Attached files
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| 8-K - DEVRY EDUCATION GROUP INC. 8-K - Adtalem Global Education Inc. | a50797323.htm |
Exhibit 99.1
DeVry Education Group Announces Second Quarter 2014 Results
DOWNERS GROVE, Ill.--(BUSINESS WIRE)--February 4, 2014--DeVry Education Group Inc. (NYSE:DV), a global provider of educational services, today reported academic, operational and financial results for its fiscal 2014 second-quarter ended Dec. 31, 2013. DeVry Group 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 for the quarter:
- Carrington College California obtained conditional approval to add the campuses of Carrington College from its accreditor, which will result in one, regionally accredited institution
- Chamberlain College of Nursing received full approval for its Houston campus from the Texas Board of Nursing and was granted initial approval for a second campus in the Houston area
- The American University of the Caribbean School of Medicine completed its new $30 million academic building
- DeVry Group completed the divestiture of Advanced Academics to, and formed a strategic partnership with, Connections Education/Pearson
Selected financial data for the three months ended Dec. 31, 2013:
- Total revenues decreased 1.9 percent to $491.3 million
- Medical and Healthcare and International and Professional Education segment revenues grew 13.5 percent and 16.6 percent respectively, while Business, Technology and Management revenues declined 14.4 percent
- Reported net income of $48.2 million, compared to $50.3 million last year; net income from continuing operations and excluding special items was $52.0 million, down 9.0 percent from prior year
- Reported diluted earnings per share of $0.74, compared to earnings per share of $0.78 last year; earnings per share from continuing operations and excluding special items was $0.80, compared to $0.88 last year
Selected financial data for the six months ended Dec. 31, 2013:
- Total revenues decreased 3.9 percent to $942.2 million
- Medical and Healthcare and International and Professional Education segment revenues grew 12.3 percent and 17.3 percent respectively, while Business, Technology and Management revenues declined 16.4 percent
- Reported net income of $41.0 million, compared to $82.3 million last year; net income from continuing operations and excluding special items was $66.2 million, down 27.5 percent from prior year
- Reported diluted earnings per share of $0.63, compared to earnings per share of $1.27 last year; earnings per share from continuing operations and excluding special items was $1.02, as compared to $1.41 last year
- Operating cash flow of $113.1 million compared to $180.2 million last year
- Cash and cash equivalents increased to $262.0 million as of Dec. 31, 2013, from $216.6 million as of Dec. 31, 2012
- Generated $35 million in cost savings and value creation in its institutions in transition during the first six months, putting these institutions on track to achieve $75 million in savings for the fiscal year
The second quarter fiscal year 2014 results contained the following special items:
- A $2.9 million after-tax, or $0.04 per share, restructuring charge for real estate consolidations and workforce reductions.
- A $0.9 million net of tax loss, or $0.01 per share, on discontinued operations at Advanced Academics
See “Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule”.
“Our formula of quality plus diversification equals growth is mitigating the current weakness in certain segments of U.S. postsecondary education,” said Daniel Hamburger, DeVry Group’s president and chief executive officer. “We are investing in the expansion of our growing institutions, particularly healthcare, professional and international education, as we execute our turnaround plans at DeVry University and Carrington.”
Operating Highlights
Medical and Healthcare Segment
During the quarter, segment revenue of $190.4 million increased 13.5 percent compared to the prior year. Excluding special charges, segment operating income increased 42.6 percent to $40.1 million versus the previous year. For the six-month period, revenues increased 12.3 percent to $366.3 million and segment operating income, excluding special charges, rose 24.5 percent to $66.3 million versus prior year.
DeVry Medical International
In the January 2014 term for DeVry Medical International, new students decreased 3.5 percent to 582 compared to 603 students for prior year session. Total students increased 5.6 percent to 6,673 compared to 6,318 students in the same session last year.
Chamberlain College of Nursing
During the quarter, Chamberlain grew its revenue by 26.2 percent, primarily driven by new locations, campus expansions, and new programs.
For the November 2013 session, new online students grew by 50.3 percent to 1,952 students. Total students increased 28.5 percent to 15,732.
