Covista Inc 8-K/A, filed Oct 22, 2021

Covista Inc. (CVSA)

8-K/A 2021-10-22 For: 2021-08-12

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Added on April 10, 2026

About this 8-K/A

Covista Inc filed this 8-K/A on October 22, 2021, reporting on events of August 12, 2021.

Items reported

Item 2.01: Completed an acquisition or sale of assets
Item 9.01: Financial statements and exhibits

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Delaware	001-13988	36-3150143
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

500 West Monroe Chicago, IL		60661
(Address of principal executive offices)		(Zip Code)



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock $0.01 Par Value	ATGE	New York Stock Exchange
Common Stock $0.01 Par Value	ATGE	NYSE Chicago


Exhibit No.		Description

99.1		Audited Combined Financial Statements of the Walden Education Business of Laureate Education, Inc. as of and for the years ended December 31, 2020 and 2019.

99.2		Consent of PricewaterhouseCoopers LLP, independent auditors

99.3		Unaudited Condensed Combined Financial Statements of the Walden Education Business of Laureate Education, Inc. as of June 30, 2021 and December 31, 2020 and for the six-months ended June 30, 2021 and 2020

99.4		Unaudited Pro Forma Combined Balance Sheet as of June 30, 2021 and Unaudited Pro Forma Combined Statement of Income for the year ended June 30, 2021 of Adtalem Global Education Inc. and notes related thereto

104		Cover Page Interactive Data File (formatted as Inline XBRL)


	ADTALEM GLOBAL EDUCATION INC.

	By:	/s/ Robert J. Phelan
		Robert J. Phelan
Date: October 22, 2021		Chief Financial Officer


Contents		Page(s)

Report of Independent Auditors		1

Financial Statements

Combined Balance Sheets as of December 31, 2020 and 2019		2

Combined Statements of Operations for the years ended December 31, 2020 and 2019		3

Combined Statements of Changes in Net Parent Investment for the years ended December 31, 2020 and 2019		4

Combined Statements of Cash Flows for the years ended December 31, 2020 and 2019		5

Notes to Combined Financial Statements		6-16


($ in thousands)	2020		2019
Assets
Current Assets
Cash	$	204,723	$	58,414
Restricted cash		100,670		151,807
Student tuition and fees receivable, net		32,827		28,413
Prepaid expenses and other current assets		3,736		3,627
Total current assets		341,956		242,261
Property, Equipment and Leasehold Improvements, Net		28,845		36,335
Other Assets
Operating lease right-of-use assets, net		8,683		11,253
Deferred project costs, net		21,022		20,237
Prepaid expenses and other long term assets		14,370		7,837
Deferred tax asset		10,662		6,885
Goodwill		2,812		2,812
Total other assets		57,549		49,024
Total assets	$	428,350	$	327,620
Liabilities and Net Parent Investment
Current Liabilities
Accounts payable and accrued expenses	$	76,585	$	62,145
Deferred revenue and student deposits		81,133		73,610
Current portion of operating leases		2,657		2,225
Other current liabilities		191		412
Total current liabilities		160,566		138,392
Long-Term Liabilities
Long term portion of operating leases		6,633		8,969
Total long-term liabilities		6,633		8,969
Total liabilities		167,199		147,361
Commitments and Contingencies
Net Parent Investment		261,151		180,259
Total liabilities and Net Parent Investment	$	428,350	$	327,620


($ in thousands)	Net parent investment
Balance as of January 1, 2019	$	191,994
Adoption of accounting standard		(63)
Net income		112,626
Non-cash stock compensation		992
Net change in parent investment		(125,290)
Balance as of December 31, 2019		180,259
Net income		113,158
Non-cash stock compensation		1,234
Net change in parent investment		(33,500)
Balance as of December 31, 2020	$	261,151


	2020		2019
Walden shared service costs (1)	$	14,326	$	95,174
Stock compensation expense (2)		1,234		992
Laureate corporate expense allocation (3)		5,091		5,907
Laureate allocated tradename (4)		1,561		—
	$	22,212	$	102,073


