CVSA 8-K
Covista Inc. (CVSA)
8-K
2022-02-08
For: 2022-02-08
View Original
Added on
July 08, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 8, 2022
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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(866 ) 374-2678
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol |
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Name of each exchange on
which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or
Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
On February 8, 2022, Adtalem Global Education Inc. (“Adtalem”) issued a press release announcing its fiscal 2022 second quarter
academic, operating and financial results. The press release is attached hereto as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Adtalem under the Securities Act of 1933,
as amended, or the Exchange Act.
Forward-Looking Statements
Certain statements contained in this Form 8-K and related
press 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 the Company’s future growth, the future impacts of the COVID-19 pandemic, the efficacy and distribution of the vaccines, the expected
synergies from the recent Walden acquisition, and the pending sale of the financial services segment, including our anticipated net proceeds and whether the pending sale will be completed in the anticipated timeframe, if at all. 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
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 as of February 8, 2022, and Adtalem assumes no obligation to publicly update or revise its
forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.
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Item 9.01
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Financial Statements and Exhibits
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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ADTALEM GLOBAL EDUCATION INC.
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By:
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/s/ Robert J. Phelan
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Robert J. Phelan
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Senior Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
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Date: February 8, 2022
Exhibit 99.1
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News Release
Investor Contact
Chandrika Nigam
312-681-3209
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Adtalem Global Education Announces Fiscal Second Quarter 2022 Results
Revises full-year guidance driven by the pending sale of Financial Services segment and continued near-term COVID headwinds
CHICAGO – Feb. 8, 2022 – Adtalem Global Education Inc. (NYSE: ATGE), a leading healthcare educator, today reported academic, operating, and financial results for its fiscal 2022 second quarter ended Dec. 31, 2021. The second quarter
results reflect the Financial Services segment in discontinued operations because of the recently announced pending divestiture.
“I’m encouraged by the tremendous progress we’ve made to reposition Adtalem as the leading provider of healthcare education. The recent announcement of
the pending sale of our Financial Services segment is the culmination of a long-term strategy to sharpen the focus of our portfolio and greatly enhance our ability to address – at scale – the rapidly growing and unmet demand for healthcare
professionals in the U.S.,” said Steve Beard, president and CEO of Adtalem Global Education. “Despite the continued near-term headwinds from the pandemic disproportionally impacting our post licensure nursing programs, we believe our strategic
focus, significant scale, and the synergies of the recent Walden acquisition leave us uniquely well positioned to be the leader in helping employers across the healthcare industry meet their critical workforce talent needs. As a result, we are
more excited than ever about the opportunities ahead.”
Financial Highlights
Selected financial data for the three months ended Dec. 31, 2021:
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•
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Revenue of $371.2 million increased 58.4% compared with the prior year due to the acquisition of Walden
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•
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Diluted earnings per share was $0.36 compared with diluted
earnings per share of $0.44 in the prior year; diluted earnings per share from continuing operations, excluding special items, was $0.75,
compared to $0.61 in the prior year
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•
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Operating income was $24.7 million, compared with $29.1 million in the prior year; operating income, excluding special items, was $70.2 million, a 70.0% increase compared with the prior
year
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•
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Net income attributable to Adtalem was $17.9 million compared with net income of $23.3 million in the prior year, driven primarily by higher interest expense, partially offset by a decrease in
income tax expense; net income from continuing operations, excluding special items, was $37.8 million, a 17.3% increase compared with the prior year
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Selected financial data for the six months ended Dec. 31, 2021:
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Revenue of $660.3 million increased 45.7% compared with the prior year due to the acquisition of Walden
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Diluted loss per share was $0.81 compared with diluted earnings
per share of $0.82 in the prior year; diluted earnings per share from continuing operations, excluding special items, was $1.10, compared
to $1.23 in the prior year
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•
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Operating income was $2.7 million, compared with $55.0 million in the prior year; operating income, excluding special items, was $106.7 million, a 27.6% increase compared with the prior
year
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Net loss attributable to Adtalem was $40.2 million compared with net income of $43.2 million in the prior year, driven primarily by higher interest expense and business acquisition and
integration expense; net income from continuing operations, excluding special items, was $55.4 million, a 14.2% decrease compared with the prior year
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Business Highlights
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Announced the pending sale
of Financial Services segment to a consortium of Wendel Group and Colibri Group, thereby enhancing our focus as a pure play, leading provider of talent to
the healthcare industry
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Achieved
re-accreditation for American University of the Caribbean School of Medicine from Accreditation Commission on Colleges of Medicine for the maximum
accreditation period of six years through 2027, reaffirming the university’s strong student outcomes
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Entered strategic
partnership with Society of Teachers of Family Medicine as the lead philanthropic partner committed to combatting inequality and encouraging civic
engagement across the entire healthcare sector
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Segment Highlights
Chamberlain
Second quarter segment revenue decreased 2.0% to $139.1 million compared with the prior year, and segment operating income declined 21.6% to $25.5
million due primarily to increased marketing expense and higher costs associated with a return to in-person campus instruction.
