|
|
Exhibit 99.1
|
News Release
 |
Investor Contact
Chandrika Nigam Chandrika.Nigam@Adtalem.com 312-681-3209 |
| Media Contact Kelly Finelli Kelly.Finelli@Adtalem.com 872-270-0230 |
Adtalem Global Education Announces Fiscal Fourth Quarter and Full Year 2022 Results
Q4 and FY 2022 results in line with expectations
Solid finish to 2022 with improvement in profitability and strengthened balance sheet
FY 2022 GAAP EPS of $6.57; Adjusted EPS of $3.24 representing y-o-y growth of 40%
CHICAGO – Aug. 11, 2022 – Adtalem Global Education
Inc. (NYSE: ATGE), a leading healthcare educator, today reported academic, operating and financial results for its fiscal 2022 fourth quarter and full year ended June 30, 2022.
“We finished fiscal 2022 in line with expectations, and I am encouraged by our results as we continued to improve our operational performance and
strengthen our balance sheet, in the face of lingering macro challenges for the industry,” said Steve Beard, president and CEO of Adtalem Global Education. “Our academic, operational and financial results for the quarter and full year reflect our
commitment to our stakeholders and position us well for fiscal 2023 and beyond."
Beard added, “We have been proactive and purposeful in transforming our portfolio. Today, Adtalem is comprised of high-quality assets with market-leading
brands, an experienced management team and an attractive healthcare focus. We are poised to win in the markets in which we compete.”
Financial Highlights
Selected financial data for the three months ended June 30, 2022:
| ● |
Revenue of $361.2 million increased 61.6% compared with the prior year due to the acquisition of Walden
|
| ● |
Diluted earnings per share was flat at $0.18, compared with the prior year; diluted
earnings per share from continuing operations, excluding special items, was $1.31, compared with $0.48 in the prior year
|
| ● |
Operating income was $44.5 million, compared with $27.1 million in the prior year; operating income, excluding special items, was $88.1 million, an increase of
174.7% compared with the prior year. Operating margins excluding special items, increased to 24.4% from 14.4%
|
| ● |
Net income attributable to Adtalem was $8.0 million, compared with $9.0 million in the prior year; net income from continuing operations, excluding special items,
was $59.9 million, an increase of 149.9% compared with the prior year
|
| ● |
Adjusted EBITDA was $103.2 million, an increase of 139.9% compared with the prior year. Adjusted EBITDA margins increased to 28.6% from 19.3%
|
| ● |
Gross debt was reduced by $394.1 million in the fourth quarter or by 31.4%
|
Selected financial data for the twelve months ended June 30, 2022:
| ● |
Revenue of $1,387.1 million increased 53.0%, compared with the prior year due to the acquisition of Walden
|
| ● |
Diluted earnings per share was $6.57, compared with $1.49 in the prior year; diluted
earnings per share from continuing operations, excluding special items, was $3.24, compared with $2.31 in the prior year
|
| ● |
Operating income was $80.5 million, compared with $118.1 million in the prior year; operating income, excluding special items, was $271.3 million, a 73.4% increase
compared with the prior year. Operating margins, excluding special items, improved 230 basis points year over year to 19.6%
|
| ● |
Net income attributable to Adtalem was $317.7 million, compared with $76.9 million in
the prior year; net income from continuing operations, excluding
special items, was $158.2 million, an increase of 32.6% compared with the prior year
|
| ● |
Adjusted EBITDA was $332.3 million, an increase of 63.5%, compared with the prior year. Adjusted EBITDA margin increased to 24.0% from 22.4%
|
Business Highlights
|
●
|
Secured a grant of $1.2 million
from the American Nurses Foundation for Chamberlain University’s Practice-Ready, Specialty-Focused™ Program which is focused on preparing nurses to contribute to a variety of settings, such as perioperative services
|
|
●
|
Graduated more than 750 medical
school students at Adtalem’s medical schools' 2022 commencement ceremonies of whom 74% will enter primary care specialties helping to combat the critical physician shortage. In 2022, 26% of Adtalem’s medical school
graduates are of a race or ethnicity underrepresented in medicine, of whom more than 100 identify as Black or African American
|
|
●
|
Hosted a Nursing Summit
bringing together nation’s nursing and HBCU leaders and policy makers for advancing equity in healthcare through access and representation in nursing
education
|
Segment Highlights
Chamberlain
Fourth quarter segment revenue decreased 1.1% to $140.2 million compared with the prior year, and segment operating income increased 36.7% to $41.1
million due primarily to lower marketing and continued benefit from cost synergies.
Total student enrollment decreased 5.8% compared with the prior year, which
was primarily attributable to COVID-related headwinds in Chamberlain’s post-licensure online programs, partially offset by improved enrollment and persistence in on-campus pre-licensure programs.
Walden
Revenue in the fourth quarter was $137.1 million and segment operating
income was $12.8 million. Segment operating income, excluding special items,
was $36.1 million. With the acquisition closing on August 12, 2021, there are no prior year comparables.
Total student enrollment decreased 9.5% compared with the prior year, which
was primarily attributable to COVID-related headwinds in Walden’s post-licensure nursing programs and declines in the management and technology programs.
Medical and Veterinary
Revenue in the fourth quarter increased 2.7% to $83.9 million compared with the prior year. Segment operating income of $14.5 million increased by 29.5%
compared to prior year. Segment operating income, excluding special items, was $19.6 million, an increase of 74.4% compared with the prior year, driven by the increased revenue and the benefit from cost synergies within the segment.
Total student enrollment increased 3.5% compared with the prior year, due to growth in new student enrollment and higher persistence.
Adtalem Outlook
For the full fiscal year 2023, Adtalem expects revenue to be within the range of $1,380 million and $1,450 million, and adjusted diluted earnings per
share from continuing operations, excluding special items, to be within the range of $3.95 to $4.20.
