EX-99.1 2 atge-20240502xex99d1.htm EX-99.1

Exhibit 99.1

Graphic

News Release

Investor Contact

Jay Spitzer

Investor.Relations@Adtalem.com

+1 312-906-6600

Media Contact

Britt Mitchell

AdtalemMedia@Adtalem.com

+1 872-270-0301

Adtalem Global Education Fiscal Third Quarter 2024 Results; Guidance Raised

Revenue up 11.8% YoY

Total enrollment up 7.8% YoY

Diluted earnings per share $0.93; Adjusted EPS $1.50, growth of 32.7% YoY

Third Quarter Highlights

Revenue $412.7 million, up 11.8% year-over-year
Total student enrollment 85,809, up 7.8% year-over-year
Chamberlain University fifth straight quarter of total enrollment growth, up 9.0% year-over-year, highest total enrollment in university history
Walden University third straight quarter of total enrollment growth, up 8.4% year-over-year
Investing in Growth with Purpose strategy, GAAP net income $36.8 million, and adjusted EBITDA $107.1 million, up 24.6% year-over-year

Capital Allocation

Repurchased $91 million of shares
Net leverage 1.3x as of March 31, 2024

Fiscal Year 2024 Guidance

Revenue $1,560 million to $1,580 million
Adjusted earnings per share $4.80 to $5.00

CHICAGO Ill. – May 2, 2024 – Adtalem Global Education Inc. (NYSE: ATGE), the leading healthcare educator in the United States, today reported third quarter fiscal 2024 results (quarter ended March 31, 2024) reflecting robust operating performance through accelerated total enrollment growth and enhanced profitability.

“Our Growth with Purpose strategy, with its emphasis on operational excellence, continues to accelerate top- and bottom-line performance, permitting us to expand access to high-quality, in-demand programs,” said Steve Beard, president and chief executive officer, Adtalem Global Education.

“The momentum is built on strong enrollments, improved persistence and outstanding academic outcomes. With over 81,000 students graduated in the last three years, we are innately focused on our ability to have an outsized impact on U.S. healthcare.”

Financial Highlights

Selected financial data for the three months ended March 31, 2024:

Revenue of $412.7 million increased 11.8% compared with the prior year.
Operating income was $61.7 million, compared with $59.4 million in the prior year; adjusted operating income was $89.8 million, compared with $73.0 million in the prior year.
Net income was $36.8 million, compared with $45.9 million in the prior year; adjusted net income was $59.4 million, compared with $51.6 million in the prior year.
Diluted earnings per share was $0.93, compared with $1.00 in the prior year; adjusted earnings per share was $1.50, compared with $1.13 in the prior year.
Adjusted EBITDA was $107.1 million, compared with $85.9 million in the prior year; adjusted EBITDA margin was 25.9%, compared with 23.3% in the prior year.

Business Highlights

American University of the Caribbean School of Medicine and Ross University School of Medicine achieved a combined 98% first-time residency attainment rate for 2023-2024 graduates1, for the second straight year, placing more than 815 students and graduates into over 350 unique healthcare facilities spanning 44 states and territories. Over 500 will enter primary care residencies, poised to enhance healthcare outcomes for some of the more than 83 million Americans in underserved areas lacking adequate access to primary care. Of the more than 815 students and graduates, 189 identify as Black/African American or Hispanic, helping diversify the pipeline of physicians in the U.S. healthcare system where,

based on 2021 data, Black Americans make up 13% of the population but only 6% of physicians, and Hispanics represent 19% of the population but only 7% of physicians.
Scott Liles rejoined Adtalem on April 1 as president of our Medical and Veterinary segment. Liles most recently served as the chief executive officer and executive board member for the Association of Certified Anti-Money Laundering Specialists (ACAMS). Liles was instrumental in returning ACAMS to growth in preparation for Adtalem’s divestiture of its Financial Services segment and in establishing ACAMS as an independent company.
Chamberlain University continues to expand its specialized nursing education that addresses areas of acute nursing shortages through its Practice Ready. Specialty Focused.™ model and a new partnership with the Emergency Nurses Association (ENA), offering in-depth introduction into emergency nursing. The ENA emergency nursing offering is in addition to partnerships with DaVita® for nephrology, BrightStar Care® for home healthcare as well as the Association of periOperative Registered Nurses for perioperative nursing. Chamberlain’s proprietary specialty model, created with a grant from the American Nurses Foundation, is now offered at all 23 Chamberlain campuses.
Walden University experienced some of the strongest new enrollment growth in its history, offering flexibility to working adults through part-time, self-paced and Tempo Learning® competency-based programs.
Walden University celebrated over 5,500 graduates at its 70th anniversary commencement.

