Q4 2023 American Public Education Inc Earnings Call
Participants
Chris Symanoskie; IR; American Public Education Inc
Angela Selden; President, Chief Executive Officer, Director; American Public Education Inc
Richard Sunderland; Chief Financial Officer, Executive Vice President; American Public Education Inc
Steve Somers; SVP, Chief Strategy and Corporate Development Officer; American Public Education Inc
Jasper Bibb; Analyst; Truist Securities, Inc.
Matt Larew; Analyst; William Blair & Company
Raj Sharma; Analyst; B. Riley Securities, Inc.
Alex Paris; Analyst; Barrington Research Associates, Inc.
Presentation
Operator
Good afternoon. My name is Jeannie, and I will be your conference operator today. I would like to welcome you to the APEI Reports Fourth Quarter 2023 Results Conference Call. (Operator Instructions) Thank you. I would now like to turn the call over to Chris Symanoskie, Investor Relations. You may begin your conference.
Chris Symanoskie
Thank you, operator. Good afternoon, everyone. Welcome to American Public Education's conference call to discuss fourth quarter 2023 results. Joining me on the call today are Angela Seldan, President and Chief Executive Officer; Rick Sunderland, Executive Vice President and Chief Financial Officer; and Steve Somers, Senior Vice President and Chief Strategy and Corporate Development Officer.
Materials for the call today are available in the Events and Presentations section of APEI's website. Statements made during this conference call and any accompanying presentation regarding APEI and its subsidiaries that are not historical facts may be forward-looking statements based on current expectations, assumptions, estimates and projections.
Forward-looking statements may sometimes be identified by words such as anticipate, believe, seek, could, estimate, expect, can, may, plan, should, will, would, and similar or opposite work. Forward-looking statements include, without limitation, statements regarding expectations for registrations and enrollment revenue, earnings and adjusted EBITDA and other earnings guidance initiatives to improve incollect pass rates and reposition Rasmussen University for growth and other company initiatives, including with respect to future competition and demand and cost saving efforts.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These include, among other statements, the Company's dependence on the effectiveness of its ability to attract students to persist and are likely to succeed the ability to effectively market programs or expand in new markets the reduction elimination, suspension or disruption of tuition assistance, changing market demand, economic and market conditions, the ability to meet regulatory and creditor requirements and the impacts thereof challenges with acquisitions.
The Company's ability to meet cost savings goals, matters related to debt and preferred stock and risks described in today's presentation. Today's press release, APEI's Form 10-K for 2023 and other SEC filings. The Company undertakes no obligation to update publicly any forward-looking statements for any reason unless required by law.
This presentation contains references to non-GAAP financial information, a reconciliation between the non-GAAP financial matter measures we use and the most directly comparable GAAP measures is located in the appendix to today's presentation and in the earnings release. Management believes that the presentation of non-GAAP financial information provides useful supplemental information to investors regarding its results of operations and should only be considered in addition to and not a substitute for or superior to any measure of financial performance prepared in accordance with GAAP.
Now I'd like to turn the call over to APEI's CEO, Angela Selden. Angie, please go ahead.
Angela Selden
Thank you, Chris. Good afternoon, and thank you for joining American Public Education's Fourth Quarter 2023 earnings call. Today, I am pleased to share details about three key themes.
First APEI has outperformed Fourth Quarter 2023 guidance and all financial metrics with better-than-expected performance from American Public University System Rasmussen University and Hondros College of Nursing.
Second, Rasmussen and Hondros both have meaningfully improved pre-licensure and collect student outcomes for Q4 and full year 2023.
Third, we are initiating full year revenue and adjusted EBITDA guidance for 2024, a reflection of our confidence in the outlook for 2024 and with investment areas that prioritized growth, academic quality and student success.
Before I provide more details on those three key themes. I would like to first recognize the extraordinary efforts of our faculty and staff across each of our education units and at APEI. They are delivering on our vision of transforming lives, advancing careers and improving communities. I am particularly proud of our entire team's ability to respond to the year's difficult challenges and their relentless efforts to improve student outcomes. These efforts have resulted in remarkable improvements in 2023 and set the course for continued growth in 2024 and beyond.
