News Release
|
Investor Contact:
John Kristoff
John.Kristoff@Adtalem.com
312-651-1437
Media Contact:
Ernie Gibble
Ernie.Gibble@Adtalem.com
630-353-9920
|
Adtalem Global Education Announces Fiscal First Quarter 2020 Results
|
•
|
Revenue of $254.6 million increased 7.5% compared with the prior year
|
|
•
|
Operating income from continuing operations was $25.7 million compared with a loss of $3.2 million in the prior year; operating income from
continuing operations, excluding special items, was $27.5 million compared with $36.2 million in the prior year
|
|
•
|
Net income was $14.4 million compared with a loss of $9.5 million in the prior year; net income from continuing operations, excluding special
items, was $18.9 million compared with $26.7 million in the prior year
|
|
•
|
Diluted earnings per share was $0.26 compared with a loss of $0.16 in the prior year; diluted earnings per share from continuing operations,
excluding special items, was $0.34 compared with $0.44 in the prior year. Approximately 0.9 million shares of common stock were repurchased during the first quarter of fiscal 2020 at an average purchase price of $43.81 for a total of
$40.3 million
|
CHICAGO – Oct. 29, 2019 – Adtalem Global Education
Inc. (NYSE: ATGE), a leading workforce solutions provider, today reported academic, operating and financial results for its fiscal 2020 first quarter ended Sept. 30, 2019. The first quarter results reflect the Business and Law segment in
discontinued operations as a result of the recently announced agreement to divest Adtalem Educacional do Brasil, which made up the entire segment.
“As part of our transition into a leading workforce solutions provider, we recently announced the divestiture of our Brazil assets. This strategic
milestone allows us to further align our portfolio to serve our markets in a more competitive and comprehensive way, while unlocking significant shareholder value,” said Lisa Wardell, chairman and CEO of Adtalem. “During the first quarter, we also
capitalized on solid demand in our other vertical markets to deliver high-single digit revenue growth overall. In Medical and Healthcare, we continued to build on institutional and employer partnerships, leveraging these relationships to create
superior student outcomes. In Financial Services, we are making progress with the integration of OnCourse Learning, which contributed to the strong double-digit growth in the vertical during the quarter. We remain focused on driving growth across
the business, including further investment in our strategic initiatives, which gives us confidence in delivering on our targets for the full year.”
Fiscal 2020 first quarter results contained special items including total pre-tax restructuring charges of $6.5 million, primarily related to the sale of
Becker’s courses for healthcare students and real estate consolidations at Adtalem’s home office, in addition to a pre-tax gain on sale of assets of $4.8 million from the sale of Adtalem’s Columbus, Ohio, campus.
Adtalem recorded a loss on discontinued operations of $3.2 million during the first quarter of fiscal year 2020. This relates to costs associated with
the DeVry University and Carrington College transfer of ownerships completed in the second quarter of fiscal year 2019 and Adtalem Educacional do Brasil operations.
Segment Highlights
Medical and Healthcare
First quarter segment revenue increased 2.7% to $207.5 million compared with the prior year.
Chamberlain revenue in the first quarter increased 2.5% compared with the prior year. September new student enrollment increased 2.9% while total student enrollment increased 1.4% compared with the
prior year, driven by growth in the campus Bachelor of Science in Nursing program, as well as graduate programs including the Master of Social Work
program, which launched in September.
Revenue in the first quarter for the medical and veterinary schools increased 2.9% from the prior year. In the September 2019 session, new student
enrollment declined 1.9% while total student enrollment declined 4.7% compared with the prior year, primarily reflecting lingering effects of the permanent campus relocation of Ross University School of Medicine to Barbados in the fiscal third
quarter of 2019.
Segment operating income in the first quarter was $28.5 million compared with $1.7 million in the prior year. Excluding special items, segment operating
income in the first quarter declined 29.6% to $28.6 million compared with $40.7 million in the prior year. The decrease in segment operating income is the result of increased marketing expenses to drive future enrollment growth, cost of expansion
and growth in campus and online programs, an increase in our bad debt reserve, and corporate costs that were previously allocated to our Business and Law segment.
