UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 29, 2016
(Date of earliest event reported)
American Public Education, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 001-33810 | 01-0724376 | ||||
(State or other jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
111 W. Congress Street Charles Town, West Virginia |
25414 | 304-724-3700 | ||
(Address of principal executive offices) | (Zip Code) | (Registrant's telephone number including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 – Financial Information
Item 2.02 | Results of Operations and Financial Condition. |
On February 29, 2016, American Public Education, Inc. issued a press release reporting financial results for the three and twelve months ended December 31, 2015. A copy of American Public Education’s press release is attached to this report as Exhibit 99.1 and is incorporated in this report by reference. American Public Education has scheduled a conference call and webcast for 5:00 p.m. Eastern time on February 29, 2016 to discuss its financial results, and slides for that call are attached to this report as Exhibit 99.2 and are incorporated in this report by reference. A copy of the investor fact sheet is attached to this report as Exhibit 99.3 and is incorporated in this report by reference.
Section 9 – Financial Statements and Exhibits
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
99.1 | American Public Education, Inc. press release dated February 29, 2016, reporting |
financial results for the three and twelve months ended December 31, 2015. | |
99.2 | American Public Education, Inc. slides for February 29, 2016 conference call and |
webcast for the three and twelve months ended December 31, 2015. | |
99.3 | American Public Education, Inc. fact sheet posted to its investor relations website |
on February 29, 2016. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
American Public Education, Inc. | |||||
Date: | February 29, 2016 | By: | /s/ Richard W. Sunderland, Jr. | ||
Richard W. Sunderland, Jr., Executive Vice President and Chief Financial Officer |
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EXHIBIT INDEX
99.1 | American Public Education, Inc. press release dated February 29, 2016, reporting |
financial results for the three and twelve months ended December 31, 2015. | |
99.2 | American Public Education, Inc. slides for February 29, 2016 conference call and |
webcast for the three and twelve months ended December 31, 2015. | |
99.3 | American Public Education, Inc. fact sheet posted to its investor relations website |
on February 29, 2016. |
American Public Education Reports Fourth Quarter and Full Year 2015 Results
CHARLES TOWN, W.Va., Feb. 29, 2016 /PRNewswire/ -- American Public Education, Inc. (NASDAQ: APEI) – parent company of online learning provider American Public University System (APUS) and campus-based Hondros College of Nursing (HCON) – announced financial results for the quarter and year ended December 31, 2015.
Recent Results:
Financial Results:
Total consolidated revenue for the fourth quarter of 2015 decreased 5.9% to $85.9 million, compared to total revenue of $91.3 million in the fourth quarter of 2014. Consolidated income from operations before interest income and income taxes in the fourth quarter of 2015 was $15.7 million, compared to $18.6 million in the fourth quarter of 2014. GAAP net income for the fourth quarter of 2015 was $9.8 million, or $0.60 per diluted share, compared to net income of $11.8 million, or $0.68 per diluted share for the fourth quarter of 2014. The weighted average diluted shares outstanding for the fourth quarter of 2015 and 2014 were approximately 16.2 million and 17.4 million, respectively.
Non-GAAP net income for the fourth quarter of 2015 was $12.1 million, or $0.75 per diluted share. Non-GAAP net income for the fourth quarter of 2015 excludes expenses of approximately $2.3 million, net of tax, or $0.15 per diluted share related to the previously announced workforce realignment and write-down of information technology and other assets. See "GAAP to Non-GAAP Reconciliation" in the financial tables for additional details.
For the twelve months ended December 31, 2015, total consolidated revenue decreased 6.3% to $327.9 million, compared to total revenue of $350.0 million in the prior year. Income from operations before interest income and income taxes for the twelve months ended December 31, 2015 was $52.3 million, compared to $65.8 million in the prior year. GAAP net income for the twelve months ended December 31, 2015 was $32.4 million, or $1.93 per diluted share, compared to net income of $40.9 million, or $2.33 per diluted share in the prior year. The weighted average diluted shares outstanding for the twelve months ended 2015 and 2014 were approximately 16.8 million and 17.5 million, respectively.