Now turning our attention to fourth quarter 2023 results. APEI's financial and operating performance exceeded guidance on all metrics. API.'s revenue exceeded the top end of our guidance range, reaching $152.8 million and adjusted EBITDA exceeding our guidance by more than 50%, reaching $25.7 million, which is $8.8 million above the high end of the range and marking the second consecutive quarter of meaningful adjusted EBITDA outperformance.
I am particularly proud of how our education units have contributed to the outperformance with APEI's, achieving record EBITDA margins and both Rasmussen and Hondros delivering positive EBITDA results. Earnings per share also saw significant growth rising from a loss of $0.35 in the prior year period to a gain of $0.64 per diluted share in the fourth quarter.
This 4Q '23 financial and operating performance also reflect our continuous improvement efforts driven by operational changes we implemented throughout 2023. These changes include enhancing our marketing efficiency across all e-use, rightsizing of the cost structure to our revenue base and in particular within Rasmussen and successfully executing on the APEI shared services transformation that we began a year ago.
Now let's turn our attention to APEI's education units, starting with APUS. In 4Q 23, overall, net course registrations increased 4% year over year to 90,700 registrations, which was at the top of our guidance range. Apus strength with the military resulted in active duty registrations increasing by 5%, while veteran registration show continued momentum with 13% year-over-year growth, a continued testament to the strong military franchise that AMU has built.
Nonmilitary registrations continue to be soft in both the competitive labor and higher end markets for those students. The 4% increase in registrations in the quarter, combined with the positive impact of pricing actions earlier in 2023, partially offset by the mix shift to lower revenue. Military enrollments resulted in an 8% increase in revenue at APUS.
However, strong revenue performance, coupled with cost containment and lower marketing spend, resulted once again in strong margin improvement in the fourth quarter with EBITDA increasing to $27.7 million from $20.6 million just a year ago. This resulted in a 35% margin for the quarter as compared with 28% in the prior year period.
Looking ahead to the first quarter of 2024, we expect total registrations at APUS to again increase year over year, but at a slightly slower pace than 2023's a very strong performance. I am proud to report that last month AMU was named the 2024 Institution of the Year by the Council of College and Military Educators, CCME for its dedication to educating active duty service members and their families. Amu was selected from over 2,000 institutions. This is the second time in 12 years that AMU. has been honored with this award. From a regulatory perspective, APUS met the Department of Ed 90-10 rule for 2023 with a ratio of 89%. As a reminder, 2023 was the first year that military tuition assistance and veterans education funding were included in the [90] portion of the calculation.
Turning our attention to Rasmussen, the team delivered in 4Q '23, the best bottom-line performance in a year with positive EBITDA of [$409,000], even while enrolments decreased 10% in the quarter. Additionally, on-ground Nursing and Health add programs showed strong growth, including the BSN program up over 20%. Rasmussen enrollments are finalized for the first quarter of 2024 and overall enrollment decreased just 6% as compared with double digit declines for each of the last four quarters.
Online enrollments were slightly positive while on-ground Herald health care enrollments declined 11%, driven primarily by declines in our assistant ADN program. Please note that to more closely align our public reporting with how Rasmussen has been operating the university internally since the reorganization in late 2022, we will discontinue our public reporting of nursing versus non-nursing effective next quarter and shift to campus health care versus online reporting instead.
For comparability, we've included a table in the appendix of our 4Q23 earnings presentation. As the Rasmussen 4Q '23 end collects results based on final scores reported for all states, except Wisconsin, which has not yet reported, but we're Rasmussen expect all four programs to pass Rasmussen on-ground pre-licensure nursing programs achieved or surpassed the respective state threshold for 26 of 29 programs or 90% of all programs in the fourth quarter 2023.
