[November 02, 2017] |
|
Adtalem Global Education Announces First Quarter Fiscal 2018 Results
Adtalem Global Education (NYSE: ATGE), a leading global education
provider, today reported academic, operational and financial results for
its fiscal 2018 first quarter ended September 30, 2017, including
enrollment results at Adtalem Education of Brazil, Carrington College,
Chamberlain University, DeVry University/Keller Graduate School of
Management and its medical and veterinary schools.
"The strength of our organization, the resiliency of our schools and the
determination of our faculty, administrators and students was evident in
our rapid response to the hurricanes during the quarter," said Lisa
Wardell, president and CEO of Adtalem Global Education. "I'm proud of
our team for successfully driving our transitional efforts, including
safely transporting our medical students and their families and securing
temporary facilities so they can continue their education.
"We're continuing to make progress in executing our plan to return our
organization to organic revenue growth and deliver returns for our
owners," Ms. Wardell added.
Selected financial data for the three months ended September 30, 2017:
-
Total revenue of $421.0 million decreased 6.4 percent versus the prior
year
-
Net income of $12.8 million compared to net income of $25.2 million in
the prior year; net income excluding special items was $18.9 million,
compared to $28.8 million in the prior year
-
Diluted earnings per share was $0.20, compared to $0.39 in the prior
year; diluted earnings per share excluding special items was $0.30,
compared to $0.45 in the prior year
-
Operating cash flow for the first quarter was $90.3 million, compared
to $98.8 million in the prior year
-
Cash and cash equivalents were $273.8 million as of September 30,
2017, compared to $189.0 million as of September 30, 2016. Outstanding
bank borrowings were $135.0 million as of September 30, 2017, compared
to $130.0 million as of September 30, 2016
-
Repurchased approximately 1,478,000 shares of common stock during the
first quarter of fiscal 2018
The fiscal 2018 first quarter results contained special items for
restructuring charges of $8.0 million (pre-tax) primarily related to
reductions in force at DeVry University and Adtalem's home office.
Academic and Operating Highlights
Medical and Healthcare Segment
First quarter segment revenue of $191.3 million decreased 4.2 percent
compared to the prior year, with growth at Chamberlain University offset
by decreased revenue at the medical and veterinary schools. Chamberlain
revenue in the quarter increased 2.2 percent from the prior year to
$113.9 million, while revenue for the medical and veterinary schools
decreased 12.4 percent from the prior year to $77.4 million.
First quarter operating income for the segment was $26.2 million,
representing a decrease of 40.2 percent from the prior year.
Both American University of the Caribbean School of Medicine and Ross
University School of Medicine were adversely impacted by damages
sustained as a result of Hurricane Irma that made landfall in St.
Maarten on Sept. 6, 2017, and Hurricane Maria that struck the island of
Dominica on Sept. 19, 2017. Adtalem evacuated students, faculty and
staff from both islands. The interruption to the schools' September
basic science semester reduced first quarter revenue by approximately
$7.0 million, most of which is expected to be realized in the fiscal
year. For the first quarter, operating income was approximately $21
million lower from the reduced revenue and additional expenses incurred
due to the impacts of the hurricanes. Management expects lost revenue
and incremental costs for fiscal 2018 to be reimbursable under its
insurance policies, net of deductibles.
Chamberlain
University president Susan Groenwald, PhD, RN, ANEF, FAAN released a
book, "Designing & Creating a Culture of Care for Students and Faculty:
The Chamberlain University College of Nursing Model," which serves as a
guide for any organization seeking to make cultural and structural
changes to improve student or employee satisfaction, engagement and
achievement. The book describes Chamberlain Care, the unique
organizational culture and work climate developed at the university.
Professional Education
First quarter segment revenue increased 15.3 percent to $40.0 million
compared to the prior year, primarily driven by growth in the
Association of Certified Anti Money Laundering Specialists (ACAMS)
business unit. Segment operating income for the first quarter was $10.5
million, up from $6.1 million from the prior year driven by revenue
growth at ACAMS.
