CVSA 8-K
Covista Inc. (CVSA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Item 2.02Results of Operations and Financial Condition
On January 30, 2025, Adtalem Global Education Inc. (“Adtalem”) issued a press release announcing its second quarter fiscal 2025 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.
Cautionary Disclosure Regarding 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 Adtalem’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and our other filings with the SEC. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.
Item 9.01Financial Statements and Exhibits.
99.1 |
| Press release of Adtalem Global Education Inc. dated January 30, 2025. |
104 | Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101) |
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.
ADTALEM GLOBAL EDUCATION INC. | ||
By: | /s/ Robert J. Phelan | |
Robert J. Phelan | ||
Senior Vice President and Chief Financial Officer (Principal Financial Officer) | ||
Date: January 30, 2025
Exhibit 99.1
News Release
Investor Contact
Jay Spitzer
+1 312-906-6600
Media Contact
Britt Mitchell
+1 872-270-0301
Adtalem Global Education Second Quarter Fiscal Year 2025 Results; Guidance Raised
Total enrollment up 11.6% YoY
Revenue up 13.9% YoY
Diluted earnings per share $1.98; Adjusted EPS $1.81, growth of 47.2% YoY
Second quarter highlights
| ● | Total student enrollment 91,264, up 11.6% year-over-year |
| ● | Revenue $447.7 million, up 13.9% year-over-year |
| ● | Chamberlain University achieved eighth straight quarter of total enrollment growth, up 11.5% year-over-year, highest total enrollment in university history |
| ● | Walden University achieved sixth straight quarter of total enrollment growth, up 13.2% year-over-year |
| ● | Strong momentum, GAAP net income $75.9 million and adjusted EBITDA $125.0 million, up 35.1% year-over-year |
| ● | Growth with Purpose strategy generating significant and sustainable returns |
Capital allocation
| ● | Repurchased $38 million of shares, $140 million remaining under $300 million Board authorized share repurchase program through January 2027 |
| ● | Repaid $100 million of outstanding Term Loan B balance on Jan. 17, 2025 |
| ● | Net leverage 1.1x as of Dec. 31, 2024 |
Fiscal year 2025 guidance
| ● | Revenue $1,730 million to $1,760 million |
| ● | Adjusted earnings per share $6.10 to $6.30 |
CHICAGO – Jan. 30, 2025 – Adtalem Global Education Inc. (NYSE: ATGE), the leading healthcare educator in the United States, today reported second quarter fiscal year 2025 results (ended Dec. 31, 2024), expanding the Company’s societal and healthcare impact at an industry-leading pace.
"Growth with Purpose, our operational excellence strategy, has delivered exceptional results—marked by six straight quarters of enrollment growth—while advancing our mission to develop skilled healthcare professionals," said Steve Beard, chairman and chief executive officer, Adtalem Global Education. "By optimizing the student experience and with a commitment to student outcomes, we're successfully scaling critical care education. These consistent and sustainable results give us confidence to raise our expectations for fiscal 2025."
Financial Highlights
Selected financial data for the three months ended Dec. 31, 2024:
| ● | Revenue of $447.7 million increased 13.9% compared with the prior year |
| ● | Operating income of $103.9 million, compared with $58.6 million in the prior year; adjusted operating income of $101.4 million, compared with $75.6 million in the prior year |
| ● | Net income of $75.9 million, compared with $39.9 million in the prior year; adjusted net income of $69.4 million, compared with $50.3 million in the prior year |
| ● | Diluted earnings per share of $1.98, compared with $0.98 in the prior year; adjusted earnings per share of $1.81, compared with $1.23 in the prior year |
| ● | Adjusted EBITDA of $125.0 million, compared with $92.6 million in the prior year; adjusted EBITDA margin of 27.9%, compared with 23.5% in the prior year |
Business Highlights
| ● | Chamberlain University continues to build a robust pipeline of nurses through programs including its Bachelor of Science in Nursing (BSN) Online Option, which offers flexibility and experiential learning opportunities to students in 36 states. The program boasts over 2,500 current enrollees since launching four years ago and operates 44 clinical hub locations at partner healthcare sites. |
| ● | Walden University launched "Get the W," a new brand campaign that celebrates the wins that drive our students and graduates to make a meaningful impact in healthcare and beyond. |
| ● | Ross University School of Veterinary Medicine (RUSVM) hosted the West Indies Veterinary Conference 2024, a prominent event in the global veterinary community that brings together hundreds of veterinary professionals, including over 300 RUSVM alumni. The event featured continuing education, including lectures and master classes on topics ranging from wound care to business management. |
Segment Highlights
$ in millions | | Three Months Ended December 31, | ||
| | 2024 | 2023 | % Change |
Revenue | | $181.0 | $153.6 | 17.9% |
Operating Income | | $42.2 | $29.6 | 42.5% |
Adj. Operating Income | | $42.3 | $29.6 | 42.7% |
Adj. EBITDA | | $52.6 | $36.9 | 42.5% |