College of Nursing and the College of Social and Behavioral Health degrees accounted for more than 60% of the degrees awarded, further showcasing Adtalem’s commitment to delivering practice-ready professionals at scale to the U.S. healthcare system.

Segment Highlights

Chamberlain

$ in millions

Three Months Ended

Mar. 31,

    

2024

2023

% Change

Revenue

$170.3

$149.7

13.8%

Operating Income

$43.3

$39.6

9.5%

Adj. Operating Income

$43.3

$39.6

9.5%

Adj. EBITDA

$50.5

$44.9

12.3%

Total Students (2)

37,985

34,847

9.0%

Total student enrollment increased 9.0% compared with the prior year, driven by continued growth in pre-licensure and post-licensure nursing programs as well as higher persistence.

Walden

$ in millions

Three Months Ended

Mar. 31,

    

2024

2023

% Change

Revenue

$150.6

$132.9

13.3%

Operating Income

$23.6

$10.3

128.0%

Adj. Operating Income

$31.9

$24.6

29.4%

Adj. EBITDA

$35.9

$27.8

28.9%

Total Students (2)

42,751

39,427

8.4%

Total student enrollment increased 8.4% compared with the prior year, driven by growth in healthcare programs and high persistence.

Medical and Veterinary

$ in millions

Three Months Ended

Mar. 31,

    

2024

2023

% Change

Revenue

$91.7

$86.5

6.1%

Operating Income

$22.8

$16.5

38.2%

Adj. Operating Income

$23.0

$16.9

35.9%

Adj. EBITDA

$27.0

$20.7

30.3%

Total Students (2)

5,073

5,312

(4.5)%

Total student enrollment decreased 4.5% compared with the prior year, primarily driven by declines at the medical schools.

Fiscal Year 2024 Outlook

Adtalem guidance for fiscal year 2024, raises revenue guidance to a range of $1,560 million to $1,580 million from $1,520 million to $1,560 million, and raises adjusted earnings per share to be in the range of $4.80 to $5.00 from $4.55 to $4.75.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its fiscal third quarter 2024 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) stating “Adtalem earnings call” or use conference ID: 13745553. 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: 13745553, or visit the Adtalem investor relations website.


About Adtalem Global Education

Adtalem Global Education (NYSE: ATGE) is the No. 1 provider of healthcare education in the U.S.3 and a systemically important solution for preparing a diverse talent workforce that meets needs of the healthcare industry. We are redefining the education pathway into healthcare and meeting the evolving patient needs for a thriving society. Adtalem recognizes the potential in each individual and guides them to success while maintaining the top-tier standards and rigor needed to fill the workforce deficit, by creating more opportunities to connect practice-ready clinicians with employers at scale. We empower a diverse learner population to achieve their goals and make inspiring contributions to their communities with a family of institutions dedicated to nursing, medicine, veterinary medicine, social work and more. Our community is comprised of approximately 80,000 students, over 300,000 alumni and nearly 10,000 employees. Visit Adtalem.com for more information and follow us on LinkedInInstagram and Facebook.

Forward-Looking Statements

Certain statements contained in this release are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth. Forward-looking statements can also be identified by words such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risk and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and our other filings with the SEC. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.

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 First-time residency attainment rate is the percent of students attaining a 2024-25 residency position out of all graduates or expected graduates in 2023-24 who were active applicants in the 2024 NRMP match or who attained a residency position outside the NRMP match.

2 Represents total students attending sessions during each institution’s most recent enrollment period in Q3 FY 2024 and Q3 FY 2023.

3 Based on most recent reported year, 2022, according to U.S. government IPEDS database.

###


Adtalem Global Education Inc.

