Attached files
| file | filename |
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| 8-K - DEVRY INC. 8-K - Adtalem Global Education Inc. | a50688204.htm |
Exhibit 99.1
DeVry Announces Fourth-Quarter and Full-Year 2013 Results
Fourth-quarter reported diluted per share loss of $0.51
Earnings per share from continuing operations and
excluding discrete items was $0.54, up 3.8 percent
DOWNERS GROVE, Ill.--(BUSINESS WIRE)--August 8, 2013--DeVry Inc. (NYSE:DV), a global provider of educational services, today reported academic, operational and financial results for its fiscal 2013 fourth-quarter and full year ended June 30, 2013. DeVry also reported enrollment results at DeVry Medical International, Chamberlain College of Nursing, Carrington Colleges Group, and DeVry University and its Keller Graduate School of Management.
Academic and operational accomplishments included:
- Carrington College California received reaccreditation from the Western Association of Schools and Colleges (WASC) for a six year period
- The percentage of DeVry University graduates who were actively seeking employment and had careers in their field within 6 months of graduation increased to 90 percent in calendar 2012
- Chamberlain College of Nursing graduates achieved an average of 92 percent NCLEX pass rate in calendar 2012
- DeVry Brasil completed the acquisition of Faculdade Differential Integral on July 1, 2013
- DeVry decided to divest Advanced Academics Inc.
- DeVry achieved more than $100 million in savings and value creation during fiscal 2013
Selected financial data for the three months ended June 30, 2013:
- Revenues decreased 4.4 percent to $480 million
- Reported a net loss of $32 million, compared to net income of $8 million last year; net income from continuing operations and excluding discrete items was $34 million, flat to prior year
- Reported diluted per share loss of $0.51, compared to earnings per share of $0.12 last year; earnings per share from continuing operations and excluding discrete items was $0.54, up 3.8 percent
Selected financial data for the 12 months ended June 30, 2013:
- Revenues decreased 5.2 percent to $1,964 million
- Reported net income decreased 24.6 percent to $107 million; net income from continuing operations and excluding discrete items was $185 million, down 18.5 percent
- Reported diluted earnings per share decreased 21.1 percent to $1.65; earnings per share from continuing operations and excluding discrete items was $2.86, down 14.6 percent
- Operating cash flow of $263.9 million was down from $277.4 million last year
- Repurchased approximately 2.2 million shares of common stock at an average price of $24.47
“We are responding to a challenging environment by executing a turnaround plan at DeVry University and Carrington including aligning our cost structure, regaining enrollment growth and making targeted investments to drive future growth,” said Daniel Hamburger, DeVry’s president and chief executive officer. “Our formula of quality plus diversification equals growth is helping us as we work through the cyclical weakness and we remain confident in the opportunities for long-term growth in career-oriented education.”
The fourth quarter fiscal year 2013 results contain discrete items:
- A non-cash goodwill and intangible asset impairment charge of $49.4 million after-tax, or $0.78 per share, for Carrington Colleges;
- A $9.0 million after-tax, or $0.14 per share, restructuring charge for workforce reductions and real estate consolidations.
- A benefit of $4.4 million after-tax, or $0.07 per share, recorded during the fourth quarter as a result of an adjustment to an earn out accrual from a previous acquisition.
During the fourth quarter of fiscal year 2013, management decided to sell Advanced Academics Inc. As a result, the assets of this institution are reclassified as “held for sale” on the Consolidated Balance Sheets and the operating results are reported as “discontinued operations” in the Consolidated Statements of Income. The fiscal 2013 fourth quarter loss on discontinued operations of $12.4 million, net of tax, includes: operating losses; an asset impairment charge related to the write down of long-term assets to their fair market value; and restructuring charges related to real estate consolidations (see ''Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule'' on p.8).
Business Highlights
Medical and Healthcare Segment
Segment revenue of $171 million was strong, increasing 13.9 percent in the quarter and growing 9.9 percent to $672.6 million in fiscal year 2013. Segment earnings, excluding discrete items, increased 97.6 percent to $28.2 million in the quarter and increased to $117.2 million for the full year, up 35.3 percent.
DeVry Medical International
In the May 2013 term for DeVry Medical International, new students decreased 19.4 percent to 518 following a strong increase in the prior year of 643 students. Total students decreased 2.4 percent to 5,800 compared to 5,944 students in the same term last year. Turnover of key roles within enrollment management at Ross University School of Medicine impacted what is typically the smallest enrollment intake of the year. This operational issue has been addressed and enrollments in the September semester are expected to be solid.
In recent months, DeVry’s medical schools have positioned themselves for future growth and academic success by expanding their education affiliations with a number of highly regarded teaching hospitals.
Expansion of the American University of the Caribbean School of Medicine’s campus continues. The new academic building currently under construction is expected to open in January 2014 and will help meet expected enrollment.
Chamberlain College of Nursing
For the May 2013 session, new online students grew by 42.1 percent to 1,457 students, compared to 1,025 students in the prior year session. Total students increased 24.4 percent to 13,953. Chamberlain’s new online student enrollment in the July session increased 5.9 percent to 1,283 students, compared with 1,211 students in the prior year. Total students in the July session (onsite and online) increased 16.5 percent to 12,648, compared to 10,852 in the prior year.
The fiscal fourth quarter marked the completion of Chamberlain’s realignment of its campus-based academic calendar from July, November and March sessions to September, January and May. The calendar transition artificially made comparisons in the May session appear better, and those of the July session appear worse.
During the quarter, Chamberlain signed an agreement with Catholic Health Initiatives (CHI) to expand access to Chamberlain’s post licensure programs for nurses across the CHI system, which includes 75 hospitals and 40 long-term care facilities across 17 states.
