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Adtalem Global Education Inc. (ATGE) SEC Filing 8-K Material Event for the period ending Thursday, August 11, 2022

Adtalem Global Education Inc.

CIK: 730464 Ticker: ATGE
 
 Exhibit 99.1

News Release

 
 Investor Contact
Chandrika Nigam
Chandrika.Nigam@Adtalem.com
312-681-3209 
   
   Media Contact
Kelly Finelli
Kelly.Finelli@Adtalem.com
872-270-0230


Adtalem Global Education Announces Fiscal Fourth Quarter and Full Year 2022 Results
 
Q4 and FY 2022 results in line with expectations
 
Solid finish to 2022 with improvement in profitability and strengthened balance sheet
 
FY 2022 GAAP EPS of $6.57; Adjusted EPS of $3.24 representing y-o-y growth of 40%
 

CHICAGO – Aug. 11, 2022
– Adtalem Global Education Inc. (NYSE: ATGE), a leading healthcare educator, today reported academic, operating and financial results for its fiscal 2022 fourth quarter and full year ended June 30, 2022.
 
“We finished fiscal 2022 in line with expectations, and I am encouraged by our results as we continued to improve our operational performance and strengthen our balance sheet, in the face of lingering macro challenges for the industry,” said Steve Beard, president and CEO of Adtalem Global Education. “Our academic, operational and financial results for the quarter and full year reflect our commitment to our stakeholders and position us well for fiscal 2023 and beyond."
 
Beard added, “We have been proactive and purposeful in transforming our portfolio. Today, Adtalem is comprised of high-quality assets with market-leading brands, an experienced management team and an attractive healthcare focus. We are poised to win in the markets in which we compete.”
 


 
Financial Highlights
 
Selected financial data for the three months ended June 30, 2022:


Revenue of $361.2 million increased 61.6% compared with the prior year due to the acquisition of Walden

Diluted earnings per share was flat at $0.18, compared with the prior year; diluted earnings per share from continuing operations, excluding special items, was $1.31, compared with $0.48 in the prior year

Operating income was $44.5 million, compared with $27.1 million in the prior year; operating income, excluding special items, was $88.1 million, an increase of 174.7% compared with the prior year. Operating margins excluding special items, increased to 24.4% from 14.4%

Net income attributable to Adtalem was $8.0 million, compared with $9.0 million in the prior year; net income from continuing operations, excluding special items, was $59.9 million, an increase of 149.9% compared with the prior year

Adjusted EBITDA was $103.2 million, an increase of 139.9% compared with the prior year.  Adjusted EBITDA margins increased to 28.6% from 19.3%

Gross debt was reduced by $394.1 million in the fourth quarter or by 31.4%

Selected financial data for the twelve months ended June 30, 2022:


Revenue of $1,387.1 million increased 53.0%, compared with the prior year due to the acquisition of Walden

Diluted earnings per share was $6.57, compared with $1.49 in the prior year; diluted earnings per share from continuing operations, excluding special items, was $3.24, compared with $2.31 in the prior year

Operating income was $80.5 million, compared with $118.1 million in the prior year; operating income, excluding special items, was $271.3 million, a 73.4% increase compared with the prior year. Operating margins, excluding special items, improved 230 basis points year over year to 19.6%

Net income attributable to Adtalem was $317.7 million, compared with $76.9 million in the prior year; net income from continuing operations, excluding special items, was $158.2 million, an increase of 32.6% compared with the prior year

Adjusted EBITDA was $332.3 million, an increase of 63.5%, compared with the prior year. Adjusted EBITDA margin increased to 24.0% from 22.4%

 

Business Highlights
 
Secured a grant of $1.2 million from the American Nurses Foundation for Chamberlain University’s Practice-Ready, Specialty-Focused™ Program which is focused on preparing nurses to contribute to a variety of settings, such as perioperative services
Graduated more than 750 medical school students at Adtalem’s medical schools' 2022 commencement ceremonies of whom 74% will enter primary care specialties helping to combat the critical physician shortage. In 2022, 26% of Adtalem’s medical school graduates are of a race or ethnicity underrepresented in medicine, of whom more than 100 identify as Black or African American
Hosted a Nursing Summit bringing together nation’s nursing and HBCU leaders and policy makers for advancing equity in healthcare through access and representation in nursing education

Segment Highlights
 
 
Chamberlain
 
Fourth quarter segment revenue decreased 1.1% to $140.2 million compared with the prior year, and segment operating income increased 36.7% to $41.1 million due primarily to lower marketing and  continued benefit from cost synergies.
 
