CHICAGO--(BUSINESS WIRE)--Adtalem Global Education Inc. (NYSE: ATGE), a national leader in post-secondary education and a leading provider of professional talent to the healthcare industry, today reported academic, operating and financial results for its third quarter fiscal 2023 ended March 31, 2023.
“Our third quarter results showcase our unwavering commitment to provide access to high-quality, post-secondary and graduate level programs to nearly 80,000 diverse students and working adults. We continue to make steady progress in strengthening our operational excellence, supporting our portfolio of programs and solutions in ways that benefit all our stakeholders, especially our students. One testament to these benefits are the first time residency attainment rates for American University of the Caribbean School of Medicine and Ross University School of Medicine students attaining 2023/24 residency positions which, at 97%, are among the highest-ever for these institutions,” said Steve Beard, president and CEO of Adtalem Global Education.
Beard continued, “With market leading scale and a commitment to broad access and quality outcomes, we are addressing critical talent shortages in healthcare for the benefit of communities nationwide. Our strategic vision, disciplined execution, results, and improving industry outlook positions Adtalem to drive long-term sustainable growth.”
Financial Highlights
Selected financial data for the three months ended March 31, 2023:
- Revenue of $369.1 million increased 1.3% compared with the prior year.
- Operating income was $59.4 million, compared with $32.9 million in the prior year; adjusted operating income was $73.0 million, a decrease of 4.3% compared with $76.2 million in the prior year. Operating margin was 16.1% compared with 9.0% in the prior year, and adjusted operating margin was 19.8% compared with 20.9% in the prior year.
- Net income was $45.9 million, compared with $347.7 million in the prior year; adjusted net income was $51.6 million, an increase of 24.7% compared with $41.4 million in the prior year.
- Diluted earnings per share decreased to $1.00 from $7.04 in the prior year; adjusted earnings per share increased to $1.13, up 34.5% compared with $0.84 in the prior year.
- Adjusted EBITDA was $85.9 million, a decrease of 6.8% compared with $92.2 million in the prior year; adjusted EBITDA margin was 23.3% compared with 25.3% in the prior year.
Selected financial data for the nine months ended March 31, 2023:
- Revenue of $1,086.2 million increased 6.4% compared with the prior year.
- Operating income was $128.6 million, compared with $30.8 million in the prior year; adjusted operating income was $217.6 million, an increase of 22.2% compared with $178.0 million in the prior year. Operating margin improved to 11.8% from 3.0% and adjusted operating margin increased to 20.0% from 17.4% in the prior year.
- Net income was $71.1 million, compared with $304.2 million in the prior year; adjusted net income was $146.9 million, an increase of 57.3% compared with $93.4 million in the prior year.
- Diluted earnings per share decreased to $1.54 from $6.15 in the prior year; adjusted earnings per share increased to $3.19, up 70.6% compared with $1.87 in the prior year.
- Adjusted EBITDA was $260.2 million, an increase of 16.2% compared with $223.9 million in the prior year; adjusted EBITDA margin was 24.0% compared with 21.9% in the prior year.
Business Highlights
- Chamberlain University’s pre-licensure Bachelor of Science in Nursing (BSN) is accredited by the Higher Learning Commission and Commission on Collegiate Nursing Education. The online option now has over 500 enrollees spread across 22 states in just 2.5 years since launch.
- First-time residency attainment rates for American University of the Caribbean School of Medicine and Ross University School of Medicine are at 97% for students attaining 2023/24 residency positions, among the highest-ever rates for the institutions, with 66% of those residents going into the all-important primary care specialty.
- More than 875 students and graduates from Ross University School of Medicine and American University of the Caribbean School of Medicine will enter U.S. residency programs in 2023, representing 29 specialties deployed across 45 states. 26% of the students and graduates entering residency are from underrepresented minorities.
- Walden University’s Master of Healthcare Administration program achieved Candidate Status from the Commission on Accreditation of Healthcare Management Education (CAHME).
- Chamberlain University and Ochsner Health, the largest healthcare system and private employer in the state of Louisiana, partnered to launch the new Heart of Healthcare Program which awards up to three years of partial tuition coverage to eligible new students enrolled in the three-year Bachelor of Science in Nursing (BSN) degree program at Chamberlain University College of Nursing at Ochsner Health campus in New Orleans.
Segment Highlights
Chamberlain
- Revenue in the third quarter increased 5.0% to $149.7 million from $142.6 million in the prior year.
- Segment operating income increased 7.1% to $39.6 million from $37.0 million in the prior year. Adjusted segment operating income increased 1.7% to $39.6 million from $38.9 million in the prior year.
- Adjusted EBITDA decreased 1.3% to $44.9 million compared with $45.5 million in the prior year.
- Total student enrollment increased 2.0% compared with the prior year, driven by growth in pre-licensure and post-licensure nursing programs as well as higher persistence across the segment.
Walden
- Revenue in the third quarter decreased 4.5% to $132.9 million from $139.1 million in the prior year.
- Segment operating income increased to $10.3 million compared with segment operating loss of $3.2 million in the prior year. Adjusted segment operating income decreased 4.7% to $24.6 million compared with $25.8 million in the prior year.
- Adjusted EBITDA decreased 4.9% to $27.8 million compared with $29.3 million in the prior year.
- Total student enrollment decreased 7.9% compared with the prior year, primarily attributable to declines in non-healthcare programs and to a lesser extent to healthcare programs partially offset by higher persistence across the segment. Elimination of off-cycle start dates adversely impacted year-over-year total enrollment growth by 2.2%.
Medical and Veterinary
- Revenue in the third quarter increased 4.6% to $86.5 million from $82.7 million in the prior year.
- Segment operating income increased by 21.4% to $16.5 million from $13.6 million in the prior year. Adjusted segment operating income decreased 6.9% to $16.9 million compared with $18.1 million in the prior year.
- Adjusted EBITDA decreased 8.4% to $20.7 million compared with $22.6 million in the prior year.
- Total student enrollment increased 1.6% compared with the prior year, driven by growth in both medical and veterinary programs.
Fiscal Year 2023 Outlook
Adtalem narrowed its guidance for fiscal year 2023 revenue to a range of $1,400 million to $1,450 million from a range of $1,380 million to $1,450 million, and adjusted earnings per share to a range of $4.05 to $4.20 from a range of $3.95 to $4.20.
Conference Call and Webcast Information
Adtalem will hold a conference call to discuss its fiscal 2023 third quarter results today at 4:30 p.m. CDT (5:30 p.m. EDT).
The call can be accessed by dialing +1 877-407-6184 (U.S. participants) or +1 201-389-0877 (international participants) stating “Adtalem earnings call” or use conference ID: 13737030. The call will be simulcast through the Adtalem investor relations website at: https://investors.adtalem.com.
