Strong performance continues in Medical and
Healthcare; Brazil acquisition highlights long-term opportunity in
International and Professional Education
DeVry Education Group (NYSE:DV), a global provider of
educational services, today reported academic, operational and
financial results for its fiscal 2016 second quarter ended Dec. 31,
2015. DeVry Group also reported enrollment results at DeVry
University/Keller Graduate School of Management, Chamberlain
College of Nursing, Carrington College and DeVry Medical
International.
“Despite the current challenges we are facing, DeVry Group’s
second-quarter financial results, excluding special items, were in
line with our expectations. We maintained our balanced
approach to capital allocation through the acquisition of Grupo
Ibmec and the authorization of a new $100 million share repurchase
program,” said Daniel Hamburger, president and CEO, of DeVry
Education Group. “We believe our strategy of quality plus
diversification plus long-term focus will enable us to deliver
positive student outcomes, attractive long-term growth and
significant value creation.”
Academic and operational accomplishments:
- American University of the Caribbean
School of Medicine’s accreditation was renewed by the Accreditation
Commission on Colleges of Medicine through 2021
- Chamberlain College of Nursing recently
opened a campus in Charlotte, North Carolina
- DeVry University introduced its
connected classroom environment at 22 campus locations during
January 2016
- DeVry University expects to achieve
$150 million in cost savings and maintain positive segment
economics in fiscal 2016
- During the quarter, DeVry Group
acquired Grupo Ibmec, which serves 15,000 students and is one of
Brazil’s leading providers of postsecondary education
Selected financial data for the three months ended Dec. 31,
2015:
- Total revenue decreased 5.9 percent to
$456.2 million
- Medical and Healthcare revenue grew 9.5
percent
- International and Professional
Education revenue grew 1.9 percent; on a constant currency basis,
revenue increased 27 percent
- Business, Technology and Management
revenue decreased 23.8 percent
- Reported net loss was $50.6 million,
compared to net income of $42.4 million last year; net income
excluding special items was $44.0 million, compared to $49.0
million last year
- Reported loss per share was $0.79,
compared to diluted earnings per share of $0.65 last year; earnings
per share excluding special items was $0.68, compared to $0.75 last
year
- Operating cash flow was $76.5 million
compared to $92.3 million last year
- Cash and cash equivalents were $178.2
million as of Dec. 31, 2015 compared to $380.0 million as of Dec.
31, 2014
- DeVry Group repurchased approximately
331,000 shares of common stock, up 13.6 percent compared to the
prior quarter
The fiscal 2016 second quarter results contained an after-tax
charge of $8.5 million related to real estate consolidations and
workforce reduction primarily at DeVry University. (See “Use of
Non-GAAP Financial Information and Supplemental Reconciliation
Schedule”). The fiscal 2016 second-quarter results also contained
an after-tax non-cash impairment charge of $86.0 million related to
the write-down of identified intangibles and goodwill at Carrington
College due to lower than forecasted operating results in the
second quarter and revised future cash flow projections.
Operating Highlights
Medical and Healthcare Segment
For the second quarter, segment revenue of $234.4 million grew
9.5 percent compared to the prior year, with growth driven by
strong enrollment trends at Chamberlain. Operating income,
excluding special items, for the segment in the quarter was $42.2
million, representing an increase of 10.8 percent from the prior
year.
DeVry Medical International
Revenue for the second quarter at DeVry Medical International
grew 2.0 percent to $91.9 million. In the January 2016 semester,
new students declined 7.5 percent to 518 versus 560 in the prior
year. Total students grew 3.7 percent to 6,374 versus 6,146 in the
prior year.
The Accreditation Commission on Colleges of Medicine (ACCM)
granted American University of the Caribbean School of Medicine a
6-year unconditional accreditation, the maximum accreditation
period recommended by ACCM.
