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Adtalem Global Education Announces Strong Fiscal Year 2024 Performance; Initiates Fiscal Year 2025 Guidance Exceeding June 2023 Investor Day Projections

08/06/2024

Total enrollment up 10.0% YoY for fourth quarter 2024

Revenue up 9.2% YoY for fiscal year 2024

Fiscal year 2024 diluted earnings per share $3.39; Adjusted EPS $5.01, growth of 19.0% YoY

Fourth quarter and fiscal year highlights

  • Revenue $409.9 million, up 12.4% year-over-year for the fourth quarter, and fiscal year revenue $1,584.7 million, up 9.2% year-over-year
  • Total student enrollment 83,321, up 10.0% year-over-year for the fourth quarter
  • Chamberlain University sixth straight quarter of total enrollment growth, up 10.4% year-over-year
  • Walden University fourth straight quarter of total enrollment growth, up 11.3% year-over-year
  • Medical and Veterinary segment third straight enrollment period of sequentially improved year-over-year total enrollment trends
  • Execution against Growth with Purpose strategy, fiscal year GAAP net income $136.8 million and fiscal year adjusted EBITDA $377.5 million, up 9.9% year-over-year

Fiscal year capital allocation

  • Repurchased $261 million of shares, $212 million remaining under $300 million Board authorized share repurchase program through January 2027
  • Repaid $50 million of outstanding Term Loan B balance on Jan. 26, 2024; remaining $253 million Term Loan B balance repriced, reducing interest rate by 50 bps
  • Net leverage 1.2x as of June 30, 2024

Fiscal year 2025 guidance

  • Revenue $1,660 million to $1,700 million
  • Adjusted earnings per share $5.60 to $5.85

Adtalem Global Education Inc. (NYSE: ATGE), the leading healthcare educator in the United States, today reported fourth quarter and fiscal year 2024 results (ended June 30, 2024) demonstrating disciplined operational performance with total enrollment growth resulting in strong earnings and robust cash generation.

“This year was a fundamental chapter in Adtalem's journey, further solidifying our market leading position in healthcare education. Through the rigorous implementation of our Growth with Purpose strategy, we have significantly broadened our impact culminating in 10% enrollment growth during the fourth quarter. This trajectory is a testament to our unwavering commitment to excellence,” said Steve Beard, president and chief executive officer, Adtalem Global Education. “We are confident that fiscal year 2025 will set new benchmarks for Adtalem, reflected in the forward-looking guidance we have established today.”

Financial Highlights

Selected financial data for the three months ended June 30, 2024:

  • Revenue of $409.9 million increased 12.4% compared with the prior year.
  • Operating income was $68.5 million, compared with $39.6 million in the prior year; adjusted operating income was $80.1 million, compared with $69.9 million in the prior year.
  • Net income was $49.4 million, compared with $22.2 million in the prior year; adjusted net income was $52.8 million, compared with $45.3 million in the prior year.
  • Diluted earnings per share was $1.28, compared with $0.50 in the prior year; adjusted earnings per share was $1.37, compared with $1.03 in the prior year.
  • Adjusted EBITDA was $97.4 million, compared with $83.3 million in the prior year; adjusted EBITDA margin was 23.8%, compared with 22.8% in the prior year.

Selected financial data for the fiscal year ended June 30, 2024:

  • Revenue of $1,584.7 million increased 9.2% compared with the prior year.
  • Operating income was $217.1 million, compared with $168.2 million in the prior year; adjusted operating income was $308.8 million, compared with $287.6 million in the prior year.
  • Net income was $136.8 million, compared with $93.4 million in the prior year; adjusted net income was $201.8 million, compared with $192.2 million in the prior year.
  • Diluted earnings per share was $3.39, compared with $2.05 in the prior year; adjusted earnings per share was $5.01, compared with $4.21 in the prior year.
  • Adjusted EBITDA was $377.5 million, compared with $343.4 million in the prior year; adjusted EBITDA margin was 23.8%, compared with 23.7% in the prior year.

Business Highlights

  • Today, we announced the intention to expand into the Kansas City market with our 24th Chamberlain location designed to accommodate approximately 550 students, poised to address provider shortages in the area.
  • In July, Chamberlain welcomed students at its newly relocated Phoenix campus, featuring a modernized learning environment and expanded SIMCARE CENTER™, with location capacity of approximately 1,100 students. This hybrid campus is built to house our second Physician Assistant program location.
  • Chamberlain expanded its specialized nursing education Practice Ready. Specialty Focused.™ (PRSF) model through a partnership with the American Association of Critical-Care Nurses (AACN), offering an in-depth introduction to caring for acutely and critically ill patients and their families. The AACN offering joins other specializations in the PRSF model, including emergency nursing, nephrology, home healthcare and perioperative nursing.
  • Walden launched the first phase of its website redesign in July, offering students simplified navigation, comprehensive program information and admissions resources. The updates lay the foundation for further enhancements to Walden’s digital learning platform, with more planned throughout fiscal year 2025.
  • Adtalem is expanding its community impact in Barbados. Thirty registered Barbadian nurses will have the opportunity to pursue the Nurse Practitioner program at Chamberlain University following the signing of a Memorandum of Understanding (MOU). The MOU launches the first-ever Nurse Practitioners program in Barbados, which will commence in September. The Pan American Health Organization, regional office of the World Health Organization (PAHO/WHO) and Ross University School of Medicine have forged an alliance to strengthen health systems in Barbados and the Eastern Caribbean, enhancing the health workforce’s capacity to handle emergencies, disasters and non-communicable diseases.

