Results ahead of expectations
Continued improvement in total enrollment
trends
FY 2023 diluted earnings per share $2.05;
Adjusted EPS $4.21, YoY growth of 35%
Raising lower end of Adjusted EPS guidance for
FY 2024
Fourth quarter and full year highlights
- Fourth quarter revenue $364.6 million, up 1.1% and full year
revenue $1,450.8 million, up 5.0% year-over-year
- Fourth quarter total student enrollment 75,735, down 2.5%
year-over-year, a quarterly sequential improvement of over 60 basis
points
- Chamberlain University and Walden University strong demand led
by nursing programs in the fourth quarter
- Achieved two-year $60 million cost synergy program
- Full year GAAP net income $93.4 million, and full year adjusted
EBITDA $343.4 million, up 4.5% year-over-year
Full year capital allocation
- Repurchased $127 million of shares against $300 million Board
authorized share repurchase program in addition to settling the
remaining $13 million against the March 2022 announced $150 million
accelerated share repurchase program in FY 2023
- Gross debt reduced by $151 million in FY 2023, net leverage
1.3x
Fiscal year 2024 guidance
- Revenue $1,460 million to $1,520 million
- Adjusted earnings per share $4.20 to $4.40
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 fourth quarter and full
year fiscal 2023 ended June 30, 2023.
“I am encouraged by the results we delivered this year. Adtalem
is a systemically important component of the U.S. healthcare
system, delivering day one ready clinicians at scale. Our renewed
focus on operational excellence is strengthening our foundation for
the future. And our value proposition as a purpose driven and
mission led organization is more relevant than ever; resonating
with students, faculty, and stakeholders alike,” said Steve Beard,
president, and chief executive officer of Adtalem Global
Education.
Beard continued, “Our strong fourth quarter results bode well
for fiscal 2024, with improving enrollment trends and the delivery
of our two-year cost synergy program. We have conviction in the
efficacy of our Growth with Purpose strategy and the confidence to
continue to invest in expanding access to high quality academic
programs that lead to rewarding careers, and collectively serve to
address workforce shortages and inequity in healthcare
delivery.”
Financial Highlights
Selected financial data for the three months ended June 30,
2023:
- Revenue of $364.6 million increased 1.1% compared with the
prior year.
- Operating income was $39.6 million, compared with $46.0 million
in the prior year; adjusted operating income was $69.9 million,
compared with $89.6 million in the prior year.
- Net income was $22.2 million, compared with $6.7 million in the
prior year; adjusted net income was $45.3 million, compared with
$58.6 million in the prior year.
- Diluted earnings per share was $0.50, compared with $0.15 in
the prior year; adjusted earnings per share was $1.03, compared
with $1.28 in the prior year.
- Adjusted EBITDA was $83.3 million, compared with $104.7 million
in the prior year; adjusted EBITDA margin was 22.8% compared with
29.0% in the prior year.
Selected financial data for the full year ended June 30,
2023:
- Revenue of $1,450.8 million increased 5.0% compared with the
prior year.
- Operating income was $168.2 million, compared with $76.7
million in the prior year; adjusted operating income was $287.6
million, compared with $267.6 million in the prior year. Operating
margin improved to 11.6% from 5.6% and adjusted operating margin
increased to 19.8% from 19.4% in the prior year.
- Net income was $93.4 million, compared with $311.0 million in
the prior year; adjusted net income was $192.2 million, an increase
of 26.4% compared with $152.0 million in the prior year.
- Diluted earnings per share decreased to $2.05 from $6.43 in the
prior year; adjusted earnings per share increased to $4.21, up
35.4% compared with $3.11 in the prior year.
- Adjusted EBITDA was $343.4 million, an increase of 4.5%
compared with $328.6 million in the prior year; adjusted EBITDA
margin was 23.7% compared with 23.8% in the prior year.
