursing Segment, or HCN Segment. This segment reflects the operational activities of HCN. Adjustments to reconcile segment results to the Consolidated Financial Statements are included in “Corporate and Other”. These adjustments include unallocated corporate activity and eliminations, and the operational activities of GSUSA. GSUSA operates as a stand-alone subsidiary of APEI, but does not meet the quantitative thresholds to qualify as a reportable segment, and does not have other requisite characteristics as a reportable segment. Therefore, GSUSA’s results are combined and presented within “Corporate and Other”. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies A summary of the Company’s significant accounting policies follows: Basis of Presentation and Accounting The accompanying unaudited, interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. Business Combinations The Company accounts for business combinations in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations , or FASB ASC 805, which requires the acquisition method to be used for all business combinations. Under ASC 805, the assets and liabilities of an acquired company are reported at business fair value along with the fair value of acquired intangible assets at the date of acquisition. Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed, and the fair value assigned to identifiable intangible assets. Principles of Consolidation The accompanying unaudited interim Consolidated Financial Statements include the accounts of APEI and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. Unaudited Interim Financial Information The unaudited interim Consolidated Financial Statements do not include all the information and notes required by GAAP for audited annual financial statement presentations. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary to present a fair statement of the Company’s financial position, results of operations, and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. This Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying notes in its audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, or the Annual Report. Use of Estimates In preparing financial statements in conformity with GAAP, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions and various other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ from those estimates under different assumptions or conditions, and the impact of such differences may be material to the Consolidated Financial Statements. Cash and Cash Equivalents The Company considers all short-term highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of demand deposits with financial institutions, money market funds, and U.S. Treasury bills. Cash and cash equivalents are Level 1 assets in the fair value reporting hierarchy. Restricted Cash Restricted cash includes funds held for students for unbilled educational services that were received from Title IV programs. As a trustee of these Title IV program funds, the Company is required to maintain and restrict these funds pursuant to the terms of the program participation agreement with ED. Restricted cash also includes amounts to secure letters of credit, including $24.2 million in a restricted certificate of deposit account to secure a letter of credit for the benefit of ED on behalf of RU in connection with RU’s 2020 composite score, which is used by ED for determining compliance with financial responsibility standards, being below the minimum required, and a $0.7 million restricted certificate of deposit to secure a letter of credit in lieu of a security deposit for a RU leased campus. Restricted cash on the Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022, excluding the restricted certificates of deposit, was $2.2 million and $2.0 million, respectively. Total restricted cash as of March 31, 2023 and December 31, 2022 was $27.2 million and $26.9 million, respectively. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed. Goodwill is not amortized. The Company accounts for goodwill and indefinite-lived intangible assets in accordance with FASB ASC 350, Intangibles Goodwill and Other, and Accounting Standards Update, or ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The Company’s goodwill and intangible assets are deductible for tax purposes. The Company annually assesses goodwill for impairment, or more frequently if events and circumstances indicate that goodwill 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 a 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. Finite-lived intangible assets acquired in business combinations are recorded at fair value on their acquisition date and are amortized on a straight-line basis over the estimated useful life of the asset. The Company reviews its indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the assets exceeds the fair value of the assets. For additional details regarding goodwill and indefinite-lived intangible assets, please refer to “Note 6. Goodwill and Intangible Assets” in these Consolidated Financial Statements. Stock-based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC 718, Stock Compensation , which requires companies to expense share-based compensation based on fair value, and ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . Stock-based payments may include incentive stock options or non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, performance shares, performance units, cash-based awards, other stock-based awards, including unrestricted shares, or any combination of the foregoing. Stock-based compensation cost is recognized as expense generally over a three-year vesting period using the straight-line method for employees and the graded-vesting method for members of the Company’s Board of Directors. It is measured using the Company’s closing stock price on the date of the grant. An accelerated one-year period is used to recognize stock-based compensation cost for employees who have reached certain service and retirement eligibility criteria on the date of grant. The fair value of each option award is estimated at the date of grant using a Black-Scholes option-pricing model that uses certain assumptions. The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of the Company’s common stock. In addition, the Company determines the risk-free interest rate by selecting the U.S. Treasury constant maturity for the same maturity as the estimated life of the option quoted on an investment basis in effect at the time of grant for that business day. Judgment is required in estimating the percentage of share-based awards that are expected to vest, and in the case of performance stock units, or PSUs, the level of performance that will be achieved and the number of shares that will be earned. The Company estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original estimates. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. If actual results differ significantly from these estimates, stock-based compensation expense could be higher and have a material impact on the Company’s consolidated financial statements. Estimates of fair value are subjective and are not intended to predict actual future events, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made under ASC 718. Stock-based compensation expense for the three months ended March 31, 2023 and 2022 was as follows (in thousands): Three Months Ended March 31, 2023 2022 (Unaudited) Instructional costs and services $ 279 $ 459 Selling and promotional 229 296 General and administrative 1,716 1,601 Total stock-based compensation expense $ 2,224 $ 2,356 Incentive-based Compensation The Company provides incentive-based compensation opportunities to certain employees through cash incentive and equity awards. The expense associated with these awards is reflected within the Company’s operating expenses. For the years ending December 31, 2023 and 2022, the Management Development and Compensation Committee of the Board approved an annual incentive arrangement for senior management employees. The aggregate amount of awards payable, if any, is dependent upon the achievement of certain Company financial and operational goals and the satisfaction of individual performance goals. Given that the awards are generally contingent upon achieving annual objectives, final determination of the current year incentive awards cannot be made until after the results for the year are finalized. The Company recognizes the estimated fair value of performance-based restricted stock units by assuming the satisfaction of any performance-based objectives at the “target” level, which is the most probable outcome determined for accounting purposes at the time of grant, and multiplying the corresponding number of shares earned based upon such achievement by the closing price of the Company’s stock on the date of grant. To the extent performance goals are not met, compensation cost is not ultimately recognized against the goals and, to the extent previously recognized, compensation cost is reversed. Amounts accrued are subject to change in future interim periods if actual future financial results or operational performance are better or worse than expected. The Company recognized an aggregate expense associated with the Company’s current year annual incentive-based compensation plans of approximately $2.0 million during the three months ended March 31, 2023, compared to an aggregate expense of approximately $1.8 million during the three months ended March 31, 2022. Income Taxes The Company determines its interim tax provision by applying the estimated income tax rate expected for the full calendar year to income before income taxes for the period adjusted for discrete items. Recent Accounting Pronouncements The Company considers the applicability and impact of all ASUs issued by the FASB. All ASUs issued subsequent to the filing of the Annual Report on March 14, 2023 were assessed and determined to be either inapplicable or not expected to have a material impact on the Company’s consolidated financial position and/or results of operations. |
Acquisition Activity
