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Adtalem Global Education Announces First Quarter Fiscal 2019 Results

November 1, 2018 4:05 PM

New Student Enrollment up 19.7% and Total Enrollment up 3.6%

CHICAGO--(BUSINESS WIRE)-- Adtalem Global Education Inc. (NYSE: ATGE), a leading global education provider, today reported academic, operating and financial results for its first quarter fiscal 2019 ended September 30, 2018.

“Fiscal year 2019 is off to a good start as we delivered solid new student enrollment growth,” said Lisa Wardell, president and CEO of Adtalem. “We are focused on growth opportunities in and across our verticals, while maintaining an operational focus through our portfolio management approach and effective cost management. Our short and long-term priorities are aligned to support our students in the achievement of outstanding outcomes, while delivering sustainable revenue and EPS growth over the long term.”

Financial and Operating Highlights

Selected operating and financial data for the three months ended September 30, 2018:

Fiscal 2019 first quarter results contained total pre-tax restructuring charges of $39.5 million, of which $37.8 million were non-cash charges, primarily related to the closing of the Ross University School of Medicine (RUSM) campus in Dominica and relocating to Barbados.

Adtalem signed agreements to transfer ownership of DeVry University and Carrington College during the second and fourth quarter of fiscal 2018, respectively. Both divestitures are expected to be completed by calendar year end 2018 and are subject to certain terms and conditions, including regulatory and accreditor approval. As a result of these transactions, DeVry University and Carrington College are classified as discontinued operations. Adtalem recorded an after-tax loss from discontinued operations of $4.7 million in the first quarter of fiscal 2019.

Segment Highlights

Medical and Healthcare

First quarter segment revenue increased 5.7 percent to $202.1 million compared to the prior year. Chamberlain revenue was essentially flat at $113.7 million in the first quarter compared to the prior year. New student enrollment increased 9.5 percent and total student enrollment increased 4.1 percent in the September 2018 session compared to the prior year. Revenue in the quarter for the medical and veterinary schools increased 14.3 percent from the prior year to $88.4 million, driven by enrollment increases and the hurricane impact in the prior year first quarter. New student enrollment increased 9.5 percent and total student enrollment increased 2.5 percent in the September 2018 semester compared to the same semester last year. Segment operating income in the first quarter was $1.7 million compared to $26.2 million in the prior year. Excluding special items, segment operating income in the first quarter was $40.7 million compared to $26.3 million in the prior year.

Professional Education

First quarter segment revenue decreased 11.0 percent to $35.6 million compared to the prior year. Segment operating income was $4.8 million compared to $10.5 million in the prior year. The decreases were primarily a result of a planned shift to hold the Association of Certified Anti-Money Laundering Specialists (ACAMS) North American annual conference in the second quarter of fiscal 2019 as compared to being held in the first quarter of fiscal 2018.

Technology and Business

First quarter segment revenue decreased 24.3 percent to $47.3 million compared to the prior year. On a constant currency basis, revenue decreased 4.2 percent compared to the prior year due to higher discounting to counter increased competition and reductions in government financial aid funding. New student enrollment increased 23.8 percent, and increased 9.4 percent excluding Wyden Online distance learning, while total enrollment was up 3.5 percent compared to the same term last year, and increased 0.7 percent excluding Wyden Online. Segment operating loss in the first quarter was $2.7 million compared to operating income of $1.9 million in the prior year.

Adtalem Outlook

Fiscal 2019 second quarter revenue is expected to increase approximately 3 to 4 percent compared to the prior year. Second quarter operating costs before special items are expected to be up 5 to 6 percent compared to the prior year. The second quarter outlook assumes an exchange rate of 3.75 Brazilian Real to the U.S. Dollar.

Fiscal 2019 full year revenue is expected to increase approximately 4 percent compared to the prior year. The effective income tax rate is expected to be in the 17 to 18 percent range. Earnings per share from continuing operations before special items are expected to grow in the 2 to 3 percent range compared to the prior year. The full year outlook assumes an exchange rate of 3.70 Brazilian Real to the U.S. Dollar. Full year capital spending is expected to be in the $70 to $75 million range, including approximately $25 to $30 million for the relocation of RUSM to Barbados. Adtalem’s outlook excludes potential charges related to restructuring plans and the pending ownership transfer of DeVry University and Carrington College.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its first quarter fiscal 2019 earnings on Thursday, November 1, at 4 p.m. CT (5 p.m. ET). The conference call will be led by Lisa Wardell, president and chief executive officer; and Patrick Unzicker, chief financial officer and treasurer.

