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Press Releases and News Details

Adtalem Global Education Announces Fiscal First Quarter 2024 Results

10/26/2023

Revenue up 4.1% YoY

Total enrollment up 1.9% YoY

Diluted earnings per share $0.25; Adjusted EPS $0.93, growth of 3.3% YoY

Raises fiscal year 2024 revenue guidance to a range of $1,470 million to $1,530 million and Adjusted EPS guidance to a range of $4.25 to $4.45

First quarter highlights

  • Revenue $368.8 million, up 4.1% year-over-year
  • Total student enrollment 81,073, up 1.9% year-over-year
  • Chamberlain University third straight quarter of total enrollment growth, up 5.2% year-over-year
  • Walden University returned to total enrollment growth, up 0.5% year-over-year
  • Investing in Growth with Purpose strategy, GAAP net income $10.6 million, and adjusted EBITDA $80.5 million, down 3.8% year-over-year

Capital allocation

  • Repurchased $92 million of shares against $300 million Board authorized share repurchase program
  • Net leverage 1.3x

Fiscal year 2024 guidance

  • Revenue $1,470 million to $1,530 million
  • Adjusted earnings per share $4.25 to $4.45

Adtalem Global Education Inc. (NYSE: ATGE) today reported first quarter fiscal 2024 results (ended Sept. 30, 2023) reflecting a return to total enrollment growth and enhanced academic outcomes.

“Our strategic transformation program – Growth with Purpose – achieved another milestone during the first quarter – returning Adtalem to total enrollment growth,” said Steve Beard, president, and chief executive officer, Adtalem Global Education.

Beard continued, “As we accelerate our performance across our five operational pillars, we are increasingly afforded the opportunity to take full advantage of our market leading scale and our market responsive healthcare focus. This gives us the confidence to raise our expectations for fiscal 2024. With more than 80,000 students and 300,000 alumni, Adtalem is well-positioned to address critical healthcare provider shortages. And our enterprise-wide emphasis on advancing health equity has never been more important.”

Financial Highlights

Selected financial data for the three months ended Sept. 30, 2023:

  • Revenue of $368.8 million increased 4.1% compared with the prior year.
  • Operating income was $28.2 million, compared with $23.6 million in the prior year; adjusted operating income was $63.3 million, compared with $66.8 million in the prior year.
  • Net income was $10.6 million, compared with $0.6 million in the prior year; adjusted net income was $39.4 million, compared with $41.6 million in the prior year.
  • Diluted earnings per share was $0.25, compared with $0.01 in the prior year; adjusted earnings per share was $0.93, compared with $0.90 in the prior year.
  • Adjusted EBITDA was $80.5 million, compared with $83.7 million in the prior year; adjusted EBITDA margin was 21.8%, compared with 23.6% in the prior year.

Business Highlights

  • Chamberlain University continues to innovate in specialized nursing education that addresses areas of acute nursing shortages, such as peri-operative, home health, nephrology, and emergency, through its Practice Ready. Specialty Focused.TM model. This model has provided more than 1,000 students in Chamberlain’s Bachelor of Science in Nursing degree program, the opportunity for specialized training. The proprietary learning model has been expanded to all 23 Chamberlain campuses, broadening access to more students.
  • Walden’s 69th commencement celebrated the conferral of more than 6,500 doctoral, master’s, and bachelor’s degrees to students from all 50 U.S. states and more than 40 countries, of which nearly 35% were for post-licensure nursing programs. More than 50% of the graduates who reported their race, identified as being from minority groups.
  • Faculty members from Walden and Chamberlain were elected into the Leadership Academy in Social Determinants of Health and Social Change, which further equips current nurse educators and interprofessional leaders to prepare future care providers to confidently and competently promote social change and advance health equity. The academy is the cornerstone of the groundbreaking collaboration between the National League for Nursing and Walden University.
  • Adtalem’s ongoing investment in innovating the student experience was recognized with 4 Telly and 12 Viddy awards for immersive “user-centered design” and short-videos for enhanced learning curriculum.
  • Our 2023 Sustainability Report, which encapsulates our mission, vision and sustainability efforts, was recently released and highlights the many ways Adtalem serves to bridge the gap between accessible education and systemic change in healthcare and demonstrates our continued global impact for a better future.