Acquisition Activity | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition Activity | Acquisition Activity Acquisition of Graduate School USA On January 1, 2022, or the GSUSA Closing Date, the Company completed the GSUSA Acquisition pursuant to an Asset Purchase Agreement dated August 10, 2021 by and between American Public Training LLC, and Graduate School USA, or the Seller, for an aggregate purchase price of $1.0 million, subject to working capital adjustments. At closing, the Company received approximately $1.9 million from the Seller, which represents the estimated net working capital at closing net of the initial cash payment to the Seller of $0.5 million, which is the purchase price less $0.5 million retained by the Company to secure the indemnification obligations of the Seller. The purchase price reflects the $0.5 million due to the Seller post-closing, and additional adjustments to the estimated net working capital at closing. The Company applied the acquisition method of accounting to the GSUSA Acquisition, whereby the assets acquired and liabilities assumed were recognized at fair value on the GSUSA Closing Date. There was no goodwill recorded as a result of the GSUSA Acquisition, but an approximate $4.5 million noncash, non-taxable gain on the acquisition was recorded and is included as a separate line item on the Consolidated Statements of Income for the three months ended March 31, 2022. The preliminary opening balance sheet was subject to adjustment based on a final assessment of the fair value of certain acquired assets and liabilities assumed. The Company had up to one year from the GSUSA Closing Date, or the measurement period, to complete the allocation of the purchase price. The Company completed its assessment of the fair values of certain acquired assets and liabilities assumed during the measurement period, and, as a result, during the second quarter of 2022, the Company recorded a $0.7 million decrease in the gain on acquisition for a net gain of $3.8 million in connection with the GSUSA Acquisition based on the final working capital adjustment. The following table summarizes the components of the estimated consideration along with the purchase price allocation (in thousands): Purchase Price Allocation Amount Cash and cash equivalents $ 1,000 Working capital adjustment (2,450) Total consideration (1,450) Assets acquired: Accounts receivable 4,282 Prepaid expenses 1,096 Property and equipment, net 400 Operating lease assets 31,635 Intangible assets 965 Total assets acquired 38,378 Liabilities assumed: Accounts payable and accrued liabilities 810 Deferred revenue 1,969 Lease liabilities, current 1,179 Lease liabilities, long-term 30,779 Deferred income taxes 1,263 Total liabilities assumed 36,000 Net assets acquired 2,378 Gain on acquisition $ 3,828 The gain on acquisition represents the excess of the fair value of net assets acquired over consideration paid. The consideration paid represents a substantial discount to the book value of GSUSA’s net assets at the GSUSA Closing Date, primarily due to the fair value adjustments related to the trade name, fixed assets, and right-of-use, or ROU, lease assets and liabilities compared to book value. The gain on acquisition was primarily the result of prior financial results, a lack of access to capital by the Seller, and the agreed upon purchase price that reflected the fact that GSUSA may need additional capital to fund operating losses. The fair values of the customer contracts and relationships and trade name intangible assets were determined using the income-based approach. The fair values of the curricula and accreditation and licensing identified intangible assets were determined using the cost approach. The table below presents a summary of intangible assets acquired and the useful lives of these assets (in thousands): Intangible Assets Useful life Amount Customer contracts and relationships 2.5 years $ 744 Curricula 3 years 158 Trade name 1 year 35 Accreditation and licenses 2.5 years 28 $ 965 Pro forma financial information relating to the GSUSA Acquisition is not presented because the GSUSA Acquisition did not represent a significant business acquisition for the Company. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue In the following table, revenue, shown net of grants and scholarships, is disaggregated by type of service provided. The table also includes a reconciliation of the disaggregated revenue with the reportable segments (in thousands): Three Months Ended March 31, 2023 (Unaudited) APUS RU HCN Corporate and Other Consolidated Instructional services, net of grants and scholarships $ 73,422 $ 48,196 $ 10,981 $ 5,104 $ 137,703 Graduation fees 369 — — — 369 Textbook and other course materials — 8,707 1,994 — 10,701 Other fees 187 564 165 — 916 Total Revenue $ 73,978 $ 57,467 $ 13,140 $ 5,104 $ 149,689 Three Months Ended March 31, 2022 (Unaudited) APUS RU HCN Corporate and Other Consolidated Instructional services, net of grants and scholarships $ 72,585 $ 55,917 $ 9,733 $ 3,017 $ 141,252 Graduation fees 335 — — — 335 Textbook and other course materials — 10,294 1,663 — 11,957 Other fees 170 888 145 — 1,203 Total Revenue $ 73,090 $ 67,099 $ 11,541 $ 3,017 $ 154,747 Corporate and Other includes tuition and contract training revenue earned by GSUSA and the elimination of intersegment revenue for courses taken by employees of one segment at other segments. Contract Balances and Performance Obligations The Company had no contract assets or deferred contract costs as of March 31, 2023 and December 31, 2022. The Company recognizes a contract liability, or deferred revenue, when a student begins a course, in the case of APUS and GSUSA, or starts a term, in the case of RU and HCN. Deferred revenue at March 31, 2023 was $28.9 million and included $17.1 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $11.8 million in consideration received in advance for future courses or terms, or student deposits. Deferred revenue at December 31, 2022 was $23.8 million and included $13.0 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $10.8 million in student deposits. Deferred revenue represents the Company’s performance obligation to transfer future instructional services to students. The Company’s remaining performance obligations represent the transaction price allocated to future reporting periods. The Company has elected, as a practical expedient, not to disclose additional information about unsatisfied performance obligations for contracts with students that have an expected duration of one year or less. When the Company begins performing its obligations, a contract receivable is created, resulting in accounts receivable on the Consolidated Balance Sheets. The Company accounts for receivables in accordance with FASB ASC 310, Receivables . The Company uses the portfolio approach, a practical expedient, to evaluate if a contract exists and to assess collectability at the time of contract inception based on historical experience. Contracts are subsequently reviewed for collectability if significant events or circumstances indicate a change. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company’s principal leasing activities include leases for facilities, which are classified as operating leases, and, as a result of the GSUSA Acquisition, leases for copiers and printers, classified as finance leases. Leases are classified as operating leases unless they meet any of the criteria below to be classified as a finance lease: • the lease transfers ownership of the asset at the end of the lease; • the lease grants an option to purchase the asset which the lessee is expected to exercise; • the lease term reflects a major part of the asset’s economic life; • the present value of the lease payments equals or exceeds the fair value of the asset; or • the asset is specialized with no alternative use to the lessor at the end of the term. Operating Leases The Company has operating leases for office space and campus facilities. Some leases include options to terminate or extend for one Operating lease assets are ROU assets, which represent the right to use the underlying assets for the lease term. Operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating leases are included in the operating lease assets, net, and lease liabilities, current and long-term, on the Consolidated Balance Sheets. These assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. When the lease does not provide an implicit interest rate, the Company uses an incremental borrowing rate based on information available at lease commencement to determine the present value of the lease payments. The ROU assets include all remaining lease payments and exclude lease incentives. Lease expense for operating leases is recognized on a straight-line basis over the lease term. There are no variable lease payments. Lease expense for the three months ended March 31, 2023 and 2022 was $5.3 million and $5.0 million, respectively. These costs are primarily related to long-term operating leases, but also include amounts for short-term leases with terms greater than 30 days that are not material. Cash paid for amounts included in the present value of operating lease liabilities during the three month periods ended March 31, 2023 and 2022 was $4.9 million and $4.8 million, respectively, and is included in operating cash flows. Finance Leases In connection with the GSUSA Acquisition, the Company acquired leases for copiers and printers that are classified as finance leases and expire on December 31, 2024. The Company pledged the assets financed to secure the outstanding leases. As of March 31, 2023, the total finance lease liability was $0.2 million, with an average interest rate of 3.75%. The ROU assets are recorded within Property and equipment, net on the Consolidated Balance Sheets. Lease amortization expense associated with the Company’s finance leases was approximately $0.03 million for both the three months ended March 31, 2023 and 2022, respectively, and is recorded within Depreciation and amortization expense on the Consolidated Statements of Income. The following tables present information about the amount and timing of cash flows arising from the Company’s operating and finance leases as of March 31, 2023 (dollars in thousands): Maturity of Lease Liabilities (Unaudited) Operating Leases Finance Leases 2023 (remaining) $ 13,292 $ 86 2024 17,851 113 2025 16,323 — 2026 15,782 — 2027 15,183 — 2028 13,990 — 2029 and beyond 52,480 — Total future minimum lease payments $ 144,901 $ 199 Less: imputed interest (28,850) (7) Present value of operating lease liabilities $ 116,051 $ 192 Less: lease liabilities, current (13,409) (108) Lease liabilities, long-term $ 102,642 $ 84 Balance Sheet Classification (Unaudited) Current Operating lease liabilities, current $ 13,409 Finance lease liabilities, current 108 Long-term Operating lease liabilities, long-term 102,642 Finance lease liabilities, long-term 84 Total lease liabilities $ 116,243 Other Information (Unaudited) Weighted average remaining lease term (in years) Operating leases 8.86 Finance leases 1.75 Weighted average discount rate Operating leases 4.4 % Finance leases 3.8 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets In connection with its acquisitions, the Company has applied FASB ASC 805, Business Combinations , using the acquisition method of accounting. The Company recorded $217.4 million and $38.6 million of goodwill in connection with the RU and HCN acquisitions, 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 reducing the carrying value of RU and HCN goodwill to $86.0 million and $26.6 