Total student enrollment decreased 5.8% compared with the prior year, which was primarily attributable to COVID-related headwinds in Chamberlain’s post-licensure online programs, partially offset by improved enrollment and persistence in on-campus pre-licensure programs.
 
Walden
 
Revenue in the fourth quarter was $137.1 million and segment operating income was $12.8 million. Segment operating income, excluding special items, was $36.1 million. With the acquisition closing on August 12, 2021, there are no prior year comparables.
 
Total student enrollment decreased 9.5% compared with the prior year, which was primarily attributable to COVID-related headwinds in Walden’s post-licensure nursing programs and declines in the management and technology programs.
 

Medical and Veterinary
 
Revenue in the fourth quarter increased 2.7% to $83.9 million compared with the prior year. Segment operating income of $14.5 million increased by 29.5% compared to prior year. Segment operating income, excluding special items, was $19.6 million, an increase of 74.4% compared with the prior year, driven by the increased revenue and the benefit from cost synergies within the segment.
 
Total student enrollment increased 3.5% compared with the prior year, due to growth in new student enrollment and higher persistence.
 
Adtalem Outlook
 
For the full fiscal year 2023, Adtalem expects revenue to be within the range of $1,380 million and $1,450 million, and adjusted diluted earnings per share from continuing operations, excluding special items, to be within the range of $3.95 to $4.20.
 
 
Conference Call and Webcast Information
 
Adtalem will hold a conference call to discuss its fiscal 2022 fourth quarter and full year on Thursday, Aug. 11, 2022, at 4 p.m. CDT (5 p.m. EDT). The conference call will be led by Steve Beard, president and chief executive officer, and Bob Phelan, senior vice president and chief financial officer. For those participating by telephone, dial 877-407-6184 (United States) or +1 201-389-0877 (outside the United States) and request the “Adtalem Call” or use conference ID: 13730300. Adtalem will also broadcast the conference call live on the web at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=qeEx1Lq8.
 
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 replay of the call until Sept. 11, 2022. To access the replay, dial 877-660-6853 (United States) or +1 201-612-7415 (outside the United States), conference ID: 13730300, or visit the Adtalem website at: https://investors.adtalem.com/overview/default.aspx.


About Adtalem Global Education
Adtalem Global Education (NYSE: ATGE) is a leading healthcare educator and 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 and its institutions have more than 10,000 employees and a network of more than 275,000 alumni. Adtalem was named one of America’s Most Responsible Companies 2021 by Newsweek, and one of America’s Best Employers for Diversity  in 2021 and 2022 by Forbes. Follow Adtalem on Twitter @adtalemglobal, LinkedIn or visit Adtalem.com for more information.

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 the future impacts of the COVID-19 pandemic, the efficacy and distribution of the vaccines, and the expected synergies from the Walden acquisition. 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 we do not undertake any obligation to update any forward-looking statement, except as required by law.



                   
     
Q4 2022
     
Q4 2021
   
% Change
 
Adtalem Global Education Student Enrollments
                     
Total students(1)
   
77,665
     
83,688
     
-7.2
%
                         
Chamberlain University
                       
Total students
   
32,891
     
34,930
     
-5.8
%
                         
Walden University(2)
                       
Total students
   
39,470
     
43,632
     
-9.5
%
                         
Medical & Veterinary
                       
Total students
   
5,304
     
5,126
     
3.5
%
                         
                         
1)
Represents total students attending sessions during each institution’s most recent enrollment period in Q4 FY 2022.
2)
Prior year Walden enrollment figures are as calculated by Walden while controlled by Laureate Education, Inc., and are included here for comparative purposes only.