For the January 2014 session, new online students grew by 55.7 percent to 2,328 students. New onsite students totaled 1,173 in the period. Total students for the session increased 32.2 percent to a record 18,136 for the session.
Chamberlain’s Cleveland campus celebrated its grand opening in October. During the quarter, the Texas Board of Nursing granted full approval to Chamberlain’s Houston campus and preliminary approval for a second campus in the Houston area.
Carrington Colleges Group
During the quarter, revenue grew 3.4 percent during the second quarter as Carrington is benefitting from executing on its turnaround plan.
For the three-month period ending Dec. 31, 2013, new student enrollment declined 3.2 percent to 1,706 versus 1,763 in the previous year. Total enrollment decreased 0.6 percent to 7,358 from 7,405 in the previous year. Carrington College California recently announced it has obtained conditional approval from its accreditor to add the campuses of Carrington College to its existing campus network. Pending successful site visits and final approval by its accreditor, Carrington College California will encompass 17 campuses located in California, Arizona, New Mexico, Idaho, Nevada, Texas and Washington.
International and Professional Education Segment
Segment revenue increased 16.6 percent to $61.4 million compared to the prior year. Segment operating income grew 7.8 percent to $16.4 million versus the previous year. For the six-month period, revenues increased 17.3 percent to $105.2 million while segment operating income declined $1.1 million to $17.5 million versus prior year.
Becker Professional Education
During the quarter, Becker grew its revenue by 5 percent, primarily driven by growth in sales of its CPA exam preparation program. Becker also continues to experience growth in the United States Medical Licensing Exam (USMLE), Association of Chartered Certified Accountants (ACCA), and Continuing Professional Education (CPE) markets.
DeVry Brasil
Revenue grew nearly 29 percent over the previous year. During the quarter, temporary admission constraints were lifted on two of the three restricted programs at one of DeVry Brasil’s institutions, Area1.
Recently DeVry Brasil’s Favip was granted Centro Universitário status from the Brazilian Ministry of Education and Culture based on the number of recognized courses that it offers, the breadth of the institution’s programs, and the quality of its faculty, including contributions to scientific research and community outreach.
Business, Technology, and Management Segment
DeVry University
Segment revenue of $239.9 million declined 14.4 percent compared to the prior year. Excluding special items, the segment generated $9.9 million of operating income during the quarter. For the six-month period, revenues declined 16.4 percent to $472.2 million and the segment reported operating income of $4.9 million, excluding special items.
For the November 2013 session at DeVry University new undergraduate enrollments decreased 12 percent to 4,824 compared to 5,482 the previous year. Total undergraduate students decreased 11.7 percent to 43,726 versus 49,515 for the session a year ago. In addition to overall cyclical weakness across higher education, the impact of the government shutdown in late October affected November enrollment results. The rate of decline in new student enrollment narrowed in the January session. January 2014 new undergraduate enrollments decreased 7.9 percent to 4,911 compared to 5,330 the previous year. Total undergraduate students decreased 15.1 percent to 45,097 versus 53,138 for the January session a year ago.
At the graduate level, including Keller Graduate School of Management, total coursetakers in the November session decreased 14.1 percent to 16,778 versus 19,540 for the same session a year ago. For the January session, total graduate coursetakers decreased 18 percent to 17,322 versus 21,131 for the same session a year ago.
DeVry University recently announced that it is offering a Career Catalyst Scholarship to qualified students who enroll for the March session.
Balance Sheet/Cash Flow
For fiscal second quarter, DeVry Group generated $113.1 million of operating cash flow. As of Dec. 31, 2013, cash and cash equivalents increased 21 percent to $262.0 million. DeVry Group has no outstanding borrowings.
Conference Call and Webcast Information
DeVry Group will host a conference call on Feb. 4, 2014, at 4:00 p.m. Central Standard Time (5:00 p.m. Eastern Standard Time) to discuss its fiscal 2014 second-quarter results and other developments with respect to DeVry Group. 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 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/dv140204.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 Group will archive a telephone replay of the call until Feb. 26, 2014. To access the replay, dial 877-344-7529 (domestic) or 412-317-0088 (international), passcode 10039633. To access the webcast replay, please visit the company's website, or http://services.choruscall.com/links/dv140204.html.