Chamberlain recently received approval from the Higher Learning Commission for a Family Nurse Practitioner program, which is expected to launch in September. In addition, Chamberlain is expanding its existing Atlanta and Chicago campuses to accommodate continued growth.
During calendar year 2012, Chamberlain students sitting for the National Council Licensure Examination (NCLEX) had an overall pass rate of 92 percent.
Carrington Colleges Group
For the three month period ending June 30, 2013, new student enrollment for Carrington Colleges Group decreased 1.5 percent to 1,607 versus 1,632 in the previous year. During the quarter, Carrington reduced the number of non-core programs in order to accelerate its return to profitability. Total enrollment increased 9.6 percent to 7,111 compared to 6,486 in the prior year.
Carrington College California recently received reaccreditation from the Western Association of Schools and Colleges (WASC) for a six year period.
International and Professional Education Segment
Segment revenue increased 21.6 percent to $61.0 million in the quarter and increased 25.8 percent to $196.0 for the year. Excluding discrete items, segment earnings increased 25.9 percent to $17.7 million during the quarter and increased 22.3 percent to $47.0 million for the year.
Becker Professional Education
During the year, Becker grew its revenue by 4 percent. In addition, the recently acquired Falcon Physician Reviews, which provides exam review programs for medical boards, officially changed its name to Becker Professional Education.
DeVry Brasil
On July 1, 2013, DeVry Brasil completed the acquisition of Faculdade Differential Integral (Facid), which serves about 2,500 students primarily in healthcare, including a Doctor of Medicine (MD) program. Along with its MD program, Facid offers undergraduate degrees in other healthcare fields such as nursing, pharmacy, and dentistry, as well as a law program.
DeVry Brasil continues to benefit from recent acquisitions and strong integration execution. Faculdade do Vale do Ipojuca (Favip), acquired in September 2012, is one of the fastest growing institutions in northern Brazil and has exceeded expectations of DeVry’s acquisition plan.
Business, Technology, and Management Segment
Segment revenue of $248.3 million declined 17.7 percent in the fourth quarter and decreased 15.9 percent to $1,096.7 million for the full year. The segment generated a loss in the fourth quarter, excluding discrete items, declining $23.1 million. For the full-year, segment earnings of $99.1 million declined 51.9 percent.
DeVry University
For the May 2013 session at DeVry University new undergraduate enrollments decreased 19.4 percent to 4,616 versus 5,730 the previous year. Total undergraduate students decreased 18.7 percent to 48,842 versus 60,044 for the session a year ago. July 2013 new undergraduate enrollments decreased 24.7 percent to 5,674 compared to 7,532 the previous year. Total undergraduate students decreased 16.1 percent to 42,374 versus 50,503 for the July session a year ago.
At the graduate level, including Keller Graduate School of Management, total coursetakers in the May session decreased 17.1 percent to 18,836 versus 22,732 for the same session a year ago. For the July session, total coursetakers decreased 18.0 percent to 16,107 versus 19,635 for the same session a year ago.
The total number of online undergraduate and graduate coursetakers in the May session decreased 17.3 percent to 61,016 versus 73,803 in the same session a year ago. For July, total online coursetakers decreased 2.2 percent to 55,099 versus 56,340.
DeVry University and its Keller Graduate School of Management continue to be negatively impacted by prospective students’ lack of confidence in the job market.
During the fourth quarter, DeVry University made more strategic use of scholarships, focused on two objectives: attracting new students and improving student persistence. The Career Catalyst Scholarship aims to achieve both, as it is attractive to new students, and is awarded in progressively higher amounts over a three year period to motivate retention. The scholarship provides up to $20,000 for eligible students enrolling for the September session. New student enrollment in the September session is expected to decline at a more moderate pace than the July session.
In calendar 2012, 90 percent of DeVry University graduates who were actively seeking employment had careers in their field within 6 months of graduation(6). DeVry University continues to execute its turnaround plan, which includes aligning its cost structure with enrollment levels; regaining enrollment growth; and making targeted investments to drive future growth. DeVry University is focused on highlighting the university’s strong value proposition to students.
During the quarter, DeVry University earned specialized accreditation of its business and accounting degree programs from the Accreditation Council for Business Schools and Programs (ACBSP). DeVry University became only the ninth institution to achieve separate accounting accreditation from the Council.
Balance Sheet/Cash Flow
For fiscal 2013, DeVry generated $263.9 million of operating cash flow. As of June 30, 2013, cash, marketable securities and investment balances totaled $199.6 million with no outstanding debt.
Share Repurchase Plan
During the quarter, DeVry repurchased 185,216 shares of its common stock for approximately $5.5 million, at an average cost of $29.87 per share.
Conference Call and Webcast Information
DeVry will host a conference call on August 8, 2013, at 4:00 p.m. Central Daylight Time (5:00 p.m. Eastern Daylight Time) to discuss its fiscal 2013 fourth-quarter and year-end results and other developments with respect to DeVry. The conference call will be led by Daniel Hamburger, president and chief executive officer, Tim Wiggins, chief financial officer and Pat Unzicker, vice president of finance.
For those wishing to participate by telephone, dial 888-317-6016 (domestic) or 412-317-6016 (international). Please say “DeVry Call”. DeVry Inc. will also broadcast the conference call live online. Interested parties may access the webcast through the Investor Relations section of DeVry’s website, or http://services.choruscall.com/links/dv130808.html.
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 will archive a telephone replay of the call until Sept. 4, 2013, 9:00 am EDT. To access the replay, dial 877-344-7529 (domestic) or 412-317-0088 (international), conference number 10031847. To access the webcast replay, please visit the company's website, or http://services.choruscall.com/links/dv130808.html.