 
Adtalem Global Education Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except par value)

             
   
June 30,
 
   
2022
   
2021
 
Assets:
           
Current assets:
           
Cash and cash equivalents
 
$
346,973
   
$
476,377
 
Restricted cash
   
964
     
819,003
 
Accounts receivable, net
   
81,635
     
43,041
 
Prepaid expenses and other current assets
   
126,467
     
128,217
 
Current assets held for sale
   
     
48,315
 
Total current assets
   
556,039
     
1,514,953
 
Noncurrent assets:
               
Property and equipment, net
   
289,926
     
283,692
 
Operating lease assets
   
177,995
     
167,365
 
Deferred income taxes
   
51,093
     
53,486
 
Intangible assets, net
   
873,577
     
137,500
 
Goodwill
   
961,262
     
310,210
 
Other assets, net
   
119,283
     
86,040
 
Noncurrent assets held for sale
   
     
531,597
 
Total noncurrent assets
   
2,473,136
     
1,569,890
 
Total assets
 
$
3,029,175
   
$
3,084,843
 
                 
Liabilities and shareholders' equity:
               
Current liabilities:
               
Accounts payable
 
$
57,140
   
$
42,421
 
Accrued payroll and benefits
   
66,642
     
54,331
 
Accrued liabilities
   
98,124
     
126,344
 
Deferred revenue
   
144,840
     
68,807
 
Current operating lease liabilities
   
50,781
     
53,991
 
Current portion of long-term debt
   
     
3,000
 
Current liabilities held for sale
   
     
59,913
 
Total current liabilities
   
417,527
     
408,807
 
Noncurrent liabilities:
               
Long-term debt
   
838,908
     
1,067,711
 
Long-term operating lease liabilities
   
177,045
     
167,066
 
Deferred income taxes
   
25,554
     
26,177
 
Other liabilities
   
65,074
     
78,705
 
Noncurrent liabilities held for sale
   
     
33,517
 
Total noncurrent liabilities
   
1,106,581
     
1,373,176
 
Total liabilities
   
1,524,108
     
1,781,983
 
Commitments and contingencies
               
Redeemable noncontrolling interest
   
     
1,790
 
Shareholders' equity:
               
Common stock, $0.01 par value per share, 200,000 shares authorized; 45,177 and 49,253 shares outstanding as of June 30, 2022 and June 30, 2021, respectively
   
818
     
811
 
Additional paid-in capital
   
521,848
     
519,826
 
Retained earnings
   
2,322,810
     
2,005,105
 
Accumulated other comprehensive loss
   
(960
)
   
(7,365
)
Treasury stock, at cost, 36,619 and 31,846 shares as of June 30, 2022 and June 30, 2021, respectively
   
(1,339,449
)
   
(1,217,307
)
Total shareholders' equity
   
1,505,067
     
1,301,070
 
Total liabilities and shareholders' equity
 
$
3,029,175
   
$
3,084,843
 



Adtalem Global Education Inc.
Consolidated Statements of Income
(unaudited)
(in thousands, except per share data)

                         
   
Three Months Ended
   
Year Ended
 
   
June 30,
   
June 30,
 
   
2022
   
2021
   
2022
   
2021
 
Revenue
 
$
361,231
   
$
223,466
   
$
1,387,122
   
$
906,901
 
Operating cost and expense:
                               
Cost of educational services
   
161,279
     
116,408
     
659,776
     
457,905
 
Student services and administrative expense
   
135,133
     
74,980
     
568,056
     
292,482
 
Restructuring expense
   
8,629
     
1,570
     
25,628
     
6,869
 
Business acquisition and integration expense
   
11,661
     
3,432
     
53,198
     
31,593
 
Total operating cost and expense
   
316,702
     
196,390
     
1,306,658
     
788,849
 
Operating income
   
44,529
     
27,076
     
80,464
     
118,052
 
Other income (expense):
                               
Interest and dividend income
   
1,036
     
961
     
3,820
     
4,094
 
Interest expense
   
(19,441
)
   
(25,382
)
   
(129,348
)
   
(41,365
)
Investment gain
   
     
636
     
     
2,638
 
Net other expense
   
(18,405
)
   
(23,785
)
   
(125,528
)
   
(34,633
)
Income (loss) from continuing operations before income taxes
   
26,124
     
3,291
     
(45,064
)
   
83,419
 
(Provision for) benefit from income taxes
   
(23,660
)
   
(726
)
   
15,237
     
(13,089
)
Income (loss) from continuing operations
   
2,464
     
2,565
     
(29,827
)
   
70,330
 
Discontinued operations:
                               
(Loss) income from discontinued operations before income taxes
   
(2,575
)
   
7,326
     
(395
)
   
9,485
 
(Loss) gain on disposal of discontinued operations before income taxes
   
(520
)
   
     
473,483
     
 
Benefit from (provision for) income taxes
   
8,645
     
(954
)
   
(125,556
)
   