New and total student enrollment in the November session decreased 0.5%
and 2.1%, respectively, compared with the same session last year. The decrease in new student enrollment was primarily attributable to COVID-related headwinds in Chamberlain’s
post-licensure programs.
Walden
Revenue in the second quarter was $140.6 million. Segment operating
loss was $2.4 million, driven primarily by intangible amortization expense. Segment operating income, excluding special items, was $32.4 million. With the acquisition closing on August 12, 2021, there are no prior year comparables.
New and total student enrollment in the December session decreased 18.3%
and 9.1%, respectively, compared with the prior year. The decrease in new student enrollment was primarily attributable to COVID-related headwinds in Walden’s post-licensure nursing programs.
Medical and Veterinary
Revenue in the second quarter decreased 1.0% to $91.5 million compared with the prior year, while segment operating income increased 3.8% to $19.5
million primarily driven by lower expenses.
Adtalem Outlook
For the full fiscal year 2022, Adtalem revised its guidance of adjusted revenue, excluding special items, to be within the range of $1,350 million
and $1,390 million, and adjusted diluted earnings per share of $2.90 to $3.10 from continuing operations, excluding special items, based on the key factors below:
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Pending sale of Financial Services segment thereby moving it to discontinued operations
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Impact of COVID-related headwinds associated with the Omicron variant that has further burdened healthcare professionals, which continues to negatively impact enrollments
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Conference Call and Webcast Information
Adtalem will hold a conference call to discuss its fiscal 2022 second
quarter on Tuesday, Feb. 8, 2022, at 4 p.m. CT (5 p.m. ET). The conference call will be led by Steve Beard, president and chief executive officer, and Bob Phelan, senior vice president and chief financial officer. For those participating by
telephone, dial 877-407-6184 (United States) or +1 201-389-0877 (outside the United States) and request the “Adtalem Call” or use conference ID: 13725911. Adtalem will also broadcast the conference call live on the web at: https://themediaframe.com/mediaframe/webcast.html?webcastid=muQe4vy4.
Please access the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.
Adtalem will archive a replay of the call until Mar. 8, 2022. To
access the replay, dial 877-660-6853 (United States) or +1 201-612-7415 (outside the United States), conference ID: 13725911, or visit the Adtalem website at: https://investors.adtalem.com/overview/default.aspx.
About Adtalem Global Education
Adtalem Global Education (NYSE: ATGE), partners with organizations in the healthcare and financial services industries to solve critical workforce
talent needs by expanding access to education, certifications and upskilling programs at scale. 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 the global community. Adtalem is the parent organization of ACAMS, American University of the Caribbean School of Medicine, Becker Professional Education, Chamberlain University, EduPristine,
OnCourse Learning, Ross University School of Medicine, Ross University School of Veterinary Medicine and Walden University. Adtalem has more than 10,000 employees, a network of more than 275,000 alumni and serves over 89,000 members across 200
countries and territories. Adtalem was named one of America’s Most Responsible Companies 2021 by Newsweek and one of America’s Best Employers for Diversity 2021 by Forbes. Follow Adtalem on Twitter (@adtalemglobal), LinkedIn or visit
adtalem.com for more information.
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 the future
impacts of the COVID-19 pandemic, and the efficacy and distribution of the vaccines, the expected synergies from the recent Walden acquisition, and the pending sale of the financial services segment including our anticipated net proceeds and
whether the pending sale will be completed in the anticipated timeframe, if at all. 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 we do not undertake any obligation to update any forward-looking statement, except as required by law.
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2Q 2022
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2Q 2021
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% Change
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Adtalem Global Education Student Enrollments
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New students(1)
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7,915
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9,046
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-12.5
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%
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Total students
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80,255
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85,509
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-6.1
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%
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Chamberlain University
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November Session
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New students(2)
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2,916
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2,931
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-0.5
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%
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Total students
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33,648
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34,387
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-2.1
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%
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Walden University(3)
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October - December Quarter
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New students
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4,999
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6,115
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-18.3
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%
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Total students
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41,158
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45,272
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-9.1
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%
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Medical & Veterinary
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New students(4)
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n/a
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n/a
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n/a
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Total students
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5,449
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5,850
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-6.9
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%
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1)
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Includes intakes from 2Q FY 2022 enrollment sessions at Adtalem’s postsecondary institutions.
