Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 7-May-15 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | APEI | |
Entity Registrant Name | AMERICAN PUBLIC EDUCATION INC | |
Entity Central Index Key | 1201792 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 17,146,418 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents (Note 2) | $112,337 | $115,634 |
Accounts receivable, net of allowance of $13,550 in 2015 and $10,699 in 2014 | 9,241 | 6,130 |
Prepaid expenses | 6,954 | 6,379 |
Income tax receivable | 1,947 | 2,029 |
Deferred income taxes | 6,009 | 6,046 |
Total current assets | 136,488 | 136,218 |
Property and equipment, net | 104,278 | 102,424 |
Investments | 12,013 | 12,051 |
Goodwill | 38,634 | 38,634 |
Other assets, net | 9,094 | 8,577 |
Total assets | 300,507 | 297,904 |
Current liabilities: | ||
Accounts payable | 6,251 | 11,029 |
Accrued liabilities | 15,017 | 13,416 |
Deferred revenue and student deposits | 23,741 | 23,805 |
Total current liabilities | 45,009 | 48,250 |
Deferred income taxes | 16,031 | 15,436 |
Total liabilities | 61,040 | 63,686 |
Commitments and contingencies (Note 2) | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value; Authorized shares - 10,000; no shares issued or outstanding | ||
Common stock, $.01 par value; Authorized shares - 100,000; 17,146 issued and outstanding in 2015; 17,152 issued and outstanding in 2014 | 171 | 172 |
Additional paid-in capital | 169,279 | 169,654 |
Retained earnings | 70,017 | 64,392 |
Total stockholders' equity | 239,467 | 234,218 |
Total liabilities and stockholders' equity | $300,507 | $297,904 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Per Share data, unless otherwise specified | ||
Accounts receivable, allowance | $13,550 | $10,699 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, Authorized shares | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, Authorized shares | 100,000 | 100,000 |
Common stock, issued | 17,146 | 17,152 |
Common stock, outstanding | 17,146 | 17,152 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue | $85,444 | $88,553 |
Costs and expenses: | ||
Instructional costs and services | 30,260 | 31,348 |
Selling and promotional | 17,019 | 17,067 |
General and administrative | 19,105 | 19,524 |
Depreciation and amortization | 4,589 | 3,889 |
Total costs and expenses | 70,973 | 71,828 |
Income from operations before interest income and income taxes | 14,471 | 16,725 |
Interest income | 10 | 81 |
Income before income taxes | 14,481 | 16,806 |
Income tax expense | 5,650 | 6,327 |
Equity investment loss, net of taxes | 38 | 43 |
Net income | $8,793 | $10,436 |
Net Income per common share: | ||
Basic | $0.51 | $0.59 |
Diluted | $0.51 | $0.59 |
Weighted average number of common shares: | ||
Basic | 17,183,952 | 17,599,199 |
Diluted | 17,353,529 | 17,805,473 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities | ||
Net income | $8,793 | $10,436 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,589 | 3,889 |
Stock-based compensation | 1,394 | 1,156 |
Investment loss | 38 | 43 |
Deferred income taxes | 632 | 486 |
Other | 25 | 35 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net of allowance for bad debt | -3,111 | -3,826 |
Prepaid expenses and other assets | -800 | -1,071 |
Income tax receivable | 82 | 3,215 |
Accounts payable | -4,778 | 848 |
Accrued liabilities | 346 | -6,340 |
Income taxes payable | 1,928 | |
Deferred revenue and student deposits | -64 | 1,650 |
Net cash provided by operating activities | 7,146 | 12,449 |
Investing activities | ||
Capital expenditures | -5,288 | -4,612 |
Equity investment | -120 | |
Note receivable | -380 | |
Capitalized program development costs and other assets | -138 | -128 |
Net cash used in investing activities | -5,426 | -5,240 |
Financing activities | ||
Cash paid for repurchase of common stock | -4,668 | -2,647 |
Cash received from issuance of common stock | 45 | |
Excess (tax)/tax benefit from stock-based compensation | -349 | 253 |
Net cash used in financing activities | -5,017 | -2,349 |
Net increase/(decrease) in cash and cash equivalents | -3,297 | 4,860 |
Cash and cash equivalents at beginning of period | 115,634 | 94,820 |
Cash and cash equivalents at end of period | 112,337 | 99,680 |
Supplemental disclosure of cash flow information | ||
Income taxes paid | $5,285 | $412 |
Nature_of_the_Business
Nature of the Business | 3 Months Ended | |
Mar. 31, 2015 | ||
Nature of the Business | 1. Nature of the Business | |