Business Highlights
- Adtalem’s medical and veterinary schools graduated more than
1,400 students at their May 2023 commencement. Medical students
from 44 states and 22 countries and veterinary students from 44
states and 5 countries, 27% of which identified as underrepresented
minorities in medicine (by race or ethnicity), were amongst the
graduating class.
- Chamberlain University continues expanding access and solving
for critical nursing shortages, opening its second Georgia campus
in Stockbridge, outside of Atlanta, with students starting in
September 2023. Stockbridge campus, at capacity, will be able to
serve as many as 600 students, including up to 200 who need the
flexibility of an evening-and-weekend program.
- As a pioneer in online learning, Walden University continues to
pave the way, recently being recognized by the United States
Distance Learning Association (USDLA) for International Distance
Learning Awards in the Trendsetter, Research, and Teaching/Learning
categories for 2023.
Segment Highlights
Chamberlain
$ in millions
Three Months Ended
June 30,
Year Ended
June 30,
2023
2022
% Change
2023
2022
% Change
Revenue
$
144.5
$
140.2
3.0
%
$
571.0
$
557.5
2.4
%
Operating Income
$
35.7
$
41.1
(13.2
)%
$
134.7
$
124.4
8.3
%
Adj. Operating Income
$
35.7
$
41.7
(14.4
)%
$
135.5
$
127.3
6.5
%
Adj. EBITDA
$
41.1
$
47.8
(14.1
)%
$
157.5
$
152.5
3.3
%
Total Students (1)
33,284
32,891
1.2
%
- Total student enrollment increased 1.2% compared with the prior
year, driven by continued growth in pre-licensure and
post-licensure nursing programs as well as higher persistence.
Walden
$ in millions
Three Months Ended
June 30,
Year Ended
June 30,
2023
2022
% Change
2023
2022
% Change
Revenue
$
138.0
$
137.1
0.7
%
$
533.7
$
485.4
10.0
%
Operating Income
$
9.8
$
12.4
(21.2
)%
$
35.9
$
(5.3
)
NM
Adj. Operating Income
$
32.2
$
35.8
(10.1
)%
$
110.4
$
104.6
5.5
%
Adj. EBITDA
$
35.3
$
39.0
(9.4
)%
$
123.7
$
116.9
5.9
%
Total Students (1)
37,582
39,470
(4.8
)%
- Total student enrollment decreased 4.8% 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. Elimination of off-cycle start dates adversely
impacted year-over-year total enrollment growth by 2.4%.
Medical and Veterinary
$ in millions
Three Months Ended
June 30,
Year Ended
June 30,
2023
2022
% Change
2023
2022
% Change
Revenue
$
82.1
$
83.4
(1.5
)%
$
346.1
$
338.9
2.1
%
Operating Income
$
10.5
$
14.0
(24.9
)%
$
59.6
$
59.4
0.5
%
Adj. Operating Income
$
10.8
$
19.0
(43.0
)%
$
67.3
$
69.1
(2.6
)%
Adj. EBITDA
$
14.7
$
23.3
(37.1
)%
$
82.8
$
86.9
(4.7
)%
Total Students (1)
4,869
5,304
(8.2
)%
- Total student enrollment decreased 8.2% compared with the prior
year, primarily due to medical programs.
(1)
Represents total students attending
sessions during each institution’s most recent enrollment period in
Q4 FY 2023 and Q4 FY 2022
Fiscal Year 2024 Outlook
Adtalem guidance for fiscal year 2024, reaffirms revenue in the
range of $1,460 million to $1,520 million, and raises the low end
of our adjusted earnings per share by 5 cents to be in the range of
$4.20 to $4.40.
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.
Conference Call and Webcast Information
Adtalem will hold a conference call to discuss its fiscal 2023
fourth quarter and full year results today at 4:00 p.m. CDT (5:00
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: 13739937. 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: 13739937, or visit the Adtalem
investor relations website.