Non-GAAP net income for the twelve months ended December 31, 2015 was $34.7 million, or $2.07 per diluted share. Non-GAAP net income for the twelve months ended December 31, 2015 excludes expenses of approximately $2.3 million, net of tax, or $0.14 per diluted share related to the previously announced workforce realignment and write-down of information technology and other assets. See "GAAP to Non-GAAP Reconciliation" in the financial tables for additional details.
Total cash and cash equivalents as of December 31, 2015 were approximately $105.7 million with no long-term debt. Approximately $33.5 million of cash was used to repurchase 1,322,846 shares of the Company's common stock through authorized stock repurchase programs during the twelve-month period ending December 31, 2015.
Capital expenditures were approximately $26.0 million for the twelve months ended December 31, 2015, compared to $24.6 million in the prior year period. Depreciation and amortization was $20.5 million for the twelve months ended December 31, 2015, compared to $16.1 million for the same period of 2014. Depreciation and amortization for the twelve months ended December 31, 2015 includes approximately $1.4 million of accelerated depreciation of information technology assets.
Enrollments and Registrations: |
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American Public University System1 |
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For the three months ended December 31, | 2015 | 2014 | % Change |
Net Course Registrations by New Students | 14,500 | 19,000 | -24% |
Net Course Registrations | 92,300 | 101,800 | -9% |
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For the twelve months ended December 31, | 2015 | 2014 | % Change |
Net Course Registrations by New Students | 58,700 | 73,100 | -20% |
Net Course Registrations | 375,100 | 403,900 | -7% |
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As of December 31, |
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Active Student Enrollment2 | 96,000 | 111,000 | -14% |
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Hondros College of Nursing3 |
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As of December 31, | 2015 | 2014 | % Change |
New Student Enrollment | 530 | 590 | -10% |
Total Student Enrollment | 1,520 | 1,470 | 3% |
1APUS Net Course Registrations represent the approximate aggregate number of courses for which students remain enrolled after the date by which they may drop a course without financial penalty.
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Non-GAAP Financial Measures:
This press release contains non-GAAP financial measures which exclude certain charges for workforce realignment and the write-down of information technology and other assets. American Public Education believes that non-GAAP measures of financial results are useful because they will allow investors to better compare results to prior year periods.
These non-GAAP measures should not be considered in isolation or as an alternative to such measures determined in accordance with generally accepted accounting principles in the United States (GAAP). The principal limitation of these non-GAAP financial measures is that they exclude expenses that are required by GAAP to be recorded. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses are excluded from the non-GAAP financial measures.
American Public Education is presenting non-GAAP financial measures in connection with its GAAP results and urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release (under the caption "GAAP to Non-GAAP Reconciliation") and not to rely on any single financial measure to evaluate its business.
First Quarter 2016 Outlook:
The following statements are based on American Public Education's current expectations. These statements are forward-looking and actual results may differ materially. The Company undertakes no obligation to update publicly any forward-looking statements for any reason.
For the quarter ending March 31, 2016, American Public Education anticipates consolidated revenues to decrease between approximately 4% and 2% year-over-year, compared to the prior year period of 2015. The Company expects consolidated net income to be between $0.47 and $0.52 per diluted share for the quarter ending March 31, 2016.
American Public Education also expects the following results from its subsidiaries for the quarter ending March 31, 2016:
Webcast:
A live webcast of the Company's earnings conference call for the quarter ended December 31, 2015 will be broadcast today at 5:00 p.m. Eastern time. This call will be open to listeners who log in through the Company's investor relations website, www.AmericanPublicEducation.com.
A replay of the live webcast will also be available starting approximately one hour after the conclusion of the live conference call. The replay will be archived and available to listeners for one year.
About American Public Education
American Public Education, Inc. (NASDAQ: APEI) is a leading provider of higher learning dedicated to preparing students all over the world for excellence in service, leadership and achievement. The Company offers respected, innovative and affordable academic programs and services to students, universities and partner organizations through wholly owned subsidiaries: American Public University System (APUS) and National Education Seminars Inc., which we refer to in this press release as Hondros College of Nursing. Together, these institutions serve nearly 100,000 adult learners worldwide and offer approximately 100 degree programs in fields ranging from homeland security, military studies, intelligence, and criminal justice to technology, business administration, public health, nursing and liberal arts. For additional information, please visit http://AmericanPublicEducation.com.