Total Students (1) | | 39,691 | 35,592 | 11.5% |
| ● | Total student enrollment increased 11.5% compared with the prior year, driven by continued growth in pre-licensure and post-licensure nursing programs. |
Walden
$ in millions | | Three Months Ended December 31, | ||
| | 2024 | 2023 | % Change |
Revenue | | $171.3 | $146.8 | 16.7% |
Operating Income | | $48.9 | $21.6 | 126.4% |
Adj. Operating Income | | $46.2 | $30.2 | 53.1% |
Adj. EBITDA | | $52.1 | $34.6 | 50.2% |
Total Students (1) | | 46,399 | 40,971 | 13.2% |
| ● | Total student enrollment increased 13.2% compared with the prior year, driven by growth in healthcare and non-healthcare programs. |
Medical and Veterinary
$ in millions | | Three Months Ended December 31, | ||
| | 2024 | 2023 | % Change |
Revenue | | $95.4 | $92.9 | 2.8% |
Operating Income | | $21.5 | $22.0 | (2.5)% |
Adj. Operating Income | | $21.5 | $22.1 | (2.6)% |
Adj. EBITDA | | $26.7 | $26.4 | 1.3% |
Total Students (1) | | 5,174 | 5,209 | (0.7)% |
| ● | Medical and Veterinary schools do not have a new enrollment period starting in the second quarter fiscal year 2025. Second quarter fiscal year 2025 enrollment period is the same as first quarter fiscal year 2025 enrollment period and corresponding reported enrollment data. |
Fiscal Year 2025 Outlook
Adtalem raises guidance for fiscal year 2025, with revenue in the range of $1,730 million to $1,760 million, approximately 9.0% to 11.0% growth year-over-year. Adjusted earnings per share to be in the range of $6.10 to $6.30, approximately 21.5% to 25.5% growth year-over-year.
Conference Call and Webcast Information
Adtalem will hold a conference call to discuss its second quarter fiscal year 2025 results today at 4:00 p.m. CT (5:00 p.m. ET).
The call can be accessed by dialing +1 877-407-6184 (U.S. participants) or +1 201-389-0877 (international participants) and stating “Adtalem earnings call” or by using conference ID: 13750710. 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: 13750710, or visit the Adtalem investor relations website.
About Adtalem Global Education
Adtalem Global Education is the leading provider of healthcare education in the U.S., shaping the future of healthcare by preparing a diverse workforce with high-quality academic programs. We innovate education pathways, align with industry needs and empower individuals to reach their full potential. Our commitment to excellence and inclusivity is reflected in our expansive network of institutions, serving over 90,000 students and supported by a strong community of approximately 350,000 alumni and nearly 10,000 dedicated employees. Visit Adtalem.com for more information and follow us on LinkedIn, Instagram and Facebook.
Cautionary Disclosure Regarding Forward-Looking Statements
Certain statements contained in this release are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and our other filings with the SEC. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-
looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.
A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of special items that may be incurred in the future, although these special items could be material to Adtalem's results in accordance with GAAP.
1 Represents total students attending sessions during each institution’s most recent enrollment period in Q2 FY 2025 and Q2 FY 2024.
###
Adtalem Global Education Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands)
| | December 31, | | June 30, | ||
|
| 2024 | | 2024 | ||
Assets: | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | $ | 193,958 | | $ | 219,306 |
Restricted cash | |
| 1,461 | |
| 1,896 |
Accounts and financing receivables, net | |
| 146,973 | |
| 126,833 |
Prepaid expenses and other current assets | |
| 64,693 | |
| 70,050 |
Total current assets | |
| 407,085 | |
| 418,085 |
Noncurrent assets: | |
|
| |
|
|
Property and equipment, net | |
| 245,878 | |
| 248,524 |
Operating lease assets | |
| 188,800 | |
| 176,755 |
Deferred income taxes | |
| 28,413 | |
| 49,088 |
Intangible assets, net | |
| 771,084 | |
| 776,694 |
Goodwill | |
| 961,262 | |
| 961,262 |
Other assets, net | |
| 112,608 | |
| 103,184 |
Assets held for sale | |
| 7,825 | |
| 7,825 |
Total noncurrent assets | |
| 2,315,870 | |
| 2,323,332 |
Total assets | | $ | 2,722,955 | | $ | 2,741,417 |
Liabilities and shareholders' equity: | |
|
| |
|
|
Current liabilities: | |
|
| |
|
|
Accounts payable | | $ | 66,920 | | $ | 102,626 |
Accrued payroll and benefits | |
| 50,999 | |
| 71,373 |
Accrued liabilities | |
| 62,479 | |
| 96,957 |
Deferred revenue | |
| 171,523 | |
| 185,272 |
Current operating lease liabilities | |
| 32,633 | |
| 31,429 |
Total current liabilities | |
| 384,554 | |
| 487,657 |
Noncurrent liabilities: | |
| | |
| |
Long-term debt | |
| 649,924 | |
| 648,712 |
Long-term operating lease liabilities | |
| 182,051 | |
| 167,712 |
Deferred income taxes | |
| 32,367 | |
| 29,526 |
Other liabilities | |
| 35,149 | |
| 38,675 |
Total noncurrent liabilities | |
| 899,491 | |
| 884,625 |
Total liabilities | |
| 1,284,045 | |
| 1,372,282 |
Commitments and contingencies | |
| | |
| |
Total shareholders' equity | |
| 1,438,910 | |
| 1,369,135 |
Total liabilities and shareholders' equity | | $ | 2,722,955 | | $ | 2,741,417 |
Adtalem Global Education Inc.