About Adtalem Global Education
Adtalem Global Education (NYSE: ATGE) is a national leader in
post-secondary education and leading provider of professional
talent to the healthcare industry. With a dedicated focus on
driving strong outcomes that increase workforce preparedness,
Adtalem empowers a diverse learner population to achieve their
goals and make inspiring contributions to their communities.
Adtalem is the parent organization of American University of the
Caribbean School of Medicine, Chamberlain University, Ross
University School of Medicine, Ross University School of Veterinary
Medicine and Walden University. Adtalem’s family of institutions
has more than 300,000 alumni and nearly 10,000 employees. Adtalem
was named one of America’s Most Responsible Companies in 2021 and
2023 by Newsweek and Statista, and one of America’s Best Employers
for Diversity in 2021 and 2022 by Forbes and Statista. Visit
Adtalem.com for more information and follow on Twitter and
LinkedIn.
Forward-Looking Statements
Certain statements contained in this release are forward-looking
statements as defined in the Private Securities Litigation Reform
Act of 1995. Forward-looking statements provide current
expectations of future events based on certain assumptions and
include any statement that does not directly relate to any
historical or current fact, which includes statements regarding
Adtalem’s future growth. Forward-looking statements can also be
identified by words such as “future,” “believe,” “expect,”
“anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,”
“could,” “can,” “continue,” “preliminary,” “range,” and similar
terms. These forward-looking statements are subject to risk and
uncertainties that could cause actual results to differ materially
from those described in the statements. These risk and
uncertainties include the risk factors described in Item 1A. “Risk
Factors” of our most recent Annual Report on Form 10-K filed with
the Securities and Exchange Commission (SEC) and our other filings
with the SEC. These forward-looking statements are based on
information available to us as of the date any such statements are
made, and Adtalem assumes no obligation to publicly update or
revise its forward-looking statements even if experience or future
changes make it clear that any projected results expressed or
implied therein will not be realized, except as required by
law.
Adtalem Global Education
Inc.
Consolidated Balance
Sheets
(unaudited)
(in thousands, except par
value)
June 30,
2023
2022
Assets:
Current assets:
Cash and cash equivalents
$
273,689
$
346,973
Restricted cash
1,386
964
Accounts receivable, net
102,749
81,635
Prepaid expenses and other current
assets
100,715
127,532
Total current assets
478,539
557,104
Noncurrent assets:
Property and equipment, net
258,522
289,926
Operating lease assets
174,677
177,995
Deferred income taxes
56,694
51,093
Intangible assets, net
812,338
873,577
Goodwill
961,262
961,262
Other assets, net
68,509
119,283
Total noncurrent assets
2,332,002
2,473,136
Total assets
$
2,810,541
$
3,030,240
Liabilities and shareholders'
equity:
Current liabilities:
Accounts payable
$
81,812
$
57,140
Accrued payroll and benefits
52,041
67,792
Accrued liabilities
105,806
98,124
Deferred revenue
153,871
149,810
Current operating lease liabilities
37,673
50,781
Total current liabilities
431,203
423,647
Noncurrent liabilities:
Long-term debt
695,077
838,908
Long-term operating lease liabilities
163,441
177,045
Deferred income taxes
26,068
25,554
Other liabilities
37,416
73,700
Total noncurrent liabilities
922,002
1,115,207
Total liabilities
1,353,205
1,538,854
Commitments and contingencies
Total shareholders' equity
1,457,336
1,491,386
Total liabilities and shareholders'
equity
$
2,810,541
$
3,030,240
Adtalem Global Education Inc.