Adtalem will archive a replay of the call for 30 days. To access the replay, dial +1 877-660-6853 (U.S.) or +1 201-612-7415 (international), conference ID: 13737030, or visit the Adtalem investor relations website at: https://investors.adtalem.com.
Investor Day
Adtalem will host an Investor Day on Tuesday, June 20, 2023, at 9:00 a.m. CDT at Adtalem’s Chamberlain University Chicago campus. Advanced registration will be required to attend the event in-person. To register, please visit Adtalem’s Investor Day website.
During the investor event, Adtalem’s executive leadership team will discuss the Company’s strategic priorities, growth strategy, and financial outlook. Investors and analysts will have the opportunity to participate in a Q&A session. In-person participants are invited to join the leadership team to tour the campus.
About Adtalem Global Education
Adtalem Global Education (NYSE: ATGE) is a national leader in post-secondary education and leading 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’s family of institutions has more than 300,000 alumni and 10,000 employees. Adtalem was named one of America’s Most Responsible Companies in 2021 and 2023 by Newsweek and Statista, and one of America’s Best Employers for Diversity in 2021 and 2022 by Forbes and Statista. Visit Adtalem.com for more information and follow on Twitter and LinkedIn.
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 Adtalem’s future growth, the future impacts of the COVID-19 pandemic, 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 Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.
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Q3 2023 |
Q3 2022 |
% Change |
Adtalem Global Education Student Enrollments |
|
|
|
Total students(1) |
79,586 5 |
82,174 |
-3.1% |
|
|
|
|
|
|
|
|
Chamberlain University |
|
|
|
Total students |
34,847 |
34,158 |
2.0% |
Walden University(3) |
|
|
|
Walden University |
|
|
|
Total students |
39,427 |
42,788 |
-7.9% |
Walden University(3) |
|||
Medical & Veterinary |
|
|
|
Total students |
5,312 |
5,228 |
1.6% |
|
|
|
|
(1) Represents total students attending sessions during each institution’s most recent enrollment period in Q3 FY 2023 and Q3 FY 2022 |
|||
Adtalem Global Education Inc. Consolidated Balance Sheets (unaudited) (in thousands, except par value) |
||||||||||||
|
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|
|
|
|
|
|
|
|
|||
|
|
March 31, |
|
June 30, |
|
March 31, |
||||||
|
|
2023 |
|
2022 |
|
2022 |
||||||
Assets: |
|
|
|
|
|
|
|
|
|
|||
Current assets: |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
315,373 |
|
|
$ |
346,973 |
|
|
$ |
788,729 |
|
Restricted cash |
|
|
1,804 |
|
|
|
964 |
|
|
|
1,266 |
|
Accounts receivable, net |
|
|
113,284 |
|
|
|
81,635 |
|
|
|
96,064 |
|
Prepaid expenses and other current assets |
|
|
102,573 |
|
|
|
127,532 |
|
|
|
124,968 |
|
Current assets held for sale |
|
|
— |
|
|
|
— |
|
|
|
1,432 |
|
Total current assets |
|
|
533,034 |
|
|
|
557,104 |
|
|
|
1,012,459 |
|
Noncurrent assets: |
|
|
|
|
|
|
|
|
|
|||
Property and equipment, net |
|
|
252,797 |
|
|
|
289,926 |
|
|
|
294,538 |
|
Operating lease assets |
|
|
173,271 |
|
|
|
177,995 |
|
|
|
186,968 |
|
Deferred income taxes |
|
|
54,494 |
|
|
|
51,093 |
|
|
|
47,574 |
|
Intangible assets, net |
|
|
824,641 |
|
|
|
873,577 |
|
|
|
896,884 |
|
Goodwill |
|
|
961,262 |
|
|
|
961,262 |
|
|
|
961,262 |
|
Other assets, net |
|
|
67,618 |
|
|
|
119,283 |
|
|
|
120,145 |
|
Noncurrent assets held for sale |
|
|
— |
|
|
|
— |
|
|
|
93 |
|
Total noncurrent assets |
|
|
2,334,083 |
|
|
|
2,473,136 |
|
|
|
2,507,464 |
|
Total assets |
|
$ |
2,867,117 |
|
|
$ |
3,030,240 |
|
|
$ |
3,519,923 |
|
|
|
|
|
|
|
|
|
|
|
|||
Liabilities and shareholders' equity: |
|
|
|
|
|
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|||
Accounts payable |
|
$ |
73,307 |
|
|
$ |
57,140 |
|
|
$ |
67,252 |
|
Accrued payroll and benefits |
|
|
56,023 |
|
|
|
67,792 |
|
|
|
57,510 |
|
Accrued liabilities |
|
|
86,691 |
|
|
|
98,124 |
|
|
|
176,921 |
|
Deferred revenue |
|
|
175,488 |
|
|
|
149,810 |
|
|
|
171,937 |
|
Current operating lease liabilities |
|
|
46,411 |
|
|
|
50,781 |
|
|
|
51,335 |
|
Current liabilities held for sale |
|
|
— |
|
|
|
— |
|
|
|
1,417 |
|
Total current liabilities |
|
|
437,920 |
|
|
|
423,647 |
|
|
|
526,372 |
|
Noncurrent liabilities: |
|
|
|
|
|
|
|
|
|
|||
Long-term debt |
|
|
694,429 |
|
|
|
838,908 |
|
|
|
1,225,360 |
|
Long-term operating lease liabilities |
|
|
164,185 |
|
|
|
177,045 |
|
|
|
188,955 |
|
Deferred income taxes |
|
|
27,237 |
|
|
|
25,554 |
|
|
|
25,862 |
|
Other liabilities |
|
|
32,961 |
|
|
|
73,700 |
|
|
|
74,380 |
|
Noncurrent liabilities held for sale |
|
|
— |
|
|
|
— |
|
|
|
41 |
|
Total noncurrent liabilities |
|
|
918,812 |
|
|
|
1,115,207 |
|
|
|
1,514,598 |
|
Total liabilities |
|
|
1,356,732 |
|
|
|
1,538,854 |
|
|
|
2,040,970 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|||
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
|||
Common stock, $0.01 par value per share, 200,000 shares authorized; 44,232, 45,177, and 45,138 shares outstanding as of March 31, 2023, June 30, 2022, and March 31, 2022, respectively |
|
|
822 |
|
|
|
818 |
|
|
|
818 |
|
Additional paid-in capital |
|
|
564,363 |
|
|
|
521,848 |
|
|
|
517,431 |
|
Retained earnings |
|
|
2,381,506 |
|
|
|
2,310,396 |
|
|
|
2,303,650 |
|
Accumulated other comprehensive loss |
|
|
(2,227 |
) |
|
|
(2,227 |
) |
|
|
(3,417 |
) |
Treasury stock, at cost, 37,939, 36,619, and 36,621 shares as of March 31, 2023, June 30, 2022, and March 31, 2022, respectively |
|
|
(1,434,079 |
) |
|
|
(1,339,449 |
) |
|
|
(1,339,529 |
) |
Total shareholders' equity |
|
|
1,510,385 |
|
|
|
1,491,386 |
|
|
|
1,478,953 |
|
Total liabilities and shareholders' equity |
|
$ |
2,867,117 |
|
|
$ |
3,030,240 |
|
|
$ |
3,519,923 |
|
| Adtalem Global Education Inc.