Becker Professional Education recently confirmed that 52 of the 58
Elijah Watt Sells Award recipients in 2016 prepared with Becker's CPA
Exam Review course. From 2005 to 2016, over 90 percent of all Watt Sells
Award winners have prepared with Becker, totaling 358 award winners
throughout the last decade. In total, Becker has helped more than one
million candidates pass the CPA Exam, attesting to the quality and
effectiveness of the organization's program and teaching methods.
Global demand for education and training in financial crimes prevention
remains strong and ACAMS remains well positioned to grow. ACAMS
continues to provide its various member groups with a broad set of
tools, training modules and technological resources so they can build
their online communities, expand seminar participation and consistently
update their curriculum.
Technology and Business
First quarter segment revenue increased 7.2 percent to $62.4 million
compared to the prior year. On a constant currency basis, revenue in the
segment grew 4.3 percent. Segment operating income in the first quarter
was $1.9 million compared to a loss of $2.0 million in the prior year as
a result of revenue growth and cost efficiencies.
US Traditional Postsecondary
First quarter segment revenue decreased 19.0 percent to $127.9 million.
Revenue at DeVry University decreased 20.8 percent to $95.8 million
compared to the prior year and revenue at Carrington declined 13.1
percent to $32.1 million compared to the prior year.
The segment reported an operating loss of $20.2 million compared to an
operating loss of $10.0 million in the prior year. Excluding special
items, the segment reported an operating loss of $13.3 million for the
quarter, compared to an operating loss of $6.9 million in the prior year.
DeVry University achieved $22.3 million of cost savings in the first
quarter compared to prior year, excluding special items. Additional cost
reductions are expected throughout fiscal 2018 to maintain positive
operating income.
Adtalem Outlook
Fiscal 2018 second quarter revenue is expected to decrease 4 to 5
percent versus the prior year. Revenue growth within the Medical and
Healthcare, Professional Education and Technology and Business segments
is expected to offset declining revenue within the US Traditional
Postsecondary segment. Second quarter operating costs before special
items are expected to decline 1 to 2 percent versus the prior year as a
result of continued cost reductions at DeVry University and Carrington
College. Second quarter expenses will be impacted by the timing of the
receipt of insurance proceeds for the reimbursement of hurricane-related
expenses.
Fiscal 2018 full year revenue is expected to decline 2 to 3 percent
compared to the prior year and earnings before special items are
expected to grow in the low single digit range as compared to the prior
year. Full year capital spending is expected to be in the $60 to $65
million range. The effective income tax rate for the fiscal year is
expected to be in the range of 19 to 20 percent, before special items.
Conference Call and Webcast Information
Adtalem will hold a conference call to discuss its fiscal 2018
first-quarter earnings on Thursday, Nov. 2, at 4 p.m. CDT (5 p.m. EDT).
The conference call will be led by Lisa Wardell, president and chief
executive officer; and Patrick Unzicker, chief financial officer.
For those wishing to participate by telephone, dial 877-407-6184
(domestic) or 201-389-0877 (international). Ask for the "Adtalem Call"
or use conference ID: 13671827. Adtalem will also broadcast the
conference call on Adtalem's website at: https://hd.choruscall.com/InComm/?callme=true&passcode=13666580&h=true&info=companyemail&r=true&B=6.
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 telephone replay of the call until Dec. 2, 2017.
To access the replay, dial 877-660-6853 (domestic) or 201-612-7415
(international), passcode 10099693. To access the webcast replay, please
visit Adtalem's website, or http://www.investorcalendar.com/event/20912.
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 global education provider and the
parent organization of Adtalem Educacional do Brasil, American
University of the Caribbean School of Medicine, Association of Certified
Anti-Money Laundering Specialists, Becker Professional Education,
Carrington College, Chamberlain University, DeVry University and its
Keller Graduate School of Management, Ross University School of Medicine
and Ross University School of Veterinary Medicine. For more information,
please visit adtalem.com.
