American Public Education Inc (APEI) 2016 Q3 法說會逐字稿

Good day, ladies and gentlemen and welcome back to the third quarter 2016 American Public Education Inc. earnings conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Mr. Chris Symanoskie, Vice President Investor Relations. Please go ahead, sir.

Thank you, operator. Good evening and welcome to the American Public Education conference call to discuss financial and operating results for the third quarter of 2016. Please note that statements made in this conference call regarding American Public Education or its subsidiary that are not historical facts are forward-looking statements based on current expectations, assumptions, estimates and projections about American public education 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, seek, could, estimate, expect, intend, may, should, will and would. These forward-looking statements include, without limitation, statements regarding expected growth, amounts and nature of anticipated charges, expected registrations and enrollments, expected revenues, expected earnings and plans with respect to recent and future initiatives, investments and partnerships.

On our call today we will discuss certain non-GAAP financial measures in connection with our GAAP results for the three and nine month ended September 30, 2016. These non-GAAP financial measures are not intended to be a substitute for GAAP results, however we believe they will allow investors to better compare results to prior periods. American Public Education urges investors not to rely on any single financial measure to evaluate this business and to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial pressures that are included as part of an exhibit to our current report on form 8K filed earlier today.

Actual results could differ materially from those expressed or implied by these forward-looking statements as a result of various factors including the risk factors described in the risk factor section and elsewhere in the Company's annual report on Form 10-K, filed with the SEC, quarterly report on Form 10-Q, filed with the SEC, and the Company's other SEC filings. The Company undertakes no obligation to update publicly for any forward-looking statements for any reason unless required by law, even if new information becomes available or other events occur in the future.

This evening it's my pleasure to introduce Dr. Wallace Boston, our President and CEO and Rick Sunderland, our Executive Vice President and Chief Financial Officer. Now at this time I'll turn the call over to Dr. Boston.

Thank you, Chris. Good evening, everyone. I will begin our call today by discussing our recent operating results in reviewing the progress we have made with respect to our strategic goals. Rick Sunderland, our CFO will then report on our third quarter financial results and provide perspective on the Company's outlook for the fourth quarter of 2016. In the third quarter of 2016, net course registrations at APUS declined 10% compared to the prior year period. Although net course registration by new students declined 23% year-over-year, net course registration by returning students decreased 8% compared to the prior year period.

We believe that the difference in the rate of decline at registrations by new students and that of returning students relates at least in part to improvements and persistence in our quality mix of students. For the three months ended August 31, 2016, and that's the period where we have the most recently available information, the first course path and completion rate of undergraduate students using federal student aid at APUS increased approximately 17% year-over-year with the month of August reaching the highest such rate since August of 2010.

Furthermore, approximately 62% of new civilian students who started in January through August of 2016 have started a second session compared to 55% for the same time period last year. We believe the continued improvement and persistence is a possible indicator that our efforts to attract and retain students with greater college readiness are working. The overall decline in net course registrations by new students at APUS was primarily driven by a 34% year-over-year decrease in net course registrations by new students using federal student aid, or FSA, and a 20% year-over-year decrease in net course registrations by new students using military tuition assistance, or TA.

We believe the decline in new students using FSA was primarily the result of our efforts to improve our quality mix of students through our emissions processes, adjustments to our marketing efforts and increasing competition for online students. We believe the decline in new students using TA is primarily the result of changes in how the TA program is being administered by the department of defense as well as other possible factors. Additional changes to TA program administration, true productions, deployments and access to military bases could adversely impact net course registrations in the future.

Net course registrations by new students using veterans benefits decreased 1% year-over-year and net course registrations by new students using cash and other sources decreased 10% compared to the prior year period. We believe that the change to the multiple disbursement method of dispersing federal student aid the first time APUS undergraduate students and various efforts aimed at improving our quality mix of students have helped reduce bad debt expense.

Bad debt expense decreased to 2.2% of revenue in the third quarter of 2016 compared to 3.4% of revenue in the same period of 2015 and compared to a high of 5.7% of revenue recorded back in the second quarter of 2014. In the third quarter of 2016, total enrollment at Hondros College of Nursing declined approximately 11% year-over-year and new student enrollment declined approximately 20% compared to the prior year period.