Chamberlain College of Nursing
For the second quarter, Chamberlain revenue increased 21.3
percent. For the November 2015 session, new students increased 20.6
percent and total students increased 23.3 percent. For the January
2016 session, new students grew 16.6 percent to 4,316 students
versus 3,702 in the prior year. Total students increased 21.2
percent to 27,938 versus 23,055 in the prior year.
Chamberlain began classes in January at its new campus located
in Charlotte, North Carolina. Chamberlain is on track to open three
campuses in fiscal 2016.
Carrington College
Revenue at Carrington College increased 0.5 percent in the
second quarter. For the period ending Dec. 31, 2015, new students
decreased 4.8 percent and total students decreased 3.1 percent
compared to the prior year.
International and Professional Education Segment
Second quarter revenue increased 1.9 percent to $62.4 million
compared to the prior year. The decline in the Brazilian Real as
compared to the US Dollar reduced reported revenues by
approximately $15 million. On a constant currency basis, revenue in
the segment would have grown 27 percent. Segment operating income
in the second quarter decreased $2.6 million to $7.8 million, as a
result of the impact of foreign currency in Brazil.
Becker Professional Education
During the quarter, revenue increased 5.5 percent, driven by
strong demand for CPA test preparation courses.
During the quarter, Becker launched new “Becker Certified”
continuing professional education courses in seven subject areas in
response to the emerging trend of micro-credentialing and
badging.
DeVry Brasil
Revenue in the quarter was flat compared to the previous year.
Without the negative currency effect, revenue would have increased
38.5 percent, driven by the acquisitions of Faci and Damásio as
well as organic growth.
In December, DeVry Brasil acquired Grupo Ibmec. Grupo Ibmec
operates campuses located in Rio de Janeiro, Brasilia and Belo
Horizonte, and in Campinas, where it operates under the name
Metrocamp. Grupo Ibmec is widely-known for its academic excellence
for more than 40 years. Grupo Ibmec currently serves nearly 15,000
undergraduate and graduate students onsite and online throughout
Brazil.
Business, Technology, and Management Segment
DeVry University
During the second quarter, DeVry University launched 22
connected classroom environments to meet the needs of students by
providing more flexible scheduling.
In the second quarter, segment revenue decreased 23.8 percent to
$160.2 million. DeVry University continues to execute its
transformation strategy by enhancing the student experience,
addressing affordability and differentiating the university through
strategic marketing.
The segment recorded operating income of $8.9 million for the
quarter compared to $11.1 million in the prior year, excluding
special items. Disciplined expense management almost entirely
offset the quarter’s revenue decline. Expenses declined by 24
percent compared to the year ago period. DeVry University is on
track to maintain positive segment economics in fiscal 2016 by
reducing its cost structure and now expects to achieve $150 million
in cost savings.
For the November 2015 session, new undergraduate students
declined 31.4 percent to 2,883 students. Total undergraduate
students declined 21.2 percent to 30,132 students. On a same-campus
basis (excluding the locations moving to an online-only delivery),
new undergraduate student enrollments declined 25.0 percent and
total students declined 14.4 percent.
For the January 2016 session, new undergraduate students
declined 29.1 percent to 3,036 students. Total undergraduate
students declined 22.7 percent to 29,313 students. On a same-campus
basis (excluding the locations moving to an online-only delivery),
new undergraduate student enrollments declined 23.2 percent and
total students declined 17.2 percent.
The number of graduate coursetakers in the November 2015 session
was 12,463, a decline of 17.7 percent compared to the prior year.
The number of graduate coursetakers in the January 2016 session was
12,368, a decline of 18.1 percent compared to the prior year.
Balance Sheet/Cash Flow
DeVry Group generated $76.5 million of operating cash flow. As
of Dec. 31, 2015, cash and cash equivalents totaled $178.2 million,
which reflects the preliminary purchase price allocation related to
the acquisition of Grupo Ibmec for $190.8 million.
During the second quarter, DeVry Group’s board of directors
approved its ninth share repurchase program, which allows DeVry
Group to repurchase up to $100 million of its common stock through
Dec. 31, 2017.
