American Public Education, Inc. (APEI) Earnings Call Transcript & Summary

Good morning. Welcome to the 2021 Annual Meeting of Stockholders of American Public Education, Inc. I'm Rick Andersen, Chairperson of the company's Board of Directors. This past year has been one of transformation and disruption. The agility and resilience of our leadership and our workforce has helped us to succeed in these unprecedented times. In 2020, we experienced strong revenue growth, we had 4 quarters of consecutive net course registration growth at American Public University system, and we had record enrollment at Hondros College of Nursing. In addition, in October of 2020, we announced an agreement to acquire Rasmussen University in what we believe will be a transformative acquisition. For a general update on our business, you are welcome to review the archived replay of our conference call and press release for our financial results for the 3 months ended March 31, 2021. These items are available in the Events and Presentations section of our website, which is apei.com. Before we begin, I would like to take a moment to thank Major General, Barbara Fast, retired, my predecessor as Chairperson of the Board. Barbara is retiring after this year's annual meeting after serving a 12-year tenure of exemplary service on our Board. We are extremely grateful to her for her vast contributions to the company and our success. Thank you, Barb. So at this time, I would like to call the meeting formally to order. There are 3 items of business on our agenda today: the election of directors, an advisory vote on the compensation of our named executive officers and the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm. As the company's bylaws provide, I am the Chairperson of this meeting. Tom Beckett, the company's Senior Vice President, General Counsel and Secretary; will act as secretary of this meeting and also as inspector of elections. There will be opportunities to ask questions pertinent to the proposals to be voted on at this meeting after the proposals have been presented, and then to ask more general questions at the conclusion of the meeting. Stockholders may submit questions or comments using the designated field on the annual meeting web portal at any time during this meeting. We will attempt to ensure that pertinent questions and comments are read allowed and representatives of management or the Board of Directors will respond. Rules of conduct that apply to the meeting and the Q&A session have been posted to the virtual meeting website. I would now like to take this opportunity to introduce directors, the company's directors and nominees for directors. In addition to me, the directors and nominees present today are: Granetta B. Blevins; Major General Barba G. Fast, retired; Jean C. Halle; Dr. Barbara L. Kurshan; Timothy J. Landon; Daniel S. Pianko; William G. Robinson, Jr; Angela K. Selden, our President and Chief Executive Officer; and Lieutenant General, Vincent R. Stewart, retired. Beth Ann Rees of Deloitte & Touche LLP, the company's independent registered public accounting firm is also present today. At the appropriate times, Ms. Rees will be available to answer any questions you may have. On behalf of our Board of Directors, I appoint Mr. Beckett as inspector of elections. Mr. Beckett has previously taken his oath as inspector of elections. And Tom, please report on the record date and preliminary proxies.

Thank you, Eric. The Board of Directors set March 25, 2021, as the date of record for determining stockholders entitled to vote at this meeting. As of the record date, there were 18,671,101 shares of common stock outstanding, held by 445 stockholders of record. A list of the stockholders of record as of the record date is available electronically for inspection today by stockholders on the meeting portal. A duplicate record has been on file since May 10, 2021, and is available to review upon request. The company has received an affidavit of mailing that states that the notice of meeting was mailed on or about April 9, 2021, to stockholders of record as of March 25, 2021. The affidavit of mailing will be made part of the minutes of the meeting. There are present at this meeting in person and by proxy, stockholders of record holding in excess of a majority of the company's issued and outstanding shares entitled to vote at today's meeting. That represents a quorum, and as a result, the meeting is duly constituted and the business of the meeting may proceed. All proxies previously received will be voted as marked by the stockholders signing them. If you have voted by proxy or have already voted by telephone or Internet, you do not need to take any further action unless you wish to change your vote. Any stockholders who have not yet voted or wish to change their votes may do so by voting on the web portal.