Segment Highlights

Chamberlain

$ in millions

 

Three Months Ended
Sept. 30,

 

 

2023

2022

% Change

Revenue

 

$142.6

$135.4

5.3%

Operating Income

 

$24.3

$26.2

(7.1)%

Adj. Operating Income

 

$24.3

$27.0

(9.9)%

Adj. EBITDA

 

$31.5

$33.8

(6.5)%

Total Students (1)

 

34,889

33,153

5.2%

  • Total student enrollment increased 5.2% compared with the prior year, driven by continued growth in pre-licensure and post-licensure nursing programs as well as high persistence.

Walden

$ in millions

 

Three Months Ended
Sept. 30,

 

 

2023

2022

% Change

Revenue

 

$141.6

$130.9

8.2%

Operating Income

 

$1.9

$2.9

(33.9)%

Adj. Operating Income

 

$31.1

$24.5

26.8%

Adj. EBITDA

 

$35.1

$29.0

21.0%

Total Students (1)

 

40,975

40,772

0.5%

  • Total student enrollment increased 0.5% compared with the prior year, driven by growth in healthcare programs and high persistence. Elimination of off-cycle start dates adversely impacted year-over-year total enrollment growth by 2.9%.

Medical and Veterinary

$ in millions

 

Three Months Ended
Sept. 30,

 

 

2023

2022

% Change

Revenue

 

$84.6

$88.0

(3.8)%

Operating Income

 

$14.4

$10.2

40.3%

Adj. Operating Income

 

$14.5

$17.1

(15.2)%

Adj. EBITDA

 

$19.1

$21.6

(11.9)%

Total Students (1)

 

5,209

5,634

(7.5)%

  • Total student enrollment decreased 7.5% compared with the prior year, driven by declines in medical schools.
(1)

Represents total students attending sessions during each institution’s most recent enrollment period in Q1 FY 2024 and Q1 FY 2023

Fiscal Year 2024 Outlook

Adtalem guidance for fiscal year 2024, raises revenue guidance to a range of $1,470 million to $1,530 million from $1,460 million to $1,520 million, and raises adjusted earnings per share to be in the range of $4.25 to $4.45 from $4.20 to $4.40.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its fiscal 2024 first 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: 13740758. 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: 13740758, or visit the Adtalem investor relations website.

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 nearly 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. 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.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of special items that may be incurred in the future, although these special items could be material to Adtalem's results in accordance with GAAP.

Adtalem Global Education Inc.

Consolidated Balance Sheets

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

 

2023

 

2023

Assets:

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

262,438

 

$

273,689

Restricted cash

 

 

1,988

 

 

1,386

Accounts receivable, net

 

 

147,752

 

 

102,749

Prepaid expenses and other current assets

 

 

60,750

 

 

100,715

Total current assets

 

 

472,928

 

 

478,539

Noncurrent assets:

 

 

 

 

 

 

Property and equipment, net

 

 

264,766

 

 

258,522

Operating lease assets

 

 

171,055

 

 

174,677

Deferred income taxes

 

 

54,855

 

 

56,694

Intangible assets, net

 

 

801,661

 

 

812,338

Goodwill

 

 

961,262

 

 

961,262

Other assets, net

 

 

67,634

 

 

68,509

Total noncurrent assets

 

 

2,321,233

 

 

2,332,002

Total assets

 

$

2,794,161

 

$

2,810,541

 

 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

76,866

 

$

81,812

Accrued payroll and benefits

 

 

43,138

 

 

52,041

Accrued liabilities

 

 

89,395

 

 

105,806

Deferred revenue

 

 

250,555

 

 

153,871

Current operating lease liabilities

 

 

35,681

 

 

37,673

Total current liabilities

 

 

495,635

 

 

431,203

Noncurrent liabilities:

 

 

 

 

 

 

Long-term debt

 

 

695,725

 

 

695,077

Long-term operating lease liabilities

 

 

160,523

 

 

163,441

Deferred income taxes

 

 

26,394

 

 

26,068

Other liabilities

 

 

37,221

 

 

37,416

Total noncurrent liabilities

 

 

919,863

 

 

922,002

Total liabilities

 

 

1,415,498

 

 

1,353,205

Commitments and contingencies

 

 

 

 

 

 

Total shareholders' equity

 

 

1,378,663

 

 

1,457,336

Total liabilities and shareholders' equity

 

$

2,794,161

 

$

2,810,541

Adtalem Global Education Inc.

Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Revenue

 

$

368,845

 

 

$

354,269

 

Operating cost and expense:

 

 

 

 

 

 

Cost of educational services

 

 

168,618

 

 

 

159,645

 

Student services and administrative expense

 

 

166,095

 

 

 

146,385

 

Restructuring expense

 

 

676

 

 

 

15,065

 

Business integration expense

 

 

5,262

 

 

 

9,540

 

Total operating cost and expense

 

 

340,651

 

 

 

330,635

 

Operating income

 

 

28,194

 

 

 

23,634

 

Interest expense

 

 

(15,657

)

 

 

(17,760

)

Other income, net

 

 

2,214

 

 

 

761

 

Income from continuing operations before income taxes

 

 

14,751

 

 

 

6,635

 

Provision for income taxes

 

 

(2,792

)

 

 

(1,122

)

Income from continuing operations

 

 

11,959

 

 

 

5,513

 

Discontinued operations:

 

 

 

 

 

 

Loss from discontinued operations before income taxes

 

 

(1,765

)

 

 

(3,265

)

Loss on disposal of discontinued operations before income taxes

 

 

 

 

 

(3,359

)

Benefit from income taxes

 

 

452

 

 

 

1,703

 

Loss from discontinued operations

 

 

(1,313

)

 

 

(4,921

)

Net income and comprehensive income

 

$

10,646

 

 

$

592

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

Continuing operations

 

$

0.29

 

 

$

0.12

 

Discontinued operations

 

$

(0.03

)

 

$

(0.11

)

Total basic earnings per share

 

$

0.26

 

 

$

0.01

 

Diluted:

 

 

 

 

 

 

Continuing operations

 

$

0.28

 

 

$

0.12

 

Discontinued operations

 

$

(0.03

)

 

$

(0.11

)

Total diluted earnings per share

 

$

0.25

 

 

$

0.01

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

Basic shares

 

 

41,399

 

 

 

45,274

 

Diluted shares

 

 

42,184

 

 

 

46,342

 

Adtalem Global Education Inc.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Operating activities:

 

 

 

 

 

 

Net income

 

$

10,646

 

 

$

592

 

Loss from discontinued operations

 

 

1,313

 

 

 

4,921

 

Income from continuing operations

 

 

11,959

 

 

 

5,513

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

7,455

 

 

 

6,145

 

Amortization and impairments to operating lease assets

 

 

8,765

 

 

 

19,708

 

Depreciation

 

 

9,778

 

 

 

10,805

 

Amortization of intangible assets

 

 

10,677

 

 

 

18,528

 

Amortization and write-off of debt discount and issuance costs

 

 

1,155

 

 

 

4,227

 

Provision for bad debts

 

 

10,226

 

 

 

5,991

 

Deferred income taxes

 

 

2,165

 

 

 

2,629

 

Loss on disposals, accelerated depreciation, and impairments to property and equipment

 

 

38

 

 

 

3,483

 

Gain on extinguishment of debt

 

 

 

 

 

(71

)

Loss on investments

 

 

447

 

 

 

901

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(50,116

)

 

 

(33,219

)

Prepaid expenses and other current assets

 

 

(5,532

)

 

 

(2,483

)

Accounts payable

 

 

(2,870

)

 

 

8,711

 

Accrued payroll and benefits

 

 

(8,882

)

 

 

(12,743

)

Accrued liabilities

 

 

13,770

 

 

 

(9,010

)

Deferred revenue

 

 

98,658

 

