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American Public Education Reports Second Quarter 2011 Results

CHARLES TOWN, W.V. - (BUSINESS WIRE) - 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 June 30, 2011.

Recent Highlights:

• Net course registrations from new students¹ in the second quarter of 2011 increased to approximately 18,900, an increase of approximately 39% over the same period of 2010.
• Net course registrations¹ increased to approximately 77,900 in the second quarter of 2011, a year-over-year increase of 28%.
• As of June 30, 2011, there were a total of 96,800 active students at American Public University System, a year-over-year increase of 34%.
• Second quarter 2011 revenues increased 31% to $60.8 million, compared to $46.3 million in the second quarter of 2010.
• Net income for the second quarter of 2011 increased 29% to $9.0 million, or $0.49 per diluted share, compared to $7.0 million, or $0.37 per diluted share, in the same period of 2010.
• American Public Education anticipates third quarter 2011 net course registrations from new students to increase approximately 35%¹ year over year; net course registrations to increase approximately 28%¹ year over year; revenues to increase approximately 29% year over year; and net income to be between $0.41 and $0.43 per diluted share.

Financial and Other Results:

Total revenues for the second quarter of 2011 increased 31% to $60.8 million, compared to total revenues of $46.3 million in the second quarter of 2010. Income from operations before interest income and income taxes in the second quarter of 2011 increased 27% to $14.9 million, compared to $11.7 million in the same period of 2010. Stock-based compensation expense reduced operating income by $746,000 in the second quarter of 2011 and $722,000 in the second quarter of 2010.

Net income for the second quarter of 2011 increased 29% to $9.0 million, or $0.49 per diluted share, which includes $452,000, or $0.03 per diluted share, in stock-based compensation expense, net of tax. This compares to net income of $7.0 million, or $0.37 per diluted share for the second quarter of 2010, including $447,000, or $0.02 per diluted share in stock-based compensation expense, net of tax. The weighted average diluted shares outstanding for the second quarter of 2011 and 2010 were approximately 18.3 million and 19.0 million, respectively.

For the six months ended June 30, 2011, total revenues were $119.5 million, an increase of 28% compared to total revenues of $93.6 million in the same period of 2010. Income from operations before interest income and income tax for the six months ended June 30, 2011 increased to $28.0 million, compared to $24.9 million in the same period of 2010. Stock-based compensation expense reduced each period's operating income by $1.6 million and $1.5 million, respectively.

Net income for the six months ended June 30, 2011 to $16.8 million, or $0.92 per diluted share, which includes $980,000, or $0.05 per diluted share, in stock-based compensation expense, net of tax. This compares to net income of $14.7 million, or $0.77 per diluted share, in the same period of 2010, including $923,000, or $0.05 per diluted share, in stock-based compensation expense, net of tax. The weighted average diluted shares outstanding for the six months ended June 30, 2011 and 2010 were approximately 18.4 million and 19.0 million, respectively.

Total cash and cash equivalents as of June 30, 2011 were approximately $94.5 million with no long-term debt. Cash from operations for the six months ended June 30, 2011 was approximately $25.7 million, compared to $18.2 million in the same period of 2010. Capital expenditures were approximately $6.8 million for the six months ended June 30, 2011, compared to $8.5 million in the prior year period. Depreciation and amortization was $4.3 million for the six months ended June 30, 2011 and $3.0 million for the same period of 2010.

Net Course Registrations:
For the three months ended June 30,
		2010		2011			% Change
Net Course Registrations from New Students1		13,600		18,900			39%
Net Course Registrations1		61,000		77,900			28%
For the six months ended June 30,
		2010		2011			% Change
Net Course Registrations from New Students		26,700		36,700			37%
Net Course Registrations		123,000		159,000			29%

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.

¹ On January 3, 2011, APUS combined each one-credit lab course with its related three-credit class resulting in one four-credit course. Net course registrations and net course registration growth rates exclude other non-credit registrations and are presented throughout this press release as if labs and classes were combined in the prior year period.

Third Quarter 2011 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 third quarter 2011 net course registrations from new students to increase approximately 35%¹ year-over-year; net course registrations to increase approximately 28%¹ year-over-year; revenues to increase approximately 29% over the prior year period; and net income to be between $0.41 and $0.43 per diluted share.

¹ As noted under Net Course Registrations above, net course registration growth rates exclude other non-credit registrations and are presented as if labs and classes were combined in the prior year period.

Webcast:

A live webcast of the Company's second quarter earnings conference call will be broadcast at 5:00 p.m. EDT today. 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 96,800 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 leaders in their fields and 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 regarding American Public Education, Inc., or its subsidiaries, that are not historical facts are forward-looking statements based on current expectations, assumptions, estimates and projections about American 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, 2010, Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 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
		June 30,
		2011				2010
		(Unaudited)
Revenues		$	60,795			$	46,254
Costs and expenses:
Instructional costs and services			23,011				17,376
Selling and promotional			9,721				8,120
General and administrative			10,910				7,451
Depreciation and amortization			2,242				1,568
Total costs and expenses			45,884				34,515
Income from operations before
interest income and income taxes			14,911				11,739
Interest income, net			25				35
Income before income taxes			14,936				11,774
Income tax expense			5,960				4,749
Net income		$	8,976			$	7,025
Net Income per common share:
Basic		$	0.50			$	0.38
Diluted		$	0.49			$	0.37
Weighted average number of
common shares:
Basic			17,890,298				18,407,149
Diluted			18,345,775				19,032,440
American Public Education, Inc.
Consolidated Statement of Income
(In thousands, except per share data)
		Six Months Ended
		June 30,
		2011				2010
		(Unaudited)
Revenues		$	119,459			$	93,565
Costs and expenses:
Instructional costs and services			45,116				35,401
Selling and promotional			20,605				15,229
General and administrative			21,421				15,083
Depreciation and amortization			4,335				2,976
Total costs and expenses			91,477				68,689
Income from operations before
interest income and income taxes			27,982				24,876
Interest income, net			52				57
Income before income taxes			28,034				24,933
Income tax expense			11,201				10,260
Net income		$	16,833			$	14,673
Net Income per common share:
Basic		$	0.94			$	0.80
Diluted		$	0.92			$	0.77
Weighted average number of
common shares:
Basic			17,912,423				18,364,843
Diluted			18,359,223				19,001,369

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, Corporate Communications
703-334-3880