American Public Education, Inc., or APEI, which together with its subsidiaries is referred to as the “Company”, is a provider of online and campus-based postsecondary education to approximately 113,080 students through the operations of two subsidiary institutions: | ||
● | American Public University System, Inc., or APUS, provides online postsecondary education directed primarily at the needs of the military and public safety communities through American Military University, or AMU, and American Public University, or APU. APUS is regionally accredited by the Higher Learning Commission. | |
● | National Education Seminars, Inc., which is referred to in these financial statements as Hondros College of Nursing, or HCON, provides nursing education to students at four campuses in the State of Ohio as well as online to serve the needs of the nursing and healthcare community. HCON is nationally accredited by the Accrediting Council of Independent Colleges and Schools and the RN-to-BSN Program is accredited by the Commission on Collegiate Nursing Education. HCON was acquired by APEI on November 1, 2013. | |
The Company’s institutions are licensed or otherwise authorized, or are in the process of obtaining such licenses or authorizations, to offer postsecondary education programs by state authorities to the extent the Company believes such licenses or authorizations are required, and 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. | ||
Our operations are organized into two reportable segments: | ||
● | American Public Education Segment, or APEI Segment. This segment reflects the historical operations of APEI prior to the acquisition of HCON and reflects operational activities at APUS, other corporate activities, and minority investments. | |
● | Hondros College of Nursing Segment, or HCON Segment. This segment reflects the operational activities of HCON. |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Basis of Presentation | 2. Basis of Presentation | |||
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. All intercompany transactions have been eliminated in consolidation. The financial statements do not include all of the information and footnotes required by GAAP for complete 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 consolidated results of operations, financial position 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, 2015. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and footnotes in its audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2014. | ||||
Use of Estimates | ||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | ||||
Recent Accounting Pronouncements | ||||
In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. As originally issued, ASU 2014-09 would be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early adoption not permitted. Accordingly, the standard would only be effective for the Company for periods beginning on or after January 1, 2017. | ||||
However, on April 1, 2015, the FASB voted to propose a one-year deferral of the effective date of the new revenue recognition standard. Under the FASB proposal, public companies would apply the new revenue standard to annual reporting periods beginning after December 15, 2017, and to all interim reporting periods within the year of adoption. Accordingly, if the proposal is adopted, the revised revenue recognition standard will be effective for the Company for the year ending December 31, 2018, with early adoption permitted for annual periods beginning after December 16, 2016. The revised standard will be effective for all interim periods within the year of adoption. We will evaluate the impact that the standard will have on our financial condition, results of operations, and disclosures. | ||||
There have been no other applicable material pronouncements since the Company's Annual Report on Form 10-K for the year ended December 31, 2014. | ||||
Revenue Recognition - APEI Segment | ||||
APUS recognizes revenue on a pro rata basis over the period of its courses as APUS completes the tasks entitling it to the benefits represented by such revenue. If a student withdraws during the academic term, APUS recognizes as revenue the remaining non-refundable amount due from the student in the period the withdrawal occurs. The calculation of the remaining non-refundable amount is based upon the APUS student refund policy. For those students who have an outstanding receivable balance at the date of withdrawal, APUS assesses collectability and only recognizes as revenue those amounts where collectability is reasonably assured based on APUS’s history with similar student accounts. This policy was implemented effective January 1, 2015. Prior to this, APUS recognized revenue for all student withdrawals and established an allowance for those receivables considered uncollectible. The Company does not believe that this change in policy will have a material effect on its results of operations or financial condition. | ||||