Consolidated Statements of
Income
(unaudited)
(in thousands, except per
share data)
Three Months Ended
Year Ended
June 30,
June 30,
2023
2022
2023
2022
Revenue
$
364,641
$
360,647
$
1,450,826
$
1,381,842
Operating cost and expense:
Cost of educational services
163,718
161,279
648,486
659,776
Student services and administrative
expense
153,296
133,115
586,009
566,494
Restructuring expense
1,111
8,629
18,817
25,628
Business acquisition and integration
expense
6,959
11,661
42,661
53,198
Gain on sale of assets
—
—
(13,317
)
—
Total operating cost and expense
325,084
314,684
1,282,656
1,305,096
Operating income
39,557
45,963
168,170
76,746
Interest expense
(15,294
)
(19,441
)
(63,100
)
(129,348
)
Other income (expense), net
3,664
(1,327
)
6,965
1,108
Income (loss) from continuing operations
before income taxes
27,927
25,195
112,035
(51,494
)
(Provision for) benefit from income
taxes
(4,377
)
(24,058
)
(10,283
)
15,539
Income (loss) from continuing
operations
23,550
1,137
101,752
(35,955
)
Discontinued operations:
Loss from discontinued operations before
income taxes
(1,730
)
(2,521
)
(8,464
)
(986
)
(Loss) gain on disposal of discontinued
operations before income taxes
—
(520
)
(3,576
)
473,483
Benefit from (provision for) income
taxes
424
8,650
3,646
(125,551
)
(Loss) income from discontinued
operations
(1,306
)
5,609
(8,394
)
346,946
Net income
$
22,244
$
6,746
$
93,358
$
310,991
Earnings (loss) per share:
Basic:
Continuing operations
$
0.54
$
0.03
$
2.27
$
(0.74
)
Discontinued operations
$
(0.03
)
$
0.12
$
(0.19
)
$
7.17
Total basic earnings per share
$
0.51
$
0.15
$
2.08
$
6.43
Diluted:
Continuing operations
$
0.53
$
0.02
$
2.23
$
(0.74
)
Discontinued operations
$
(0.03
)
$
0.12
$
(0.18
)
$
7.17
Total diluted earnings per share
$
0.50
$
0.15
$
2.05
$
6.43
Weighted-average shares outstanding:
Basic shares
43,292
45,162
44,781
48,388
Diluted shares
44,129
45,758
45,600
48,388
Adtalem Global Education Inc.
Consolidated Statements of
Cash Flows
(unaudited)
(in thousands)
Year Ended June 30,
2023
2022
Operating activities:
Net income
$
93,358
$
310,991
Loss (income) from discontinued
operations
8,394
(346,946
)
Income (loss) from continuing
operations
101,752
(35,955
)
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock-based compensation expense
14,299
22,611
Amortization and impairments to operating
lease assets
48,470
44,748
Depreciation
41,575
44,574
Amortization of intangible assets
61,239
97,274
Amortization and write-off of debt
discount and issuance costs
9,129
42,654
Provision for bad debts
32,999
27,141
Deferred income taxes
(5,087
)
(544
)
Loss on disposals, accelerated
depreciation, and impairments to property and equipment
3,999
3,501
Gain on extinguishment of debt
(71
)
(2,072
)
Loss on investments
3,689
3,271
Gain on sale of assets
(13,317
)
—
Changes in assets and liabilities:
Accounts receivable
(37,614
)
(29,881
)
Prepaid expenses and other current
assets
9,324
(2,827
)
Accounts payable
21,666
(15,724
)
Accrued payroll and benefits
(15,683
)
(12,118
)
Accrued liabilities
241
(16,305
)
Deferred revenue
5,807
70,355
Operating lease liabilities
(59,188
)
(49,147
)
Other assets and liabilities
(17,545
)
(27,554
)
Net cash provided by operating
activities-continuing operations
205,684
164,002
Net cash used in operating
activities-discontinued operations
(2,776
)
(153,401
)
Net cash provided by operating
activities
202,908
10,601
Investing activities:
Capital expenditures
(37,008
)
(31,054
)
Proceeds from sales of marketable
securities
7,635
3,447
Purchases of marketable securities
(1,508
)
(3,624
)
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
15,919
(1,509,285
)
Net cash used in investing
activities-discontinued operations
—
(3,287
)
Proceeds from sale of business, net of
cash transferred
—
960,768
Payment for working capital adjustment for
sale of business
(3,174
)
—
Net cash provided by (used in) investing
activities
12,745
(551,804
)
Financing activities:
Proceeds from exercise of stock
options
2,625
8,879
Employee taxes paid on withholding
shares
(4,592
)
(2,834
)
Proceeds from stock issued under Colleague
Stock Purchase Plan
608
535
Repurchases of common stock for
treasury
(123,133
)
(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
)
(1,079,713
)
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
(288,515
)
(424,476
)
Net decrease in cash, cash equivalents and
restricted cash
(72,862
)
(965,679
)
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
$
275,075
$
347,937
Adtalem Global Education Inc.