About DeVry Inc.
DeVry's purpose is to empower its students to achieve their educational and career goals. DeVry (NYSE: DV; member S&P MidCap 400 Index) is a global provider of educational services and the parent organization of Advanced Academics, American University of the Caribbean School of Medicine, Becker Professional Education, Carrington College, Carrington College California, Chamberlain College of Nursing, DeVry Brasil, DeVry University, Ross University School of Medicine and Ross University School of Veterinary Medicine. These institutions offer a wide array of programs in business, healthcare, technology, accounting and finance. For more information, please call 630-353-3800 or visit http://www.devryinc.com.
Certain statements contained in this release concerning DeVry's future performance, including those statements concerning DeVry'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 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's most recent Annual Report on Form 10-K for the year ending June 30, 2012 and filed with the Securities and Exchange Commission on August 28, 2012.
Selected Operating Data (in thousands, except per share data)
| Fourth Quarter | ||||||||
| FY 2013 | FY 2012 | Change | ||||||
| Revenues | $479,964 | $501,962 | -4.4 | % | ||||
| Net Income | $(32,310 | ) | $8,085 | $(40,395 | ) | |||
| Earnings per Share (diluted) | $(0.51 | ) | $0.12 | $(0.63 | ) | |||
| Number of common shares (diluted) | 63,751 | 66,141 | -3.6 | % | ||||
| Fiscal Year | ||||||
| FY 2013 | FY 2012 | Change | ||||
| Revenues | $1,964,375 | $2,071,783 | -5.2% | |||
| Net Income | $106,786 | $141,565 | -24.6% | |||
| Earnings per Share (diluted) | $1.65 | $2.09 | -21.1% | |||
| Number of common shares (diluted) | 64,611 | 67,705 | -4.6% | |||
Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule
During fiscal year 2013, DeVry recorded impairment charges related to its Carrington Colleges Group reporting unit. In addition, DeVry recorded restructuring charges primarily related to workforce reductions and real estate consolidations to align its cost structure with enrollments at DeVry University, Carrington Colleges and the DeVry Inc. home office. DeVry also recorded the operating results of its Advanced Academic Inc. reporting unit as discontinued operations beginning in the fourth quarter of the fiscal year. Also, DeVry recorded an adjustment to reduce an accrual for an earn out payment from a previous acquisition. During fiscal year 2012, DeVry recorded impairment charges related to its Carrington Colleges Group reporting unit and its Advanced Academics reporting unit. In addition, DeVry recorded a restructuring charge primarily related to workforce reductions to align its cost structure with enrollments at DeVry University and Carrington Colleges. DeVry also recorded a gain from the sale of Becker’s Stalla CFA review operations. The following table illustrates the effects of the impairment charges, restructuring charges, discontinued operations and gain on the sale of assets on DeVry’s earnings. Management believes that the non-GAAP disclosure of net income and earnings per share excluding these discrete items and discontinued operations provides investors with useful supplemental information regarding the underlying business trends and performance of DeVry’s ongoing operations and is useful for period-over-period comparisons of such operations given the discrete nature of the impairment and restructuring charges and gain on the sale of assets. DeVry 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’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):
| For The Three Months | For The Year | |||||||||||
| Ended June 30, | Ended June 30, | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| Net Income | $(32,310 | ) | $8,085 | $106,786 | $141,565 | |||||||
| Earnings per Share (Diluted) | $(0.51 | ) | $0.12 | $1.65 | $2.09 | |||||||
| Discontinued Operations (net of tax) | $12,357 | $21,645 | $16,902 | $27,541 | ||||||||
| Effect on Earnings per Share (Diluted) | $0.19 | $0.33 | $0.26 | $0.41 | ||||||||
| Earn-out Accrual Adjustment (net of tax) | $(4,381 | ) | $ - | $(4,381 | ) | $ - | ||||||
|
Effect on Earnings per Share (Diluted) |
$(0.07 | ) | $ - | $(0.07 | ) | $ - | ||||||
| Impairment Charges (net of tax) | $49,448 | $ - | $49,448 | $55,751 | ||||||||
| Effect on Earnings per Share (Diluted) | $0.78 | $ - | $0.77 | $0.82 | ||||||||
| Restructuring Expenses (net of tax) | $9,029 | $4,334 | $16,240 | $4,334 | ||||||||
| Effect on Earnings per Share (Diluted) | $0.14 | $0.07 | $0.25 | $0.06 | ||||||||
| Gain on Sale of Assets (net of tax) | $ - | $ - | $ - | $(2,216 | ) | |||||||