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, 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 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, 2013 and filed with the Securities and Exchange Commission on August 29, 2013.
Selected Operating Data (in thousands, except per share data)
| Second Quarter | ||||||||||
| FY 2014 | FY 2013 | Change | ||||||||
| Revenues | $491,269 | $500,666 | -1.9% | |||||||
| Net Income | $48,155 | $50,286 | -4.2% | |||||||
| Earnings per Share (diluted) | $0.74 | $0.78 | -5.1% | |||||||
| Number of common shares (diluted) | 64,719 | 64,536 | -0.3% | |||||||
| Six Months | ||||||||||
| FY 2014 | FY 2013 | Change | ||||||||
| Revenues | $942,181 | $980,586 | -3.9% | |||||||
| Net Income | $41,023 | $82,275 | -50.1% | |||||||
| Earnings per Share (diluted) | $0.63 | $1.27 | -50.4% | |||||||
| Number of common shares (diluted) | 64,616 | 64,788 | -0.3% | |||||||
Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule
During the second quarter and first six months of fiscal year 2014, DeVry Group recorded expenses related to workforce reductions and real estate consolidations to align its cost structure at DeVry University, Carrington Colleges and DeVry Education Group home office with enrollments. DeVry Group also recorded a gain from the sale of a former DeVry University campus in Decatur, Georgia. Additionally, DeVry Group recorded the operating results of Advanced Academics Inc. reporting unit as discontinued operations. The following table illustrates the effects of restructuring charges, discontinued operations and gain on the sale of assets on DeVry Group’s earnings. Management believes that the non-GAAP disclosure of net income and earnings per share excluding these special items and discontinued operations 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 gain on the sale of assets. 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 | ||||||||||||||||
| For The Three Months | For The Six Months | |||||||||||||||
| Ended December 31, | Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
|
Net Income |
$ | 48,155 | $ | 50,286 | $ | 41,023 | $ | 82,275 | ||||||||
|
Earnings per Share (Diluted) |
$ | 0.74 | $ | 0.78 | $ | 0.63 | $ | 1.27 | ||||||||
| Discontinued Operations (net of tax) | $ | 920 | $ | 838 | $ | 16,248 | $ | 3,012 | ||||||||
| Effect on Earnings per Share (Diluted) | $ | 0.01 | $ | 0.01 | $ | 0.25 | $ | 0.05 | ||||||||
| Restructuring Expenses (net of tax) | $ | 2,877 | $ | 5,940 | $ | 10,057 | $ | 5,940 | ||||||||
| Effect on Earnings per Share (Diluted) | $ | 0.04 | $ | 0.09 | $ | 0.16 | $ | 0.09 | ||||||||
| Gain on Sale of Assets (net of tax) | $ | - | $ | - | $ | (1,167 | ) | $ | - | |||||||
| Effect on Earnings per Share (Diluted) | $ | - | $ | - | $ | (0.02 | ) | $ | - | |||||||
| Net Income from Continuing Operations | ||||||||||||||||
| Excluding the Restructuring Expense and | ||||||||||||||||
| Gain on Sale of Assets (Diluted) | $ | 51,952 | $ | 57,064 | $ | 66,161 | $ | 91,227 | ||||||||
| Earnings per Share from Continuing Operations | ||||||||||||||||
| Excluding the Restructuring Expense and | ||||||||||||||||
| Gain on Sale of Assets (Diluted) | $ | 0.80 | $ | 0.88 | $ | 1.02 | $ | 1.41 | ||||||||
|
Enrollment Results |
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| 2013/14 | 2012/13 | % Change | |||||||||||||