 

 

82,688

 

Operating lease liabilities

 

 

(10,053

)

 

 

(12,921

)

Other assets and liabilities

 

 

(6,914

)

 

 

(7,406

)

Net cash provided by operating activities-continuing operations

 

 

90,726

 

 

 

91,476

 

Net cash provided by (used in) operating activities-discontinued operations

 

 

8,959

 

 

 

(130

)

Net cash provided by operating activities

 

 

99,685

 

 

 

91,346

 

Investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(15,046

)

 

 

(5,551

)

Proceeds from sale of marketable securities

 

 

400

 

 

 

356

 

Purchases of marketable securities

 

 

(300

)

 

 

(308

)

Net cash used in investing activities-continuing operations

 

 

(14,946

)

 

 

(5,503

)

Payment for working capital adjustment for sale of business

 

 

 

 

 

(811

)

Net cash used in investing activities

 

 

(14,946

)

 

 

(6,314

)

Financing activities:

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

550

 

 

 

1,241

 

Employee taxes paid on withholding shares

 

 

(5,651

)

 

 

(3,486

)

Proceeds from stock issued under Colleague Stock Purchase Plan

 

 

190

 

 

 

132

 

Repurchases of common stock for treasury

 

 

(90,477

)

 

 

 

Repayments of long-term debt

 

 

 

 

 

(100,861

)

Net cash used in financing activities

 

 

(95,388

)

 

 

(102,974

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(10,649

)

 

 

(17,942

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

275,075

 

 

 

347,937

 

Cash, cash equivalents and restricted cash at end of period

 

$

264,426

 

 

$

329,995

 

Non-cash investing and financing activities:

 

 

 

 

 

 

Accrued capital expenditures

 

$

9,217

 

 

$

4,713

 

Accrued liability for repurchases of common stock

 

$

3,600

 

 

$

 

Accrued excise tax on share repurchases

 

$

1,928

 

 

$

 

Adtalem Global Education Inc.

Segment Information

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

 

 

 

 

 

 

 

Increase/(Decrease)

 

 

 

2023

 

2022

 

$

 

%

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Chamberlain

 

$

142,596

 

 

$

135,405

 

 

$

7,191

 

 

5.3

 

%

Walden

 

 

141,608

 

 

 

130,901

 

 

 

10,707

 

 

8.2

 

%

Medical and Veterinary

 

 

84,641

 

 

 

87,963

 

 

 

(3,322

)

 

(3.8

)

%

Total consolidated revenue

 

$

368,845

 

 

$

354,269

 

 

$

14,576

 

 

4.1

 

%

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Chamberlain

 

$

24,324

 

 

$

26,184

 

 

$

(1,860

)

 

(7.1

)

%

Walden

 

 

1,938

 

 

 

2,933

 

 

 

(995

)

 

(33.9

)

%

Medical and Veterinary

 

 

14,363

 

 

 

10,238

 

 

 

4,125

 

 

40.3

 

%

Home Office and Other

 

 

(12,431

)

 

 

(15,721

)

 

 

3,290

 

 

20.9

 

%

Total consolidated operating income

 

$

28,194

 

 

$

23,634

 

 

$

4,560

 

 

19.3

 

%

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 restructuring expense, business integration expense, intangible amortization expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, and net loss from discontinued operations.

Adjusted earnings per share (most comparable GAAP measure: earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business integration expense, intangible amortization expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, and net loss from discontinued operations.

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business integration expense, intangible amortization expense, and litigation reserve. 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 from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation and amortization, stock-based compensation, restructuring expense, business integration expense, and litigation reserve. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Income taxes, interest expense, and other income, net 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:

  • Restructuring expense primarily related to 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 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 integration expense.
  • Intangible amortization expense on acquired intangible assets.
  • Write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, and reserves related to significant litigation.
  • Net loss from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University divestiture and a loss on the sale of ACAMS, Becker, and OCL for working capital adjustments to the initial sales prices.

Adtalem Global Education Inc.