| Effect on Earnings per Share (Diluted) | $ - | $ - | $ - | $(0.03 | ) | |||||||
| Net Income from Continuing Operations | ||||||||||||
| Excluding the Impairment and Restructuring Charges; Earn | ||||||||||||
| Out Adjustment; and Gain on Sale of Assets | $34,143 | $34,064 | $184,995 | $226,975 | ||||||||
| Earnings per Share from Continuing Operations | ||||||||||||
| Excluding the Impairment and | ||||||||||||
| Restructuring Charges and Gain on Sale of Assets (Diluted) | $0.54 | $0.52 | $2.86 | $3.35 | ||||||||
| Shares used in Diluted EPS Calculation | 63,751 | 66,141 | 64,611 | 67,705 | ||||||||
| 2013 | 2012 | % Change | ||||
| DeVry Inc. Student Enrollments(1) | ||||||
| Total students | 110,297 | 117,315 | -6.0 | |||
| DeVry University | ||||||
| Undergraduate: May Session | ||||||
| New students | 4,616 | 5,730 | -19.4 | |||
| Total students | 48,842 | 60,044 | -18.7 | |||
| Undergraduate: July Session | ||||||
| New students | 5,674 | 7,532 | -24.7 | |||
| Total students | 42,374 | 50,503 | -16.1 | |||
| Graduate: May Session | ||||||
| Coursetakers(2) | 18,836 | 22,732 | -17.1 | |||
| Graduate: July Session | ||||||
| Coursetakers(2) | 16,107 | 19,635 | -18.0 | |||
| Online | ||||||
| May Session | ||||||
| Total coursetakers(2)(3) | 61,016 | 73,803 | -17.3 | |||
| July Session | ||||||
| Total coursetakers(2)(3) | 55,099 | 56,340 | -2.2 | |||
| Chamberlain College of Nursing(4) | ||||||
| May Session | ||||||
| New students (online only) | 1,457 | 1,025 | 42.1 | |||
| New students (onsite only)(5) | 826 | 58 | N/A | |||
| Total students | 13,953 | 11,214 | 24.4 | |||
| July Session | ||||||
| New students (online only) | 1,283 | 1,211 | 5.9 | |||
| New students (onsite only) | 0 | 7634 | N/A | |||
| Total students | 12,648 | 10,852 | 16.5 | |||
| Carrington Colleges Group | ||||||
| 3 months ending June 30 | ||||||
| New students | 1,607 | 1,632 | -1.5 | |||
| Total students | 7,111 | 6,486 | 9.6 | |||
| DeVry Medical International | ||||||
| May Term | ||||||
| New students | 518 | 643 | -19.4 | |||
| Total students | 5,800 | 5,944 | -2.4 |
|
Graduate Employment Statistics(6) |
|
Percent Employed | Average Salary | |
| DeVry University (Undergraduate) | 90.4% | $43,539 |
| 1) | Excludes Becker and Advanced Academics. | |
| 2) | The term “coursetaker” refers to the number of courses taken by a student. Thus one student taking two courses equals two coursetakers. | |
| 3) | Includes both undergraduate and graduate students. | |
| 4) | New enrollment comparisons for the May and July sessions were impacted by a realignment of Chamberlain’s academic calendar, which resulted in no new campus-based students in July. | |
| 5) | Chamberlain’s Atlanta campus was the first to enroll onsite students in the May 2012 session. | |
| 6) | Figures based on 2012 graduates’ self-reported data to DeVry University Career Services who were employed at graduation or who were actively seeking employment after graduation and found employment in their field within six months. Does not include graduates who were not actively seeking employment, as determined by DeVry University Career Services, or who did not report data on employment status to DeVry University Career Services. |
|
Chart 1: DeVry Inc. Remaining Calendar 2013 Announcements & Events |
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| October 24, 2013 | Fiscal 2014 First Quarter Results and September Enrollment | |
|
DeVry University
Chamberlain College of Nursing Carrington Colleges Group DeVry Medical International DeVry Brasil |
||
| November 6, 2013 | Annual Shareholders’ Meeting | |
| DEVRY INC. | |||||||||||||
|
CONSOLIDATED BALANCE SHEETS |
|||||||||||||
| (Dollars in Thousands) | |||||||||||||
| (Unaudited) | |||||||||||||
| PRELIMINARY | |||||||||||||
| June 30, | June 30, | ||||||||||||
| 2013 | 2012 | ||||||||||||
|
ASSETS |
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|
Current Assets |
|||||||||||||
| Cash and Cash Equivalents | $ | 196,576 | $ | 173,984 | |||||||||
| Marketable Securities and Investments | 2,975 | 2,632 | |||||||||||
| Restricted Cash | 7,019 | 2,498 | |||||||||||
| Accounts Receivable, Net | 139,778 | 93,046 | |||||||||||
| Deferred Income Taxes, Net | 32,515 | 27,845 | |||||||||||
| Refundable Income Taxes | 154 | 40,278 | |||||||||||
| Prepaid Expenses and Other | 35,166 | 35,823 | |||||||||||
| Total Current Assets | 414,183 | 376,106 | |||||||||||
|
Land, Buildings and Equipment |
|||||||||||||
| Land | 71,122 | 65,172 | |||||||||||
| Buildings | 424,902 | 385,779 | |||||||||||
| Equipment | 475,656 | 422,590 | |||||||||||
| Construction In Progress | 33,724 | 61,752 | |||||||||||
| 1,005,404 | 935,293 | ||||||||||||