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2)
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Post-licensure online programs only; Pre-licensure campus-based programs start in September, January and May.
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3)
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Prior year Walden enrollment figures are as calculated by Walden while controlled by Laureate Education, Inc., and are included here for
comparative purposes only.
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4)
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Medical and Veterinary segment does not have an intake period during 2Q FY 2022.
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Adtalem Global Education Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except par value)
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December 31,
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June 30,
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December 31,
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||||||||||
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2021
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2021
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2020
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Assets:
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Current assets:
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Cash and cash equivalents
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$
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275,420
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$
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476,377
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$
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415,907
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Restricted cash
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1,224
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819,003
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39,425
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Accounts receivable, net
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92,744
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43,041
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71,614
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Prepaid expenses and other current assets
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166,722
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128,217
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96,910
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Current assets held for sale
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74,397
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48,315
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56,704
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Total current assets
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610,507
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1,514,953
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680,560
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Noncurrent assets:
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Property and equipment, net
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301,666
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283,692
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279,186
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Operating lease assets
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155,356
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167,365
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191,028
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Deferred income taxes
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61,536
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53,486
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53,592
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Intangible assets, net
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923,701
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137,500
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137,500
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Goodwill
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960,058
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310,210
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310,210
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Other assets, net
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117,621
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86,040
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88,362
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Noncurrent assets held for sale
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529,328
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531,597
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534,442
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|||||||||
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Total noncurrent assets
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3,049,266
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1,569,890
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1,594,320
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|||||||||
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Total assets
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$
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3,659,773
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$
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3,084,843
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$
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2,274,880
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Liabilities and shareholders' equity:
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Current liabilities:
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Accounts payable
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$
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65,422
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$
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42,421
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$
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39,255
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Accrued payroll and benefits
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52,086
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54,331
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31,983
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Accrued liabilities
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134,585
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126,344
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97,013
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Deferred revenue
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124,347
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68,807
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69,652
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Current operating lease liabilities
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54,845
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53,991
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50,657
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Current portion of long-term debt
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8,500
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3,000
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3,000
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Current liabilities held for sale
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57,690
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59,913
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49,296
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Total current liabilities
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497,475
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408,807
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340,856
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Noncurrent liabilities:
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Long-term debt
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1,599,538
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1,067,711
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284,131
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Long-term operating lease liabilities
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155,827
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167,066
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194,355
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Deferred income taxes
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27,127
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26,177
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24,732
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Other liabilities
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58,040
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78,705
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80,883
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Noncurrent liabilities held for sale
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32,086
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33,517
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33,549
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Total noncurrent liabilities
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1,872,618
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1,373,176
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617,650
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Total liabilities
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2,370,093
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1,781,983
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958,506
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Commitments and contingencies
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Redeemable noncontrolling interest
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1,790
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1,790
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2,595
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Shareholders' equity:
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Common stock, $0.01 par value per share, 200,000 shares authorized; 49,797, 49,253, and
50,632 shares outstanding as of December 31, 2021, June 30, 2021, and December 31, 2020, respectively |
817
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811
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810
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Additional paid-in capital
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542,296
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519,826
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512,102
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Retained earnings
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1,964,954
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2,005,105
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1,970,813
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|||||||||
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Accumulated other comprehensive loss
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(634
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)
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(7,365
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)
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(7,711
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)
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Treasury stock, at cost, 31,908, 31,846, and 30,389 shares as of December 31, 2021, June 30,
2021, and December 31, 2020, respectively
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(1,219,543
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)
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(1,217,307
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)
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(1,162,235
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)
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||||||
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Total shareholders' equity
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1,287,890
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1,301,070
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1,313,779
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|||||||||
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Total liabilities and shareholders' equity
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$
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3,659,773
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$
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3,084,843
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$
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2,274,880
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Adtalem Global Education Inc.