Enrollment Results:
|
|
|
FY2018
|
|
|
FY2017
|
|
|
% Change
|
|
Adtalem Global Education Student Enrollments(1)
|
|
|
|
|
|
|
|
|
|
|
New students
|
|
|
26,165
|
|
|
28,629
|
|
|
-8.6%
|
|
Total students
|
|
|
145,473
|
|
|
151,503
|
|
|
-4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adtalem Education of Brazil(2)
|
|
|
|
|
|
|
|
|
|
|
September Semester
|
|
|
|
|
|
|
|
|
|
|
New students
|
|
|
14,507
|
|
|
15,892
|
|
|
-8.7%
|
|
Total students
|
|
|
78,340
|
|
|
76,862
|
|
|
+1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Chamberlain University
|
|
|
|
|
|
|
|
|
|
|
September Session
|
|
|
|
|
|
|
|
|
|
|
New students
|
|
|
4,962
|
|
|
5,003
|
|
|
-0.8%
|
|
Total students
|
|
|
30,062
|
|
|
28,781
|
|
|
+4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical and Veterinary
|
|
|
|
|
|
|
|
|
|
|
September Semester
|
|
|
|
|
|
|
|
|
|
|
New students
|
|
|
812
|
|
|
806
|
|
|
+0.7%
|
|
Total students
|
|
|
5,744
|
|
|
6,168
|
|
|
-6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrington College
|
|
|
|
|
|
|
|
|
|
|
3 months ending September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
New students
|
|
|
2,155
|
|
|
2,338
|
|
|
-7.8%
|
|
Total students
|
|
|
5,258
|
|
|
6,638
|
|
|
-20.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
DeVry University
|
|
|
|
|
|
|
|
|
|
|
Undergraduate - September Session
|
|
|
|
|
|
|
|
|
|
|
New students
|
|
|
2,825
|
|
|
3,432
|
|
|
-17.7%
|
|
Total students
|
|
|
19,287
|
|
|
24,540
|
|
|
-21.4%
|
|
Graduate - September Session
|
|
|
|
|
|
|
|
|
|
|
Coursetakers (3)
|
|
|
7,915
|
|
|
10,146
|
|
|
-22.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
1) Includes the most recently reported enrollments at Adtalem's
postsecondary institutions
2) Excludes Damásio test prep students.
3) The term "coursetaker" refers to the number of courses taken by a
student. Thus one student taking two courses equals two coursetakers
Supplemental Reconciliations
The following tables present revenue and total expenses by reporting
segment detailing the changes from the year-ago comparative periods
including disclosure of the effect of Hurricanes Irma and Maria and the
effect of restructuring charges and changes in the value of the
Brazilian Real compared to the U.S. dollar.
SUPPLEMENTAL RECONCILIATIONS
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2017
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
Technology
|
|
|
U.S.
|
|
|
Home Office
|
|
|
|
|
|
|
Medical and
|
|
|
Professional
|
|
|
and
|
|
|
Traditional
|
|
|
and
|
|
|
|
Revenue:
|
|
|
Healthcare
|
|
|
Education
|
|
|
Business
|
|
|
Postsecondary
|
|
|
Other
|
|
|
Consolidated
|
Fiscal Year 2017 as Reported
|
|
$
|
199,769
|
|
|
$
|
34,730
|
|
|
$
|
58,240
|
|
|
$
|
157,875
|
|
|
$
|
(722
|
)
|
|
$
|
449,892
|
|
Organic Growth (Decline)
|
|
|
(1,140
|
)
|
|
|
5,312
|
|
|
|
2,510
|
|
|
|
(29,994
|
)
|
|
|
100
|
|
|
|
(23,212
|
)
|
Hurricane Impact
|
|
|
(7,344
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7,344
|
)
|
Effect of Currency Change
|
|
|
-
|
|
|
|
-
|
|
|
|
1,689
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,689
|
|
Fiscal Year 2018 as Reported
|
|
$
|
191,285
|
|
|
$
|
40,042
|
|
|
$
|
62,439
|
|
|
$
|
127,881
|
|
|
$
|
(622
|
)
|
|
$
|
421,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2018 % Change:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Growth (Decline)
|
|
|
(0.6
|
%)
|
|
|
15.3
|
%
|
|
|
4.3
|
%
|
|
|
(19.0
|
%)
|
|
|
NM
|
|
|
|
(5.2
|
%)
|
Hurricane Impact
|
|
|
(3.7
|
%)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
NM
|
|
|
|
(1.6
|
%)
|
Effect of Currency Change
|
|
|
-
|
|
|
|
-
|
|
|
|
2.9
|
%
|
|
|
-
|
|
|
|
NM
|
|
|
|
0.4
|
%
|
Fiscal Year 2018 % Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as Reported
|
|
|
(4.2
|
%)
|
|
|
15.3
|
%
|
|
|
7.2
|
%
|
|
|
(19.0
|
%)
|
|
|
NM
|
|
|
|
(6.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2017
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
Technology
|
|
|
U.S.