Financial Services
First quarter segment revenue increased 32.2% to $47.1 million compared with the prior year. Becker Accounting revenue grew 0.3% and the Association of
Anti-Money Laundering Specialists (ACAMS) revenue increased 37.4%. First quarter segment revenue included $7.6 million of revenue from the fourth quarter of fiscal year 2019 acquisition of OnCourse Learning. Segment operating income in the quarter
was $2.1 million compared with $4.8 million in the prior year. Excluding special items, segment operating income in the first quarter declined 13.5% to $4.1 million compared with $4.8 million in the prior year. The decrease in segment operating
income is the result of increased expenses to support segment growth and a higher level of corporate expense allocation.
Adtalem Outlook
Fiscal Year 2020
|
•
|
Revenue is expected to grow 5% to 7% compared with the prior year
|
|
•
|
Effective income tax rate is expected to be in the 19% to 20% range
|
|
•
|
Earnings per share from continuing operations, excluding special items, are expected to grow in the 7 to 9% range compared with the prior year
|
|
•
|
Full-year capital spending is expected to be in the $45 million to $50 million range
|
Conference Call and Webcast Information
Adtalem will hold a conference call to discuss its fiscal 2020 first quarter on Tuesday, Oct. 29, 2019, at 4 p.m. CT (5 p.m. ET). The
conference call will be led by Lisa Wardell, chairman of the board, president and chief executive officer, and Mike Randolfi, senior vice president and chief financial officer.
For those participating by telephone, dial 844-582-0106 (United States) or +1 825-312-2256 (outside the United States) and request the
“Adtalem Call” or use conference ID: 3664928. Adtalem will also broadcast the conference call live on the web at:
https://event.on24.com/wcc/r/2113644/440710983A97D538212E30BAAE55611D.
Please access the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio
software.
Adtalem will archive a replay of the call until Nov. 29,
2019. To access the replay, dial 800-585-8367 (United States) or +1 416-621-4642 (outside the United States), conference ID: 3664928, or visit the Adtalem website at: http://investors.adtalem.com/CorporateProfile.
About Adtalem Global Education
The purpose of Adtalem Global Education is to empower students to achieve their goals, find success and make inspiring contributions to our global
community. Adtalem Global Education Inc. (NYSE: ATGE; member S&P MidCap 400 Index) is a leading workforce solutions provider and the parent organization of Adtalem Educacional do Brasil (IBMEC, Damásio and Wyden institutions), American
University of the Caribbean School of Medicine, Association of Certified Anti-Money Laundering Specialists, Becker Professional Education, Chamberlain University, EduPristine, OnCourse Learning, Ross University School of Medicine and Ross
University School of Veterinary Medicine. For more information, please visit adtalem.com and follow us on Twitter (@adtalemglobal) and LinkedIn.
Forward-Looking Statement
Certain statements contained in this release concerning Adtalem Global Education’s expected
future performance, including those statements concerning expectations or plans, constitute “forward-looking statements” within the meaning of the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. All statements other
than statements of historical fact are, or may be deemed to be, forward-looking statements. These forward-looking statements generally can be identified by phrases such as Adtalem Global Education or its management “believes,” “expects,”
“anticipates,” “foresees,” “forecasts,” “estimates,” “plans,” “intends,” “continues,” “may,” “will,” “should,” “could,” or other words or phrases of similar import which predict or indicate future events or trends or that are not statements of
historical matters. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our
perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances.
These forward-looking statements are subject to known and unknown risks, uncertainties and
assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking
statements. Factors that might cause or contribute to a material difference include the risks discussed in Item 1A, “Risk Factors,” in our most recent Annual Report on Form 10-K for the fiscal year ended June 30, 2019 filed with the Securities
and Exchange Commission (SEC) on August 28, 2019 and our other filings with the SEC. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. All forward-looking statements
set forth in this release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected
consequences to or effects on us or our business or operations. Forward-looking statements set forth in this release speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect
subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law.