| Accumulated Depreciation and Amortization | (433,747 | ) | (382,242 | ) | |||||||||
| Land, Buildings and Equipment, Net | 571,657 | 553,051 | |||||||||||
|
Other Assets |
|||||||||||||
| Intangible Assets, Net | 281,998 | 285,220 | |||||||||||
| Goodwill | 508,937 | 549,961 | |||||||||||
| Perkins Program Fund, Net | 13,450 | 13,450 | |||||||||||
| Other Assets | 33,025 | 29,894 | |||||||||||
| Total Other Assets | 837,410 | 878,525 | |||||||||||
| Assets of Business Held for Sale | 16,647 | 30,934 | |||||||||||
| TOTAL ASSETS | $ | 1,839,897 | $ | 1,838,616 | |||||||||
| DEVRY INC. | |||||||||||||
|
CONSOLIDATED BALANCE SHEETS |
|||||||||||||
| (Dollars in Thousands) | |||||||||||||
| (Unaudited) | |||||||||||||
| PRELIMINARY | |||||||||||||
| June 30, | June 30, | ||||||||||||
| 2013 | 2012 | ||||||||||||
|
LIABILITIES |
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|
Current Liabilities |
|||||||||||||
| Accounts Payable | $ | 55,131 | $ | 61,831 | |||||||||
| Accrued Salaries, Wages and Benefits | 88,444 | 77,385 | |||||||||||
| Accrued Expenses | 57,423 | 76,209 | |||||||||||
| Advance Tuition Payments | 27,135 | 20,580 | |||||||||||
| Deferred Tuition Revenue | 70,343 | 77,501 | |||||||||||
| Total Current Liabilities | 298,476 | 313,506 | |||||||||||
|
Non-Current Liabilities |
|||||||||||||
| Deferred Income Taxes, Net | 57,501 | 62,276 | |||||||||||
| Deferred Rent and Other | 85,088 | 96,826 | |||||||||||
| Total Non-current Liabilities | 142,589 | 159,102 | |||||||||||
| Liabilities of Business Held for Sale | 825 | 1,373 | |||||||||||
| TOTAL LIABILITIES | 441,890 | 473,981 | |||||||||||
| NON-CONTROLLING INTEREST | 854 | 8,242 | |||||||||||
|
SHAREHOLDERS' EQUITY |
|||||||||||||
| Common Stock, $0.01 par value, 200,000,000 Shares Authorized; | |||||||||||||
| 62,946,000 and 64,722,000 Shares issued | |||||||||||||
| and outstanding at June 30, 2013 | |||||||||||||
| and 2012, respectively. | 745 | 741 | |||||||||||
| Additional Paid-in Capital | 291,269 | 272,962 | |||||||||||
| Retained Earnings | 1,575,006 | 1,488,988 | |||||||||||
| Accumulated Other Comprehensive Income | (17,101 | ) | (5,889 | ) | |||||||||
| Treasury Stock, at Cost (11,581,000 and 9,386,000 | |||||||||||||
| Shares, Respectively) | (452,766 | ) | (400,409 | ) | |||||||||
| TOTAL SHAREHOLDERS' EQUITY | 1,397,153 | 1,356,393 | |||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,839,897 | $ | 1,838,616 | |||||||||
|
DEVRY INC. |
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|
CONSOLIDATED STATEMENTS OF INCOME |
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|
(Dollars in Thousands Except for Per Share Amounts) |
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|
(Unaudited) |
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|
PRELIMINARY |
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| For The Quarter | For The Year | ||||||||||||||||||||||
| Ended June 30, | Ended June 30, | ||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2011 | |||||||||||||||||||
|
REVENUES: |
|||||||||||||||||||||||
| Tuition | $ | 452,155 | $ | 475,550 | $ | 1,840,033 | $ | 1,949,909 | $ | 2,023,483 | |||||||||||||
| Other Educational | 27,809 | 26,412 | 124,342 | 121,874 | 136,781 | ||||||||||||||||||
| Total Revenues | 479,964 | 501,962 | 1,964,375 | 2,071,783 | 2,160,264 | ||||||||||||||||||
|
OPERATING COSTS AND EXPENSES: |
|||||||||||||||||||||||
| Cost of Educational Services | 245,698 | 247,472 | 962,223 | 960,814 | 914,389 | ||||||||||||||||||
| Student Services and Administrative Expense | 192,301 | 207,459 | 756,384 | 789,903 | 744,369 | ||||||||||||||||||
| Earn-out Accrual Adjustment | (4,381 | ) | - | (4,381 | ) | - | - | ||||||||||||||||
| Asset Impairment Charge | 56,992 | - | 56,992 | 75,039 | - | ||||||||||||||||||
| Restructuring Expenses | 14,716 | 7,102 | 26,229 | 7,102 | - | ||||||||||||||||||
| Total Operating Costs and Expenses | 505,326 | 462,033 | 1,797,447 | 1,832,858 | 1,658,758 | ||||||||||||||||||
|
Operating Income (Loss) |
(25,362 | ) | 39,929 | 166,928 | 238,925 | 501,506 | |||||||||||||||||
|
INTEREST AND OTHER INCOME (EXPENSE): |
|||||||||||||||||||||||
| Interest Income | 446 | 297 | 1,652 | 817 | 1,538 | ||||||||||||||||||
| Interest Expense | (605 | ) | (959 | ) | (3,611 | ) | (2,612 | ) | (1,282 | ) | |||||||||||||
| Net Gain on Sale of Assets | - | - | - | 3,695 | - | ||||||||||||||||||
| Net Interest and Other Income (Expense) | (159 | ) | (662 | ) | (1,959 | ) | 1,900 | 256 | |||||||||||||||
|
Income (Loss) from Continuing Operations Before Income Taxes |
(25,521 | ) | 39,267 | 164,969 | 240,825 | 501,762 | |||||||||||||||||
|
Income Tax Benefit (Provision) |