Conference Call and Webcast Information
Adtalem will hold a conference call to discuss its fiscal 2022 fourth quarter
and full year on Thursday, Aug. 11, 2022, at 4 p.m. CDT (5 p.m. EDT). The conference call will be led by Steve Beard, president and chief executive officer, and Bob Phelan, senior vice president and chief financial officer. For those
participating by telephone, dial 877-407-6184 (United States) or +1 201-389-0877 (outside the United States) and request the “Adtalem Call” or use conference ID: 13730300.
Adtalem will also broadcast the conference call live on the web at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=qeEx1Lq8.
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 Sept. 11, 2022. To access
the replay, dial 877-660-6853 (United States) or +1 201-612-7415 (outside the United States), conference ID: 13730300, or visit the Adtalem website at: https://investors.adtalem.com/overview/default.aspx.
About Adtalem Global Education
Adtalem Global Education (NYSE: ATGE) is a leading healthcare educator and provider of professional talent to the healthcare industry. With a dedicated
focus on driving strong outcomes that increase workforce preparedness, Adtalem empowers a diverse learner population to achieve their goals and make inspiring contributions to their communities. Adtalem is the parent organization of American
University of the Caribbean School of Medicine, Chamberlain University, Ross University School of Medicine, Ross University School of Veterinary Medicine and Walden University. Adtalem and its institutions have more than 10,000 employees and a
network of more than 275,000 alumni. Adtalem was named one of America’s Most Responsible Companies 2021 by Newsweek, and one of America’s Best Employers for Diversity in 2021 and 2022 by Forbes. Follow Adtalem on Twitter @adtalemglobal, LinkedIn
or visit Adtalem.com for more information.
Forward-Looking Statements
Certain statements contained in this release are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding the future
impacts of the COVID-19 pandemic, the efficacy and distribution of the vaccines, and the expected synergies from the Walden acquisition. Forward-looking statements can also be identified by words such as “future,” “believe,” “expect,”
“anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to
differ materially from those described in the statements. These risk and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission
(SEC) and our other filings with the SEC. These forward-looking statements are based on information available to us as of the date any such statements are made, and we do not undertake any obligation to update any forward-looking statement,
except as required by law.
|
Q4 2022
|
Q4 2021
|
% Change
|
||||||||||
|
Adtalem Global Education Student Enrollments
|
||||||||||||
|
Total students(1)
|
77,665
|
83,688
|
-7.2
|
%
|
||||||||
|
Chamberlain University
|
||||||||||||
|
Total students
|
32,891
|
34,930
|
-5.8
|
%
|
||||||||
|
Walden University(2)
|
||||||||||||
|
Total students
|
39,470
|
43,632
|
-9.5
|
%
|
||||||||
|
Medical & Veterinary
|
||||||||||||
|
Total students
|
5,304
|
5,126
|
3.5
|
%
|
||||||||
|
1)
|
Represents total students attending sessions during each institution’s most recent enrollment period in Q4 FY 2022.
|
|
2)
|
Prior year Walden enrollment figures are as calculated by Walden while controlled by Laureate Education, Inc., and are included here for
comparative purposes only.
|
Adtalem Global Education Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except par value)
|
June 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Assets:
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$
|
346,973
|
$
|
476,377
|
||||
|
Restricted cash
|
964
|
819,003
|
||||||
|
Accounts receivable, net
|
81,635
|
43,041
|
||||||
|
Prepaid expenses and other current assets
|
126,467
|
128,217
|
||||||
|
Current assets held for sale
|
—
|
48,315
|
||||||
|
Total current assets
|
556,039
|
1,514,953
|
||||||
|
Noncurrent assets:
|
||||||||
|
Property and equipment, net
|
289,926
|
283,692
|
||||||
|
Operating lease assets
|
177,995
|
167,365
|
||||||
|
Deferred income taxes
|
51,093
|
53,486
|
||||||
|
Intangible assets, net
|
873,577
|
137,500
|
||||||
|
Goodwill
|
961,262
|
310,210
|
||||||
|
Other assets, net
|
119,283
|
86,040
|
||||||
|
Noncurrent assets held for sale
|
—
|
531,597
|
||||||
|
Total noncurrent assets
|
2,473,136
|
1,569,890
|
||||||
|
Total assets
|
$
|
3,029,175
|
$
|
3,084,843
|
||||
|
Liabilities and shareholders' equity:
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$
|
57,140
|
$
|
42,421
|
||||
|
Accrued payroll and benefits
|
66,642
|
54,331
|
||||||
|
Accrued liabilities
|
98,124
|
126,344
|
||||||
|
Deferred revenue
|
144,840
|
68,807
|
||||||
|
Current operating lease liabilities
|
50,781
|
53,991
|
||||||
|
Current portion of long-term debt
|
—
|
3,000
|
||||||
|
Current liabilities held for sale
|
—
|
59,913
|
||||||
|
Total current liabilities
|
417,527
|
408,807
|
||||||
|
Noncurrent liabilities:
|
||||||||
|
Long-term debt
|
838,908
|
1,067,711
|
||||||
|
Long-term operating lease liabilities
|
177,045
|
167,066
|
||||||
|
Deferred income taxes
|
25,554
|
26,177
|
||||||
|
Other liabilities
|
65,074
|
78,705
|
||||||
|
Noncurrent liabilities held for sale
|
—
|
33,517
|
||||||
|
Total noncurrent liabilities
|
1,106,581
|
1,373,176
|
||||||
|
Total liabilities
|
1,524,108
|
1,781,983
|
||||||
|
Commitments and contingencies
|
||||||||
|
Redeemable noncontrolling interest
|
—
|
1,790
|
||||||
|
Shareholders' equity:
|
||||||||
|
Common stock, $0.01 par value per share, 200,000 shares authorized; 45,177 and 49,253 shares outstanding as of June 30, 2022 and
June 30, 2021, respectively
|
818
|
811
|
||||||
|
Additional paid-in capital
|
521,848
|
519,826
|
||||||
|
Retained earnings
|
2,322,810
|
2,005,105
|
||||||
|
Accumulated other comprehensive loss
|
(960
|
)
|
(7,365
|
)
|
||||
|
Treasury stock, at cost, 36,619 and 31,846 shares as of June 30, 2022 and June 30, 2021, respectively
|
(1,339,449
|
)
|
(1,217,307
|
)
|
||||
|
Total shareholders' equity
|
1,505,067
|
1,301,070
|
||||||
|
Total liabilities and shareholders' equity
|
$
|
3,029,175
|
$
|
3,084,843
|
||||
Adtalem Global Education Inc.