(3,340
)
Income from discontinued operations
   
5,550
     
6,372
     
347,532
     
6,145
 
Net income
   
8,014
     
8,937
     
317,705
     
76,475
 
Net loss attributable to redeemable noncontrolling interest from discontinued operations
   
     
75
     
     
434
 
Net income attributable to Adtalem
 
$
8,014
   
$
9,012
   
$
317,705
   
$
76,909
 
                                 
Amounts attributable to Adtalem:
                               
Net income (loss) from continuing operations
 
$
2,464
   
$
2,565
   
$
(29,827
)
 
$
70,330
 
Net income from discontinued operations
   
5,550
     
6,447
     
347,532
     
6,579
 
Net income attributable to Adtalem
 
$
8,014
   
$
9,012
   
$
317,705
   
$
76,909
 
                                 
Earnings (loss) per share attributable to Adtalem:
                               
Basic:
                               
Continuing operations
 
$
0.05
   
$
0.05
   
$
(0.62
)
 
$
1.37
 
Discontinued operations
 
$
0.12
   
$
0.13
   
$
7.18
   
$
0.13
 
Total basic earnings per share
 
$
0.18
   
$
0.18
   
$
6.57
   
$
1.50
 
Diluted:
                               
Continuing operations
 
$
0.05
   
$
0.05
   
$
(0.62
)
 
$
1.36
 
Discontinued operations
 
$
0.12
   
$
0.13
   
$
7.18
   
$
0.13
 
Total diluted earnings per share
 
$
0.18
   
$
0.18
   
$
6.57
   
$
1.49
 
                                 
Weighted-average shares outstanding:
                               
Basic shares
   
45,162
     
49,884
     
48,388
     
51,322
 
Diluted shares
   
45,758
     
50,326
     
48,388
     
51,645
 


 
Adtalem Global Education Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)

             
   
Year Ended June 30,
 
   
2022
   
2021
 
Operating activities:
           
Net income
 
$
317,705
   
$
76,475
 
Income from discontinued operations
   
(347,532
)
   
(6,145
)
(Loss) income from continuing operations
   
(29,827
)
   
70,330
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Stock-based compensation expense
   
22,611
     
12,824
 
Amortization and adjustments to operating lease assets
   
44,748
     
50,651
 
Depreciation
   
44,574
     
33,888
 
Amortization of intangible assets
   
97,274
     
 
Amortization and write-off of debt discount and issuance costs
   
42,654
     
2,657
 
Reclassification adjustment from other comprehensive income
   
     
(126
)
Provision for bad debts
   
27,141
     
11,023
 
Deferred income taxes
   
(544
)
   
62
 
Loss on disposals, accelerated depreciation, and adjustments to property and equipment
   
3,501
     
1,912
 
Gain on extinguishment of debt
   
(2,072
)
   
 
Realized and unrealized gain on investments
   
     
(2,638
)
Changes in assets and liabilities:
               
Accounts receivable
   
(29,881
)
   
15,443
 
Prepaid expenses and other current assets
   
569
     
(17,198
)
Accounts payable
   
(15,724
)
   
5,666
 
Accrued payroll and benefits
   
(13,268
)
   
12,552
 
Accrued liabilities
   
(16,305
)
   
29,312
 
Deferred revenue
   
65,075
     
5,312
 
Operating lease liabilities
   
(49,147
)
   
(48,588
)
Other assets and liabilities
   
(27,554
)
   
(14,322
)
Net cash provided by operating activities-continuing operations
   
163,825
     
168,760
 
Net cash (used in) provided by operating activities-discontinued operations
   
(153,401
)
   
23,439
 
Net cash provided by operating activities
   
10,424
     
192,199
 
Investing activities:
               
Capital expenditures
   
(31,054
)
   
(39,881
)
Proceeds from sales of marketable securities
   
     
2,721
 
Purchases of marketable securities
   
     
(10,745
)
Payment for purchase of business, net of cash and restricted cash acquired
   
(1,488,054
)
   
 
Cash received on DeVry University loan
   
10,000
     
 
Net cash used in investing activities-continuing operations
   
(1,509,108
)
   
(47,905
)
Net cash used in investing activities-discontinued operations
   
(3,287
)
   
(8,783
)
Proceeds from sale of business, net of cash transferred
   
960,768
     
 
Net cash used in investing activities
   
(551,627
)
   
(56,688
)
Financing activities:
               
Proceeds from exercise of stock options
   
8,879
     
1,457
 
Employee taxes paid on withholding shares
   
(2,834
)
   