Non-GAAP Operating Income by Segment

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

 

 

 

 

 

 

 

Increase/(Decrease)

 

 

 

2023

 

2022

 

$

 

%

 

Chamberlain:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

24,324

 

 

$

26,184

 

 

$

(1,860

)

 

(7.1

)

%

Restructuring expense

 

 

 

 

 

818

 

 

 

(818

)

 

 

 

Adjusted operating income (non-GAAP)

 

$

24,324

 

 

$

27,002

 

 

$

(2,678

)

 

(9.9

)

%

Operating margin (GAAP)

 

 

17.1

 

%

 

19.3

 

%

 

 

 

 

 

Operating margin (non-GAAP)

 

 

17.1

 

%

 

19.9

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walden:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

1,938

 

 

$

2,933

 

 

$

(995

)

 

(33.9

)

%

Restructuring expense

 

 

 

 

 

3,080

 

 

 

(3,080

)

 

 

 

Intangible amortization expense

 

 

10,677

 

 

 

18,528

 

 

 

(7,851

)

 

 

 

Litigation reserve

 

 

18,500

 

 

 

 

 

 

18,500

 

 

 

 

Adjusted operating income (non-GAAP)

 

$

31,115

 

 

$

24,541

 

 

$

6,574

 

 

26.8

 

%

Operating margin (GAAP)

 

 

1.4

 

%

 

2.2

 

%

 

 

 

 

 

Operating margin (non-GAAP)

 

 

22.0

 

%

 

18.7

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical and Veterinary:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

14,363

 

 

$

10,238

 

 

$

4,125

 

 

40.3

 

%

Restructuring expense

 

 

114

 

 

 

6,826

 

 

 

(6,712

)

 

 

 

Adjusted operating income (non-GAAP)

 

$

14,477

 

 

$

17,064

 

 

$

(2,587

)

 

(15.2

)

%

Operating margin (GAAP)

 

 

17.0

 

%

 

11.6

 

%

 

 

 

 

 

Operating margin (non-GAAP)

 

 

17.1

 

%

 

19.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Office and Other:

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss (GAAP)

 

$

(12,431

)

 

$

(15,721

)

 

$

3,290

 

 

20.9

 

%

Restructuring expense

 

 

562

 

 

 

4,341

 

 

 

(3,779

)

 

 

 

Business integration expense

 

 

5,262

 

 

 

9,540

 

 

 

(4,278

)

 

 

 

Adjusted operating loss (non-GAAP)

 

$

(6,607

)

 

$

(1,840

)

 

$

(4,767

)

 

(259.1

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adtalem Global Education:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

28,194

 

 

$

23,634

 

 

$

4,560

 

 

19.3

 

%

Restructuring expense

 

 

676

 

 

 

15,065

 

 

 

(14,389

)

 

 

 

Business integration expense

 

 

5,262

 

 

 

9,540

 

 

 

(4,278

)

 

 

 

Intangible amortization expense

 

 

10,677

 

 

 

18,528

 

 

 

(7,851

)

 

 

 

Litigation reserve

 

 

18,500

 

 

 

 

 

 

18,500

 

 

 

 

Adjusted operating income (non-GAAP)

 

$

63,309

 

 

$

66,767

 

 

$

(3,458

)

 

(5.2

)

%

Operating margin (GAAP)

 

 

7.6

 

%

 

6.7

 

%

 

 

 

 

 

Operating margin (non-GAAP)

 

 

17.2

 

%

 

18.8

 

%

 

 

 

 

 

Adtalem Global Education Inc.