Consolidated Statements of Income (unaudited) (in thousands, except per share data) |
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Three Months Ended |
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Nine Months Ended |
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|
|
March 31, |
|
March 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue |
|
$ |
369,082 |
|
|
$ |
364,281 |
|
|
$ |
1,086,185 |
|
|
$ |
1,021,195 |
|
Operating cost and expense: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of educational services |
|
|
165,820 |
|
|
|
166,027 |
|
|
|
484,768 |
|
|
|
498,497 |
|
Student services and administrative expense |
|
|
144,526 |
|
|
|
148,863 |
|
|
|
432,713 |
|
|
|
433,379 |
|
Restructuring expense |
|
|
1,278 |
|
|
|
10,518 |
|
|
|
17,706 |
|
|
|
16,999 |
|
Business acquisition and integration expense |
|
|
11,346 |
|
|
|
5,924 |
|
|
|
35,702 |
|
|
|
41,537 |
|
Gain on sale of assets |
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
— |
|
Total operating cost and expense |
|
|
309,653 |
|
|
|
331,332 |
|
|
|
957,572 |
|
|
|
990,412 |
|
Operating income |
|
|
59,429 |
|
|
|
32,949 |
|
|
|
128,613 |
|
|
|
30,783 |
|
Interest expense |
|
|
(14,457 |
) |
|
|
(36,585 |
) |
|
|
(47,806 |
) |
|
|
(109,907 |
) |
Other income (expense), net |
|
|
3,980 |
|
|
|
(327 |
) |
|
|
3,301 |
|
|
|
2,435 |
|
Income (loss) from continuing operations before income taxes |
|
|
48,952 |
|
|
|
(3,963 |
) |
|
|
84,108 |
|
|
|
(76,689 |
) |
(Provision for) benefit from income taxes |
|
|
(389 |
) |
|
|
8,363 |
|
|
|
(5,906 |
) |
|
|
39,597 |
|
Income (loss) from continuing operations |
|
|
48,563 |
|
|
|
4,400 |
|
|
|
78,202 |
|
|
|
(37,092 |
) |
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income from discontinued operations before income taxes |
|
|
(3,993 |
) |
|
|
3,426 |
|
|
|
(6,734 |
) |
|
|
1,535 |
|
(Loss) gain on disposal of discontinued operations before income taxes |
|
|
(402 |
) |
|
|
474,003 |
|
|
|
(3,576 |
) |
|
|
474,003 |
|
Benefit from (provision for) income taxes |
|
|
1,701 |
|
|
|
(134,089 |
) |
|
|
3,222 |
|
|
|
(134,201 |
) |
(Loss) income from discontinued operations |
|
|
(2,694 |
) |
|
|
343,340 |
|
|
|
(7,088 |
) |
|
|
341,337 |
|
Net income |
|
$ |
45,869 |
|
|
$ |
347,740 |
|
|
$ |
71,114 |
|
|
$ |
304,245 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
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|
||||
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations |
|
$ |
1.08 |
|
|
$ |
0.09 |
|
|
$ |
1.73 |
|
|
$ |
(0.75 |
) |
Discontinued operations |
|
$ |
(0.06 |
) |
|
$ |
7.02 |
|
|
$ |
(0.16 |
) |
|
$ |
6.90 |
|
Total basic earnings per share |
|
$ |
1.02 |
|
|
$ |
7.11 |
|
|
$ |
1.57 |
|
|
$ |
6.15 |
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations |
|
$ |
1.06 |
|
|
$ |
0.09 |
|
|
$ |
1.70 |
|
|
$ |
(0.75 |
) |
Discontinued operations |
|
$ |
(0.06 |
) |
|
$ |
6.95 |
|
|
$ |
(0.15 |
) |
|
$ |
6.90 |
|
Total diluted earnings per share |
|
$ |
1.00 |
|
|
$ |
7.04 |
|
|
$ |
1.54 |
|
|
$ |
6.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic shares |
|
|
45,125 |
|
|
|
48,925 |
|
|
|
45,276 |
|
|
|
49,459 |
|
Diluted shares |
|
|
45,801 |
|
|
|
49,377 |
|
|
|
46,089 |
|
|
|
49,459 |
|
Adtalem Global Education Inc. Consolidated Statements of Cash Flows (unaudited) (in thousands) |
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|
|
Nine Months Ended |
||||||
|
|
March 31, |
||||||
|
|
2023 |
|
2022 |
||||
Operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
71,114 |
|
|
$ |
304,245 |
|
Loss (income) from discontinued operations |
|
|
7,088 |
|
|
|
(341,337 |
) |
Income (loss) from continuing operations |
|
|
78,202 |
|
|
|
(37,092 |
) |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
10,908 |
|
|
|
18,604 |
|
Amortization and impairments to operating lease assets |
|
|
37,928 |
|
|
|
35,251 |
|
Depreciation |
|
|
31,618 |
|
|
|
33,471 |
|
Amortization of intangible assets |
|
|
48,936 |
|
|
|
73,967 |
|
Amortization and write-off of debt discount and issuance costs |
|
|
7,974 |
|
|
|
34,481 |
|
Provision for bad debts |
|
|
23,391 |
|
|
|
19,552 |
|
Deferred income taxes |
|
|
(1,718 |
) |
|
|
3,425 |
|
Loss on disposals, accelerated depreciation, and impairments to property and equipment |
|
|
3,999 |
|
|
|
2,274 |
|
Gain on extinguishment of debt |
|
|
(71 |
) |
|
|
— |
|
Loss on investments |
|
|
4,122 |
|
|
|
807 |
|
Gain on sale of assets |
|
|
(13,317 |
) |
|
|
— |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(43,345 |
) |
|
|
(40,520 |
) |
Prepaid expenses and other current assets |
|
|
7,034 |
|
|
|
2,398 |
|
Accounts payable |
|
|
12,286 |
|
|
|
(5,737 |
) |
Accrued payroll and benefits |
|
|
(11,719 |
) |
|
|
(22,416 |
) |
Accrued liabilities |
|
|
(20,275 |
) |
|
|
(92,528 |
) |
Deferred revenue |
|
|
26,038 |
|
|
|
92,507 |
|
Operating lease liabilities |
|
|
(37,758 |
) |
|
|
(36,159 |
) |
Other assets and liabilities |
|
|
(14,412 |
) |
|
|
(23,514 |
) |
Net cash provided by operating activities-continuing operations |
|
|
149,821 |
|
|
|
58,771 |
|
Net cash used in operating activities-discontinued operations |
|
|
(404 |
) |
|
|
(6,915 |
) |
Net cash provided by operating activities |
|
|
149,417 |
|
|
|
51,856 |
|
Investing activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(19,056 |
) |
|
|
(22,249 |
) |
Proceeds from sale of marketable securities |
|
|
7,635 |
|
|
|
941 |
|