6,512 | (9,137 | ) | (39,227 | ) | (70,903 | ) | (166,542 | ) | ||||||||||||||
| Income (Loss) from Continuing Operations | (19,009 | ) | 30,130 | 125,742 | 169,922 | 335,220 | |||||||||||||||||
|
DISCONTINUED OPERATIONS |
|||||||||||||||||||||||
|
Loss from Operations of Held for Sale Component |
(18,864 | ) | (24,766 | ) | (25,856 | ) | (34,687 | ) | (7,330 | ) | |||||||||||||
|
Income Tax Benefit |
6,507 | 3,121 | 8,954 | 7,146 | 2,940 | ||||||||||||||||||
|
Loss on Discontinued Operations |
(12,357 | ) | (21,645 | ) | (16,902 | ) | (27,541 | ) | (4,390 | ) | |||||||||||||
|
NET INCOME (LOSS) |
(31,366 | ) | 8,485 | 108,840 | 142,381 | 330,830 | |||||||||||||||||
| Net Income Attributable to Noncontrolling Interest | (944 | ) | (400 | ) | (2,054 | ) | (816 | ) | (427 | ) | |||||||||||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO DEVRY INC. |
$ | (32,310 | ) | $ | 8,085 | $ | 106,786 | $ | 141,565 | $ | 330,403 | ||||||||||||
|
AMOUNTS ATTRIBUTABLE TO DEVRY INC.: |
|||||||||||||||||||||||
| Income (Loss) from Continuing Operations, Net of Income Taxes | (19,953 | ) | 29,730 | 123,688 | 169,106 | 334,793 | |||||||||||||||||
| Loss from Discontinued Operations, Net of Income Taxes | (12,357 | ) | (21,645 | ) | (16,902 | ) | (27,541 | ) | (4,390 | ) | |||||||||||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO DEVRY INC. |
$ | (32,310 | ) | $ | 8,085 | $ | 106,786 | $ | 141,565 | $ | 330,403 | ||||||||||||
|
EARNINGS PER COMMON SHARE ATTRIBUTABLE |
|||||||||||||||||||||||
|
TO DEVRY INC. SHAREHOLDERS |
|||||||||||||||||||||||
|
Basic |
|||||||||||||||||||||||
| Continuing Operations | $ | (0.32 | ) | $ | 0.45 | $ | 1.92 | $ | 2.52 | $ | 4.79 | ||||||||||||
| Discontinued Operations | (0.19 | ) | (0.33 | ) | (0.26 | ) | (0.41 | ) | (0.06 | ) | |||||||||||||
| $ | (0.51 | ) | $ | 0.12 | $ | 1.66 | $ | 2.11 | $ | 4.73 | |||||||||||||
|
Diluted |
|||||||||||||||||||||||
| Continuing Operations | $ | (0.32 | ) | $ | 0.45 | $ | 1.91 | $ | 2.50 | $ | 4.74 | ||||||||||||
| Discontinued Operations | (0.19 | ) | (0.33 | ) | (0.26 | ) | (0.41 | ) | (0.06 | ) | |||||||||||||
| $ | (0.51 | ) | $ | 0.12 | $ | 1.65 | $ | 2.09 | $ | 4.68 | |||||||||||||
|
Cash Dividend Declared per Common Share |
$ | 0.17 | $ | 0.15 | $ | 0.34 | $ | 0.30 | $ | 0.24 | |||||||||||||
| DEVRY INC. | |||||||||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||
| (Dollars in Thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| PRELIMINARY | |||||||||||||||
| For The Year | |||||||||||||||
| Ended June 30, | |||||||||||||||
| 2013 | 2012 | 2011 | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
| Net Income | $108,837 | $142,381 | $330,830 | ||||||||||||
| Loss from Discontinued Operations | 16,902 | 28,096 | 4,390 | ||||||||||||
| Adjustments to Reconcile Net Income to Net | |||||||||||||||
| Cash Provided by Operating Activities: | |||||||||||||||
| Stock-Based Compensation Expense | 15,493 | 18,530 | 14,251 | ||||||||||||
| Depreciation | 83,111 | 74,472 | 56,462 | ||||||||||||
| Amortization | 10,139 | 10,002 | 4,732 | ||||||||||||
| Impairment of Goodwill and Intangible Assets | 56,992 | 75,039 | - | ||||||||||||
| Provision for Refunds and Uncollectible Accounts | 80,557 | 89,928 | 89,987 | ||||||||||||
| Deferred Income Taxes | (12,462 | ) | (10,160 | ) | 23,966 | ||||||||||
| Loss on Disposals and Adjustments to Land, Buildings and Equipment | 10,633 | 1,185 | 468 | ||||||||||||
| Realized Gain on Sale of Assets | - | (3,695 | ) | - | |||||||||||
| Changes in Assets and Liabilities, Net of Effects from | |||||||||||||||
| Acquisitions and Divestitures of Businesses: | |||||||||||||||
| Restricted Cash | (4,521 | ) | (190 | ) | (206 | ) | |||||||||
| Accounts Receivable | (124,448 | ) | (90,254 | ) | (77,981 | ) | |||||||||
| Prepaid Expenses And Other | 24,389 | (36,348 | ) | 782 | |||||||||||
| Accounts Payable | (6,697 | ) | (2,687 | ) | (26,876 | ) | |||||||||
| Accrued Salaries, Wages, Expenses and Benefits | 15,446 | (10,329 | ) | 5,769 | |||||||||||
| Advance Tuition Payments | 6,648 | (1,652 | ) | 1,291 | |||||||||||
| Deferred Tuition Revenue | (7,158 | ) | (3,382 | ) | (12,329 | ) | |||||||||
| Net Cash Provided by Operating Activities-Continuing Operations | 273,861 | 280,936 | 415,536 | ||||||||||||
| Net Cash Used by Operating Activities-Discontinued Operations | (9,913 | ) | (3,514 | ) | (7,546 | ) | |||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 263,948 | 277,422 | 407,990 | ||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
| Capital Expenditures | (111,775 | ) | (125,298 | ) | (132,602 | ) | |||||||||
| Payment for Purchase of Businesses, Net of Cash Acquired | (31,386 | ) | (255,369 | ) | (3,027 | ) | |||||||||