Segment Highlights

Chamberlain

 

$ in millions

 

Three Months Ended

June 30,

Year Ended

June 30,

 

 

2024

2023

% Change

2024

2023

% Change

Revenue

 

$

167.0

$

144.5

15.6

%

$

633.5

$

571.0

10.9

%

Operating Income

 

$

40.5

$

35.7

13.5

%

$

137.8

$

134.7

2.3

%

Adj. Operating Income

 

$

40.5

$

35.7

13.5

%

$

137.8

$

135.5

1.7

%

Adj. EBITDA

 

$

47.3

$

41.1

15.1

%

$

166.2

$

157.5

5.5

%

Total Students (1)

 

 

36,750

 

33,284

10.4

%

 

 

 

  • Total student enrollment increased 10.4% compared with the prior year, driven by continued growth in pre-licensure and post-licensure nursing programs.

Walden

 

$ in millions

 

Three Months Ended

June 30,

 

Year Ended

June 30,

 

 

2024

2023

% Change

 

2024

2023

% Change

Revenue

 

$

156.3

$

138.0

13.3

%

 

$

595.3

$

533.7

 

11.5

%

Operating Income

 

$

30.1

$

9.8

206.4

%

 

$

77.2

$

35.9

 

115.1

%

Adj. Operating Income

 

$

37.4

$

32.2

16.2

%

 

$

130.5

$

110.4

 

18.3

%

Adj. EBITDA

 

$

41.1

$

35.3

16.6

%

 

$

146.8

$

123.7

 

18.7

%

Total Students (1)

 

 

41,845

 

37,582

11.3

%

 

 

 

 

  • Total student enrollment increased 11.3% compared with prior year, driven by growth in healthcare and non-healthcare programs.

Medical and Veterinary

 

$ in millions

 

Three Months Ended

June 30,

 

Year Ended

June 30,

 

 

2024

 

2023

 

% Change

 

2024

 

2023

 

% Change

Revenue

 

$

86.6

$

82.1

5.4

%

 

$

355.8

$

346.1

2.8

%

Operating Income

 

$

11.9

$

10.5

13.8

%

 

$

71.1

$

59.6

19.1

%

Adj. Operating Income

 

$

12.0

$

10.8

10.7

%

 

$

71.5

$

67.3

6.2

%

Adj. EBITDA

 

$

16.5

$

14.7

12.3

%

 

$

88.9

$

82.8

7.3

%

Total Students (1)

 

 

4,726

 

4,869

(2.9

)%

 

 

 

 

  • Total student enrollment decreased 2.9% compared with the prior year, driven by declines at medical.

Fiscal Year 2025 Outlook

Adtalem initiates guidance for fiscal year 2025, revenue in the range of $1,660 million to $1,700 million, approximately 5% to 7.5% growth year-over-year. Adjusted earnings per share to be in the range of $5.60 to $5.85, approximately 12% to 17% growth year-over-year.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its fiscal 2024 fourth quarter and fiscal year results today at 4:30 p.m. CT (5:30 p.m. ET).

The call can be accessed by dialing +1 877-407-6184 (U.S. participants) or +1 201-389-0877 (international participants) and stating “Adtalem earnings call” or by using conference ID: 13747739. 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: 13747739, or visit the Adtalem investor relations website.

About Adtalem Global Education

Adtalem Global Education is the leading provider of healthcare education in the U.S., shaping the future of healthcare by preparing a diverse workforce with high-quality academic programs. We innovate education pathways, align with industry needs and empower individuals to reach their full potential. Our commitment to excellence and inclusivity is reflected in our expansive network of institutions, serving over 80,000 students and supported by a strong community of over 300,000 alumni and nearly 10,000 dedicated employees. Discover more Adtalem.com for more information and follow us on LinkedIn, Instagram and Facebook.

Cautionary Disclosure Regarding 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 generally can be identified by the use of forward-looking terminology 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 risks 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.

(1)

Represents total students attending sessions during each institution’s most recent enrollment period in Q4 FY 2024 and Q4 FY 2023.

Adtalem Global Education Inc.