Consolidated Balance Sheets

(unaudited)

(in thousands)

    

March 31,

    

June 30,

2024

2023

Assets:

Current assets:

Cash and cash equivalents

$

179,762

$

273,689

Restricted cash

7,562

1,386

Accounts and financing receivables, net

140,909

102,749

Prepaid expenses and other current assets

59,401

100,715

Total current assets

387,634

478,539

Noncurrent assets:

Property and equipment, net

272,792

258,522

Operating lease assets

169,498

174,677

Deferred income taxes

64,213

56,694

Intangible assets, net

784,042

812,338

Goodwill

961,262

961,262

Other assets, net

67,768

68,509

Assets held for sale

7,825

Total noncurrent assets

2,327,400

2,332,002

Total assets

$

2,715,034

$

2,810,541

Liabilities and shareholders’ equity:

Current liabilities:

Accounts payable

$

92,198

$

81,812

Accrued payroll and benefits

67,647

52,041

Accrued liabilities

114,224

105,806

Deferred revenue

202,566

153,871

Current operating lease liabilities

32,475

37,673

Total current liabilities

509,110

431,203

Noncurrent liabilities:

Long-term debt

648,106

695,077

Long-term operating lease liabilities

159,717

163,441

Deferred income taxes

28,937

26,068

Other liabilities

48,201

37,416

Total noncurrent liabilities

884,961

922,002

Total liabilities

1,394,071

1,353,205

Commitments and contingencies

Total shareholders’ equity

1,320,963

1,457,336

Total liabilities and shareholders’ equity

$

2,715,034

$

2,810,541


Adtalem Global Education Inc.

Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)

Three Months Ended

Nine Months Ended

March 31,

March 31,

2024

2023

2024

2023

Revenue

    

$

412,658

    

$

369,082

    

$

1,174,745

    

$

1,086,185

Operating cost and expense:

Cost of educational services

175,321

165,820

516,008

484,768

Student services and administrative expense

156,689

144,526

478,368

432,713

Restructuring expense

473

1,278

1,217

17,706

Business integration expense

18,450

11,346

30,621

35,702

Gain on sale of assets

(13,317)

(13,317)

Total operating cost and expense

350,933

309,653

1,026,214

957,572

Operating income

61,725

59,429

148,531

128,613

Interest expense

(16,560)

(14,457)

(48,910)

(47,806)

Other income, net

2,871

3,980

8,648

3,301

Income from continuing operations before income taxes

48,036

48,952

108,269

84,108

Provision for income taxes

(10,595)

(389)

(21,156)

(5,906)

Income from continuing operations

37,441

48,563

87,113

78,202

Discontinued operations:

(Loss) income from discontinued operations before income taxes

(832)

(3,993)

329

(6,734)

Loss on disposal of discontinued operations before income taxes

(402)

(3,576)

Benefit from (provision for) income taxes

212

1,701

(84)

3,222

(Loss) income from discontinued operations

(620)

(2,694)

245

(7,088)

Net income and comprehensive income

$

36,821

$

45,869

$

87,358

$

71,114

Earnings (loss) per share:

Basic:

Continuing operations

$

0.97

$

1.08

$

2.18

$

1.73

Discontinued operations

$

(0.02)

$

(0.06)

$

0.01

$

(0.16)

Total basic earnings per share

$

0.95

$

1.02

$

2.18

$

1.57

Diluted:

Continuing operations

$

0.94

$

1.06

$

2.13

$

1.70

Discontinued operations

$

(0.02)

$

(0.06)

$

0.01

$

(0.15)

Total diluted earnings per share

$

0.93

$

1.00

$

2.14

$

1.54

Weighted-average shares outstanding:

Basic shares

38,713

45,125

40,000

45,276

Diluted shares

39,636

45,801

40,874

46,089


Adtalem Global Education Inc.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

Nine Months Ended

March 31,

2024

2023

Operating activities:

    

    

    

Net income

$

87,358

$

71,114

(Income) loss from discontinued operations

(245)

7,088

Income from continuing operations

87,113

78,202

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

Stock-based compensation expense

19,405

10,908

Amortization and impairments to operating lease assets

24,705

37,928

Depreciation

32,106

31,618

Amortization of intangible assets

28,296

48,936

Amortization and write-off of debt discount and issuance costs

4,550

7,974

Provision for bad debts

35,741

23,391

Deferred income taxes

(4,650)

(1,718)

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

50

3,999

Gain on extinguishment of debt

(71)

(Gain) loss on investments

(1,281)

4,122

Gain on sale of assets

(13,317)

Unrealized loss on assets held for sale

647

Changes in assets and liabilities:

Accounts and financing receivables

(73,661)