| Marketable Securities Purchased | (93 | ) | (61 | ) | (101 | ) | |||||||||
| Marketable Securities Sales | - | - | 13,495 | ||||||||||||
| Cash Received from Sale of Assets | - | 4,475 | - | ||||||||||||
| Purchase of Non-controlling Interest of Subsidiary | (7,649 | ) | - | - | |||||||||||
| Other | - | - | (627 | ) | |||||||||||
| Net Cash Used in Investing Activities-Continuing Operations | (150,903 | ) | (376,253 | ) | (122,862 | ) | |||||||||
| Net Cash Used in Investing Activities-Discontinued Operations | (1,729 | ) | (3,757 | ) | (3,124 | ) | |||||||||
| NET CASH USED IN INVESTING ACTIVITIES | (152,632 | ) | (380,010 | ) | (125,986 | ) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
| Proceeds from Exercise of Stock Options | 4,976 | 6,134 | 9,098 | ||||||||||||
| Proceeds from Stock issued Under Employee Stock Purchase Plan | 1,700 | 1,716 | 1,460 | ||||||||||||
| Repurchase of Common Stock for Treasury | (53,886 | ) | (158,093 | ) | (132,940 | ) | |||||||||
| Cash Dividends Paid | (31,529 | ) | (18,369 | ) | (15,529 | ) | |||||||||
| Excess Tax Benefit from Stock-Based Payments | (2,443 | ) | 664 | 1,012 | |||||||||||
| Payment of Seller Financed Debt | (3,822 | ) | - | - | |||||||||||
| Payment of Debt Financing Fees | - | (70 | ) | (3,290 | ) | ||||||||||
| NET CASH USED IN FINANCING ACTIVITIES | (85,004 | ) | (168,018 | ) | (140,189 | ) | |||||||||
| Effects of Exchange Rate Differences | (3,244 | ) | (2,463 | ) | (2,372 | ) | |||||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 23,068 | (273,069 | ) | 139,443 | |||||||||||
| Cash and Cash Equivalents at Beginning of Year | 174,076 | 447,145 | 307,702 | ||||||||||||
| Cash and Cash Equivalents at End of Year | 197,144 | 174,076 | 447,145 | ||||||||||||
| Less: Cash and Cash Equivalents of Discontinued Operations at End of Year | 568 | 92 | 100 | ||||||||||||
| Cash and Cash Equivalents of Continuing Operations at End of Year | $196,576 | $173,984 | $447,045 | ||||||||||||
| DEVRY INC. | ||||||||||||||||||||||||
|
SEGMENT INFORMATION |
||||||||||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| PRELIMINARY | ||||||||||||||||||||||||
| For The Quarter | For The Year | |||||||||||||||||||||||
| Ended June 30, | Ended June 30, | |||||||||||||||||||||||
| Increase | Increase | |||||||||||||||||||||||
| 2013 | 2012 | (Decrease) | 2013 | 2012 | (Decrease) | |||||||||||||||||||
| REVENUES: | ||||||||||||||||||||||||
| Business, Technology and Management | $ | 248,302 | $ | 301,597 | (17.7 | %) | $ | 1,096,695 | $ | 1,303,556 | (15.9 | %) | ||||||||||||
| Medical and Healthcare | 171,376 | 150,497 | 13.9 | % | 672,604 | 611,953 | 9.9 | % | ||||||||||||||||
| International and Professional Education | 60,664 | 49,868 | 21.6 | % | 196,576 | 156,284 | 25.8 | % | ||||||||||||||||
| Intersegment Elimination | (378 | ) | - | NM | (1,500 | ) | - | NM | ||||||||||||||||
| Total Consolidated Revenues | 479,964 | 501,962 | (4.4 | %) | 1,964,375 | 2,071,793 | (5.2 | %) | ||||||||||||||||
| OPERATING INCOME (LOSS): | ||||||||||||||||||||||||
| Business, Technology and Management | (8,791 | ) | 17,272 | NM | 90,045 | 201,122 | (55.2 | %) | ||||||||||||||||
| Medical and Healthcare | (32,446 | ) | 12,283 | NM | 54,076 | 9,602 | 463.2 | % | ||||||||||||||||
| International and Professional Education | 21,418 | 13,899 | 54.1 | % | 50,620 | 38,198 | 32.5 | % | ||||||||||||||||
| Reconciling Items: | ||||||||||||||||||||||||
| Amortization Expense | (2,369 | ) | (3,041 | ) | (22.1 | %) | (9,480 | ) | (10,885 | ) | (12.9 | %) | ||||||||||||
| Depreciation and Other | (3,174 | ) | (484 | ) | 555.8 | % | (18,333 | ) | 888 | NM | ||||||||||||||
| Total Consolidated Operating Income (Loss) | (25,362 | ) | 39,929 | NM | 166,928 | 238,925 | (30.1 | %) | ||||||||||||||||
| INTEREST AND OTHER INCOME (EXPENSE): | ||||||||||||||||||||||||
| Interest Income | 446 | 297 | 50.2 | % | 1,652 | 817 | 102.2 | % | ||||||||||||||||
| Interest Expense | (605 | ) | (959 | ) | (36.9 | %) | (3,611 | ) | (2,612 | ) | 38.2 | % | ||||||||||||
| Net Gain on Sale of Assets | - | - | - | - | 3,695 | NM | ||||||||||||||||||
| Net Interest and Other (Expense) Income | (159 | ) | (662 | ) | (76.0 | %) | (1,959 | ) | 1,900 | NM | ||||||||||||||
| Total Consolidated Income before Minority Interest | ||||||||||||||||||||||||
| and Income Taxes | $ | (25,521 | ) | $ | 39,267 | NM | $ | 164,969 | $ | 240,825 | (31.5 | %) | ||||||||||||