For those wishing to participate by telephone, dial 877-407-6184 (domestic) or 201-389-0877 (international) and ask for the Adtalem call or use conference ID: 13684548. Adtalem will also broadcast the conference call on Adtalem's website at: http://www.investorcalendar.com/event/39722.

Please access the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

Adtalem will archive a telephone replay of the call until December 1, 2019. To access the replay, dial 877-660-6853 (domestic) or 201-612-7415 (international), conference ID: 13684548. To access the webcast replay, please visit Adtalem's website at: http://www.investorcalendar.com/event/39722.

About Adtalem Global Education Inc.

The purpose of Adtalem Global Education Inc. is to empower students to achieve their goals, find success, and make inspiring contributions to our global community. Adtalem Global Education Inc. (NYSE: ATGE; member S&P MidCap 400 Index) is a leading global education provider and the parent organization of Adtalem Educacional do Brasil, American University of the Caribbean School of Medicine, Association of Certified Anti-Money Laundering Specialists, Becker Professional Education, Carrington College, Chamberlain University, DeVry University and its Keller Graduate School of Management, EduPristine, Ross University School of Medicine and Ross University School of Veterinary Medicine. For more information, please visit�adtalem.com.

Forward Looking Statement

Certain statements contained in this release concerning Adtalem Global Education’s expected future performance, including those statements concerning expectations or plans, constitute “forward-looking statements” within the meaning of the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as Adtalem Global Education or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates," “plans,” “intends,” “estimates,” “potential,” “continue,” “may,” “will,” “should,” “could,” or other words or phrases of similar import which predict or indicate future events or trends or that are not statements of historical matters. Actual results may differ materially from those projected or implied by these forward-looking statements. Potential risks, uncertainties and other factors that could cause results to differ are described more fully in Item 1A, "Risk Factors," in the most recent Annual Report on Form 10-K for the year ending June 30, 2018 filed with the Securities and Exchange Commission (SEC) on August 24, 2018. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

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Enrollment from Continuing Operations
� FY 2019 � FY 2018 � % Change
Adtalem Global Education Student Enrollments(1)
New students 24,280 20,281 +19.7%
Total students 118,270 114,146 +3.6%
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Chamberlain University
September Session
New students 5,435 4,962 +9.5%
Total students 31,295 30,062 +4.1%
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July Session
New students(2) 2,523 2,497 +1.0%
Total students 28,037 26,811 +4.6%
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Medical and Veterinary

September Semester(3)
New students 889 812 +9.5%
Total students 5,887 5,744 +2.5%
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Adtalem Brazil

September Semester
New students 17,956 14,507 +23.8%
Total students 81,088 78,340 +3.5%
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Enrollment from Discontinued Operations

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FY 2019 FY 2018 % Change

Carrington College

3 months ending September 30, 2018
New students 1,970 2,155 -8.6%
Total students 5,692 5,258 +8.3%
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DeVry University
Undergraduate – September Session
New students 3,189 2,825 +12.9%
Total students 18,129 19,287 -6.0%
Graduate – September Session
Coursetakers(4) 6,886 7,915 -13.0%
Undergraduate – July Session
New students 2,977 2,616 +13.8%
Total students 17,478 18,853 -7.3%
Graduate – July Session
Coursetakers(4) 6,449 7,442 -13.3%
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1) Includes the most recently reported enrollments at Adtalem’s postsecondary institutions

2) Post-licensure online programs only; pre-licensure campus-based programs start in September, January and May; Total students includes pre and post-licensure enrollment

3) Includes enrollments in its medical and veterinary preparatory programs

4) The term “coursetaker” refers to the number of courses taken by a student. Thus one student taking two courses equals two coursetakers