Consolidated Statements of Income
(unaudited)
(in thousands, except per share data)
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2024 | | 2023 | | 2024 | | 2023 | ||||
Revenue | | $ | 447,729 | | $ | 393,242 | | $ | 865,129 | | $ | 762,087 |
Operating cost and expense: | |
| | | | | |
| | | | |
Cost of educational services | |
| 186,636 | |
| 172,069 | |
| 372,631 | |
| 340,687 |
Student services and administrative expense | |
| 156,901 | |
| 155,584 | |
| 315,974 | |
| 321,679 |
Restructuring expense | |
| 322 | |
| 68 | |
| 2,416 | |
| 744 |
Business integration expense | |
| — | |
| 6,909 | |
| — | |
| 12,171 |
Total operating cost and expense | |
| 343,859 | |
| 334,630 | |
| 691,021 | |
| 675,281 |
Operating income | |
| 103,870 | |
| 58,612 | |
| 174,108 | |
| 86,806 |
Interest expense | |
| (13,909) | |
| (16,693) | |
| (28,391) | |
| (32,350) |
Other income, net | |
| 2,235 | |
| 3,563 | |
| 4,881 | |
| 5,777 |
Income from continuing operations before income taxes | |
| 92,196 | |
| 45,482 | |
| 150,598 | |
| 60,233 |
Provision for income taxes | |
| (21,020) | |
| (7,769) | |
| (33,177) | |
| (10,561) |
Income from continuing operations | |
| 71,176 | |
| 37,713 | |
| 117,421 | |
| 49,672 |
Discontinued operations: | |
| | | | | |
| | | | |
Income from discontinued operations before income taxes | |
| 6,271 | |
| 2,926 | |
| 6,164 | |
| 1,161 |
Provision for income taxes | |
| (1,591) | |
| (748) | |
| (1,564) | |
| (296) |
Income from discontinued operations | |
| 4,680 | |
| 2,178 | |
| 4,600 | |
| 865 |
Net income and comprehensive income | | $ | 75,856 | | $ | 39,891 | | $ | 122,021 | | $ | 50,537 |
| | | | | | | | | | | | |
Earnings per share: | |
| | | | | |
| | | | |
Basic: | |
| | | | | |
| | | | |
Continuing operations | | $ | 1.90 | | $ | 0.95 | | $ | 3.12 | | $ | 1.22 |
Discontinued operations | | $ | 0.13 | | $ | 0.05 | | $ | 0.12 | | $ | 0.02 |
Total basic earnings per share | | $ | 2.03 | | $ | 1.00 | | $ | 3.25 | | $ | 1.24 |
Diluted: | |
| | |
| | |
| | |
| |
Continuing operations | | $ | 1.85 | | $ | 0.92 | | $ | 3.03 | | $ | 1.20 |
Discontinued operations | | $ | 0.12 | | $ | 0.05 | | $ | 0.12 | | $ | 0.02 |
Total diluted earnings per share | | $ | 1.98 | | $ | 0.98 | | $ | 3.15 | | $ | 1.22 |
| | | | | | | | | | | | |
Weighted-average shares outstanding: | | | | | | | | | | | | |
Basic shares | | | 37,435 | | | 39,872 | | | 37,578 | | | 40,636 |
Diluted shares | | | 38,401 | | | 40,787 | | | 38,755 | | | 41,486 |
Adtalem Global Education Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| | Six Months Ended | ||||
| | December 31, | ||||
| | 2024 | | 2023 | ||
Operating activities: | | | | | | |
Net income | | $ | 122,021 | | $ | 50,537 |
Income from discontinued operations | |
| (4,600) | |
| (865) |
Income from continuing operations | | | 117,421 | | | 49,672 |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | |
| |
Stock-based compensation | |
| 20,918 | |
| 13,505 |
Amortization and impairments to operating lease assets | | | 14,092 | | | 17,340 |
Depreciation | |
| 19,993 | |
| 19,381 |
Amortization of acquired intangible assets | |
| 5,610 | |
| 20,010 |
Amortization of debt discount and issuance costs | | | 2,226 | | | 2,310 |
Provision for bad debts | | | 28,719 | | | 23,024 |
Deferred income taxes | |
| 23,516 | |
| (343) |
Loss on disposals of property and equipment | |
| 114 | |
| 38 |
Gain on investments | | | (442) | | | (575) |
Unrealized loss on assets held for sale | | | — | | | 647 |
Changes in assets and liabilities: | |
| | |
| |
Accounts and financing receivables | |
| (46,493) | |
| (52,716) |
Prepaid expenses and other current assets | |
| 6,829 | |
| (2,143) |
Cloud computing implementation assets | |
| (14,071) | |
| (11,314) |
Accounts payable | |
| (34,588) | |
| 9,755 |
Accrued payroll and benefits | | | (20,311) | | | (6,073) |
