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 NCLEX scores. And as a result, Rasmussen has three years now to meet the state standard for its nursing program. So those are very meaningful, important developments for our four campuses in Illinois. And then as we discussed, we have only had caps in the Bloomington, Minnesota ADN program, which, as you heard from our voluntary action will no longer be relevant as we teach out that program over the course of 2024.
Matt Filek: Okay. Got it. 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.
Rick Sunderland: Right. So there are numerous — this is Rick. There are numerous initiatives that will bolster the 10 side of that 90/10 ratio, right? So sources of nonfederal 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 and some in the second half of the year, we haven’t seen the full benefit of that, which we’ll see in 2024. There are some of the levers, which is your specific question, include enrolling students that are not title for eligible specifically international students looking at various, call it, student mix options B2B reimbursement and some perhaps some pricing. We note that at the graduate level, 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.
Matt Filek: Okay. Thank you.
Operator: [Operator Instructions] Your next question comes from the line of Raj Sharma with B. Riley. Your line is open.
Raj Sharma: Yes. Thank you for taking the questions. Stellar results, congratulations. Can you — can you — my first question is, can you give us more color on the greater-than-expected profitability. Clearly, you beat your guidance significantly. Was that largely advertising and marketing expenses being down or what other elements of — because your revenues were largely in line with guidance with the — can you give us more color on the…
Rick Sunderland: Yes. Broadly, Raj, it’s Rick. 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 expense improvements. Number one was in our marketing and advertising costs. We saw good momentum and great efficiency in that area, allowing us to optimize or conserve on our expenses there. And then on the compensation side, we — 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 for the reasons stated earlier. Number one, the seasonality of business. And number two, the cost reduction initiatives, the reduction in force that took place in the third quarter. I think those are the primary drivers. But Angela, you want to comment further?
Angela Selden: No, I have nothing more to add.
Rick Sunderland: Okay.
Raj Sharma: Well, thank you. So I can move on to my next question. In the past, you’ve indicated a higher run rate EBITDA than you’ve guided to fiscal 2024. And I’m wondering, so you have these expense savings in Q4 that helped you beat the EBITDA margin for Q4 was 17%, and then Q1 is 10% and then the fiscal 2024 is even lower, higher single-digits. So I guess my question is, the gains you made in 2023 in the margins, are these being offset by the new investments? Or is there an element of conservatism here?
Steve Somers: Hey, Raj, it’s Steve. I think there’s — this is 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 the point about where we’ve saved, we had outperformance in the fourth quarter, right? We’re taking the opportunity to make sure that we’re investing in quality and the student experience. Quality to now come 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 changes in marketing and market dynamics.
Angela Selden: And two things, Raj, I’ll add. As I mentioned in my remarks, Hondros is relocating two campuses is launching the NA program. And we are also moving Rasmussen, off of the colleges IT platform and into the API 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: Yes. 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 heartening to see the positive EBITDA in Rasmussen and HCN. And I don’t 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?
Rick Sunderland: Yes. Raj, I think you’re referring to Hondros and Graduate School. Is that correct?
Angela Selden: No Ras.
Raj Sharma: Yes.
Rick Sunderland: No, I think as it relates to Ras, 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: Got it. Got it. And I have a couple more questions, if I may. The Rasmussen Bloomington campus, the teach-out is that driven by — is that driven by regulators or was that self-driven?
