Wall Street Transcript Interview with American Public Education, Inc. (APEI) President and CEO Wallace E. Boston

Wall Street Transcript

67 WALL STREET, New York - August 30, 2012 - The Wall Street Transcript has just published its Education Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Enrollment and Retention Trends - Regulatory Risks - Chinese Education Growth Catalysts - For-Profit Institutions - Online Content Distribution

Companies include: American Public Education, Inc (APEI) and many others.

In the following excerpt from the Education Report, the CEO of American Public Education discusses the outlook for his company for investors:

TWST: Please start by introducing us to American Public Education with a brief history and an overview of the company today.

Dr. Boston: The origins of American Public Education, Inc., date back to 1991, when James P. Etter, a Marine Corps officer, retired from active service and launched one of the first online universities, American Military University. AMU was designed to meet the unique educational needs of military professionals. In 2002, AMU reorganized and created the American Public University System, which is comprised of American Military University and American Public University. The reason for this was to further diversify our student population and extend the school's outreach to better meet the needs of those in public service and related fields.

American Public Education, Inc., the holding company of American Public University System, went public in 2007 and held two secondary offerings in 2008 to monetize the original investment of our early private equity investors. Since then, we have continued to grow because of high demand for affordable higher education, growing acceptance of online education and the many quality initiatives we have put in place.

We pride ourselves on having a different business model than most other for-profit universities in that we rely on student referrals for a significant percentage of our new student growth. We are intensely focused on academic quality, and we are very passionate about making our tuition affordable. We haven't increased our undergraduate tuition in about 11 years.

TWST: A few analysts interviewed in this report cited APEI as a top pick, in large part because of its low-tuition costs. Would you talk a bit about how the company has been able to maintain that affordability?

Dr. Boston: Our founder had the experience of being an enlisted Marine during the Vietnam years, and he often recalled living from paycheck to paycheck. Thus, our goal was to charge a tuition that did not exceed the military's tuition assistance benefit so that service members could complete their studies with minimal or no out-of-pocket expense.

We built our business model around this tuition level through growth, referral-based marketing and by creating additional efficiencies along the way. We have automated many administrative functions through our proprietary business and information technology system that we call PAD, or partnership at a distance. We recently automated our transfer credit evaluation process, saving both time and reducing costs. Lastly, our referral-based marketing approach is highly effective and it supports our model quite nicely - relative to most of our peers, we spend a lot less money on marketing.

As we have stated in a number of our recent earnings calls, our goal is to keep selling and promotional expenses to approximately 20% of revenue or less on a 12-month basis. This is working for us, and it also allows us to invest in other areas to enhance quality, such as in academics and information technology.

TWST: Besides price, what else would you say differentiates the company from its peers or competitors?

For more from this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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