Purchases of marketable securities |
|
|
(1,508 |
) |
|
|
(1,315 |
) |
Proceeds from note receivable related to property sold |
|
|
46,800 |
|
|
|
— |
|
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 provided by (used in) investing activities-continuing operations |
|
|
33,871 |
|
|
|
(1,500,677 |
) |
Net cash used in investing activities-discontinued operations |
|
|
— |
|
|
|
(3,287 |
) |
Proceeds from sale of business, net of cash transferred |
|
|
— |
|
|
|
962,652 |
|
Payment for working capital adjustment for sale of business |
|
|
(3,174 |
) |
|
|
— |
|
Net cash provided by (used in) investing activities |
|
|
30,697 |
|
|
|
(541,312 |
) |
Financing activities: |
|
|
|
|
|
|
||
Proceeds from exercise of stock options |
|
|
1,622 |
|
|
|
8,433 |
|
Employee taxes paid on withholding shares |
|
|
(4,214 |
) |
|
|
(2,727 |
) |
Proceeds from stock issued under Colleague Stock Purchase Plan |
|
|
451 |
|
|
|
400 |
|
Repurchases of common stock for treasury |
|
|
(44,710 |
) |
|
|
(120,000 |
) |
Payment on equity forward contract |
|
|
(13,162 |
) |
|
|
(30,000 |
) |
Proceeds from long-term debt |
|
|
— |
|
|
|
850,000 |
|
Repayments of long-term debt |
|
|
(150,861 |
) |
|
|
(687,667 |
) |
Payment of debt discount and issuance costs |
|
|
— |
|
|
|
(49,553 |
) |
Payment for purchase of redeemable noncontrolling interest of subsidiary |
|
|
— |
|
|
|
(1,790 |
) |
Net cash used in financing activities |
|
|
(210,874 |
) |
|
|
(32,904 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
— |
|
|
|
12 |
|
Net decrease in cash, cash equivalents and restricted cash |
|
|
(30,760 |
) |
|
|
(522,348 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
|
347,937 |
|
|
|
1,313,616 |
|
Cash, cash equivalents and restricted cash at end of period |
|
|
317,177 |
|
|
|
791,268 |
|
Less: cash, cash equivalents and restricted cash of discontinued operations at end of period |
|
|
— |
|
|
|
1,273 |
|
Cash, cash equivalents and restricted cash of continuing operations at end of period |
|
$ |
317,177 |
|
|
$ |
789,995 |
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
||
Accrued capital expenditures |
|
$ |
10,474 |
|
|
$ |
5,408 |
|
Accrued liability for repurchases of common stock |
|
$ |
2,699 |
|
|
$ |
— |
|
Accrued excise tax on share repurchases |
|
$ |
361 |
|
|
$ |
— |
|
Settlement of financing liability with assets |
|
$ |
38,606 |
|
|
$ |
— |
|
Adtalem Global Education Inc. Segment Information (unaudited) (in thousands) |
|||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||||||||
|
|
March 31, |
|
March 31, |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
Increase/(Decrease) |
|
|
|
|
|
|
|
|
Increase/(Decrease) |
|
|||||||||||||
|
|
2023 |
|
2022 |
|
$ |
|
% |
|
|
2023 |
|
2022 |
|
$ |
|
% |
|
|||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Chamberlain |
|
$ |
149,737 |
|
|
$ |
142,550 |
|
|
$ |
7,187 |
|
|
5.0 |
|
% |
|
$ |
426,538 |
|
|
$ |
417,310 |
|
|
$ |
9,228 |
|
2.2 |
% |
|
Walden |
|
|
132,874 |
|
|
|
139,081 |
|
|
|
(6,207 |
) |
|
(4.5 |
) |
% |
|
|
395,715 |
|
|
|
348,325 |
|
|
|
47,390 |
|
13.6 |
% |
|
Medical and Veterinary |
|
|
86,471 |
|
|
|
82,650 |
|
|
|
3,821 |
|
|
4.6 |
|
% |
|
|
263,932 |
|
|
|
255,560 |
|
|
|
8,372 |
|
3.3 |
% |
|
Total consolidated revenue |
|
$ |
369,082 |
|
|
$ |
364,281 |
|
|
$ |
4,801 |
|
|
1.3 |
|
% |
|
$ |
1,086,185 |
|
|
$ |
1,021,195 |
|
|
$ |
64,990 |
|
6.4 |
% |
|
Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Chamberlain |
|
$ |
39,589 |
|
|
$ |
36,979 |
|
|
$ |
2,610 |
|
|
7.1 |
|
% |
|
$ |
99,002 |
|
|
$ |
83,290 |
|
|
$ |
15,712 |
|
18.9 |
% |
|
Walden |
|
|
10,343 |
|
|
|
(3,199 |
) |
|
|
13,542 |
|
|
NM |
|
|
|
|
26,071 |
|
|
|
(17,748 |
) |
|
|
43,819 |
|
NM |
|
|
Medical and Veterinary |
|
|
16,472 |
|
|
|
13,571 |
|
|
|
2,901 |
|
|
21.4 |
|
% |
|
|
49,172 |
|
|
|
45,400 |
|
|
|
3,772 |
|
8.3 |
% |
|
Home Office and Other |
|
|
(6,975 |
) |
|
|
(14,402 |
) |
|
|
7,427 |
|
|
51.6 |
|
% |
|
|
(45,632 |
) |
|
|
(80,159 |
) |
|
|
34,527 |
|
43.1 |
% |
|
Total consolidated operating income |
|
$ |
59,429 |
|
|
$ |
32,949 |
|
|
$ |
26,480 |
|
|
80.4 |
|
% |
|
$ |
128,613 |
|
|
$ |
30,783 |
|
|
$ |
97,830 |
|
317.8 |
% |
|
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:
Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, intangible amortization expense, gain on sale of assets, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, investment impairment, net tax benefit related to a valuation allowance release, and net loss (income) from discontinued operations.
Adjusted earnings per share (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, intangible amortization expense, gain on sale of assets, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, investment impairment, net tax benefit related to a valuation allowance release, and net loss (income) from discontinued operations.
Adjusted operating income (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, intangible amortization expense, and gain on sale of assets. 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) – Measure of Adtalem’s net income adjusted for net loss (income) from discontinued operations, interest expense, other (income) expense, net, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation, deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Income taxes, interest expense, and other (income) expense, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income (loss).