Consolidated Statements of Income
(unaudited)
(in thousands, except per share data)
|
Three Months Ended
|
Year Ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
|
Revenue
|
$
|
361,231
|
$
|
223,466
|
$
|
1,387,122
|
$
|
906,901
|
||||||||
|
Operating cost and expense:
|
||||||||||||||||
|
Cost of educational services
|
161,279
|
116,408
|
659,776
|
457,905
|
||||||||||||
|
Student services and administrative expense
|
135,133
|
74,980
|
568,056
|
292,482
|
||||||||||||
|
Restructuring expense
|
8,629
|
1,570
|
25,628
|
6,869
|
||||||||||||
|
Business acquisition and integration expense
|
11,661
|
3,432
|
53,198
|
31,593
|
||||||||||||
|
Total operating cost and expense
|
316,702
|
196,390
|
1,306,658
|
788,849
|
||||||||||||
|
Operating income
|
44,529
|
27,076
|
80,464
|
118,052
|
||||||||||||
|
Other income (expense):
|
||||||||||||||||
|
Interest and dividend income
|
1,036
|
961
|
3,820
|
4,094
|
||||||||||||
|
Interest expense
|
(19,441
|
)
|
(25,382
|
)
|
(129,348
|
)
|
(41,365
|
)
|
||||||||
|
Investment gain
|
—
|
636
|
—
|
2,638
|
||||||||||||
|
Net other expense
|
(18,405
|
)
|
(23,785
|
)
|
(125,528
|
)
|
(34,633
|
)
|
||||||||
|
Income (loss) from continuing operations before income taxes
|
26,124
|
3,291
|
(45,064
|
)
|
83,419
|
|||||||||||
|
(Provision for) benefit from income taxes
|
(23,660
|
)
|
(726
|
)
|
15,237
|
(13,089
|
)
|
|||||||||
|
Income (loss) from continuing operations
|
2,464
|
2,565
|
(29,827
|
)
|
70,330
|
|||||||||||
|
Discontinued operations:
|
||||||||||||||||
|
(Loss) income from discontinued operations before income taxes
|
(2,575
|
)
|
7,326
|
(395
|
)
|
9,485
|
||||||||||
|
(Loss) gain on disposal of discontinued operations before income taxes
|
(520
|
)
|
—
|
473,483
|
—
|
|||||||||||
|
Benefit from (provision for) income taxes
|
8,645
|
(954
|
)
|
(125,556
|
)
|
(3,340
|
)
|
|||||||||
|
Income from discontinued operations
|
5,550
|
6,372
|
347,532
|
6,145
|
||||||||||||
|
Net income
|
8,014
|
8,937
|
317,705
|
76,475
|
||||||||||||
|
Net loss attributable to redeemable noncontrolling interest from discontinued operations
|
—
|
75
|
—
|
434
|
||||||||||||
|
Net income attributable to Adtalem
|
$
|
8,014
|
$
|
9,012
|
$
|
317,705
|
$
|
76,909
|
||||||||
|
Amounts attributable to Adtalem:
|
||||||||||||||||
|
Net income (loss) from continuing operations
|
$
|
2,464
|
$
|
2,565
|
$
|
(29,827
|
)
|
$
|
70,330
|
|||||||
|
Net income from discontinued operations
|
5,550
|
6,447
|
347,532
|
6,579
|
||||||||||||
|
Net income attributable to Adtalem
|
$
|
8,014
|
$
|
9,012
|
$
|
317,705
|
$
|
76,909
|
||||||||
|
Earnings (loss) per share attributable to Adtalem:
|
||||||||||||||||
|
Basic:
|
||||||||||||||||
|
Continuing operations
|
$
|
0.05
|
$
|
0.05
|
$
|
(0.62
|
)
|
$
|
1.37
|
|||||||
|
Discontinued operations
|
$
|
0.12
|
$
|
0.13
|
$
|
7.18
|
$
|
0.13
|
||||||||
|
Total basic earnings per share
|
$
|
0.18
|
$
|
0.18
|
$
|
6.57
|
$
|
1.50
|
||||||||
|
Diluted:
|
||||||||||||||||
|
Continuing operations
|
$
|
0.05
|
$
|
0.05
|
$
|
(0.62
|
)
|
$
|
1.36
|
|||||||
|
Discontinued operations
|
$
|
0.12
|
$
|
0.13
|
$
|
7.18
|
$
|
0.13
|
||||||||
|
Total diluted earnings per share
|
$
|
0.18
|
$
|
0.18
|
$
|
6.57
|
$
|
1.49
|
||||||||
|
Weighted-average shares outstanding:
|
||||||||||||||||
|
Basic shares
|
45,162
|
49,884
|
48,388
|
51,322
|
||||||||||||
|
Diluted shares
|
45,758
|
50,326
|
48,388
|
51,645
|
||||||||||||
Adtalem Global Education Inc.