	Estimated
	Useful Life		2020		2019
Leasehold improvements	5 - 15 years	$	10,198	$	12,778
Furniture and fixtures	5 - 7 years		3,299		3,491
Computer hardware, software and other equipment	2 - 12 years		100,643		104,251
			114,140		120,520
Less: accumulated depreciation			(87,532)		(86,783)
			26,608		33,737
Construction in progress			2,237		2,598
Property, Equipment and Leasehold Improvements, Net		$	28,845	$	36,335


2021	$	3,111
2022		2,496
2023		2,390
2024		2,255
Total minimum lease payments		10,252
Less: interest		(962)
Present value of lease liabilities	$	9,290


	2020		2019
Deferred projects costs	$	98,393	$	94,427
Less: accumulated amortization		(81,229)		(77,922)
	$	17,164	$	16,505
Projects in development		3,858		3,732
Deferred project costs, net	$	21,022	$	20,237


	2020		2019
Current
Federal	$	33,231	$	30,271
State		9,061		9,263
Total Current Expense		42,292		39,534

Deferred
Federal		(2,795)		(455)
State		(982)		86
Total Deferred Expense		(3,777)		(369)
Total provision for income taxes	$	38,515	$	39,165


	2020		2019
Deferred tax assets
Deferred compensation	$	6,962	$	4,627
Allowance for doubtful accounts		4,749		4,077
Nondeductible reserves		685		655
Operating lease liability		497		2,862
Unrealized Loss		182		—
Total deferred tax assets		13,075		12,221
Deferred tax liabilities
Depreciation		(1,345)		(1,666)
Amortization of intangible assets		(727)		(719)
Unrealized gain		—		(73)
Operating lease right-of-use assets, net		(340)		(2,877)
Total deferred tax liabilities		(2,412)		(5,335)
Net deferred tax assets	$	10,662	$	6,885


	2020		2019
Tax expense at U.S. statutory rate of 21%	$	31,851	$	31,876
State income tax expense, net of federal tax effect		6,382		7,386
Deferred only adjustment - Depreciation		—		(491)
Deferred only adjustment Excess Tax Benefits		—		132
Deferred Adjustments		337		—
Effect of permanent differences and other		(55)		262
Income tax expense	$	38,515	$	39,165


($ in thousands)	June 2021		December 2020
Assets
Current Assets
Cash	$	84,135	$	204,723
Restricted cash		100,622		100,670
Student tuition and fees receivable, net		33,068		32,827
Prepaid expenses and other current assets		9,996		3,736
Total current assets		227,821		341,956

Property, Equipment and Leasehold Improvements, Net		28,171		28,845
Other Assets
Operating lease right-of-use assets, net		5,896		8,683
Deferred project costs, net		20,626		21,022
Other long term assets		16,576		14,370
Deferred tax asset		10,635		10,662
Goodwill		2,812		2,812
Total other assets		56,545		57,549

Total assets	$	312,537	$	428,350

Liabilities and Net Parent Investment
Current Liabilities
Accounts payable and accrued expenses	$	64,500	$	76,585
Deferred revenue and student deposits		82,207		81,133
Current portion of operating leases		1,797		2,657
Other current liabilities		197		191
Total current liabilities		148,701		160,566

Long-Term Liabilities
Long term portion of operating leases		4,416		6,633
Total long-term liabilities		4,416		6,633

Total liabilities		153,117		167,199

Commitments and Contingencies

Net Parent Investment		159,420		261,151

Total liabilities and Net Parent Investment	$	312,537	$	428,350


($ in thousands)	2020		2019
Revenues
Masters programs	$	362,582	$	342,270
Doctoral programs		145,345		154,493
Undergraduate programs		66,873		60,908
Other revenues		46,589		42,121
Total revenues, net of scholarships		621,389		599,792
Operating Expenses
Direct costs		408,110		398,615
General and administrative		61,207		49,775
Total operating expenses		469,317		448,390
Operating income		152,072		151,402
Other (expense) income:
Interest income, net		158		216
Other (expense) income		(557)		173
Total other (expense) income		(399)		389
Income before income taxes		151,673		151,791
Provision for income taxes		(38,515)		(39,165)
Net income	$	113,158	$	112,626