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 Walden, Medical and Veterinary, and Adtalem’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.
- Business acquisition and integration expense include expenses related to the Walden acquisition and certain costs related to growth transformation initiatives. We do not include normal, recurring, cash operating expenses in our business acquisition and integration expense.
- Intangible amortization expense on acquired intangible assets.
- Gain on sale of Adtalem’s Chicago, Illinois, campus facility.
- Pre-acquisition interest expense related to financing arrangements in connection with the Walden acquisition, write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, and impairment of an equity investment.
- Net tax benefit related to a valuation allowance release.
- Net loss (income) from discontinued operations includes the operations of ACAMS, Becker, OCL, including the after-tax gain on the sale of these businesses, and EduPristine operations, in addition to costs related to DeVry University.
Adtalem Global Education Inc. Non-GAAP Operating Income by Segment (unaudited) (in thousands) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||||||||
|
|
March 31, |
|
March 31, |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
Increase/(Decrease) |
|
|
|
|
|
|
|
|
Increase/(Decrease) |
|
||||||||||||||
|
|
2023 |
|
2022 |
|
$ |
|
% |
|
|
2023 |
|
2022 |
|
$ |
|
% |
|
||||||||||||||
Chamberlain: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (GAAP) |
|
$ |
39,589 |
|
|
$ |
36,979 |
|
|
$ |
2,610 |
|
|
7.1 |
|
% |
|
$ |
99,002 |
|
|
$ |
83,290 |
|
|
$ |
15,712 |
|
|
18.9 |
% |
|
Restructuring expense |
|
|
— |
|
|
|
1,931 |
|
|
|
(1,931 |
) |
|
|
|
|
|
818 |
|
|
|
2,266 |
|
|
|
(1,448 |
) |
|
|
|
||
Adjusted operating income (non-GAAP) |
|
$ |
39,589 |
|
|
$ |
38,910 |
|
|
$ |
679 |
|
|
1.7 |
|
% |
|
$ |
99,820 |
|
|
$ |
85,556 |
|
|
$ |
14,264 |
|
|
16.7 |
% |
|
Operating margin (GAAP) |
|
|
26.4 |
|
% |
|
25.9 |
|
% |
|
|
|
|
|
|
|
23.2 |
|
% |
|
20.0 |
|
% |
|
|
|
|
|
||||
Operating margin (non-GAAP) |
|
|
26.4 |
|
% |
|
27.3 |
|
% |
|
|
|
|
|
|
|
23.4 |
|
% |
|
20.5 |
|
% |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Walden: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) (GAAP) |
|
$ |
10,343 |
|
|
$ |
(3,199 |
) |
|
$ |
13,542 |
|
|
NM |
|
|
|
$ |
26,071 |
|
|
$ |
(17,748 |
) |
|
$ |
43,819 |
|
|
NM |
|
|
Deferred revenue adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
8,561 |
|
|
|
(8,561 |
) |
|
|
|
||
Restructuring expense |
|
|
53 |
|
|
|
2,225 |
|
|
|
(2,172 |
) |
|
|
|
|
|
3,174 |
|
|
|
4,016 |
|
|
|
(842 |
) |
|
|
|
||
Intangible amortization expense |
|
|
14,232 |
|
|
|
26,817 |
|
|
|
(12,585 |
) |
|
|
|
|
|
48,936 |
|
|
|
73,967 |
|
|
|
(25,031 |
) |
|
|
|
||
Adjusted operating income (non-GAAP) |
|
$ |
24,628 |
|
|
$ |
25,843 |
|
|
$ |
(1,215 |
) |
|
(4.7 |
) |
% |
|
$ |
78,181 |
|
|
$ |
68,796 |
|
|
$ |
9,385 |
|
|
13.6 |
% |
|
Operating margin (GAAP) |
|
|
7.8 |
|
% |
|
(2.3 |
) |
% |
|
|
|
|
|
|
|
6.6 |
|
% |
|
(5.1 |
) |
% |
|
|
|
|
|
||||
Operating margin (non-GAAP) |
|
|
18.5 |
|
% |
|
18.6 |
|
% |
|
|
|
|
|
|
|
19.8 |
|
% |
|
19.8 |
|
% |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Medical and Veterinary: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (GAAP) |
|
$ |
16,472 |
|
|
$ |
13,571 |
|
|
$ |
2,901 |
|
|
21.4 |
|
% |
|
$ |
49,172 |
|
|
$ |
45,400 |
|
|
$ |
3,772 |
|
|
8.3 |
% |
|
Restructuring expense |
|
|
421 |
|
|
|
4,569 |
|
|
|
(4,148 |
) |
|
|
|
|
|
7,334 |
|
|
|
4,757 |
|
|
|
2,577 |
|
|
|
|
||
Adjusted operating income (non-GAAP) |
|
$ |
16,893 |
|
|
$ |
18,140 |
|
|
$ |
(1,247 |
) |
|
(6.9 |
) |
% |
|
$ |
56,506 |
|
|
$ |
50,157 |
|
|
$ |
6,349 |
|
|
12.7 |
% |
|
Operating margin (GAAP) |
|
|
19.0 |
|
% |
|
16.4 |
|
% |
|
|
|
|
|
|
|
18.6 |
|
% |
|
17.8 |
|
% |
|
|
|
|
|
||||
Operating margin (non-GAAP) |
|
|
19.5 |
|
% |
|
21.9 |
|
% |
|
|
|
|
|
|
|
21.4 |
|
% |
|
19.6 |
|
% |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home Office and Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating loss (GAAP) |
|
$ |
(6,975 |
) |
|
$ |
(14,402 |
) |
|
$ |
7,427 |
|
|
51.6 |
|
% |
|
$ |
(45,632 |
) |
|
$ |
(80,159 |
) |
|
$ |
34,527 |
|
|
43.1 |
% |
|
CEO transition costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
6,195 |
|
|
|
(6,195 |
) |
|
|
|
||
Restructuring expense |
|
|
804 |
|
|
|
1,793 |
|
|
|
(989 |
) |
|
|
|
|
|
6,380 |
|
|
|
5,960 |
|
|
|
420 |
|
|
|
|
||
Business acquisition and integration expense |
|
|
11,346 |
|
|
|
5,924 |
|
|
|
5,422 |
|
|
|
|
|
|
35,702 |
|
|
|
41,537 |
|
|
|
(5,835 |
) |
|
|
|
||
Gain on sale of assets |
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
|
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
|
||
Adjusted operating loss (non-GAAP) |
|
$ |
(8,142 |
) |
|
$ |
(6,685 |
) |
|