| Intangible asset and goodwill impairment charges were recorded for the three and twelve month periods ended June 30, 2013 and 2012. These charges are related to DeVry's Carrington Colleges Group, Inc. which is part of the Medical and Healthcare segment. Also, restructuring charges were recorded for the three and twelve month periods ended June 30, 2013 and 2012. These charges were made to reporting units in all three segments. The following table illustrates the effects of these impairment and restructuring charges on the operating income of the segments. Management believes that the non-GAAP disclosure of operating earnings provides investors with useful supplemental information regarding the underlying business trends and performance of DeVry’s ongoing operations and are useful for period-over-period comparisons of such operations given the discrete nature of these impairment transactions. DeVry uses these supplemental financial measures internally in its budgeting process. However, the non-GAAP financial measures should be viewed in addition to, and not as a substitute for, DeVry’s reported results prepared in accordance with GAAP. The following table reconciles these items to the relevant GAAP information: |
| For The Quarter | For The Year | |||||||||||||||||||||
| Ended June 30, | Ended June 30, | |||||||||||||||||||||
| Increase | Increase | |||||||||||||||||||||
| 2013 | 2012 | (Decrease) | 2013 | 2012 | (Decrease) | |||||||||||||||||
| Business, Technology and Management Operating Income | $ | (8,791 | ) | $ | 17,272 | NM | $ | 90,045 | $ | 201,122 | (55.2 | %) | ||||||||||
| Restructuring Charge | 7,892 | 4,962 | 59.0 | % | 9,078 | 4,962 | NM | |||||||||||||||
| Business, Technology and Management Operating Income | ||||||||||||||||||||||
| Excluding Discrete Charges | $ | (899 | ) | $ | 22,234 | NM | $ | 99,123 | $ | 206,084 | (51.9 | %) | ||||||||||
| Medical and Healthcare Operating Income | $ | (32,446 | ) | $ | 12,283 | NM | $ | 54,076 | $ | 9,602 | 463.2 | % | ||||||||||
| Asset Impairment Charge | 56,992 | - | NM | 56,992 | 75,039 | (24.1 | %) | |||||||||||||||
| Restructuring Charge | 3,672 | 1,997 | 83.9 | % | 6,131 | 1,997 | 207.0 | % | ||||||||||||||
| Medical and Healthcare Operating Income | ||||||||||||||||||||||
| Excluding Discrete Charges | $ | 28,218 | $ | 14,280 | 97.6 | % | $ | 117,199 | $ | 86,638 | 35.3 | % | ||||||||||
| International and Professional Education Operating Income | $ | 21,418 | $ | 13,899 | 54.1 | % | $ | 50,620 | $ | 38,198 | 32.5 | % | ||||||||||
| Earn-out Accrual Adjustment | (4,381 | ) | - | NM | (4,381 | ) | - | NM | ||||||||||||||
| Restructuring Charge | 637 | 143 | 345.5 | % | 637 | 143 | 345.5 | % | ||||||||||||||
| International and Professional Education Operating Income | ||||||||||||||||||||||
| Excluding Discrete Charges | $ | 17,674 | $ | 14,042 | 25.9 | % | $ | 46,876 | $ | 38,341 | 22.3 | % | ||||||||||
| For The Three Months | For The Year | |||||||||||||||
| Ended June 30, | Ended June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net Income | $ | (32,310 | ) | $ | 8,085 | $ | 106,786 | $ | 141,565 | |||||||
| Earnings per Share (Diluted) | $ | (0.51 | ) | $ | 0.12 | $ | 1.65 | $ | 2.09 | |||||||
| Discontinued Operations (net of tax) | $ | 12,357 | $ | 21,645 | $ | 16,902 | $ | 27,541 | ||||||||
| Effect on Earnings per Share (Diluted) | $ | 0.19 | $ | 0.33 | $ | 0.26 | $ | 0.41 | ||||||||
| Earn-out Accrual Adjustment (net of tax) | $ | (4,381 | ) | $ | - | $ | (4,381 | ) | $ | - | ||||||
| Effect on Earnings per Share (Diluted) | $ | (0.07 | ) | $ | - | $ | (0.07 | ) | $ | - | ||||||
| Impairment Charges (net of tax) | $ | 49,448 | $ | - | $ | 49,448 | $ | 55,751 | ||||||||
| Effect on Earnings per Share (Diluted) | $ | 0.78 | $ | - | $ | 0.77 | $ | 0.82 | ||||||||
| Restructuring Expenses (net of tax) | $ | 9,029 | $ | 4,334 | $ | 16,240 | $ | 4,334 | ||||||||
| Effect on Earnings per Share (Diluted) | $ | 0.14 | $ | 0.07 | $ | 0.25 | $ | 0.06 | ||||||||
| Gain on Sale of Assets (net of tax) | $ | - | $ | - | $ | - | $ | (2,216 | ) | |||||||
| Effect on Earnings per Share (Diluted) | $ | - | $ | - | $ | - | $ | (0.03 | ) | |||||||
| Net Income from Continuing Operations | ||||||||||||||||
| Excluding the Impairment and | ||||||||||||||||
| Restructuring Charges, Earn-out Accrual | ||||||||||||||||
| Adjustment and Gain on Sale of Assets (Diluted) | $ | 34,143 | $ | 34,064 | $ | 184,995 | $ | 226,975 | ||||||||
| Earnings per Share from Continuing Operations | ||||||||||||||||
| Excluding the Impairment and | ||||||||||||||||
| Restructuring Charges, Earn-out Accrual | ||||||||||||||||
| Adjustment and Gain on Sale of Assets (Diluted) | $ | 0.54 | $ | 0.52 | $ | 2.86 | $ | 3.35 | ||||||||
| Shares used in Diluted EPS Calculation | 63,751 | 66,141 | 64,611 | 67,705 | ||||||||||||
CONTACT:
DeVry Inc.
Investor Contact:
Joan Bates, (630) 353-3800
jbates@devry.com
or
Media
Contact:
Mike DeGraff, (312) 895-4700
mdegraff@sardverb.com