|
1Q 2020
|
1Q 2019
|
% Change
|
|
|
Adtalem Global Education Student Enrollments(1)
|
|||
|
New students
|
6,467
|
6,324
|
+2.3%
|
|
Total students
|
37,344
|
37,182
|
+0.4%
|
|
Chamberlain University
|
|||
|
September Session
|
|||
|
New students
|
5,595
|
5,435
|
+2.9%
|
|
Total students
|
31,736
|
31,295
|
+1.4%
|
|
Medical and Veterinary
|
|||
|
September Semester(2)
|
|||
|
New students
|
872
|
889
|
-1.9%
|
|
Total students
|
5,608
|
5,887
|
-4.7%
|
|
1)
|
Includes the most recently reported enrollment sessions at Adtalem’s postsecondary institutions, excluding Brazil
|
|
2)
|
Includes enrollments in its medical and veterinary preparatory programs
|
# # #
ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
|
September 30,
|
June 30,
|
September 30,
|
||||||||||
|
2019
|
2019
|
2018
|
||||||||||
|
(in thousands, except share and par value amounts)
|
||||||||||||
|
ASSETS:
|
||||||||||||
|
Current Assets:
|
||||||||||||
|
Cash and Cash Equivalents
|
$
|
121,079
|
$
|
204,202
|
$
|
334,222
|
||||||
|
Investments in Marketable Securities
|
8,763
|
8,680
|
8,402
|
|||||||||
|
Restricted Cash
|
710
|
1,022
|
877
|
|||||||||
|
Accounts Receivable, Net
|
116,212
|
83,560
|
108,213
|
|||||||||
|
Prepaid Expenses and Other Current Assets
|
39,476
|
29,313
|
60,031
|
|||||||||
|
Current Assets Held for Sale
|
169,873
|
177,923
|
227,641
|
|||||||||
|
Total Current Assets
|
456,113
|
504,700
|
739,386
|
|||||||||
|
Land, Building and Equipment:
|
||||||||||||
|
Land
|
41,441
|
41,938
|
41,183
|
|||||||||
|
Building
|
309,893
|
322,657
|
288,438
|
|||||||||
|
Equipment
|
235,027
|
228,533
|
221,294
|
|||||||||
|
Construction in Progress
|
8,681
|
13,545
|
25,799
|
|||||||||
|
595,042
|
606,673
|
576,714
|
||||||||||
|
Accumulated Depreciation
|
(314,219
|
)
|
(323,240
|
)
|
(306,340
|
)
|
||||||
|
Land, Building and Equipment Held for Sale, Net
|
73,763
|
81,250
|
81,029
|
|||||||||
|
Land, Building and Equipment, Net
|
354,586
|
364,683
|
351,403
|
|||||||||
|
Noncurrent Assets:
|
||||||||||||
|
Operating Lease Assets
|
195,238
|
—
|
—
|
|||||||||
|
Deferred Income Taxes
|
14,977
|
18,314
|
31,080
|
|||||||||
|
Intangible Assets, Net
|
295,324
|
297,989
|
240,166
|
|||||||||
|
Goodwill
|
686,992
|
687,256
|
627,239
|
|||||||||
|
Other Assets, Net
|
91,086
|
52,113
|
45,201
|
|||||||||
|
Other Assets Held for Sale
|
366,008
|
317,641
|
315,390
|
|||||||||
|
Total Noncurrent Assets
|
1,649,625
|
1,373,313
|
1,259,076
|
|||||||||
|
TOTAL ASSETS
|
$
|
2,460,324
|
$
|
2,242,696
|
$
|
2,349,865
|
||||||
|
LIABILITIES:
|
||||||||||||
|
Current Liabilities:
|
||||||||||||
|
Accounts Payable
|
$
|
44,674
|
$
|
53,385
|
$
|
48,087
|
||||||
|
Accrued Salaries, Wages and Benefits
|
30,071
|
46,664
|
32,056
|
|||||||||
|
Accrued Liabilities
|
61,966
|
76,529
|
80,591
|
|||||||||
|
Deferred Revenue
|
168,533
|
95,944
|
173,856
|
|||||||||
|
Current Operating Lease Liabilities
|
54,057
|
—
|
—
|
|||||||||
|
Current Portion of Long-Term Debt
|
3,000
|
3,000
|
3,000
|
|||||||||
|
Current Liabilities Held for Sale
|
50,174
|
36,109
|
121,496
|
|||||||||
|
Total Current Liabilities
|
412,475
|
311,631
|
459,086
|
|||||||||
|
Noncurrent Liabilities:
|
||||||||||||
|
Long-Term Debt
|
327,600
|
398,094
|
289,579
|
|||||||||
|
Long-Term Operating Lease Liabilities
|
192,055
|
—
|
—
|
|||||||||
|
Deferred Income Taxes
|
29,094
|
29,426
|
29,378
|
|||||||||
|
Other Liabilities
|
92,252
|
86,326
|
101,561
|
|||||||||
|
Noncurrent Liabilities Held for Sale