Forward Looking Statements
Statements made in this press release regarding American Public Education, Inc., or its subsidiaries, that are not historical facts are forward-looking statements based on current expectations, assumptions, estimates and projections about American Public Education, Inc. and the industry. 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," "seek," "could," "estimate," "expect," "intend," "may," "should," "will" and "would." These forward-looking statements include, without limitation, statements regarding expected registration and enrollments, expected revenues, and expected earnings. 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, 2015 and other filings with the SEC. 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.
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American Public Education, Inc. | |||||||
Consolidated Statement of Income | |||||||
(In thousands, except per share data) | |||||||
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| Three Months Ended |
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| December 31, |
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| 2015 |
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| 2014 |
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| (Audited) |
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Revenue | $ | 85,912 |
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| $ | 91,297 |
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Costs and expenses: |
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Instructional costs and services |
| 29,725 |
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| 31,594 |
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Selling and promotional |
| 15,164 |
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| 17,232 |
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General and administrative |
| 18,959 |
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| 19,626 |
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Depreciation and amortization |
| 6,342 |
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| 4,220 |
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Total costs and expenses |
| 70,190 |
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| 72,672 |
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Income from operations before |
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interest income and income taxes |
| 15,722 |
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| 18,625 |
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Interest income |
| 37 |
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| 84 |
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Income before income taxes |
| 15,759 |
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| 18,709 |
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Income tax expense |
| 6,078 |
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| 6,773 |
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Equity investment income (loss), net of taxes |
| 110 |
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| (139) |
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Net income | $ | 9,791 |
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| $ | 11,797 |
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Net Income per common share: |
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Basic |
| 0.61 |
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| 0.69 |
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Diluted |
| 0.60 |
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| 0.68 |
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Weighted average number of |
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common shares: |
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Basic |
| 16,182 |
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| 17,209 |
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Diluted |
| 16,248 |
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| 17,350 |
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| Three Months Ended |
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Segment Information: | December 31, |
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| 2015 |
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| 2014 |
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Revenue: |
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American Public Education, Inc. | $ | 78,176 |
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| $ | 83,045 |
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Hondros College of Nursing | $ | 7,736 |
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| $ | 8,252 |
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Income from operations before |
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interest income and income taxes: |
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American Public Education, Inc. | $ | 14,787 |
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| $ | 17,456 |
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Hondros College of Nursing | $ | 935 |
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| $ | 1,169 |
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American Public Education, Inc. | |||||||
Consolidated Statement of Income | |||||||
(In thousands, except per share data) | |||||||
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| Twelve Months Ended |
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| Decmeber 31, |
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| 2015 |
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| 2014 |
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| (Audited) |
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Revenue | $ | 327,910 |
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| $ | 350,020 |
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Costs and expenses: |
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Instructional costs and services |
| 118,848 |
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| 123,765 |
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Selling and promotional |
| 62,397 |
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| 69,229 |
