American Public Education Reports Third Quarter 2012 Results

  American Public Education Reports Third Quarter 2012 Results

Business Wire

CHARLES TOWN, W. Va. -- November 08, 2012

American Public Education, Inc. (NASDAQ: APEI) – parent company of online
learning provider American Public University System (APUS), which operates
through American Military University (AMU) and American Public University
(APU) – announced financial results for the quarter ended September 30, 2012.

Recent Highlights:

  *Net course registrations ^ increased to approximately 103,000 in the third
    quarter of 2012, a year-over-year increase of 17%.
  *Net course registrations by new students in the third quarter of 2012
    increased to approximately 24,000, a slight increase over the same period
    of 2011.
  *Third quarter 2012 revenues increased 18% to $77.1 million, compared to
    $65.3 million in the third quarter of 2011.
  *Income from operations before interest income and income taxes in the
    third quarter of 2012 increased 17% to $17.5 million, compared to $15.0
    million in the same period of 2011.
  *Net income for the third quarter of 2012 was $10.8 million, or $0.60 per
    diluted share, compared to $10.9 million, or $0.60 per diluted share, in
    the same period of 2011.
  *American Public University announced that it renewed its multi-year
    partnership agreement with Walmart Stores, Inc. to offer academic courses
    and degree programs to its associates through the Lifelong Learning
    Partnership.
  *American Public Education announced a focus on international students,
    including a new investment in, and relationship with, New Horizons
    Worldwide, Inc., a global independent I.T. training company.

Financial and Other Results:

Total revenues for the third quarter of 2012 increased 18% to $77.1 million,
compared to total revenues of $65.3 million in the third quarter of 2011.
Income from operations before interest income and income taxes in the third
quarter of 2012 increased 17% to $17.5 million, compared to $15.0 million in
the same period of 2011. Stock-based compensation expense reduced operating
income by $940,000 in the third quarter of 2012 and $812,000 in the third
quarter of 2011.

Net income for the third quarter of 2012 was $10.8 million, or $0.60 per
diluted share, which includes $0.03 per diluted share in stock-based
compensation expense, net of tax. This compares to net income of $10.9
million, or $0.60 per diluted share for the third quarter of 2011, including
$0.03 per diluted share in stock-based compensation expense, net of tax. The
third quarter of 2011 included a tax benefit of approximately $1.8 million, or
$0.10 per diluted share, resulting from state tax, and research and
development tax credits recorded during the third quarter of 2011. The
weighted average diluted shares outstanding for the third quarter of 2012 and
2011 were approximately 18.0 million and 18.3 million, respectively.

For the nine months ended September 30, 2012, total revenues were $227.5
million, an increase of 23% compared to total revenues of $184.7 million in
the same period of 2011. Income from operations before interest income and
income tax for the nine months ended September 30, 2012 increased to $47.4
million, compared to $43.0 million in the same period of 2011. Stock-based
compensation expense reduced each period's operating income by $2.9 million
and $2.4 million, respectively.

Net income for the nine months ended September 30, 2012 to $29.1 million, or
$1.61 per diluted share, which includes $0.10 per diluted share in stock-based
compensation expense, net of tax. This compares to net income of $27.8
million, or $1.52 per diluted share, in the same period of 2011, including
$0.08 per diluted share in stock-based compensation expense, net of tax. The
weighted average diluted shares outstanding for the nine months ended
September 30, 2012 and 2011 were approximately 18.1 million and 18.3 million,
respectively.

Total cash and cash equivalents as of September 30, 2012 were approximately
$101.6 million with no long-term debt. Cash from operations for the nine
months ended September 30, 2012 was approximately $34.5 million, compared to
$47.5 million in the same period of 2011. Capital expenditures were
approximately $28.5 million for the nine months ended September 30, 2012,
compared to $13.8 million in the prior year period. Depreciation and
amortization was $8.1 million for the nine months ended September 30, 2012 and
$6.7 million for the same period of 2011.

During the third quarter of 2012, APEI made a $6.75 million, or 19.9% minority
investment, in NWHW Holdings, Inc., which was formed to acquire New Horizons
Worldwide, Inc., a global, independent IT-training company. In connection with
that investment, APEI also extended $6.0 million in credit to New Horizons
Worldwide in exchange for a subordinated note.

Net Course Registrations:
For the three months ended September                         
30,
                                            2012          2011        % Change
Net Course Registrations by New             24,000        23,900      0%
Students
Net Course Registrations                    103,000       87,800      17%
                                                                      
For the nine months ended September
30,
                                            2012          2011        % Change
Net Course Registrations from New           64,100        60,600      6%
Students
Net Course Registrations                    296,900       247,900     20%
                                                                      

Note: Net course registrations represent the aggregate number of classes in
which students remain enrolled after the date by which they may drop the
course without financial penalty. Net course registrations and net course
registration growth rates include registrations for certain one-credit courses
(non-lab courses) and other non-credit registrations in the current and prior
year periods.

Fourth Quarter 2012 Outlook:

The following statements are based on current expectations. These statements
are forward-looking and actual results may differ materially. The Company
undertakes no obligation to update publicly any forward-looking statements for
any reason.