We believe these declines were the result of various factors including the uncertain status of Hondros' accreditor, ACICS, and its effect on enrollment, our efforts to enhance the quality and efficiency of the curriculum and changes in the institution's leadership. Although Hondros may continue to be challenged by regulatory change and other headwinds in the future we are pleased that efforts to stabilize enrollment and further advance our original plan are beginning to yield results.

For example, Hondros is enrolled for the fall term, or for the three months ending December 31, 2016 its largest cohort of new students since fall of 2014. This represents approximately a 1% year-over-year increase in new student enrollment and the first year-over-year increase since the second quarter of 2015. Hondros has applied for and is pursuing initial accreditation by Accrediting Bureau of Higher Education Schools, ABHES, a national creditor for Allied Health Schools. This is a particularly important development given the risk that Hondros' current accreditor ACICS may eventually cease to be a recognized accreditor enabling Title IV eligibility. Hondros has experienced sequential move improvements in its NCLEX licensure exam pass rates.

Although we anticipate that one of their programs may not meet OBN standards, Hondros has already implemented curriculum changes that are believed will result in additional increases in NCLEX licensure pass rates over time. Lastly, Hondros has announced that it set to begin classes in practical nursing PM programs at its new Toledo campus starting in January of 2017. As previously noted, our long-term plan for APUS includes several important initiatives aimed at achieving two critical near-term goals. One; to increase student persistence and two; to stabilize student enrollment.

We are pleased with the current trajectory of persistence rates at APUS. We will continue with our efforts to stabilize enrollment which is particularly challenging given the difficult higher education landscape and relatively low marketing budget compared to the marketing expenditures of our higher priced peers. Over the next few months we plan to continue to focus on our enrollment challenges by working to strengthen our brand, further improving enrollment processes, adding new programs and expanding our strategic relationships in addition to our recent investment in new pro-enrollment management leadership.

Excuse me. In 2015, APUS provided more than $8.6 million in grants and scholarships to our non-employee students. These included tuition grants, equity grants, grants for strategic partners and other scholarships. We believe that there are additional opportunities for APUS to promote the availability of existing grants and scholarships to attract new students particularly among military affiliated, public safety and corporate communities. We have continued to observe variances between lead flow, applications and student starts at APUS.

As a result we intend to expand our focus on analysis, predictive modeling and applied innovations to improve the dynamics of our enrollment life cycle. To help lead the advancement of our enrollment efforts, we have recently hired Robert E. Gay as our new Chief Operations Officer. Bob Gay is an industry leader in enrollment management who most recently served as Senior Vice President of Maguire Associates, a higher education consulting firm focused on enrollment management. Among his many prior positions, Mr. Gay served as Vice President of Enrollment Management at the New School, Party and Learning Group and University of Maryland University College.

APUS also recently announced the appointment of Dr. Bernard C. Smith as Provost to succeed former Provost and current APUS President, Dr. Karan Powell. Dr. Smith was formerly Vice Provost of distributed learning and Associate Professor of the Benerd School of Education for the University of the Pacific. In his new role at APUS, he will be responsible for ongoing initiatives focused on learning outcomes assessment, program development and faculty development as well as innovation and advancement of our curriculum.

Although APUS offers more than 200 degree and certificate programs, we remain focused on additional opportunities for expansion and professions where demand is growing and where corporations struggle to find talent. For example, APUS recently launched seven new programs, a BS and MS in Business Analytics, a Certificate AA and BA in Technical Management, a Graduate Certificate in Accounting and a CPA exam preparation certificate.

As a result of our unique affordability, we believe APUS is well-positioned to help employers advance the capabilities of their workforce and lower the cost of human capital in addition to helping job seekers close significant skills gaps and find employment and/or advancement. APUS has submitted new competency-based programs to the Higher Learning Commission, HLC for approval. Once approved by the HLC, we plan to launch the programs under an initiative we call momentum, competency-based faculty guided degree programs that empower students to advance more rapidly by demonstrating mastery of program competencies, through a more engaging, flexible and cost-effective approach.

Initially our focus will be on undergraduate degrees in retail management, criminal justice, emergency and disaster management, fire science management, information technology and information system security. Given APUS' strong reputation among public safety communities, we've launched the APUS center for applied learning, CAL, a B-to-B program to provide customized training aligned with the workforce demands of public safety professionals and their employers.