Consolidated Statements of Cash Flows
(unaudited)
(unaudited)
(in thousands)
|
Year Ended June 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Operating activities:
|
||||||||
|
Net income
|
$
|
317,705
|
$
|
76,475
|
||||
|
Income from discontinued operations
|
(347,532
|
)
|
(6,145
|
)
|
||||
|
(Loss) income from continuing operations
|
(29,827
|
)
|
70,330
|
|||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
|
Stock-based compensation expense
|
22,611
|
12,824
|
||||||
|
Amortization and adjustments to operating lease assets
|
44,748
|
50,651
|
||||||
|
Depreciation
|
44,574
|
33,888
|
||||||
|
Amortization of intangible assets
|
97,274
|
—
|
||||||
|
Amortization and write-off of debt discount and issuance costs
|
42,654
|
2,657
|
||||||
|
Reclassification adjustment from other comprehensive income
|
—
|
(126
|
)
|
|||||
|
Provision for bad debts
|
27,141
|
11,023
|
||||||
|
Deferred income taxes
|
(544
|
)
|
62
|
|||||
|
Loss on disposals, accelerated depreciation, and adjustments to property and equipment
|
3,501
|
1,912
|
||||||
|
Gain on extinguishment of debt
|
(2,072
|
)
|
—
|
|||||
|
Realized and unrealized gain on investments
|
—
|
(2,638
|
)
|
|||||
|
Changes in assets and liabilities:
|
||||||||
|
Accounts receivable
|
(29,881
|
)
|
15,443
|
|||||
|
Prepaid expenses and other current assets
|
569
|
(17,198
|
)
|
|||||
|
Accounts payable
|
(15,724
|
)
|
5,666
|
|||||
|
Accrued payroll and benefits
|
(13,268
|
)
|
12,552
|
|||||
|
Accrued liabilities
|
(16,305
|
)
|
29,312
|
|||||
|
Deferred revenue
|
65,075
|
5,312
|
||||||
|
Operating lease liabilities
|
(49,147
|
)
|
(48,588
|
)
|
||||
|
Other assets and liabilities
|
(27,554
|
)
|
(14,322
|
)
|
||||
|
Net cash provided by operating activities-continuing operations
|
163,825
|
168,760
|
||||||
|
Net cash (used in) provided by operating activities-discontinued operations
|
(153,401
|
)
|
23,439
|
|||||
|
Net cash provided by operating activities
|
10,424
|
192,199
|
||||||
|
Investing activities:
|
||||||||
|
Capital expenditures
|
(31,054
|
)
|
(39,881
|
)
|
||||
|
Proceeds from sales of marketable securities
|
—
|
2,721
|
||||||
|
Purchases of marketable securities
|
—
|
(10,745
|
)
|
|||||
|
Payment for purchase of business, net of cash and restricted cash acquired
|
(1,488,054
|
)
|
—
|
|||||
|
Cash received on DeVry University loan
|
10,000
|
—
|
||||||
|
Net cash used in investing activities-continuing operations
|
(1,509,108
|
)
|
(47,905
|
)
|
||||
|
Net cash used in investing activities-discontinued operations
|
(3,287
|
)
|
(8,783
|
)
|
||||
|
Proceeds from sale of business, net of cash transferred
|
960,768
|
—
|
||||||
|
Net cash used in investing activities
|
(551,627
|
)
|
(56,688
|
)
|
||||
|
Financing activities:
|
||||||||
|
Proceeds from exercise of stock options
|
8,879
|
1,457
|
||||||
|
Employee taxes paid on withholding shares
|
(2,834
|
)
|
(4,206
|
)
|
||||
|
Proceeds from stock issued under Colleague Stock Purchase Plan
|
535
|
262
|
||||||
|
Repurchases of common stock for treasury
|
(120,000
|
)
|
(100,000
|
)
|
||||
|
Payment for purchase of equity forward contract
|
(30,000
|
)
|
—
|
|||||
|
Proceeds from long-term debt
|
850,000
|
800,000
|
||||||
|
Repayments of long-term debt
|
(1,079,713
|
)
|
(3,000
|
)
|
||||
|
Payment of debt discount and issuance costs
|
(49,553
|
)
|
(18,047
|
)
|
||||
|
Payment for purchase of redeemable noncontrolling interest of subsidiary
|
(1,790
|
)
|
—
|
|||||
|
Net cash (used in) provided by financing activities
|
(424,476
|
)
|
676,466
|
|||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
—
|
534
|
||||||
|
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(965,679
|
)
|
812,511
|
|||||
|
Cash, cash equivalents and restricted cash at beginning of period
|
1,313,616
|
501,105
|
||||||
|
Cash, cash equivalents and restricted cash at end of period
|
347,937
|
1,313,616
|
||||||
|
Less: cash, cash equivalents and restricted cash of discontinued operations at end of period
|
—
|
18,236
|
||||||
|
Cash, cash equivalents and restricted cash of continuing operations at end of period
|
$
|
347,937
|
$
|
1,295,380
|
||||
Adtalem Global Education Inc.