This was up from about 80% in the third quarter and considerably up from 60% a year ago. For the entire year 2023 measurement period, 20 of 29 program, or about 70% passed, which includes the preliminary results for Wisconsin, and that is over 20 points higher than a year earlier. Importantly, the trend has improved steadily each quarter since 1Q '23. Even as Rasmussen has delivered much better scores over the past year. Rasmussen Bloomington, Minnesota ADN program has continued to perform below state standards.
As a result, Rasmussen has taken the difficult decision to voluntarily close the ADN program at this campus effective in 1Q '24 and has received approval from the Minnesota Board of Nursing to teach-out this program by the end of 2Q '24. Rasmussen had already stopped enrolling new students in the Bloomington ADN program as of the last quarter, and we expect minimal impact on enrollments and revenue, given that fewer than 50 students will still be in the program upon closing.
While this has been a difficult decision to make, Rasmussen remains committed to offering strong nursing programs in the Twin Cities. As such, Rasmussen will focus on attracting BSN students to that location. Instead where Rasmussen has reported over 90% and collect pass rates for BSN in the most recent quarter. This pivot to BSN also reflects the high demand for BSN nurses in the Twin Cities health care market relative to ADN nurses, Rasmussen expects further growth in its non-ADN health said, campus-based programs and the institution's more targeted programmatic marketing efforts are helping to drive improved enrollment in these areas by streamlining processes for identifying and attracting new.
Yes, at Hondros it delivered record enrollment of 3,300 students in the first quarter of 2024, surpassing 3,000 enrolled students for the second consecutive quarter. Demand remains strong for PN and ADN nursing program with the new Detroit campus continuing to perform very well. Legacy campuses, including Indianapolis, while still operating with enrollment cap as a new program also contributed to growth this robust enrollment growth has driven a strong top line with revenue growing 25% in the fourth quarter '23 and 21% for the full year 2023.
During 2023, Hondros implemented a modest price increase in the second quarter, reduced headcount to up to optimize operating costs and delivered positive EBITDA of $1.1 million in the fourth quarter compared to a loss of $700,000 in the prior year period. This represented a 7% margin. And with that strong fourth quarter performance, Hondros delivered positive adjusted EBITDA for the year of $400,000 as compared to a loss last year.
Hondros maintained its track record of achieving high and credit scores in its PN program in 2023 and for the first time since 2014 has also reached the passing criterion for its RN program in Ohio. This achievement sets the stage for Hondros to have the opportunity to expand its ADN RN program to India of Indianapolis and Detroit, where that program is not currently offered.
Additionally, in 2024, Hondros plans to begin offering a medical assistant program at all Hondros, Ohio campuses. This will increase utilization of both these locations and prospective student leads and will lead to increased access to healthcare education for the local community population, which will also improve profitability.
I would now like to turn our attention briefly to 2024. We are pleased to provide full year 2024 guidance for revenue and adjusted EBITDA. For revenue, we expect a range of $610 million to $620 million. And for adjusted EBITDA, we expect a range of $55 million to $65 million. In 2024, we are investing in several initiatives that we believe will strengthen our market position, set the stage for improved student experience and success and will lead to additional growth.
These areas include APUS, which is both investing in curriculum modernization to improve the student experience and satisfaction and has announced the first time -- first part-time faculty wage increase in 14 years. Hondros is relocating to campuses and has plans to add programs to increase access and to better meet the needs of its students and health partners in the local communities, APEI, which is modernizing and optimizing our enterprise technology platform -- experience includes the technology transition for Rasmussen from Collegium and the upgrade of the training platform at USA.
In closing, it remains my top priority to attract and retain strong leaders across APEI and our education units to drive operational enhancements and to foster a culture of excellence and trust among our internal and external stakeholders to uphold the educational promises we make to over 107,000 students each year.
Before turning the call over to Rick Sunderland, our CFO, I'd like to summarize by saying while challenges remain and our efforts to address them are ongoing. Our 1Q '24 guidance coupled with the fourth quarter's outperformance, signifies a return to year-over-year growth and profitability and improved visibility. Tangible proof points, whether enrollment trends, profitability metrics for in-collect scores reflects the steps we have taken to strengthen our schools and the overall enterprise.