Consolidated Statements of Income (Loss)
(unaudited)
(in thousands, except per share data)
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Three Months Ended
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Six Months Ended
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||||||||||||||
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December 31,
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December 31,
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||||||||||||||
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2021
|
2020
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2021
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2020
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||||||||||||
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Revenue
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$
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371,198
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$
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234,396
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$
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660,268
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$
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453,222
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|||||||
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Operating cost and expense:
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|||||||||||||||
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Cost of educational services
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180,420
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120,827
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332,470
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226,520
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|||||||||||
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Student services and administrative expense
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153,597
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72,260
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283,033
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143,090
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|||||||||||
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Restructuring expense
|
3,387
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1,166
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6,481
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4,082
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|||||||||||
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Business acquisition and integration expense
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9,060
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11,079
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35,613
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24,515
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|||||||||||
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Total operating cost and expense
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346,464
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205,332
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657,597
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398,207
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|||||||||||
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Operating income
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24,734
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29,064
|
2,671
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55,015
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|||||||||||
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Other income (expense):
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|||||||||||||||
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Interest and dividend income
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861
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1,219
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1,739
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2,223
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|||||||||||
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Interest expense
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(25,929
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)
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(3,736
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)
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(73,322
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)
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(7,428
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)
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|||||||
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Investment gain
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—
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1,005
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—
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1,523
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|||||||||||
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Net other expense
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(25,068
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)
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(1,512
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)
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(71,583
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)
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(3,682
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)
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|||||||
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(Loss) income from continuing operations before income taxes
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(334
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)
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27,552
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(68,912
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)
|
51,333
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|||||||||
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Benefit from (provision for) income taxes
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39,368
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(3,611
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)
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30,764
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(7,806
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)
|
|||||||||
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Income (loss) from continuing operations
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39,034
|
23,941
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(38,148
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)
|
43,527
|
||||||||||
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Discontinued operations:
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|||||||||||||||
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Income (loss) from discontinued operations before income taxes
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4,159
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72
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(1,891
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)
|
743
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||||||||||
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Provision for income taxes
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(25,340
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)
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(864
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)
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(112
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)
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(1,282
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)
|
|||||||
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Loss from discontinued operations
|
(21,181
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)
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(792
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)
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(2,003
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)
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(539
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)
|
|||||||
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Net income (loss)
|
17,853
|
23,149
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(40,151
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)
|
42,988
|
||||||||||
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Net loss attributable to redeemable noncontrolling interest from discontinued
operations
|
—
|
166
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—
|
257
|
|||||||||||
|
Net income (loss) attributable to Adtalem Global Education
|
$
|
17,853
|
$
|
23,315
|
$
|
(40,151
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)
|
$
|
43,245
|
||||||
|
Amounts attributable to Adtalem Global Education:
|
|||||||||||||||
|
Net income (loss) from continuing operations
|
$
|
39,034
|
$
|
23,941
|
$
|
(38,148
|
)
|
$
|
43,527
|
||||||
|
Net loss from discontinued operations
|
(21,181
|
)
|
(626
|
)
|
(2,003
|
)
|
(282
|
)
|
|||||||
|
Net income (loss) attributable to Adtalem Global Education
|
$
|
17,853
|
$
|
23,315
|
$
|
(40,151
|
)
|
$
|
43,245
|
||||||
|
Earnings (loss) per share attributable to Adtalem Global Education:
|
|||||||||||||||
|
Basic:
|
|||||||||||||||
|
Continuing operations
|
$
|
0.78
|
$
|
0.46
|
$
|
(0.77
|
)
|
$
|
0.83
|
||||||
|
Discontinued operations
|
$
|
(0.43
|
)
|
$
|
(0.01
|
)
|
$
|
(0.04
|
)
|
$
|
(0.01
|
)
|
|||
|
Net
|
$
|
0.36
|
$
|
0.45
|
$
|
(0.81
|
)
|
$
|
0.83
|
||||||
|
Diluted:
|
|||||||||||||||
|
Continuing operations
|
$
|
0.78
|
$
|
0.46
|
$
|
(0.77
|
)
|
$
|
0.83
|
||||||
|
Discontinued operations
|
$
|
(0.42
|
)
|
$
|
(0.01
|
)
|
$
|
(0.04
|
)
|
$
|
(0.01
|
)
|
|||
|
Net
|
$
|
0.36
|
$
|
0.44
|
$
|
(0.81
|
)
|
$
|
0.82
|
||||||
|
Weighted-average shares outstanding:
|
|||||||||||||||
|
Basic shares
|
49,776
|
52,251
|
49,719
|
52,358
|
|||||||||||
|
Diluted shares
|
50,237
|
52,441
|
49,719
|
52,622
|
|||||||||||
Adtalem Global Education Inc.