Segment Information
(unaudited)
(in thousands)
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||||||||||||||||||
|
Increase/(Decrease)
|
Increase/(Decrease)
|
|||||||||||||||||||||||||||||||
|
2022
|
2021
|
$
|
%
|
2022
|
2021
|
$
|
%
|
|||||||||||||||||||||||||
|
Revenue:
|
||||||||||||||||||||||||||||||||
|
Chamberlain
|
$
|
140,226
|
$
|
141,760
|
$
|
(1,534
|
)
|
(1.1
|
)%
|
$
|
557,536
|
$
|
563,814
|
$
|
(6,278
|
)
|
(1.1
|
)%
|
||||||||||||||
|
Walden
|
137,068
|
—
|
137,068
|
NM
|
485,393
|
—
|
485,393
|
NM
|
||||||||||||||||||||||||
|
Medical and Veterinary
|
83,937
|
81,706
|
2,231
|
2.7
|
%
|
344,193
|
343,087
|
1,106
|
0.3
|
%
|
||||||||||||||||||||||
|
Total consolidated revenue
|
$
|
361,231
|
$
|
223,466
|
$
|
137,765
|
61.6
|
%
|
$
|
1,387,122
|
$
|
906,901
|
$
|
480,221
|
53.0
|
%
|
||||||||||||||||
|
Operating income (loss):
|
||||||||||||||||||||||||||||||||
|
Chamberlain
|
$
|
41,124
|
$
|
30,093
|
$
|
11,031
|
36.7
|
%
|
$
|
124,414
|
$
|
128,851
|
$
|
(4,437
|
)
|
(3.4
|
)%
|
|||||||||||||||
|
Walden
|
12,787
|
—
|
12,787
|
NM
|
(4,156
|
)
|
—
|
(4,156
|
)
|
NM
|
||||||||||||||||||||||
|
Medical and Veterinary
|
14,541
|
11,226
|
3,315
|
29.5
|
%
|
64,637
|
67,852
|
(3,215
|
)
|
(4.7
|
)%
|
|||||||||||||||||||||
|
Home Office and Other
|
(23,923
|
)
|
(14,243
|
)
|
(9,680
|
)
|
(68.0
|
)%
|
(104,431
|
)
|
(78,651
|
)
|
(25,780
|
)
|
(32.8
|
)%
|
||||||||||||||||
|
Total consolidated operating income
|
$
|
44,529
|
$
|
27,076
|
$
|
17,453
|
64.5
|
%
|
$
|
80,464
|
$
|
118,052
|
$
|
(37,588
|
)
|
(31.8
|
)%
|
|||||||||||||||
Non-GAAP Financial Measures and Reconciliations
We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying
business trends and performance of Adtalem’s ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of
performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial
measures used in the subsequent GAAP to non-GAAP reconciliation tables:
Net income from continuing
operations excluding special items (most comparable GAAP measure: net income attributable to Adtalem) – Measure of Adtalem’s net income attributable to Adtalem adjusted for deferred revenue adjustment, CEO transition costs, restructuring
expense, business acquisition and integration expense, Walden intangible amortization expense, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, and net income from discontinued
operations attributable to Adtalem.
Earnings per share from continuing
operations excluding special items (most comparable GAAP measure: earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business
acquisition and integration expense, Walden intangible amortization expense, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, and net income from discontinued operations attributable
to Adtalem.
Operating income excluding special
items (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, and Walden
intangible amortization expense. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.
Adjusted EBITDA (most comparable
GAAP measure: net income attributable to Adtalem) – Measure of Adtalem’s net income attributable to Adtalem adjusted for net income from discontinued operations attributable to Adtalem, net other expense, provision for (benefit from)
income taxes, depreciation and amortization, stock-based compensation, deferred revenue adjustment, CEO transition costs, restructuring expense, and business acquisition and integration expense. This measure is applied on a consolidated and segment
basis, depending on the context of the discussion. Income taxes and net other expense is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.
Free cash flow (most comparable
GAAP measure: net cash provided by operating activities-continuing operations) – Defined as net cash provided by operating activities-continuing operations less capital expenditures.
Net debt – Defined as
long-term debt less cash and cash equivalents.
Net leverage – Defined as
net debt divided by adjusted EBITDA.
A description of special items in our non-GAAP financial measures described above are as follows:
|
●
|
Deferred revenue adjustment related to a revenue purchase accounting adjustment to record Walden’s deferred revenue at fair value.
|
|
●
|
CEO transition costs related to acceleration of stock-based compensation expense.
|
|
●
|
Restructuring expense primarily related to plans to achieve synergies with the Walden acquisition and real estate consolidations at Medical and
Veterinary and Adtalem’s home office.
|
|
●
|
Business acquisition and integration expense include expenses related to the Walden acquisition.
|
|
●
|
Walden intangible amortization expense on acquired intangible assets.
|
|
●
|
Pre-acquisition interest expense, write-off of debt discount and issuance costs, and gain on extinguishment of debt related to financing
arrangements in connection with the Walden acquisition and prepayment of debt.
|
|
●
|
Net income from discontinued operations attributable to Adtalem includes the operations of ACAMS, Becker, OCL, and EduPristine, including the
after-tax gain on the sale of these businesses, in addition to costs related to DeVry University.
|
Adtalem Global Education Inc.