Restricted Cash | ||||
Cash and cash equivalents 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 its subsidiary institution's program participation agreements with the U.S. Department of Education. Restricted cash on our Consolidated Balance Sheets as of March 31, 2015 (unaudited) and December 31, 2014 is $2.6 million and $3.9 million, respectively. Changes in restricted cash that represent funds held for students as described above are included in cash flows from operating activities on our Consolidated Statements of Cash Flows because these restricted funds are a core activity of our operations. | ||||
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 cost and expenses associated with any such contingency. | ||||
From time to time, the Company may be involved in litigation in the normal course of its business. The Company is not aware of any pending or threatened litigation matters the resolution of which, in the opinion of management, will have a material adverse effect on the Company’s business, operations, financial condition or cash flows. | ||||
Concentration | ||||
APUS students utilize various payment sources and programs to finance tuition. These programs include funds from Department of Defense, or DoD, tuition assistance programs, education benefit programs administered by the U.S. Department of Veterans Affairs, or VA, and federal student aid from Title IV programs, as well as cash and other sources. Reductions in or changes to DoD tuition assistance, VA education benefits, Title IV programs and other payment sources could have a significant impact on the Company’s business, operations, financial condition or cash flows. A summary of APEI Segment revenue derived from students by primary funding source for the quarters ended March 31, 2015 and March 31, 2014 is as follows (unaudited): | ||||
Three Months Ended March 31, | ||||
2015 | 2014 | |||
Title IV programs | 33% | 35% | ||
DoD tuition assistance programs | 35% | 36% | ||
VA education benefits | 20% | 17% | ||
Cash and other sources | 12% | 12% | ||
As of March 31, 2015, approximately 86% of the HCON Segment’s revenue was derived from students who received federal student aid. |
Net_Income_Per_Common_Share
Net Income Per Common Share | 3 Months Ended |
Mar. 31, 2015 | |
Net Income Per Common Share | 3. Net Income Per Common Share |
Basic net income per common share is based on the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share increases the shares used in the per share calculation by the dilutive effects of options and restricted stock awards. Stock options are not included in the computation of diluted earnings per share when their effect is anti-dilutive. There were 342,066 anti-dilutive stock options excluded from the calculation for the three months ended March 31, 2015 and no anti-dilutive stock options excluded from the calculation for the three months ended March 31, 2014. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | 4. Income Taxes |
The Company is subject to U.S. Federal income taxes as well as income taxes of multiple state jurisdictions. For Federal and state tax purposes, the tax years from 2012 to 2014 remain open to examination. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Stock-Based Compensation | 5. Stock-Based Compensation | ||||||||||||||||
On March 15, 2011, the Company’s Board of Directors adopted the American Public Education, Inc. 2011 Omnibus Incentive Plan, or the 2011 Incentive Plan, and the Company’s stockholders approved the 2011 Incentive Plan on May 6, 2011, at which time the 2011 Incentive Plan became effective. Upon effectiveness of the 2011 Incentive Plan, the Company ceased making awards under the American Public Education, Inc. 2007 Omnibus Incentive Plan, or the 2007 Incentive Plan. The 2011 Incentive Plan allows the Company to grant up to 2,000,000 shares plus any shares of common stock that are subject to outstanding awards under the 2007 Incentive Plan or the American Public Education, Inc. 2002 Stock Plan, or the 2002 Stock Plan, that terminate due to expiration, forfeiture, cancellation or otherwise without the issuance of such shares. As of March 31, 2015, there were 337,119 shares subject to outstanding awards under the 2011 Incentive Plan, and 428,329 shares subject to outstanding awards under the 2007 Incentive Plan and the 2002 Stock Plan. | |||||||||||||||||