Consolidated Statements of Cash Flows
(unaudited)
(unaudited)
(in thousands)
|
Six Months Ended
|
|||||||
|
December 31,
|
|||||||
|
2021
|
2020
|
||||||
|
Operating activities:
|
|||||||
|
Net (loss) income
|
$
|
(40,151
|
)
|
$
|
42,988
|
||
|
Loss from discontinued operations
|
2,003
|
539
|
|||||
|
(Loss) income from continuing operations
|
(38,148
|
)
|
43,527
|
||||
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|||||||
|
Stock-based compensation expense
|
13,931
|
6,967
|
|||||
|
Amortization and adjustments to operating lease assets
|
24,421
|
26,676
|
|||||
|
Depreciation
|
22,130
|
16,722
|
|||||
|
Amortization of intangible assets
|
47,150
|
—
|
|||||
|
Amortization of debt discount and issuance costs
|
19,985
|
828
|
|||||
|
Provision for bad debts
|
12,577
|
5,157
|
|||||
|
Deferred income taxes
|
(9,331
|
)
|
(1,382
|
)
|
|||
|
Loss on disposals, accelerated depreciation, and adjustments to property and equipment
|
266
|
1,593
|
|||||
|
Realized and unrealized gain on investments
|
—
|
(1,524
|
)
|
||||
|
Changes in assets and liabilities:
|
|||||||
|
Accounts receivable
|
(33,765
|
)
|
(10,362
|
)
|
|||
|
Prepaid expenses and other current assets
|
(29,686
|
)
|
5,095
|
||||
|
Accounts payable
|
(8,304
|
)
|
3,678
|
||||
|
Accrued payroll and benefits
|
(26,594
|
)
|
(9,816
|
)
|
|||
|
Accrued liabilities
|
(10,524
|
)
|
797
|
||||
|
Deferred revenue
|
44,582
|
6,157
|
|||||
|
Operating lease liabilities
|
(23,027
|
)
|
(24,321
|
)
|
|||
|
Other assets and liabilities
|
(24,631
|
)
|
(11,835
|
)
|
|||
|
Net cash (used in) provided by operating activities-continuing operations
|
(18,968
|
)
|
57,957
|
||||
|
Net cash provided by operating activities-discontinued operations
|
20,062
|
5,436
|
|||||
|
Net cash provided by operating activities
|
1,094
|
63,393
|
|||||
|
Investing activities:
|
|||||||
|
Capital expenditures
|
(14,772
|
)
|
(19,704
|
)
|
|||
|
Proceeds from sales of marketable securities
|
—
|
1,565
|
|||||
|
Purchases of marketable securities
|
—
|
(1,613
|
)
|
||||
|
Payment for purchase of business, net of cash and restricted cash acquired
|
(1,488,054
|
)
|
—
|
||||
|
Net cash used in investing activities-continuing operations
|
(1,502,826
|
)
|
(19,752
|
)
|
|||
|
Net cash used in investing activities-discontinued operations
|
(2,199
|
)
|
(4,471
|
)
|
|||
|
Net cash used in investing activities
|
(1,505,025
|
)
|
(24,223
|
)
|
|||
|
Financing activities:
|
|||||||
|
Proceeds from exercise of stock options
|
8,200
|
56
|
|||||
|
Employee taxes paid on withholding shares
|
(2,518
|
)
|
(4,073
|
)
|
|||
|
Proceeds from stock issued under Colleague Stock Purchase Plan
|
244
|
83
|
|||||
|
Repurchases of common stock for treasury
|
—
|
(44,963
|
)
|
||||
|
Proceeds from long-term debt
|
850,000
|
—
|
|||||
|
Repayments of long-term debt
|
(291,000
|
)
|
(1,500
|
)
|
|||
|
Payment of debt discount and issuance costs
|
(49,553
|
)
|
(1,722
|
)
|
|||
|
Net cash provided by (used in) financing activities
|
515,373
|
(52,119
|
)
|
||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
36
|
565
|
|||||
|
Net decrease in cash, cash equivalents and restricted cash
|
(988,522
|
)
|
(12,384
|
)
|
|||
|
Cash, cash equivalents and restricted cash at beginning of period
|
1,313,616
|
501,105
|
|||||
|
Cash, cash equivalents and restricted cash at end of period
|
325,094
|
488,721
|
|||||
|
Less: cash, cash equivalents and restricted cash of discontinued operations at end of period
|
48,450
|
33,389
|
|||||
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
276,644
|
$
|
455,332
|
|||
Adtalem Global Education Inc.