Non-GAAP Adjusted EBITDA by Segment

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

 

 

 

 

 

 

 

Increase/(Decrease)

 

 

 

2023

 

2022

 

$

 

%

 

Chamberlain:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

24,324

 

 

$

26,184

 

 

$

(1,860

)

 

(7.1

)

%

Restructuring expense

 

 

 

 

 

818

 

 

 

(818

)

 

 

 

Depreciation

 

 

4,316

 

 

 

4,481

 

 

 

(165

)

 

 

 

Stock-based compensation

 

 

2,907

 

 

 

2,274

 

 

 

633

 

 

 

 

Adjusted EBITDA (non-GAAP)

 

$

31,547

 

 

$

33,757

 

 

$

(2,210

)

 

(6.5

)

%

Adjusted EBITDA margin (non-GAAP)

 

 

22.1

 

%

 

24.9

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walden:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

1,938

 

 

$

2,933

 

 

$

(995

)

 

(33.9

)

%

Restructuring expense

 

 

 

 

 

3,080

 

 

 

(3,080

)

 

 

 

Intangible amortization expense

 

 

10,677

 

 

 

18,528

 

 

 

(7,851

)

 

 

 

Litigation reserve

 

 

18,500

 

 

 

 

 

 

18,500

 

 

 

 

Depreciation

 

 

2,162

 

 

 

2,595

 

 

 

(433

)

 

 

 

Stock-based compensation

 

 

1,864

 

 

 

1,905

 

 

 

(41

)

 

 

 

Adjusted EBITDA (non-GAAP)

 

$

35,141

 

 

$

29,041

 

 

$

6,100

 

 

21.0

 

%

Adjusted EBITDA margin (non-GAAP)

 

 

24.8

 

%

 

22.2

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical and Veterinary:

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

14,363

 

 

$

10,238

 

 

$

4,125

 

 

40.3

 

%

Restructuring expense

 

 

114

 

 

 

6,826

 

 

 

(6,712

)

 

 

 

Depreciation

 

 

2,944

 

 

 

3,105

 

 

 

(161

)

 

 

 

Stock-based compensation

 

 

1,640

 

 

 

1,475

 

 

 

165

 

 

 

 

Adjusted EBITDA (non-GAAP)

 

$

19,061

 

 

$

21,644

 

 

$

(2,583

)

 

(11.9

)

%

Adjusted EBITDA margin (non-GAAP)

 

 

22.5

 

%

 

24.6

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Office and Other:

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss (GAAP)

 

$

(12,431

)

 

$

(15,721

)

 

$

3,290

 

 

20.9

 

%

Restructuring expense

 

 

562

 

 

 

4,341

 

 

 

(3,779

)

 

 

 

Business integration expense

 

 

5,262

 

 

 

9,540

 

 

 

(4,278

)

 

 

 

Depreciation

 

 

356

 

 

 

624

 

 

 

(268

)

 

 

 

Stock-based compensation

 

 

1,044

 

 

 

491

 

 

 

553

 

 

 

 

Adjusted EBITDA (non-GAAP)

 

$

(5,207

)

 

$

(725

)

 

$

(4,482

)

 

(618.2

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adtalem Global Education:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

10,646

 

 

$

592

 

 

$

10,054

 

 

1,698.3

 

%

Net loss from discontinued operations

 

 

1,313

 

 

 

4,921

 

 

 

(3,608

)

 

 

 

Interest expense

 

 

15,657

 

 

 

17,760

 

 

 

(2,103

)

 

 

 

Other income, net

 

 

(2,214

)

 

 

(761

)

 

 

(1,453

)

 

 

 

Provision for income taxes

 

 

2,792

 

 

 

1,122

 

 

 

1,670

 

 

 

 

Operating income (GAAP)

 

 

28,194

 

 

 

23,634

 

 

 

4,560

 

 

 

 

Depreciation and amortization

 

 

20,455

 

 

 

29,333

 

 

 

(8,878

)

 

 

 

Stock-based compensation

 

 

7,455

 

 

 

6,145

 

 

 

1,310

 

 

 

 

Restructuring expense

 

 

676

 

 

 

15,065

 

 

 

(14,389

)

 

 

 

Business integration expense

 

 

5,262

 

 

 

9,540

 

 

 

(4,278

)

 

 

 

Litigation reserve

 

 

18,500

 

 

 

 

 

 

18,500

 

 

 

 

Adjusted EBITDA (non-GAAP)

 

$

80,542

 

 

$

83,717

 

 

$

(3,175

)

 

(3.8

)

%

Adjusted EBITDA margin (non-GAAP)

 

 

21.8

 

%

 

23.6

 

%

 

 

 

 

 

Adtalem Global Education Inc.