Consolidated Balance Sheets

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

June 30,

 

 

2024

 

2023

Assets:

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

219,306

 

$

272,194

Restricted cash

 

 

1,896

 

 

2,881

Accounts and financing receivables, net

 

 

126,833

 

 

102,749

Prepaid expenses and other current assets

 

 

70,050

 

 

102,473

Total current assets

 

 

418,085

 

 

480,297

Noncurrent assets:

 

 

 

 

 

 

Property and equipment, net

 

 

248,524

 

 

244,649

Operating lease assets

 

 

176,755

 

 

174,677

Deferred income taxes

 

 

49,088

 

 

56,694

Intangible assets, net

 

 

776,694

 

 

812,338

Goodwill

 

 

961,262

 

 

961,262

Other assets, net

 

 

103,184

 

 

80,624

Total noncurrent assets

 

 

2,323,332

 

 

2,330,244

Total assets

 

$

2,741,417

 

$

2,810,541

 

 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

102,626

 

$

81,812

Accrued payroll and benefits

 

 

71,373

 

 

52,041

Accrued liabilities

 

 

96,957

 

 

105,806

Deferred revenue

 

 

185,272

 

 

153,871

Current operating lease liabilities

 

 

31,429

 

 

37,673

Total current liabilities

 

 

487,657

 

 

431,203

Noncurrent liabilities:

 

 

 

 

 

 

Long-term debt

 

 

648,712

 

 

695,077

Long-term operating lease liabilities

 

 

167,712

 

 

163,441

Deferred income taxes

 

 

29,526

 

 

26,068

Other liabilities

 

 

38,675

 

 

37,416

Total noncurrent liabilities

 

 

884,625

 

 

922,002

Total liabilities

 

 

1,372,282

 

 

1,353,205

Commitments and contingencies

 

 

 

 

 

 

Total shareholders' equity

 

 

1,369,135

 

 

1,457,336

Total liabilities and shareholders' equity

 

$

2,741,417

 

$

2,810,541

Adtalem Global Education Inc.

Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

Revenue

 

$

409,907

 

 

$

364,641

 

 

$

1,584,652

 

 

$

1,450,826

 

Operating cost and expense:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of educational services

 

 

182,540

 

 

 

163,718

 

 

 

698,548

 

 

 

648,486

 

Student services and administrative expense

 

 

154,597

 

 

 

153,296

 

 

 

632,965

 

 

 

586,009

 

Restructuring expense

 

 

653

 

 

 

1,111

 

 

 

1,870

 

 

 

18,817

 

Business acquisition and integration expense

 

 

3,594

 

 

 

6,959

 

 

 

34,215

 

 

 

42,661

 

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

 

(13,317

)

Total operating cost and expense

 

 

341,384

 

 

 

325,084

 

 

 

1,367,598

 

 

 

1,282,656

 

Operating income

 

 

68,523

 

 

 

39,557

 

 

 

217,054

 

 

 

168,170

 

Interest expense

 

 

(14,749

)

 

 

(15,294

)

 

 

(63,659

)

 

 

(63,100

)

Other income, net

 

 

1,894

 

 

 

3,664

 

 

 

10,542

 

 

 

6,965

 

Income from continuing operations before income taxes

 

 

55,668

 

 

 

27,927

 

 

 

163,937

 

 

 

112,035

 

Provision for income taxes

 

 

(5,068

)

 

 

(4,337

)

 

 

(26,224

)

 

 

(10,283

)

Income from continuing operations

 

 

50,600

 

 

 

23,550

 

 

 

137,713

 

 

 

101,752

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations before income taxes

 

 

(1,091

)

 

 

(1,730

)

 

 

(762

)

 

 

(8,464

)

Loss on disposal of discontinued operations before income taxes

 

 

 

 

 

 

 

 

 

 

 

(3,576

)

(Provision for) benefit from income taxes

 

 

(90

)

 

 

424

 

 

 

(174

)

 

 

3,646

 

Loss from discontinued operations

 

 

(1,181

)

 

 

(1,306

)

 

 

(936

)

 

 

(8,394

)

Net income

 

$

49,419

 

 

$

22,244

 

 

$

136,777

 

 

$

93,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.34

 

 

$

0.54

 

 

$

3.49

 

 

$

2.27

 

Discontinued operations

 

$

(0.03

)

 

$

(0.03

)

 

$

(0.02

)

 

$

(0.19

)

Total basic earnings per share

 

$

1.31

 

 

$

0.51

 

 

$

3.47

 

 

$

2.08

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.31

 

 

$

0.53

 

 

$

3.42

 

 

$

2.23

 

Discontinued operations

 

$

(0.03

)

 

$

(0.03

)

 

$

(0.02

)

 

$

(0.18

)

Total diluted earnings per share

 

$

1.28

 

 

$

0.50

 

 

$

3.39

 

 

$

2.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic shares

 

 

37,642

 

 

 

43,292

 

 

 

39,413

 

 

 

44,781

 

Diluted shares

 

 

38,595

 

 

 

44,129

 

 

 

40,307

 

 

 

45,600

 

Adtalem Global Education Inc.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

Year Ended June 30,

 

 

2024

 

2023

Operating activities:

 

 

 