($ in thousands)	2021		2020
Revenues
Masters programs	$	183,633	$	169,301
Doctoral programs		68,573		70,068
Undergraduate programs		33,352		31,308
Other revenues		21,192		22,840
Total revenues, net of scholarships		306,750		293,517

Operating Expenses
Direct costs		214,732		204,010
General and administrative		22,966		19,994
Total operating expenses		237,698		224,004

Operating income		69,052		69,513

Other income:
Interest income, net		2		100
Other income, net		(39)		(212)
Total other income		(37)		(112)

Income before income taxes		69,015		69,401
Provision for income taxes		(17,632)		(17,849)
Net income	$	51,383	$	51,552


($ in thousands)	Net parent investment
Balance as of January 1, 2020	$	180,259
Net income		51,552
Non-cash stock compensation		423
Net change in parent investment		(106,972)
Balance as of June 30, 2020		125,262

Balance as of January 1, 2021	$	261,151
Net income		51,383
Non-cash stock compensation		574
Net change in parent investment		(153,688)
Balance as of June 30, 2021	$	159,420


	Six Months Ended June 30,
	2021		2020
Walden shared service costs (1)	$	1,806	$	6,363
Stock compensation expense (2)		574		423
Laureate Corporate expense allocation (3)		2,174		2,127
Laureate allocated tradename (4)		2,669		—
	$	7,223	$	8,913


	Six Months Ended June 30, 2021
	2021		2020
Current
Federal	$	13,756	$	14,526
State		3,849		3,309
Total Current Expense		17,605		17,835
Deferred
Federal		21		—
State		6		14
Total Deferred Expense		27		14
Total provision for income taxes	$	17,632	$	17,849

					Transaction Accounting Adjustments
	Adtalem Global Education Inc. historical		Walden Education Business historical		Acquisition Financing and Refinancing adjustments			Walden Acquisition adjustments			Pro forma combined
						Note 2			Note 3
Assets:
Current assets:
Cash and cash equivalents	$	494,613	$	84,135	$	488,552	(b)	$	(768,903)	(c)	$	298,397
Restricted cash		819,003		100,622		—			(818,607)	(d)		17,442
									(83,576)	(e)
Accounts receivable, net		67,996		33,068		—			—			101,064
Prepaid expenses and other current assets		133,341		9,996		—			—			143,337
Total current assets		1,514,953		227,821		488,552			(1,671,086)			560,240
Noncurrent assets:
Property and equipment, net		297,237		28,171		—			—			325,408
Operating lease assets		168,943		5,896		—			—			174,839
Deferred income taxes		22,479		10,635		—			(10,635)	(e)		22,479
Intangible assets, net		276,249		—		—			833,351	(b)		1,109,600
Goodwill		686,374		2,812		—			616,005	(a)		1,305,191
Other assets, net		87,601		37,202		6,778	(a)		(20,626)	(b)		110,955
Total assets	$	3,053,836	$	312,537	$	495,330		$	(252,991)		$	3,608,712