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General and administrative |
| 73,864 |
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| 75,073 |
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Depreciation and amortization |
| 20,520 |
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| 16,121 |
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Total costs and expenses |
| 275,629 |
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| 284,188 |
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Income from operations before |
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interest income and income taxes |
| 52,281 |
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| 65,832 |
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Interest income |
| 115 |
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| 361 |
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Income before income taxes |
| 52,396 |
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| 66,193 |
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Income tax expense |
| 20,072 |
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| 25,150 |
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Equity investment income (loss), net of taxes |
| 90 |
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| (166) |
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Net income | $ | 32,414 |
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| $ | 40,877 |
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Net Income per common share: |
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Basic |
| 1.94 |
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| 2.36 |
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Diluted |
| 1.93 |
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| 2.33 |
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Weighted average number of |
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common shares: |
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Basic |
| 16,676 |
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| 17,357 |
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Diluted |
| 16,797 |
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| 17,543 |
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| Twelve Months Ended |
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Segment Information: | December 31, |
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| 2015 |
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| 2014 |
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Revenue: |
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American Public Education, Inc. | $ | 297,439 |
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| $ | 319,879 |
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Hondros College of Nursing | $ | 30,471 |
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| $ | 30,141 |
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Income from operations before |
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interest income and income taxes: |
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American Public Education, Inc. | $ | 48,967 |
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| $ | 62,499 |
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Hondros College of Nursing | $ | 3,314 |
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| $ | 3,333 |
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| GAAP to Non-GAAP Reconciliation: |
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| (in thousands, except per share data) | Three Months Ended |
| Twelve Months Ended |
| Unaudited | December 31, 2015 |
| December 31, 2015 |
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| Revenue | $ 85,912 |
| $ 327,910 |
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| Total Costs and Expenses | $ 70,190 |
| $ 275,629 |
| Less: |
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| Workforce Realignment Costs | $ 1,598 |
| $ 1,598 |
| Write-down of Information Technology and |
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| other Assets | $ 2,105 |
| $ 2,105 |
| Adjusted Total Costs and Expenses: | $ 66,487 |
| $ 271,926 |
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| Adjusted income from operations before |
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| interest income and income taxes | $ 19,425 |
| $ 55,984 |
| Interest income | $ 37 |
| $ 115 |
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| Adjusted income before income taxes | $ 19,462 |
| $ 56,099 |
| Income tax expense | $ 6,078 |
| $ 20,072 |
| Tax Effect of Non-GAAP Adjustment | $ (1,372) |
| $ (1,372) |
| Equity investment income (loss), net of taxes | $ 110 |
| $ 90 |
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| Non-GAAP net income | $ 12,122 |
| $ 34,745 |
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| Non-GAAP net Income per common share: |
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| Basic | $ 0.75 |
| $ 2.08 |
| Diluted | $ 0.75 |
| $ 2.07 |
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| Weighted average number of |
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| common shares: |
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| Basic | 16,182 |
| 16,676 |
| Diluted | 16,248 |
| 16,797 |
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CONTACT: Richard W. Sunderland, Jr., CPA, Executive Vice President and Chief Financial Officer, 304.885.5371; Christopher L. Symanoskie, Vice President, Investor Relations, 703.334.3880
Exhibit 99.2
February 29, 2016 Recent Results and Developments Fourth Quarter 2015
Statements made in this presentation regarding American Public Education, Inc . or its subsidiaries, that are not historical facts are forward - looking statements based on current expectations, assumptions, estimates and projections about American Public Education and the industry . 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”, “seek”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “should”, “will” and “would” . These forward - looking statements include, without limitation, statements regarding expected growth, amounts and nature of anticipated charges, expected registrations and enrollments, expected revenues, and expected earnings . 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 , 2015 and in the Company’s other filings with the SEC . 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 . 2 Advancing the Learning Experience | Exploring New Opportunities SAFE HARBOR STATEMENT American Public Education, Inc.