$ |
(1,457 |
) |
|
(21.8 |
) |
% |
|
$ |
(16,867 |
) |
|
$ |
(26,467 |
) |
|
$ |
9,600 |
|
|
36.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adtalem Global Education: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (GAAP) |
|
$ |
59,429 |
|
|
$ |
32,949 |
|
|
$ |
26,480 |
|
|
80.4 |
|
% |
|
$ |
128,613 |
|
|
$ |
30,783 |
|
|
$ |
97,830 |
|
|
317.8 |
% |
|
Deferred revenue adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
8,561 |
|
|
|
(8,561 |
) |
|
|
|
||
CEO transition costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
6,195 |
|
|
|
(6,195 |
) |
|
|
|
||
Restructuring expense |
|
|
1,278 |
|
|
|
10,518 |
|
|
|
(9,240 |
) |
|
|
|
|
|
17,706 |
|
|
|
16,999 |
|
|
|
707 |
|
|
|
|
||
Business acquisition and integration expense |
|
|
11,346 |
|
|
|
5,924 |
|
|
|
5,422 |
|
|
|
|
|
|
35,702 |
|
|
|
41,537 |
|
|
|
(5,835 |
) |
|
|
|
||
Intangible amortization expense |
|
|
14,232 |
|
|
|
26,817 |
|
|
|
(12,585 |
) |
|
|
|
|
|
48,936 |
|
|
|
73,967 |
|
|
|
(25,031 |
) |
|
|
|
||
Gain on sale of assets |
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
|
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
|
||
Adjusted operating income (non-GAAP) |
|
$ |
72,968 |
|
|
$ |
76,208 |
|
|
$ |
(3,240 |
) |
|
(4.3 |
) |
% |
|
$ |
217,640 |
|
|
$ |
178,042 |
|
|
$ |
39,598 |
|
|
22.2 |
% |
|
Operating margin (GAAP) |
|
|
16.1 |
|
% |
|
9.0 |
|
% |
|
|
|
|
|
|
|
11.8 |
|
% |
|
3.0 |
|
% |
|
|
|
|
|
||||
Operating margin (non-GAAP) |
|
|
19.8 |
|
% |
|
20.9 |
|
% |
|
|
|
|
|
|
|
20.0 |
|
% |
|
17.4 |
|
% |
|
|
|
|
|
||||
Adtalem Global Education Inc. Non-GAAP Adjusted EBITDA by Segment (unaudited) (in thousands) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||||||||
|
|
March 31, |
|
March 31, |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
Increase/(Decrease) |
|
|
|
|
|
|
|
|
Increase/(Decrease) |
|
||||||||||||||
|
|
2023 |
|
2022 |
|
$ |
|
% |
|
|
2023 |
|
2022 |
|
$ |
|
% |
|
||||||||||||||
Chamberlain: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (GAAP) |
|
$ |
39,589 |
|
|
$ |
36,979 |
|
|
$ |
2,610 |
|
|
7.1 |
|
% |
|
$ |
99,002 |
|
|
$ |
83,290 |
|
|
$ |
15,712 |
|
|
18.9 |
|
% |
Restructuring expense |
|
|
— |
|
|
|
1,931 |
|
|
|
(1,931 |
) |
|
|
|
|
|
818 |
|
|
|
2,266 |
|
|
|
(1,448 |
) |
|
|
|
||
Depreciation |
|
|
4,405 |
|
|
|
4,738 |
|
|
|
(333 |
) |
|
|
|
|
|
12,985 |
|
|
|
14,048 |
|
|
|
(1,063 |
) |
|
|
|
||
Stock-based compensation |
|
|
923 |
|
|
|
1,869 |
|
|
|
(946 |
) |
|
|
|
|
|
3,600 |
|
|
|
5,104 |
|
|
|
(1,504 |
) |
|
|
|
||
Adjusted EBITDA (non-GAAP) |
|
$ |
44,917 |
|
|
$ |
45,517 |
|
|
$ |
(600 |
) |
|
(1.3 |
) |
% |
|
$ |
116,405 |
|
|
$ |
104,708 |
|
|
$ |
11,697 |
|
|
11.2 |
|
% |
Adjusted EBITDA margin (non-GAAP) |
|
|
30.0 |
|
% |
|
31.9 |
|
% |
|
|
|
|
|
|
|
27.3 |
|
% |
|
25.1 |
|
% |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Walden: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) (GAAP) |
|
$ |
10,343 |
|
|
$ |
(3,199 |
) |
|
$ |
13,542 |
|
|
NM |
|
|
|
$ |
26,071 |
|
|
$ |
(17,748 |
) |
|
$ |
43,819 |
|
|
NM |
|
|
Deferred revenue adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
8,561 |
|
|
|
(8,561 |
) |
|
|
|
||
Restructuring expense |
|
|
53 |
|
|
|
2,225 |
|
|
|
(2,172 |
) |
|
|
|
|
|
3,174 |
|
|
|
4,016 |
|
|
|
(842 |
) |
|
|
|
||
Intangible amortization expense |
|
|
14,232 |
|
|
|
26,817 |
|
|
|
(12,585 |
) |
|
|
|
|
|
48,936 |
|
|
|
73,967 |
|
|
|
(25,031 |
) |
|
|
|
||
Depreciation |
|
|
2,439 |
|
|
|
2,573 |
|
|
|
(134 |
) |
|
|
|
|
|
7,303 |
|
|
|
6,801 |
|
|
|
502 |
|
|
|
|
||
Stock-based compensation |
|
|
754 |
|
|
|
841 |
|
|
|
(87 |
) |
|
|
|
|
|
2,945 |
|
|
|
2,308 |
|
|
|
637 |
|
|
|
|
||
Adjusted EBITDA (non-GAAP) |
|
$ |
27,821 |
|
|
$ |
29,257 |
|
|
$ |
(1,436 |
) |
|
(4.9 |
) |
% |
|
$ |
88,429 |
|
|
$ |
77,905 |
|
|
$ |
10,524 |
|
|
13.5 |
|
% |
Adjusted EBITDA margin (non-GAAP) |
|
|
20.9 |
|
% |
|
21.0 |
|
% |
|
|
|
|
|
|
|
22.3 |
|
% |
|
22.4 |
|
% |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Medical and Veterinary: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (GAAP) |
|
$ |
16,472 |
|
|
$ |
13,571 |
|
|
$ |
2,901 |
|
|
21.4 |
|
% |
|
$ |
49,172 |
|
|
$ |
45,400 |
|
|
$ |
3,772 |
|
|
8.3 |
|
% |
Restructuring expense |
|
|
421 |
|
|
|
4,569 |
|
|
|
(4,148 |
) |
|
|
|
|
|
7,334 |
|
|
|
4,757 |
|
|
|
2,577 |
|
|
|
|
||
Depreciation |
|
|
3,231 |
|
|
|
3,397 |
|
|
|
(166 |
) |
|
|
|
|
|
9,367 |
|
|
|
10,497 |
|
|
|
(1,130 |
) |
|
|
|
||
Stock-based compensation |
|
|
587 |
|
|
|
1,075 |
|
|
|
(488 |
) |
|
|
|
|
|
2,291 |
|
|
|
2,974 |
|
|
|
(683 |
) |
|
|
|
||
Adjusted EBITDA (non-GAAP) |
|
$ |
20,711 |
|
|
$ |
22,612 |
|
|
$ |
(1,901 |
) |
|
(8.4 |
) |
% |
|
$ |
68,164 |
|
|
$ |
63,628 |
|
|
$ |
4,536 |
|
|
7.1 |
|
% |
Adjusted EBITDA margin (non-GAAP) |
|
|
24.0 |
|
% |
|
27.4 |
|
% |
|
|
|
|
|
|
|
25.8 |
|
% |
|
24.9 |
|