|
|
|
Home Office
|
|
|
|
|
|
|
Medical and
|
|
|
Professional
|
|
|
and
|
|
|
Traditional
|
|
|
and
|
|
|
|
Total Expenses:
|
|
|
Healthcare
|
|
|
Education
|
|
|
Business
|
|
|
Postsecondary
|
|
|
Other
|
|
|
Consolidated
|
Fiscal Year 2017 as Reported
|
|
$
|
155,906
|
|
|
$
|
28,673
|
|
|
$
|
60,216
|
|
|
$
|
167,881
|
|
|
$
|
4,109
|
|
|
$
|
416,785
|
|
Cost (Reduction) Investment
|
|
|
(4,582
|
)
|
|
|
862
|
|
|
|
(1,102
|
)
|
|
|
(23,587
|
)
|
|
|
186
|
|
|
|
(28,223
|
)
|
Hurricane Impact
|
|
|
13,617
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13,617
|
|
Restructuring Expense Change
|
|
|
112
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,790
|
|
|
|
(956
|
)
|
|
|
2,946
|
|
Effect of Currency Change
|
|
|
-
|
|
|
|
-
|
|
|
|
1,464
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,464
|
|
Fiscal Year 2018 as Reported
|
|
$
|
165,053
|
|
|
$
|
29,535
|
|
|
$
|
60,578
|
|
|
$
|
148,084
|
|
|
$
|
3,339
|
|
|
$
|
406,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2018 % Change:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost (Reduction) Investment
|
|
|
(2.9
|
%)
|
|
|
3.0
|
%
|
|
|
(1.8
|
%)
|
|
|
(14.0
|
%)
|
|
|
NM
|
|
|
|
(6.8
|
%)
|
Hurricane Impact
|
|
|
8.7
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
NM
|
|
|
|
3.3
|
%
|
Restructuring Expense Change
|
|
|
0.1
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
2.3
|
%
|
|
|
NM
|
|
|
|
0.7
|
%
|
Effect of Currency Change
|
|
|
-
|
|
|
|
-
|
|
|
|
2.4
|
%
|
|
|
-
|
|
|
|
NM
|
|
|
|
0.4
|
%
|
Fiscal Year 2018 % Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as Reported
|
|
|
5.9
|
%
|
|
|
3.0
|
%
|
|
|
0.6
|
%
|
|
|
(11.8
|
%)
|
|
|
NM
|
|
|
|
(2.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADTALEM GLOBAL EDUCATION INC.