In fact CAL just announced the completion of its first customized development program entitled active shooter for non-first responders. This program represents a precedent-setting collaboration between CAL and Command Excellence, an organization that specializes in critical incident preparation and survival training for corporate manufacturing retail and educational institutions. CAL has already qualified interest among a growing pipeline of domestic and international corporations in anticipation of the program's release.

We believe new professional learning solutions like this will allow us to deepen long-standing ties with our strategic partners and enable us to develop new relationships with corporations and professional associations. In the third quarter of 2016 APUS developed several new strategic relationships including with Holland America Group, the US Postal Service and National Public Employees Alliance, the only national affinity group dedicated to the public service sector.

In summary I am encouraged by the notable progress we have made with respect to improving student persistence and reducing bad debt expense at APUS while simultaneously improving the student experience, diversifying our program offerings and maintaining our affordability. Our progress is important to our long-term success especially in the face of regulatory headwinds. According to the Department of Education's draft Debt-to-Earnings rates, none of APUS or HCON's degree programs were identified as failing or in the warning zone for gainful employment regulations.

Furthermore, I am pleased by the sequential improvement in NCLEX licensure pass rates and the increase in new student enrollment for the fall term at Hondros College of Nursing. Perhaps this is early indication that the efforts of our new management team at Hondros have begun to yield positive results. Stabilizing enrollment at APUS and returning to growth is of critical importance to our management team.

We are laser focused on further strengthening our brand, programs and enrollment processes. I am pleased we have hired a tremendously skilled enrollment management executive and new provost to assist us in this effort. We believe that our new degree programs coupled with a growing emphasis on workforce development, competency-based learning and expansion of our strategic relationships will also support efforts to strengthen our enrollment in the future.

At this time I will turn the call over to our CFO, Rick Sunderland.

Thank you, Wally. American Public Education's third quarter 2016 consolidated financial results, include a 3.3% decline in revenue to $73.8 million compared to $76.3 million in the prior year period. Both our APEI segment and our Hondros segment reported declines in revenue when compared to the prior year. In the third quarter our APEI segment revenue decreased 3.1% to $67.1 million compared to $69.2 million in the prior year period. The decline in APEI segment revenue is the result of the decrease in net course registrations partially offset by the July 2015 tuition increase.

Hondros segment revenue decreased 4.5% to $6.7 million in the third quarter of 2016 compared to $7.1 million in the same period of 2015. The decline in Hondros segment revenue is due to decreased enrollment at Hondros. On a consolidated basis, cost of expenses increased 11.6% to $73.4 million compared to $65.8 million in the prior year period. The increase is primarily due to a $4.3 million loss on disposals of long lived assets and a $0.8 million loss on assets held for sale in our APEI segment and a $4.7 million charge for impairment of goodwill in our Hondros segment.

The $4.3 million expense related to disposals of long lived assets was primarily due to a $4.0 million write-off of student course registration software development which resulted when it was no longer probable that the software would be completed and placed into service as a result of programming difficulties that could not be resolved on a timely basis and without additional cost. The $0.8 million expense on assets held for sale represents two buildings in Charleston that are no longer in use due to the relocation of employees to a new facility.

The Company recorded a loss of $0.3 million on the sale of one building and a $0.5 million loss on the second building that is expected to be sold in the next 12 months. In connection with the preparation of our financial statements, we completed an interim assessment and goodwill impairment test in accordance with ASC 350, intangibles, goodwill and other. This interim assessment determined that the fair value of Hondros goodwill with less than its carrying value and resulted in a pretax non-cash impairment charge of $4.7 million. For additional information regarding the impairment charge please review APEIs quarterly report on Form 10-Q.

For the third quarter, consolidated instructional costs and services expense or ICF as a percentage of revenue increased to 38.4% compared to 38.2% in the prior year period. The year-over-year increase as a percentage of revenue is due to revenue decreasing at a rate greater than the decrease in ICS costs. Selling and promotional expense, or S&P, as a percentage of revenue decreased to 17.8% of revenue compared to 18.4% in the prior year period.