% |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home Office and Other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating loss (GAAP) |
|
$ |
(6,975 |
) |
|
$ |
(14,402 |
) |
|
$ |
7,427 |
|
|
51.6 |
|
% |
|
$ |
(45,632 |
) |
|
$ |
(80,159 |
) |
|
$ |
34,527 |
|
|
43.1 |
|
% |
CEO transition costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
6,195 |
|
|
|
(6,195 |
) |
|
|
|
||
Restructuring expense |
|
|
804 |
|
|
|
1,793 |
|
|
|
(989 |
) |
|
|
|
|
|
6,380 |
|
|
|
5,960 |
|
|
|
420 |
|
|
|
|
||
Business acquisition and integration expense |
|
|
11,346 |
|
|
|
5,924 |
|
|
|
5,422 |
|
|
|
|
|
|
35,702 |
|
|
|
41,537 |
|
|
|
(5,835 |
) |
|
|
|
||
Gain on sale of assets |
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
|
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
|
||
Depreciation |
|
|
82 |
|
|
|
633 |
|
|
|
(551 |
) |
|
|
|
|
|
1,963 |
|
|
|
2,125 |
|
|
|
(162 |
) |
|
|
|
||
Stock-based compensation |
|
|
531 |
|
|
|
888 |
|
|
|
(357 |
) |
|
|
|
|
|
2,072 |
|
|
|
2,023 |
|
|
|
49 |
|
|
|
|
||
Adjusted EBITDA (non-GAAP) |
|
$ |
(7,529 |
) |
|
$ |
(5,164 |
) |
|
$ |
(2,365 |
) |
|
(45.8 |
) |
% |
|
$ |
(12,832 |
) |
|
$ |
(22,319 |
) |
|
$ |
9,487 |
|
|
42.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adtalem Global Education: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (GAAP) |
|
$ |
45,869 |
|
|
$ |
347,740 |
|
|
$ |
(301,871 |
) |
|
(86.8 |
) |
% |
|
$ |
71,114 |
|
|
$ |
304,245 |
|
|
$ |
(233,131 |
) |
|
(76.6 |
) |
% |
Net loss (income) from discontinued operations |
|
|
2,694 |
|
|
|
(343,340 |
) |
|
|
346,034 |
|
|
|
|
|
|
7,088 |
|
|
|
(341,337 |
) |
|
|
348,425 |
|
|
|
|
||
Interest expense |
|
|
14,457 |
|
|
|
36,585 |
|
|
|
(22,128 |
) |
|
|
|
|
|
47,806 |
|
|
|
109,907 |
|
|
|
(62,101 |
) |
|
|
|
||
Other (income) expense, net |
|
|
(3,980 |
) |
|
|
327 |
|
|
|
(4,307 |
) |
|
|
|
|
|
(3,301 |
) |
|
|
(2,435 |
) |
|
|
(866 |
) |
|
|
|
||
Provision for (benefit from) income taxes |
|
|
389 |
|
|
|
(8,363 |
) |
|
|
8,752 |
|
|
|
|
|
|
5,906 |
|
|
|
(39,597 |
) |
|
|
45,503 |
|
|
|
|
||
Operating income (GAAP) |
|
|
59,429 |
|
|
|
32,949 |
|
|
|
26,480 |
|
|
|
|
|
|
128,613 |
|
|
|
30,783 |
|
|
|
97,830 |
|
|
|
|
||
Depreciation and amortization |
|
|
24,389 |
|
|
|
38,158 |
|
|
|
(13,769 |
) |
|
|
|
|
|
80,554 |
|
|
|
107,438 |
|
|
|
(26,884 |
) |
|
|
|
||
Stock-based compensation |
|
|
2,795 |
|
|
|
4,673 |
|
|
|
(1,878 |
) |
|
|
|
|
|
10,908 |
|
|
|
12,409 |
|
|
|
(1,501 |
) |
|
|
|
||
Deferred revenue adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
8,561 |
|
|
|
(8,561 |
) |
|
|
|
||
CEO transition costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
6,195 |
|
|
|
(6,195 |
) |
|
|
|
||
Restructuring expense |
|
|
1,278 |
|
|
|
10,518 |
|
|
|
(9,240 |
) |
|
|
|
|
|
17,706 |
|
|
|
16,999 |
|
|
|
707 |
|
|
|
|
||
Business acquisition and integration expense |
|
|
11,346 |
|
|
|
5,924 |
|
|
|
5,422 |
|
|
|
|
|
|
35,702 |
|
|
|
41,537 |
|
|
|
(5,835 |
) |
|
|
|
||
Gain on sale of assets |
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
|
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
|
||
Adjusted EBITDA (non-GAAP) |
|
$ |
85,920 |
|
|
$ |
92,222 |
|
|
$ |
(6,302 |
) |
|
(6.8 |
) |
% |
|
$ |
260,166 |
|
|
$ |
223,922 |
|
|
$ |
36,244 |
|
|
16.2 |
|
% |
Adjusted EBITDA margin (non-GAAP) |
|
|
23.3 |
|
% |
|
25.3 |
|
% |
|
|
|
|
|
|
|
24.0 |
|
% |
|
21.9 |
|
% |
|
|
|
|
|
||||
Adtalem Global Education Inc. Non-GAAP Earnings Disclosure (unaudited) (in thousands, except per share data) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
March 31, |
|
March 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income (GAAP) |
|
$ |
45,869 |
|
|
$ |
347,740 |
|
|
$ |
71,114 |
|
|
$ |
304,245 |
|
Deferred revenue adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,561 |
|
CEO transition costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,195 |
|
Restructuring expense |
|
|
1,278 |
|
|
|
10,518 |
|
|
|
17,706 |
|
|
|
16,999 |
|
Business acquisition and integration expense |
|
|
11,346 |
|
|
|
5,924 |
|
|
|
35,702 |
|
|
|
41,537 |
|
Intangible amortization expense |
|
|
14,232 |
|
|
|
26,817 |
|
|
|
48,936 |
|
|
|
73,967 |
|
Gain on sale of assets |
|
|
(13,317 |
) |
|
|
— |
|
|
|
(13,317 |
) |
|
|
— |
|
Pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, and investment impairment |
|
|
— |
|
|
|
12,471 |
|
|
|
9,226 |
|
|
|
44,105 |
|
Net tax benefit related to a valuation allowance release |
|
|
(6,184 |
) |
|
|
— |
|
|
|
(6,184 |
) |
|
|
— |
|
Income tax impact on non-GAAP adjustments (1) |
|
|
(4,359 |
) |
|
|
(18,769 |
) |
|
|
(23,341 |
) |
|
|
(60,871 |
) |
Net loss (income) from discontinued operations |
|
|
2,694 |
|
|
|
(343,340 |
) |
|
|
7,088 |
|
|
|
(341,337 |
) |
Adjusted net income (non-GAAP) |
|
$ |
51,559 |
|
|
$ |
41,361 |
|
|
$ |
146,930 |
|
|
$ |
93,401 |
|