(56,477)

Prepaid expenses and other current assets

(2,484)

7,034

Accounts payable

10,841

12,286

Accrued payroll and benefits

15,671

(11,719)

Accrued liabilities

39,748

(20,275)

Deferred revenue

60,935

26,038

Operating lease liabilities

(28,448)

(37,758)

Other assets and liabilities

(2,475)

(1,280)

Net cash provided by operating activities-continuing operations

246,809

149,821

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

8,396

(404)

Net cash provided by operating activities

255,205

149,417

Investing activities:

Capital expenditures

(52,014)

(19,056)

Proceeds from sales of marketable securities

626

7,635

Purchases of marketable securities

(498)

(1,508)

Proceeds from note receivable related to property sold

46,800

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

(51,886)

33,871

Payment for working capital adjustment for sale of business

(3,174)

Net cash (used in) provided by investing activities

(51,886)

30,697

Financing activities:

Proceeds from exercise of stock options

15,412

1,622

Employee taxes paid on withholding shares

(6,600)

(4,214)

Proceeds from stock issued under Colleague Stock Purchase Plan

581

451

Repurchases of common stock for treasury

(250,463)

(44,710)

Payment on equity forward contract

(13,162)

Proceeds from issuance of long-term debt

1,896

Repayments of long-term debt

(51,896)

(150,861)

Net cash used in financing activities

(291,070)

(210,874)

Net decrease in cash, cash equivalents and restricted cash

(87,751)

(30,760)

Cash, cash equivalents and restricted cash at beginning of period

275,075

347,937

Cash, cash equivalents and restricted cash at end of period

$

187,324

$

317,177

Non-cash investing and financing activities:

Accrued capital expenditures

$

11,086

$

10,474

Accrued liability for repurchases of common stock

$

2,995

$

2,699

Accrued excise tax on share repurchases

$

3,257

$

361

Settlement of financing liability with assets

$

$

38,606


Adtalem Global Education Inc.

Segment Information

(unaudited)

(in thousands)

Three Months Ended

Nine Months Ended

March 31,

March 31,

Increase/(Decrease)

Increase/(Decrease)

2024

2023

$

%

2024

2023

$

%

Revenue:

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

 

Chamberlain

$

170,338

$

149,737

$

20,601

13.8

%  

$

466,487

$

426,538

$

39,949

9.4

%

Walden

150,607

132,874

17,733

13.3

%  

439,023

395,715

43,308

10.9

%

Medical and Veterinary

91,713

86,471

5,242

6.1

%  

269,235

263,932

5,303

2.0

%

Total consolidated revenue

$

412,658

$

369,082

$

43,576

11.8

%  

$

1,174,745

$

1,086,185

$

88,560

8.2

%

Operating income (loss):

Chamberlain

$

43,349

$

39,589

$

3,760

9.5

%  

$

97,313

$

99,002

$

(1,689)

(1.7)

%

Walden

23,585

10,343

13,242

128.0

%  

47,121

26,071

21,050

80.7

%

Medical and Veterinary

22,759

16,472

6,287

38.2

%  

59,142

49,172

9,970

20.3

%

Home Office and Other

(27,968)

(6,975)

(20,993)

(301.0)

%  

(55,045)

(45,632)

(9,413)

(20.6)

%

Total consolidated operating income

$

61,725

$

59,429

$

2,296

3.9

%  

$

148,531

$

128,613

$

19,918

15.5

%

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, intangible amortization expense, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, net tax benefit related to a valuation allowance release, and loss (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, intangible amortization expense, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, net tax benefit related to a valuation allowance release, and loss (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, intangible amortization expense, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.


Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for loss (income) from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation and amortization, stock-based compensation, restructuring expense, business integration expense, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.

Free cash flow (most comparable GAAP measure: net cash provided by operating activities-continuing operations) – Defined as net cash provided by operating activities-continuing operations less capital expenditures.

Net debt – Defined as long-term debt less cash and cash equivalents.

Net leverage – Defined as net debt divided by adjusted EBITDA.