 

 

 

Net income

 

$

136,777

 

 

$

93,358

 

Loss from discontinued operations

 

 

936

 

 

 

8,394

 

Income from continuing operations

 

 

137,713

 

 

 

101,752

 

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

 

 

 

 

 

 

Stock-based compensation

 

 

25,947

 

 

 

14,299

 

Amortization and impairments to operating lease assets

 

 

32,641

 

 

 

48,470

 

Depreciation

 

 

39,676

 

 

 

41,376

 

Amortization of acquired intangible assets

 

 

35,644

 

 

 

61,239

 

Amortization and write-off of debt discount and issuance costs

 

 

5,663

 

 

 

9,129

 

Provision for bad debts

 

 

53,175

 

 

 

32,999

 

Deferred income taxes

 

 

11,073

 

 

 

(5,087

)

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

 

 

466

 

 

 

3,999

 

Gain on extinguishment of debt

 

 

 

 

 

(71

)

(Gain) loss on investments

 

 

(1,365

)

 

 

3,689

 

Gain on sale of assets

 

 

 

 

 

(13,317

)

Unrealized loss on assets held for sale

 

 

647

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts and financing receivables

 

 

(76,355

)

 

 

(56,309

)

Prepaid expenses and other current assets

 

 

(8,781

)

 

 

9,324

 

Cloud computing implementation assets

 

 

(27,154

)

 

 

(13,873

)

Accounts payable

 

 

18,330

 

 

 

24,744

 

Accrued payroll and benefits

 

 

19,422

 

 

 

(15,683

)

Accrued liabilities

 

 

27,422

 

 

 

241

 

Deferred revenue

 

 

40,622

 

 

 

5,807

 

Operating lease liabilities

 

 

(36,692

)

 

 

(59,188

)

Other assets and liabilities

 

 

(9,727

)

 

 

1,150

 

Net cash provided by operating activities-continuing operations

 

 

288,367

 

 

 

194,690

 

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

 

 

7,408

 

 

 

(2,776

)

Net cash provided by operating activities

 

 

295,775

 

 

 

191,914

 

Investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(48,893

)

 

 

(26,014

)

Proceeds from sales of marketable securities

 

 

1,732

 

 

 

7,635

 

Purchases of marketable securities

 

 

(689

)

 

 

(1,508

)

Proceeds from note receivable related to property sold

 

 

 

 

 

46,800

 

Net cash (used in) provided by investing activities-continuing operations

 

 

(47,850

)

 

 

26,913

 

Payment for working capital adjustment for sale of business

 

 

 

 

 

(3,174

)

Net cash (used in) provided by investing activities

 

 

(47,850

)

 

 

23,739

 

Financing activities:

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

17,089

 

 

 

2,625

 

Employee taxes paid on withholding shares

 

 

(7,731

)

 

 

(4,592

)

Proceeds from stock issued under Colleague Stock Purchase Plan

 

 

810

 

 

 

608

 

Repurchases of common stock for treasury

 

 

(261,966

)

 

 

(123,133

)

Payment on equity forward contract

 

 

 

 

 

(13,162

)

Proceeds from issuance of long-term debt

 

 

1,896

 

 

 

 

Repayments of long-term debt

 

 

(51,896

)

 

 

(150,861

)

Net cash used in financing activities

 

 

(301,798

)

 

 

(288,515

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(53,873

)

 

 

(72,862

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

275,075

 

 

 

347,937

 

Cash, cash equivalents and restricted cash at end of period

 

$

221,202

 

 

$

275,075

 

Adtalem Global Education Inc.

Segment Information

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

June 30,

 

June 30,

 

 

 

 

 

 

 

 

Increase/(Decrease)

 

 

 

 

 

 

 

Increase/(Decrease)

 

 

 

2024

 

2023

 

$

 

%

 

2024

 

2023

 

$

 

%

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chamberlain

 

$

167,035

 

 

$

144,496

 

 

$

22,539

 

 

15.6

%

 

$

633,522

 

 

$

571,034

 

 

$

62,488

 

10.9

%

Walden

 

 

156,309

 

 

 

138,010

 

 

 

18,299

 

 

13.3

%

 

 

595,332

 

 

 

533,725

 

 

 

61,607

 

11.5

%

Medical and Veterinary

 

 

86,563

 

 

 

82,135

 

 

 

4,428

 

 

5.4

%

 

 

355,798

 

 

 

346,067

 

 

 

9,731

 

2.8

%

Total consolidated revenue

 

$

409,907

 

 

$

364,641

 

 

$

45,266

 

 

12.4

%

 

$

1,584,652

 

 

$

1,450,826

 

 

$

133,826

 

9.2

%

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chamberlain

 

$

40,487

 

 

$

35,683

 

 

$

4,804

 

 

13.5

%

 

$

137,800

 

 

$

134,685

 

 

$

3,115

 

2.3

%

Walden

 

 

30,058

 

 

 

9,809

 

 

 