|
76,468
|
16,146
|
21,412
|
|||||||||
|
Total Noncurrent Liabilities
|
717,469
|
529,992
|
441,930
|
|||||||||
|
TOTAL LIABILITIES
|
1,129,944
|
841,623
|
901,016
|
|||||||||
|
NONCONTROLLING INTEREST
|
3,187
|
9,543
|
8,814
|
|||||||||
|
SHAREHOLDERS’ EQUITY:
|
||||||||||||
|
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized; 54,649,000, 55,303,000 and 59,120,000 Shares
Outstanding at September 30, 2019, June 30, 2019 and September 30, 2018, respectively
|
805
|
801
|
798
|
|||||||||
|
Additional Paid-in Capital
|
492,151
|
486,061
|
469,545
|
|||||||||
|
Retained Earnings
|
2,027,263
|
2,012,902
|
1,908,465
|
|||||||||
|
Accumulated Other Comprehensive Loss
|
(176,739
|
)
|
(137,290
|
)
|
(163,168
|
)
|
||||||
|
Treasury Stock, at Cost, 25,862,000, 24,830,000 and 20,727,000 Shares at September 30, 2019, June 30, 2019 and
September 30, 2018, respectively
|
(1,016,287
|
)
|
(970,944
|
)
|
(775,605
|
)
|
||||||
|
TOTAL SHAREHOLDERS’ EQUITY
|
1,327,193
|
1,391,530
|
1,440,035
|
|||||||||
|
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY
|
$
|
2,460,324
|
$
|
2,242,696
|
$
|
2,349,865
|
||||||
ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(unaudited)
|
Three Months Ended
|
||||||||
|
September 30,
|
||||||||
|
2019
|
2018
|
|||||||
|
(in thousands, except per share amounts)
|
||||||||
|
REVENUE
|
$
|
254,613
|
$
|
236,939
|
||||
|
OPERATING COST AND EXPENSE:
|
||||||||
|
Cost of Educational Services
|
128,034
|
111,534
|
||||||
|
Student Services and Administrative Expense
|
99,087
|
89,164
|
||||||
|
Restructuring Expense
|
6,530
|
39,473
|
||||||
|
Gain on Sale of Assets
|
(4,779
|
)
|
—
|
|||||
|
Total Operating Cost and Expense
|
228,872
|
240,171
|
||||||
|
Operating Income (Loss) from Continuing Operations
|
25,741
|
(3,232
|
)
|
|||||
|
OTHER INCOME (EXPENSE):
|
||||||||
|
Interest and Dividend Income
|
678
|
969
|
||||||
|
Interest Expense
|
(5,328
|
)
|
(4,918
|
)
|
||||
|
Investment Gain
|
23
|
—
|
||||||
|
Net Other Expense
|
(4,627
|
)
|
(3,949
|
)
|
||||
|
Income (Loss) from Continuing Operations Before Income Taxes
|
21,114
|
(7,181
|
)
|
|||||
|
Income Tax (Provision) Benefit
|
(3,706
|
)
|
2,330
|
|||||
|
Income (Loss) from Continuing Operations
|
17,408
|
(4,851
|
)
|
|||||
|
DISCONTINUED OPERATIONS:
|
||||||||
|
Loss from Discontinued Operations Before Income Taxes
|
(2,883
|
)
|
(5,719
|
)
|
||||
|
Income Tax (Provision) Benefit
|
(273
|
)
|
985
|
|||||
|
Loss from Discontinued Operations
|
(3,156
|
)
|
(4,734
|
)
|
||||
|
NET INCOME (LOSS)
|
14,252
|
(9,585
|
)
|
|||||
|
Net Loss Attributable to Noncontrolling Interest from Continuing Operations
|
109
|
64
|
||||||
|
Net Income Attributable to Noncontrolling Interest from Discontinued Operations
|
—
|
(9
|
)
|
|||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION
|
$
|
14,361
|
$
|
(9,530
|
)
|
|||
|
AMOUNTS ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION:
|
||||||||
|
Income (Loss) from Continuing Operations
|
$
|
17,517
|
$
|
(4,787
|
)
|
|||
|
Loss from Discontinued Operations
|
(3,156
|
)
|
(4,743
|
)
|
||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION
|
$
|
14,361
|
$
|
(9,530
|
)
|
|||
|
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION SHAREHOLDERS:
|
||||||||
|
Basic:
|
||||||||
|
Continuing Operations
|
$
|
0.32
|
$
|
(0.08
|
)
|
|||
|
Discontinued Operations
|
$
|
(0.06
|
)
|
$
|
(0.08
|
)
|
||
|
Total
|
$
|
0.26
|
$
|
(0.16
|
)
|
|||
|
Diluted:
|
||||||||
|
Continuing Operations
|