A description of special items in our non-GAAP financial measures described above are as follows:

Restructuring expense primarily related to real estate consolidations at Walden, Medical and Veterinary, and Adtalem’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.
Business 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.
Intangible amortization expense on acquired intangible assets.
Gain on sale of Adtalem’s Chicago, Illinois, campus facility.
Write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, reserves related to significant litigation, impairment of an equity investment, loss on assets held for sale related to a fair value write-down on assets, and debt modification costs related to refinancing our Term Loan B loan.
Net tax benefit related to a valuation allowance release.
Loss (income) from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, a loss on sale of ACAMS, Becker, and OCL for working capital adjustments to the initial sales prices and a tax return to provision adjustment, and the earn-outs we received.


Adtalem Global Education Inc.

Non-GAAP Operating Income by Segment

(unaudited)

(in thousands)

Three Months Ended

Nine Months Ended

March 31,

March 31,

Increase/(Decrease)

Increase/(Decrease)

2024

2023

$

%

2024

2023

$

%

Chamberlain:

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

 

Operating income (GAAP)

$

43,349

$

39,589

$

3,760

9.5

%  

$

97,313

$

99,002

$

(1,689)

(1.7)

%

Restructuring expense

818

(818)

Adjusted operating income (non-GAAP)

$

43,349

$

39,589

$

3,760

9.5

%  

$

97,313

$

99,820

$

(2,507)

(2.5)

%

Operating margin (GAAP)

25.4

%  

26.4

%  

20.9

%  

23.2

%  

Operating margin (non-GAAP)

25.4

%  

26.4

%  

20.9

%  

23.4

%  

Walden:

Operating income (GAAP)

$

23,585

$

10,343

$

13,242

128.0

%  

$

47,121

$

26,071

$

21,050

80.7

%

Restructuring expense

53

(53)

(776)

3,174

(3,950)

Intangible amortization expense

8,286

14,232

(5,946)

28,296

48,936

(20,640)

Litigation reserve

18,500

18,500

Adjusted operating income (non-GAAP)

$

31,871

$

24,628

$

7,243

29.4

%  

$

93,141

$

78,181

$

14,960

19.1

%

Operating margin (GAAP)

15.7

%  

7.8

%  

10.7

%  

6.6

%  

Operating margin (non-GAAP)

21.2

%  

18.5

%  

21.2

%  

19.8

%  

Medical and Veterinary:

Operating income (GAAP)

$

22,759

$

16,472

$

6,287

38.2

%  

$

59,142

$

49,172

$

9,970

20.3

%

Restructuring expense

194

421

(227)

379

7,334

(6,955)

Adjusted operating income (non-GAAP)

$

22,953

$

16,893

$

6,060

35.9

%  

$

59,521

$

56,506

$

3,015

5.3

%

Operating margin (GAAP)

24.8

%  

19.0

%  

22.0

%  

18.6

%  

Operating margin (non-GAAP)

25.0

%  

19.5

%  

22.1

%  

21.4

%  

Home Office and Other:

Operating loss (GAAP)

$

(27,968)

$

(6,975)

$

(20,993)

(301.0)

%  

$

(55,045)

$

(45,632)

$

(9,413)

(20.6)

%

Restructuring expense

279

804

(525)

1,614

6,380

(4,766)

Business integration expense

18,450

11,346

7,104

30,621

35,702

(5,081)

Loss on assets held for sale

647

647

Debt modification costs

848

848

848

848

Gain on sale of assets

(13,317)

13,317

(13,317)

13,317

Adjusted operating loss (non-GAAP)

$

(8,391)

$

(8,142)

$

(249)

(3.1)

%  

$

(21,315)

$

(16,867)

$

(4,448)

(26.4)

%

Adtalem Global Education:

Operating income (GAAP)

$

61,725

$

59,429

$

2,296

3.9

%  

$

148,531

$

128,613

$

19,918

15.5

%

Restructuring expense

473

1,278

(805)

1,217

17,706

(16,489)

Business integration expense

18,450

11,346

7,104

30,621

35,702

(5,081)

Intangible amortization expense

8,286

14,232

(5,946)

28,296

48,936

(20,640)

Litigation reserve

18,500

18,500

Loss on assets held for sale

647

647

Debt modification costs

848

848

848

848

Gain on sale of assets

(13,317)

13,317

(13,317)

13,317

Adjusted operating income (non-GAAP)

$

89,782

$

72,968

$

16,814

23.0

%  

$

228,660

$

217,640

$

11,020

5.1

%

Operating margin (GAAP)

15.0

%  

16.1

%  

12.6

%  

11.8

%  

Operating margin (non-GAAP)

21.8

%  

19.8

%  

19.5

%  

20.0

%  


Adtalem Global Education Inc.