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
|
|
|
|
2017
|
|
|
|
2017
|
|
|
|
2016
|
|
ASSETS:
|
|
|
(in thousands, except share and par value amounts)
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
|
273,751
|
|
|
$
|
241,979
|
|
|
$
|
189,017
|
|
|
|
Marketable Securities and Investments
|
|
|
4,139
|
|
|
|
4,013
|
|
|
|
3,738
|
|
|
|
Restricted Cash
|
|
|
7,442
|
|
|
|
9,117
|
|
|
|
5,795
|
|
|
|
Accounts Receivable, Net
|
|
|
189,783
|
|
|
|
173,362
|
|
|
|
184,294
|
|
|
|
Prepaid Expenses and Other
|
|
|
66,511
|
|
|
|
42,736
|
|
|
|
40,814
|
|
|
|
|
Total Current Assets
|
|
|
541,626
|
|
|
|
471,207
|
|
|
|
423,658
|
|
|
Land, Building and Equipment:
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
49,088
|
|
|
|
48,947
|
|
|
|
54,967
|
|
|
|
Building
|
|
|
470,347
|
|
|
|
474,942
|
|
|
|
484,104
|
|
|
|
Equipment
|
|
|
524,054
|
|
|
|
514,118
|
|
|
|
523,492
|
|
|
|
Construction in Progress
|
|
|
19,091
|
|
|
|
22,461
|
|
|
|
24,201
|
|
|
|
|
|
|
|
1,062,580
|
|
|
|
1,060,468
|
|
|
|
1,086,764
|
|
|
|
Accumulated Depreciation
|
|
|
(597,732
|
)
|
|
|
(582,922
|
)
|
|
|
(572,320
|
)
|
|
|
Land, Building and Equipment Held for Sale, Net
|
|
|
11,280
|
|
|
|
11,280
|
|
|
|
-
|
|
|
|
|
Land, Building and Equipment, Net
|
|
|
476,128
|
|
|
|
488,826
|
|
|
|
514,444
|
|
|
Other Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Income Taxes, Net
|
|
|
31,222
|
|
|
|
33,772
|
|
|
|
32,037
|
|
|
|
Intangible Assets, Net
|
|
|
417,761
|
|
|
|
413,803
|
|
|
|
426,089
|
|
|
|
Goodwill
|
|
|
860,865
|
|
|
|
851,282
|
|
|
|
854,188
|
|
|
|
Perkins Program Fund, Net
|
|
|
13,450
|
|
|
|
13,450
|
|
|
|
13,450
|
|
|
|
Other Assets, Net
|
|
|
42,544
|
|
|
|
41,695
|
|
|
|
60,490
|
|
|
|
|
Total Other Assets
|
|
|
1,365,842
|
|
|
|
1,354,002
|
|
|
|
1,386,254
|
|
TOTAL ASSETS
|
|
$
|
2,383,596
|
|
|
$
|
2,314,035
|
|
|
$
|
2,324,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
$
|
71,371
|
|
|
$
|
64,285
|
|
|
$
|
57,423
|
|
|
|
Accrued Salaries, Wages and Benefits
|
|
|
67,950
|
|
|
|
96,241
|
|
|
|
65,841
|
|
|
|
Accrued Expenses
|
|
|
89,686
|
|
|
|
99,243
|
|
|
|
96,863
|
|
|
|
Deferred Revenue
|
|
|
221,511
|
|
|
|
117,558
|
|
|
|
224,713
|
|
|
|
|
Total Current Liabilities
|
|
|
450,518
|
|
|
|
377,327
|
|
|
|
444,840
|
|
|
Other Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Revolving Loan
|
|
|
135,000
|
|
|
|
125,000
|
|
|
|
130,000
|
|
|
|
Deferred Income Taxes, Net
|
|
|
34,755
|
|
|
|
34,712
|
|
|
|
30,769
|
|
|
|
Deferred Rent and Other
|
|
|
98,718
|
|
|
|
101,672
|
|
|
|
112,026
|
|
|
|
|
Total Other Liabilities
|
|
|
268,473
|
|
|
|
261,384
|
|
|
|
272,795
|
|
TOTAL LIABILITIES
|
|
|
718,991
|
|
|
|
638,711
|
|
|
|
717,635
|
|
NONCONTROLLING INTEREST
|
|
|
6,566
|
|
|
|
6,285
|
|
|
|
5,043
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized;
|
|
|
|
|
|
|
|
|
|
|
|
61,194,000, 62,371,000 and 62,728,000 Shares Outstanding at
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017, June 30, 2017 and September 30, 2016,
respectively
|
|
|
785
|
|
|
|
781
|
|
|
|
772
|
|
|
Additional Paid-in Capital
|
|
|
422,358
|
|
|
|
415,912
|
|
|
|
383,815
|
|
|
Retained Earnings
|
|
|
1,894,372
|
|
|
|
1,881,397
|
|
|
|
1,796,099
|
|
|
Accumulated Other Comprehensive Loss
|
|
|
(35,720
|
)
|
|
|
(59,119
|
)
|
|
|
(49,223
|
)
|
|
Treasury Stock, at Cost, 17,271,000, 15,691,000 and 14,454,000
Shares at
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017, June 30, 2017 and September 30, 2016,
respectively
|
|
|
(623,756
|
)
|
|
|
(569,932
|
)
|
|
|
(529,785
|
)
|
TOTAL SHAREHOLDERS' EQUITY
|
|
|
1,658,039
|
|
|
|
1,669,039
|
|
|
|
1,601,678
|
|
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
$
|
2,383,596
|
|
|
$
|
2,314,035
|
|
|
$
|
2,324,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADTALEM GLOBAL EDUCATION INC.