Segment Information
(unaudited)
(in thousands)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||||||||
|
December 31,
|
December 31,
|
||||||||||||||||||||
|
2021
|
2020
|
Increase
(Decrease) |
2021
|
2020
|
Increase
(Decrease) |
||||||||||||||||
|
Revenue:
|
|||||||||||||||||||||
|
Chamberlain
|
$
|
139,121
|
$
|
141,977
|
(2.0
|
)%
|
$
|
274,760
|
$
|
275,741
|
(0.4
|
)%
|
|||||||||
|
Walden
|
140,627
|
—
|
NM
|
209,244
|
—
|
NM
|
|||||||||||||||
|
Medical and Veterinary
|
91,450
|
92,419
|
(1.0
|
)%
|
176,264
|
177,481
|
(0.7
|
)%
|
|||||||||||||
|
Total consolidated revenue
|
$
|
371,198
|
$
|
234,396
|
58.4
|
%
|
$
|
660,268
|
$
|
453,222
|
45.7
|
%
|
|||||||||
|
Operating income (loss):
|
|||||||||||||||||||||
|
Chamberlain
|
$
|
25,456
|
$
|
32,482
|
(21.6
|
)%
|
$
|
46,311
|
$
|
62,651
|
(26.1
|
)%
|
|||||||||
|
Walden
|
(2,443
|
)
|
—
|
NM
|
(14,089
|
)
|
—
|
NM
|
|||||||||||||
|
Medical and Veterinary
|
19,518
|
18,808
|
3.8
|
%
|
35,183
|
41,649
|
(15.5
|
)%
|
|||||||||||||
|
Home Office and Other
|
(17,797
|
)
|
(22,226
|
)
|
19.9
|
%
|
(64,734
|
)
|
(49,285
|
)
|
(31.3
|
)%
|
|||||||||
|
Total consolidated operating income
|
$
|
24,734
|
$
|
29,064
|
(14.9
|
)%
|
$
|
2,671
|
$
|
55,015
|
(95.1
|
)%
|
|||||||||
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 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:
Net income
from continuing operations excluding special items (most comparable GAAP measure: net income (loss) attributable to Adtalem) – Measure of Adtalem’s net income (loss) attributable to Adtalem adjusted
for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, Walden intangible amortization expense, pre-acquisition interest expense, and loss from discontinued operations.
Earnings
per share from continuing operations excluding special items (most comparable GAAP measure: earnings (loss) per share) – Measure of Adtalem’s diluted earnings (loss) per share adjusted for deferred
revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, Walden intangible amortization expense, pre-acquisition interest expense, and loss from discontinued operations.
Operating
income excluding special items (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, and Walden intangible amortization expense. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.
Free cash
flow (most comparable GAAP measure: net cash (used in) provided by operating activities-continuing operations ) – Defined as net cash (used in) provided by operating activities-continuing operations
less capital expenditures.
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
Adtalem’s home office.
|
|
•
|
Business acquisition and integration expense include expenses related to the Walden acquisition.
|
|
•
|
Walden amortization expense on acquired intangible assets.
|
|
•
|
Pre-acquisition interest expense related to financing arrangements in connection with the Walden acquisition.
|
|
•
|
Loss from discontinued operations attributable to Adtalem includes the operations of ACAMS, Becker,
OCL, and EduPristine, in addition to costs related to DeVry University.
|
Adtalem Global Education Inc.
Non-GAAP Operating Income by Segment
(unaudited)
(in thousands)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||||||||
|
December 31,
|
December 31,
|
||||||||||||||||||||
|
2021
|
2020
|
Increase
(Decrease) |
2021
|
2020
|
Increase
(Decrease) |
||||||||||||||||
|
Chamberlain:
|
|||||||||||||||||||||
|
Operating income (GAAP)
|
$
|
25,456
|
$
|
32,482
|
(21.6
|
)%
|
$
|
46,311
|
$
|
62,651
|
(26.1
|
)%
|
|||||||||
|