million, respectively. There was no goodwill recorded in connection with the acquisition of GSUSA. The Company accounts for goodwill and indefinite-lived intangible assets 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 for impairment, or more frequently if events and circumstances indicate that goodwill might be impaired. Goodwill 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. At March 31, 2023 the Company performed a qualitative analysis for our RU and HCN Segments’ goodwill and indefinite-lived intangible assets. As part of the analysis, the Company considered all the events and circumstances listed in FASB ASC 350, Intangibles-Goodwill and Other, in addition to other entity-specific factors. Factors considered include: RU and HCN’s financial and enrollment performance against internal targets; economic factors; RU key leadership changes including the appointment of a new President and appointees to other significant leadership roles; and the continued favorable growth outlook for nursing education. In addition, the Company considered the 2022 annual quantitative analysis performed and concluded that the events in the first quarter of 2023 did not have a significant impact on the fair value of our RU Segment. After completing the qualitative review of goodwill for the RU and HCN Segments for the three months ended March 31, 2023, the Company concluded it was more likely than not that the fair value of the RU and HCN Segments were more than the carrying value and therefore it was not necessary to perform a quantitative impairment test. The Company determined that there was no impairment of RU or HCN Segment goodwill and indefinite-lived intangible assets during the three months ended March 31, 2023 and 2022. The Company’s 2022 annual assessment concluded that the fair value of RU and HCN exceeded their carrying values by approximately $10.0 million, or 5%, and $4.9 million, or 13%, respectively. Determining fair value requires judgment and the use of significant estimates and assumptions, including fluctuations in enrollments, revenue growth rates, operating margins, discount rates, and future market conditions, among others. Given the current competitive and regulatory environment and the uncertainties regarding the related impact on the business, there can be no assurance that the estimates and assumptions made for purposes of the Company’s interim and annual goodwill impairment tests will prove to be accurate predictions of the future. If the Company’s assumptions are not realized, the Company may record additional goodwill impairment charges in future periods. It is not possible at this time to determine if any such future impairment charge would result or whether such charge would be material. The following table summarizes the changes in the carrying amount of goodwill by reportable segment for the three months ended March 31, 2023 (in thousands): APUS Segment RU Segment HCN Segment Total Goodwill (Unaudited) Goodwill as of December 31, 2022 $ — $ 86,030 $ 26,563 $ 112,593 Goodwill acquired — — — — Impairment — — — — Adjustments — — — — Goodwill as of March 31, 2023 $ — $ 86,030 $ 26,563 $ 112,593 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 identified intangible assets with an indefinite useful life to $35.5 million. There were no indefinite useful life intangible assets identified as a result of the GSUSA Acquisition. There are no indefinite-lived intangible assets in our 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 our APUS Segment. During the three months ended March 31, 2023 and 2022, the Company recorded amortization expense related to definite lived intangibles assets of $3.9 million and $4.0 million, respectively. The following table represents the balance of the Company’s intangible assets as of March 31, 2023 (in thousands): Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount (Unaudited) Finite-lived intangible assets Student roster $ 20,000 $ 15,833 $ — $ 4,167 Curricula 14,563 7,860 — 6,703 Student and customer contracts and relationships 4,614 4,242 — 372 Lead conversions 1,500 1,187 — 313 Non-compete agreements 86 86 — — Tradename 35 35 — — Accreditation and licenses 28 14 — 14 Total finite-lived intangible assets $ 40,826 $ 29,257 $ — $ 11,569 Indefinite-lived intangible assets Trade name 28,498 — — 28,498 Accreditation, licensing, and Title IV 26,186 — 15,500 10,686 Affiliation agreements 37 — — 37 Total indefinite-lived intangible assets 54,721 — 15,500 39,221 Total intangible assets $ 95,547 $ 29,257 $ 15,500 $ 50,790 The following table represents the balance of the Company’s intangible assets as of December 31, 2022 (in thousands): Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount Finite-lived intangible assets Student roster $ 20,000 $ 13,333 $ — $ 6,667 Curricula 14,563 6,680 — 7,883 Student contracts and relationships 4,614 4,168 — 446 Lead conversions 1,500 1,000 — 500 Non-compete agreements 86 86 — — Tradename 35 35 — — Accreditation and licenses 28 11 — 17 Total finite-lived intangible assets $ 40,826 $ 25,313 $ — $ 15,513 Indefinite-lived intangible assets Trade name 28,498 — — 28,498 Accreditation, licensing, and Title IV 26,186 — 15,500 10,686 Affiliation agreements 37 — — 37 Total indefinite-lived intangible assets 54,721 — 15,500 39,221 Total intangible assets $ 95,547 $ 25,313 $ 15,500 $ 54,734 For additional information on goodwill and intangible assets, see the Consolidated Financial Statements and accompanying notes in the Annual Report. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Earnings per common share is calculated by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net (loss) income available to common stockholders is net (loss) income adjusted for preferred stock dividends declared. Diluted earnings per common share is calculated by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding, increased by the shares used in the per share calculation by the dilutive effects of restricted stock and option awards. The table below reflects the calculation of earnings per common share and the weighted average number of common shares outstanding, on an as if converted basis, used in computing basic and diluted earnings per common share (in thousands, expect per share amounts). Three Months Ended March 31, 2023 2022 (Unaudited) Earnings per common share Net (loss) income $ (5,740) $ 5,333 Preferred Stock Dividend 1,457 — Net (loss) income available to common shareholders $ (7,197) $ 5,333 Basic weighted average shares outstanding 18,982 18,805 (Loss) earnings per common share $ (0.38) $ 0.28 Diluted earnings per common share Net (loss) income available to common shareholders $ (7,197) $ 5,333 Basic weighted average shares outstanding 18,982 18,805 Effect of dilutive restricted stock and options 90 74 Diluted weighted average shares outstanding 19,072 18,879 Diluted (loss) earnings per common share $ (0.38) $ 0.28 The table below reflects a summary of securities that could potentially dilute basic earnings per common share in future periods that were not included in the computation of diluted earnings per share because the effect would have been antidilutive (in thousands). Three Months Ended March 31, 2023 2022 (Unaudited) Antidilutive securities: Stock options 136 103 Restricted shares 666 173 Total antidilutive securities 802 276 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term DebtIn connection with the Rasmussen Acquisition, APEI, as borrower, entered into a Credit Agreement with Macquarie Capital Funding LLC, or the Credit Agreement, as administrative agent and collateral agent, or the Agent, Macquarie Capital USA Inc. and Truist Securities, Inc., as lead arrangers and joint bookrunners, and certain lenders party thereto, or the Lenders. The Credit Agreement provides for (i) a senior secured term loan facility in an aggregate original principal amount of $175 million, or the Term Loan, with a scheduled maturity date of September 1, 2027 and (ii) a senior secured revolving loan facility in an aggregate commitment amount of $20.0 million, or the Revolving Credit Facility, which together with the Term Loan is referred to as the Facilities, with a scheduled maturity date of September 1, 2026, the full capacity of which may be utilized for the issuance of letters of credit. The Revolving Credit Facility also includes a $5.0 million sub-facility for swing line loans. The Term Loan, the proceeds of which were used as part of the cash consideration for the Rasmussen Acquisition, was fully funded on the Closing Date and is presented net of deferred financing fees on the Consolidated Balance Sheets. Deferred financing fees are being amortized using the effective interest method over the term of the Term Loan. As of March 31, 2023 and December 31, 2022, the remaining unamortized deferred financing fees were $5.5 million and $5.9 million, respectively. Deferred financing fees of $0.5 million related to the Revolving Credit Facility were recorded as an asset and are being amortized to interest expense over the term of the Revolving Credit Facility. There were no borrowings outstanding under the Revolving Credit Facility as of March 31, 2023 and December 31, 2022. Outstanding borrowings under the Facilities bear interest at a per annum rate equal to LIBOR (subject to a 0.75% floor) plus 5.50%, which shall increase by an additional 2.00% on all past due obligations if APEI fails to pay any amount when due. As of March 31, 2023, the Facilities borrowing rate was 10.13%, excluding any offset from the interest rate cap agreement described below. An unused commitment fee in the amount of 0.50% is payable quarterly in arrears based on the average daily unused amount of the commitments under the Revolving Credit Facility. In December 2022, APEI made prepayments totaling $65.0 million on the Term Loan. With this prepayment, APEI is not required to make quarterly principal payments on the Term Loan until payment of the outstanding principal amount at maturity in September 2027. The Credit Agreement contains customary affirmative and negative covenants, including limitations on APEI’s and its subsidiaries’ abilities, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, and enter into affiliate transactions, in each case, subject to certain exceptions, as well as customary representations, warranties, events of default, and remedies upon default, including acceleration and rights to foreclose on the collateral securing the Facilities. In addition, the Credit Agreement contains a financial covenant that requires APEI to maintain a Total Net Leverage Ratio of no greater than 2.0 to 1.0. As of March 31, 2023, APEI was in compliance with all debt covenants. For additional information on certain restrictions placed on the Company’s indebtedness pursuant to the terms of the Company’s Series A Senior Preferred stock, please refer to “Note 12. Preferred