Non-GAAP Operating Income by Segment
(unaudited)
(in thousands)
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||||||||||
|
Increase/(Decrease)
|
Increase/(Decrease)
|
|||||||||||||||||||||||
|
|
2022
|
2021
|
$
|
%
|
2022
|
2021
|
$
|
%
|
||||||||||||||||
|
Chamberlain:
|
||||||||||||||||||||||||
|
Operating income (GAAP)
|
$
|
41,124
|
$
|
30,093
|
$
|
11,031
|
36.7
|
%
|
$
|
124,414
|
$
|
128,851
|
$
|
(4,437)
|
(3.4)
|
%
|
||||||||
|
Restructuring expense
|
572
|
—
|
572
|
2,838
|
—
|
2,838
|
||||||||||||||||||
|
Operating income excluding special items (non-GAAP)
|
$
|
41,696
|
$
|
30,093
|
$
|
11,603
|
38.6
|
%
|
$
|
127,252
|
$
|
128,851
|
$
|
(1,599)
|
(1.2)
|
%
|
||||||||
|
Walden:
|
||||||||||||||||||||||||
|
Operating income (loss) (GAAP)
|
$
|
12,787
|
$
|
—
|
$
|
12,787
|
NM
|
$
|
(4,156)
|
$
|
—
|
$
|
(4,156)
|
NM
|
||||||||||
|
Deferred revenue adjustment
|
—
|
—
|
—
|
8,561
|
—
|
8,561
|
||||||||||||||||||
|
Restructuring expense
|
37
|
—
|
37
|
4,053
|
—
|
4,053
|
||||||||||||||||||
|
Walden intangible amortization expense
|
23,307
|
—
|
23,307
|
97,274
|
—
|
97,274
|
||||||||||||||||||
|
Operating income excluding special items (non-GAAP)
|
$
|
36,131
|
$
|
—
|
$
|
36,131
|
NM
|
$
|
105,732
|
$
|
—
|
$
|
105,732
|
NM
|
||||||||||
|
Medical and Veterinary:
|
||||||||||||||||||||||||
|
Operating income (GAAP)
|
$
|
14,541
|
$
|
11,226
|
$
|
3,315
|
29.5
|
%
|
$
|
64,637
|
$
|
67,852
|
$
|
(3,215)
|
(4.7)
|
%
|
||||||||
|
Restructuring expense
|
5,034
|
—
|
5,034
|
9,791
|
—
|
9,791
|
||||||||||||||||||
|
Operating income excluding special items (non-GAAP)
|
$
|
19,575
|
$
|
11,226
|
$
|
8,349
|
74.4
|
%
|
$
|
74,428
|
$
|
67,852
|
$
|
6,576
|
9.7
|
%
|
||||||||
|
Home Office and Other:
|
||||||||||||||||||||||||
|
Operating loss (GAAP)
|
$
|
(23,923)
|
$
|
(14,243)
|
$
|
(9,680)
|
(68.0)
|
%
|
$
|
(104,431)
|
$
|
(78,651)
|
$
|
(25,780)
|
(32.8)
|
%
|
||||||||
|
CEO transition costs
|
—
|
—
|
—
|
6,195
|
—
|
6,195
|
||||||||||||||||||
|
Restructuring expense
|
2,986
|
1,570
|
1,416
|
8,946
|
6,869
|
2,077
|
||||||||||||||||||
|
Business acquisition and integration expense
|
11,661
|
3,432
|
8,229
|
53,198
|
31,593
|
21,605
|
||||||||||||||||||
|
Operating loss excluding special items (non-GAAP)
|
$
|
(9,276)
|
$
|
(9,241)
|
$
|
(35)
|
(0.4)
|
%
|
$
|
(36,092)
|
$
|
(40,189)
|
$
|
4,097
|
10.2
|
%
|
||||||||
|
Adtalem Global Education:
|
||||||||||||||||||||||||
|
Operating income (GAAP)
|
$
|
44,529
|
$
|
27,076
|
$
|
17,453
|
64.5
|
%
|
$
|
80,464
|
$
|
118,052
|
$
|
(37,588)
|
(31.8)
|
%
|
||||||||
|
Deferred revenue adjustment
|
—
|
—
|
—
|
8,561
|
—
|
8,561
|
||||||||||||||||||
|
CEO transition costs
|
—
|
—
|
—
|
6,195
|
—
|
6,195
|
||||||||||||||||||
|
Restructuring expense
|
8,629
|
1,570
|
7,059
|
25,628
|
6,869
|
18,759
|
||||||||||||||||||
|
Business acquisition and integration expense
|
11,661
|
3,432
|
8,229
|
53,198
|
31,593
|
21,605
|
||||||||||||||||||
|
Walden intangible amortization expense
|
23,307
|
—
|
23,307
|
97,274
|
—
|
97,274
|
||||||||||||||||||
|
Operating income excluding special items (non-GAAP)
|
$
|
88,126
|
$
|
32,078
|
$
|
56,048
|
174.7
|
%
|
$
|
271,320
|
$
|
156,514
|
$
|
114,806
|
73.4
|
%
|
||||||||
Adtalem Global Education Inc.
Non-GAAP Adjusted EBITDA by Segment
(unaudited)
(in thousands)
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||||||||||
|
Increase/(Decrease)
|
Increase/(Decrease)
|
|||||||||||||||||||||||
|
2022
|
2021
|
$
|
%
|
2022
|
2021
|
$
|
%
|
|||||||||||||||||
|
Chamberlain:
|
||||||||||||||||||||||||
|
Operating income (GAAP)
|
$
|
41,124
|
$
|
30,093
|
$
|
11,031
|
36.7
|
%
|
$
|
124,414
|
$
|
128,851
|
$
|
(4,437)
|
(3.4)
|
%
|
||||||||
|
Restructuring expense
|
572
|
—
|
572
|
2,838
|
—
|
2,838
|
||||||||||||||||||
|
Depreciation
|
4,499
|
4,125
|
374
|
18,547
|
16,123
|
2,424
|
||||||||||||||||||
|
Stock-based compensation
|
1,603
|
986
|
617
|
6,707
|
5,181
|
1,526
|
||||||||||||||||||
|
Adjusted EBITDA (non-GAAP)
|
$
|
47,798
|
$
|
35,204
|
$
|
12,594
|
35.8
|
%
|
$
|
152,506
|
$
|
150,155
|
$
|
2,351
|
1.6
|
%
|
||||||||
|
Walden:
|
||||||||||||||||||||||||
|
Operating income (loss) (GAAP)
|
$
|
12,787
|
$
|
—
|
$
|
12,787
|
NM
|
$
|
(4,156)
|
$
|
—
|
$
|
(4,156)
|
NM
|
||||||||||
|
Deferred revenue adjustment
|
—
|
—
|
—
|
8,561
|
—
|
8,561
|
||||||||||||||||||
|
Restructuring expense
|
37
|
—
|
37
|
4,053
|
—
|
4,053
|
||||||||||||||||||
|
Walden intangible amortization expense