20,249

 

 

206.4

%

 

 

77,179

 

 

 

35,880

 

 

 

41,299

 

115.1

%

Medical and Veterinary

 

 

11,923

 

 

 

10,477

 

 

 

1,446

 

 

13.8

%

 

 

71,065

 

 

 

59,649

 

 

 

11,416

 

19.1

%

Home Office

 

 

(13,945

)

 

 

(16,412

)

 

 

2,467

 

 

15.0

%

 

 

(68,990

)

 

 

(62,044

)

 

 

(6,946

)

(11.2

)%

Total consolidated operating income

 

$

68,523

 

 

$

39,557

 

 

$

28,966

 

 

73.2

%

 

$

217,054

 

 

$

168,170

 

 

$

48,884

 

29.1

%

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 acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.

Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, litigation reserve, loss on assets held for sale, debt modification costs, 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 loss from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, business acquisition and integration expense, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for 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 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.
  • Amortization of acquired intangible assets.
  • Amortization of cloud computing implementation assets.
  • Gain on sale of Adtalem’s Chicago, Illinois, campus facility.
  • Write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, reserves related to significant litigation, impairment of an equity investment, loss on assets held for sale related to a fair value write-down on assets, and debt modification costs related to refinancing our Term Loan B loan.
  • Tax benefit due to change in valuation allowance.
  • Tax benefit due to change in unrecognized tax benefits.
  • Loss from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, a loss on sale of ACAMS, Becker, and OCL for working capital adjustments to the initial sales prices and a tax return to provision adjustment, and the earn-outs we received.

Adtalem Global Education Inc.

Non-GAAP Operating Income by Segment

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

June 30,

 

June 30,

 

 

 

 

 

 

 

 

Increase/(Decrease)

 

 

 

 

 

 

 

Increase/(Decrease)

 

 

2024

 

2023

 

$

 

%

 

2024

 

2023

 

$

 

%

Chamberlain:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

40,487

 

$

35,683

 

$

4,804

 

 

13.5

%

 

$

137,800

 

$

134,685

 

$

3,115

 

 

2.3

%

Restructuring expense

 

 

 

 

 

 

 

 

 

 

 

 

 

818

 

 

(818

)

 

 

Adjusted operating income (non-GAAP)

 

$

40,487

 

$

35,683

 

$

4,804

 

 

13.5

%

 

$

137,800

 

$

135,503

 

$

2,297

 

 

1.7

%

Operating margin (GAAP)

 

 

24.2

%

 

24.7

%

 

 

 

 

 

 

21.8

%

 

23.6

%

 

 

 

 

Operating margin (non-GAAP)

 

 

24.2

%

 

24.7

%

 

 

 

 

 

 

21.8

%

 

23.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walden:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

30,058

 

$

9,809

 

$

20,249

 

 

206.4

%

 

$

77,179

 

$

35,880

 

$

41,299

 

 

115.1

%

Restructuring expense

 

 

 

 

71

 

 

(71

)

 

 

 

 

(776

)

 

3,245

 

 

(4,021

)

 

 

Amortization of acquired intangible assets

 

 

7,348

 

 

12,303

 

 

(4,955

)

 

 

 

 

35,644

 

 

61,239

 

 

(25,595

)

 

 

Litigation reserve

 

 

 

 

10,000

 

 

(10,000

)

 

 

 

 

18,500

 

 

10,000

 

 

8,500

 

 

 

Adjusted operating income (non-GAAP)

 

$

37,406

 

$

32,183

 

$

5,223

 

 

16.2

%

 

$

130,547

 

$

110,364

 

$

20,183

 

 

18.3

%

Operating margin (GAAP)

 

 

19.2

%

 

7.1

%

 

 

 

 

 

 

13.0

%

 

6.7

%

 

 

 

 

Operating margin (non-GAAP)

 

 

23.9

%

 

23.3

%

 

 

 

 

 

 

21.9

%

 

20.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical and Veterinary:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

11,923

 

$

10,477

 

$

1,446

 

 

13.8

%

 

$

71,065

 

$

59,649

 

$

11,416

 

 

19.1

%

Restructuring expense

 

 

63

 

 

353

 

 

(290

)

 

 

 

 

442

 

 

7,687

 

 

(7,245

)

 

 

Adjusted operating income (non-GAAP)

 

$

11,986

 

$

10,830

 

$

1,156

 

 

10.7

%

 

$

71,507

 

$

67,336

 

$

4,171

 

 

6.2

%

Operating margin (GAAP)

 

 

13.8

%

 

12.8

%

 

 

 

 

 

 

20.0

%

 

17.2

%

 

 

 

 

Operating margin (non-GAAP)

 

 

13.8

%

 

13.2

%

 

 

 

 

 

 

20.1

%

 

19.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Office:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss (GAAP)

 

$

(13,945

)

$

(16,412

)

$

2,467

 

 

15.0

%

 

$

(68,990

)

$

(62,044

)

$

(6,946

)