|
CONSOLIDATED STATEMENTS OF INCOME
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
|
|
|
|
(in thousands, except per
|
|
|
|
|
|
|
share amounts)
|
REVENUE:
|
|
|
|
|
|
|
|
Tuition
|
|
$
|
366,691
|
|
|
$
|
399,027
|
|
|
Other Educational
|
|
|
54,334
|
|
|
|
50,865
|
|
|
|
Total Revenue
|
|
|
421,025
|
|
|
|
449,892
|
|
OPERATING COST AND EXPENSE:
|
|
|
|
|
|
|
|
Cost of Educational Services
|
|
|
248,116
|
|
|
|
250,673
|
|
|
Student Services and Administrative Expense
|
|
|
150,480
|
|
|
|
161,065
|
|
|
Restructuring Expense
|
|
|
7,993
|
|
|
|
5,047
|
|
|
|
Total Operating Cost and Expense
|
|
|
406,589
|
|
|
|
416,785
|
|
Operating Income
|
|
|
14,436
|
|
|
|
33,107
|
|
INTEREST:
|
|
|
|
|
|
|
|
Interest Income
|
|
|
2,118
|
|
|
|
1,058
|
|
|
Interest Expense
|
|
|
(1,916
|
)
|
|
|
(2,115
|
)
|
|
|
Net Interest Income (Expense)
|
|
|
202
|
|
|
|
(1,057
|
)
|
Income Before Income Taxes
|
|
|
14,638
|
|
|
|
32,050
|
|
Income Tax Provision
|
|
|
(1,678
|
)
|
|
|
(6,901
|
)
|
Equity Method Investment Loss
|
|
|
(44
|
)
|
|
|
-
|
|
NET INCOME
|
|
|
12,916
|
|
|
|
25,149
|
|
|
Net (Income) Loss Attributable to Noncontrolling Interest
|
|
|
(131
|
)
|
|
|
3
|
|
NET INCOME ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION
|
|
$
|
12,785
|
|
|
$
|
25,152
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO ADTALEM
|
|
|
|
|
|
|
|
GLOBAL EDUCATION SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.20
|
|
|
$
|
0.40
|
|
|
|
Diluted
|
|
$
|
0.20
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
ADTALEM GLOBAL EDUCATION INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
|
|
|
|
(in thousands)
|
CASH FLOW FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
12,916
|
|
|
$
|
25,149
|
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
|
|
|
|
|
|
|
|
|
Stock-Based Compensation Expense
|
|
|
4,985
|
|
|
|
5,750
|
|
|
|
Depreciation
|
|
|
16,972
|
|
|
|
17,476
|
|
|
|
Amortization
|
|
|
2,673
|
|
|
|
3,439
|
|
|
|
Provision for Refunds and Uncollectible Accounts
|
|
|
21,300
|
|
|
|
22,481
|
|
|
|
Deferred Income Taxes
|
|
|
2,406
|
|
|
|
3,328
|
|
|
|
Loss on Disposals, Accelerated Depreciation and Adjustments to Land,
Building and Equipment
|
|
|
11,307
|
|
|
|
418
|
|
|
|
Changes in Assets and Liabilities, Net of Effects from Acquisition
of Components:
|
|
|
|
|
|
|
|
|
|
Accounts Receivable
|
|
|
(33,895
|
)
|
|
|
(45,280
|
)
|
|
|
|
Prepaid Expenses and Other
|
|
|
(21,661
|
)
|
|
|
(6,017
|
)
|
|
|
|
Accounts Payable
|
|
|
9,107
|
|
|
|
(3,717
|
)
|
|
|
|
Accrued Salaries, Wages, Benefits and Expenses
|
|
|
(39,451
|
)
|
|
|
(33,617
|
)
|
|
|
|
Deferred Revenue
|
|
|
103,678
|
|
|
|
109,348
|
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
|
90,337
|
|
|
|
98,758
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Capital Expenditures
|
|
|
(13,895
|
)
|
|
|
(11,318
|
)
|
|