Stock” in these Consolidated Financial Statements. Long-term debt consists of the following as of March 31, 2023 and December 31, 2022 (in thousands): As of March 31, 2023 As of December 31, 2022 (Unaudited) Credit agreement $ 99,063 $ 99,063 Deferred financing fees (5,506) (5,912) Total debt 93,557 93,151 Less: Current portion — — Long-Term Debt $ 93,557 $ 93,151 Scheduled maturities of long-term debt at March 31, 2023 are as follows (in thousands): Maturities of Long-Term Debt (Unaudited) Loan Payments 2027 99,063 Total 99,063 Derivatives and Hedging The Company is subject to interest rate risk, as all outstanding borrowings under the Credit Agreement are subject to a variable rate of interest. On September 30, 2021, the Company entered into an interest rate cap agreement to manage its exposure to the variable rate of interest with a total notional value of $87.5 million. This interest rate cap agreement, designated as a cash flow hedge, provides the Company with interest rate protection in the event the LIBOR rate exceeds 2.0%. The interest rate cap was effective October 1, 2021 and will expire on January 1, 2025. Changes in the fair value of the interest rate cap designated as a hedging instrument that effectively offset the variability of cash flows associated with the Company’s variable-rate long-term debt obligations are reported in accumulated other comprehensive income. These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged interest payments in the same period in which the related interest affects earnings. As of March 31, 2023 and December 31, 2022, the fair value of the interest rate cap totaled $3.9 million and $4.5 million, respectively, and was recorded in Other assets on the Consolidated Balance Sheets. The unrealized loss of $22,000, net of taxes, is included in accumulated other comprehensive income. During the three months ended March 31, 2023, the Company reclassified approximately $0.6 million from other comprehensive income to interest expense. The Company estimates that approximately $2.6 million will be reclassified from accumulated other comprehensive income into interest expense during the next twelve months. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has three reportable segments: the APUS Segment, the RU Segment, and the HCN Segment. GSUSA does not meet the quantitative thresholds to qualify as a reportable segment, and does not have other requisite characteristics as a reportable segment, therefore, its operational activities are presented below within “Corporate and Other”. Adjustments to reconcile segment results to the Consolidated Financial Statements, including unallocated corporate activity and eliminations, are also included in “Corporate and Other”. In accordance with FASB ASC 280, Segment Reporting , the chief operating decision-maker has been identified as the Company’s Chief Executive Officer. The Company’s Chief Executive Officer reviews operating results to make decisions about allocating resources and assessing performance for the APUS, RU, and HCN Segments. A summary of financial information by reportable segment is as follows (in thousands): Three Months Ended March 31, 2023 2022 (Unaudited) Revenue: APUS Segment $ 73,978 $ 73,090 RU Segment 57,467 67,099 HCN Segment 13,140 11,541 Corporate and Other 5,104 3,017 Total Revenue $ 149,689 $ 154,747 Depreciation and amortization: APUS Segment $ 1,400 $ 1,701 RU Segment 5,927 6,079 HCN Segment 290 222 Corporate and Other 139 146 Total Depreciation and amortization $ 7,756 $ 8,148 Income (loss) from operations before interest and income taxes: APUS Segment $ 17,074 $ 13,182 RU Segment (12,864) 891 HCN Segment (1,303) (995) Corporate and Other (8,277) (7,878) Total (loss) income from operations before interest and income taxes $ (5,370) $ 5,200 Interest income (expense): APUS Segment $ 160 $ 39 RU Segment 1 3 HCN Segment 19 2 Corporate and Other (1,959) (3,399) Total Interest expense $ (1,779) $ (3,355) Income tax expense (benefit): APUS Segment $ 5,513 $ 4,674 RU Segment (3,954) 306 HCN Segment (345) (316) Corporate and Other (2,628) (3,624) Total Income tax (benefit) expense $ (1,414) $ 1,040 Capital expenditures: APUS Segment $ 300 $ 441 RU Segment 2,006 1,924 HCN Segment 827 500 Corporate and Other 73 100 Total Capital Expenditures $ 3,206 $ 2,965 A summary of the Company’s consolidated assets by reportable segment is as follows (in thousands): As of March 31, 2023 As of December 31, 2022 (Unaudited) Assets: APUS Segment $ 125,170 $ 113,551 RU Segment 297,980 300,625 HCN Segment 64,109 59,820 Corporate and Other 131,263 141,060 Total Assets $ 618,522 $ 615,056 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company accrues for costs associated with contingencies, including, but not limited to, regulatory compliance and legal matters, when such costs are probable and can be reasonably estimated. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved. The Company bases these accruals on management’s estimate of such costs, which may vary from the ultimate costs and expenses, associated with any such contingency. From time to time, the Company is involved in legal matters in the normal course of its business. |
Concentration
Concentration | 3 Months Ended |
Mar. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentration | Concentration The Company’s students utilize various payment sources and programs to finance their education expenses, including funds from: the U.S. Department of Defense, or DoD, tuition assistance programs, or TA; education benefit programs administered by the U.S. Department of Veterans Affairs, or VA; federal student aid from Title IV programs; and cash and other sources. A summary of APUS Segment revenue derived from students by primary funding source is as follows: Three Months Ended March 31, (Unaudited) 2023 2022 DoD tuition assistance programs 49% 48% VA education benefits 21% 21% Title IV programs 16% 18% Cash and other sources 14% 13% A summary of RU Segment revenue derived from students by primary funding source is as follows: Three Months Ended March 31, (Unaudited) 2023 2022 Title IV programs 74% 74% Cash and other sources 24% 24% VA education benefits 2% 2% A summary of HCN Segment revenue derived from students by primary funding source is as follows: Three Months Ended March 31, (Unaudited) 2023 2022 Title IV programs 79% 79% Cash and other sources 20% 19% VA education benefits 1% 2% |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Preferred Stock | Preferred Stock On December 28, 2022, APEI issued $40 million of the Series A Senior Preferred Stock, $0.01 par value per share, to affiliates of existing common stockholders of the Company. The Series A Senior Preferred Stock has cumulative dividends that accrue daily at the initial annual rate, which is equal to the Secured Overnight Financing Rate, or SOFR (selected by the Company for each divided period), plus 10.00%, or an initial rate of 14.55% for the first dividend period, a quarterly dividend period. On the 30-month anniversary of issuance, the dividend rate spread shall increase by 2.00% per annum and shall increase by 0.50% per annum at the beginning of each full fiscal quarter thereafter. The dividend rate spread increases 6% in the event of default, a change of control, or other non-compliance as noted in the related Certificate of Designation and the purchase agreement for the shares of Series A Senior Preferred Stock, or the Purchase Agreement. Other than an increase in the dividend rate spread relating to default, in no event will the dividend rate spread exceed SOFR plus 25.00%. As of March 31, 2023, the dividend rate was 14.88% based on a three-month dividend period. Dividend periods will be monthly, every three months or every six months, at the Company’s option, and the Company currently anticipates using a three-month period. Dividends will be paid, after declaration by the Company’s Board of Directors, for each dividend period. If the Company selects a six-month dividend period, an interim dividend payment will be required for each three-month period therein. During the three-month period ended March 31, 2023, $1.5 million of dividends were declared and paid on preferred stock. The Series A Senior Preferred Stock has no stated maturity, is not convertible, is not subject to any mandatory redemption, sinking fund or other similar provisions, and will remain outstanding unless redeemed at the Company’s option. The Company has the right to redeem the preferred stock pro rata in whole or in part at the price per share equal to the liquidation preference, or the Liquidation Preference, plus any applicable early premium amount noted in the Certificate of Designation and Purchase Agreement. The Liquidation Preference of $60.8 million and $62.2 million as of March 31, 2023 and December 31, 2022. respectively, is based on the occurrence of a liquidation event, which is also considered an event of default as defined in the Certificate of Designation, as of March 31, 2023 and December 31, 2022, respectively. The Liquidation Preference includes an early redemption premium amount and a make-whole payment for any redemption of the securities prior to June 30, 2025. As of March 31, 2023, and December 31, 2022, the make-whole payment included in the Liquidation Preference was $17.8 million and $19.3 million, respectively. The make-whole payment included in the Liquidation Preference will be reduced quarterly until June 30, 2025 at which time it will be eliminated. Events of default include an increase of the dividend rate spread of 6.00% and an early premium amount, as defined in the Certificate of Designation. The Series A Senior Preferred Stock has no voting rights for directors or otherwise, except as required by law or with respect to certain protective provisions. Without the consent of at least 60% of the then outstanding shares of Series A Senior Preferred Stock, with certain exceptions, the Company may not, among other things, (i) incur any indebtedness if such incurrence would cause the Company’s Total Net Leverage Ratio (as defined in the Purchase Agreement) to exceed 0.75:1, (ii) issue any capital stock senior to or pari passu with the Series A Senior Preferred Stock, (iii) declare or pay any cash dividends on the Company’s common stock, or (iv) repurchase more than an aggregate of $30 million of the Company’s common stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting | Basis of Presentation and AccountingThe accompanying unaudited, interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. |