| DeVry Education Group Student Enrollments(1) | |||||||||||||||
| Total students | 120,798 | 124,007 | -2.6 | ||||||||||||
| Chamberlain College of Nursing | |||||||||||||||
| November Session | |||||||||||||||
| New students (online only) | 1,952 | 1,299 | 50.3 | ||||||||||||
| New students (onsite only)(2) | - | 822 | N/A | ||||||||||||
| Total students | 15,732 | 12,247 | 28.5 | ||||||||||||
| January Session | |||||||||||||||
| New students (online only) | 2,328 | 1,495 | 55.7 | ||||||||||||
| New students (onsite only) (2) | 1,173 | 625 | 87.7 | ||||||||||||
| Total students | 18,136 | 13,714 | 32.2 | ||||||||||||
| Carrington Colleges Group | |||||||||||||||
| 3 months ending Dec. 31, 2013 | |||||||||||||||
| New students | 1,706 | 1,763 | -3.2 | ||||||||||||
| Total students | 7,358 | 7,405 | -0.6 | ||||||||||||
| DeVry Medical International | |||||||||||||||
| January Term | |||||||||||||||
| New students | 582 | 603 | -3.5 | ||||||||||||
| Total students | 6,673 | 6,318 | 5.6 | ||||||||||||
| DeVry University | |||||||||||||||
| Undergraduate: November Session | |||||||||||||||
| New students | 4,824 | 5,482 | -12.0 | ||||||||||||
| Total students | 43,726 | 49,515 | -11.7 | ||||||||||||
| Undergraduate: January Session | |||||||||||||||
| New students | 4,911 | 5,330 | -7.9 | ||||||||||||
| Total students | 45,097 | 53,138 | -15.1 | ||||||||||||
| Graduate: November Session | |||||||||||||||
| Coursetakers(3) | 16,778 | 19,540 | -14.1 | ||||||||||||
| Graduate: January Session | |||||||||||||||
| Coursetakers(3) | 17,322 | 21,131 | -18.0 | ||||||||||||
| Online | |||||||||||||||
| November Session | |||||||||||||||
| Total coursetakers(3)(4) | 57,258 | 62,899 | -9.0 | ||||||||||||
| January Session | |||||||||||||||
| Total coursetakers(3)(4) | 59,645 | 67,983 | -5.2 |
| 1) | Excludes Becker Professional Education. Includes the most recently reported enrollments at DeVry Group’s other institutions. | ||
| 2) | New enrollment comparisons for the November and January sessions were impacted by a realignment of Chamberlain’s academic calendar. | ||
| 3) | The term “coursetaker” refers to the number of courses taken by a student. Thus one student taking two courses equals two coursetakers. | ||
| 4) | Includes both undergraduate and graduate students. |
|
Chart 1: DeVry Education Group 2014 Announcements & Events |
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| April 24, 2014 | Fiscal 2014 Third Quarter Results and March Enrollment | ||
|
DeVry University
Chamberlain College of Nursing Carrington Colleges Group DeVry Brasil |
|||
| August 7, 2014 | Fiscal 2014 Fourth Quarter/Year-End and May/July Enrollment | ||
|
DeVry University
Chamberlain College of Nursing Carrington Colleges Group DeVry Medical International |
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| October 23, 2014 | Fiscal 2015 First Quarter Results and September Enrollment | ||
|
DeVry University
Chamberlain College of Nursing Carrington Colleges Group DeVry Medical International DeVry Brasil |
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| November 5, 2014 | Annual Shareholders’ Meeting | ||
| DEVRY EDUCATION GROUP INC. | ||||||||||||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| PRELIMINARY | ||||||||||||||||||
| December 31, | June 30, | December 31, | ||||||||||||||||
| 2013 | 2013 | 2012 | ||||||||||||||||
|
ASSETS |
||||||||||||||||||
|