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ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
� � � �
September 30, June 30, September 30,
2018 2018 2017
ASSETS: (in thousands, except share and par value amounts)
Current Assets:
Cash and Cash Equivalents $ 408,765 $ 430,690 $ 273,102
Marketable Securities and Investments 8,402 4,255 4,139
Restricted Cash 877 310 1,555
Accounts Receivable, Net 166,794 146,726 151,867
Prepaid Expenses and Other Current Assets 69,714 58,887 56,794
Current Assets Held for Sale 84,834 � 47,132 � 54,169 �
Total Current Assets 739,386 � 688,000 � 541,626 �
Land, Building and Equipment:
Land 43,724 48,177 49,078
Building 349,694 389,129 403,717
Equipment 269,298 302,516 289,692
Construction in Progress 26,849 � 25,360 � 18,803 �
689,565 765,182 761,290
Accumulated Depreciation (338,162 ) (376,528 ) (344,316 )
Land, Building and Equipment Held for Sale, Net - � - � 59,154 �
Land, Building and Equipment, Net 351,403 � 388,654 � 476,128 �
Noncurrent Assets:
Deferred Income Taxes 31,080 38,780 32,137
Intangible Assets, Net 355,595 362,931 395,916
Goodwill 805,285 813,887 838,669
Other Assets, Net 53,666 39,259 37,663
Noncurrent Assets Held for Sale 13,450 � 13,450 � 62,372 �
Total Noncurrent Assets 1,259,076 � 1,268,307 � 1,366,757 �
TOTAL ASSETS $ 2,349,865 � $ 2,344,961 � $ 2,384,511 �
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LIABILITIES:
Current Liabilities:
Accounts Payable $ 50,413 $ 47,477 $ 46,095
Accrued Salaries, Wages and Benefits 46,255 71,289 56,860
Accrued Liabilities 90,167 80,803 80,871
Deferred Revenue 185,061 106,773 171,470
Current Portion of Long-Term Debt 3,000 3,000 -
Current Liabilities Held for Sale 84,190 � 56,439 � 95,222 �
Total Current Liabilities 459,086 � 365,781 � 450,518 �
Noncurrent Liabilities:
Long-Term Debt 289,579 290,073 135,000
Deferred Income Taxes 29,378 29,115 34,755
Other Liabilities 122,757 131,380 98,718
Noncurrent Liabilities Held for Sale 216 � 216 � 915 �
Total Noncurrent Liabilities 441,930 � 450,784 � 269,388 �
TOTAL LIABILITIES 901,016 � 816,565 � 719,906 �
NONCONTROLLING INTEREST 8,814 � 9,110 � 6,566 �
SHAREHOLDERS' EQUITY:
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized;
59,120,000, 59,893,000 and 61,194,000 Shares Outstanding at
September 30, 2018, June 30, 2018 and September 30, 2017, respectively 798 793 785
Additional Paid-in Capital 469,545 454,653 422,358
Retained Earnings 1,908,465 1,917,373 1,894,372
Accumulated Other Comprehensive Loss (163,168 ) (142,168 ) (35,720 )
Treasury Stock, at Cost, 20,727,000, 19,390,000 and 17,271,000 Shares at
September 30, 2018, June 30, 2018 and September 30, 2017, respectively (775,605 ) (711,365 ) (623,756 )
TOTAL SHAREHOLDERS' EQUITY 1,440,035 � 1,519,286 � 1,658,039 �
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND
SHAREHOLDERS' EQUITY $ 2,349,865 � $ 2,344,961 � $ 2,384,511 �
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ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
� � � �
Three Months Ended
September 30,
2018 2017
(in thousands, except per
share amounts)
REVENUE $ 284,190 $ 293,143
OPERATING COST AND EXPENSE:
Cost of Educational Services 148,653 173,176
Student Services and Administrative Expense 98,497 88,944
Restructuring Expense 39,548 � 1,137 �
Total Operating Cost and Expense 286,698 � 263,257 �
Operating (Loss) Income from Continuing Operations (2,508 ) 29,886 �
INTEREST:
Interest Income 1,945 2,118
Interest Expense (6,202 ) (1,916 )
Net Interest (Expense) Income (4,257 ) 202 �
(Loss) Income from Continuing Operations Before Income Taxes (6,765 ) 30,088
Income Tax Benefit (Provision) 1,887 (4,475 )
Equity Method Investment Loss - � (44 )
(Loss) Income from Continuing Operations (4,878 ) 25,569 �
DISCONTINUED OPERATIONS:
Loss from Discontinued Operations Before Income Taxes (6,135 ) (15,449 )
Income Tax Benefit 1,428 � 2,796 �
Loss from Discontinued Operations (4,707 ) (12,653 )
NET (LOSS) INCOME (9,585 ) 12,916
Net Loss (Income) Attributable to Noncontrolling Interest 55 � (131 )
NET (LOSS) INCOME ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION $ (9,530 ) $ 12,785 �
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AMOUNTS ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION:
(Loss) Income from Continuing Operations $ (4,823 ) $ 25,438
Loss from Discontinued Operations (4,707 ) (12,653 )
NET (LOSS) INCOME ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION $ (9,530 ) $ 12,785 �
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EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO
ADTALEM GLOBAL EDUCATION SHAREHOLDERS:
Basic:
Continuing Operations $ (0.08 ) $ 0.41
Discontinued Operations $ (0.08 ) $ (0.20 )
Total $ (0.16 ) $ 0.20
Diluted:
Continuing Operations $ (0.08 ) $ 0.40
Discontinued Operations $ (0.08 ) $ (0.20 )
Total $ (0.16 ) $ 0.20
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ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
� � � �
Three Months Ended
September 30,
2018 2017
(in thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net (Loss) Income $ (9,585 ) $ 12,916
Loss from Discontinued Operations 4,707 12,653
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities:
Stock-Based Compensation Expense 4,137 4,985
Depreciation 10,042 11,178
Amortization of Intangible Assets 2,110 2,497
Amortization of Deferred Debt Issuance Costs 392 176
Provision for Bad Debts 2,982 4,536
Deferred Income Taxes 7,915 1,491
Loss on Disposals, Accelerated Depreciation and Adjustments to Land, Building and Equipment 39,205 10,552
Changes in Assets and Liabilities:
Accounts Receivable (26,314 ) (3,900 )
Prepaid Expenses and Other (26,153 ) (16,781 )
Accounts Payable 780 4,248
Accrued Salaries, Wages, Benefits and Liabilities (15,153 ) (30,877 )
Deferred Revenue 78,622 � 67,653 �
Net Cash Provided by Operating Activities-Continuing Operations 73,687 81,327
Net Cash Provided by Operating Activities-Discontinued Operations 4,327 � 9,010 �
NET CASH PROVIDED BY OPERATING ACTIVITIES 78,014 � 90,337 �
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (15,150 ) (11,773 )
Marketable Securities Purchased (4,152 ) (13 )
Net Cash Used in Investing Activities-Continuing Operations (19,302 ) (11,786 )
Net Cash Used in Investing Activities-Discontinued Operations (1,117 ) (2,122 )
NET CASH USED IN INVESTING ACTIVITIES (20,419 ) (13,908 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 10,492 1,884
Employee Taxes Paid on Withholding Shares (5,188 ) (3,486 )
Proceeds from Stock Issued Under Colleague Stock Purchase Plan 159 195
Repurchase of Common Stock for Treasury (59,175 ) (50,375 )
Payments of Seller Financed Obligations (470 ) (6,315 )
Borrowings Under Credit Facility - 76,000
Repayments Under Credit Facility (750 ) (66,000 )
NET CASH USED IN FINANCING ACTIVITIES (54,932 ) (48,097 )
Effects of Exchange Rate Differences (1,579 ) 1,765 �
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 1,084 30,097
Cash, Cash Equivalents and Restricted Cash at Beginning of Period 444,405 � 251,096 �
Cash, Cash Equivalents and Restricted Cash at End of Period 445,489 281,193
Cash, Cash Equivalents and Restricted Cash of Discontinued Operations at End of Period 35,847 � 6,973 �
Cash, Cash Equivalents and Restricted Cash at End of Period $ 409,642 � $ 274,220 �
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ADTALEM GLOBAL EDUCATION INC.
SEGMENT INFORMATION
(Unaudited)
� � � � � �
Three Months Ended
September 30,
Increase
2018 2017 (Decrease)
(in thousands)
REVENUE:
Medical and Healthcare $ 202,100 $ 191,285 5.7 %
Professional Education 35,646 40,042 (11.0 )%
Technology and Business 47,251 62,439 (24.3 )%
Home Office and Other (807 ) (623 ) NM
Total Consolidated Revenue 284,190 � 293,143 � (3.1 )%
OPERATING INCOME (LOSS):
Medical and Healthcare 1,656 26,232 (93.7 )%
Professional Education 4,750 10,507 (54.8 )%
Technology and Business (2,745 ) 1,861 NM
Home Office and Other (6,169 ) (8,714 ) NM
Total Consolidated Operating (Loss) Income $ (2,508 ) $ 29,886 � NM
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NON-GAAP SEGMENT INFORMATION
In accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), the operating results of DeVry University and Carrington College ("Carrington") are reclassified as discontinued operations for the first quarter of fiscal year 2019 and 2018. During the first quarter of fiscal year 2019, Adtalem recorded special items related to the following: (i) Restructuring charges related to the closing of the Ross University School of Medicine ("RUSM"), which is part of the Medical and Healthcare segment, campus in Dominica; (ii) loss on sale charges at Adtalem Brazil, which is part of the Technology and Business segment, related to the disposition of the Joao Pessoa institution (presented as restructuring expense); and (iii) real estate consolidations at Adtalem's home office (not related to any segment). During the first quarter of fiscal year 2018, Adtalem recorded special items related to the following: (i) Restructuring charges primarily related to workforce reductions at Adtalem's home office in order to align its cost structure with operating changes. The following tables illustrate the effects of the discontinued operations and special items on Adtalem’s operating income and net income. Management believes that the non-GAAP disclosure of adjusted operating income, adjusted net income and adjusted earnings per share excluding the discontinued operations and special items provides investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations and is useful for period-over-period comparisons of such operations given the special nature of discontinued operations and restructuring charges. Adtalem uses these supplemental financial measures internally in its management and budgeting process. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, Adtalem’s reported results prepared in accordance with GAAP. The following tables reconcile these non-GAAP measures to the most directly comparable GAAP information (in thousands):
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Three Months Ended
September 30,
Increase
2018 2017 (Decrease)
�
Medical and Healthcare Operating Income $ 1,656 $ 26,232 (93.7 )%
Restructuring Expense 39,015 � 112 � NM
Medical and Healthcare Operating Income Excluding Special Items $ 40,671 � $ 26,344 � 54.4 %
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Technology and Business Operating (Loss) Income $ (2,745 ) $ 1,861 NM
Restructuring Expense 75 � - � NM
Technology and Business Operating (Loss) Income Excluding Special Items $ (2,670 ) $ 1,861 � NM
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Home Office and Other Operating Loss $ (6,169 ) $ (8,714 ) NM
Restructuring Expense 458 � 1,025 � NM
Home Office and Other Operating Loss Excluding Special Items $ (5,711 ) $ (7,689 ) NM
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Adtalem Global Education Operating (Loss) Income $ (2,508 ) $ 29,886 NM
Restructuring Expense 39,548 � 1,137 � NM
Adtalem Global Education Operating Income Excluding Special Items $ 37,040 � $ 31,023 � 19.4 %
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ADTALEM GLOBAL EDUCATON INC.
NON-GAAP EARNINGS DISCLOSURE
(Unaudited)
� � �
Three Months Ended
September 30,
2018 2017
(in thousands, except
per share amounts)
Net (Loss) Income $ (9,530 ) $ 12,785
(Loss) Earnings per Share (basic-2018, diluted-2017) $ (0.16 ) $ 0.20
Continuing Operations:
Restructuring Expense $ 39,548 $ 1,137
Effect on Earnings per Share (diluted) $ 0.65 $ 0.02
Income Tax Impact on Non-GAAP Adjustments $ (7,452 ) $ (327 )
Effect on Earnings per Share (diluted) $ (0.12 ) $ (0.01 )
Discontinued Operations, net of tax $ 4,707 $ 12,653
Effect on Earnings per Share (diluted) 0.08 0.20
Net Income from Continuing Operations Excluding Special Items, net of tax $ 27,273 $ 26,248
Earnings per Share Excluding Special Items (diluted) $ 0.45 $ 0.41
Shares used in Basic EPS Calculation 60,328 NA
Shares used in Diluted EPS Calculation 61,202 63,432
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SUPPLEMENTAL RECONCILIATIONS
(Unaudited)
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Three Months Ended September 30, 2018
(in thousands)
Medical and Professional Technology and Home Office
Healthcare Education Business and Other Consolidated