Business Combinations | Business Combinations The Company accounts for business combinations in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations , or FASB ASC 805, which requires the acquisition method to be used for all business combinations. Under ASC 805, the assets and liabilities of an acquired company are reported at business fair value along with the fair value of acquired intangible assets at the date of acquisition. Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed, and the fair value assigned to identifiable intangible assets. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited interim Consolidated Financial Statements include the accounts of APEI and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The unaudited interim Consolidated Financial Statements do not include all the information and notes required by GAAP for audited annual financial statement presentations. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary to present a fair statement of the Company’s financial position, results of operations, and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. This Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying notes in its audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, or the Annual Report. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with GAAP, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions and various other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ from those estimates under different assumptions or conditions, and the impact of such differences may be material to the Consolidated Financial Statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of demand deposits with financial institutions, money market funds, and U.S. Treasury bills. Cash and cash equivalents are Level 1 assets in the fair value reporting hierarchy. |
Restricted Cash | Restricted Cash Restricted cash includes funds held for students for unbilled educational services that were received from Title IV programs. As a trustee of these Title IV program funds, the Company is required to maintain and restrict these funds pursuant to the terms of the program participation agreement with ED. Restricted cash also includes amounts to secure letters of credit, including $24.2 million in a restricted certificate of deposit account to secure a letter of credit for the benefit of ED on behalf of RU in connection with RU’s 2020 composite score, which is used by ED for determining compliance with financial responsibility standards, being below the minimum required, and a $0.7 million restricted certificate of deposit to secure a letter of credit in lieu of a security deposit for a RU leased campus. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed. Goodwill is not amortized. The Company accounts for goodwill and indefinite-lived intangible assets in accordance with FASB ASC 350, Intangibles Goodwill and Other, and Accounting Standards Update, or ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The Company’s goodwill and intangible assets are deductible for tax purposes. The Company annually assesses goodwill for impairment, or more frequently if events and circumstances indicate that goodwill 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 a 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. Finite-lived intangible assets acquired in business combinations are recorded at fair value on their acquisition date and are amortized on a straight-line basis over the estimated useful life of the asset. The Company reviews its indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the assets exceeds the fair value of the assets. |
Stock-based Compensation | Stock-based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC 718, Stock Compensation , which requires companies to expense share-based compensation based on fair value, and ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . Stock-based payments may include incentive stock options or non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, performance shares, performance units, cash-based awards, other stock-based awards, including unrestricted shares, or any combination of the foregoing. Stock-based compensation cost is recognized as expense generally over a three-year vesting period using the straight-line method for employees and the graded-vesting method for members of the Company’s Board of Directors. It is measured using the Company’s closing stock price on the date of the grant. An accelerated one-year period is used to recognize stock-based compensation cost for employees who have reached certain service and retirement eligibility criteria on the date of grant. The fair value of each option award is estimated at the date of grant using a Black-Scholes option-pricing model that uses certain assumptions. The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of the Company’s common stock. In addition, the Company determines the risk-free interest rate by selecting the U.S. Treasury constant maturity for the same maturity as the estimated life of the option quoted on an investment basis in effect at the time of grant for that business day. Judgment is required in estimating the percentage of share-based awards that are expected to vest, and in the case of performance stock units, or PSUs, the level of performance that will be achieved and the number of shares that will be earned. The Company estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original estimates. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. If actual results differ significantly from these estimates, stock-based compensation expense could be higher and have a material impact on the Company’s consolidated financial statements. Estimates of fair value are subjective and are not intended to predict actual future events, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made under ASC 718. Stock-based compensation expense for the three months ended March 31, 2023 and 2022 was as follows (in thousands): Three Months Ended March 31, 2023 2022 (Unaudited) Instructional costs and services $ 279 $ 459 Selling and promotional 229 296 General and administrative 1,716 1,601 Total stock-based compensation expense $ 2,224 $ 2,356 Incentive-based Compensation The Company provides incentive-based compensation opportunities to certain employees through cash incentive and equity awards. The expense associated with these awards is reflected within the Company’s operating expenses. For the years ending December 31, 2023 and 2022, the Management Development and Compensation Committee of the Board approved an annual incentive arrangement for senior management employees. The aggregate amount of awards payable, if any, is dependent upon the achievement of certain Company financial and operational goals and the satisfaction of individual performance goals. Given that the awards are generally contingent upon achieving annual objectives, final determination of the current year incentive awards cannot be made until after the results for the year are finalized. The Company recognizes the estimated fair value of performance-based restricted stock units by assuming the satisfaction of any performance-based objectives at the “target” level, which is the most probable outcome determined for accounting purposes at the time of grant, and multiplying the corresponding number of shares earned based upon such achievement by the closing price of the Company’s stock on the date of grant. To the extent performance goals are not met, compensation cost is not ultimately recognized against the goals and, to the extent previously recognized, compensation cost is reversed. Amounts accrued are subject to change in future interim periods if actual future financial results or operational performance are better or worse than expected. The Company recognized an aggregate expense associated with the Company’s current year annual incentive-based compensation plans of approximately $2.0 million during the three months ended March 31, 2023, compared to an aggregate expense of approximately $1.8 million during the three months ended March 31, 2022. |
Income Taxes | Income Taxes The Company determines its interim tax provision by applying the estimated income tax rate expected for the full calendar year to income before income taxes for the period adjusted for discrete items. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all ASUs issued by the FASB. All ASUs issued subsequent to the filing of the Annual Report on March 14, 2023 were assessed and determined to be either inapplicable or not expected to have a material impact on the Company’s consolidated financial position and/or results of operations. |
Commitments and Contingencies | Commitments and Contingencies The Company accrues for costs associated with contingencies, including, but not limited to, regulatory compliance and legal matters, when such costs are probable and can be reasonably estimated. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved. The Company bases these accruals on management’s estimate of such costs, which may vary from the ultimate costs and expenses, associated with any such contingency. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Stock-based Compensation Cost Charged Against Income | Stock-based compensation expense for the three months ended March 31, 2023 and 2022 was as follows (in thousands): Three Months Ended March 31, 2023 2022 (Unaudited) Instructional costs and services $ 279 $ 459 Selling and promotional 229 296 General and administrative 1,716 1,601 Total stock-based compensation expense $ 2,224 $ 2,356 |
Acquisition Activity (Tables)