Payment for Purchase of Businesses, Net of Cash Acquired
|
|
|
-
|
|
|
|
(331,070
|
)
|
|
Marketable Securities Purchased
|
|
|
(13
|
)
|
|
|
(10
|
)
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
|
|
(13,908
|
)
|
|
|
(342,398
|
)
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from Exercise of Stock Options
|
|
|
1,884
|
|
|
|
6,350
|
|
|
Employee Taxes Paid on Withholding Shares
|
|
|
(3,486
|
)
|
|
|
(2,378
|
)
|
|
Proceeds from Stock Issued Under Colleague Stock Purchase Plan
|
|
|
195
|
|
|
|
211
|
|
|
Repurchase of Common Stock for Treasury
|
|
|
(50,375
|
)
|
|
|
(8,255
|
)
|
|
Payments of Seller Financed Obligations
|
|
|
(6,315
|
)
|
|
|
(3,518
|
)
|
|
Borrowings Under Revolving Credit Facility
|
|
|
76,000
|
|
|
|
240,000
|
|
|
Repayments Under Revolving Credit Facility
|
|
|
(66,000
|
)
|
|
|
(110,000
|
)
|
|
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
|
|
|
(48,097
|
)
|
|
|
122,410
|
|
Effects of Exchange Rate Differences
|
|
|
1,765
|
|
|
|
695
|
|
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED
CASH
|
|
|
30,097
|
|
|
|
(120,535
|
)
|
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
|
|
251,096
|
|
|
|
315,347
|
|
Cash, Cash Equivalents and Restricted Cash at End of Period
|
|
$
|
281,193
|
|
|
$
|
194,812
|
|
|
|
|
|
|
|
|
|
|
ADTALEM GLOBAL EDUCATION INC.
|
SEGMENT INFORMATION
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
(in thousands)
|
REVENUE:
|
|
|
|
|
|
|
|
|
|
|
Medical and Healthcare
|
|
$
|
191,285
|
|
|
$
|
199,769
|
|
|
|
(4.2
|
)%
|
|
Professional Education
|
|
|
40,042
|
|
|
|
34,730
|
|
|
|
15.3
|
%
|
|
Technology and Business
|
|
|
62,439
|
|
|
|
58,240
|
|
|
|
7.2
|
%
|
|
U.S. Traditional Postsecondary
|
|
|
127,881
|
|
|
|
157,875
|
|
|
|
(19.0
|
)%
|
|
Home Office and Other
|
|
|
(622
|
)
|
|
|
(722
|
)
|
|
|
13.9
|
%
|
|
|
Total Consolidated Revenue
|
|
|
421,025
|
|
|
|
449,892
|
|
|
|
(6.4
|
)%
|
OPERATING INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
Medical and Healthcare
|
|
|
26,232
|
|
|
|
43,863
|
|
|
|
(40.2
|
)%
|
|
Professional Education
|
|
|
10,507
|
|
|
|
6,057
|
|
|
|
73.5
|
%
|
|
Technology and Business
|
|
|
1,861
|
|
|
|
(1,976
|
)
|
|
|
NM
|
|
|
U.S. Traditional Postsecondary
|
|
|
(20,203
|
)
|
|
|
(10,006
|
)
|
|
|
(101.9
|
)%
|
|
Home Office and Other
|
|
|
(3,961
|
)
|
|
|
(4,831
|
)
|
|
|
18.0
|
%
|
|
Total Consolidated Operating Income
|
|
$
|
14,436
|
|
|
$
|
33,107
|
|
|
|
(56.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP INFORMATION
|
|
During the first quarter of fiscal year 2018, Adtalem recorded
special items related to the following: (i) Restructuring charges
primarily related to workforce reductions at DeVry University which
is part of the U.S. Traditional Postsecondary segment and Adtalem's
home office (not related to any segment) in order to align its cost