FOURTH QUARTER 2015 RESULTS Improving Our Quality Mix of Students • APUS continued to experience year - over - year declines in net course registrations. • Net course registrations by returning students at APUS declined 6%, compared to the prior year period. • Undergraduate first course pass and completion rates at APUS increased 38%, compared to the prior year period. • Bad debt expense as a percent of revenue decreased to 2.3 % in the fourth quarter 2015, compared 5.5 % in the fourth quarter of 2014 . − For the year ended December 31, 2015, bad debt expense as a percent of revenue decreased to 3.9%, compared to 5.5 % in the prior year. For the three months ended December 31, 2015 APUS Net Course Registrations by Primary Funding Source Other 11% FSA/Title IV 32% Military/TA 36% VA 20% 3 Advancing the Learning Experience | Exploring New Opportunities FSA -21.3% TA -4.0% VA 2.0% OTHER -4.2% Total: -9.3% % Change (y/y) 4Q2015 APUS Net Course Registrations by Primary Funding Source
APUS INSTITUTIONAL GOALS Utilizing Education Technology & Improving Persistence 4 Advancing the Learning Experience | Exploring New Opportunities Refine Assessment & Application Processes Improve Conversion Rates Enhance The University Experience Optimize Targeted Outreach Increase Lead Quality & Applications Improve Engagement & Interactivity Further Increase Persistence Rates Optimized assessment & application processes expected to be substantially completed by 1Q16. Primary Goal: improve conversion rates in 2016. More than 45% of alumni return for a second degree. More than 50% of new APUS students referred by others. Strengthen Marketplace Differentiation & Improve Referrals In December 2015, net course registrations by new FSA students who passed their first course increased by 4.4% year - over - year APUS Mobile installed on +44,000 devices; usage averaging approx. 1.2 million page views/week in January 2016. Over 29,000 APUS students using Fidelis/Clearpath. Investments in Technology/Persistence Initiatives
FINANCIAL RESULTS SUMMARY Fourth Quarter 2015 (Consolidated) Advancing the Learning Experience | Exploring New Opportunities 5 • Revenue decreased 5.9% to $85.9 million, compared to the prior year period. • Overall operating margins decreased in the fourth quarter of 2015: • Instructional costs and services were 34.6% percent of revenue, compared to 34.6% in the prior year period. • Selling and promotional expenses decreased as a percent of revenue to 17.7%, compared to 18.9% in the prior year period. • General and administrative expenses as a percentage of revenues increased to 22.1% compared to 21.5% in the prior period. • Income from operations before interest income and income taxes decreased to $15.7 million, compared to $18.6 million in the prior year period. • GAAP net income decreased to $9.8 million or approximately $0.60 per diluted share, compared to the prior year period. Non - GAAP net income for the fourth quarter of 2015 was $12.1 million, or $ 0.75 per diluted share . See “GAAP to Non - GAAP Reconciliation” in the appendix (page 9) of this presentation and the tables in the earnings release for additional detail. • Cash and cash equivalents decreased to $105.7 million with no long - term debt. • Approximately $33.5 million of cash was used to repurchase 1,322,846 shares of the Company’s common stock during the twelve - month period ending December 31, 2015.
FINANCIAL/OPERATIONAL OUTLOOK First Quarter 2016 Advancing the Learning Experience | Exploring New Opportunities 6 The following statements are based on current expectations. These statements are forward - looking and actual results may differ materially. Approximate Change (y/y) APUS Net course registrations by new students - 20% to - 15% APUS Net course registrations - 8% to - 4% HCON New student enrollment Approx. - 20% HCON Total student enrollment Approx. - 6% Total revenue - 4% to - 2% Total net income per diluted share (GAAP) $0.47 to $0.52 First Quarter 2016
RECENT ACCOMPLISHMENTS Committed to Long - Term Stability in a Difficult Environment Advancing the Learning Experience | Exploring New Opportunities 7 ADVANCING THE LEARNING PLATFORM; SEEKING NEW OPPORTUNITIES Recent Initiatives Current Status Expand student persistence pilots, including Fidelis/ ClearPath Increase strategic relationships and targeted outreach Launched APUS Native Classroom App (“APUS Mobile”) Implement admissions standards/assessment Tuition increase (tuition grant for military and military - affiliated) Multiple disbursements in Federal Student Aid Improve Lead to Enrollment Conversion Processes 2016 Differential Pricing 2016 Differentiated & Advanced Learning Experience – Online/On Campus New Academic Fields and Markets – Through Investment & Acquisition
Fourth Quarter 2015 Financial Results Conference Call February 29, 2016
APPENDIX GAAP to Non - GAAP Reconciliation 9 GAAP to Non-GAAP Reconciliation: (in thousands, except per share data) Three Months Ended Twelve Months Ended Unaudited December 31, 2015 December 31, 2015 Revenue 85,912$ 327,910$ Total Costs and Expenses 70,190$ 275,629$ Less: Workforce Realignment Costs 1,598$ 1,598$ Write-down of Information Technology and other Assets 2,105$ 2,105$ Adjusted Total Costs and Expenses: 66,487$ 271,926$ Adjusted income from operations before interest income and income taxes 19,425$ 55,984$ Interest income 37$ 115$ Adjusted income before income taxes 19,462$ 56,099$ Income tax expense 6,078$ 20,072$ Tax Effect of Non-GAAP Adjustment (1,372)$ (1,372)$ Equity investment income (loss), net of taxes 110$ 90$ Non-GAAP net income 12,122$ 34,745$ Non-GAAP net Income per common share: Basic 0.75$ 2.08$ Diluted 0.75$ 2.07$ GAAP net income 9,791$ 32,414$ GAAP net Income per common share: Basic 0.61$ 1.94$ Diluted 0.60$ 1.93$ Weighted average number of common shares: Basic 16,182 16,676 Diluted 16,248 16,797
Exhibit 99.3
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