Current Assets |
||||||||||||||||||
| Cash and Cash Equivalents | $ | 262,034 | $ | 196,576 | $ | 216,567 | ||||||||||||
| Marketable Securities and Investments | 3,263 | 2,975 | 2,752 | |||||||||||||||
| Restricted Cash | 11,873 | 7,019 | 3,894 | |||||||||||||||
| Accounts Receivable, Net | 117,812 | 139,778 | 118,322 | |||||||||||||||
| Deferred Income Taxes, Net | 31,169 | 29,758 | 25,008 | |||||||||||||||
| Refundable Income Taxes | 6,969 | 154 | 23,827 | |||||||||||||||
| Prepaid Expenses and Other | 42,625 | 49,685 | 31,695 | |||||||||||||||
| Current Assets of Divested Business | - | 16,219 | 28,706 | |||||||||||||||
| Total Current Assets | 475,745 | 442,164 | 450,771 | |||||||||||||||
|
Land, Buildings and Equipment |
||||||||||||||||||
| Land | 66,539 | 71,122 | 65,963 | |||||||||||||||
| Buildings | 429,463 | 424,902 | 388,010 | |||||||||||||||
| Equipment | 472,944 | 475,656 | 459,711 | |||||||||||||||
| Construction In Progress | 44,115 | 33,724 | 48,143 | |||||||||||||||
| 1,013,061 | 1,005,404 | 961,827 | ||||||||||||||||
| Accumulated Depreciation and Amortization | (455,018 | ) | (433,747 | ) | (407,991 | ) | ||||||||||||
| Land, Buildings and Equipment of Divested Business, Net | - | - | 5,521 | |||||||||||||||
| Land, Buildings and Equipment, Net | 558,043 | 571,657 | 559,357 | |||||||||||||||
|
Other Assets |
||||||||||||||||||
| Intangible Assets, Net | 293,720 | 281,998 | 294,177 | |||||||||||||||
| Goodwill | 514,757 | 508,937 | 566,199 | |||||||||||||||
| Perkins Program Fund, Net | 13,450 | 13,450 | 13,450 | |||||||||||||||
| Other Assets | 33,398 | 33,025 | 30,112 | |||||||||||||||
| Other Assets of Divested Business | - | 5,787 | 718 | |||||||||||||||
| Total Other Assets | 855,325 | 843,197 | 904,656 | |||||||||||||||
| TOTAL ASSETS | $ | 1,889,113 | $ | 1,857,018 | $ | 1,914,784 | ||||||||||||
| DEVRY EDUCATION GROUP INC. | ||||||||||||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| PRELIMINARY | ||||||||||||||||||
| December 31, | June 30, | December 31, | ||||||||||||||||
| 2013 | 2013 | 2012 | ||||||||||||||||
|
LIABILITIES |
||||||||||||||||||
|
Current Liabilities |
||||||||||||||||||
| Accounts Payable | $ | 62,721 | $ | 55,131 | $ | 60,383 | ||||||||||||
| Accrued Salaries, Wages and Benefits | 77,447 | 88,444 | 63,607 | |||||||||||||||
| Accrued Expenses | 69,259 | 74,451 | 71,432 | |||||||||||||||
| Advance and Deferred Tuition | 97,725 | 97,478 | 140,576 | |||||||||||||||
| Current Liabilities of Divested Business | - | 713 | 1,530 | |||||||||||||||
| Total Current Liabilities | 307,152 | 316,217 | 337,528 | |||||||||||||||
|
Other Liabilities |
||||||||||||||||||
| Deferred Income Taxes, Net | 59,941 | 60,103 | 64,444 | |||||||||||||||
| Deferred Rent and Other | 91,054 | 82,576 | 107,553 | |||||||||||||||
| Total Non-current Liabilities | 150,995 | 142,679 | 171,997 | |||||||||||||||
| Other Liabilities of Divested Business | - | 112 | - | |||||||||||||||
| TOTAL LIABILITIES | 458,147 | 459,008 | 509,525 | |||||||||||||||
| NON-CONTROLLING INTEREST | 5,975 | 854 | 8,901 | |||||||||||||||
|
SHAREHOLDERS' EQUITY |
||||||||||||||||||
| Common Stock, $0.01 par value, 200,000,000 Shares Authorized; | ||||||||||||||||||
| 63,332,000, 62,946,000 and 63,287,000 Shares issued | ||||||||||||||||||
| and outstanding at December 31, 2013, June 30, 2013 | ||||||||||||||||||