Accrued liabilities | |
| (29,066) | |
| 25,130 |
Deferred revenue | |
| (12,028) | |
| (13,540) |
Operating lease liabilities | | | (10,594) | | | (20,441) |
Other assets and liabilities | |
| (5,888) | |
| (1,314) |
Net cash provided by operating activities-continuing operations | |
| 65,957 | |
| 72,353 |
Net cash provided by operating activities-discontinued operations | |
| 4,340 | |
| 9,515 |
Net cash provided by operating activities | |
| 70,297 | |
| 81,868 |
Investing activities: | |
| | | | |
Capital expenditures | |
| (21,094) | |
| (19,612) |
Proceeds from sales of marketable securities | |
| 2,426 | |
| 626 |
Purchases of marketable securities | |
| (1,548) | |
| (498) |
Net cash used in investing activities | |
| (20,216) | |
| (19,484) |
Financing activities: | |
| | | | |
Proceeds from exercise of stock options | |
| 9,833 | |
| 15,313 |
Employee taxes paid on withholding shares | |
| (12,198) | |
| (6,505) |
Proceeds from stock issued under Colleague Stock Purchase Plan | |
| 567 | |
| 359 |
Repurchases of common stock for treasury | |
| (74,066) | |
| (160,549) |
Proceeds from issuance of long-term debt | |
| 9,873 | |
| — |
Repayments of long-term debt | |
| (9,873) | |
| — |
Net cash used in financing activities | |
| (75,864) | |
| (151,382) |
Net decrease in cash, cash equivalents and restricted cash | |
| (25,783) | |
| (88,998) |
Cash, cash equivalents and restricted cash at beginning of period | |
| 221,202 | |
| 275,075 |
Cash, cash equivalents and restricted cash at end of period | | $ | 195,419 | | $ | 186,077 |
Non-cash investing and financing activities: | | | | | | |
Accrued capital expenditures | | $ | 5,085 | | $ | 4,053 |
Accrued liability for repurchases of common stock | | $ | 400 | | $ | 2,400 |
Accrued excise tax on share repurchases | | $ | 301 | | $ | 2,358 |
Adtalem Global Education Inc.
Segment Information
(unaudited)
(in thousands)
| | Three Months Ended | | Six Months Ended | ||||||||||||||||||||
| | December 31, | | December 31, | ||||||||||||||||||||
| | | | | | | | Increase/(Decrease) | | | | | | | | | Increase/(Decrease) | | ||||||
|
| 2024 | | 2023 |
| $ | | % | |
| 2024 | | 2023 |
| $ | | % | | ||||||
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | |
Chamberlain | | $ | 180,986 | | $ | 153,553 | | $ | 27,433 | | 17.9 | % | | $ | 348,916 | | $ | 296,149 | | $ | 52,767 | | 17.8 | % |
Walden | | | 171,306 | | | 146,808 | | | 24,498 | | 16.7 | % | | | 332,819 | | | 288,416 | | | 44,403 | | 15.4 | % |
Medical and Veterinary | | | 95,437 | | | 92,881 | | | 2,556 | | 2.8 | % | | | 183,394 | | | 177,522 | | | 5,872 | | 3.3 | % |
Total consolidated revenue | | $ | 447,729 | | $ | 393,242 | | $ | 54,487 | | 13.9 | % | | $ | 865,129 | | $ | 762,087 | | $ | 103,042 | | 13.5 | % |
Operating income (loss): | | | | | | | | | | | | | | | | | | | | | | | | |
Chamberlain | | $ | 42,226 | | $ | 29,640 | | $ | 12,586 | | 42.5 | % | | $ | 68,200 | | $ | 53,964 | | $ | 14,236 | | 26.4 | % |
Walden | | | 48,898 | | | 21,598 | | | 27,300 | | 126.4 | % | | | 88,735 | | | 23,536 | | | 65,199 | | 277.0 | % |
Medical and Veterinary | | | 21,463 | | | 22,020 | | | (557) | | (2.5) | % | | | 36,134 | | | 36,383 | | | (249) | | (0.7) | % |
Home Office | | | (8,717) | | | (14,646) | | | 5,929 | | 40.5 | % | | | (18,961) | | | (27,077) | | | 8,116 | | 30.0 | % |
Total consolidated operating income | | $ | 103,870 | | $ | 58,612 | | $ | 45,258 | | 77.2 | % | | $ | 174,108 | | $ | 86,806 | | $ | 87,302 | | 100.6 | % |
Non-GAAP Financial Measures and Reconciliations
We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial measures used in the subsequent GAAP to non-GAAP reconciliation tables:
Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, debt modification costs, loss on assets held for sale, and income from discontinued operations.
Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, debt modification costs, loss on assets held for sale, and income from discontinued operations.
Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, debt modification costs, and loss on assets held for sale. 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 income from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, business integration expense, litigation reserve, loss on assets held for sale, and debt modification costs. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.
Free cash flow (most comparable GAAP measure: net cash provided by operating activities-continuing operations) – Defined as net cash provided by operating activities-continuing operations less capital expenditures.
Net debt – Defined as long-term debt less cash and cash equivalents.
Net leverage – Defined as net debt divided by adjusted EBITDA.
A description of special items in our non-GAAP financial measures described above are as follows:
| ● | Restructuring expense primarily related to workforce reductions, costs to exit certain course offerings, and prior real estate consolidations at Adtalem’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense. |
| ● | Business 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 integration expense. |
| ● | Amortization of acquired intangible assets. |
| ● | Amortization of cloud computing implementation assets. |
| ● | Reserves related to significant litigation, debt modification costs related to refinancing our Term Loan B loan, and loss on assets held for sale related to a fair value write-down on assets. |
| ● | Income from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University divestiture and the earn-outs we received. |
Adtalem Global Education Inc.
Non-GAAP Operating Income by Segment
(unaudited)
(in thousands)
| | Three Months Ended | | Six Months Ended | ||||||||||||||||||||
| | December 31, | | December 31, | ||||||||||||||||||||
| | | | | | | | Increase/(Decrease) | | | | | | | | | Increase/(Decrease) | | ||||||
| | 2024 | | 2023 | | $ | | % | | | 2024 | | 2023 | | $ | | % | | ||||||
Chamberlain: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (GAAP) | | $ | 42,226 | | $ | 29,640 | | $ | 12,586 | | 42.5 | % | | $ | 68,200 | | $ | 53,964 | | $ | 14,236 | | 26.4 | % |
Restructuring expense | | | 77 | | | — | | | 77 | | | | | | 1,935 | | | — | | | 1,935 | | | |
Adjusted operating income (non-GAAP) | | $ | 42,303 | | $ | 29,640 | | $ | 12,663 | | 42.7 | % | | $ | 70,135 | | $ | 53,964 | | $ | 16,171 | | 30.0 | % |
Operating margin (GAAP) | | | 23.3 | % | | 19.3 | % | | | | | | | | 19.5 | % | | 18.2 | % | | | | | |
Operating margin (non-GAAP) | | | 23.4 | % | | 19.3 | % | | | | | | | | 20.1 | % | | 18.2 | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Walden: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (GAAP) | | $ | 48,898 | | $ | 21,598 | | $ | 27,300 | | 126.4 | % | | $ | 88,735 | | $ | 23,536 | | $ | 65,199 | | 277.0 | % |
Restructuring expense | | | — | | | (776) | | | 776 | | | | | | — | | | (776) | | | 776 | | | |
Amortization of acquired intangible assets | | | 2,805 | | | 9,333 | | | (6,528) | | | | | | 5,610 | | | 20,010 | | | (14,400) | | | |
Litigation reserve | | | (5,550) | | | — | | | (5,550) | | | | | | (5,550) | | | 18,500 | | | (24,050) | | | |
Adjusted operating income (non-GAAP) | | $ | 46,153 | | $ | 30,155 | | $ | 15,998 | | 53.1 | % | | $ | 88,795 | | $ | 61,270 | | $ | 27,525 | | 44.9 | % |
Operating margin (GAAP) | | | 28.5 | % | | 14.7 | % | | | | | | | | 26.7 | % | | 8.2 | % | | | | | |
Operating margin (non-GAAP) | | | 26.9 | % | | 20.5 | % | | | | | | | | 26.7 | % | | 21.2 | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Medical and Veterinary: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (GAAP) | | $ | 21,463 | | $ | 22,020 | | $ | (557) | | (2.5) | % | | $ | 36,134 | | $ | 36,383 | | $ | (249) | | (0.7) | % |
Restructuring expense | | | 56 | | | 71 | | | (15) | | | | | | 115 | | | 185 | | | (70) | | | |
