AMERICAN PUBLIC EDUCATION, INC. (APEI, Financial) filed Quarterly Report for the period ended 2009-09-30.
American Public Education Inc. is an online provider of higher education focused primarily on serving the military and public service communities. American Public University System wholly owned by APEI comprises two universities American Military University and American Public University. Nationally and regionally accredited APUS serves over 25000 part-time students who live and work in all 50 states and more than 130 countries; and offers 57 degree programs and 48 certificate programs in fields ranging from homeland security military studies intelligence and criminal justice to technology business administration public health and liberal arts. American Public Education, Inc. has a market cap of $580.6 million; its shares were traded at around $31.92 with a P/E ratio of 31 and P/S ratio of 8.4.
Our difficulty in forecasting future growth rates and operating margins is in part due to our inability to fully estimate the actual impact of gaining access to Title IV programs. We first became eligible to use Title IV funds beginning with classes that started in November 2006. Because of our limited history with Title IV programs and because we cannot estimate the growth of new students that may result from our participation in Title IV programs, estimating the costs and expenses associated with administering Title IV programs and complying with the associated regulations is difficult. For the year ended December 31, 2008, 14% of our net course registrations were from students using financial aid under Title IV programs. For the three and nine months ended September 30, 2009, 20% and 18%, or approximately 10,900 and 26,800, respectively, of our net course registrations were from students using financial aid under the Title IV programs compared to 14% and 13%, or approximately 5,600 and 13,800 for the three and nine months ended September 30, 2008, respectively. This represents an increase of 94.6% and 94.2%, respectively.
Costs and Expenses. Costs and expenses were $28.1 million for the three months ended September 30, 2009, an increase of $6.9 million, or 33%, compared to $21.2 million for the three months ended September 30, 2008. Costs and expenses as a percentage of revenues decreased to 77.0% for the three months ended September 30, 2009 from 77.4% for the three months ended September 30, 2008. This percentage decrease resulted from the factors described below.
General and administrative expenses. Our general and administrative expenses for the three months ended September 30, 2009 were $6.5 million representing an increase of 16% from $5.6 million for the three months ended September 30, 2008. The increase in expense was a result of an increase in expenditures for stock-based compensation, recruiting, financial aid processing fees, and an increase in expenditures for technology, staffing, and facilities required to support a larger student body. General and administrative expenses as a percentage of revenues decreased to 17.7% for the three months ended September 30, 2009 from 20.4% for the three months ended September 30, 2008. The decrease was primarily due to efficiencies realized through a higher volume of students and the number of staff and related expenses increasing at a slower rate than enrollment.
Costs and Expenses. Costs and expenses were $79.4 million for the nine months ended September 30, 2009; an increase of $21.2 million, or 36%, compared to $58.2 million for the nine months ended September 30, 2008. Costs and expenses as a percentage of revenues decreased to 75.4% for the nine months ended September 30, 2009 from 76.9% for the nine months ended September 30, 2008. This percentage decrease resulted from the factors described below.
General and administrative expenses. Our general and administrative expenses for the nine months ended September 30, 2009 were $18.6 million representing an increase of 20% from $15.5 million for the nine months ended September 30, 2008. The increase in expense was a result of an increase in stock-based compensation, recruiting, professional services, financial aid processing fees, and an increase in expenditures for technology, staffing, and facilities required to support a larger student body. General and administrative expenses as a percentage of revenues decreased to 17.7% for the nine months ended September 30, 2009 from 20.4% for the nine months ended September 30, 2008. The decrease was primarily due to efficiencies realized through a higher volume of students and the number of staff and related expenses increasing at a slower rate than revenue.
Read the The complete ReportAPEI is in the portfolios of Ron Baron of Baron Funds.