(4,206
)
Proceeds from stock issued under Colleague Stock Purchase Plan
   
535
     
262
 
Repurchases of common stock for treasury
   
(120,000
)
   
(100,000
)
Payment for purchase of equity forward contract
   
(30,000
)
   
 
Proceeds from long-term debt
   
850,000
     
800,000
 
Repayments of long-term debt
   
(1,079,713
)
   
(3,000
)
Payment of debt discount and issuance costs
   
(49,553
)
   
(18,047
)
Payment for purchase of redeemable noncontrolling interest of subsidiary
   
(1,790
)
   
 
Net cash (used in) provided by financing activities
   
(424,476
)
   
676,466
 
Effect of exchange rate changes on cash, cash equivalents and restricted cash
   
     
534
 
Net (decrease) increase in cash, cash equivalents and restricted cash
   
(965,679
)
   
812,511
 
Cash, cash equivalents and restricted cash at beginning of period
   
1,313,616
     
501,105
 
Cash, cash equivalents and restricted cash at end of period
   
347,937
     
1,313,616
 
Less: cash, cash equivalents and restricted cash of discontinued operations at end of period
   
     
18,236
 
Cash, cash equivalents and restricted cash of continuing operations at end of period
 
$
347,937
   
$
1,295,380
 


Adtalem Global Education Inc.
Segment Information
(unaudited)
(in thousands)

                                     
 
Three Months Ended
   
Year Ended
 
 
June 30,
   
June 30,
 
         
Increase/(Decrease)
             
Increase/(Decrease)
 
 
2022
 
2021
       
$
%
     
2022
     
2021
       
$
%
 
Revenue:
                                               
Chamberlain
 
$
140,226
   
$
141,760
   
$
(1,534
)
   
(1.1
)%
 
$
557,536
   
$
563,814
   
$
(6,278
)
   
(1.1
)%
Walden
   
137,068
     
     
137,068
 
NM
     
485,393
     
     
485,393
 
NM
 
Medical and Veterinary
   
83,937
     
81,706
     
2,231
     
2.7
%
   
344,193
     
343,087
     
1,106
     
0.3
%
Total consolidated revenue
 
$
361,231
   
$
223,466
   
$
137,765
     
61.6
%
 
$
1,387,122
   
$
906,901
   
$
480,221
     
53.0
%
Operating income (loss):
                                                               
Chamberlain
 
$
41,124
   
$
30,093
   
$
11,031
     
36.7
%
 
$
124,414
   
$
128,851
   
$
(4,437
)
   
(3.4
)%
Walden
   
12,787
     
     
12,787
 
NM
     
(4,156
)
   
     
(4,156
)
NM
 
Medical and Veterinary
   
14,541
     
11,226
     
3,315
     
29.5
%
   
64,637
     
67,852
     
(3,215
)
   
(4.7
)%
Home Office and Other
   
(23,923
)
   
(14,243
)
   
(9,680
)
   
(68.0
)%
   
(104,431
)
   
(78,651
)
   
(25,780
)
   
(32.8
)%
Total consolidated operating income
 
$
44,529
   
$
27,076
   
$
17,453
     
64.5
%
 
$
80,464
   
$
118,052
   
$
(37,588
)
   
(31.8
)%

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:
 
Net income from continuing operations excluding special items (most comparable GAAP measure: net income attributable to Adtalem) – Measure of Adtalem’s net income attributable to Adtalem adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, Walden intangible amortization expense, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, and net income from discontinued operations attributable to Adtalem.
 
Earnings per share from continuing operations excluding special items (most comparable GAAP measure: earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, Walden intangible amortization expense, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, and net income from discontinued operations attributable to Adtalem.
 
Operating income excluding special items (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, and Walden intangible amortization expense. 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 attributable to Adtalem) – Measure of Adtalem’s net income attributable to Adtalem adjusted for net income from discontinued operations attributable to Adtalem, net other expense, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation, deferred revenue adjustment, CEO transition costs, restructuring expense, and business acquisition and integration expense. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Income taxes and net other expense 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:
Deferred revenue adjustment related to a revenue purchase accounting adjustment to record Walden’s deferred revenue at fair value.
CEO transition costs related to acceleration of stock-based compensation expense.
Restructuring expense primarily related to plans to achieve synergies with the Walden acquisition and real estate consolidations at Medical and Veterinary and Adtalem’s home office.
Business acquisition and integration expense include expenses related to the Walden acquisition.
Walden intangible amortization expense on acquired intangible assets.
Pre-acquisition interest expense, write-off of debt discount and issuance costs, and gain on extinguishment of debt related to financing arrangements in connection with the Walden acquisition and prepayment of debt.
Net income from discontinued operations attributable to Adtalem includes the operations of ACAMS, Becker, OCL, and EduPristine, including the after-tax gain on the sale of these businesses, in addition to costs related to DeVry University.