Stock-based compensation expense related to restricted stock and restricted stock unit grants is expensed over the vesting period using the straight-line method for Company employees and the graded-vesting method for members of the Board of Directors, and is measured using the Company's stock price 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. Prior to 2012, the Company calculated the expected term of stock option awards using the “simplified method” in accordance with Securities and Exchange Commission Staff Accounting Bulletins No. 107 and 110 because the Company lacked historical data and was unable to make reasonable assumptions regarding the future. The Company also estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original projections. The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of peers with similar attributes. In addition, the Company determines the risk-free interest rate by selecting the U.S. Treasury five-year constant maturity, quoted on an investment basis in effect at the time of grant for that business day. 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 FASB ASC Topic 718. | |||||||||||||||||
Options previously granted vest ratably over periods of three to five years and expire in seven to ten years from the date of grant. Option activity is summarized as follows (unaudited): | |||||||||||||||||
Number | Weighted | Weighted- | Aggregate | ||||||||||||||
of Options | Average | Average | Intrinsic | ||||||||||||||
Exercise Price | Contractual | Value | |||||||||||||||
Life (Years) | (In thousands) | ||||||||||||||||
Outstanding, December 31, 2014 | 434,401 | $ | 30.04 | ||||||||||||||
Options granted | — | $ | — | ||||||||||||||
Awards exercised | — | $ | — | ||||||||||||||
Awards forfeited | (6,072 | ) | $ | 36.43 | |||||||||||||
Outstanding, March 31, 2015 | 428,329 | $ | 29.95 | 1.9 | $ | 2,188 | |||||||||||
Exercisable, March 31, 2015 | 428,329 | $ | 29.95 | 1.9 | $ | 2,188 | |||||||||||
The following table summarizes information regarding stock option exercises (unaudited): | |||||||||||||||||
31-Mar-15 | 31-Mar-14 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Proceeds from stock options exercised | $ | — | $ | 45 | |||||||||||||
Intrinsic value of stock options exercised | $ | — | $ | 405 | |||||||||||||
Tax benefit from exercises | $ | — | $ | 1 | |||||||||||||
The table below summarizes the restricted stock awards activity for the three months ended March 31, 2015 (unaudited): | |||||||||||||||||
Number | Weighted-Average | ||||||||||||||||
of Shares | Grant Price | ||||||||||||||||
and Fair Value | |||||||||||||||||
Non-vested, December 31, 2014 | 360,769 | $ | 37.03 | ||||||||||||||
Shares granted | 112,615 | $ | 36.41 | ||||||||||||||
Vested shares | (116,910 | ) | $ | 41.52 | |||||||||||||
Shares forfeited | (19,355 | ) | $ | 37.53 | |||||||||||||
Non-vested, March 31, 2015 | 337,119 | $ | 35.28 | ||||||||||||||
Stock-based compensation cost charged against income during the three-month periods ended March 31, 2015 and March 31, 2014 is as follows (unaudited): | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Instructional costs and services | $ | 384 | $ | 290 | |||||||||||||
Marketing and promotional | 165 | 126 | |||||||||||||||
General and administrative | 845 | 740 | |||||||||||||||
Stock-based compensation expense in operating income | 1,394 | 1,156 | |||||||||||||||
Tax benefit | (574 | ) | (458 | ) | |||||||||||||
Stock-based compensation expense, net of tax | $ | 820 | $ | 698 | |||||||||||||
As of March 31, 2015, there was $9.7 million of total unrecognized compensation cost, representing unrecognized compensation cost associated with non-vested restricted stock. The total remaining cost is expected to be recognized over a weighted average period of 2.1 years. |
Other_Employee_Benefits
Other Employee Benefits | 3 Months Ended |
Mar. 31, 2015 | |
Other Employee Benefits | Note 6. Other Employee Benefits |
In November 2007, the Company adopted the American Public Education Employee Stock Purchase Plan, or the ESPP, which was implemented effective July 1, 2008. There were initially 100,000 shares of common stock available for purchase by participating employees under the ESPP. On June 13, 2014, the Company's shareholders approved an amendment to the ESPP to increase the number of shares of the Company’s common stock available for issuance under the plan by 100,000 shares, extend the term of the ESPP to March 7, 2024, and make other administrative changes. As of March 31, 2015, 88,609 shares remained available for purchase under the ESPP. |