Having exceeded our revenue and adjusted EBITDA outlook for each of the last two quarters, we are well positioned as we enter 2024. Our entire APEI team recognizes the significance of the challenges we have faced and are energized by how we have come together to strengthen our organization to prepare for the next phase of our journey as we begin 2024, we do so from a position of stability with a large and growing addressable market, a committed leadership team, a distinctive value proposition and a well-established franchise among service minded adult learners.
With that, let me turn the call over to APEI CFO, Rick Sunderland.
Richard Sunderland
Thank you, Angie. Looking at our fourth quarter 2023 financial results, total revenue for the quarter was $152.8 million, up $0.4 million or 0.2% from the prior year period and better than our fourth quarter guidance. Fourth quarter revenue growth was driven by increased revenue at APUS and Hondros, partially offset by revenue declines at Rasmussen and graduate school for the quarter. Adjusted EBITDA was also above our previously issued guidance due in part to lower than expected advertising costs in the quarter at APUS and Rasmussen and lower than expected compensation costs.
For the quarter, adjusted EBITDA was $25.7 million compared to $15.4 million in the prior period. Current quarter results represent an adjusted EBITDA margin of 16.8% compared to 10.1% in the prior quarter, reflecting the modest revenue growth in the quarter, combined with lower advertising and marketing costs and lower compensation costs due to the third quarter reduction in force compared to the prior quarter.
In total, advertising and marketing costs decreased $10.7 million year over year. Our diluted EPS in the fourth quarter was $0.64, a significant improvement from the loss of $0.35 in the prior year period and again exceeding fourth quarter guidance at APUS revenue was $79.4 million in the fourth quarter, up 8.1% as compared to the prior year due to continued growth in net course registrations from students utilizing TA and VA education funding and the impact of tuition and fee increases implemented in the second and third quarters of 2023.
APUS continued to achieve more with less for the quarter. Net course registrations increased 4% on lower advertising and marketing costs of $1.8 million compared to the prior year. For the year 2023, advertising and marketing costs was $6.8 million lower than the prior year. If you adjust APUS EBITDA for the fourth quarter was $27.7 million compared to $20.6 million in the prior year, an increase of 34% year over year.
APUS EBITDA margin for the quarter increased to 35% compared to 28.1% in the prior year period. At Rasmussen, fourth quarter revenue was $52.6 million, a decrease of 13.4% compared to the prior year due to lower enrollment during the quarter. However, the rate of revenue decline improved in the fourth quarter as compared to the third quarter decline of 15.4%. Restaurant-level EBITDA turned positive in the quarter and was $0.4 million compared to an EBITDA loss in the prior year period.
Fourth quarter EBITDA benefited from lower advertising expense and labor savings from the previous reduction in force. For the quarter, advertising marketing spend was $4.5 million lower than the prior quarter. For the year 2023 advertising expense was $11.1 million lower than the prior year. At Hondros, revenue was $15.8 million for the fourth quarter, up 24.9% as compared to the prior year due to continued growth in enrollments.
For the quarter Hondros, total enrollment grew 19.2% to approximately 3,100 students, the highest enrollment ever for the quarter. Hydro achieved positive EBITDA of $1.1 million compared to an EBITDA loss of $0.7 million in the prior quarter. Graduate School included in Corporate and Other experienced a 10% decline in revenue to $5.1 million, primarily due to lower enrollments in the quarter. Graduate School enrollments continue to be negatively impacted by the continuing federal agency funding uncertainty over federal funding either through continuing resolutions or the passing of annual funding legislation for the quarter graduate schools EBITDA loss was $1.1 million compared to an EBITDA profit of $0.1 million in the prior year period.
At December 31, 2023, cash, cash equivalents and restricted cash was $144.3 million, an increase of $14.9 million from year end 2022. Restricted cash at December 31 was approximately $27.7 million and continues to be almost entirely comprised of a restricted certificate of deposit that secures a letter of credit for Rasmussen with the Department of Education. For the year 2023 cash flow from operations was $45.5 million, an increase of $16.3 million or plus 55.8% as compared to the prior year.