Acquisition Activity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Identifiable Assets Acquired and Liabilities Assumed Based on the Fair Values | The following table summarizes the components of the estimated consideration along with the purchase price allocation (in thousands): Purchase Price Allocation Amount Cash and cash equivalents $ 1,000 Working capital adjustment (2,450) Total consideration (1,450) Assets acquired: Accounts receivable 4,282 Prepaid expenses 1,096 Property and equipment, net 400 Operating lease assets 31,635 Intangible assets 965 Total assets acquired 38,378 Liabilities assumed: Accounts payable and accrued liabilities 810 Deferred revenue 1,969 Lease liabilities, current 1,179 Lease liabilities, long-term 30,779 Deferred income taxes 1,263 Total liabilities assumed 36,000 Net assets acquired 2,378 Gain on acquisition $ 3,828 |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The fair values of the customer contracts and relationships and trade name intangible assets were determined using the income-based approach. The fair values of the curricula and accreditation and licensing identified intangible assets were determined using the cost approach. The table below presents a summary of intangible assets acquired and the useful lives of these assets (in thousands): Intangible Assets Useful life Amount Customer contracts and relationships 2.5 years $ 744 Curricula 3 years 158 Trade name 1 year 35 Accreditation and licenses 2.5 years 28 $ 965 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | In the following table, revenue, shown net of grants and scholarships, is disaggregated by type of service provided. The table also includes a reconciliation of the disaggregated revenue with the reportable segments (in thousands): Three Months Ended March 31, 2023 (Unaudited) APUS RU HCN Corporate and Other Consolidated Instructional services, net of grants and scholarships $ 73,422 $ 48,196 $ 10,981 $ 5,104 $ 137,703 Graduation fees 369 — — — 369 Textbook and other course materials — 8,707 1,994 — 10,701 Other fees 187 564 165 — 916 Total Revenue $ 73,978 $ 57,467 $ 13,140 $ 5,104 $ 149,689 Three Months Ended March 31, 2022 (Unaudited) APUS RU HCN Corporate and Other Consolidated Instructional services, net of grants and scholarships $ 72,585 $ 55,917 $ 9,733 $ 3,017 $ 141,252 Graduation fees 335 — — — 335 Textbook and other course materials — 10,294 1,663 — 11,957 Other fees 170 888 145 — 1,203 Total Revenue $ 73,090 $ 67,099 $ 11,541 $ 3,017 $ 154,747 Corporate and Other includes tuition and contract training revenue earned by GSUSA and the elimination of intersegment revenue for courses taken by employees of one segment at other segments. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Minimum Rental Commitments | The following tables present information about the amount and timing of cash flows arising from the Company’s operating and finance leases as of March 31, 2023 (dollars in thousands): Maturity of Lease Liabilities (Unaudited) Operating Leases Finance Leases 2023 (remaining) $ 13,292 $ 86 2024 17,851 113 2025 16,323 — 2026 15,782 — 2027 15,183 — 2028 13,990 — 2029 and beyond 52,480 — Total future minimum lease payments $ 144,901 $ 199 Less: imputed interest (28,850) (7) Present value of operating lease liabilities $ 116,051 $ 192 Less: lease liabilities, current (13,409) (108) Lease liabilities, long-term $ 102,642 $ 84 Balance Sheet Classification (Unaudited) Current Operating lease liabilities, current $ 13,409 Finance lease liabilities, current 108 Long-term Operating lease liabilities, long-term 102,642 Finance lease liabilities, long-term 84 Total lease liabilities $ 116,243 |
Schedule of Information Related to Leases | Other Information (Unaudited) Weighted average remaining lease term (in years) Operating leases 8.86 Finance leases 1.75 Weighted average discount rate Operating leases 4.4 % Finance leases 3.8 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill by reportable segment for the three months ended March 31, 2023 (in thousands): APUS Segment RU Segment HCN Segment Total Goodwill (Unaudited) Goodwill as of December 31, 2022 $ — $ 86,030 $ 26,563 $ 112,593 Goodwill acquired — — — — Impairment — — — — Adjustments — — — — Goodwill as of March 31, 2023 $ — $ 86,030 $ 26,563 $ 112,593 |
Schedule of Intangible Assets and Goodwill | The following table represents the balance of the Company’s intangible assets as of March 31, 2023 (in thousands): Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount (Unaudited) Finite-lived intangible assets Student roster $ 20,000 $ 15,833 $ — $ 4,167 Curricula 14,563 7,860 — 6,703 Student and customer contracts and relationships 4,614 4,242 — 372 Lead conversions 1,500 1,187 — 313 Non-compete agreements 86 86 — — Tradename 35 35 — — Accreditation and licenses 28 14 — 14 Total finite-lived intangible assets $ 40,826 $ 29,257 $ — $ 11,569 Indefinite-lived intangible assets Trade name 28,498 — — 28,498 Accreditation, licensing, and Title IV 26,186 — 15,500 10,686 Affiliation agreements 37 — — 37 Total indefinite-lived intangible assets 54,721 — 15,500 39,221 Total intangible assets $ 95,547 $ 29,257 $ 15,500 $ 50,790 The following table represents the balance of the Company’s intangible assets as of December 31, 2022 (in thousands): Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount Finite-lived intangible assets Student roster $ 20,000 $ 13,333 $ — $ 6,667 Curricula 14,563 6,680 — 7,883 Student contracts and relationships 4,614 4,168 — 446 Lead conversions 1,500 1,000 — 500 Non-compete agreements 86 86 — — Tradename 35 35 — — Accreditation and licenses 28 11 — 17 Total finite-lived intangible assets $ 40,826 $ 25,313 $ — $ 15,513 Indefinite-lived intangible assets Trade name 28,498 — — 28,498 Accreditation, licensing, and Title IV 26,186 — 15,500 10,686 Affiliation agreements 37 — — 37 Total indefinite-lived intangible assets 54,721 — 15,500 39,221 Total intangible assets $ 95,547 $ 25,313 $ 15,500 $ 54,734 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The table below reflects the calculation of earnings per common share and the weighted average number of common shares outstanding, on an as if converted basis, used in computing basic and diluted earnings per common share (in thousands, expect per share amounts). Three Months Ended March 31, 2023 2022 (Unaudited) Earnings per common share Net (loss) income $ (5,740) $ 5,333 Preferred Stock Dividend 1,457 — Net (loss) income available to common shareholders $ (7,197) $ 5,333 Basic weighted average shares outstanding 18,982 18,805 (Loss) earnings per common share $ (0.38) $ 0.28 Diluted earnings per common share Net (loss) income available to common shareholders $ (7,197) $ 5,333 Basic weighted average shares outstanding 18,982 18,805 Effect of dilutive restricted stock and options 90 74 Diluted weighted average shares outstanding 19,072 18,879 Diluted (loss) earnings per common share $ (0.38) $ 0.28 |
Schedule of Antidilutive Securities | The table below reflects a summary of securities that could potentially dilute basic earnings per common share in future periods that were not included in the computation of diluted earnings per share because the effect would have been antidilutive (in thousands). Three Months Ended March 31, 2023 2022 (Unaudited) Antidilutive securities: Stock options 136 103 Restricted shares 666 173 Total antidilutive securities 802 276 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consists of the following as of March 31, 2023 and December 31, 2022 (in thousands): As of March 31, 2023 As of December 31, 2022 (Unaudited) Credit agreement $ 99,063 $ 99,063 Deferred financing fees (5,506) (5,912) Total debt 93,557 93,151 Less: Current portion — — Long-Term Debt $ 93,557 $ 93,151 |
Schedule of Maturities of Long-term Debt | Scheduled maturities of long-term debt at March 31, 2023 are as follows (in thousands): Maturities of Long-Term Debt (Unaudited) Loan Payments 2027 99,063 Total 99,063 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary of Financial Information by Reportable Segment | A summary of financial information by reportable segment is as follows (in thousands): Three Months Ended March 31, 2023 2022 (Unaudited) Revenue: APUS Segment $ 73,978 $ 73,090 RU Segment 57,467 67,099 HCN Segment 13,140 11,541 Corporate and Other 5,104 3,017 Total Revenue $ 149,689 $ 154,747 Depreciation and amortization: APUS Segment $ 1,400 $ 1,701 RU Segment 5,927 6,079 HCN Segment 290 222 Corporate and Other 139 146 Total Depreciation and amortization $ 7,756 $ 8,148 Income (loss) from operations before interest and income taxes: APUS Segment $ 17,074 $ 13,182 RU Segment (12,864) 891 HCN Segment (1,303) (995) Corporate and Other (8,277) (7,878) Total (loss) income from operations before interest and income taxes $ (5,370) $ 5,200 Interest income (expense): APUS Segment $ 160 $ 39 RU Segment 1 3 HCN Segment 19 2 Corporate and Other (1,959) (3,399) Total Interest expense $ (1,779) $ (3,355) Income tax expense (benefit): APUS Segment $ 5,513 $ 4,674 RU Segment (3,954) 306 HCN Segment (345) (316) Corporate and Other (2,628) (3,624) Total Income tax (benefit) expense $ (1,414) $ 1,040 Capital expenditures: APUS Segment $ 300 $ 441 RU Segment 2,006 1,924 HCN Segment 827 500 Corporate and Other 73 100 Total Capital Expenditures $ 3,206 $ 2,965 |
Summary of Consolidated Assets by Reportable Segment | A summary of the Company’s consolidated assets by reportable segment is as follows (in thousands): As of March 31, 2023 As of December 31, 2022 (Unaudited) Assets: APUS Segment $ 125,170 $ 113,551 RU Segment 297,980 300,625 HCN Segment 64,109 59,820 Corporate and Other 131,263 141,060 Total Assets $ 618,522 $ 615,056 |
Concentration (Tables)
Concentration (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Summary of segment revenues | A summary of APUS Segment revenue derived from students by primary funding source is as follows: Three Months Ended March 31, (Unaudited) 2023 2022 DoD tuition assistance programs 49% 48% VA education benefits 21% 21% Title IV programs 16% 18% Cash and other sources 14% 13% A summary of RU Segment revenue derived from students by primary funding source is as follows: Three Months Ended March 31, (Unaudited) 2023 2022 Title IV programs 74% 74% Cash and other sources 24% 24% VA education benefits 2% 2% A summary of HCN Segment revenue derived from students by primary funding source is as follows: Three Months Ended March 31, (Unaudited) 2023 2022 Title IV programs 79% 79% Cash and other sources 20% 19% VA education benefits 1% 2% |
Nature of the Business (Details
Nature of the Business (Details) | 3 Months Ended |
Mar. 31, 2023 segment campus state | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | segment | 3 |
RU Segment | |
Segment Reporting Information [Line Items] | |
Number of campuses | campus | 22 |
Number of states | state | 6 |
HCN Segment | Ohio | |
Segment Reporting Information [Line Items] | |
Number of campuses | campus | 8 |
Number of states | state | 3 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Escrow deposit | $ 24.2 | |
Line of credit facility | 0.7 | |
Restricted cash, excluding certificates of deposit | 2.2 | $ 2 |
Restricted cash | $ 27.2 | $ 26.9 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Stock-based Compensation Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Award vesting period | 3 years |
Period of accelerated service | 1 year |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 2,224 | $ 2,356 |
Instructional costs and services | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 279 | 459 |
Selling and promotional | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 229 | 296 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 1,716 | $ 1,601 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Incentive-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense in operating income | $ 2,224 | $ 2,356 |
Incentive-Based Compensation Plan | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense in operating income | $ 2,000 | $ 1,800 |
Acquisition Activity - Narrativ
Acquisition Activity - Narrative (Details) - USD ($) | 3 Months Ended | |||||
Jan. 01, 2022 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Aug. 10, 2021 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 112,593,000 | $ 112,593,000 | ||||
Gain on the acquisition | $ 0 | $ 4,533,000 | ||||