Segment_Information
Segment Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Information | Note 7. Segment Information | ||||||||
The Company has identified two operating segments that are managed in the following reportable segments: | |||||||||
● American Public Education Segment, or APEI Segment | |||||||||
● Hondros College of Nursing Segment, or HCON Segment | |||||||||
In accordance with FASB ASC Topic 280, Segment Reporting, the chief operating decision-maker has been identified as the Chief Executive Officer. The Chief Executive Officer reviews operating results to make decisions about allocating resources and assessing performance for the APEI and HCON segments. | |||||||||
A summary of financial information by reportable segment is as follows (unaudited): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Revenue: | |||||||||
American Public Education Segment | $ | 77,452 | $ | 81,349 | |||||
Hondros College of Nursing Segment | 7,992 | 7,204 | |||||||
Total Revenue | $ | 85,444 | $ | 88,553 | |||||
Depreciation and Amortization: | |||||||||
American Public Education Segment | $ | 4,315 | $ | 3,565 | |||||
Hondros College of Nursing Segment | 274 | 324 | |||||||
Total Depreciation and Amortization | $ | 4,589 | $ | 3,889 | |||||
Income from continuing operations before interest income and income taxes: | |||||||||
American Public Education Segment | $ | 13,316 | $ | 16,027 | |||||
Hondros College of Nursing Segment | 1,155 | 698 | |||||||
Total income from continuing operations before interest income and income taxes | $ | 14,471 | 16,725 | ||||||
Capital Expenditures: | |||||||||
American Public Education Segment | $ | 5,247 | $ | 4,588 | |||||
Hondros College of Nursing Segment | 41 | 24 | |||||||
Total Capital Expenditures | $ | 5,288 | $ | 4,612 | |||||
A summary of the Company’s consolidated assets by reportable segment is as follows (unaudited): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Assets: | |||||||||
American Public Education Segment | $ | 247,367 | $ | 230,807 | |||||
Hondros College of Nursing Segment | 53,140 | 51,450 | |||||||
Total Assets | $ | 300,507 | $ | 282,257 |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Use of Estimates | Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | ||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||
In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. As originally issued, ASU 2014-09 would be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early adoption not permitted. Accordingly, the standard would only be effective for the Company for periods beginning on or after January 1, 2017. | ||||
However, on April 1, 2015, the FASB voted to propose a one-year deferral of the effective date of the new revenue recognition standard. Under the FASB proposal, public companies would apply the new revenue standard to annual reporting periods beginning after December 15, 2017, and to all interim reporting periods within the year of adoption. Accordingly, if the proposal is adopted, the revised revenue recognition standard will be effective for the Company for the year ending December 31, 2018, with early adoption permitted for annual periods beginning after December 16, 2016. The revised standard will be effective for all interim periods within the year of adoption. We will evaluate the impact that the standard will have on our financial condition, results of operations, and disclosures. | ||||
There have been no other applicable material pronouncements since the Company's Annual Report on Form 10-K for the year ended December 31, 2014. | ||||
Revenue Recognition | Revenue Recognition - APEI Segment | |||
APUS recognizes revenue on a pro rata basis over the period of its courses as APUS completes the tasks entitling it to the benefits represented by such revenue. If a student withdraws during the academic term, APUS recognizes as revenue the remaining non-refundable amount due from the student in the period the withdrawal occurs. The calculation of the remaining non-refundable amount is based upon the APUS student refund policy. For those students who have an outstanding receivable balance at the date of withdrawal, APUS assesses collectability and only recognizes as revenue those amounts where collectability is reasonably assured based on APUS’s history with similar student accounts. This policy was implemented effective January 1, 2015. Prior to this, APUS recognized revenue for all student withdrawals and established an allowance for those receivables considered uncollectible. The Company does not believe that this change in policy will have a material effect on its results of operations or financial condition. | ||||