Outlook
DeVry Group provided the following outlook for the third quarter
and full year of fiscal 2016:
- During the third quarter, revenue is
expected to decrease about 4 to 5 percent year over year,
reflecting the repositioning of DeVry University and declining
revenue at Carrington, offsetting revenue growth at DeVry Group’s
other institutions.
- Third quarter operating costs are
expected to decline about 3 to 4 percent versus the prior year
quarter
- The effective income tax rate is
expected to be approximately 20 percent, before special items
- For the full year, revenue is expected
to be down 4 to 5 percent and earnings before special items to
decline 5 to 6 percent compared to fiscal 2015.
Conference Call and Webcast Information
DeVry Group will hold a conference call to discuss its fiscal
2016 second-quarter financial results on Feb. 4, 2016 at 4 p.m. CST
(5 p.m. EST). The conference call will be led by Daniel Hamburger,
president and CEO, Tim Wiggins, chief financial officer and Patrick
Unzicker, chief accounting officer and treasurer.
For those wishing to participate by telephone, dial 877-506-6380
(domestic) or 412-902-6690 (international). Please say “DeVry Group
Call.” DeVry Group will also broadcast the conference call via
webcast. Interested parties may access the webcast through the
Investor Relations section of DeVry Group's website, or
http://services.choruscall.com/links/dv160204.
Please access the website at least 15 minutes prior to the start
of the call to register, download and install any necessary audio
software.
DeVry Group will archive a telephone replay of the call until
Feb. 18, 2016. To access the replay, dial 877-344-7529 (domestic)
or 412-317-0088 (international), passcode 10079019. To access the
webcast replay, please visit DeVry Group's website, or http://services.choruscall.com/links/dv160204.
About DeVry Education Group
The purpose of DeVry Education Group is to empower its students
to achieve their educational and career goals. DeVry Education
Group Inc. (NYSE: DV; member S&P MidCap 400 Index) is a global
provider of educational services and the parent organization of
American University of the Caribbean School of Medicine, Becker
Professional Education, Carrington College, Chamberlain College of
Nursing, DeVry Brasil, DeVry University and its Keller Graduate
School of Management, Ross University School of Medicine and Ross
University School of Veterinary Medicine. These institutions offer
a wide array of programs in healthcare, business, technology,
accounting, finance and law. For more information, please visit
www.devryeducationgroup.com.
Certain statements contained in this release concerning DeVry
Group's future performance, including those statements concerning
DeVry Group's expectations or plans, may constitute forward-looking
statements subject to 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 DeVry
Group or its management "believes," "expects," "anticipates,"
"foresees," "forecasts," "estimates" or other words or phrases of
similar import. 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
DeVry Group's most recent Annual Report on Form 10-K for the year
ending June 30, 2015 and filed with the Securities and Exchange
Commission (SEC) on August 27, 2015 and its most recent Form 10-Q
for the quarter ending September 30, 2015 and filed with the SEC on
November 4, 2015.