Business Combination Bargain Purchase Gain Recognized Statement Of Income Or Comprehensive Income Extensible Enumeration Not Disclosed Flag | Consolidated Statements of Income | |||||
Graduate School USA | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate purchase price | $ 1,000,000 | |||||
Net working capital | 1,900,000 | |||||
Initial cash payment | 500,000 | |||||
Consideration retained by acquirer | 500,000 | |||||
Purchase price consideration, liability | 500,000 | |||||
Goodwill | $ 0 | $ 0 | ||||
Gain on the acquisition | $ 3,800,000 | $ 4,500,000 | ||||
Reduction of gain on acquisition | $ 700,000 |
Acquisition Activity - Assets A
Acquisition Activity - Assets Acquired and Liabilities (Details) $ in Thousands | Jan. 01, 2022 USD ($) |
Assets acquired: | |
Intangible assets | $ 965 |
Graduate School USA | |
Business Acquisition [Line Items] | |
Cash and cash equivalents | 1,000 |
Working capital adjustment | (2,450) |
Total consideration | (1,450) |
Assets acquired: | |
Accounts receivable | 4,282 |
Prepaid expenses | 1,096 |
Property and equipment, net | 400 |
Operating lease assets | 31,635 |
Intangible assets | 965 |
Total assets acquired | 38,378 |
Liabilities assumed: | |
Accounts payable and accrued liabilities | 810 |
Deferred revenue | 1,969 |
Lease liabilities, current | 1,179 |
Lease liabilities, long-term | 30,779 |
Deferred income taxes | 1,263 |
Total liabilities assumed | 36,000 |
Net assets acquired | 2,378 |
Gain on acquisition | $ 3,828 |
Acquisition Activity - Schedule
Acquisition Activity - Schedule of Fair Value of Identified Intangible Assets Acquired (Details) $ in Thousands | Jan. 01, 2022 USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 965 |
Customer contracts and relationships | |
Business Acquisition [Line Items] | |
Useful life | 2 years 6 months |
Identified intangible assets with finite useful life | $ 744 |
Curricula | |
Business Acquisition [Line Items] | |
Useful life | 3 years |
Identified intangible assets with finite useful life | $ 158 |
Trade name | |
Business Acquisition [Line Items] | |
Identified intangible assets with finite useful life | 35 |
Accreditation and licenses | |
Business Acquisition [Line Items] | |
Identified intangible assets with finite useful life | $ 28 |
Trade name | |
Business Acquisition [Line Items] | |
Useful life | 1 year |
Accreditation and licenses | |
Business Acquisition [Line Items] | |
Useful life | 2 years 6 months |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 149,689 | $ 154,747 |
Instructional services, net of grants and scholarships | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 137,703 | 141,252 |
Graduation fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 369 | 335 |
Textbook and other course materials | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 10,701 | 11,957 |
Other fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 916 | 1,203 |
Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 5,104 | 3,017 |
Corporate and Other | Instructional services, net of grants and scholarships | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 5,104 | 3,017 |
Corporate and Other | Graduation fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 0 | 0 |
Corporate and Other | Textbook and other course materials | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 0 | 0 |
Corporate and Other | Other fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 0 | 0 |
APUS | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 73,978 | 73,090 |
APUS | Operating Segments | Instructional services, net of grants and scholarships | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 73,422 | 72,585 |
APUS | Operating Segments | Graduation fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 369 | 335 |
APUS | Operating Segments | Textbook and other course materials | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 0 | 0 |
APUS | Operating Segments | Other fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 187 | 170 |
RU | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 57,467 | 67,099 |
RU | Operating Segments | Instructional services, net of grants and scholarships | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 48,196 | 55,917 |
RU | Operating Segments | Graduation fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 0 | 0 |
RU | Operating Segments | Textbook and other course materials | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 8,707 | 10,294 |
RU | Operating Segments | Other fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 564 | 888 |
HCN | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 13,140 | 11,541 |
HCN | Operating Segments | Instructional services, net of grants and scholarships | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 10,981 | 9,733 |
HCN | Operating Segments | Graduation fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 0 | 0 |
HCN | Operating Segments | Textbook and other course materials | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 1,994 | 1,663 |
HCN | Operating Segments | Other fees | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 165 | $ 145 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 0 | $ 0 |
Deferred revenue | 28,866,000 | 23,760,000 |
Courses in Progress | ||
Disaggregation of Revenue [Line Items] | ||
Future revenue | 17,100,000 | 13,000,000 |
Future Courses | ||
Disaggregation of Revenue [Line Items] | ||
Future revenue | $ 11,800,000 | $ 10,800,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2023 USD ($) campus state | Mar. 31, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | ||
Extension term | 1 year | |
Variable lease payments | $ 0 | |
Lease expense | 5,300,000 | $ 5,000,000 |
Cash paid for amounts included in operating lease liabilities | 4,900,000 | 4,800,000 |
Present value of operating lease liabilities | $ 192,000 | |
Interest rate | 3.75% | |
Finance lease expense | $ 30,000 | $ 30,000 |
RU Segment | ||
Property, Plant and Equipment [Line Items] | ||
Number of campuses | campus | 22 | |
Number of states | state | 6 | |
HCN Segment | Ohio | ||
Property, Plant and Equipment [Line Items] | ||
Number of campuses | campus | 8 | |
Number of states | state | 3 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Operating Leases | |
2023 (remaining) | $ 13,292 |
2024 | 17,851 |
2025 | 16,323 |
2026 | 15,782 |
2027 | 15,183 |
2028 | 13,990 |
2029 and beyond | 52,480 |
Total future minimum lease payments | 144,901 |
Less: imputed interest | (28,850) |
Present value of operating lease liabilities | 116,051 |
Less: lease liabilities, current | (13,409) |
Lease liabilities, long-term | 102,642 |
Finance Leases | |
2023 (remaining) | 86 |
2024 | 113 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
2028 | 0 |
2029 and beyond | 0 |
Total future minimum lease payments | 199 |
Less: imputed interest | (7) |
Present value of operating lease liabilities | 192 |
Less: lease liabilities, current | (108) |
Lease liabilities, long-term | $ 84 |
Leases - Other Information (Det
Leases - Other Information (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Current | |
Operating lease liabilities, current | $ 13,409 |
Finance lease liabilities, current | 108 |
Long-term | |
Operating lease liabilities, long-term | 102,642 |
Finance lease liabilities, long-term | 84 |
Total lease liabilities | $ 116,243 |
Operating leases, weighted average remaining lease term | 8 years 10 months 9 days |
Finance leases, weighted average remaining lease term | 1 year 9 months |
Operating lease weighted average discount rate percent | 4.40% |
Finance lease weighted average discount rate percent | 3.80% |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Lease Liability, Current |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Lease Liability, Current |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Lease liabilities, long-term |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Lease liabilities, long-term |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | ||||||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Sep. 01, 2021 | Aug. 10, 2021 | |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 112,593,000 | $ 112,593,000 | |||||
Amortization | 3,900,000 | $ 4,000,000 | |||||
RU Segment | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | 86,000,000 | $ 217,400,000 | |||||
Impairment of goodwill and intangible assets | 0 | 0 | |||||
Fair value exceeding carrying value | $ 10,000,000 | ||||||
Fair value exceeding carrying value (in percent) | 5% | ||||||
Indefinite-lived intangible assets acquired | 35,500,000 | $ 51,000,000 | |||||
Identified intangible assets with finite useful life | 35,500,000 | ||||||
HCN Segment | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | 26,600,000 | $ 38,600,000 | |||||
Impairment of goodwill and intangible assets | 0 | $ 0 | |||||
Fair value exceeding carrying value | $ 4,900,000 | ||||||
Fair value exceeding carrying value (in percent) | 13% | ||||||
Indefinite-lived intangible assets acquired | $ 3,700,000 | ||||||
Identified intangible assets with finite useful life | 4,400,000 | ||||||
Graduate School USA | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | $ 0 | $ 0 | |||||
Identified intangible assets with finite useful life | $ 1,000,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 40,826 | $ 40,826 |
Accumulated Amortization | 29,257 | 25,313 |
Net Carrying Amount | 11,569 | 15,513 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross carrying amount, before impairment | 54,721 | 54,721 |
Impairment | 15,500 | 15,500 |
Gross/net carrying amount | 39,221 | 39,221 |
Total intangible assets, Gross | 95,547 | 95,547 |
Total intangible assets, Impairment | 15,500 | 15,500 |
Total intangible assets, net | 50,790 | 54,734 |
Trade name | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross carrying amount, before impairment | 28,498 | 28,498 |
Gross/net carrying amount | 28,498 | 28,498 |
Accreditation, licensing, and Title IV | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross carrying amount, before impairment | 26,186 | 26,186 |
Impairment | 15,500 | 15,500 |
Gross/net carrying amount | 10,686 | 10,686 |
Affiliation agreements | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross carrying amount, before impairment | 37 | 37 |
Gross/net carrying amount | 37 | 37 |
Student roster | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 20,000 | 20,000 |
Accumulated Amortization | 15,833 | 13,333 |
Net Carrying Amount | 4,167 | 6,667 |
Curricula | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 14,563 | 14,563 |
Accumulated Amortization | 7,860 | 6,680 |
Net Carrying Amount | 6,703 | 7,883 |
Student and customer contracts and relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 4,614 | 4,614 |
Accumulated Amortization | 4,242 | 4,168 |
Net Carrying Amount | 372 | 446 |
Lead conversions | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 1,500 | 1,500 |
Accumulated Amortization | 1,187 | 1,000 |