Adjusted operating income (non-GAAP) | | $ | 21,519 | | $ | 22,091 | | $ | (572) | | (2.6) | % | | $ | 36,249 | | $ | 36,568 | | $ | (319) | | (0.9) | % |
Operating margin (GAAP) | | | 22.5 | % | | 23.7 | % | | | | | | | | 19.7 | % | | 20.5 | % | | | | | |
Operating margin (non-GAAP) | | | 22.5 | % | | 23.8 | % | | | | | | | | 19.8 | % | | 20.6 | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Home Office: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating loss (GAAP) | | $ | (8,717) | | $ | (14,646) | | $ | 5,929 | | 40.5 | % | | $ | (18,961) | | $ | (27,077) | | $ | 8,116 | | 30.0 | % |
Restructuring expense | | | 189 | | | 773 | | | (584) | | | | | | 366 | | | 1,335 | | | (969) | | | |
Business integration expense | | | — | | | 6,909 | | | (6,909) | | | | | | — | | | 12,171 | | | (12,171) | | | |
Loss on assets held for sale | | | — | | | 647 | | | (647) | | | | | | — | | | 647 | | | (647) | | | |
Debt modification costs | | | — | | | — | | | — | | | | | | 712 | | | — | | | 712 | | | |
Adjusted operating loss (non-GAAP) | | $ | (8,528) | | $ | (6,317) | | $ | (2,211) | | (35.0) | % | | $ | (17,883) | | $ | (12,924) | | $ | (4,959) | | (38.4) | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Adtalem Global Education: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (GAAP) | | $ | 103,870 | | $ | 58,612 | | $ | 45,258 | | 77.2 | % | | $ | 174,108 | | $ | 86,806 | | $ | 87,302 | | 100.6 | % |
Restructuring expense | | | 322 | | | 68 | | | 254 | | | | | | 2,416 | | | 744 | | | 1,672 | | | |
Business integration expense | | | — | | | 6,909 | | | (6,909) | | | | | | — | | | 12,171 | | | (12,171) | | | |
Amortization of acquired intangible assets | | | 2,805 | | | 9,333 | | | (6,528) | | | | | | 5,610 | | | 20,010 | | | (14,400) | | | |
Litigation reserve | | | (5,550) | | | — | | | (5,550) | | | | | | (5,550) | | | 18,500 | | | (24,050) | | | |
Loss on assets held for sale | | | — | | | 647 | | | (647) | | | | | | — | | | 647 | | | (647) | | | |
Debt modification costs | | | — | | | — | | | — | | | | | | 712 | | | — | | | 712 | | | |
Adjusted operating income (non-GAAP) | | $ | 101,447 | | $ | 75,569 | | $ | 25,878 | | 34.2 | % | | $ | 177,296 | | $ | 138,878 | | $ | 38,418 | | 27.7 | % |
Operating margin (GAAP) | | | 23.2 | % | | 14.9 | % | | | | | | | | 20.1 | % | | 11.4 | % | | | | | |
Operating margin (non-GAAP) | | | 22.7 | % | | 19.2 | % | | | | | | | | 20.5 | % | | 18.2 | % | | | | | |
Adtalem Global Education Inc.
Non-GAAP Adjusted EBITDA by Segment
(unaudited)
(in thousands)
| | Three Months Ended | | Six Months Ended | ||||||||||||||||||||
| | December 31, | | December 31, | ||||||||||||||||||||
| | | | | | | | Increase/(Decrease) | | | | | | | | | Increase/(Decrease) | | ||||||
| | 2024 | | 2023 | | $ | | % | | | 2024 | | 2023 | | $ | | % | | ||||||
Chamberlain: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (GAAP) | | $ | 42,226 | | $ | 29,640 | | $ | 12,586 | | 42.5 | % | | $ | 68,200 | | $ | 53,964 | | $ | 14,236 | | 26.4 | % |
Restructuring expense | | | 77 | | | — | | | 77 | | | | | | 1,935 | | | — | | | 1,935 | | | |
Depreciation | | | 5,466 | | | 4,786 | | | 680 | | | | | | 10,834 | | | 8,902 | | | 1,932 | | | |
Amortization of cloud computing implementation assets | | | 815 | | | 376 | | | 439 | | | | | | 1,467 | | | 576 | | | 891 | | | |
Stock-based compensation | | | 3,993 | | | 2,089 | | | 1,904 | | | | | | 7,112 | | | 4,996 | | | 2,116 | | | |
Adjusted EBITDA (non-GAAP) | | $ | 52,577 | | $ | 36,891 | | $ | 15,686 | | 42.5 | % | | $ | 89,548 | | $ | 68,438 | | $ | 21,110 | | 30.8 | % |
Adjusted EBITDA margin (non-GAAP) | | | 29.1 | % | | 24.0 | % | | | | | | | | 25.7 | % | | 23.1 | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Walden: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (GAAP) | | $ | 48,898 | | $ | 21,598 | | $ | 27,300 | | 126.4 | % | | $ | 88,735 | | $ | 23,536 | | $ | 65,199 | | 277.0 | % |
Restructuring expense | | | — | | | (776) | | | 776 | | | | | | — | | | (776) | | | 776 | | | |