Year-over-year S&P costs decreased 6.6% to $13.1 million compared to $14.1 million in the prior year period. Accordingly the year-over-year decrease as a percentage of revenue is due to S&P costs declining at a rate greater than the decline in revenue. General and administrative expense, or G&A, as a percentage of revenue increased slightly to 23.2% from 23.1% in the prior year period. Our G&A expenses decreased 2.8% to $17.1 million compared to $17.6 million in the prior year. The decrease in G&A expense was primarily related to a decrease in bad debt expense in our APEI segment that was partially offset by professional fees incurred during the organizational realignment and increased compensation costs.

For the three months ended September 30, 2016, bad debt expense decreased to $1.6 million or 2.2% of revenue. Compared to $2.6 million or 3.4% of revenue in the third quarter of 2015. We believe the improvement in bad debt expense is a result of the our ongoing efforts to attract students with greater college readiness, the change in our quality mix of students and the launch of the multiple disbursement method of dispersing federal student aide to first-time APUS undergraduate students.

In the third quarter of 2016, we reported GAAP income from operations before interest income and income taxes of $0.4 million compared to $10.5 million in the prior year period. In the third quarter, we reported GAAP net income of $0.3 million or $0.02 per diluted share compared to GAAP net income of $6.8 million or $0.41 per diluted share in the prior year. Adjusted net income, a non-GAAP measure, for the third quarter of 2016 was $5.7 million or $0.35 per diluted share.

Adjusted net income for the third quarter of 2016 excludes the $4 million write-off of student course registration software development in our APEI segment and the $4.7 million charge for impairment of goodwill in our Hondros segment and reflects the applicable tax rate of those adjustments. For additional information regarding adjusted net income, a non-GAAP measure, please refer to GAAP -- to the GAAP to Adjusted Net Income Reconciliation in the financial tables in the earnings release.

Cash generated by the business remains strong. For the nine months ended September 30, 2016, net cash provided by operating activities was $42.7 million compared to $42.8 million in the prior year period. Capital expenditures declined to approximately $9.7 million for the nine months ended September 30 compared to $19.6 million in the priority year period. Depreciation and amortization was $14.6 million for the nine months ended September 30, 2016 compared to $14.2 million for the same period in 2015.

Total cash and cash equivalents as of September 30, 2016 were approximately $137.7 million with no long-term debt. Going on to slide six, the outlook for the fourth quarter. Our outlook for the fourth quarter of 2016 is as follows; APUS net course registrations by new students in the fourth quarter of 2016 are expected to decrease between 30% and 26% year-over-year. Total net course registrations are expected to decrease between 14% and 10% year-over-year.

The expected declines are largely the result of anticipated declines in net course registrations by students using federal student aid and students using military tuition assistance. In the fourth quarter of 2016, total student enrollment at Hondros is expected to decrease by 13% year-over-year and new student enrollment is expected to increase by approximately 1% year-over-year.

As Wally indicated earlier, we are pleased to see the turn around in new student enrollment at Hondros and we are excited to announce that Hondros is set to begin classes in practical nursing this January at its new campus in Toledo, Ohio. For the fourth quarter of 2016, we anticipate consolidated revenue to decrease between 6% and 3% year-over-year. Net income for the fourth quarter of 2016 is expected to be in the range of $0.38 to $0.43 per fully diluted share.

In closing we are pleased with the continued reduction in bad debt expense and ongoing improvement in persistence rates at APUS and we are excited about the opening of the Toledo campus and improvements in new student enrollment at Hondros.

Going forward, enrollment stabilization at APUS is our top priority which we intend to address through investment enrollment management leadership, continued efforts to optimize our marketing efforts and new program development that includes new degrees and competency-based programs for which we are currently seeking approval. At the same time we plan to leverage our affordability, reputation for quality, existing strategic relationships, and B-to-B capabilities to address long-term workforce and skilled development opportunities in the marketplace.

Now we would like to take questions from the audience. Operator, please open the line for questions.

Certainly. (Operator Instructions). Our first question comes from the line of Peter Appert from Piper Jaffray. Your question please.

Thanks. Good afternoon. So, Wally I guess, I'm not fully understanding why the acceleration in the piece of decline at APUS in the fourth quarter and the contracts are getting a little bit easier. So what would you call out as the major factors?