Net Carrying Amount | 313 | 500 |
Non-compete agreements | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 86 | 86 |
Accumulated Amortization | 86 | 86 |
Net Carrying Amount | 0 | 0 |
Tradename | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 35 | 35 |
Accumulated Amortization | 35 | 35 |
Net Carrying Amount | 0 | 0 |
Accreditation and licenses | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 28 | 28 |
Accumulated Amortization | 14 | 11 |
Net Carrying Amount | $ 14 | $ 17 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill by Reportable Segment (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 112,593 |
Goodwill acquired | 0 |
Impairment | 0 |
Adjustments | 0 |
Ending balance | 112,593 |
APUS Segment | |
Goodwill [Roll Forward] | |
Beginning balance | 0 |
Goodwill acquired | 0 |
Impairment | 0 |
Adjustments | 0 |
Ending balance | 0 |
RU Segment | |
Goodwill [Roll Forward] | |
Beginning balance | 86,030 |
Goodwill acquired | 0 |
Impairment | 0 |
Adjustments | 0 |
Ending balance | 86,030 |
HCN Segment | |
Goodwill [Roll Forward] | |
Beginning balance | 26,563 |
Goodwill acquired | 0 |
Impairment | 0 |
Adjustments | 0 |
Ending balance | $ 26,563 |
Earnings Per Common Share - Sch
Earnings Per Common Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings per common share | ||
Net (loss) income | $ (5,740) | $ 5,333 |
Preferred stock dividends | 1,457 | 0 |
Net (loss) income available to common shareholders | $ (7,197) | $ 5,333 |
Basic weighted average shares outstanding (in shares) | 18,982 | 18,805 |
(Loss) earnings per common share (in dollars per share) | $ (0.38) | $ 0.28 |
Diluted earnings per common share | ||
Net (loss) income available to common shareholders | $ (7,197) | $ 5,333 |
Basic weighted average shares outstanding (in shares) | 18,982 | 18,805 |
Effect of dilutive restricted stock and options (in shares) | 90 | 74 |
Diluted weighted average shares outstanding (in shares) | 19,072 | 18,879 |
Diluted (loss) earnings per common share (in dollars per share) | $ (0.38) | $ 0.28 |
Earnings Per Common Share - Ant
Earnings Per Common Share - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive stock options (in shares) | 802 | 276 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive stock options (in shares) | 136 | 103 |
Restricted shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive stock options (in shares) | 666 | 173 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Sep. 30, 2021 | |
Debt Instrument, Redemption [Line Items] | ||||
Principal amount | $ 700,000 | |||
Long-term debt | 93,557,000 | $ 93,151,000 | ||
Repayments of Long-Term Debt | $ 28,000 | $ 2,216,000 | ||
Maximum total net leverage ratio | 2 | |||
Reclassification out of Accumulated Other Comprehensive Income | ||||
Debt Instrument, Redemption [Line Items] | ||||
Interest expense | $ 600,000 | |||
Interest expense expected to be reclassified over the next 12 months | 2,600,000 | |||
Interest Rate Cap | ||||
Debt Instrument, Redemption [Line Items] | ||||
Derivative notional amount | $ 87,500,000 | |||
Derivative asset, fair value | $ 3,900,000 | 4,500,000 | ||
Interest Rate Cap | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument, Redemption [Line Items] | ||||
Spread on derivative instrument | 2% | |||
Secured Debt | ||||
Debt Instrument, Redemption [Line Items] | ||||
Floor interest rate | 10.13% | |||
Line of Credit | Revolving Credit Facility | ||||
Debt Instrument, Redemption [Line Items] | ||||
Current borrowing capacity | $ 20,000,000 | |||
Deferred financing fees | 500,000 | |||
Long-term debt | 0 | 0 | ||
Senior Secured Term Loan Facility | Secured Debt | ||||
Debt Instrument, Redemption [Line Items] | ||||
Principal amount of debt | 175,000,000 | |||
Deferred financing fees | $ 5,506,000 | 5,912,000 | ||
Floor interest rate | 0.75% | |||
Applicable interest rate | 5.50% | |||
Variable rate | 2% | |||
Commitment fee percentage | 0.50% | |||
Repayments of Long-Term Debt | $ 65,000,000 | |||
Subfacility For Swing Line Loans | Line of Credit | Revolving Credit Facility | ||||
Debt Instrument, Redemption [Line Items] | ||||
Principal amount | $ 5,000,000 |
Long-Term Debt - Long term debt
Long-Term Debt - Long term debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Credit agreement | $ 99,063 | |
Total debt | 93,557 | $ 93,151 |
Less: Current portion | 0 | 0 |
Long-Term Debt | 93,557 | 93,151 |
Senior Secured Term Loan Facility | Secured Debt | ||
Debt Instrument [Line Items] | ||
Credit agreement | 99,063 | 99,063 |
Deferred financing fees | $ (5,506) | $ (5,912) |
Long-Term Debt - Maturities of
Long-Term Debt - Maturities of long term debt (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2027 | $ 99,063 |
Total | $ 99,063 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Summary o
Segment Information - Summary of Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue: | ||
Total Revenue | $ 149,689 | $ 154,747 |
Depreciation and amortization: | ||
Total Depreciation and amortization | 7,756 | 8,148 |
Income (loss) from operations before interest and income taxes: | ||
Total (loss) income from operations before interest and income taxes | (5,370) | 5,200 |
Interest income (expense): | ||
Total Interest expense | (1,779) | (3,355) |
Income tax expense (benefit): | ||
Total Income tax (benefit) expense | (1,414) | 1,040 |
Capital expenditures: | ||
Total Capital Expenditures | 3,206 | 2,965 |
Corporate and Other | ||
Revenue: | ||
Total Revenue | 5,104 | 3,017 |
Depreciation and amortization: | ||
Total Depreciation and amortization | 139 | 146 |
Income (loss) from operations before interest and income taxes: | ||
Total (loss) income from operations before interest and income taxes | (8,277) | (7,878) |
Interest income (expense): | ||
Total Interest expense | (1,959) | (3,399) |
Income tax expense (benefit): | ||
Total Income tax (benefit) expense | (2,628) | (3,624) |
Capital expenditures: | ||
Total Capital Expenditures | 73 | 100 |
APUS Segment | Operating Segments | ||
Revenue: | ||
Total Revenue | 73,978 | 73,090 |
Depreciation and amortization: | ||
Total Depreciation and amortization | 1,400 | 1,701 |
Income (loss) from operations before interest and income taxes: | ||
Total (loss) income from operations before interest and income taxes | 17,074 | 13,182 |
Interest income (expense): | ||
Total Interest expense | 160 | 39 |
Income tax expense (benefit): | ||
Total Income tax (benefit) expense | 5,513 | 4,674 |
Capital expenditures: | ||
Total Capital Expenditures | 300 | 441 |
RU Segment | Operating Segments | ||
Revenue: | ||
Total Revenue | 57,467 | 67,099 |
Depreciation and amortization: | ||
Total Depreciation and amortization | 5,927 | 6,079 |
Income (loss) from operations before interest and income taxes: | ||
Total (loss) income from operations before interest and income taxes | (12,864) | 891 |
Interest income (expense): | ||
Total Interest expense | 1 | 3 |
Income tax expense (benefit): | ||
Total Income tax (benefit) expense | (3,954) | 306 |
Capital expenditures: | ||
Total Capital Expenditures | 2,006 | 1,924 |
HCN Segment | Operating Segments | ||
Revenue: | ||
Total Revenue | 13,140 | 11,541 |
Depreciation and amortization: | ||
Total Depreciation and amortization | 290 | 222 |
Income (loss) from operations before interest and income taxes: | ||
Total (loss) income from operations before interest and income taxes | (1,303) | (995) |
Interest income (expense): | ||
Total Interest expense | 19 | 2 |
Income tax expense (benefit): | ||
Total Income tax (benefit) expense | (345) | (316) |
Capital expenditures: | ||
Total Capital Expenditures | $ 827 | $ 500 |
Segment Information - Summary_2
Segment Information - Summary of Consolidated Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Total Assets | $ 618,522 | $ 615,056 |
Corporate and Other | ||
Assets: | ||
Total Assets | 131,263 | 141,060 |
APUS Segment | Operating Segments | ||
Assets: | ||
Total Assets | 125,170 | 113,551 |
RU Segment | Operating Segments | ||
Assets: | ||
Total Assets | 297,980 | 300,625 |
HCN Segment | Operating Segments | ||
Assets: | ||
Total Assets | $ 64,109 | $ 59,820 |
Concentration - Summary of Segm
Concentration - Summary of Segment Revenue Derived from Students by Primary Funding Source (Details) - Revenue - Customer Concentration Risk | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
APUS Segment | DoD tuition assistance programs | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 49% | 48% |
APUS Segment | VA education benefits | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 21% | 21% |
APUS Segment | Title IV programs | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 16% | 18% |
APUS Segment | Cash and other sources | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 14% | 13% |
RU Segment | VA education benefits | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 2% | 2% |
RU Segment | Title IV programs | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 74% | 74% |
RU Segment | Cash and other sources | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 24% | 24% |
HCN Segment | VA education benefits | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 1% | 2% |
HCN Segment | Title IV programs | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 79% | 79% |
HCN Segment | Cash and other sources | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 20% | 19% |
Preferred Stock (Details)
Preferred Stock (Details) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | ||
Dec. 28, 2022 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |
Preferred stock dividend rate percentage | 14.88% | ||
Dividends, preferred stock | $ 1,500 | ||
Series A Preferred Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Preferred stock value issued | shares | 40 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||
Preferred stock dividend rate percentage | 14.55% | ||
Increase to annual preferred stock dividend rate | 2% | ||
Increase to quarterly preferred stock dividend rate | 0.50% | ||
Preferred stock liquidation preference | 60,762 | $ 62,235 | |
Liquidation preference, make-whole payment | $ 17,800 | $ 19,300 | |
Preferred stock, liquidation preference, dividend rate spread | 6% | ||
Percentage of outstanding shares with certain exceptions | 60% | ||
Ratio of indebtedness to net capital | 0.75 | ||
Payments for repurchase of common stock | $ 30,000 | ||
Series A Preferred Stock | Equipment Trust Certificate | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Preferred stock dividend, interest rate spread | 10% | ||
Series A Preferred Stock | Equipment Trust Certificate | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Preferred stock dividend, interest rate spread | 6% | ||
Series A Preferred Stock | Equipment Trust Certificate | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Preferred stock dividend, interest rate spread | 25% |