Restricted Cash | Restricted Cash | |||
Cash and cash equivalents 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 its subsidiary institution's program participation agreements with the U.S. Department of Education. Restricted cash on our Consolidated Balance Sheets as of March 31, 2015 (unaudited) and December 31, 2014 is $2.6 million and $3.9 million, respectively. Changes in restricted cash that represent funds held for students as described above are included in cash flows from operating activities on our Consolidated Statements of Cash Flows because these restricted funds are a core activity of our 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 cost and expenses associated with any such contingency. | ||||
From time to time, the Company may be involved in litigation in the normal course of its business. The Company is not aware of any pending or threatened litigation matters the resolution of which, in the opinion of management, will have a material adverse effect on the Company’s business, operations, financial condition or cash flows. | ||||
Concentration | Concentration | |||
APUS students utilize various payment sources and programs to finance tuition. These programs include funds from Department of Defense, or DoD, tuition assistance programs, education benefit programs administered by the U.S. Department of Veterans Affairs, or VA, and federal student aid from Title IV programs, as well as cash and other sources. Reductions in or changes to DoD tuition assistance, VA education benefits, Title IV programs and other payment sources could have a significant impact on the Company’s business, operations, financial condition or cash flows. A summary of APEI Segment revenue derived from students by primary funding source for the quarters ended March 31, 2015 and March 31, 2014 is as follows (unaudited): | ||||
Three Months Ended March 31, | ||||
2015 | 2014 | |||
Title IV programs | 33% | 35% | ||
DoD tuition assistance programs | 35% | 36% | ||
VA education benefits | 20% | 17% | ||
Cash and other sources | 12% | 12% | ||
As of March 31, 2015, approximately 86% of the HCON Segment’s revenue was derived from students who received federal student aid. |
Basis_of_Presentation_Tables
Basis of Presentation (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Summary of APEI Segment Revenues | A summary of APEI Segment revenue derived from students by primary funding source for the quarters ended March 31, 2015 and March 31, 2014 is as follows (unaudited): | |||
Three Months Ended March 31, | ||||
2015 | 2014 | |||
Title IV programs | 33% | 35% | ||
DoD tuition assistance programs | 35% | 36% | ||
VA education benefits | 20% | 17% | ||
Cash and other sources | 12% | 12% |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Stock Option Activity | Options previously granted vest ratably over periods of three to five years and expire in seven to ten years from the date of grant. Option activity is summarized as follows (unaudited): | ||||||||||||||||
Number | Weighted | Weighted- | Aggregate | ||||||||||||||
of Options | Average | Average | Intrinsic | ||||||||||||||
Exercise Price | Contractual | Value | |||||||||||||||
Life (Years) | (In thousands) | ||||||||||||||||
Outstanding, December 31, 2014 | 434,401 | $ | 30.04 | ||||||||||||||
Options granted | — | $ | — | ||||||||||||||
Awards exercised | — | $ | — | ||||||||||||||
Awards forfeited | (6,072 | ) | $ | 36.43 | |||||||||||||
Outstanding, March 31, 2015 | 428,329 | $ | 29.95 | 1.9 | $ | 2,188 | |||||||||||
Exercisable, March 31, 2015 | 428,329 | $ | 29.95 | 1.9 | $ | 2,188 | |||||||||||
Stock Option Exercise | The following table summarizes information regarding stock option exercises (unaudited): | ||||||||||||||||
31-Mar-15 | 31-Mar-14 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Proceeds from stock options exercised | $ | — | $ | 45 | |||||||||||||
Intrinsic value of stock options exercised | $ | — | $ | 405 | |||||||||||||
Tax benefit from exercises | $ | — | $ | 1 | |||||||||||||
Restricted Stock Activity | The table below summarizes the restricted stock awards activity for the three months ended March 31, 2015 (unaudited): | ||||||||||||||||
Number | Weighted-Average | ||||||||||||||||
of Shares | Grant Price | ||||||||||||||||
and Fair Value | |||||||||||||||||
Non-vested, December 31, 2014 | 360,769 | $ | 37.03 | ||||||||||||||
Shares granted | 112,615 | $ | 36.41 | ||||||||||||||
Vested shares | (116,910 | ) | $ | 41.52 | |||||||||||||