Non-GAAP Adjusted EBITDA by Segment

(unaudited)

(in thousands)

Three Months Ended

Nine Months Ended

March 31,

March 31,

Increase/(Decrease)

Increase/(Decrease)

    

2024

    

2023

    

$

    

%

    

  

2024

    

2023

    

$

    

%

Chamberlain:

Operating income (GAAP)

$

43,349

$

39,589

$

3,760

9.5

%  

$

97,313

$

99,002

$

(1,689)

(1.7)

%

Restructuring expense

 —

 —

 —

 —

818

(818)

Depreciation

5,312

4,405

907

14,790

12,985

1,805

Stock-based compensation

1,795

923

872

6,791

3,600

3,191

Adjusted EBITDA (non-GAAP)

$

50,456

$

44,917

$

5,539

12.3

%

$

118,894

$

116,405

$

2,489

2.1

%

Adjusted EBITDA margin (non-GAAP)

29.6

%  

30.0

%

25.5

%

27.3

%

Walden:

Operating income (GAAP)

$

23,585

$

10,343

$

13,242

128.0

%

$

47,121

$

26,071

$

21,050

80.7

%

Restructuring expense

 —

53

(53)

(776)

3,174

(3,950)

Intangible amortization expense

8,286

14,232

(5,946)

28,296

48,936

(20,640)

Litigation reserve

 —

 —

 —

18,500

 —

18,500

Depreciation

2,214

2,439

(225)

6,681

7,303

(622)

Stock-based compensation

1,770

754

1,016

5,822

2,945

2,877

Adjusted EBITDA (non-GAAP)

$

35,855

$

27,821

$

8,034

28.9

%

$

105,644

$

88,429

$

17,215

19.5

%

Adjusted EBITDA margin (non-GAAP)

23.8

%

20.9

%

24.1

%

22.3

%

Medical and Veterinary:

Operating income (GAAP)

$

22,759

$

16,472

$

6,287

38.2

%

$

59,142

$

49,172

$

9,970

20.3

%

Restructuring expense

194

421

(227)

379

7,334

(6,955)

Depreciation

3,174

3,231

(57)

9,228

9,367

(139)

Stock-based compensation

851

587

264

3,687

2,291

1,396

Adjusted EBITDA (non-GAAP)

$

26,978

$

20,711

$

6,267

30.3

%

$

72,436

$

68,164

$

4,272

6.3

%

Adjusted EBITDA margin (non-GAAP)

29.4

%

24.0

%

26.9

%

25.8

%

Home Office and Other:

Operating loss (GAAP)

$

(27,968)

$

(6,975)

$

(20,993)

(301.0)

%

$

(55,045)

$

(45,632)

$

(9,413)

(20.6)

%

Restructuring expense

279

804

(525)

1,614

6,380

(4,766)

Business integration expense

18,450

11,346

7,104

30,621

35,702

(5,081)

Loss on assets held for sale

 —

 —

 —

647

 —

647

Debt modification costs

848

 —

848

848

 —

848

Gain on sale of assets

 —

(13,317)

13,317

 —

(13,317)

13,317

Depreciation

692

82

610

1,407

1,963

(556)

Stock-based compensation

1,484

531

953

3,105

2,072

1,033

Adjusted EBITDA (non-GAAP)

$

(6,215)

$

(7,529)

$

1,314

17.5

%

$

(16,803)

$

(12,832)

$

(3,971)

(30.9)

%

Adtalem Global Education:

Net income (GAAP)

$

36,821

$

45,869

$

(9,048)

(19.7)

%

$

87,358

$

71,114

$

16,244

22.8

%

Loss (income) from discontinued operations

620

2,694

(2,074)

(245)

7,088

(7,333)

Interest expense

16,560

14,457

2,103

48,910

47,806

1,104

Other income, net

(2,871)

(3,980)

1,109

(8,648)

(3,301)

(5,347)

Provision for income taxes

10,595

389

10,206

21,156

5,906

15,250

Operating income (GAAP)

61,725

59,429

2,296

148,531

128,613

19,918

Depreciation and amortization

19,678

24,389

(4,711)

60,402

80,554

(20,152)

Stock-based compensation

5,900

2,795

3,105

19,405

10,908

8,497

Restructuring expense

473

1,278

(805)