The increase in cash and cash flow was primarily due to higher revenue and operating income at APUS, increased payments received from ARV, including payments related to prior periods prior to 2023 and the timing of other receipts and payments, partially offset by our investment in capital expenditures, payment of preferred dividends, repurchases of common stock, and the change in billing approach in the fourth quarter for TTA and APUS.
Principal on APEI term loan at December 31 is unchanged from the prior year and at approximately $99 million with unrestricted cash at approximately $117 million, APEI continues to be net cash positive. Additionally, there are no borrowings under APEI's $20 million revolving credit facility, which remains fully available.
During the fourth quarter, we repurchased 1.7 million of our common share -- common stock, bringing our repurchases in 2023 to 1.5 million shares for $9.7 million or an average price of approximately [$6.40]. In addition, we repurchased an additional 251,000 shares in the first quarter of 2023 for $2.8 million. So over the past year, we've repurchased an aggregate of 1.76 million shares for $12.5 million at an average price of approximately $7.8.
Turning now to the first quarter 2024 outlook, APUS net course registrations are expected to be between 97,000 and 99,000 registrations, an increase of between 1% and 3% over the prior period. At Rasmussen and Hondros first quarter student enrollments are actual because of the quarterly starts to the schools. At Rasmussen, first quarter total on-ground enrollment decreased 11% to approximately 6,300 students, while total online student enrollment increased 1% year over year to approximately 7,200 students for an aggregate enrollment decline of approximately 6% year over year to approximately 13,500 students.
At Hondros first quarter, total student enrollment increased 22% year over year to approximately 3,300 students, the highest enrollment ever at Hondros. In the first quarter of 2024 consolidated revenue is expected to be between $151 million to $153 million. The Company expects net loss to common shareholders to be between $4.4 million and $3.0 million or a loss between $0.25 and $0.17 per diluted share.
Adjusted EBITDA is expected to be between $8 million and $10 million for the first quarter of 2024. For the full year 2024, we anticipate consolidated full year revenue of between $610 million and $620 million and adjusted EBITDA of between $55 million and $65 million.
With that, operator, we would like to open the line for questions.
Question and Answer Session
Operator
(Operator Instructions) Jasper Bibb, Truist Securities.
Jasper Bibb
Hey, good evening. Nice results here. I guess the obvious question is you did a really strong 17% EBITDA margin in the fourth quarter. And I guess that's always kind of a seasonally strong margin in the fourth quarter, but the guide implies a 10% margin ourselves. So I guess you mentioned the growth investments earlier, but how do we bridge that 4Q margin exit rates where you're guiding on '24?
Richard Sunderland
Well, just for the fourth quarter is seasonally strong and by giving an indication of adjusted EBITDA for the year, you can see sort of a increase year over year of that margin up. But we've invested we're investing in a number of initiatives which AIG outlined in her in her remarks up importantly course, up improvement, faculty, salaries and technology. I think those are the three primary areas of investment and they're all going to lead to improved student experience and improve student outcomes. Angie, would you like to comment further?
Angela Selden
I would just say bridging, which would be looking back at 4Q of '23 data for a couple of things, just to highlight. First we were able to convert conserve our marketing spend and I spent about $3 million less than we had expected. At the same time, we had been accruing a somewhat larger bonus accrual than what we ended up spending for the year. So that saves some money and obviously resulted in a higher performance in the fourth quarter than we had originally forecasted and done. And we had some revenue outperformance at APUS above what we had expected and lower expenses at Hondros to all those things added up to a very favorable 4Q '23 that was above what we had guided to before.
Jasper Bibb
Got it. Or would there be any way to frame the size of those growth investments in like an absolute dollar perspective? Versus I guess what would be considered normal or what you're spending in those categories in 2023?