Revenue:

Fiscal Year 2018 as Reported $ 191,285 $ 40,042 $ 62,439 $ (623 ) $ 293,143
Organic Growth (Decline) 3,471 (5,338 ) (3,223 ) (184 ) (5,274 )
Effect of Acquisitions - 942 626 - 1,568
Hurricane Impact 7,344 - - - 7,344
Effect of Currency Change - � - � (12,591 ) - � (12,591 )
Fiscal Year 2019 as Reported $ 202,100 � $ 35,646 � $ 47,251 � $ (807 ) $ 284,190 �
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Fiscal Year 2019 % Change:

Organic Growth (Decline) 1.8 % (13.3 %) (5.2 %) NM (1.8 %)
Effect of Acquisitions - 2.4 % 1.0 % NM 0.5 %
Hurricane Impact 3.8 % - � - � NM � 2.5 %
Constant Currency Change 5.7 % (11.0 %) (4.2 %) NM 1.2 %
Effect of Currency Change - � - � (20.2 %) NM � (4.3 %)
Fiscal Year 2019 % Change
as Reported 5.7 % (11.0 %) (24.3 %) NM � (3.1 %)
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Three Months Ended September 30, 2018
(in thousands)
Medical and Professional Technology and Home Office

Total Expenses:

Healthcare Education Business and Other Consolidated
Fiscal Year 2018 as Reported $ 165,053 $ 29,535 $ 60,578 $ 8,091 $ 263,257
Cost Increase (Reduction) 10,104 215 143 (2,161 ) 8,301
Effect of Acquisitions - 1,146 417 - 1,563
Hurricane Impact (13,617 ) - - - (13,617 )
Restructuring Expense Change 38,903 - 75 (567 ) 38,411
Effect of Currency Change - � - � (11,217 ) - � (11,217 )
Fiscal Year 2019 as Reported $ 200,443 � $ 30,896 � $ 49,996 � $ 5,363 � $ 286,698 �
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Fiscal Year 2019 % Change:

Cost Increase (Reduction) 6.1 % 0.7 % 0.2 % NM 3.2 %
Effect of Acquisitions - 3.9 % 0.7 % NM 0.6 %
Hurricane Impact (8.3 %) - - NM (5.2 %)
Restructuring Expense Change 23.6 % - � 0.1 % NM � 14.6 %
Constant Currency Change 21.4 % 4.6 % 1.0 % NM 13.2 %
Effect of Currency Change - � - � (18.5 %) NM � (4.3 %)
Fiscal Year 2019 % Change
as Reported 21.4 % 4.6 % (17.5 %) NM � 8.9 %
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SUPPLEMENTAL RECONCILIATIONS
(Unaudited)
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Three Months Ended September 30, 2018
(in thousands)
Medical and Professional Technology Home Office

Operating Income (Loss):

Healthcare Education and Business and Other Consolidated
Fiscal Year 2018 as Reported $ 26,232 $ 10,507 $ 1,861 $ (8,714 ) $ 29,886
Organic Growth (Decline) (6,634 ) (5,553 ) (3,366 ) 1,978 (13,575 )
Effect of Acquisitions - (204 ) 209 - 5
Hurricane Impact 20,961 - - - 20,961
Restructuring Expense Change (38,903 ) - (75 ) 567 (38,411 )
Effect of Currency Change - � - � (1,374 ) - � (1,374 )
Fiscal Year 2019 as Reported $ 1,656 � $ 4,750 � $ (2,745 ) $ (6,169 ) $ (2,508 )
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ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) 1
(Unaudited)
� � �
Fiscal Year 2018
Q1 Q2 Q3 Q4
(in thousands, except per share amounts)
REVENUE $ 293,143 $ 308,211 $ 310,070 $ 319,787
OPERATING COST AND EXPENSE:
Cost of Educational Services 173,176 157,443 159,312 155,673
Student Services and Administrative Expense 88,944 89,423 97,633 97,064
Restructuring Expense 1,137 � 1,426 � 621 � 1,883 �
Total Operating Cost and Expense 263,257 � 248,292 � 257,566 � 254,620 �
Operating Income from Continuing Operations 29,886 � 59,919 � 52,504 � 65,167 �
INTEREST:
Interest Income 2,118 1,365 1,329 1,015
Interest Expense (1,916 ) (2,481 ) (2,850 ) (7,373 )
Net Interest Income (Expense) 202 � (1,116 ) (1,521 ) (6,358 )
Income from Continuing Operations Before Income Taxes 30,088 58,803 50,983 58,809
Income Tax (Provision) Benefit (4,475 ) (110,276 ) (8,024 ) 38,673
Equity Method Investment (Loss) Income (44 ) 6 � (100 ) - �
Income (Loss) from Continuing Operations 25,569 � (51,467 ) 42,859 � 97,482 �
DISCONTINUED OPERATIONS:
Loss from Discontinued Operations Before Income Taxes (15,449 ) (48,409 ) (7,422 ) (52,882 )
Income Tax Benefit 2,796 � 19,094 � 3,851 � 18,275 �
Loss from Discontinued Operations (12,653 ) (29,315 ) (3,571 ) (34,607 )
NET INCOME (LOSS) 12,916 (80,782 ) 39,288 62,875
Net (Income) Loss Attributable to Noncontrolling Interest (131 ) (374 ) 46 � (69 )
NET INCOME (LOSS) ATTRIBUTABLE TO ADTALEM
GLOBAL EDUCATION $ 12,785 � $ (81,156 ) $ 39,334 � $ 62,806 �
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AMOUNTS ATTRIBUTABLE TO ADTALEM GLOBAL
EDUCATION:
Income (Loss) from Continuing Operations $ 25,438 $ (51,841 ) $ 42,905 $ 97,413
Loss from Discontinued Operations (12,653 ) (29,315 ) (3,571 ) (34,607 )
NET INCOME (LOSS) ATTRIBUTABLE TO ADTALEM
GLOBAL EDUCATION $ 12,785 � $ (81,156 ) $ 39,334 � $ 62,806 �
�
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE
TO ADTALEM GLOBAL EDUCATION SHAREHOLDERS:
Basic:
Continuing Operations $ 0.41 $ (0.85 ) $ 0.70 $ 1.60
Discontinued Operations $ (0.20 ) $ (0.48 ) $ (0.06 ) $ (0.57 )
Total $ 0.20 $ (1.33 ) $ 0.64 $ 1.03
Diluted:
Continuing Operations $ 0.40 $ (0.85 ) $ 0.69 $ 1.58
Discontinued Operations $ (0.20 ) $ (0.48 ) $ (0.06 ) $ (0.56 )
Total $ 0.20 $ (1.33 ) $ 0.63 $ 1.02
�

1

This financial statement provides fiscal year 2018 quarterly supplemental information after classifying DeVry University and Carrington as discontinued operations.

�

�
NON-GAAP EARNINGS DISCLOSURE 1
(Unaudited)
� � �
Fiscal Year 2018
Q1 Q2 Q3 Q4
(in thousands, except per share amounts)
Net Income (Loss) $ 12,785 $ (81,156 ) $ 39,334 $ 62,806
Earnings (Loss) per Share (diluted, basic-Q2) $ 0.20 $ (1.33 ) $ 0.63 $ 1.02
Continuing Operations:
Restructuring Expense $ 1,137 $ 1,426 $ 621 $ 1,883
Effect on Earnings per Share (diluted) $ 0.02 $ 0.02 $ 0.01 $ 0.03
Tax Cuts and Jobs Act of 2017 $ - $ 101,196 $ - $ 2,682
Effect on Earnings per Share (diluted) $ - $ 1.63 $ - $ 0.04
Tax Benefit on Carrington Loss $ - $ - $ - $ (48,903 )
Effect on Earnings per Share (diluted) $ - $ - $ - $ (0.79 )
Income Tax Impact on Non-GAAP Adjustments $ (327 ) $ (528 ) $ (144 ) $ (84 )
Effect on Earnings per Share (diluted) $ (0.01 ) $ (0.01 ) $ 0.00 $ 0.00
Discontinued Operations, net of tax $ 12,653 $ 29,315 $ 3,571 $ 34,607
Effect on Earnings per Share (diluted) $ 0.20 $ 0.47 $ 0.06 $ 0.56
Net Income from Continuing Operations Excluding Special
Items, net of tax $ 26,248 $ 50,253 $ 43,382 $ 52,991
Earnings per Share from Continuing Operations Excluding
Special Items, net of tax $ 0.41 $ 0.81 $ 0.70 $ 0.86
Shares used in Basic EPS calculation NA 61,234 NA NA
Shares used in Diluted EPS calculation 63,432 62,023 61,965 61,659
�

1

�

This Non-GAAP information provides fiscal year 2018 quarterly supplemental information after classifying DeVry University and Carrington as discontinued operations.

�

Adtalem Global Education

Investor Contact:

Beth Coronelli

[email protected]

630-353-9035

or

Media Contact:

Ernie Gibble

[email protected]

630-353-9920

Source: Adtalem Global Education Inc.

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