American Public Education, Inc. (NASDAQ:APEI) Q3 2023 Earnings Call Transcript

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And so we continue to be sure that we are not enrolling more students in the Bloomington campus until we know that we’ve got an engine that allows us to deliver a high-quality educational experience for students and one that will allow them to pass the exam. As it relates to Illinois, the other place where we have enrollment caps. As we discussed briefly on our last call, we’re very pleased with legislation that was recently enacted in Illinois. It takes effect in January of 2024, allows our Illinois program to remove — be removed from any probationary status from an NCLEX perspective for three years. So, we believe that, that’s going to help us with accreditation, state approvals. And as a result, will allow us to both enroll — continue to enroll students in the ADN program and also allow us to add new programs to our Illinois campuses.

And you had another question about profit, but I don’t …

Raj Sharma: Yeah.

Angela Selden: I don’t remember what the third question was. So if you could repeat it, I really appreciate it.

Raj Sharma: Yes. Sure, of course. I know you mentioned that enrollment for us, for investments were going to be up year-on-year in second half. Is that only — is that only nursing or also non-nursing? And then my next question was could you tell us when you would be profitable in Rasmussen?

Angela Selden: All right. Okay. So we are seeing improved enrollment in all categories except for ADM. In all nursing except for ADN in all of our allied health, so those are all of our campus-based programs. And we’re seeing positive growth in our online program. So only the ADN remains the area of Rasmussen that is not yet growing. As it relates to your question, we still see and expect to have positive overall enrollment growth in the second half of 2024. And we would expect profitability to follow that positive enrollment growth. Certainly, we want to make sure that depending upon when that occurs, we take into consideration seasonality, but we expect to see profitability following that turn back to positive enrollment momentum.

Raj Sharma: Got it. Thank you. And then just last question on Hondros, we were almost profitable in the quarter and then last quarter. And then you were not profitable this one. Is there any expectation that we should get to Hondros being profitable sometime soon? Or what is holding you back? Or what is holding Hondros back in achieving profitability on a segment basis?

Angela Selden: Good question. I’ll start and then, Rick, I’ll let you …

Rick Sunderland: Sure.

Angela Selden: …follow on. As I mentioned in my comments, we do expect Hondros to be profitable in the fourth quarter. We want to be sure that we can offset the cost of opening new campuses. And as a result, we really believe that as we enter 2024 and beyond that the focus on marketing spends and the savings from a headcount perspective will help us with the predictability around continued profitability at Hondros. The other thing I will say is that, where we had to recalibrate our nursing faculty salaries in the last year. We do not expect to see that continuing to grow at the pace that it has in prior years. We are not experiencing the same challenges around recruiting and retaining nursing faculty that we saw a year ago. And so we believe that, that stabilization will allow us to create more predictability around what our nursing faculty costs are going to be.

Raj Sharma: Great. Thank you for answering my questions. I’ll take it offline.

Operator: There are no further questions at this time. I would like to turn the call back over to Christopher Symanoskie, Investor Relations.

Christopher Symanoskie: Thank you, Operator. That will conclude our call for today. Thank you for your participation and your interest in American Public Education. Good evening, everyone.

Operator: Ladies and gentlemen, that ends today’s conference call. You may now disconnect.

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