| and December 31, 2012, respectively. | 752 | 745 | 744 | |||||||||||||||
| Additional Paid-in Capital | 304,807 | 291,269 | 280,901 | |||||||||||||||
| Retained Earnings | 1,599,985 | 1,575,009 | 1,560,130 | |||||||||||||||
| Accumulated Other Comprehensive Income | (25,573 | ) | (17,101 | ) | (6,696 | ) | ||||||||||||
| Treasury Stock, at Cost (11,661,000, 11,581,000 and 11,079,000 | ||||||||||||||||||
| Shares, Respectively) | (454,980 | ) | (452,766 | ) | (438,721 | ) | ||||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 1,424,991 | 1,397,156 | 1,396,358 | |||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,889,113 | $ | 1,857,018 | $ | 1,914,784 | ||||||||||||
| DEVRY EDUCATION GROUP INC. | ||||||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME |
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| (Dollars in Thousands Except for Per Share Amounts) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| PRELIMINARY | ||||||||||||||||||||||
| For The Quarter | For The Six Months | |||||||||||||||||||||
| Ended December 31, | Ended December 31, | |||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
| REVENUES: | ||||||||||||||||||||||
| Tuition | $ | 457,888 | $ | 471,881 | $ | 877,205 | $ | 920,566 | ||||||||||||||
| Other Educational | 33,381 | 28,785 | 64,976 | 60,020 | ||||||||||||||||||
| Total Revenues | 491,269 | 500,666 | 942,181 | 980,586 | ||||||||||||||||||
| OPERATING COSTS AND EXPENSES: | ||||||||||||||||||||||
| Cost of Educational Services | 242,997 | 240,244 | 484,732 | 479,697 | ||||||||||||||||||
| Student Services and Administrative Expense | 185,046 | 183,743 | 374,205 | 374,762 | ||||||||||||||||||
| Gain on Sale of Asset | - | - | (1,918 | ) | - | |||||||||||||||||
| Restructuring Expenses | 4,664 | 9,484 | 16,329 | 9,484 | ||||||||||||||||||
| Total Operating Costs and Expenses | 432,707 | 433,471 | 873,348 | 863,943 | ||||||||||||||||||
| Operating Income | 58,562 | 67,195 | 68,833 | 116,643 | ||||||||||||||||||
| INTEREST (EXPENSE) INCOME: | ||||||||||||||||||||||
| Interest Income | 310 | 230 | 893 | 791 | ||||||||||||||||||
| Interest Expense | (1,052 | ) | (759 | ) | (2,052 | ) | (2,250 | ) | ||||||||||||||
| Net Interest (Expense) Income | (742 | ) | (529 | ) | (1,159 | ) | (1,459 | ) | ||||||||||||||
| Income from Continuing Operations Before Income Taxes | 57,820 | 66,666 | 67,674 | 115,184 | ||||||||||||||||||
| Income Tax Provision | (8,492 | ) | (14,604 | ) | (10,195 | ) | (29,126 | ) | ||||||||||||||
| Income from Continuing Operations | 49,328 | 52,062 | 57,479 | 86,058 | ||||||||||||||||||
| DISCONTINUED OPERATIONS | ||||||||||||||||||||||
| Loss from Operations of Divested Component | (1,387 | ) | (1,290 | ) | (17,711 | ) | (4,948 | ) | ||||||||||||||
| Income Tax Benefit | 467 | 452 | 1,463 | 1,936 | ||||||||||||||||||
| Loss on Discontinued Operations | (920 | ) | (838 | ) | (16,248 | ) | (3,012 | ) | ||||||||||||||
| NET INCOME | 48,408 | 51,224 | 41,231 | 83,046 | ||||||||||||||||||
| Net Income Attributable to Noncontrolling Interest | (253 | ) | (938 | ) | (208 | ) | (771 | ) | ||||||||||||||
| NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP INC. | $ | 48,155 | $ | 50,286 | $ | 41,023 | $ | 82,275 | ||||||||||||||
| AMOUNTS ATTRIBUTABLE TO DEVRY EDUCATION GROUP INC.: | ||||||||||||||||||||||
| Income from Continuing Operations, Net of Income Taxes | 49,075 | 51,124 | 57,271 | 85,287 | ||||||||||||||||||