Use of Non-GAAP Financial Information
and Supplemental Reconciliation Schedule
During the second quarters of fiscal year 2016 and 2015, DeVry
Group recorded restructuring charges primarily related to workforce
reductions and real estate consolidations at DeVry University in
order to align its cost structure with enrollments. Also, during
the second quarter of fiscal 2016, DeVry Group recorded an asset
impairment charge related to the write down of Carrington College’s
intangible assets and goodwill. The following table illustrates the
effects of restructuring and asset impairment charges on DeVry
Group’s earnings. Management believes that the non-GAAP disclosure
of net income and earnings per share excluding these special items
provides shareholders with useful supplemental information
regarding the underlying business trends and performance of DeVry
Group’s ongoing operations and is useful for period-over-period
comparisons of such operations given the special nature of the
restructuring charges. DeVry Group 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, DeVry Group’s
reported results prepared in accordance with GAAP. The following
table reconciles these non-GAAP measures to the most directly
comparable GAAP information (in thousands, except per share
data):
Non-GAAP Earnings Disclosure PRELIMINARY
(Dollars in Thousands Except for Per Share Amounts)
For The Three Months
For The Six Months Ended December 31, Ended
December 31, 2015 2014 2015
2014 Net (Loss) Income $ (50,587 ) $ 42,413 $ (45,122 ) $
62,853 (Loss) Earnings per Share (Basic-2015, Diluted-2014) $ (0.79
) $ 0.65 $ (0.70 ) $ 0.96 Restructuring Expense (net of tax)
$ 8,536 $ 6,537 $ 27,548 $ 16,989 Effect on Earnings per Share
(Diluted) $ 0.14 $ 0.10 $ 0.43 $ 0.26 Asset Impairment
Charge (net of tax) $ 86,028 $ - $ 86,028 $ - Effect on Earnings
per Share (Diluted) $ 1.33 $ - $ 1.33 $ - Net Income
Excluding Restructuring Expense and Asset Impairment Charge
(Diluted) $ 43,977 $ 48,950 $ 68,454 $ 79,842 Earnings Per
Share Excluding Restructuring Expense and Asset Impairment Charge
(Diluted) $ 0.68 $ 0.75 $ 1.06 $ 1.22 Shares used in Basic
EPS Calculation 64,252 NA 64,272 NA Shares used in Diluted EPS
Calculation 64,654 65,470 64,617 65,488
Enrollment
Results
FY 2016 FY 2015 % Change DeVry Education
Group Student Enrollments New students(1) 10,901 12,091 -9.8%
Total students(1) 138,934 120,713 +15.1%
Chamberlain College of Nursing November Session(2) New
students 2,577 2,137 +20.6% Total students 25,654 20,807 +23.3%
January Session New students 4,316 3,702 +16.6% Total students
27,938 23,055 +21.2%
Carrington College 3 months
ending December 31, 2015 New students 1,858 1,951 -4.8% Total
students 7,211 7,444 -3.1%
DeVry Medical
International(3) January Term New students 518 560 -7.5%
Total students 6,374 6,146 +3.7%
DeVry University
Undergraduate – November Session New students 2,883 4,201 -31.4%
Total students 30,132 38,235 -21.2% Undergraduate – January Session
New students 3,036 4,282 -29.1% Total students 29,313 37,922 -22.7%
Graduate – November Session Coursetakers(4) 12,463 15,136 -17.7%
Graduate – January Session Coursetakers(4) 12,368 15,108 -18.1%
1) Includes the most recently reported
enrollments at DeVry Group’s postsecondary institutions 2)
Post-licensure online programs only; pre-licensure campus-based
programs start in September, January and May. 3) Includes
enrollments in its medical and veterinary preparatory programs
offered through DeVry Medical International 4) The term
“coursetaker” refers to the number of courses taken by a student.
Thus one student taking two courses equals two coursetakers
Chart 1: DeVry Education Group Fiscal
2016 Events & Announcements
Feb. 4, 2016
Fiscal 2016 Second Quarter Results Call
May 3, 2016 Fiscal 2016 Third Quarter Results Call Aug. 23, 2016
Fiscal 2016 Fourth Quarter and Year-end Results Call Nov. 10, 2016
Annual Shareholders’ Meeting
DEVRY EDUCATION GROUP
INC.