$
|
0.31
|
$
|
(0.08
|
)
|
|||
|
Discontinued Operations
|
$
|
(0.06
|
)
|
$
|
(0.08
|
)
|
||
|
Total
|
$
|
0.26
|
$
|
(0.16
|
)
|
|||
ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
|
Three Months Ended
|
||||||||
|
September 30,
|
||||||||
|
2019
|
2018
|
|||||||
|
(in thousands)
|
||||||||
|
CASH FLOW FROM OPERATING ACTIVITIES:
|
||||||||
|
Net Income (Loss)
|
$
|
14,252
|
$
|
(9,585
|
)
|
|||
|
Loss from Discontinued Operations
|
3,156
|
4,734
|
||||||
|
Adjustments to Reconcile Net Income (Income) to Net Cash Provided by Operating Activities:
|
||||||||
|
Stock-Based Compensation Expense
|
5,223
|
4,137
|
||||||
|
Amortization and Adjustments to Operating Lease Assets
|
12,804
|
—
|
||||||
|
Depreciation
|
8,393
|
7,727
|
||||||
|
Amortization of Intangible Assets
|
2,534
|
1,605
|
||||||
|
Amortization of Deferred Debt Issuance Costs
|
392
|
392
|
||||||
|
Provision for Bad Debts
|
5,554
|
1,203
|
||||||
|
Deferred Income Taxes
|
2,991
|
7,915
|
||||||
|
Loss on Disposals, Accelerated Depreciation and Adjustments to Land, Building and Equipment
|
1,053
|
37,984
|
||||||
|
Realized Loss on Investments
|
11
|
—
|
||||||
|
Unrealized Loss on Investments
|
(33
|
)
|
—
|
|||||
|
Gain on Sale of Assets
|
(4,779
|
)
|
—
|
|||||
|
Changes in Assets and Liabilities:
|
||||||||
|
Accounts Receivable
|
(38,206
|
)
|
(39,199
|
)
|
||||
|
Prepaid Expenses and Other Current Assets
|
(13,646
|
)
|
(11,308
|
)
|
||||
|
Accounts Payable
|
(7,566
|
)
|
1,397
|
|||||
|
Accrued Salaries, Wages, Benefits and Liabilities
|
(19,010
|
)
|
(14,257
|
)
|
||||
|
Deferred Revenue
|
72,589
|
74,909
|
||||||
|
Operating Lease Liabilities
|
(13,681
|
)
|
—
|
|||||
|
Other Assets and Liabilities
|
1,270
|
(14,137
|
)
|
|||||
|
Net Cash Provided by Operating Activities-Continuing Operations
|
33,301
|
53,517
|
||||||
|
Net Cash Provided by Operating Activities-Discontinued Operations
|
14,167
|
24,497
|
||||||
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
47,468
|
78,014
|
||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Capital Expenditures
|
(10,436
|
)
|
(13,321
|
)
|
||||
|
Sales of Marketable Securities
|
290
|
—
|
||||||
|
Purchases of Marketable Securities
|
(292
|
)
|
(4,152
|
)
|
||||
|
Proceeds from Sale of Assets
|
6,421
|
—
|
||||||
|
Net Cash Used in Investing Activities-Continuing Operations
|
(4,017
|
)
|
(17,473
|
)
|
||||
|
Net Cash Used in Investing Activities-Discontinued Operations
|
(1,728
|
)
|
(2,946
|
)
|
||||
|
NET CASH USED IN INVESTING ACTIVITIES
|
(5,745
|
)
|
(20,419
|
)
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Proceeds from Exercise of Stock Options
|
828
|
10,492
|
||||||
|
Employee Taxes Paid on Withholding Shares
|
(5,045
|
)
|
(5,188
|
)
|
||||
|
Proceeds from Stock Issued Under Colleague Stock Purchase Plan
|
—
|
159
|
||||||
|
Repurchase of Common Stock for Treasury
|
(40,255
|
)
|
(59,175
|
)
|
||||
|
Borrowings Under Credit Facility
|
30,000
|
—
|
||||||
|
Repayments Under Credit Facility
|
(100,750
|
)
|
(750
|
)
|
||||
|
Proceeds from Down Payment on Seller Loan
|
5,200
|
—
|
||||||
|
Payment for Purchase of Noncontrolling Interest of Subsidiary
|
(6,247
|
)
|
—
|
|||||
|
Net Cash Used in Financing Activities-Continuing Operations
|
(116,269
|
)
|
(54,462
|
)
|
||||
|
Net Cash Used in Financing Activities-Discontinued Operations
|
(480
|
)
|
(470
|
)
|
||||
|
NET CASH USED IN FINANCING ACTIVITIES
|
(116,749
|
)
|
(54,932
|
)
|
||||
|
Effects of Exchange Rate Differences
|
(6,750