 

(11.2

)%

Restructuring expense

 

 

590

 

 

687

 

 

(97

)

 

 

 

 

2,204

 

 

7,067

 

 

(4,863

)

 

 

Business acquisition and integration expense

 

 

3,594

 

 

6,959

 

 

(3,365

)

 

 

 

 

34,215

 

 

42,661

 

 

(8,446

)

 

 

Loss on assets held for sale

 

 

 

 

 

 

 

 

 

 

 

647

 

 

 

 

647

 

 

 

Debt modification costs

 

 

 

 

 

 

 

 

 

 

 

848

 

 

 

 

848

 

 

 

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,317

)

 

13,317

 

 

 

Adjusted operating loss (non-GAAP)

 

$

(9,761

)

$

(8,766

)

$

(995

)

 

(11.4

)%

 

$

(31,076

)

$

(25,633

)

$

(5,443

)

 

(21.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adtalem Global Education:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

 

$

68,523

 

$

39,557

 

$

28,966

 

 

73.2

%

 

$

217,054

 

$

168,170

 

$

48,884

 

 

29.1

%

Restructuring expense

 

 

653

 

 

1,111

 

 

(458

)

 

 

 

 

1,870

 

 

18,817

 

 

(16,947

)

 

 

Business acquisition and integration expense

 

 

3,594

 

 

6,959

 

 

(3,365

)

 

 

 

 

34,215

 

 

42,661

 

 

(8,446

)

 

 

Amortization of acquired intangible assets

 

 

7,348

 

 

12,303

 

 

(4,955

)

 

 

 

 

35,644

 

 

61,239

 

 

(25,595

)

 

 

Litigation reserve

 

 

 

 

10,000

 

 

(10,000

)

 

 

 

 

18,500

 

 

10,000

 

 

8,500

 

 

 

Loss on assets held for sale

 

 

 

 

 

 

 

 

 

 

 

647

 

 

 

 

647

 

 

 

Debt modification costs

 

 

 

 

 

 

 

 

 

 

 

848

 

 

 

 

848

 

 

 

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,317

)

 

13,317

 

 

 

Adjusted operating income (non-GAAP)

 

$

80,118

 

$

69,930

 

$

10,188

 

 

14.6

%

 

$

308,778

 

$

287,570

 

$

21,208

 

 

7.4

%

Operating margin (GAAP)

 

 

16.7

%

 

10.8

%

 

 

 

 

 

 

13.7

%

 

11.6

%

 

 

 

 

Operating margin (non-GAAP)

 

 

19.5

%

 

19.2

%

 

 

 

 

 

 

19.5

%

 

19.8

%

 

 

 

 

Adtalem Global Education Inc.

Non-GAAP Adjusted EBITDA by Segment

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Year Ended

 

June 30,

June 30,

 

 

 

 

 

Increase/(Decrease)

 

 

 

 

Increase/(Decrease)

 

2024

 

2023

 

$

 

%

 

2024

 

2023

 

$

 

%

Chamberlain:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

$

40,487

 

$

35,683

 

$

4,804

 

13.5

%

$

137,800

 

$

134,685

 

$

3,115

 

2.3

%

Restructuring expense

 

 

 

 

 

 

 

 

 

 

818

 

 

(818

)

 

Depreciation

 

4,912

 

 

4,240

 

 

672

 

 

 

18,752

 

 

17,175

 

 

1,577

 

 

Amortization of cloud computing implementation assets

 

382

 

 

39

 

 

343

 

 

 

1,332

 

 

89

 

 

1,243

 

 

Stock-based compensation

 

1,512

 

 

1,118

 

 

394

 

 

 

8,303

 

 

4,719

 

 

3,584

 

 

Adjusted EBITDA (non-GAAP)

$

47,293

 

$

41,080

 

$

6,213

 

15.1

%

$

166,187

 

$

157,486

 

$

8,701

 

5.5

%

Adjusted EBITDA margin (non-GAAP)

 

28.3

%

 

28.4

%

 

 

 

 

26.2

%

 

27.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walden:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

$

30,058

 

$

9,809

 

$

20,249

 

206.4

%

$

77,179

 

$

35,880

 

$

41,299

 

115.1

%

Restructuring expense

 

 

 

71

 

 

(71

)

 

 

(776

)

 

3,245

 

 

(4,021

)

 

Amortization of acquired intangible assets

 

7,348

 

 

12,303

 

 

(4,955

)

 

 

35,644

 

 

61,239

 

 

(25,595

)

 

Litigation reserve

 

 

 

10,000

 

 

(10,000

)

 

 

18,500

 

 

10,000

 

 

8,500

 

 

Depreciation

 

1,654

 

 

2,157

 

 

(503

)

 

 

7,389

 

 

9,419

 

 

(2,030

)

 

Amortization of cloud computing implementation assets

 

385

 

 

32

 

 

353

 

 

 

1,331

 

 

73

 

 

1,258

 

 

Stock-based compensation

 

