CHARLES TOWN, W.Va.--(BUSINESS WIRE)--Aug. 21, 2008--American
Public Education, Inc. (NASDAQ: APEI) - parent company of online
learning provider American Public University System, which operates
through American Military University and American Public University -
announced today that it has been informed by its largest shareholder,
ABS Capital Partners, that the shareholder is undertaking a limited
distribution of 400,000 shares to its partners.
CEO Wally Boston commented that: "ABS Capital Partners informed us
today that they are taking this action, which is intended to bring
their ownership below 25% of the company and which under U.S.
Department of Education regulations is deemed to be a change in
ownership and control requiring review by the Department in order for
APUS to reestablish eligibility and continue participation in the
federal student financial aid programs. As we have previously
disclosed, we viewed it as inevitable that ABS Capital Partners would
go below the 25% level, and now that they are taking this action we
will be able to move forward with the required regulatory process
that, when completed, will remove a regulatory hurdle that otherwise
creates timing and execution constraints to certain future financings
and acquisitions we may undertake. We will formally notify the
Department of Education of this distribution and the deemed change in
ownership and control. We expect that the Department's formal review
process will be completed by the end of September. Based on Department
regulations and consultation with the Department, we currently expect
that APUS will move back into provisional status with respect to
participation in federal student financial aid programs. While
provisional status will mean certain enhanced regulatory reviews and
processes, at this time we do not expect it to have an impact on our
business results. Since we moved off provisional status earlier this
summer, we received approval for several new degree programs including
our Education programs, and we do not expect our current plans for
growth will be affected by moving back to provisional status."
Additional information on certification by the Department of Education
and the impact of provisional certification is contained in Item 1 of
APEI's Annual Report on Form 10-K under the heading "Regulation of our
Business."
ABS Capital Partners Managing General Partner Phil Clough stated:
"The purpose of this limited distribution is simply to move our
holdings below the 25% ownership threshold that the Department of
Education uses to define a controlling shareholder. We carefully
considered the right time to conduct this transaction so as not to
interfere with management's goals for the year, including the recently
announced approval of new education degrees and programs. We felt it
would be in the best interest of the company to proactively move below
the Department's controlling shareholder threshold so that this
inevitable administrative process occurred at a time and in a manner
that was least likely to interrupt the company's business plans. We
have no current plan for further distributions." Following the
distribution, ABS Capital Partners continues to hold 4.2 million
shares, and Phil Clough remains as Chairman of the APEI Board of
Directors.
Forward-looking Statements
Statements made in this press release regarding American Public
Education, or its subsidiaries, that are not historical facts are
forward-looking statements based on current expectations, assumptions,
estimates and projections. 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", "could", "estimate", "expect", "intend",
"may", "should", "will" and "would". These forward-looking statements
include, without limitation, statements about Department of Education
review, provisional certification, future growth and business
objectives and actions by ABS Capital Partners. Actual results could
differ materially from those expressed or implied by these
forward-looking statements as a result of various factors, including
the various risks described in the "Risk Factors" section and
elsewhere in the company's Annual Report on Form 10-K for the year
ended December 31, 2007 as filed with the SEC. The company undertakes
no obligation to update publicly any forward-looking statements for
any reason, even if new information becomes available or other events
occur in the future.
CONTACT: American Public Education, Inc.
Harry T. Wilkins, CPA, 304-724-3722
Executive Vice President and Chief Financial Officer
or
Christopher L. Symanoskie, 703-334-3880
Director, Investor Relations
SOURCE: American Public Education, Inc.