|
)
|
(1,579
|
)
|
||||
|
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(81,776
|
)
|
1,084
|
|||||
|
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
300,467
|
444,405
|
||||||
|
Cash, Cash Equivalents and Restricted Cash at End of Period
|
218,691
|
445,489
|
||||||
|
Less: Cash, Cash Equivalents and Restricted Cash of Discontinued Operations at End of Period
|
96,902
|
110,390
|
||||||
|
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
121,789
|
$
|
335,099
|
||||
ADTALEM GLOBAL EDUCATION INC.
SEGMENT INFORMATION
(unaudited)
|
Three Months Ended
|
||||||||||||
|
September 30,
|
||||||||||||
|
2019
|
2018
|
Increase
(Decrease) |
||||||||||
|
(in thousands)
|
||||||||||||
|
REVENUE:
|
||||||||||||
|
Medical and Healthcare
|
$
|
207,487
|
$
|
202,100
|
2.7
|
%
|
||||||
|
Financial Services
|
47,126
|
35,646
|
32.2
|
%
|
||||||||
|
Home Office and Other
|
—
|
(807
|
)
|
NM
|
||||||||
|
Total Consolidated Revenue
|
254,613
|
236,939
|
7.5
|
%
|
||||||||
|
OPERATING INCOME (LOSS):
|
||||||||||||
|
Medical and Healthcare
|
28,500
|
1,656
|
1,621.0
|
%
|
||||||||
|
Financial Services
|
2,128
|
4,750
|
(55.2
|
)%
|
||||||||
|
Home Office and Other
|
(4,887
|
)
|
(9,638
|
)
|
49.3
|
%
|
||||||
|
Total Consolidated Operating Income (Loss)
|
$
|
25,741
|
$
|
(3,232
|
)
|
NM
|
||||||
NON-GAAP INFORMATION
In accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), the operating results of DeVry University, Carrington College
("Carrington") and Adtalem Brazil are reclassified as discontinued operations for the first quarter of fiscal year 2020 and 2019. During the first quarter of fiscal year 2020, Adtalem recorded special items related to the following: (i)
restructuring charges primarily related to the sale of Becker’s courses for healthcare students, which is part of the Financial Services segment, and real estate consolidations at Adtalem’s home office (not related to any segment); and (ii) gain on
sale of assets related to the sale of Adtalem’s home office Columbus, Ohio, campus facility. During the first quarter of fiscal year 2019, Adtalem recorded special items related to restructuring charges, including asset write-offs, primarily
related to the closing of the Ross University School of Medicine (“RUSM”), which is part of the Medical and Healthcare segment, campus in Dominica and Adtalem’s home office real estate consolidations. The following tables illustrate the effects of
the discontinued operations and special items on Adtalem’s operating income from continuing operations excluding special items and net income from continuing operations excluding special items. Management believes that the non-GAAP disclosure of
operating income from continuing operations, net income from continuing operations and earnings per share excluding the discontinued operations and special items provides investors with useful supplemental information regarding the underlying
business trends and performance of Adtalem’s ongoing operations and is useful for period-over-period comparisons of such operations given the special nature of discontinued operations, restructuring charges and gain on sale of assets. Adtalem uses
these supplemental financial measures internally in its management and budgeting process. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, Adtalem’s reported results prepared in accordance
with GAAP. The following tables reconcile these non-GAAP measures to the most directly comparable GAAP information.