|
23,307
|
—
|
23,307
|
97,274
|
—
|
97,274
|
||||||||||||||||||
|
Depreciation
|
2,454
|
—
|
2,454
|
9,255
|
—
|
9,255
|
||||||||||||||||||
|
Stock-based compensation
|
721
|
—
|
721
|
3,029
|
—
|
3,029
|
||||||||||||||||||
|
Adjusted EBITDA (non-GAAP)
|
$
|
39,306
|
$
|
—
|
$
|
39,306
|
NM
|
$
|
118,016
|
$
|
—
|
$
|
118,016
|
NM
|
||||||||||
|
Medical and Veterinary:
|
||||||||||||||||||||||||
|
Operating income (GAAP)
|
$
|
14,541
|
$
|
11,226
|
$
|
3,315
|
29.5
|
%
|
$
|
64,637
|
$
|
67,852
|
$
|
(3,215)
|
(4.7)
|
%
|
||||||||
|
Restructuring expense
|
5,034
|
—
|
5,034
|
9,791
|
—
|
9,791
|
||||||||||||||||||
|
Depreciation
|
3,393
|
3,629
|
(236)
|
13,890
|
14,431
|
(541)
|
||||||||||||||||||
|
Stock-based compensation
|
922
|
632
|
290
|
3,896
|
3,321
|
575
|
||||||||||||||||||
|
Adjusted EBITDA (non-GAAP)
|
$
|
23,890
|
$
|
15,487
|
$
|
8,403
|
54.3
|
%
|
$
|
92,214
|
$
|
85,604
|
$
|
6,610
|
7.7
|
%
|
||||||||
|
Home Office and Other:
|
||||||||||||||||||||||||
|
Operating loss (GAAP)
|
$
|
(23,923)
|
$
|
(14,243)
|
$
|
(9,680)
|
(68.0)
|
%
|
$
|
(104,431)
|
$
|
(78,651)
|
$
|
(25,780)
|
(32.8)
|
%
|
||||||||
|
CEO transition costs
|
—
|
—
|
—
|
6,195
|
—
|
6,195
|
||||||||||||||||||
|
Restructuring expense
|
2,986
|
1,570
|
1,416
|
8,946
|
6,869
|
2,077
|
||||||||||||||||||
|
Business acquisition and integration expense
|
11,661
|
3,432
|
8,229
|
53,198
|
31,593
|
21,605
|
||||||||||||||||||
|
Depreciation
|
757
|
809
|
(52)
|
2,882
|
3,334
|
(452)
|
||||||||||||||||||
|
Stock-based compensation
|
761
|
777
|
(16)
|
2,784
|
4,322
|
(1,538)
|
||||||||||||||||||
|
Adjusted EBITDA (non-GAAP)
|
$
|
(7,758)
|
$
|
(7,655)
|
$
|
(103)
|
(1.3)
|
%
|
$
|
(30,426)
|
$
|
(32,533)
|
$
|
2,107
|
6.5
|
%
|
||||||||
|
Adtalem Global Education:
|
||||||||||||||||||||||||
|
Net income attributable to Adtalem (GAAP)
|
$
|
8,014
|
$
|
9,012
|
$
|
(998)
|
(11.1)
|
%
|
$
|
317,705
|
$
|
76,909
|
$
|
240,796
|
313.1
|
%
|
||||||||
|
Net income from discontinued operations attributable to Adtalem
|
(5,550)
|
(6,447)
|
897
|
(347,532)
|
(6,579)
|
(340,953)
|
||||||||||||||||||
|
Net other expense
|
18,405
|
23,785
|
(5,380)
|
125,528
|
34,633
|
90,895
|
||||||||||||||||||
|
Provision for (benefit from) income taxes
|
23,660
|
726
|
22,934
|
(15,237)
|
13,089
|
(28,326)
|
||||||||||||||||||
|
Operating income (GAAP)
|
44,529
|
27,076
|
17,453
|
80,464
|
118,052
|
(37,588)
|
||||||||||||||||||
|
Depreciation and amortization
|
34,410
|
8,563
|
25,847
|
141,848
|
33,888
|
107,960
|
||||||||||||||||||
|
Stock-based compensation
|
4,007
|
2,395
|
1,612
|
16,416
|
12,824
|
3,592
|
||||||||||||||||||
|
Deferred revenue adjustment
|
—
|
—
|
—
|
8,561
|
—
|
8,561
|
||||||||||||||||||
|
CEO transition costs
|
—
|
—
|
—
|
6,195
|
—
|
6,195
|
||||||||||||||||||
|
Restructuring expense
|
8,629
|
1,570
|
7,059
|
25,628
|
6,869
|
18,759
|
||||||||||||||||||
|
Business acquisition and integration expense
|
11,661
|
3,432
|
8,229
|
53,198
|
31,593
|
21,605
|
||||||||||||||||||
|
Adjusted EBITDA (non-GAAP)
|
$
|
103,236
|
$
|
43,036
|
$
|
60,200
|
139.9
|
%
|
$
|
332,310
|
$
|
203,226
|
$
|
129,084
|
63.5
|
%
|
||||||||
Adtalem Global Education Inc.
Non-GAAP Earnings Disclosure
(unaudited)
(in thousands, except per share data)
|
Three Months Ended
|
Year Ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
|
Net income attributable to Adtalem (GAAP)
|
$
|
8,014
|
$
|
9,012
|
$
|
317,705
|
$
|
76,909
|
||||||||
|
Deferred revenue adjustment
|
—
|
—
|
8,561
|
—
|
||||||||||||
|
CEO transition costs
|
—
|
—
|
6,195
|
—
|
||||||||||||
|
Restructuring expense
|
8,629
|
1,570
|
25,628
|
6,869
|
||||||||||||
|
Business acquisition and integration expense
|
11,661
|
3,432
|
53,198
|
31,593
|
||||||||||||
|
Walden intangible amortization expense
|
23,307
|
—
|
97,274
|
—
|
||||||||||||
|
Pre-acquisition interest expense, write-off of debt discount and issuance costs, and gain on extinguishment of debt
|
4,699
|
21,750
|
48,804
|
26,746
|
||||||||||||
|
Income tax impact on non-GAAP adjustments (1)
|
9,188
|
(5,325
|
)
|
(51,683
|
)
|
(16,297
|
)
|
|||||||||
|
Net income from discontinued operations attributable to Adtalem
|
(5,550
|
)
|
(6,447
|
)
|
(347,532
|
)
|
(6,579
|
)
|
||||||||
|
Net income from continuing operations excluding special items (non-GAAP)
|
$
|
59,948
|
$
|
23,992
|
$
|
158,150
|
$
|
119,241
|
||||||||
(1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.