Adtalem Global Education Inc.
Non-GAAP Operating Income by Segment
(unaudited)
(in thousands)

                                                 
   
Three Months Ended
 
Year Ended
   
June 30, 
 
June 30, 
               
Increase/(Decrease)
               
Increase/(Decrease)
 
 
    
2022
 
2021
 
$
 
%
   
2022
 
2021
 
$
 
%
 
Chamberlain:
                                               
Operating income (GAAP)
 
$
 41,124
 
$
 30,093
 
$
 11,031
 
 36.7
%
 
$
 124,414
 
$
 128,851
 
$
 (4,437)
 
 (3.4)
%
Restructuring expense
   
 572
   
 —
   
 572
         
 2,838
   
 —
   
 2,838
     
Operating income excluding special items (non-GAAP)
 
$
 41,696
 
$
 30,093
 
$
 11,603
 
 38.6
%
 
$
 127,252
 
$
 128,851
 
$
 (1,599)
 
 (1.2)
%
                                                 
Walden:
                                               
Operating income (loss) (GAAP)
 
$
 12,787
 
$
 —
 
$
 12,787
 
NM
   
$
 (4,156)
 
$
 —
 
$
 (4,156)
 
NM
 
Deferred revenue adjustment
   
 —
   
 —
   
 —
         
 8,561
   
 —
   
 8,561
     
Restructuring expense
   
 37
   
 —
   
 37
         
 4,053
   
 —
   
 4,053
     
Walden intangible amortization expense
   
 23,307
   
 —
   
 23,307
         
 97,274
   
 —
   
 97,274
     
Operating income excluding special items (non-GAAP)
 
$
 36,131
 
$
 —
 
$
 36,131
 
NM
   
$
 105,732
 
$
 —
 
$
 105,732
 
NM
 
                                                 
Medical and Veterinary:
                                               
Operating income (GAAP)
 
$
 14,541
 
$
 11,226
 
$
 3,315
 
 29.5
%
 
$
 64,637
 
$
 67,852
 
$
 (3,215)
 
 (4.7)
%
Restructuring expense
   
 5,034
   
 —
   
 5,034
         
 9,791
   
 —
   
 9,791
     
Operating income excluding special items (non-GAAP)
 
$
 19,575
 
$
 11,226
 
$
 8,349
 
 74.4
%
 
$
 74,428
 
$
 67,852
 
$
 6,576
 
 9.7
%
                                                 
Home Office and Other:
                                               
Operating loss (GAAP)
 
$
 (23,923)
 
$
 (14,243)
 
$
 (9,680)
 
 (68.0)
%
 
$
 (104,431)
 
$
 (78,651)
 
$
 (25,780)
 
 (32.8)
%
CEO transition costs
   
 —
   
 —
   
 —
         
 6,195
   
 —
   
 6,195
     
Restructuring expense
   
 2,986
   
 1,570
   
 1,416
         
 8,946
   
 6,869
   
 2,077
     
Business acquisition and integration expense
   
 11,661
   
 3,432
   
 8,229
         
 53,198
   
 31,593
   
 21,605
     
Operating loss excluding special items (non-GAAP)
 
$
 (9,276)
 
$
 (9,241)
 
$
 (35)
 
 (0.4)
%
 
$
 (36,092)
 
$
 (40,189)
 
$
 4,097
 
 10.2
%
                                                 
Adtalem Global Education:
                                               
Operating income (GAAP)
 
$
 44,529
 
$
 27,076
 
$
 17,453
 
 64.5
%
 
$
 80,464
 
$
 118,052
 
$
 (37,588)
 