American Public Education anticipates fourth quarter 2012 net course
registrations by new students to be between -7% and -3% year-over-year; net
course registrations to increase between approximately 8% and 12%
year-over-year; revenues to increase between approximately 9% and 13% over the
prior year period; and net income to be between $0.64 and $0.67 per diluted
share. In addition, the Company anticipates full-year 2012 net income to be
between $2.25 and $2.28 per diluted share.

Webcast:

A live webcast of the Company’s third quarter earnings conference call will be
broadcast today at 9:00 a.m. Eastern time. This call will be open to listeners
who log in through the Company's investor relations website,
www.AmericanPublicEducation.com.

A replay of the live webcast will also be available starting approximately one
hour after the conclusion of the live conference call. The replay will be
archived and available to listeners for one year.

American Public Education, Inc.

American Public Education, Inc. (NASDAQ: APEI) is an online provider of higher
education focused primarily on serving the military and public service
communities. American Public University System (APUS), wholly owned by APEI,
operates through American Military University (AMU) and American Public
University (APU). APUS serves more than 100,000 adult learners worldwide and
offers 87 degree programs in fields ranging from homeland security, military
studies, intelligence, and criminal justice to technology, business
administration, public health, and liberal arts. Nationally recognized for its
best practices in online higher education, APUS provides an affordable
education through classes taught by experienced faculty who are committed to
the academic achievement of their students.

American Public University System is accredited by The Higher Learning
Commission and is a member of the North Central Association of Colleges and
Schools (www.ncahlc.org). For more information about APUS graduation rates,
median debt of students who completed programs, and other important
information, visit www.apus.edu/disclosure.

Forward Looking Statements

Statements made in this press release regardingAmerican Public Education,
Inc., or its subsidiaries,that are not historical facts are forward-looking
statements based on current expectations, assumptions, estimates and
projections aboutAmerican Public Education, Inc.and the industry. These
forward-looking statements are subject to risks and uncertainties that could
cause actual future events or results to differ materially from such
statements. Forward-looking statements can be identified by words such as
"anticipate", "believe", "could", "estimate", "expect", "intend", "may",
"should", "will" and "would". These forward-looking statements include,
without limitation, statements regarding expected growth, expected revenues
and expected earnings. Actual results could differ materially from those
expressed or implied by these forward-looking statements as a result of
various factors, including the various risks described in the "Risk Factors"
section and elsewhere in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2011, Form 10-Q for the quarter ended September 30, 2012,
and other filings with the SEC. The Company undertakes no obligation to update
publicly any forward-looking statements for any reason, even if new
information becomes available or other events occur in the future.


                                                                         
  American Public Education, Inc.
  Consolidated Statement of Income
  (In thousands, except per share data)
                                                     
                                               Three Months Ended
                                               September 30,
                                               2012             2011
                                               (Unaudited)
                                                                         
  Revenues                                     $ 77,122         $ 65,251
  Costs and expenses:
  Instructional costs and services               26,436           23,948
  Selling and promotional                        14,430           11,705
  General and administrative                     15,978           12,160
  Depreciation and amortization                 2,760           2,404
                                                                         
  Total costs and expenses                      59,604          50,217
                                                                         
  Income from operations before
  interest income and income taxes               17,518           15,034
  Interest income, net                          30              35
                                                                         
  Income before income taxes                     17,548           15,069
  Income tax expense                            6,724           4,130
                                                                         
  Net income                                   $ 10,824         $ 10,939
                                                                         
                                                                         
  Net Income per common share:
  Basic                                        $ 0.61           $ 0.61
                                                                         
  Diluted                                      $ 0.60           $ 0.60
                                                                         
  Weighted average number of
  common shares:
  Basic                                         17,706          17,843
                                                                         
  Diluted                                       17,951          18,253


                                                                           
  American Public Education, Inc.
  Consolidated Statement of Income
  (In thousands, except per share data)
                                                      
                                               Nine Months Ended
                                               September 30,
                                               2012              2011
                                               (Unaudited)
                                                                           
  Revenues                                     $ 227,516         $ 184,710
  Costs and expenses:
  Instructional costs and services               80,538            69,064
  Selling and promotional                        43,276            32,310
  General and administrative                     48,191            33,581
  Depreciation and amortization                 8,131            6,739
                                                                           
  Total costs and expenses                      180,136          141,694
                                                                           
  Income from operations before
  interest income and income taxes               47,380            43,016
  Interest income, net                          17               87
                                                                           
  Income before income taxes                     47,397            43,103
  Income tax expense                            18,249           15,331
                                                                           
  Net income                                   $ 29,148          $ 27,772
                                                                           
                                                                           
  Net Income per common share:
  Basic                                        $ 1.64            $ 1.55
                                                                           
  Diluted                                      $ 1.61            $ 1.52
                                                                           
  Weighted average number of
  common shares:
  Basic                                         17,824           17,888
                                                                           
  Diluted                                       18,104           18,321
                                                                           

Contact:

American Public Education, Inc.
Harry T. Wilkins, CPA
Executive Vice President and Chief Financial Officer
304-724-3722
or
Christopher L. Symanoskie
Associate Vice President, Investor Relations
703-334-3880