Segment Information
(unaudited)
(in thousands)
Three Months Ended
Year Ended
June 30,
June 30,
Increase/(Decrease)
Increase/(Decrease)
2023
2022
$
%
2023
2022
$
%
Revenue:
Chamberlain
$
144,496
$
140,226
$
4,270
3.0
%
$
571,034
$
557,536
$
13,498
2.4
%
Walden
138,010
137,068
942
0.7
%
533,725
485,393
48,332
10.0
%
Medical and Veterinary
82,135
83,353
(1,218
)
(1.5
)%
346,067
338,913
7,154
2.1
%
Total consolidated revenue
$
364,641
$
360,647
$
3,994
1.1
%
$
1,450,826
$
1,381,842
$
68,984
5.0
%
Operating income (loss):
Chamberlain
$
35,683
$
41,124
$
(5,441
)
(13.2
)%
$
134,685
$
124,414
$
10,271
8.3
%
Walden
9,809
12,442
(2,633
)
(21.2
)%
35,880
(5,306
)
41,186
NM
Medical and Veterinary
10,477
13,957
(3,480
)
(24.9
)%
59,649
59,357
292
0.5
%
Home Office and Other
(16,412
)
(21,560
)
5,148
23.9
%
(62,044
)
(101,719
)
39,675
39.0
%
Total consolidated operating income
$
39,557
$
45,963
$
(6,406
)
(13.9
)%
$
168,170
$
76,746
$
91,424
119.1
%
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 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, litigation reserve, 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, litigation reserve,
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, litigation reserve, 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, litigation reserve, 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, reserves related to
significant litigation, 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, and EduPristine, including the
after-tax gain on the sale of these businesses, in addition to
costs related to DeVry University.
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)
2023
2022
$
%
2023
2022
$
%
Chamberlain:
Operating income (GAAP)
$
35,683
$
41,124
$
(5,441
)
(13.2
)%
$
134,685
$
124,414
$
10,271
8.3
%
Restructuring expense
—
572
(572
)
818
2,838
(2,020
)
Adjusted operating income (non-GAAP)
$
35,683
$
41,696
$
(6,013
)
(14.4
)%
$
135,503
$
127,252
$
8,251
6.5
%
Operating margin (GAAP)
24.7
%
29.3
%
23.6
%
22.3
%
Operating margin (non-GAAP)
24.7
%
29.7
%
23.7
%
22.8
%
Walden:
Operating income (loss) (GAAP)
$
9,809
$
12,442
$
(2,633
)
(21.2
)%
$
35,880
$
(5,306
)
$
41,186
NM
Deferred revenue adjustment
—
—
—
—
8,561
(8,561
)
Restructuring expense
71
37
34
3,245
4,053
(808
)
Intangible amortization expense
12,303
23,307
(11,004
)
61,239
97,274
(36,035
)
Litigation reserve
10,000
—
10,000
10,000
—
10,000
Adjusted operating income (non-GAAP)
$
32,183
$
35,786
$
(3,603
)
(10.1
)%
$
110,364
$
104,582
$
5,782
5.5
%
Operating margin (GAAP)
7.1
%
9.1
%
6.7
%
(1.1
)%