Shares forfeited | (19,355 | ) | $ | 37.53 | |||||||||||||
Non-vested, March 31, 2015 | 337,119 | $ | 35.28 | ||||||||||||||
Stock-Based Compensation Cost Charged Against Income | Stock-based compensation cost charged against income during the three-month periods ended March 31, 2015 and March 31, 2014 is as follows (unaudited): | ||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Instructional costs and services | $ | 384 | $ | 290 | |||||||||||||
Marketing and promotional | 165 | 126 | |||||||||||||||
General and administrative | 845 | 740 | |||||||||||||||
Stock-based compensation expense in operating income | 1,394 | 1,156 | |||||||||||||||
Tax benefit | (574 | ) | (458 | ) | |||||||||||||
Stock-based compensation expense, net of tax | $ | 820 | $ | 698 |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Summary of Financial Information by Reportable Segment | A summary of financial information by reportable segment is as follows (unaudited): | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Revenue: | |||||||||
American Public Education Segment | $ | 77,452 | $ | 81,349 | |||||
Hondros College of Nursing Segment | 7,992 | 7,204 | |||||||
Total Revenue | $ | 85,444 | $ | 88,553 | |||||
Depreciation and Amortization: | |||||||||
American Public Education Segment | $ | 4,315 | $ | 3,565 | |||||
Hondros College of Nursing Segment | 274 | 324 | |||||||
Total Depreciation and Amortization | $ | 4,589 | $ | 3,889 | |||||
Income from continuing operations before interest income and income taxes: | |||||||||
American Public Education Segment | $ | 13,316 | $ | 16,027 | |||||
Hondros College of Nursing Segment | 1,155 | 698 | |||||||
Total income from continuing operations before interest income and income taxes | $ | 14,471 | 16,725 | ||||||
Capital Expenditures: | |||||||||
American Public Education Segment | $ | 5,247 | $ | 4,588 | |||||
Hondros College of Nursing Segment | 41 | 24 | |||||||
Total Capital Expenditures | $ | 5,288 | $ | 4,612 | |||||
Summary of Company's Consolidated Assets by Reportable Segment | A summary of the Company’s consolidated assets by reportable segment is as follows (unaudited): | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Assets: | |||||||||
American Public Education Segment | $ | 247,367 | $ | 230,807 | |||||
Hondros College of Nursing Segment | 53,140 | 51,450 | |||||||
Total Assets | $ | 300,507 | $ | 282,257 |
Nature_of_the_Business_Additio
Nature of the Business - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Subsidiary | |
Person | |
Basis of Presentation [Line Items] | |
Number of students | 113,080 |
Number of subsidiaries | 2 |
Number of reportable segments | 2 |
Hondros College of Nursing Segment | |
Basis of Presentation [Line Items] | |
Number of Campuses | 4 |
Basis_of_Presentation_Addition
Basis of Presentation - Additional Presentation (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Basis of Presentation [Line Items] | ||
Restricted cash | 2.6 | $3.90 |
Sales Revenue, Services, Net | Customer Concentration Risk | Students Who Received Federal Student Aid | Hondros College of Nursing Segment | ||
Basis of Presentation [Line Items] | ||
Concentration risk, percentage | 86.00% |
Summary_of_Segment_Revenues_De
Summary of Segment Revenues Derived from Students by Primary Funding Source (Detail) (Sales Revenue, Services, Net, Customer Concentration Risk) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Title IV programs | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 33.00% | 35.00% |
Represents the students who utilize tuition aid from Department of Defense assistance programs as their funding source. | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 35.00% | 36.00% |
VA education benefits | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 20.00% | 17.00% |
Represents the students who is funded by cash or other sources. | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12.00% | 12.00% |
Net_Income_Per_Common_Share_Ad
Net Income Per Common Share - Additional Information (Detail) (Equity Option) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Equity Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net income per common share | 342,066 | 0 |
Stock_Based_Compensation_Addit
Stock Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | 6-May-11 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation award, shares outstanding | 428,329 | 434,401 | |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $9.70 | ||
Unrecognized compensation cost, weighted average period for recognition | 2 years 1 month 6 days | ||