Steve Somers
Hi, Jasper. It's Steve. I think at this point, right, from a guidance standpoint, to the metrics, we're comfortable providing revenue and adjusted EBITDA and obviously, CapEx, we're not we're not prepared at this time to kind of dig into that level of detail and bridge from '23 to '24, right? And it will also depend on some of the timing of when that happens. So there's a there's a range that we've got internally, but I think that that's captured in in the overall guidance range that we provided for adjusted EBITDA.
Jasper Bibb
Maybe next one for me, it looks like the receivables balance ticked up quite a bit in the fourth quarter with some of the billing changes at army. Would you expect those DSOs to normalize down in the first half of 2024. And I guess longer term, like how do you plan to manage that? I think it's $26 million in receivables from Army for '22 and '23 in light of 90-10 compliance.
Richard Sunderland
Well, Jasper, we talked about a change in our billing policy effective January first. We will see a normalization in receivables. You'll see a decline from the year-end number. I don't think you'll see a return to where we were at June 30, simply because we've changed the timing of how we bill the military, like I understand.
Jasper Bibb
And I guess maybe at the segment level doesn't have to be like particularly specific, but just any color on how you're thinking about segment margins for your main three segments in 2024?
Steve Somers
I think the way to think about that, the very same story, we're not providing segment level detail, but we expect that we'll see improvement on Hondros graduate school and the rand Rasmussen, APS is relatively flat and that reflects some of the investments that Andy just talked about in terms of technology and curriculum and quality improvement. So I think you should also think from a sequential flow of quarterly flow perspective that our quarters will follow a similar pattern as to what we delivered in 2023.
Operator
Stephen Sheldon, William Blair.
Matt Larew
We have Matt Larew on for Stephen Sheldon. Thank you for taking my questions. I wanted to start with one on and pucks pass rates. I was wondering if you could talk about what the main driver of the improving first time and collects pass rates has been given you have a variety of initiatives underway there. And then as a second part to that, could you also talk about what campuses may still be facing enrollment caps due to underperforming and click scores, whether those be self-imposed or from the nursing boards?
Angela Selden
Thanks for the question. The first I will answer by saying, if you recall earlier last year, we did hire new leadership in our nursing program at Rasmussen. And what Dr. Politico has implemented include it strengthened faculty, onboarding and training to provide more visibility to helping students have awareness around the importance of plus exams early in the curriculum.
The second was that we invested at Rasmussen in student success coaches to help it strengthened the and tax preparation that was present at the campuses already. We implemented assessments during the middle and end of the program to help give students remediation strategies, identify areas of focus and help them really, I'd really pinpoint the areas that they needed to pay attention to as they prepare for the end question, Pam, and in certainly the changes to the overall and collect exam to next-gen has passed seen the end credit scores increase across the nation.
The second part of your question is which campuses are affected by enrollment cap. As we've mentioned previously, our Kansas has caps, but those are not related to any flex scores or anything that we've imposed simply as a programmatic level cap, which we intend to do to explore in 2024. Illinois has a cap that had historically been present as a result of and more about the on the accreditation of the full accreditation of the program than the than the EnQuest scores themselves.
Recently, and we talked about this in our last call, the Illinois legislature and Board of Nursing have removed the temporary approval and Rasmussen has been granted the accreditation for its program in Illinois and the state of Illinois has removed the any kind of penalty that any nursing programs in Illinois would have expected as a result of lower than state average and credit scores.
And as a result for us, it has three years now to meet the same standard for it nursing programs. Those are very meaningful, important developments for our four campuses in Illinois. And then as we discussed, we have only had CAP in the Bloomington, Minnesota ADN program, which, as you heard from our voluntary action, will it no longer be relevant as we teach out that program over the course of 2024.
Matt Larew
Super helpful overview, Angie, thank you for that. And then just wanted to circle back on the 90-10 rule note was briefly touched on in a previous question, but can you just talk about the options you have to reduce risk related to the 90-10 rule in 2024, especially given it looks like APUS was close to exceeding that threshold in 2023, right?