CONSOLIDATED
BALANCE SHEETS
(Unaudited) PRELIMINARY
December 31, June 30, December
31, 2015 2015 2014
(Dollars in thousands, except for shareand
par value amounts)
ASSETS
Current
Assets
Cash and Cash Equivalents $ 178,193 $ 353,022 $ 379,965 Marketable
Securities and Investments 3,493 3,579 3,520 Restricted Cash 13,973
10,743 10,534 Accounts Receivable, Net 121,817 139,163 89,318
Deferred Income Taxes, Net 41,261 41,458 45,104 Prepaid Expenses
and Other 41,551 53,092 44,338
Total Current Assets 400,288 601,057 572,779
Land, Buildings
and Equipment
Land 59,677 59,691 63,261 Buildings 489,145 485,288 467,330
Equipment 500,274 521,361 492,716 Construction in Progress
32,166 26,664 26,666 1,081,262
1,093,004 1,049,973 Accumulated Depreciation (545,711 )
(547,130 ) (506,984 ) Land, Buildings and Equipment,
Net 535,551 545,874 542,989
Other
Assets
Intangible Assets, Net 357,901 323,731 289,160 Goodwill 542,994
552,329 519,748 Perkins Program Fund, Net 13,450 13,450 13,450
Other Assets 58,728 37,752
29,740 Total Other Assets 973,073
927,262 852,098
TOTAL ASSETS $
1,908,912 $ 2,074,193 $ 1,967,866
LIABILITIES
Current
Liabilities
Accounts Payable $ 56,762 $ 63,083 $ 55,737 Accrued Salaries, Wages
and Benefits 73,506 83,491 73,460 Accrued Expenses 83,763 85,103
69,427 Deferred Revenue 77,778 90,232
66,356 Total Current Liabilities 291,809 321,909
264,980
Other
Liabilities
Deferred Income Taxes, Net 37,752 56,092 48,339 Deferred Rent and
Other 109,701 101,762 90,533
Total Other Liabilities 147,453 157,854
138,872
TOTAL LIABILITIES
439,262 479,763 403,852
NONCONTROLLING INTEREST 2,813 9,620 8,139
SHAREHOLDERS'
EQUITY
Common Stock, $0.01 par value, 200,000,000
Shares Authorized; 63,284,000, 63,623,000 and 63,840,000 Shares
issued and outstanding at December 31, 2015, June 30, 2015 and
December 31, 2014, respectively.
764 760 769 Additional Paid-in Capital 360,333 350,256 338,710
Retained Earnings 1,743,105 1,796,361 1,731,976 Accumulated Other
Comprehensive Loss (133,207 ) (77,114 ) (44,066 )
Treasury Stock, at Cost 13,131,000,
12,414,000 and 12,022,000 Shares at December 31, 2015, June 30,
2015 and December 31, 2014, respectively
(504,158 ) (485,453 ) (471,514 )
TOTAL
SHAREHOLDERS' EQUITY 1,466,837 1,584,810
1,555,875
TOTAL LIABILITIES, NONCONTROLLING
INTEREST AND SHAREHOLDERS' EQUITY
$ 1,908,912 $ 2,074,193 $ 1,967,866
DEVRY EDUCATION GROUP INC.
CONSOLIDATED
STATEMENTS OF INCOME
(Dollars in Thousands Except for Per Share Amounts)
(Unaudited) PRELIMINARY
For The Three Months For The Six
Months Ended December 31, Ended December 31,
2015 2014 2015 2014
REVENUE: Tuition $ 421,602 $ 453,609 $ 817,658 $
875,482 Other Educational 34,601 31,271
79,957 71,442 Total Revenue
456,203 484,880 897,615 946,924
OPERATING COST AND EXPENSE:
Cost of Educational Services 241,021 250,809 486,098 497,140
Student Services and Administrative Expense 159,163 174,913 323,179
352,666 Restructuring Expense 12,923 10,188 36,997 23,505 Asset
Impairment Charge
99,473
- 99,473 -