Liabilities and shareholders’ equity:
Current liabilities:
Accounts payable, accrued payroll and benefits, accrued liabilities, and other current liabilities	$	249,781	$	64,697	$	(12,112)	(a)	$	—		$	302,366
Deferred revenue and student deposits		100,697		82,207		—			(71,249)	(b)		111,655
Current operating lease liabilities		55,329		1,797		—			—			57,126
Current portion of long-term debt		3,000		—		3,375	(a)		—			6,375
Total current liabilities		408,807		148,701		(8,737)			(71,249)			477,522
Noncurrent liabilities:
Long-term debt		1,067,711		—		531,288	(a)		—			1,598,999
Long-term operating lease liabilities		167,855		4,416		—			—			172,271
Deferred income taxes		26,991		—		2,231	(c)		—			29,222
Other liabilities		79,612		—		(8,926)	(c)		—			70,686
Total liabilities		1,750,976		153,117		515,856			(71,249)			2,348,700
Commitments and contingencies
Redeemable noncontrolling interest		1,790		—		—			—			1,790
Shareholders’ equity:
Common stock, $0.01 par value per share, 200,000 shares authorized; 49,253 shares outstanding		811		—		—			—			811
Additional paid-in capital		519,826		—		—			—			519,826
Retained earnings		2,005,105		—		(27,221)	(d)		(22,322)	(f)		1,955,562
Accumulated other comprehensive loss		(7,365)		—		6,695	(c)		—			(670)
Treasury stock, at cost, 31,846 shares		(1,217,307)		—		—			—			(1,217,307)
Net parent investment		—		159,420		—			(159,420)	(g)		—
Total shareholders’ equity		1,301,070		159,420		(20,526)			(181,742)			1,258,222
Total liabilities and shareholders’ equity	$	3,053,836	$	312,537	$	495,330		$	(252,991)		$	3,608,712

					Transaction Accounting Adjustments
	Adtalem Global Education Inc. historical		Walden Education Business historical		Acquisition Financing and Refinancing adjustments			Walden Acquisition adjustments			Pro forma combined
					Note 2			Note 4
Revenue	$	1,112,380	$	634,622	$	—		$	—		$	1,747,002
Operating cost and expense:
Cost of educational services		489,233		418,832		—			16,430	(b)		924,495
Student services and administrative expense		420,267		64,179		—			106,537	(a)		574,553
		—							(16,430)	(b)
Restructuring expense		9,804		—		—			—			9,804
Business acquisition and integration expense		31,593		—		—			22,322	(c)		53,915
Total operating cost and expense		950,897		483,011		—			128,859			1,562,767
Operating income (loss)		161,483		151,611		—			(128,859)			184,235
Other income (expense):
Interest and dividend income		4,094		60		—			—			4,154
Interest expense		(41,365)		—		(77,277)	(a)		—			(123,167)
						(4,525)	(c)		—
Investment gain and other income (expense), net		2,638		(384)		—			—			2,254
Net other expense		(34,633)		(324)		(81,802)			—			(116,759)
Income (loss) from continuing operations before income taxes		126,850		151,287		(81,802)			(128,859)			67,476
(Provision for) benefit from income taxes		(25,248)		(38,298)		20,123	(e)		31,699	(d)		(11,724)
Income (loss) from continuing operations		101,602		112,989		(61,679)			(97,160)			55,752
Net loss attributable to redeemable noncontrolling interest from continuing operations		434		—		—			—			434
Net income (loss) from continuing operations	$	102,036	$	112,989	$	(61,679)		$	(97,160)		$	56,186

Earnings per share from continuing operations:
Basic	$	1.99									$	1.09
Diluted	$	1.98									$	1.09
Weighted-average shares outstanding:
Basic shares		51,322										51,322
Diluted shares		51,645										51,645


Description Amounts in thousands	Balance as of June 30, 2021		Interest expense Year ended June 30, 2021
New Credit Facilities:
Term Facility (5.25%; 7 years)	$	850,000	$	44,541
Deferred debt issuance costs paid at closing – Term Facility		(19,310)
Deferred debt issuance costs paid prior to closing – Term Facility		(1,268)
Original issue discount (1.0%) – Term Facility		(8,500)
Amortization of deferred debt issuance costs and original issue discount		3,610
Write-off of deferred debt issuance costs on unused bridge facility		10,329
Additional interest expense associated with the Notes		29,333
Additional deferred debt issuance costs associated with the Notes		1,554
Ticking fees		(11,263)
Letters of credit		6,710
Acquisition financing, net		820,922		84,814
Current portion of long-term debt		6,375
Noncurrent portion of long-term debt		814,547
Ticking fees payable (within accrued liabilities)		(11,263)

Revolving Facility (0.25% unused commitment fee, 5 years)		—		617
Deferred debt issuance costs paid at closing – Revolving Facility		9,549		1,910
Deferred debt issuance costs paid prior to closing – Revolving Facility		597		119
Rating agency fees reclassified to deferred debt issuance costs		(1,866)
Other assets, net		8,280		2,646