Richard Sunderland
So there are numerous and this is right. There are numerous initiatives that will bolster the 10 side of that 90, 10 ratio, right? So sources of non federal funds. I would point out that there were several initiatives that were implemented in 2023, which had a favorable impact on that 2023 number. But because they were implemented through the year at some in the second half of the year. We haven't seen the full benefit of that, which we'll see in in 2024.
There are some of the levers, which is your specific question include of enrolling students that are not Title for eligible specifically, international students are looking at various of call it student mix options, a B2B B reimbursement and some perhaps some pricing. And we note that at the graduate level, the of the level of cash pay is higher than what you see at the undergraduate or associate level. So when we talk about mix, it would be a programmatic mix that would favorably impact that 90-10 score.
Operator
(Operator Instructions) Raj Sharma, B. Riley.
Raj Sharma
Thank you for taking the questions of stellar results. Congratulations. And can you can you add about First question is, can you give us more color on the greater than expected profitability, clearly EBITDA your guidance significantly. Was that largely advertising and marketing expenses being down or from what other elements of your revenues were largely in line with guidance with the can you give us more color on the big broad.
Richard Sunderland
You note that it's on the expense side, right? Because revenue was above guidance, but not significantly above guidance, two areas where we really saw our expense improvements. Number one was in our marketing and advertising costs. We saw a good momentum and great efficiency in that area, allowing us to to optimize or conserve on our expenses there.
And then on the compensation side, we of the year end bonus accrual ended up being lower than what was anticipated earlier. And so compensation costs were lower than we expected. When you look at the quarter, you would expect margins to be higher than what was previously reserved for the reasons stated earlier, number one, the seasonality business and number two of the cost reduction initiatives, the reduction in force that took place in the third quarter. I think those are the primary drivers. Angie, if you want to comment further?
Angela Selden
No, I have nothing more to add.
Raj Sharma
So I can move on to my next question that in the past, you've indicated a higher run rate EBITDA. Then, you've guided to fiscal '24, and I'm wondering, you say, you know, you have these expense savings in Q4 that helped you beat the EBITDA margin for Q4 was 17% and then Q1 is 10% in the fiscal '24 is an even lower higher single digit.
So I guess my question is the gains you made in '23 in the margins, are these being offset by the new investments? Or is there an element of conservatism here and for Horizon?
Steve Somers
Hey, Raj. It's Steve, I think there's for instance, the first time that we put out full year annual guidance, we're still early in the year. So we certainly want to make sure that we're not being too aggressive on that front. I think that the points about where we've saved, you know, we had outperformance in fourth quarter, right? We're taking the opportunity to make sure that we're investing in quality and the student experience, again, quality, student outcomes, student experience. So I think it's a combination of wanting to make sure that we're investing in a prudent way throughout the year. And also want to make sure that we give ourselves some room throughout the year as to be able to adjust to the changes in marketing and market dynamics.
Angela Selden
And two things, Raj, I'll add, as I mentioned in my remarks, Hondros is relocating to campuses is launching the MA program, and we are also moving Rasmussen off of the clean IT platform and into the APEI ad tech platform, which will have a meaningful long-term savings for Rasmussen and for APEI. But that move will not be complete until the end of 2024. And so the real cost savings associated with that, we will see take effect on a full year basis in 2025.
Raj Sharma
Thank you for that. So I know that you're not breaking out the guidance in terms of the EBITDA margins for the three divisions, but clearly it was up heartening to see the positive EBITDA in Rasmussen ATM. And I know you're not I know you're not putting numbers to it, but in the general direction, you expect breakeven to profitability to continue for the other two divisions?
Steve Somers
I think you're referring to Honduras and graduate school. Is that correct?
Raj Sharma
Yes
Steve Somers
So no, I think as everybody has read as it relates to raise. We're expecting progress throughout the year. We don't anticipate that it will be positive on a full year basis, but we are expecting to get toward profitability in the back half of the year.
Raj Sharma
And I have a couple of more questions, if I may. On the Rasmussen Bloomington campus, the teach-out, is that the driven by I mean, is that driven by regulators or was that self-driven?