Total Operating Cost and Expense 512,580
435,910 945,747 873,311
Operating (Loss) Income (56,377 ) 48,970 (48,132 ) 73,613
INTEREST: Interest Income 240 300 367 697 Interest Expense
(1,847 ) (352 ) (4,173 ) (745 )
Net Interest Expense (1,607 ) (52 ) (3,806 )
(48 )
(Loss) Income Before Income Taxes
(57,984 ) 48,918 (51,938 ) 73,565
Income Tax Benefit
(Provision) 7,514 (6,116 ) 6,853
(10,326 )
NET (LOSS) INCOME (50,470 )
42,802 (45,085 ) 63,239 Net Income Attributable to Noncontrolling
Interest (117 ) (389 ) (37 ) (386 )
NET (LOSS) INCOME ATTRIBUTABLE TO DEVRY EDUCATION
GROUP $ (50,587 ) $ 42,413 $ (45,122 ) $ 62,853
(LOSS) EARNINGS PER COMMON SHARE
ATTRIBUTABLE TO DEVRY EDUCATION GROUP SHAREHOLDERS
Basic $ (0.79 ) $ 0.66 $ (0.70 ) $ 0.97
Diluted $ (0.79 ) $ 0.65 $ (0.70 ) $ 0.96
Cash Dividend Declared per Common Share $ 0.18
$ 0.18 $ 0.18 $ 0.18
DEVRY
EDUCATION GROUP INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited) PRELIMINARY
For The Six Months Ended December 31, 2015
2014 (Dollars in Thousands) CASH
FLOWS FROM OPERATING ACTIVITIES: Net (Loss) Income ($45,085 ) $
63,239
Adjustments to Reconcile Net (Loss) Income
to Net Cash Provided by Operating Activities:
Stock-Based Compensation Expense 10,212 9,530 Depreciation
39,370 41,362 Amortization 2,902 1,293 Impairment of Goodwill and
Intangible Assets 99,473 - Provision for Refunds and Uncollectible
Accounts 40,601 45,627 Deferred Income Taxes (16,993 ) (2,996 )
Loss on Disposals, Accelerated
Depreciation and Adjustments to Land, Building and Equipment
15,263 2,430
Changes in Assets and Liabilities, Net of
Effects from Acquisitions and Divestitures of Businesses:
Restricted Cash (3,230 ) (2,187 ) Accounts Receivable (18,218 )
(6,367 ) Prepaid Expenses And Other (5,134 ) (540 ) Accounts
Payable (9,257 ) 3,481 Accrued Salaries, Wages, Expenses and
Benefits (20,199 ) (29,795 ) Deferred Revenue (13,186 )
(32,768 )
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 76,519 $ 92,309
CASH FLOWS
FROM INVESTING ACTIVITIES: Capital Expenditures (41,048 )
(43,061 ) Payment for Purchase of Business, Net of Cash Acquired
(170,577 ) (9,649 ) Marketable Securities Purchased (86 ) (140 )
Cash Received from Sale of Assets - 6,100 Purchase of
Noncontrolling Interest of Subsidiary (3,114 ) -
NET CASH USED IN INVESTING ACTIVITIES
(214,825 ) (46,750 )
CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from Exercise of Stock Options 271 5,380
Proceeds from Stock Issued Under Colleague Stock Purchase Plan 558
674 Repurchase of Common Stock for Treasury (16,510 ) (11,541 )
Cash Dividends Paid (11,563 ) (11,639 ) Payments of Seller Financed
Obligations (3,476 ) (4,097 )
NET CASH USED
IN FINANCING ACTIVITIES (30,720 ) (21,223 )
Effects of Exchange Rate Differences (5,803 )
(2,559 )
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (174,829 ) 21,777
Cash and Cash
Equivalents at Beginning of Period 353,022
358,188
Cash and Cash Equivalents at End of Period $
178,193 $ 379,965
DEVRY EDUCATION
GROUP INC.