Operating margin (non-GAAP)
23.3
%
26.1
%
20.7
%
21.5
%
Medical and Veterinary:
Operating income (GAAP)
$
10,477
$
13,957
$
(3,480
)
(24.9
)%
$
59,649
$
59,357
$
292
0.5
%
Restructuring expense
353
5,034
(4,681
)
7,687
9,791
(2,104
)
Adjusted operating income (non-GAAP)
$
10,830
$
18,991
$
(8,161
)
(43.0
)%
$
67,336
$
69,148
$
(1,812
)
(2.6
)%
Operating margin (GAAP)
12.8
%
16.7
%
17.2
%
17.5
%
Operating margin (non-GAAP)
13.2
%
22.8
%
19.5
%
20.4
%
Home Office and Other:
Operating loss (GAAP)
$
(16,412
)
$
(21,560
)
$
5,148
23.9
%
$
(62,044
)
$
(101,719
)
$
39,675
39.0
%
CEO transition costs
—
—
—
—
6,195
(6,195
)
Restructuring expense
687
2,986
(2,299
)
7,067
8,946
(1,879
)
Business acquisition and integration
expense
6,959
11,661
(4,702
)
42,661
53,198
(10,537
)
Gain on sale of assets
—
—
—
(13,317
)
—
(13,317
)
Adjusted operating loss (non-GAAP)
$
(8,766
)
$
(6,913
)
$
(1,853
)
(26.8
)%
$
(25,633
)
$
(33,380
)
$
7,747
23.2
%
Adtalem Global Education:
Operating income (GAAP)
$
39,557
$
45,963
$
(6,406
)
(13.9
)%
$
168,170
$
76,746
$
91,424
119.1
%
Deferred revenue adjustment
—
—
—
—
8,561
(8,561
)
CEO transition costs
—
—
—
—
6,195
(6,195
)
Restructuring expense
1,111
8,629
(7,518
)
18,817
25,628
(6,811
)
Business acquisition and integration
expense
6,959
11,661
(4,702
)
42,661
53,198
(10,537
)
Intangible amortization expense
12,303
23,307
(11,004
)
61,239
97,274
(36,035
)
Litigation reserve
10,000
—
10,000
10,000
—
10,000
Gain on sale of assets
—
—
—
(13,317
)
—
(13,317
)
Adjusted operating income (non-GAAP)
$
69,930
$
89,560
$
(19,630
)
(21.9
)%
$
287,570
$
267,602
$
19,968
7.5
%
Operating margin (GAAP)
10.8
%
12.7
%
11.6
%
5.6
%
Operating margin (non-GAAP)
19.2
%
24.8
%
19.8
%
19.4
%
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)
2023
2022
$
%
2023
2022
$
%
Chamberlain:
Operating income (GAAP)
$
35,683
$
41,124
$
(5,441
)
(13.2
)%
$
134,685
$
124,414
$
10,271
8.3
%
Restructuring expense
—
572
(572
)
818
2,838
(2,020
)
Depreciation
4,279
4,499
(220
)
17,264
18,547
(1,283
)
Stock-based compensation
1,118
1,603
(485
)
4,719
6,707
(1,988
)
Adjusted EBITDA (non-GAAP)
$
41,080
$
47,798
$
(6,718
)
(14.1
)%
$
157,486
$
152,506
$
4,980
3.3
%
Adjusted EBITDA margin (non-GAAP)
28.4
%
34.1
%
27.6
%
27.4
%
Walden:
Operating income (loss) (GAAP)
$
9,809
$
12,442
$
(2,633
)
(21.2
)%
$
35,880
$
(5,306
)
$
41,186
NM
Deferred revenue adjustment
—
—
—
—
8,561
(8,561
)
Restructuring expense
71
37
34
3,245
4,053
(808
)
Intangible amortization expense
12,303
23,307
(11,004
)
61,239
97,274
(36,035
)
Litigation reserve
