Adtalem Global Education Inc. (NYSE: ATGE), a national leader in post-secondary education and a leading provider of professional talent to the healthcare industry, today reported academic, operating and financial results for its fourth quarter and full year fiscal 2023 ended June 30, 2023.
“I am encouraged by the results we delivered this year. Adtalem is a systemically important component of the U.S. healthcare system, delivering day one ready clinicians at scale. Our renewed focus on operational excellence is strengthening our foundation for the future. And our value proposition as a purpose driven and mission led organization is more relevant than ever; resonating with students, faculty, and stakeholders alike,” said Steve Beard, president, and chief executive officer of Adtalem Global Education.
Beard continued, “Our strong fourth quarter results bode well for fiscal 2024, with improving enrollment trends and the delivery of our two-year cost synergy program. We have conviction in the efficacy of our Growth with Purpose strategy and the confidence to continue to invest in expanding access to high quality academic programs that lead to rewarding careers, and collectively serve to address workforce shortages and inequity in healthcare delivery.”
Financial Highlights
Selected financial data for the three months ended June 30, 2023:
- Revenue of $364.6 million increased 1.1% compared with the prior year.
- Operating income was $39.6 million, compared with $46.0 million in the prior year; adjusted operating income was $69.9 million, compared with $89.6 million in the prior year.
- Net income was $22.2 million, compared with $6.7 million in the prior year; adjusted net income was $45.3 million, compared with $58.6 million in the prior year.
- Diluted earnings per share was $0.50, compared with $0.15 in the prior year; adjusted earnings per share was $1.03, compared with $1.28 in the prior year.
- Adjusted EBITDA was $83.3 million, compared with $104.7 million in the prior year; adjusted EBITDA margin was 22.8% compared with 29.0% in the prior year.
Selected financial data for the full year ended June 30, 2023:
- Revenue of $1,450.8 million increased 5.0% compared with the prior year.
- Operating income was $168.2 million, compared with $76.7 million in the prior year; adjusted operating income was $287.6 million, compared with $267.6 million in the prior year. Operating margin improved to 11.6% from 5.6% and adjusted operating margin increased to 19.8% from 19.4% in the prior year.
- Net income was $93.4 million, compared with $311.0 million in the prior year; adjusted net income was $192.2 million, an increase of 26.4% compared with $152.0 million in the prior year.
- Diluted earnings per share decreased to $2.05 from $6.43 in the prior year; adjusted earnings per share increased to $4.21, up 35.4% compared with $3.11 in the prior year.
- Adjusted EBITDA was $343.4 million, an increase of 4.5% compared with $328.6 million in the prior year; adjusted EBITDA margin was 23.7% compared with 23.8% in the prior year.
Business Highlights
- Adtalem’s medical and veterinary schools graduated more than 1,400 students at their May 2023 commencement. Medical students from 44 states and 22 countries and veterinary students from 44 states and 5 countries, 27% of which identified as underrepresented minorities in medicine (by race or ethnicity), were amongst the graduating class.
- Chamberlain University continues expanding access and solving for critical nursing shortages, opening its second Georgia campus in Stockbridge, outside of Atlanta, with students starting in September 2023. Stockbridge campus, at capacity, will be able to serve as many as 600 students, including up to 200 who need the flexibility of an evening-and-weekend program.
- As a pioneer in online learning, Walden University continues to pave the way, recently being recognized by the United States Distance Learning Association (USDLA) for International Distance Learning Awards in the Trendsetter, Research, and Teaching/Learning categories for 2023.
Segment Highlights
Chamberlain | ||||||||||||||||||
$ in millions | Three Months Ended June 30, | Year Ended June 30, | ||||||||||||||||
2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||||
Revenue | $ | 144.5 | $ | 140.2 | 3.0 | % | $ | 571.0 | $ | 557.5 | 2.4 | % | ||||||
Operating Income | $ | 35.7 | $ | 41.1 | (13.2 | )% | $ | 134.7 | $ | 124.4 | 8.3 | % | ||||||
Adj. Operating Income | $ | 35.7 | $ | 41.7 | (14.4 | )% | $ | 135.5 | $ | 127.3 | 6.5 | % | ||||||
Adj. EBITDA | $ | 41.1 | $ | 47.8 | (14.1 | )% | $ | 157.5 | $ | 152.5 | 3.3 | % | ||||||
Total Students (1) | 33,284 | 32,891 | 1.2 | % | ||||||||||||||
- Total student enrollment increased 1.2% 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 June 30, | Year Ended June 30, | |||||||||||||||||
2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||
Revenue | $ | 138.0 | $ | 137.1 | 0.7 | % | $ | 533.7 | $ | 485.4 | 10.0 | % | |||||||
Operating Income | $ | 9.8 | $ | 12.4 | (21.2 | )% | $ | 35.9 | $ | (5.3 | ) | NM | |||||||
Adj. Operating Income | $ | 32.2 | $ | 35.8 | (10.1 | )% | $ | 110.4 | $ | 104.6 | 5.5 | % | |||||||
Adj. EBITDA | $ | 35.3 | $ | 39.0 | (9.4 | )% | $ | 123.7 | $ | 116.9 | 5.9 | % | |||||||
Total Students (1) | 37,582 | 39,470 | (4.8 | )% | |||||||||||||||
- Total student enrollment decreased 4.8% compared with the prior year, primarily attributable to declines in non-healthcare programs and to a lesser extent to healthcare programs partially offset by higher persistence. Elimination of off-cycle start dates adversely impacted year-over-year total enrollment growth by 2.4%.