American Public Education Inc. is an online provider of higher education focused primarily on serving the military and public service communities. American Public University System wholly owned by APEI comprises two universities American Military University and American Public University. Nationally and regionally accredited APUS serves over 25000 part-time students who live and work in all 50 states and more than 130 countries; and offers 57 degree programs and 48 certificate programs in fields ranging from homeland security military studies intelligence and criminal justice to technology business administration public health and liberal arts. American Public Education, Inc. has a market cap of $580.6 million; its shares were traded at around $31.92 with a P/E ratio of 31 and P/S ratio of 8.4.
Highlight of Business Operations:
Net course registrations increased 42% for the three month and nine month periods ended September 30, 2009 over the three month and nine month periods ended September 30, 2008. Our revenue increased from $27.4 million to $36.5 million, or by 33%, and $75.6 million to $105.3 million, or by 39% for the three and nine month period ended September 30, 2009 over the three month and nine month period ended September 30, 2008, respectively. Operating margins increased to 23.0% from 22.6% and to 24.6% from 23.1% for the three month and nine month period ended September 30, 2009 over the three and nine month period ended September 30, 2008, respectively.Our difficulty in forecasting future growth rates and operating margins is in part due to our inability to fully estimate the actual impact of gaining access to Title IV programs. We first became eligible to use Title IV funds beginning with classes that started in November 2006. Because of our limited history with Title IV programs and because we cannot estimate the growth of new students that may result from our participation in Title IV programs, estimating the costs and expenses associated with administering Title IV programs and complying with the associated regulations is difficult. For the year ended December 31, 2008, 14% of our net course registrations were from students using financial aid under Title IV programs. For the three and nine months ended September 30, 2009, 20% and 18%, or approximately 10,900 and 26,800, respectively, of our net course registrations were from students using financial aid under the Title IV programs compared to 14% and 13%, or approximately 5,600 and 13,800 for the three and nine months ended September 30, 2008, respectively. This represents an increase of 94.6% and 94.2%, respectively.
Costs and Expenses. Costs and expenses were $28.1 million for the three months ended September 30, 2009, an increase of $6.9 million, or 33%, compared to $21.2 million for the three months ended September 30, 2008. Costs and expenses as a percentage of revenues decreased to 77.0% for the three months ended September 30, 2009 from 77.4% for the three months ended September 30, 2008. This percentage decrease resulted from the factors described below.
General and administrative expenses. Our general and administrative expenses for the three months ended September 30, 2009 were $6.5 million representing an increase of 16% from $5.6 million for the three months ended September 30, 2008. The increase in expense was a result of an increase in expenditures for stock-based compensation, recruiting, financial aid processing fees, and an increase in expenditures for technology, staffing, and facilities required to support a larger student body. General and administrative expenses as a percentage of revenues decreased to 17.7% for the three months ended September 30, 2009 from 20.4% for the three months ended September 30, 2008. The decrease was primarily due to efficiencies realized through a higher volume of students and the number of staff and related expenses increasing at a slower rate than enrollment.
Costs and Expenses. Costs and expenses were $79.4 million for the nine months ended September 30, 2009; an increase of $21.2 million, or 36%, compared to $58.2 million for the nine months ended September 30, 2008. Costs and expenses as a percentage of revenues decreased to 75.4% for the nine months ended September 30, 2009 from 76.9% for the nine months ended September 30, 2008. This percentage decrease resulted from the factors described below.
General and administrative expenses. Our general and administrative expenses for the nine months ended September 30, 2009 were $18.6 million representing an increase of 20% from $15.5 million for the nine months ended September 30, 2008. The increase in expense was a result of an increase in stock-based compensation, recruiting, professional services, financial aid processing fees, and an increase in expenditures for technology, staffing, and facilities required to support a larger student body. General and administrative expenses as a percentage of revenues decreased to 17.7% for the nine months ended September 30, 2009 from 20.4% for the nine months ended September 30, 2008. The decrease was primarily due to efficiencies realized through a higher volume of students and the number of staff and related expenses increasing at a slower rate than revenue.
Read the The complete ReportAPEI is in the portfolios of Ron Baron of Baron Funds.