 (31.8)
%
Deferred revenue adjustment
   
 —
   
 —
   
 —
         
 8,561
   
 —
   
 8,561
     
CEO transition costs
   
 —
   
 —
   
 —
         
 6,195
   
 —
   
 6,195
     
Restructuring expense
   
 8,629
   
 1,570
   
 7,059
         
 25,628
   
 6,869
   
 18,759
     
Business acquisition and integration expense
   
 11,661
   
 3,432
   
 8,229
         
 53,198
   
 31,593
   
 21,605
     
Walden intangible amortization expense
   
 23,307
   
 —
   
 23,307
         
 97,274
   
 —
   
 97,274
     
Operating income excluding special items (non-GAAP)
 
$
 88,126
 
$
 32,078
 
$
 56,048
 
 174.7
%
 
$
 271,320
 
$
 156,514
 
$
 114,806
 
 73.4
%



Adtalem Global Education Inc.
Non-GAAP Adjusted EBITDA by Segment
(unaudited)
(in thousands)

                                                 
   
Three Months Ended
 
Year Ended
   
June 30, 
 
June 30, 
               
Increase/(Decrease)
               
Increase/(Decrease)
 
   
2022
 
2021
 
$
 
%
   
2022
 
2021
 
$
 
%
 
Chamberlain:
                                               
Operating income (GAAP)
 
$
 41,124
 
$
 30,093
 
$
 11,031
 
 36.7
%
 
$
 124,414
 
$
 128,851
 
$
 (4,437)
 
 (3.4)
%
Restructuring expense
   
 572
   
 —
   
 572
         
 2,838
   
 —
   
 2,838
     
Depreciation
   
 4,499
   
 4,125
   
 374
         
 18,547
   
 16,123
   
 2,424
     
Stock-based compensation
   
 1,603
   
 986
   
 617
         
 6,707
   
 5,181
   
 1,526
     
Adjusted EBITDA (non-GAAP)
 
$
 47,798
 
$
 35,204
 
$
 12,594
 
 35.8
%
 
$
 152,506
 
$
 150,155
 
$
 2,351
 
 1.6
%
                                                 
Walden:
                                               
Operating income (loss) (GAAP)
 
$
 12,787
 
$
 —
 
$
 12,787
 
NM
   
$
 (4,156)
 
$
 —
 
$
 (4,156)
 
NM
 
Deferred revenue adjustment
   
 —
   
 —
   
 —
         
 8,561
   
 —
   
 8,561
     
Restructuring expense
   
 37
   
 —
   
 37
         
 4,053
   
 —
   
 4,053
     
Walden intangible amortization expense
   
 23,307
   
 —
   
 23,307
         
 97,274
   
 —
   
 97,274
     
Depreciation
   
 2,454
   
 —
   
 2,454
         
 9,255
   
 —
   
 9,255
     
Stock-based compensation
   
 721
   
 —
   
 721
         
 3,029
   
 —
   
 3,029
     
Adjusted EBITDA (non-GAAP)
 
$
 39,306
 
$
 —
 
$
 39,306
 
NM
   
$
 118,016
 
$
 —
 
$
 118,016
 
NM
 
                                                 
Medical and Veterinary:
                                               
Operating income (GAAP)
 
$
 14,541
 
$
 11,226
 
$
 3,315
 
 29.5
%
 
$
 64,637
 
$
 67,852
 
$
 (3,215)
 
 (4.7)
%
Restructuring expense
   
 5,034
   
 —
   
 5,034
         
 9,791
   
 —
   
 9,791
     
Depreciation
   
 3,393
   
 3,629
   
 (236)
         
 13,890
   
 14,431
   
 (541)
     
Stock-based compensation
   
 922
   
 632
   
 290
         
 3,896
   
 3,321
   
 575
     
Adjusted EBITDA (non-GAAP)
 
$
 23,890
 
$
 15,487
 
$
 8,403
 
 54.3
%
 
$
 92,214
 
$
 85,604
 
$
 6,610
 
 7.7
%
                                                 
Home Office and Other:
                                               
Operating loss (GAAP)
 
$
 (23,923)
 
$
 (14,243)
 
$
 (9,680)
 
 (68.0)
%
 
$
 (104,431)
 
$
 (78,651)
 
$
 (25,780)
 
 (32.8)
%
CEO transition costs
   
 —
   
 —
   
 —
         
 6,195
   
 —
   
 6,195
     
Restructuring expense
   
 2,986
   
 1,570
   
 1,416
         
 8,946
   
 6,869
   
 2,077
     
Business acquisition and integration expense
   
 11,661
   
 3,432
   
 8,229
         
 53,198
   
 31,593
   
 21,605
     
Depreciation
   
 757
   
 809
   
 (52)
         