1,217

17,706

(16,489)

Business integration expense

18,450

11,346

7,104

30,621

35,702

(5,081)

Litigation reserve

 —

 —

 —

18,500

 —

18,500

Loss on assets held for sale

 —

 —

 —

647

 —

647

Debt modification costs

848

 —

848

848

 —

848

Gain on sale of assets

 —

(13,317)

13,317

 —

(13,317)

13,317

Adjusted EBITDA (non-GAAP)

$

107,074

$

85,920

$

21,154

24.6

%

$

280,171

$

260,166

$

20,005

7.7

%

Adjusted EBITDA margin (non-GAAP)

25.9

%

23.3

%

23.8

%

24.0

%


Adtalem Global Education Inc.

Non-GAAP Earnings Disclosure

(unaudited)

(in thousands, except per share data)

Three Months Ended

Nine Months Ended

March 31, 

March 31, 

    

2024

    

2023

    

2024

    

2023

Net income (GAAP)

$

36,821

$

45,869

$

87,358

$

71,114

Restructuring expense

473

1,278

1,217

17,706

Business integration expense

18,450

11,346

30,621

35,702

Intangible amortization expense

8,286

14,232

28,296

48,936

Gain on sale of assets

 —

(13,317)

 —

(13,317)

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

1,961

 —

21,108

9,226

Net tax benefit related to a valuation allowance release

 —

(6,184)

 —

(6,184)

Income tax impact on non-GAAP adjustments (1)

(7,260)

(4,359)

(19,355)

(23,341)

Loss (income) from discontinued operations

620

2,694

(245)

7,088

Adjusted net income (non-GAAP)

$

59,351

$

51,559

$

149,000

$

146,930

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

Three Months Ended

Nine Months Ended

March 31, 

March 31, 

    

2024

    

2023

    

2024

    

2023

Diluted earnings per share (GAAP)

$

0.93

$

1.00

$

2.14

$

1.54

Effect on diluted earnings per share:

Restructuring expense

0.01

0.03

0.03

0.38

Business integration expense

0.47

0.25

0.75

0.77

Intangible amortization expense

0.21

0.31

0.69

1.06

Gain on sale of assets

 —

(0.29)

 —

(0.29)

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

0.05

 —

0.52

0.20

Net tax benefit related to a valuation allowance release

 —

(0.14)

 —

(0.13)

Income tax impact on non-GAAP adjustments (1)

(0.18)

(0.10)

(0.47)

(0.51)

Loss (income) from discontinued operations

0.02

0.06

(0.01)

0.15

Adjusted earnings per share (non-GAAP)

$

1.50

$

1.13

$

3.65

$

3.19

Diluted shares used in non-GAAP EPS calculation

39,636

45,801

40,874

46,089

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

Nine Months Ended

Twelve Months Ended

FY24

FY23

FY24

FY23

FY24

FY24

FY24

FY23

FY23

    

Q3

    

Q3

    

Q3

    

Q3

    

Q3

    

Q2

    

Q1

    

Q4

    

Q3

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

$

163,740

$

107,544

$

246,809

$

149,821

$

302,672

$

246,476

$

204,934

$

205,684

$

255,052

Capital expenditures

(21,686)

(9,309)

(52,014)

(19,056)

(69,966)

(57,589)

(46,503)

(37,008)

(27,861)

Free cash flow (non-GAAP)

$

142,054

$

98,235

$

194,795

$

130,765

$

232,706

$

188,887

$

158,431

$

168,676

$

227,191

Adtalem Global Education Inc.

Non-GAAP Net Leverage Disclosure

(unaudited)

(in thousands)

Twelve Months Ended

    

March 31, 2024

Adtalem Global Education:

Net income (GAAP)

$

109,602

Loss from discontinued operations

1,061

Interest expense

64,204

Other income, net

(12,312)

Provision for income taxes

25,533

Depreciation and amortization

82,662

Stock-based compensation

22,796

Restructuring expense

2,328

Business integration expense

37,580

Litigation reserve

28,500

Loss on assets held for sale

647

Debt modification costs

848

Adjusted EBITDA (non-GAAP)

$

363,449

March 31, 2024

Long-term debt

$

658,283

Less: Cash and cash equivalents

(179,762)

Net debt (non-GAAP)

$

478,521

Net leverage (non-GAAP)

1.3 x