SEGMENT
INFORMATION
(Dollars in Thousands) (Unaudited) PRELIMINARY
For The Three
Months For The Six Months Ended December 31,
Ended December 31, Increase Increase
2015 2014 (Decrease) 2015 2014
(Decrease) REVENUE: Medical and Healthcare $ 234,374
$ 213,985 9.5 % $ 458,358 $ 419,997 9.1 % International and
Professional Education 62,403 61,224 1.9 % 121,076 114,427 5.8 %
Business, Technology and Management 160,212 210,337 -23.8 % 319,678
413,978 -22.8 % Intersegment Elimination (786 ) (666
) NM (1,497 ) (1,478 ) NM Total Consolidated Revenue
456,203 484,880 -5.9 % 897,615
946,924 -5.2 %
OPERATING INCOME (LOSS):
Medical and Healthcare (56,941 ) 36,858 -254.5 % (22,688 ) 74,501
-130.5 % International and Professional Education 7,846 10,491
-25.2 % 9,884 15,229 -35.1 % Business, Technology and Management
(4,362 ) 2,172 -300.8 % (29,611 ) (10,296 ) NM Reconciling Items:
Home Office and Other (2,920 ) (551 ) NM
(5,717 ) (5,821 ) NM Total Consolidated Operating Income
(56,377 ) 48,970 -215.1 % (48,132 ) 73,613 -165.4 %
INTEREST: Interest Income 240 300 -20.0 % 367 697 -47.3 %
Interest Expense (1,847 ) (352 ) 424.7 %
(4,173 ) (745 ) 460.1 % Net Interest (Expense) Income
(1,607 ) (52 ) 2990.4 % (3,806 ) (48 ) 7829.2
%
Total Consolidated Income before Income
Taxes and Noncontrolling Interest
$ (57,984 ) $ 48,918 -218.5 % $ (51,938 ) $ 73,565
-170.6 % During the second quarter and first six
months of fiscal year 2016, DeVry Group recorded restructuring
charges related to workforce reductions at DeVry University which
is part of the Business, Technology and Management segment and real
estate consolidations at DeVry University and Carrington College
which is part of the Medical and Healthcare segment in order to
align its cost structure with enrollments. Also, during the second
quarter of fiscal year 2016, DeVry Group recorded an asset
impairment charge related to the write down of Carrington College's
intangible assets and goodwill. During the second quarter and first
six months of fiscal year 2015, DeVry Group recorded restructuring
charges related to workforce reductions primarily at DeVry
University, and real estate consolidations at DeVry University,
Carrington College and the DeVry Group home office (not related to
any segment) in order to align its cost structure with enrollments.
The following table illustrates the effects of restructuring
expense and asset impairment charge on DeVry Group’s operating
income. Management believes that the non-GAAP disclosure of
operating income excluding these special items provides investors
with useful supplemental information regarding the underlying
business trends and performance of DeVry Group’s ongoing operations
and is useful for period-over-period comparisons of such operations
given the special nature of the restructuring charges and asset
impairment charge. DeVry Group 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, DeVry Group’s reported
results prepared in accordance with GAAP. The following table
reconciles these non-GAAP measures to the most directly comparable
GAAP information (in thousands):
For The Three Months
For The Six Months Ended December 31, Ended
December 31, Increase Increase 2015
2014 (Decrease) 2015 2014
(Decrease) Medical and Healthcare Operating Income $
(56,941 ) $ 36,858 -254.5 % $ (22,688 ) $ 74,501 -130.5 %
Restructuring Expense (310 ) 1,234 NM 71 1,918 NM Asset Impairment
Charge 99,473 - 99,473
- NM Medical and Healthcare Operating Income
Excluding Restructuring Expense $ 42,222 $ 38,092
10.8 % $ 76,856 $ 76,419 0.6 % Business,
Technology and Management Operating Income $ (4,362 ) $ 2,172
-300.8 % $ (29,611 ) $ (10,296 ) 187.6 % Restructuring Expense
13,259 8,914 NM 36,951
21,517 NM
Business, Technology and Management
Operating Income Excluding Restructuring Expense
$ 8,897 $ 11,086 -19.7 % $ 7,340 $ 11,221
-34.6 %
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version on businesswire.com: http://www.businesswire.com/news/home/20160204006414/en/
DeVry Education GroupInvestor Contact:Joan
Walterjwalter@devrygroup.com630-353-3800orMedia Contact:Ernie
Gibbleegibble@devrygroup.com630-353-9920
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