structure with enrollments. During the first quarter of fiscal year
2017, Adtalem recorded special items related to the following: (i)
Restructuring charges primarily related to real estate
consolidations at DeVry University and Carrington College
("Carrington"), which are part of the U.S. Traditional Postsecondary
segment, and Adtalem's home office in order to align its cost
structure with enrollments. The following tables illustrate the
effects of the special items on Adtalem's operating income and net
income. Management believes that the non-GAAP disclosure of
operating income and net income excluding these 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 the restructuring charges.
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 U.S.
Generally Accepted Accounting Principles ("GAAP"). The following
tables reconcile these non-GAAP measures to the most directly
comparable GAAP information (in thousands):
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical and Healthcare Operating Income
|
|
$
|
26,232
|
|
|
$
|
43,863
|
|
|
|
(40.2
|
)%
|
|
Restructuring Expense
|
|
|
112
|
|
|
|
-
|
|
|
|
NM
|
|
Medical and Healthcare Operating Income Excluding Special Items
|
|
$
|
26,344
|
|
|
$
|
43,863
|
|
|
|
(39.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Traditional Postsecondary Operating Loss
|
|
$
|
(20,203
|
)
|
|
$
|
(10,006
|
)
|
|
|
(101.9
|
)%
|
|
Restructuring Expense
|
|
|
6,856
|
|
|
|
3,066
|
|
|
|
123.6
|
%
|
U.S. Traditional Postsecondary Operating Loss Excluding Special Items
|
|
$
|
(13,347
|
)
|
|
$
|
(6,940
|
)
|
|
|
(92.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Office and Other Operating Loss
|
|
$
|
(3,961
|
)
|
|
$
|
(4,831
|
)
|
|
|
18.0
|
%
|
|
Restructuring Expense
|
|
|
1,025
|
|
|
|
1,981
|
|
|
|
(48.3
|
)%
|
Home Office and Other Operating Loss Excluding Special Items
|
|
$
|
(2,936
|
)
|
|
$
|
(2,850
|
)
|
|
|
(3.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADTALEM GLOBAL EDUCATON INC.
|
NON-GAAP EARNINGS DISCLOSURE
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
|
|
|
(in thousands, except per
|
|
|
|
|
|
share amounts)
|
Net Income
|
|
$
|
12,785
|
|
|
$
|
25,152
|
|
|
Earnings per Share (diluted)
|
|
$
|
0.20
|
|
|
$
|
0.39
|
|
Restructuring Expense
|
|
$
|
7,993
|
|
|
$
|
5,047
|
|
|
Effect on Earnings per Share (diluted)
|
|
$
|
0.13
|
|
|
$
|
0.08
|
|
Income Tax Impact on Non-GAAP Adjustments
|
|
$
|
(1,864
|
)
|
|
$
|
(1,434
|
)
|
|
Effect on Earnings per Share (diluted)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
Net Income Excluding Special Items, net of tax
|
|
$
|
18,914
|
|
|
$
|
28,765
|
|
|
Earnings per Share Excluding Special Items (diluted)
|
|
$
|
0.30
|
|
|
$
|
0.45
|
|
Shares used in EPS calculation
|
|
|
63,432
|
|
|
|
63,896
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171102006446/en/
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