Restructuring expense
|
335
|
—
|
335
|
—
|
|||||||||||||||||
|
Operating income excluding special items (non-GAAP)
|
$
|
25,791
|
$
|
32,482
|
(20.6
|
)%
|
$
|
46,646
|
$
|
62,651
|
(25.5
|
)%
|
|||||||||
|
Walden:
|
|||||||||||||||||||||
|
Operating loss (GAAP)
|
$
|
(2,443
|
)
|
$
|
—
|
NM
|
$
|
(14,089
|
)
|
$
|
—
|
NM
|
|||||||||
|
Deferred revenue adjustment
|
2,354
|
—
|
8,561
|
—
|
|||||||||||||||||
|
Restructuring expense
|
1,791
|
—
|
1,791
|
—
|
|||||||||||||||||
|
Walden intangible amortization expense
|
30,699
|
—
|
47,150
|
—
|
|||||||||||||||||
|
Operating income excluding special items (non-GAAP)
|
$
|
32,401
|
$
|
—
|
NM
|
$
|
43,413
|
$
|
—
|
NM
|
|||||||||||
|
Medical and Veterinary:
|
|||||||||||||||||||||
|
Operating income (GAAP)
|
$
|
19,518
|
$
|
18,808
|
3.8
|
%
|
$
|
35,183
|
$
|
41,649
|
(15.5
|
)%
|
|||||||||
|
Restructuring expense
|
188
|
—
|
188
|
—
|
|||||||||||||||||
|
Operating income excluding special items (non-GAAP)
|
$
|
19,706
|
$
|
18,808
|
4.8
|
%
|
$
|
35,371
|
$
|
41,649
|
(15.1
|
)%
|
|||||||||
|
Home Office and Other:
|
|||||||||||||||||||||
|
Operating loss (GAAP)
|
$
|
(17,797
|
)
|
$
|
(22,226
|
)
|
19.9
|
%
|
$
|
(64,734
|
)
|
$
|
(49,285
|
)
|
(31.3
|
)%
|
|||||
|
CEO transition costs
|
—
|
—
|
6,195
|
—
|
|||||||||||||||||
|
Restructuring expense
|
1,073
|
1,166
|
4,167
|
4,082
|
|||||||||||||||||
|
Business acquisition and integration expense
|
9,060
|
11,079
|
35,613
|
24,515
|
|||||||||||||||||
|
Operating loss excluding special items (non-GAAP)
|
$
|
(7,664
|
)
|
$
|
(9,981
|
)
|
23.2
|
%
|
$
|
(18,759
|
)
|
$
|
(20,688
|
)
|
9.3
|
%
|
|||||
|
Adtalem Global Education:
|
|||||||||||||||||||||
|
Operating income (GAAP)
|
$
|
24,734
|
$
|
29,064
|
(14.9
|
)%
|
$
|
2,671
|
$
|
55,015
|
(95.1
|
)%
|
|||||||||
|
Deferred revenue adjustment
|
2,354
|
—
|
8,561
|
—
|
|||||||||||||||||
|
CEO transition costs
|
—
|
—
|
6,195
|
—
|
|||||||||||||||||
|
Restructuring expense
|
3,387
|
1,166
|
6,481
|
4,082
|
|||||||||||||||||
|
Business acquisition and integration expense
|
9,060
|
11,079
|
35,613
|
24,515
|
|||||||||||||||||
|
Walden intangible amortization expense
|
30,699
|
—
|
47,150
|
—
|
|||||||||||||||||
|
Operating income excluding special items (non-GAAP)
|
$
|
70,234
|
$
|
41,309
|
70.0
|
%
|
$
|
106,671
|
$
|
83,612
|
27.6
|
%
|
|||||||||
Adtalem Global Education Inc.
Non-GAAP Earnings Disclosure
(unaudited)
(in thousands, except per share data)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
December 31,
|
December 31,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
Net income (loss) attributable to Adtalem (GAAP)
|
$
|
17,853
|
$
|
23,315
|
$
|
(40,151
|
)
|
$
|
43,245
|
||||||
|
Deferred revenue adjustment
|
2,354
|
—
|
8,561
|
—
|
|||||||||||
|
CEO transition costs
|
—
|
—
|
6,195
|
—
|
|||||||||||
|
Restructuring expense
|
3,387
|
1,166
|
6,481
|
4,082
|
|||||||||||
|
Business acquisition and integration expense
|
9,060
|
11,079
|
35,613
|
24,515
|
|||||||||||
|
Walden intangible amortization expense
|
30,699
|
—
|
47,150
|
—
|
|||||||||||
|
Pre-acquisition interest expense
|
—
|
45
|
31,634
|
45
|
|||||||||||
|
Income tax impact on non-GAAP adjustments (1)
|
(46,742
|
)
|
(4,006
|
)
|
(42,102
|
)
|
(7,607
|
)
|
|||||||
|
Loss from discontinued operations attributable to Adtalem
|
21,181
|
626
|
2,003
|
282
|
|||||||||||
|
Net income from continuing operations excluding special items (non-GAAP)
|
$
|
37,792
|
$
|
32,225
|
$
|
55,384
|
$
|
64,562
|
|||||||
(1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial
statements.