Existing Credit Facilities:
Existing Term Loan B	$	(291,000)	$	(9,311)
Deferred debt issuance costs		4,741		(1,159)
Write-off of unamortized deferred debt issuance costs		4,596
Interest expense associated with the interest rate swap agreement		(2,405)
Letters of credit		(1,648)
Existing Credit Facilities		(286,259)		(9,927)
Current portion of long-term debt		(3,000)
Noncurrent portion of long-term debt		(283,259)
Interest payable (within accrued liabilities)		(849)

Existing Revolver		—		(939)
Deferred debt issuance costs		(1,502)		(721)
Write-off of unamortized deferred debt issuance costs		1,404
Other assets, net		(1,502)		(256)

Pro forma adjustments to:
Current portion of long-term debt		3,375
Noncurrent portion of long-term debt		531,288
Other assets, net		6,778
Interest payable and ticking fees payable (within accrued liabilities)		(12,112)
Interest expense				77,277


Description	Amounts in thousands
Sources of funds:
Term Facility	$	850,000
Deferred debt issuance costs (Term Facility and Revolving Facility)		(28,858)
Original issue discount of 1.0% (Term Facility)		(8,500)
Net cash inflow from financing	$	812,642

Uses of funds:
Extinguishment of existing debt	$	(291,000)
Interest payable and ticking fees payable related to debt instruments		(12,112)
Deferred debt issuance costs on the unused bridge facility		(10,329)
Incremental ticking fees incurred between July 1, 2021 and August 12, 2021		(5,330)
One-time fees associated with the New Credit Facility		(794)
Interest rate swap settlement payment		(4,525)
Net cash outflow from financing	$	(324,090)

Pro forma adjustment to cash and cash equivalents	$	488,552


Description	Amounts in thousands
Adjustment to the unaudited pro forma combined balance sheet:
Deferred income taxes	$	2,231
Other liabilities		(8,926)
Accumulated other comprehensive loss		6,695

Adjustment to the unaudited pro forma combined statement of income:
Interest expense	$	(4,525)


Description Amounts in thousands	Preliminary estimate of fair value	Total
Purchase price consideration, net of cash received		$	1,464,007
Walden’s net assets to be acquired:
Current assets	43,064
Property and equipment, net	28,171
Operating lease assets	5,896
Intangible assets, net	833,351
Current liabilities, excluding deferred revenue	(66,494)
Deferred revenue	(10,958)
Other assets and liabilities, net	12,160
Net assets acquired			845,190
Less: Walden Historical Goodwill			(2,812)
Pro forma adjustment to Goodwill		$	616,005


Description Amounts in thousands	Historical basis		Preliminary estimate of fair value		Pro forma Adjustment
Assets:
Trade name	$	—	$	119,560	$	119,560
Title IV eligibility and accreditation		—		495,800		495,800
Student relationships		—		161,900		161,900
Curriculum		—		56,091		56,091
Intangible assets, net					$	833,351

Curriculum	$	20,626	$	—	$	(20,626)
Other assets, net	$	(20,626)

Liabilities:
Deferred revenue	$	82,207	$	10,958	$	(71,249)


Description	Amounts in thousands
Purchase price consideration for Walden		(1,565,188)
One-time transaction costs		(18,421)
Insurance for representations and warranties		(3,901)
Net cash outflow for the Walden Acquisition	$	(1,587,510)

Release of funds from restricted cash that were required to be used for the Walden Acquisition		818,607

Pro forma adjustment to cash and cash equivalents	$	(768,903)


Intangible assets Amounts in thousands	Amount		Useful life (years)		Adjustment to Amortization Year ended June 30, 2021
Trade name	$	119,560		Indefinite	$	—
Title IV eligibility and accreditation		495,800		Indefinite		—
Student relationships		161,900		3		95,319
Curriculum		56,091		5		11,218
Total	$	833,351			$	106,537