Thanks, Tom. We will now proceed with the business of the meeting. After the presentation of the proposals, we will open the floor for questions and comments on the proposals. The first item of business today is the election of directors. 9 directors have been nominated for election at today's meeting. Nominees shall be elected as a director by a majority of the votes cast. The directors elected today will hold office until the 2022 Annual Meeting of Stockholders and until their successors are duly elected and qualified or until their earlier death, resignation or removal. The nominees are myself, Eric C. Andersen; Granetta B. Blevins; Jean C. Halle; Dr. Barbara L. Kurshan; Timothy J. Landon; Daniel S. Pianko; William G. Robinson, Jr.; Angela K. Selden; and Lieutenant General, Vincent R. Stewart, retired. The next matter being submitted to the stockholders for action is an advisory vote on the compensation of our named executive officers. Our Board and our compensation committee actively review and assess our executive compensation program in light of executive compensation governance and best practices as well as changes in our industry and the marketplace for executive talent. We encourage stockholders to read the compensation discussion and analysis and compensation tables and disclosure sections of our proxy statement for a very detailed discussion of our compensation programs and policies, the actions taken with respect to 2020 compensation and the compensation awarded to our named executive officers. The following resolution related to this proposal is set forth in the company's proxy statement. And I quote resolved that the compensation paid to the American Public Education, Inc. named Executive Officers as disclosed in the company's proxy statement for the 2021 Annual Meeting of Stockholders pursuant to the rules of the Securities and Exchange Commission, including the compensation discussion and analysis, compensation tables and other related disclosures is hereby approved. The last matter being submitted to stockholders for action is the ratification of the appointment of our Audit committee of Deloitte & Touche LLP as American Public Education, Inc.'s independent registered public accounting firm for the fiscal year ended December 31, 2021. The affirmative vote of at least a majority of the shares of our voting stock entitled to vote and represented in person or by proxy at this meeting is required to ratify the appointment of Deloitte & Touche LLP. The Board of Directors has unanimously recommended that the stockholders vote for the nominees for director; for approval of the compensation of our named executive officers as disclosed in the company's proxy statement; and for ratification of Deloitte & Touche LLP as the company's independent registered accounting firm. I now open the floor for questions and comments regarding proposals. Validated stockholders will be able to enter questions and comments in the designated field on the web portal, and we will attempt to ensure that everybody that has a question or comment will have a chance to be heard, and either I or representatives of management will respond. However, in the interest of time, we will limit each individual to one question or comment at a time and discussion of each question or comment will be limited to 5 minutes. In addition, questions or comments that are about personal concerns not shared by stockholders generally or any use of offensive language will not be addressed. Finally, our remarks made today may contain forward-looking statements. Actual results could differ materially from those projected, including as a result of risks discussed in our most recent 10-K and 10-Q and other filings with the SEC. The company undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or other factors. Tom, are there any questions or comments pertinent to the proposals at this time.

No questions at this time.

Okay. So the polls remain open. And we will now pause to give stockholders who have not yet voted or who may wish to change their vote, the opportunity to do so. So we're going to wait just a moment to allow that to happen. [Voting]

Okay. Now that everybody has had the opportunity to vote. The polls for the 2021 Annual Meeting are officially closed. I understand that the votes have been counted and the inspector of election is now available to provide a preliminary report on the voting results for each of the proposals. Tom, over to you.

Thank you, Rick. I have determined that a sufficient number of votes have been cast for me to provide this preliminary report, which is subject to final tabulation and verification. Each of the 9 nominees for election as a Director has received a majority of the votes cast. The stockholder advisory vote on the compensation of the company's named executive officers received the approval of a majority of the shares present at the meeting in person or by proxy. And finally, a majority of the shares present at the meeting in person or by proxy voted in favor of the ratification of the appointment of Deloitte and Touche.

Thanks, Tom. Based on your report, each of the 9 nominees for Director of American Public Education, Inc. has been duly elected to serve for the term expiring on the date of the company's 2022 Annual Meeting, or until his or her successor has been duly elected and qualified or until their earlier death, resignation or removal. The compensation of the company's named executive Officers has been approved on an advisory basis. And the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ended 12/31/2021, has been ratified. The inspector of elections will provide a written report of the final vote counts with respect to matters voted on today, which will be included in the minutes of this meeting. The company will also report the final votes in a current report on Form 8-K. This concludes the formal business of this meeting, and the meeting is now adjourned. We will now open the floor to any general questions or comments. Okay. Seeing no further questions or comments at this time. That concludes the general question-and-answer period. I want to thank all of you for attending today's meeting and for your continued support of American Public Education, Inc. So thank you all for attending today's meeting. Having reached the end of our allotted time, we're going to end the session now. I want to thank you all for attending today's meeting and for your continued support of American Public Education, Inc. Thank you.