Medical and Veterinary | ||||||||||||||||||
$ in millions | Three Months Ended June 30, | Year Ended June 30, | ||||||||||||||||
2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||||
Revenue | $ | 82.1 | $ | 83.4 | (1.5 | )% | $ | 346.1 | $ | 338.9 | 2.1 | % | ||||||
Operating Income | $ | 10.5 | $ | 14.0 | (24.9 | )% | $ | 59.6 | $ | 59.4 | 0.5 | % | ||||||
Adj. Operating Income | $ | 10.8 | $ | 19.0 | (43.0 | )% | $ | 67.3 | $ | 69.1 | (2.6 | )% | ||||||
Adj. EBITDA | $ | 14.7 | $ | 23.3 | (37.1 | )% | $ | 82.8 | $ | 86.9 | (4.7 | )% | ||||||
Total Students (1) | 4,869 | 5,304 | (8.2 | )% | ||||||||||||||
- Total student enrollment decreased 8.2% compared with the prior year, primarily due to medical programs.
(1) | Represents total students attending sessions during each institution’s most recent enrollment period in Q4 FY 2023 and Q4 FY 2022 |
Fiscal Year 2024 Outlook
Adtalem guidance for fiscal year 2024, reaffirms revenue in the range of $1,460 million to $1,520 million, and raises the low end of our adjusted earnings per share by 5 cents to be in the range of $4.20 to $4.40.
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.
Conference Call and Webcast Information
Adtalem will hold a conference call to discuss its fiscal 2023 fourth quarter and full year results today at 4:00 p.m. CDT (5:00 p.m. EDT).
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: 13739937. 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: 13739937, or visit the Adtalem investor relations website.
About Adtalem Global Education
Adtalem Global Education (NYSE: ATGE) is a national leader in post-secondary education and leading provider of professional talent to the healthcare industry. With a dedicated focus on driving strong outcomes that increase workforce preparedness, Adtalem empowers a diverse learner population to achieve their goals and make inspiring contributions to their communities. Adtalem is the parent organization of American University of the Caribbean School of Medicine, Chamberlain University, Ross University School of Medicine, Ross University School of Veterinary Medicine and Walden University. Adtalem’s family of institutions has more than 300,000 alumni and nearly 10,000 employees. Adtalem was named one of America’s Most Responsible Companies in 2021 and 2023 by Newsweek and Statista, and one of America’s Best Employers for Diversity in 2021 and 2022 by Forbes and Statista. Visit Adtalem.com for more information and follow on Twitter and LinkedIn.
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.
Adtalem Global Education Inc. Consolidated Balance Sheets (unaudited) (in thousands, except par value) | ||||||
June 30, | ||||||
2023 | 2022 | |||||
Assets: | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 273,689 | $ | 346,973 | ||
Restricted cash | 1,386 | 964 | ||||
Accounts receivable, net | 102,749 | 81,635 | ||||
Prepaid expenses and other current assets | 100,715 | 127,532 | ||||
Total current assets | 478,539 | 557,104 | ||||
Noncurrent assets: | ||||||
Property and equipment, net | 258,522 | 289,926 | ||||
Operating lease assets | 174,677 | 177,995 | ||||
Deferred income taxes | 56,694 | 51,093 | ||||
Intangible assets, net | 812,338 | 873,577 | ||||
Goodwill | 961,262 | 961,262 | ||||
Other assets, net | 68,509 | 119,283 | ||||
Total noncurrent assets | 2,332,002 | 2,473,136 | ||||
Total assets | $ | 2,810,541 | $ | 3,030,240 | ||
Liabilities and shareholders' equity: | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 81,812 | $ | 57,140 | ||
Accrued payroll and benefits | 52,041 | 67,792 | ||||
Accrued liabilities | 105,806 | 98,124 | ||||
Deferred revenue | 153,871 | 149,810 | ||||
Current operating lease liabilities | 37,673 | 50,781 | ||||
Total current liabilities | 431,203 | 423,647 | ||||
Noncurrent liabilities: | ||||||
Long-term debt | 695,077 | 838,908 | ||||
Long-term operating lease liabilities | 163,441 | 177,045 | ||||
Deferred income taxes | 26,068 | 25,554 | ||||
Other liabilities | 37,416 | 73,700 | ||||
Total noncurrent liabilities | 922,002 | 1,115,207 | ||||
Total liabilities | 1,353,205 | 1,538,854 | ||||
Commitments and contingencies | ||||||
Total shareholders' equity | 1,457,336 | 1,491,386 | ||||
Total liabilities and shareholders' equity | $ | 2,810,541 | $ | 3,030,240 | ||