I think we did call out the major factors, Peter, as a decline in FSA and a decline in TA. So, the FSA searches continued to find ways to have a qualified student and academically qualified and prepared student. And I would say that we've talked about anywhere from five to six different initiatives that we've done over the last two years. That's probably our biggest struggle and that's where our biggest decline is. And we're pleased that we're bringing in a nationally recognized enrollment management person who particularly has a lot of background with civilian student enrollment management.

On the TA side, there's multiple explanations but DoD has continued to change its processes and some of them are the same among the services, some of them are different. So we're not sure of the exact reasons whether it's the draw-down in staff that's happening in the army, whether it's budget reasons that are no longer publicized as to what the budget is for the new fiscal year. Remember we have a continuing resolution that I think funds these types of expenses through, like, December 8 but there's no guarantee beyond that.

And I guess the election tomorrow will tell us whether it will be a co-operative lame duck congress or not so co-operative lame duck congress. And then other processes such as the army built a recommendation engine called [VIA] and no one knows exactly how it works. It's a little too soon to tell. And then there's the base access issue that has been going on for a while. So, the net of that is that we have a decrease in our TA students. If I could give you a specific explanations, I would, but hopefully we can find ways to stabilize that.

But in the past, we had such a high referral rate on TA students that our conversion rate on TA students who inquired who then applied who then enrolled was quite high. In fact more than double what our civilian rate was. So making up for finding those students in the civilian sector when we already have a process that we've put in place to make sure that we get qualified civilian students is just really hard.

Understood. One thing, Wally, is you're trimming the selling and promotional expenses. As I understand your attempt to protect profitability, but it seems like there's a disconnect in terms of trimming the marketing budget when you're trying to increase the flow of increase in students. Can you talk about that?

I wouldn't say -- the number is down, Peter. But I would tell you that both Rick and I would spend more money if the processes that we're putting in place to find quality civilian students are such that by ramping up the spend, we could find more quality students. It's just right now that doesn't happen. I mean we're experimenting with things. We're spending some money. Those amounts of money aren't material but when the things that we are spending money on to pilot a new student recruitment idea to increase that quality don't work, then we're not going to throw good money after bad.

And I would say that on the good news, the applications themselves are strong. So the things that we have put in place on the application side are very strong. It's just that our conversion rate is lower than it's been in the past and we're thinking that probably one explanation for that is competition. But we're looking in our processes and seeing if there's anything else that might explain it. For example are we slower to get back with students than some of the other firms that we compete with. So we're looking into that. But on the good news side, our application volumes are very strong.

And just one last thing. Any insight in terms of the timing of an answer on the change in accreditation for Hondros?

No. We disclosed who we had sent our application in with, and one of the requirements with them is that we not discuss the process. So, we'll announce it as soon as we have something to announce.

Okay. Thanks, Wally.

Sure.

Thank you. Our next question comes from the line of Corey Greendale from First Analysis. Your question please.

Hey, good afternoon. A couple questions. Can you just on the positive side put a little more detail behind what drove the improvement in Hondros new students?

Sure. Management. We put in -- we took our COO and made him interim CEO and then he went out and recruited new campus directors for three of the four campuses as well as a campus director for our newly approved Toledo location. And they're making a difference.

Any lessons learned or extrapolation you could apply to APUS?

Well, we don't have campuses with APUS so it's a different situation. But I think that -- and also, the recruiting nursing students is very much different. There's a high referral percentage from marketing to nursing students. We don't spend as much money to do that. At Hondros there's a preliminary test that you have to take as well.

But if I keep it simple, we have hired a new Provost who has a tremendous background in online learning and we have a new enrollment management person who has a tremendous background. We cited the institutions that he's worked for in the past as well as the premiere enrollment management consulting firm so, we're optimistic we might able to make a difference with that.

Okay. And then on the revenue per registration and per student was up high single digits. Does that calculate it for both APUS and Hondros in the quarter. Can you just give us a little bit on what drove that?

On the APUS side it has to do with the timing of the starts. So we recognize revenue based upon what we call normalized registrations which are revenue generating registrations versus what was reported simply registrations. So it's the inner play between the difference between registrations and normalized registrations.

Okay. And Hondros?

Hondros is the new curriculum phasing in is having an effect on the mix between, if you will, between the day class and the evening and weekend class which is driving up ever so slightly the total revenue per enrollment.