Non-GAAP Earnings Disclosure

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Net income (GAAP)

 

$

10,646

 

 

$

592

 

Restructuring expense

 

 

676

 

 

 

15,065

 

Business integration expense

 

 

5,262

 

 

 

9,540

 

Intangible amortization expense

 

 

10,677

 

 

 

18,528

 

Write-off of debt discount and issuance costs, gain on extinguishment of debt, and litigation reserve

 

 

18,500

 

 

 

2,824

 

Income tax impact on non-GAAP adjustments (1)

 

 

(7,693

)

 

 

(9,871

)

Net loss from discontinued operations

 

 

1,313

 

 

 

4,921

 

Adjusted net income (non-GAAP)

 

$

39,381

 

 

$

41,599

 

(1)

Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Earnings per share, diluted (GAAP)

 

$

0.25

 

 

$

0.01

 

Effect on diluted earnings per share:

 

 

 

 

 

 

Restructuring expense

 

 

0.02

 

 

 

0.33

 

Business integration expense

 

 

0.12

 

 

 

0.21

 

Intangible amortization expense

 

 

0.25

 

 

 

0.40

 

Write-off of debt discount and issuance costs, gain on extinguishment of debt, and litigation reserve

 

 

0.44

 

 

 

0.06

 

Income tax impact on non-GAAP adjustments (1)

 

 

(0.18

)

 

 

(0.21

)

Net loss from discontinued operations

 

 

0.03

 

 

 

0.11

 

Adjusted earnings per share, diluted (non-GAAP)

 

$

0.93

 

 

$

0.90

 

Diluted shares used in non-GAAP EPS calculation

 

 

42,184

 

 

 

46,342

 

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

 

 

FY24

 

FY23

 

FY24

 

FY23

 

FY23

 

FY23

 

FY23

 

 

Q1

 

Q1

 

Q1

 

Q4

 

Q3

 

Q2

 

Q1

Net cash provided by operating activities-continuing operations (GAAP)

 

$

90,726

 

 

$

91,476

 

 

$

204,934

 

 

$

205,684

 

 

$

255,052

 

 

$

225,247

 

 

$

225,972

 

Capital expenditures

 

 

(15,046

)

 

 

(5,551

)

 

 

(46,503

)

 

 

(37,008

)

 

 

(27,861

)

 

 

(26,029

)

 

 

(29,914

)

Free cash flow (non-GAAP)

 

$

75,680

 

 

$

85,925

 

 

$

158,431

 

 

$

168,676

 

 

$

227,191

 

 

$

199,218

 

 

$

196,058

 

Adtalem Global Education Inc.

Non-GAAP Net Leverage Disclosure

(unaudited)

(in thousands)

 

 

 

 

 

 

Twelve Months Ended

 

 

September 30, 2023

Adtalem Global Education:

 

 

 

Net income (GAAP)

 

$

103,412

 

Net loss from discontinued operations

 

 

4,786

 

Interest expense

 

 

60,997

 

Other income, net

 

 

(8,418

)

Provision for income taxes

 

 

11,953

 

Depreciation and amortization

 

 

93,936

 

Stock-based compensation

 

 

15,609

 

Restructuring expense

 

 

4,428

 

Business integration expense

 

 

38,383

 

Litigation reserve

 

 

28,500

 

Gain on sale of assets

 

 

(13,317

)

Adjusted EBITDA (non-GAAP)

 

$

340,269

 

 

 

 

 

 

 

September 30, 2023

Long-term debt

 

$

708,283

 

Less: Cash and cash equivalents

 

 

(262,438

)

Net debt (non-GAAP)

 

$

445,845

 

 

 

 

 

Net leverage (non-GAAP)

 

 

1.3 x

 

 

Investor Contact
Jay Spitzer and Chandrika Nigam
Investor.Relations@Adtalem.com
+1 312-906-6600

Media Contact
Talisha Holmes
AdtalemMedia@Adtalem.com
+1 872-270-0331

Source: Adtalem Global Education Inc.