American Public Education, Inc.

Good afternoon, ladies and gentlemen. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the APEI Reports first quarter 2019 results call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, you may press the pound key. And with that, I would now like to turn the call over to Chris Semenovsky, Vice President of Investor Relations. Please go ahead.

Great. Thank you, Julie. Good evening and welcome to American Public Education's discussion of financial and operating results for the first quarter of 2019. Materials that accompany today's conference call are available in the events and presentation section of our website, and are included as an exhibit to our current report on Form 8K furnished with the SEC earlier today. Please note that statements made in this conference call and in the accompanying presentation materials regarding American public education or its subsidiaries that are not historical facts may be forward-looking statements based on current expectations, assumptions, estimates and projections about American public education and the industry. 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, expected registrations and enrollments, expected revenues, expected earnings, and plans with respect to recent, current and future initiatives, investments and partnerships. 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 factors section and elsewhere in the company's most recent annual report on Form 10-K filed with the SEC and the quarterly report on Form 10-Q filed with the SEC earlier today as well as factors described in the company's other SEC filings. The company undertakes no obligation to update publicly 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. And now I'll turn the call over to Dr. Boston.

Thank you, Chris. Good afternoon, everyone. I will begin our call today by discussing our recent operating results for the first quarter of 2019. Our CFO, Rick Sunderland, will then discuss APEI's financial results and our outlook for the second quarter of 2019. In the first quarter of 2019, APUS reported a year-over-year increase in both new and total net course registrations of 8% and 1% respectively. This exciting result represents the first year-over-year quarterly increase in net course registrations by new students at APUS since the third quarter of 2012. The increase was driven by a 25.7% year-over-year increase in net course registrations by new students utilizing Military Tuition Assistance, or TA, as well as by a 3.1% increase in net course registrations by new students utilizing cash or other sources. We believe these increases are a reflection of our focus on most likely to persist communities where student quality and advertising costs are more compatible with APUS's low tuition model. That said, the increase in net course registrations at APUS was partially offset by a 9.3% decline in net course registrations by new students utilizing Federal Student Aid, or FSA, and a 6.8% decline in net course registrations by new students utilizing Veterans Benefits, or VA. While net course registrations by students utilizing FSA continue to decline, the first course pass and completion rate, a measure of student persistence and quality, for APOS undergraduate students utilizing FSA remains at historically high levels. For the three months ended March 31, 2019, total enrollment at Honduras College of Nursing, or HCN, declined 15% year-over-year, and new student enrollment decreased 32% compared to the prior year period. We believe some of the changes we have made to our admissions and academic achievement requirements have negatively affected student enrollment at HCN. However, we believe these changes are ultimately beneficial to students and will result in a better educational experience and improved testing pass rates in the future. Furthermore, we remain committed to serving the higher education needs of nurses and healthcare professionals more broadly as we see continued strong demand for education in these professions. We believe our continued focus on academic quality attracting students with greater college readiness, and on recent upgrades to our enrollment management processes, has produced outstanding results, including, but not limited to, significantly better student persistence, improved conversion rates, and a more stable student population at APUS. The improvement in our quality mix of students is reflected in part by APUS's fiscal year 2016 draft cohort default rate, which improved to 18.5%. compared to the fiscal year 2015 official cohort default rate of 23.8%. The quality of APUS is also reflected by referral rates and student satisfaction. Thus far in 2019, 50% of new students responding to our new student surveys indicated that they were referred by others, and 95% of respondents to our 2018 alumni survey indicated that they would recommend APUS to a friend or colleague. In short, we believe APUS offers a better student experience at an affordable price and exhibits improved student persistence than just a few years ago. Although building a durable higher education institution requires time and patience, the initiatives to stabilize APUS enrollment and enroll students whose educational objectives align with completion give us confidence in the future of our overall enterprise. As a result, I am pleased to announce that the APEI Board of Directors has authorized a $35 million stock repurchase program that effectively returns a portion of our excess cash to shareholders. Now I will turn the call over to our CFO, Rick Sunderland. Rick?