Okay. And Rick, sorry, I'm back to APUS. If it's timing, I think the guidance implies revenue for registration is going to be up kind of by a similar rate in Q4. Do I have that right? And is that going to be true -- how many quarters is that going to be true for?

That's true for the fourth quarter. I don't know that I've looked at the day's count going out beyond that so I can't comment on that.

Okay. And then I just have one more question about the competency-based programs. I don't know if you've figured out all of the details yet but can you give us some sense how you're going to position that relative to your existing programs and thoughts on pricing of those programs?

We haven't announced the pricing and as a matter of fact literally while we were on this call, we got an email indicating that they've been approved.

Congratulations.

Yes, thank you. So we will have to put out some information on the estimated start and what our pricing is. But the intent is to -- I would tell you this. The programs for competency are in areas where we already do regular degrees which are credit hour, clock hour based and we have very good relationships. I think we disclosed the six areas in which we've submitted for approval and like I said, we got an email while I was on this call.

And so we believe that for our corporate and public sector partners in this area, this will offer a very relevant program for their employees with a lot of experience who may or may not have the time to do the credit hour, clock-hour based program but have enough experience to pass the competency-based exams and assessments that we've built into this program.

Understood. It sounds like you're getting good news during the call, if we keep asking questions, maybe we'll keep getting good news. I'll turn it over. Thanks.

Okay. Thank you.

Thank you. (Operator Instructions). Our next question comes from the line of Jeff Silber from BMO. Your question please.

Hey, good evening, guys. It's Henry Chien calling for Jeff.

Hi, Henry.

Hey, guys. I just had a question on the new enrollment. I guess management or strategy. I wonder if you can put some more color on how you're targeting the FSA student, if you have like a particular niche or strategy kind of just looking for some more color there. Thanks.

Our targeting is limited to certain geographical areas. And to certain sectors with either public sector or corporate clients that we have relationships with. So I don't want to get really specific because we listen to other people's calls and try to find out what markets they're pursuing pretty heavily.

But that is a different strategy than two-and-a-half, three years ago when we primarily bought Google key words that related to the degrees we offer and related to affordability and used that to bring in people from all areas of the country. And we now are also requiring people who are not transferring in credit to complete an assessment that we have to make sure that they're ready for college and that's something different as well.

So there's probably a couple other things we're doing that I'm not remembering here. But we've definitely taken a different approach for multiple reasons. Accreditation reasons, regulatory reasons and yes, we know that it's not favorable to our enrollments in the short term but we believe it's very favorable for us reputationally as well as a good quality indicator in the long term. It's just taken us a little longer than I would have hoped to stabilize what we can have as predicted civilian enrollments.

Got it. Okay. That's fair enough. And just on Hondros, if the ACIS or the ACICS is not recognized or renewed, what's the sort of thinking of how to -- what to do if that happens?

Well, I think the thinking is that once that decision is final, if it's not appealed and goes through an appeal process but once it's final, regardless of which way the outcome is, institutions who were accredited by ACICS have 18 months to obtain new accreditation. We didn't want it wait until the decision was final. So we basically made a decision on who we would contact and why and our application is in process.

Got it. Okay, great. And just lastly, a quick follow-up. In terms of the -- sorry if I missed this but for the net new course registrations, or FSA and TA and other, what were they again?

Are you talking about the fourth quarter guidance or the third quarter actual?

Third quarter actual.

Rick, do you want to give that?

I'm sorry, you want new?

Yes, I think, was it down 34% for FSA.

Federal student aid was down 34%, TA was down 20%, that's on the new. And on total FSA was down 15% and TA was down 9% for the third quarter.

Okay, got it. And the other bucket?

Okay, back to the new. VA was down 1% and other was down 10%. Blend all that together you're down 23%. And on total, VA was down 7% and other was down 8%. If you blend all that together --

VA was up one.

I'm looking at VA was down 7% I believe. Okay, yes, 7%. Sorry, we're looking at the charts?

Yes. We're looking at two different charts.

Other was down 8% and you blend all that together and you're down 10% on total.

Got it. Okay. Great. Thanks so much.

Thank you.

Thank you. And this does conclude the question and answer session of today's program. I would like to hand the program back to Chris Symanoskie for any further remarks.

Thank you, operator. That will conclude our call for today. We wish to thank all our callers for participating and for your interesting in American Public Education. Thank you and have a great evening.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.