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
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
“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
“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
Financial Highlights
Selected financial data for the three months ended
-
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 theCaribbean School of Medicine andRoss 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 theU.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 onApril 1 as president of our Medical and Veterinary segment. Liles most recently served as the chief executive officer and executive board member for theAssociation 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 theEmergency 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 theAmerican 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 theCollege 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 theU.S. healthcare system.
Segment Highlights
Chamberlain
$ in millions |
|
Three Months Ended
|
||
|
|
2024 |
2023 |
% Change |
Revenue |
|
|
|
13.8% |
Operating Income |
|
|
|
9.5% |
Adj. Operating Income |
|
|
|
9.5% |
Adj. EBITDA |
|
|
|
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
|
||
|
|
2024 |
2023 |
% Change |
Revenue |
|
|
|
13.3% |
Operating Income |
|
|
|
128.0% |
Adj. Operating Income |
|
|
|
29.4% |
Adj. EBITDA |
|
|
|
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
|
||
|
|
2024 |
2023 |
% Change |
Revenue |
|
|
|
6.1% |
Operating Income |
|
|
|
38.2% |
Adj. Operating Income |
|
|
|
35.9% |
Adj. EBITDA |
|
|
|
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
Conference Call and Webcast Information
Adtalem will hold a conference call to discuss its fiscal third quarter 2024 results today at
The call can be accessed by dialing +1 877-407-6184 (
Adtalem will archive a replay of the call for 30 days. To access the replay, dial +1 877-660-6853 (
About
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
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 |
Consolidated Balance Sheets (unaudited) (in thousands) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
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 |
|
|
|
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 |
Consolidated Statements of Income (unaudited) (in thousands, except per share data) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
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 |
|
Consolidated Statements of Cash Flows (unaudited) (in thousands) |
||||||||
|
|
|
|
|
|
|
||
|
|
Nine Months Ended |
||||||
|
|
|
||||||
|
|
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 |
|
Segment Information (unaudited) (in thousands) |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
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 andCarrington 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.
Non-GAAP Operating Income by Segment (unaudited) (in thousands) |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
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 |
)% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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 |
% |
|
|
|
|
Non-GAAP Adjusted EBITDA by Segment (unaudited) (in thousands) |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
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 |
)% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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 |
% |
|
|
|
|
Non-GAAP Earnings Disclosure (unaudited) (in thousands, except per share data) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
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 |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
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. |
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 |
|
Non-GAAP Net Leverage Disclosure (unaudited) (in thousands) |
||||
|
|
|
|
|
|
|
Twelve Months Ended |
||
|
|
|
||
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
||
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 |
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