1,703

 

 

916

 

 

787

 

 

 

7,525

 

 

3,861

 

 

3,664

 

 

Adjusted EBITDA (non-GAAP)

$

41,148

 

$

35,288

 

$

5,860

 

16.6

%

$

146,792

 

$

123,717

 

$

23,075

 

18.7

%

Adjusted EBITDA margin (non-GAAP)

 

26.3

%

 

25.6

%

 

 

 

 

24.7

%

 

23.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical and Veterinary:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (GAAP)

$

11,923

 

$

10,477

 

$

1,446

 

13.8

%

$

71,065

 

$

59,649

 

$

11,416

 

19.1

%

Restructuring expense

 

63

 

 

353

 

 

(290

)

 

 

442

 

 

7,687

 

 

(7,245

)

 

Depreciation

 

3,086

 

 

3,092

 

 

(6

)

 

 

11,983

 

 

12,438

 

 

(455

)

 

Amortization of cloud computing implementation assets

 

138

 

 

16

 

 

122

 

 

 

469

 

 

37

 

 

432

 

 

Stock-based compensation

 

1,243

 

 

712

 

 

531

 

 

 

4,930

 

 

3,003

 

 

1,927

 

 

Adjusted EBITDA (non-GAAP)

$

16,453

 

$

14,650

 

$

1,803

 

12.3

%

$

88,889

 

$

82,814

 

$

6,075

 

7.3

%

Adjusted EBITDA margin (non-GAAP)

 

19.0

%

 

17.8

%

 

 

 

 

25.0

%

 

23.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Office:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss (GAAP)

$

(13,945

)

$

(16,412

)

$

2,467

 

15.0

%

$

(68,990

)

$

(62,044

)

$

(6,946

)

(11.2

)%

Restructuring expense

 

590

 

 

687

 

 

(97

)

 

 

2,204

 

 

7,067

 

 

(4,863

)

 

Business acquisition and integration expense

 

3,594

 

 

6,959

 

 

(3,365

)

 

 

34,215

 

 

42,661

 

 

(8,446

)

 

Loss on assets held for sale

 

 

 

 

 

 

 

 

647

 

 

 

 

647

 

 

Debt modification costs

 

 

 

 

 

 

 

 

848

 

 

 

 

848

 

 

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

(13,317

)

 

13,317

 

 

Depreciation

 

145

 

 

381

 

 

(236

)

 

 

1,552

 

 

2,344

 

 

(792

)

 

Stock-based compensation

 

2,084

 

 

645

 

 

1,439

 

 

 

5,189

 

 

2,716

 

 

2,473

 

 

Adjusted EBITDA (non-GAAP)

$

(7,532

)

$

(7,740

)

$

208

 

2.7

%

$

(24,335

)

$

(20,573

)

$

(3,762

)

(18.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adtalem Global Education:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

$

49,419

 

$

22,244

 

$

27,175

 

122.2

%

$

136,777

 

$

93,358

 

$

43,419

 

46.5

%

Loss from discontinued operations

 

1,181

 

 

1,306

 

 

(125

)

 

 

936

 

 

8,394

 

 

(7,458

)

 

Interest expense

 

14,749

 

 

15,294

 

 

(545

)

 

 

63,659

 

 

63,100

 

 

559

 

 

Other income, net

 

(1,894

)

 

(3,664

)

 

1,770

 

 

 

(10,542

)

 

(6,965

)

 

(3,577

)

 

Provision for income taxes

 

5,068

 

 

4,377

 

 

691

 

 

 

26,224

 

 

10,283

 

 

15,941

 

 

Operating income (GAAP)

 

68,523

 

 

39,557

 

 

28,966

 

 

 

217,054

 

 

168,170

 

 

48,884

 

 

Depreciation and amortization

 

18,050

 

 

22,260

 

 

(4,210

)

 

 

78,453

 

 

102,814

 

 

(24,362

)

 

Stock-based compensation

 

6,542

 

 

3,391

 

 

3,151

 

 

 

25,947

 

 

14,299

 

 

11,648

 

 

Restructuring expense

 

653

 

 

1,111

 

 

(458

)

 

 

1,870

 

 

18,817

 

 

(16,947

)

 

Business acquisition and integration expense

 

3,594

 

 

6,959

 

 

(3,365

)

 

 

34,215

 

 

42,661

 

 

(8,446

)

 

Litigation reserve

 

 

 

10,000

 

 

(10,000

)

 

 

18,500

 

 

10,000

 

 

8,500

 

 

Loss on assets held for sale

 

 

 

 

 

 

 

 

647

 

 

 

 

647

 

 

Debt modification costs

 

 

 

 

 

 

 

 

848

 

 

 

 

848

 

 

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

(13,317

)

 

13,317

 

 

Adjusted EBITDA (non-GAAP)

$

97,362

 

$

83,278

 

$

14,084

 

16.9

%

$

377,533

 

$

343,444

 

$

34,089

 

9.9

%

Adjusted EBITDA margin (non-GAAP)

 

23.8

%

 

22.8

%

 

 

 

 

23.8

%

 

23.7

%

 

 

 

Adtalem Global Education Inc.