2011 Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation award, shares authorized for grant | 2,000,000 | ||
Share based compensation award, shares outstanding | 337,119 | ||
Represents the 2002 Stock Plan and the 2007 Incentive Plan adopted by the company for equity-based compensation arrangements. | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation award, shares outstanding | 428,329 |
Summary_of_Status_of_Companys_
Summary of Status of Company's Stock Incentive Plans and Changes During Periods Ended (Detail) (USD $) | 3 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 |
Number of options | |
Outstanding, Beginning Balance | 434,401 |
Options granted | 0 |
Awards exercised | 0 |
Awards forfeited | -6,072 |
Outstanding, Ending Balance | 428,329 |
Exercisable, Ending Balance | 428,329 |
Weighted average exercise price | |
Outstanding, Beginning Balance | $30.04 |
Options granted | $0 |
Awards exercised | $0 |
Awards forfeited | $36.43 |
Outstanding, Ending Balance | $29.95 |
Exercisable, Ending Balance | $29.95 |
Weighted average contractual life (years) | |
Outstanding, Ending Balance | 1 year 10 months 24 days |
Exercisable, Ending Balance | 1 year 10 months 24 days |
Aggregate intrinsic value | |
Outstanding, Ending Balance | $2,188 |
Exercisable, Ending Balance | $2,188 |
Stock_Option_Exercise_Detail
Stock Option Exercise (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Proceeds from stock options exercised | $45 |
Intrinsic value of stock options exercised | 405 |
Tax benefit from exercises | $1 |
Restricted_Stock_Awards_Activi
Restricted Stock Awards Activity (Detail) (Restricted Stock, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Restricted Stock | |
Number of shares | |
Non vested, beginning balance | 360,769 |
Shares granted | 112,615 |
Vested shares | -116,910 |
Shares forfeited | -19,355 |
Non vested, ending balance | 337,119 |
Weighted-average grant price and fair value | |
Non vested, beginning balance | $37.03 |
Shares granted | $36.41 |
Vested shares | $41.52 |
Shares forfeited | $37.53 |
Non vested, ending balance | $35.28 |
StockBased_Compensation_Includ
Stock-Based Compensation Included in Operating Expense Line-Items (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense in operating income | $1,394 | $1,156 |
Tax benefit | -574 | -458 |
Stock-based compensation expense, net of tax | 820 | 698 |
Instructional costs and services | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense in operating income | 384 | 290 |
Selling and promotional | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense in operating income | 165 | 126 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense in operating income | $845 | $740 |
Other_Employee_Benefits_Additi
Other Employee Benefits - Additional Information (Detail) (American Public Education, Inc. employee stock purchase plan) | 0 Months Ended | ||
Jun. 13, 2014 | Mar. 31, 2015 | Jul. 01, 2008 | |
American Public Education, Inc. employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
ESPP, common stock that may be available for purchase | 100,000 | ||
ESPP, common stock remained available | 88,609 | ||
ESPP, additional shares approved for issuance | 100,000 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 2 |
Summary_of_Financial_Informati
Summary of Financial Information by Reportable Segment (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Revenue | $85,444 | $88,553 |
Depreciation and amortization | 4,589 | 3,889 |
Income from continuing operations before interest income and income taxes | 14,471 | 16,725 |
Capital Expenditures | 5,288 | 4,612 |
American Public Education Segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 77,452 | 81,349 |
Depreciation and amortization | 4,315 | 3,565 |
Income from continuing operations before interest income and income taxes | 13,316 | 16,027 |
Capital Expenditures | 5,247 | 4,588 |
Hondros College of Nursing Segment | ||
Segment Reporting Information [Line Items] | ||
Revenue | 7,992 | 7,204 |
Depreciation and amortization | 274 | 324 |
Income from continuing operations before interest income and income taxes | 1,155 | 698 |
Capital Expenditures | $41 | $24 |
Summary_of_Companys_Consolidat
Summary of Company's Consolidated Assets by Reportable Segment (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |||
Segment Reporting Information [Line Items] | |||
Assets | $300,507 | $297,904 | $282,257 |
American Public Education Segment | |||
Segment Reporting Information [Line Items] | |||
Assets | 247,367 | 230,807 | |
Hondros College of Nursing Segment | |||
Segment Reporting Information [Line Items] | |||
Assets | $53,140 | $51,450 |