10,000
—
10,000
10,000
—
10,000
Depreciation
2,189
2,454
(265
)
9,492
9,255
237
Stock-based compensation
916
721
195
3,861
3,029
832
Adjusted EBITDA (non-GAAP)
$
35,288
$
38,961
$
(3,673
)
(9.4
)%
$
123,717
$
116,866
$
6,851
5.9
%
Adjusted EBITDA margin (non-GAAP)
25.6
%
28.4
%
23.2
%
24.1
%
Medical and Veterinary:
Operating income (GAAP)
$
10,477
$
13,957
$
(3,480
)
(24.9
)%
$
59,649
$
59,357
$
292
0.5
%
Restructuring expense
353
5,034
(4,681
)
7,687
9,791
(2,104
)
Depreciation
3,108
3,393
(285
)
12,475
13,890
(1,415
)
Stock-based compensation
712
922
(210
)
3,003
3,896
(893
)
Adjusted EBITDA (non-GAAP)
$
14,650
$
23,306
$
(8,656
)
(37.1
)%
$
82,814
$
86,934
$
(4,120
)
(4.7
)%
Adjusted EBITDA margin (non-GAAP)
17.8
%
28.0
%
23.9
%
25.7
%
Home Office and Other:
Operating loss (GAAP)
$
(16,412
)
$
(21,560
)
$
5,148
23.9
%
$
(62,044
)
$
(101,719
)
$
39,675
39.0
%
CEO transition costs
—
—
—
—
6,195
(6,195
)
Restructuring expense
687
2,986
(2,299
)
7,067
8,946
(1,879
)
Business acquisition and integration
expense
6,959
11,661
(4,702
)
42,661
53,198
(10,537
)
Gain on sale of assets
—
—
—
(13,317
)
—
(13,317
)
Depreciation
381
757
(376
)
2,344
2,882
(538
)
Stock-based compensation
645
761
(116
)
2,716
2,784
(68
)
Adjusted EBITDA (non-GAAP)
$
(7,740
)
$
(5,395
)
$
(2,345
)
(43.5
)%
$
(20,573
)
$
(27,714
)
$
7,141
25.8
%
Adtalem Global Education:
Net income (GAAP)
$
22,244
$
6,746
$
15,498
229.7
%
$
93,358
$
310,991
$
(217,633
)
(70.0
)%
Net loss (income) from discontinued
operations
1,306
(5,609
)
6,915
8,394
(346,946
)
355,340
Interest expense
15,294
19,441
(4,147
)
63,100
129,348
(66,248
)
Other (income) expense, net
(3,664
)
1,327
(4,991
)
(6,965
)
(1,108
)
(5,857
)
Provision for (benefit from) income
taxes
4,377
24,058
(19,681
)
10,283
(15,539
)
25,822
Operating income (GAAP)
39,557
45,963
(6,406
)
168,170
76,746
91,424
Depreciation and amortization
22,260
34,410
(12,150
)
102,814
141,848
(39,034
)
Stock-based compensation
3,391
4,007
(616
)
14,299
16,416
(2,117
)
Deferred revenue adjustment
—
—
—
—
8,561
(8,561
)
CEO transition costs
—
—
—
—
6,195
(6,195
)
Restructuring expense
1,111
8,629
(7,518
)
18,817
25,628
(6,811
)
Business acquisition and integration
expense
6,959
11,661
(4,702
)
42,661
53,198
(10,537
)
Litigation reserve
10,000
—
10,000
10,000
—
10,000
Gain on sale of assets
—
—
—
(13,317
)
—
(13,317
)
Adjusted EBITDA (non-GAAP)
$
83,278
$
104,670
$
(21,392
)
(20.4
)%
$
343,444
$
328,592
$
14,852
4.5
%
Adjusted EBITDA margin (non-GAAP)
22.8
%
29.0
%
23.7
%
23.8
%
Adtalem Global Education Inc.