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
December 31,
|
December 31,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
Earnings (loss) per share, diluted (GAAP)
|
$
|
0.36
|
$
|
0.44
|
$
|
(0.81
|
)
|
$
|
0.82
|
||||||
|
Effect on diluted earnings per share:
|
|||||||||||||||
|
Deferred revenue adjustment
|
0.05
|
-
|
0.17
|
-
|
|||||||||||
|
CEO transition costs
|
-
|
-
|
0.12
|
-
|
|||||||||||
|
Restructuring expense
|
0.07
|
0.02
|
0.13
|
0.08
|
|||||||||||
|
Business acquisition and integration expense
|
0.18
|
0.21
|
0.71
|
0.47
|
|||||||||||
|
Walden intangible amortization expense
|
0.61
|
-
|
0.94
|
-
|
|||||||||||
|
Pre-acquisition interest expense
|
-
|
0.00
|
0.63
|
0.00
|
|||||||||||
|
Income tax impact on non-GAAP adjustments (1)
|
(0.93
|
)
|
(0.08
|
)
|
(0.84
|
)
|
(0.14
|
)
|
|||||||
|
Loss from discontinued operations attributable to Adtalem
|
0.42
|
0.01
|
0.04
|
0.01
|
|||||||||||
|
Earnings per share from continuing operations excluding special items, diluted (non-GAAP)
|
$
|
0.75
|
$
|
0.61
|
$
|
1.10
|
$
|
1.23
|
|||||||
|
Diluted shares used in non-GAAP EPS calculation
|
50,237
|
52,441
|
50,166
|
52,622
|
|||||||||||
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
|
|||||||||||||
|
FY22
|
FY21
|
FY22
|
FY22
|
FY21
|
||||||||||
|
Q2
|
|
Q2
|
|
Q2
|
Q1
|
Q4
|
||||||||
|
Net cash (used in) provided by operating
activities-continuing operations (GAAP)
|
$
|
(48,474)
|
$
|
(15,567)
|
$
|
91,835
|
$
|
124,742
|
$
|
168,760
|
||||
|
Capital expenditures
|
(8,081)
|
(7,388)
|
(34,949)
|
(34,256)
|
(39,881)
|
|||||||||
|
Free cash flow (non-GAAP)
|
$
|
(56,555)
|
$
|
(22,955)
|
$
|
56,886
|
$
|
90,486
|
$
|
128,879
|
||||
Adtalem Global Education Inc.
Non-GAAP Outlook Disclosure
(unaudited)
(in millions, except per share data)
|
Year Ended
|
|||
|
June 30, 2022
|
|||
|
Expected (loss) earnings per share, diluted (GAAP)
|
$ |
(0.11) to 0.09
|
|
|
Expected effects on diluted earnings per share:
|
|||
|
Purchase accounting adjustment - deferred revenue
|
0.17
|
||
|
CEO transition costs
|
0.12
|
||
|
Restructuring expense
|
0.13
|
||
|
Business acquisition and integration costs
|
0.71
|
||
|
Estimated purchase accounting adjustment - intangible amortization
|
1.94
|
||
|
Pre-acquisition interest expense
|
0.63
|
||
|
Estimated incremental acquisition integration costs
|
0.26
|
||
|
Estimated income tax impact on non-GAAP adjustments(1)
|
(0.99
|
)
|
|
|
Loss from discontinued operations
|
0.04
|
||
|
Expected adjusted earnings per share from continuing operations excluding special items, diluted
(non-GAAP)(2)
|
$ |
2.90 to 3.10
|
|
|
Diluted shares used in EPS calculation
|
50,166
|
(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 2022, except for reflecting the Financial Services segment in discontinued operations. The expected effects on diluted earnings per share (“EPS”) of (1) the estimated purchase accounting
adjustment – intangible amortization, and (2) the estimated incremental acquisition integration costs are estimates related to the Walden University acquisition. The effects on diluted EPS of purchase accounting adjustment – deferred revenue,
CEO transition costs, restructuring expense, business acquisition and integration costs, pre-acquisition interest expense, and loss from discontinued operations include the results realized through December 31, 2021. 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 2022, would impact the GAAP
expected EPS provided above.
|
Year Ended
|
|||
|
June 30, 2022
|
|||
|
Expected revenue (GAAP)
|
$ |
1,341 to 1,381
|
|
|
Estimated incremental purchase accounting adjustment - deferred revenue
|
9
|
||
|
Expected revenue excluding special items (non-GAAP)(3)
|
$ |
1,350 to 1,390
|
|
(3) 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 2022, except for reflecting the Financial Services segment in discontinued operations. The expected effects on revenue of the item listed above is an estimate related to the Walden University
acquisition.