ADTALEM GLOBAL EDUCATION INC.
NON-GAAP OPERATING INCOME FROM CONTINUING OPERATIONS BY SEGMENT
(unaudited)
|
Three Months Ended
|
||||||||||||
|
September 30,
|
||||||||||||
|
2019
|
2018
|
Increase
(Decrease) |
||||||||||
|
(in thousands)
|
||||||||||||
|
Medical and Healthcare Operating Income
|
$
|
28,500
|
$
|
1,656
|
1,621.0
|
%
|
||||||
|
Restructuring Expense
|
127
|
39,015
|
(99.7
|
)%
|
||||||||
|
Medical and Healthcare Operating Income Excluding Special Items
|
$
|
28,627
|
$
|
40,671
|
(29.6
|
)%
|
||||||
|
Financial Services Operating Income
|
$
|
2,128
|
$
|
4,750
|
(55.2
|
)%
|
||||||
|
Restructuring Expense
|
1,979
|
—
|
NM
|
|||||||||
|
Financial Services Operating Income Excluding Special Items
|
$
|
4,107
|
$
|
4,750
|
(13.5
|
)%
|
||||||
|
Home Office and Other Operating Loss
|
$
|
(4,887
|
)
|
$
|
(9,638
|
)
|
49.3
|
%
|
||||
|
Restructuring Expense
|
4,424
|
458
|
865.9
|
%
|
||||||||
|
Gain on Sale of Assets
|
(4,779
|
)
|
—
|
NM
|
||||||||
|
Home Office and Other Operating Loss Excluding Special Items
|
$
|
(5,242
|
)
|
$
|
(9,180
|
)
|
42.9
|
%
|
||||
|
Adtalem Global Education Operating Income (Loss)
|
$
|
25,741
|
$
|
(3,232
|
)
|
NM
|
||||||
|
Restructuring Expense
|
6,530
|
39,473
|
(83.5
|
)%
|
||||||||
|
Gain on Sale of Assets
|
(4,779
|
)
|
—
|
NM
|
||||||||
|
Adtalem Global Education Operating Income Excluding Special Items
|
$
|
27,492
|
$
|
36,241
|
(24.1
|
)%
|
||||||
ADTALEM GLOBAL EDUCATION INC.
NON-GAAP EARNINGS DISCLOSURE
(unaudited)
|
Three Months Ended
|
||||||||
|
September 30,
|
||||||||
|
2019
|
2018
|
|||||||
|
(in thousands, except per share amounts)
|
||||||||
|
Net Income (Loss)
|
$
|
14,361
|
$
|
(9,530
|
)
|
|||
|
Earnings (Loss) per Share (diluted-2019, basic-2018)
|
$
|
0.26
|
$
|
(0.16
|
)
|
|||
|
Continuing Operations:
|
||||||||
|
Restructuring Expense
|
$
|
6,530
|
$
|
39,473
|
||||
|
Effect on Earnings per Share (diluted)
|
$
|
0.12
|
$
|
0.64
|
||||
|
Gain on Sale of Assets
|
$
|
(4,779
|
)
|
$
|
—
|
|||
|
Effect on Earnings per Share (diluted)
|
$
|
(0.09
|
)
|
$
|
—
|
|||
|
Income Tax Impact on Non-GAAP Adjustments
|
$
|
(343
|
)
|
$
|
(7,952
|
)
|
||
|
Effect on Earnings per Share (diluted)
|
$
|
(0.01
|
)
|
$
|
(0.13
|
)
|
||
|
Discontinued Operations, net of tax
|
$
|
3,156
|
$
|
4,743
|
||||
|
Effect on Earnings per Share (diluted)
|
$
|
0.06
|
$
|
0.08
|
||||
|
Net Income from Continuing Operations Excluding Special Items, net of tax
|
$
|
18,925
|
$
|
26,734
|
||||
|
Earnings per Share from Continuing Operations Excluding Special Items, net of tax (diluted)
|
$
|
0.34
|
$
|
0.44
|
||||
|
Shares used in Basic EPS Calculation
|
N/A
|
60,328
|
||||||
|
Shares used in Diluted EPS Calculation
|
56,140
|
61,202
|
||||||