Angela Selden
No, we made the decision rush and went to the Board of Nursing voluntarily to opportunity to add that program. We saw that while we saw improvements in the incollect scores at that campus, that the improvements did not meet state standards by the end of the quarter or fourth quarter of 2023. And so we voluntarily went to the Board of Nursing with that offer. And the more what we are seeing in the Twin Cities specifically is that the market demand, it's not as strong for two year ADN nurses as it is for four-year BSN nurses.
And given the very strong and collects results that we have at the Bloomington campus among other campuses in Minnesota for BSN, above 90%. For our incollect scores. We chose to invest our energy, our marketing resources, our faculty towards the BSN program, which will better align with the jobs that are available in the Twin Cities and the preferences of the health systems for a BSN train versus Navy and trainers.
Operator
Alex Paris, Barrington Research.
Alex Paris
Thank you for taking my questions. Congratulations on the strong finish to the year.
Angela Selden
Thank you.
Alex Paris
I just wanted to ask you a question about full year guidance. Thank you for that. Incidentally, are what was the last time that you offered full year guidance, just refresh my memory or if you hadn't done that in the past that it's usually one quarter at a time. So -- confidence, but now (multiple speakers)
Richard Sunderland
Yes, it's Rick. And I'm here with Chris. We're going to test each other's memory. I think with 2011 or '12, Chris?
Chris Symanoskie
I'll say 2014 but --
Richard Sunderland
Not 2014 now because I started in '11 and '12 and I think that was the very tail end of annual guidance.
Alex Paris
Right. Well, on the latest data, you have one specific question between the prepared comments and the questions that preceded but I just had a couple of left up, and this is as a result of a quick scan of the 10-K, the 10-K mentions the planned closure of the ATM program in Bloomington. It talks about the legislative changes in Illinois, which is a positive for the Illinois Rasmussen programs. I mean, it also mentioned something about Florida introducing legislation that could have an impact on our used nursing programs there. Can you give us a little bit more color on those legislative changes or the introduction of legislative changes?
Angela Selden
Sure. And those things are really developing as we speak. And you may have seen the headlines about it, our nursing program in Florida that was essentially a diploma mill. And as a result of that we're not it's not us, but we're hoping to find another program. Yes, another program, Florida, and they replace these higher governing board in in Florida.
And obviously, they have a mandate to be sure that all nursing programs are meeting the standards that the state of Florida would expect. And so we are pleased with our performance in our program campus combinations we have one campus program combination in Fort Myers that is below the state and collect standards.
But we believe that we have a strong message to deliver to the Florida State and nursing board. And we are striving to collaborate with them and make sure that we provide them all the information they need it do you know, evaluate and have confidence in our program, how many campuses or programs in Florida for Rasmussen, we add six campuses. And as it relates to nursing (multiple speakers)
Steve Somers
12 --
Angela Selden
Yeah, two programs at each campus. So six, six campuses with an LPN and ADN program.
Steve Somers
So 12 total, Alex.
Alex Paris
So12 total and then you just said there is there and where you are below state standards and Flex is one campus one program in Fort Myers?
Angela Selden
That's correct.
Alex Paris
And is this proposed legislation or is it enacted less legislation? And what's your exposure with that campus?
Angela Selden
It is -- it is very early in the legislative process, so it is not proposed and that we are aware of as it relates to Fort Myers specifically. And that program has been below the state standard for two consecutive years. And so we're paying careful attention to the remediation plan at Fort Myers.
Alex Paris
And is this a is this an ADN program or the LPN program or both in ADN program?
Angela Selden
It is an ADN program, yeah.
Alex Paris
And how many students are roughly in their program that table.
Angela Selden
I can't comment on. I don't know that number for sure.
Operator
There are no further questions at this time. I will now turn the call back over to Chris Symanoskie for closing remarks.
Chris Symanoskie
Thank you, operator. That will conclude our call for today. We thank you for your time and your interest in American Public Education. Good evening, everyone.
Operator
This concludes today's call. You may now disconnect.