Amortization of acquired intangible assets | | | 2,805 | | | 9,333 | | | (6,528) | | | | | | 5,610 | | | 20,010 | | | (14,400) | | | |
Litigation reserve | | | (5,550) | | | — | | | (5,550) | | | | | | (5,550) | | | 18,500 | | | (24,050) | | | |
Depreciation | | | 1,795 | | | 1,926 | | | (131) | | | | | | 3,477 | | | 3,900 | | | (423) | | | |
Amortization of cloud computing implementation assets | | | 778 | | | 379 | | | 399 | | | | | | 1,479 | | | 567 | | | 912 | | | |
Stock-based compensation | | | 3,326 | | | 2,188 | | | 1,138 | | | | | | 6,066 | | | 4,052 | | | 2,014 | | | |
Adjusted EBITDA (non-GAAP) | | $ | 52,052 | | $ | 34,648 | | $ | 17,404 | | 50.2 | % | | $ | 99,817 | | $ | 69,789 | | $ | 30,028 | | 43.0 | % |
Adjusted EBITDA margin (non-GAAP) | | | 30.4 | % | | 23.6 | % | | | | | | | | 30.0 | % | | 24.2 | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Medical and Veterinary: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (GAAP) | | $ | 21,463 | | $ | 22,020 | | $ | (557) | | (2.5) | % | | $ | 36,134 | | $ | 36,383 | | $ | (249) | | (0.7) | % |
Restructuring expense | | | 56 | | | 71 | | | (15) | | | | | | 115 | | | 185 | | | (70) | | | |
Depreciation | | | 2,744 | | | 2,972 | | | (228) | | | | | | 5,313 | | | 5,864 | | | (551) | | | |
Amortization of cloud computing implementation assets | | | 315 | | | 138 | | | 177 | | | | | | 598 | | | 190 | | | 408 | | | |
Stock-based compensation | | | 2,158 | | | 1,196 | | | 962 | | | | | | 3,765 | | | 2,836 | | | 929 | | | |
Adjusted EBITDA (non-GAAP) | | $ | 26,736 | | $ | 26,397 | | $ | 339 | | 1.3 | % | | $ | 45,925 | | $ | 45,458 | | $ | 467 | | 1.0 | % |
Adjusted EBITDA margin (non-GAAP) | | | 28.0 | % | | 28.4 | % | | | | | | | | 25.0 | % | | 25.6 | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Home Office: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating loss (GAAP) | | $ | (8,717) | | $ | (14,646) | | $ | 5,929 | | 40.5 | % | | $ | (18,961) | | $ | (27,077) | | $ | 8,116 | | 30.0 | % |
Restructuring expense | | | 189 | | | 773 | | | (584) | | | | | | 366 | | | 1,335 | | | (969) | | | |
Business integration expense | | | — | | | 6,909 | | | (6,909) | | | | | | — | | | 12,171 | | | (12,171) | | | |
Loss on assets held for sale | | | — | | | 647 | | | (647) | | | | | | — | | | 647 | | | (647) | | | |
Debt modification costs | | | — | | | — | | | — | | | | | | 712 | | | — | | | 712 | | | |
Depreciation | | | 185 | | | 359 | | | (174) | | | | | | 369 | | | 715 | | | (346) | | | |
Stock-based compensation | | | 1,990 | | | 577 | | | 1,413 | | | | | | 3,975 | | | 1,621 | | | 2,354 | | | |
Adjusted EBITDA (non-GAAP) | | $ | (6,353) | | $ | (5,381) | | $ | (972) | | (18.1) | % | | $ | (13,539) | | $ | (10,588) | | $ | (2,951) | | (27.9) | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Adtalem Global Education: | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (GAAP) | | $ | 75,856 | | $ | 39,891 | | $ | 35,965 | | 90.2 | % | | $ | 122,021 | | $ | 50,537 | | $ | 71,484 | | 141.4 | % |
Income from discontinued operations | | | (4,680) | | | (2,178) | | | (2,502) | | | | | | (4,600) | | | (865) | | | (3,735) | | | |
Interest expense | | | 13,909 | | | 16,693 | | | (2,784) | | | | | | 28,391 | | | 32,350 | | | (3,959) | | | |
Other income, net | | | (2,235) | | | (3,563) | | | 1,328 | | | | | | (4,881) | | | (5,777) | | | 896 | | | |
Provision for income taxes | | | 21,020 | | | 7,769 | | | 13,251 | | | | | | 33,177 | | | 10,561 | | | 22,616 | | | |
Operating income (GAAP) | | | 103,870 | | | 58,612 | | | 45,258 | | | | | | 174,108 | | | 86,806 | | | 87,302 | | | |
Depreciation and amortization | | | 14,903 | | | 20,269 | | | (5,366) | | | | | | 29,147 | | | 40,724 | | | (11,577) | | | |
Stock-based compensation | | | 11,467 | | | 6,050 | | | 5,417 | | | | | | 20,918 | | | 13,505 | | | 7,413 | | | |
Restructuring expense | | | 322 | | | 68 | | | 254 | | | | | | 2,416 | | | 744 | | | 1,672 | | | |