Non-GAAP Earnings
Disclosure
(unaudited)
(in thousands, except per
share data)
Three Months Ended
Year Ended
June 30,
June 30,
2023
2022
2023
2022
Net income (GAAP)
$
22,244
$
6,746
$
93,358
$
310,991
Deferred revenue adjustment
—
—
—
8,561
CEO transition costs
—
—
—
6,195
Restructuring expense
1,111
8,629
18,817
25,628
Business acquisition and integration
expense
6,959
11,661
42,661
53,198
Intangible amortization expense
12,303
23,307
61,239
97,274
Gain on sale of assets
—
—
(13,317
)
—
Pre-acquisition interest expense,
write-off of debt discount and issuance costs, gain on
extinguishment of debt, litigation reserve, and investment
impairment
10,000
4,699
19,226
48,804
Net tax benefit related to a valuation
allowance release
—
—
(6,184
)
—
Income tax impact on non-GAAP adjustments
(1)
(8,656
)
9,188
(31,997
)
(51,683
)
Net loss (income) from discontinued
operations
1,306
(5,609
)
8,394
(346,946
)
Adjusted net income (non-GAAP)
$
45,267
$
58,621
$
192,197
$
152,022
(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,
2023
2022
2023
2022
Earnings per share, diluted (GAAP)
$
0.50
$
0.15
$
2.05
$
6.43
Effect on diluted earnings per share:
Deferred revenue adjustment
—
—
—
0.18
CEO transition costs
—
—
—
0.13
Restructuring expense
0.03
0.19
0.41
0.53
Business acquisition and integration
expense
0.16
0.25
0.94
1.09
Intangible amortization expense
0.28
0.51
1.34
1.99
Gain on sale of assets
—
—
(0.29
)
—
Pre-acquisition interest expense,
write-off of debt discount and issuance costs, gain on
extinguishment of debt, litigation reserve, and investment
impairment
0.23
0.10
0.42
1.00
Net tax benefit related to a valuation
allowance release
—
—
(0.14
)
—
Income tax impact on non-GAAP adjustments
(1)
(0.20
)
0.20
(0.70
)
(1.06
)
Net loss (income) from discontinued
operations
0.03
(0.12
)
0.18
(7.17
)
Adjusted earnings per share, diluted
(non-GAAP)
$
1.03
$
1.28
$
4.21
$
3.11
Diluted shares used in non-GAAP EPS
calculation
44,129
45,758
45,600
48,804
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
FY23
FY22
Q4
Q4
Q4
Q3
Q2
Q1
Q4
Net cash provided by operating
activities-continuing operations (GAAP)
$
55,863
$
105,231
$
205,684
$
255,052
$
225,247
$
225,972
$
164,002
Capital expenditures
(17,952
)
(8,805
)
(37,008
)
(27,861
)
(26,029
)
(29,914
)
(31,054
)
Free cash flow (non-GAAP)
$
37,911
$
96,426
$
168,676
$
227,191
$
199,218
$
196,058
$
132,948
Adtalem Global Education
Inc.
Non-GAAP Net Leverage
Disclosure
(unaudited)
(in thousands)
Year Ended
June 30, 2023
Adtalem Global Education:
Net income (GAAP)
$
93,358
Net loss from discontinued operations
8,394
Interest expense
63,100
Other income, net
(6,965
)
Provision for income taxes
10,283
Depreciation and amortization
102,814
Stock-based compensation
14,299
Restructuring expense
18,817
Business acquisition and integration
expense
42,661
Litigation reserve
10,000
Gain on sale of assets
(13,317
)
Adjusted EBITDA (non-GAAP)
$
343,444
June 30, 2023
Long-term debt
$
708,283
Less: Cash and cash equivalents
(273,689
)
Net debt (non-GAAP)
$
434,594
Net leverage (non-GAAP)
1.3 x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810844297/en/
Investor Contact Jay Spitzer and Chandrika Nigam
Investor.Relations@Adtalem.com +1 312-906-6600
Media Contact Talisha Holmes AdtalemMedia@Adtalem.com +1
872-270-0331
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