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Press Releases and News Details

Adtalem Global Education Announces Fiscal Third Quarter 2023 Results

05/02/2023

Improving total enrollment trends

Strategic transformation momentum

Narrows guidance for fiscal year 2023

Third quarter highlights

  • Revenue $369.1 million, up 1.3% year-over-year
  • Total student enrollment 79,586, down 3.1% year-over-year, a quarterly sequential improvement of 100 basis points
  • Chamberlain University strong demand in pre-licensure BSN and post-licensure MSN programs
  • Diluted earnings per share $1.00 from $7.04 in the prior year; adjusted earnings per share $1.13, up 34.5% versus prior year

Fiscal year 2023 guidance

  • Revenue $1,400 million to $1,450 million
  • Adjusted earnings per share $4.05 to $4.20

Repurchased $48 million of shares in the third quarter against $300 million Board authorized share repurchase program

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.

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

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

 

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

Media Contact
Jacquelyn Manetakis
adtalemmedia@adtalem.com
+1 630-303-4438

Source: Adtalem Global Education Inc.