|
Three Months Ended
|
Year Ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
|
Earnings per share, diluted (GAAP)
|
$
|
0.18
|
$
|
0.18
|
$
|
6.57
|
$
|
1.49
|
||||||||
|
Effect on diluted earnings per share:
|
||||||||||||||||
|
Deferred revenue adjustment
|
—
|
—
|
0.18
|
—
|
||||||||||||
|
CEO transition costs
|
—
|
—
|
0.13
|
—
|
||||||||||||
|
Restructuring expense
|
0.19
|
0.03
|
0.53
|
0.13
|
||||||||||||
|
Business acquisition and integration expense
|
0.25
|
0.07
|
1.09
|
0.61
|
||||||||||||
|
Walden intangible amortization expense
|
0.51
|
—
|
1.99
|
—
|
||||||||||||
|
Pre-acquisition interest expense, write-off of debt discount and issuance costs, and gain on extinguishment of debt
|
0.10
|
0.43
|
1.00
|
0.52
|
||||||||||||
|
Income tax impact on non-GAAP adjustments (1)
|
0.20
|
(0.11
|
)
|
(1.06
|
)
|
(0.32
|
)
|
|||||||||
|
Net income from discontinued operations attributable to Adtalem
|
(0.12
|
)
|
(0.13
|
)
|
(7.18
|
)
|
(0.13
|
)
|
||||||||
|
Earnings per share from continuing operations excluding special items, diluted (non-GAAP)
|
$
|
1.31
|
$
|
0.48
|
$
|
3.24
|
$
|
2.31
|
||||||||
|
Diluted shares used in non-GAAP EPS calculation
|
45,758
|
50,326
|
48,804
|
51,645
|
||||||||||||
Note: May not sum due to rounding.
(1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.
Adtalem Global Education Inc.
Non-GAAP Free Cash Flow Disclosure
(unaudited)
(in thousands)
|
Three Months Ended
|
Twelve Months Ended
|
||||||||||||||||||||
|
FY22
|
FY21
|
FY22
|
FY22
|
FY22
|
FY22
|
FY21
|
|||||||||||||||
|
|
Q4
|
|
Q4
|
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
||||||||||||
|
Net cash provided by operating activities-continuing operations (GAAP)
|
$
|
105,428
|
$
|
43,084
|
$
|
163,825
|
$
|
101,481
|
$
|
91,835
|
$
|
124,742
|
$
|
168,760
|
|||||||
|
Capital expenditures
|
(8,805)
|
(11,290)
|
(31,054)
|
(33,539)
|
(34,949)
|
(34,256)
|
(39,881)
|
||||||||||||||
|
Free cash flow (non-GAAP)
|
$
|
96,623
|
$
|
31,794
|
$
|
132,771
|
$
|
67,942
|
$
|
56,886
|
$
|
90,486
|
$
|
128,879
|
|||||||
Adtalem Global Education Inc.
Non-GAAP Outlook Disclosure
(unaudited)
(in thousands, except per share data)
|
Year Ended
|
|||
|
June 30, 2023
|
|||
|
Expected earnings per share, diluted (GAAP)
|
$
|
2.72 to 2.97
|
|
|
Expected effects on diluted earnings per share:
|
|||
|
Estimated purchase accounting adjustment - intangible amortization
|
1.33
|
||
|
Estimated incremental acquisition integration costs
|
0.33
|
||
|
Estimated income tax impact on non-GAAP adjustments(1)
|
(0.43)
|
||
|
Expected adjusted earnings per share from continuing operations excluding special items, diluted (non-GAAP)(2)
|
$
|
3.95 to 4.20
|
|
|
Diluted shares used in EPS calculation
|
45,900
|
||
(1) Represents the estimated income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.
(2) The outlook provided above does not reflect the potential impact of any business or asset acquisitions or dispositions that may occur during fiscal
year 2023. The expected effects on diluted earnings per share (“EPS”) of (1) the estimated purchase accounting adjustment – intangible amortization and (2) the estimated incremental acquisition integration costs are estimates related to the Walden
University acquisition. Additional charges to these special items, or additional special items not currently identified, which may occur during fiscal year 2023, would impact the GAAP expected EPS provided above.
Adtalem Global Education Inc.
Non-GAAP Net Leverage Disclosure
(unaudited)
(in thousands)
|
Year Ended
|
||||
|
June 30, 2022
|
||||
|
Adtalem Global Education:
|
||||
|
Net income attributable to Adtalem (GAAP)
|
$
|
317,705
|
||
|
Net income from discontinued operations attributable to Adtalem
|
(347,532
|
)
|
||
|
Net other expense
|
125,528
|
|||
|
Benefit from income taxes
|
(15,237
|
)
|
||
|
Depreciation and amortization
|
141,848
|
|||
|
Stock-based compensation
|
16,416
|
|||
|
Deferred revenue adjustment
|
8,561
|
|||
|
CEO transition costs
|
6,195
|
|||
|
Restructuring expense
|
25,628
|
|||
|
Business acquisition and integration expense
|
53,198
|
|||
|
Adjusted EBITDA (non-GAAP)
|
$
|
332,310
|
||
|
June 30, 2022
|
||||
|
Long-term debt
|
$
|
859,215
|
||
|
Less: Cash and cash equivalents
|
(346,973
|
)
|
||
|
Net debt (non-GAAP)
|
$
|
512,242
|
||
|
Net leverage (non-GAAP)
|
1.5
|
x
|
||