(1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements. |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
March 31, |
|
March 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Earnings per share, diluted (GAAP) |
|
$ |
1.00 |
|
|
$ |
7.04 |
|
|
$ |
1.54 |
|
|
$ |
6.15 |
|
Effect on diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred revenue adjustment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.17 |
|
CEO transition costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.12 |
|
Restructuring expense |
|
|
0.03 |
|
|
|
0.21 |
|
|
|
0.38 |
|
|
|
0.34 |
|
Business acquisition and integration expense |
|
|
0.25 |
|
|
|
0.12 |
|
|
|
0.77 |
|
|
|
0.83 |
|
Intangible amortization expense |
|
|
0.31 |
|
|
|
0.54 |
|
|
|
1.06 |
|
|
|
1.48 |
|
Gain on sale of assets |
|
|
(0.29 |
) |
|
|
- |
|
|
|
(0.29 |
) |
|
|
- |
|
Pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, and investment impairment |
|
|
- |
|
|
|
0.25 |
|
|
|
0.20 |
|
|
|
0.88 |
|
Net tax benefit related to a valuation allowance release |
|
|
(0.14 |
) |
|
|
- |
|
|
|
(0.13 |
) |
|
|
- |
|
Income tax impact on non-GAAP adjustments (1) |
|
|
(0.10 |
) |
|
|
(0.38 |
) |
|
|
(0.51 |
) |
|
|
(1.22 |
) |
Net loss (income) from discontinued operations |
|
|
0.06 |
|
|
|
(6.95 |
) |
|
|
0.15 |
|
|
|
(6.90 |
) |
Adjusted earnings per share, diluted (non-GAAP) |
|
$ |
1.13 |
|
|
$ |
0.84 |
|
|
$ |
3.19 |
|
|
$ |
1.87 |
|
Diluted shares used in non-GAAP EPS calculation |
|
|
45,801 |
|
|
|
49,377 |
|
|
|
46,089 |
|
|
|
49,872 |
|
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 |
||||||||||||||||||||||||
|
|
FY23 |
|
FY22 |
|
FY23 |
|
FY23 |
|
FY23 |
|
FY22 |
|
FY22 |
||||||||||||||
|
|
Q3 |
|
Q3 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
||||||||||||||
Net cash provided by operating activities-continuing operations (GAAP) |
|
$ |
107,544 |
|
|
$ |
77,739 |
|
|
$ |
255,052 |
|
|
$ |
225,247 |
|
|
$ |
225,972 |
|
|
$ |
164,002 |
|
|
$ |
101,855 |
|
Capital expenditures |
|
|
(9,309 |
) |
|
|
(7,477 |
) |
|
|
(27,861 |
) |
|
|
(26,029 |
) |
|
|
(29,914 |
) |
|
|
(31,054 |
) |
|
|
(33,539 |
) |
Free cash flow (non-GAAP) |
|
$ |
98,235 |
|
|
$ |
70,262 |
|
|
$ |
227,191 |
|
|
$ |
199,218 |
|
|
$ |
196,058 |
|
|
$ |
132,948 |
|
|
$ |
68,316 |
|
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) |
|
$ |
2.14 to 2.29 |
Expected effects on diluted earnings per share: |
|
|
|
Restructuring expense |
|
|
0.38 |
Integration costs |
|
|
0.77 |
Estimated incremental integration costs |
|
|
0.15 |
Estimated intangible amortization |
|
|
1.33 |
Gain on sale of assets |
|
|
(0.29) |
Write-off of debt discount and issuance costs, gain on extinguishment of debt, and investment impairment |
|
|
0.20 |
Net tax benefit related to a valuation allowance release |
|
|
(0.13) |
Estimated income tax impact on non-GAAP adjustments(1) |
|
|
(0.65) |
Net loss from discontinued operations |
|
|
0.15 |
Expected adjusted earnings per share, diluted (non-GAAP)(2) |
|
$ |
4.05 to 4.20 |
Diluted shares used in EPS calculation |
|
|
46,089 |
(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 the remainder of fiscal year 2023. The expected effects on diluted earnings per share (“EPS”) of (1) the estimated intangible amortization and (2) the estimated incremental integration costs are estimates related to the Walden University acquisition and certain costs related to growth transformation initiatives. The effects on diluted EPS of restructuring expense, integration costs, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, investment impairment, net tax benefit related to a valuation allowance release, and loss from discontinued operations includes the results realized through March 31, 2023. We are not able to further estimate certain special items for the full fiscal year. Additional charges to these special items, or additional special items not currently identified, which may occur during the remainder of fiscal year 2023, would impact the GAAP expected EPS provided above. |
|||
Adtalem Global Education Inc. Non-GAAP Net Leverage Disclosure (unaudited) (in thousands) |
|||
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
March 31, 2023 |
|
Adtalem Global Education: |
|
|
|
Net income (GAAP) |
|
$ |
77,860 |
Net income from discontinued operations |
|
|
1,479 |
Interest expense |
|
|
67,247 |
Other income, net |
|
|
(1,974) |
Provision for income taxes |
|
|
29,964 |
Depreciation and amortization |
|
|
114,964 |
Stock-based compensation |
|
|
14,915 |
Restructuring expense |
|
|
26,335 |
Business acquisition and integration expense |
|
|
47,363 |
Gain on sale of assets |
|
|
(13,317) |
Adjusted EBITDA (non-GAAP) |
|
$ |
364,836 |
|
|
|
|
|
|
March 31, 2023 |
|
Long-term debt |
|
$ |
708,283 |
Less: Cash and cash equivalents |
|
|
(315,373) |
Net debt (non-GAAP) |
|
$ |
392,910 |
|
|
|
|
Net leverage (non-GAAP) |
|
|
1.1 x |