 2,882
   
 3,334
   
 (452)
     
Stock-based compensation
   
 761
   
 777
   
 (16)
         
 2,784
   
 4,322
   
 (1,538)
     
Adjusted EBITDA (non-GAAP)
 
$
 (7,758)
 
$
 (7,655)
 
$
 (103)
 
 (1.3)
%
 
$
 (30,426)
 
$
 (32,533)
 
$
 2,107
 
 6.5
%
                                                 
Adtalem Global Education:
                                               
Net income attributable to Adtalem (GAAP)
 
$
 8,014
 
$
 9,012
 
$
 (998)
 
 (11.1)
%
 
$
 317,705
 
$
 76,909
 
$
 240,796
 
 313.1
%
Net income from discontinued operations attributable to Adtalem
   
 (5,550)
   
 (6,447)
   
 897
         
 (347,532)
   
 (6,579)
   
 (340,953)
     
Net other expense
   
 18,405
   
 23,785
   
 (5,380)
         
 125,528
   
 34,633
   
 90,895
     
Provision for (benefit from) income taxes
   
 23,660
   
 726
   
 22,934
         
 (15,237)
   
 13,089
   
 (28,326)
     
Operating income (GAAP)
   
 44,529
   
 27,076
   
 17,453
         
 80,464
   
 118,052
   
 (37,588)
     
Depreciation and amortization
   
 34,410
   
 8,563
   
 25,847
         
 141,848
   
 33,888
   
 107,960
     
Stock-based compensation
   
 4,007
   
 2,395
   
 1,612
         
 16,416
   
 12,824
   
 3,592
     
Deferred revenue adjustment
   
 —
   
 —
   
 —
         
 8,561
   
 —
   
 8,561
     
CEO transition costs
   
 —
   
 —
   
 —
         
 6,195
   
 —
   
 6,195
     
Restructuring expense
   
 8,629
   
 1,570
   
 7,059
         
 25,628
   
 6,869
   
 18,759
     
Business acquisition and integration expense
   
 11,661
   
 3,432
   
 8,229
         
 53,198
   
 31,593
   
 21,605
     
Adjusted EBITDA (non-GAAP)
 
$
 103,236
 
$
 43,036
 
$
 60,200
 
 139.9
%
 
$
 332,310
 
$
 203,226
 
$
 129,084
 
 63.5
%




Adtalem Global Education Inc.
Non-GAAP Earnings Disclosure
(unaudited)
(in thousands, except per share data)

                         
   
Three Months Ended
   
Year Ended
 
   
June 30,
   
June 30,
 
   
2022
   
2021
   
2022
   
2021
 
Net income attributable to Adtalem (GAAP)
 
$
8,014
   
$
9,012
   
$
317,705
   
$
76,909
 
Deferred revenue adjustment
   
     
     
8,561
     
 
CEO transition costs
   
     
     
6,195
     
 
Restructuring expense
   
8,629
     
1,570
     
25,628
     
6,869
 
Business acquisition and integration expense
   
11,661
     
3,432
     
53,198
     
31,593
 
Walden intangible amortization expense
   
23,307
     
     
97,274
     
 
Pre-acquisition interest expense, write-off of debt discount and issuance costs, and gain on extinguishment of debt
   
4,699
     
21,750
     
48,804
     
26,746
 
Income tax impact on non-GAAP adjustments (1)
   
9,188
     
(5,325
)
   
(51,683
)
   
(16,297
)
Net income from discontinued operations attributable to Adtalem
   
(5,550
)
   
(6,447
)
   
(347,532
)
   
(6,579
)
Net income from continuing operations excluding special items (non-GAAP)
 
$
59,948
   
$
23,992
   
$
158,150
   
$
119,241
 
(1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

                         
   
Three Months Ended
   
Year Ended
 
   
June 30,
   
June 30,
 
   
2022
   
2021
   
2022
   
2021
 
Earnings per share, diluted (GAAP)
 
$
0.18
   
$
0.18
   
$
6.57
   
$
1.49
 
Effect on diluted earnings per share:
                               
Deferred revenue adjustment
   
     
     
0.18
     
 
CEO transition costs
   
     
     
0.13
     
 
Restructuring expense
   
0.19
     
0.03
     
0.53
     
0.13
 
Business acquisition and integration expense
   
0.25
     
0.07
     
1.09
     
0.61
 
Walden intangible amortization expense
   
0.51