Business integration expense | | | — | | | 6,909 | | | (6,909) | | | | | | — | | | 12,171 | | | (12,171) | | | |
Litigation reserve | | | (5,550) | | | — | | | (5,550) | | | | | | (5,550) | | | 18,500 | | | (24,050) | | | |
Loss on assets held for sale | | | — | | | 647 | | | (647) | | | | | | — | | | 647 | | | (647) | | | |
Debt modification costs | | | — | | | — | | | — | | | | | | 712 | | | — | | | 712 | | | |
Adjusted EBITDA (non-GAAP) | | $ | 125,012 | | $ | 92,555 | | $ | 32,457 | | 35.1 | % | | $ | 221,751 | | $ | 173,097 | | $ | 48,654 | | 28.1 | % |
Adjusted EBITDA margin (non-GAAP) | | | 27.9 | % | | 23.5 | % | | | | | | | | 25.6 | % | | 22.7 | % | | | | | |
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, | ||||||||
| | 2024 | | 2023 | | 2024 | | 2023 | ||||
Net income (GAAP) | | $ | 75,856 | | $ | 39,891 | | $ | 122,021 | | $ | 50,537 |
Restructuring expense | | | 322 | | | 68 | | | 2,416 | | | 744 |
Business integration expense | | | — | | | 6,909 | | | — | | | 12,171 |
Amortization of acquired intangible assets | | | 2,805 | | | 9,333 | | | 5,610 | | | 20,010 |
Litigation reserve, debt modification costs, and loss on assets held for sale | | | (5,550) | | | 647 | | | (4,838) | | | 19,147 |
Income tax impact on non-GAAP adjustments (1) | | | 645 | | | (4,402) | | | (687) | | | (12,095) |
Income from discontinued operations | | | (4,680) | | | (2,178) | | | (4,600) | | | (865) |
Adjusted net income (non-GAAP) | | $ | 69,398 | | $ | 50,268 | | $ | 119,922 | | $ | 89,649 |
| (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, | ||||||||
| | 2024 | | 2023 | | 2024 | | 2023 | ||||
Diluted earnings per share (GAAP) | | $ | 1.98 | | $ | 0.98 | | $ | 3.15 | | $ | 1.22 |
Effect on diluted earnings per share: | | | | | | | | | | | | |
Restructuring expense | | | 0.01 | | | 0.00 | | | 0.06 | | | 0.02 |
Business integration expense | | | - | | | 0.17 | | | - | | | 0.29 |
Amortization of acquired intangible assets | | | 0.07 | | | 0.23 | | | 0.14 | | | 0.48 |
Litigation reserve, debt modification costs, and loss on assets held for sale | | | (0.14) | | | 0.02 | | | (0.12) | | | 0.46 |
Income tax impact on non-GAAP adjustments (1) | | | 0.02 | | | (0.11) | | | (0.02) | | | (0.29) |
Income from discontinued operations | | | (0.12) | | | (0.05) | | | (0.12) | | | (0.02) |
Adjusted earnings per share (non-GAAP) | | $ | 1.81 | | $ | 1.23 | | $ | 3.09 | | $ | 2.16 |
Diluted shares used in non-GAAP EPS calculation | | | 38,401 | | | 40,787 | | | 38,755 | | | 41,486 |
Note: May not sum due to rounding.
| (1) | Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements. |
Adtalem Global Education Inc.
Non-GAAP Free Cash Flow Disclosure
(unaudited)
(in thousands)
| | Twelve Months Ended | |||||||||||||
| | FY24 | | FY24 | | FY24 | | FY25 | | FY25 | |||||
|
| Q2 | | Q3 | | Q4 | | Q1 | | Q2 | |||||
Net cash provided by (used in) operating activities-continuing operations (GAAP) | | $ | 227,600 | | $ | 276,843 | | $ | 288,367 | | $ | 291,820 | | $ | 281,971 |
Capital expenditures | | | (38,713) | | | (44,137) | | | (48,893) | | | (48,873) | | | (50,375) |
Free cash flow (non-GAAP) | | $ | 188,887 | | $ | 232,706 | | $ | 239,474 | | $ | 242,947 | | $ | 231,596 |
Adtalem Global Education Inc.
Non-GAAP Net Leverage Disclosure
(unaudited)
(in thousands)
| | Twelve Months Ended | |
| | December 31, 2024 | |
Adtalem Global Education: | | | |
Net income (GAAP) | | $ | 208,261 |
Income from discontinued operations | | | (2,799) |
Interest expense | | | 59,700 |
Other income, net | | | (9,646) |
Provision for income taxes | | | 48,840 |
Depreciation and amortization | | | 66,875 |
Stock-based compensation | | | 33,360 |
Restructuring expense | | | 3,542 |
Business integration expense | | | 22,044 |
Litigation reserve | | | (5,550) |
Debt modification costs | | | 1,560 |
Adjusted EBITDA (non-GAAP) | | $ | 426,187 |
| | | |
| | December 31, 2024 | |
Long-term debt | | $ | 658,283 |
Less: Cash and cash equivalents | | | (193,958) |
Net debt (non-GAAP) | | $ | 464,325 |
| | | |
Net leverage (non-GAAP) | | | 1.1 x |