Non-GAAP Earnings Disclosure

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

Net income (GAAP)

 

$

49,419

 

 

$

22,244

 

 

$

136,777

 

 

$

93,358

 

Restructuring expense

 

 

653

 

 

 

1,111

 

 

 

1,870

 

 

 

18,817

 

Business acquisition and integration expense

 

 

3,594

 

 

 

6,959

 

 

 

34,215

 

 

 

42,661

 

Amortization of acquired intangible assets

 

 

7,348

 

 

 

12,303

 

 

 

35,644

 

 

 

61,239

 

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

 

(13,317

)

Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and debt modification costs

 

 

 

 

 

10,000

 

 

 

21,108

 

 

 

19,226

 

Tax benefit due to change in valuation allowance

 

 

 

 

 

 

 

 

 

 

 

(6,184

)

Tax benefit due to change in unrecognized tax benefits

 

 

(5,657

)

 

 

 

 

 

(5,657

)

 

 

 

Income tax impact on non-GAAP adjustments (1)

 

 

(3,749

)

 

 

(8,656

)

 

 

(23,104

)

 

 

(31,997

)

Loss from discontinued operations

 

 

1,181

 

 

 

1,306

 

 

 

936

 

 

 

8,394

 

Adjusted net income (non-GAAP)

 

$

52,789

 

 

$

45,267

 

 

$

201,789

 

 

$

192,197

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

Diluted earnings per share (GAAP)

 

$

1.28

 

 

$

0.50

 

 

$

3.39

 

 

$

2.05

 

Effect on diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring expense

 

 

0.02

 

 

 

0.03

 

 

 

0.05

 

 

 

0.41

 

Business acquisition and integration expense

 

 

0.09

 

 

 

0.16

 

 

 

0.85

 

 

 

0.94

 

Amortization of acquired intangible assets

 

 

0.19

 

 

 

0.28

 

 

 

0.88

 

 

 

1.34

 

Gain on sale of assets

 

 

 

 

 

 

 

 

 

 

 

(0.29

)

Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and debt modification costs

 

 

 

 

 

0.23

 

 

 

0.52

 

 

 

0.42

 

Tax benefit due to change in valuation allowance

 

 

 

 

 

 

 

 

 

 

 

(0.14

)

Tax benefit due to change in unrecognized tax benefits

 

 

(0.15

)

 

 

 

 

 

(0.14

)

 

 

 

Income tax impact on non-GAAP adjustments (1)

 

 

(0.10

)

 

 

(0.20

)

 

 

(0.57

)

 

 

(0.70

)

Loss from discontinued operations

 

 

0.03

 

 

 

0.03

 

 

 

0.02

 

 

 

0.18

 

Adjusted earnings per share (non-GAAP)

 

$

1.37

 

 

$

1.03

 

 

$

5.01

 

 

$

4.21

 

Diluted shares used in non-GAAP EPS calculation

 

 

38,595

 

 

 

44,129

 

 

 

40,307

 

 

 

45,600

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

FY23

 

FY24

 

FY24

 

FY24

 

FY24

 

 

Q4

 

Q1

 

Q2

 

Q3

 

Q4

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

 

$

194,690

 

 

$

189,501

 

 

$

227,600

 

 

$

276,843

 

 

$

288,367

 

Capital expenditures

 

 

(26,014

)

 

 

(31,070

)

 

 

(38,713

)

 

 

(44,137

)

 

 

(48,893

)

Free cash flow (non-GAAP)

 

$

168,676

 

 

$

158,431

 

 

$

188,887

 

 

$

232,706

 

 

$

239,474

 

Adtalem Global Education Inc.

Non-GAAP Net Leverage Disclosure

(unaudited)

(in thousands)

 

 

 

 

 

 

Year Ended

 

 

June 30, 2024

Adtalem Global Education:

 

 

 

Net income (GAAP)

 

$

136,777

 

Net loss from discontinued operations

 

 

936

 

Interest expense

 

 

63,659

 

Other income, net

 

 

(10,542

)

Provision for income taxes

 

 

26,224

 

Depreciation and amortization

 

 

78,452

 

Stock-based compensation

 

 

25,947

 

Restructuring expense

 

 

1,870

 

Business acquisition and integration expense

 

 

34,215

 

Litigation reserve

 

 

18,500

 

Loss on assets held for sale

 

 

647

 

Debt modification costs

 

 

848

 

Adjusted EBITDA (non-GAAP)

 

$

377,533

 

 

 

 

 

 

 

June 30, 2024

Long-term debt

 

$

658,283

 

Less: Cash and cash equivalents

 

 

(219,306

)

Net debt (non-GAAP)

 

$

438,977

 

 

 

 

 

Net leverage (non-GAAP)

 

 

1.2 x