| Loss from Discontinued Operations, Net of Income Taxes | (920 | ) | (838 | ) | (16,248 | ) | (3,012 | ) | ||||||||||||||
| NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP INC. | $ | 48,155 | $ | 50,286 | $ | 41,023 | $ | 82,275 | ||||||||||||||
| EARNINGS PER COMMON SHARE ATTRIBUTABLE | ||||||||||||||||||||||
| TO DEVRY EDUCATION GROUP INC. SHAREHOLDERS | ||||||||||||||||||||||
| Basic | ||||||||||||||||||||||
| Continuing Operations | $ | 0.76 | $ | 0.79 | $ | 0.89 | $ | 1.32 | ||||||||||||||
| Discontinued Operations | (0.01 | ) | (0.01 | ) | (0.25 | ) | (0.05 | ) | ||||||||||||||
| $ | 0.75 | $ | 0.78 | $ | 0.64 | $ | 1.27 | |||||||||||||||
| Diluted | ||||||||||||||||||||||
| Continuing Operations | $ | 0.75 | $ | 0.79 | $ | 0.88 | $ | 1.32 | ||||||||||||||
| Discontinued Operations | (0.01 | ) | (0.01 | ) | (0.25 | ) | (0.05 | ) | ||||||||||||||
| $ | 0.74 | $ | 0.78 | $ | 0.63 | $ | 1.27 | |||||||||||||||
| Cash Dividend Declared per Common Share | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.17 | ||||||||||||||
| DEVRY EDUCATION GROUP INC. | ||||||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
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| (Dollars in Thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| PRELIMINARY | ||||||||||||
| For The Six Months | ||||||||||||
| Ended December 31, | ||||||||||||
| 2013 | 2012 | |||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net Income | $ | 41,231 | $ | 83,046 | ||||||||
| Loss from Discontinued Operations | 16,248 | 3,012 | ||||||||||
| Adjustments to Reconcile Net Income to Net | ||||||||||||
| Cash Provided by Operating Activities: | ||||||||||||
| Stock-Based Compensation Expense | 9,860 | 8,370 | ||||||||||
| Depreciation | 40,719 | 40,842 | ||||||||||
| Amortization | 3,590 | 5,019 | ||||||||||
| Provision for Refunds and Uncollectible Accounts | 37,274 | 40,777 | ||||||||||
| Deferred Income Taxes | 1,699 | 2,075 | ||||||||||
| Loss on Disposals of Land, Buildings and Equipment | 1,333 | 2,237 | ||||||||||
| Unrealized Loss on Assets Held for Sale | 244 | 6,250 | ||||||||||
| Realized Gain on Sale of Assets | (1,918 | ) | - | |||||||||
| Changes in Assets and Liabilities, Net of Effects from | ||||||||||||
| Acquisitions and Divestitures of Businesses: | ||||||||||||
| Restricted Cash | (4,854 | ) | (1,396 | ) | ||||||||
| Accounts Receivable | (17,170 | ) | (62,674 | ) | ||||||||
| Prepaid Expenses And Other | 1,338 | 29,040 | ||||||||||
| Accounts Payable | 7,592 | (1,449 | ) | |||||||||
| Accrued Salaries, Wages, Expenses and Benefits | (23,279 | ) | (11,590 | ) | ||||||||
| Deferred and Advance Tuition | (589 | ) | 42,332 | |||||||||
| Net Cash Provided by Operating Activities-Continuing Operations | 113,318 | 185,891 | ||||||||||
| Net Cash Provided by Operating Activities-Discontinued Operations | (197 | ) | (5,686 | ) | ||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 113,121 | 180,205 | ||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Capital Expenditures | (33,426 | ) | (47,213 | ) | ||||||||
| Payment for Purchase of Business, Net of Cash Acquired | (12,343 | ) | (31,386 | ) | ||||||||
| Marketable Securities Purchased | (106 | ) | (82 | ) | ||||||||
| Cash Received from Sale of Assets | 8,662 | - | ||||||||||
| Net Cash Used in Investing Activities-Continuing Operations | (37,213 | ) | (78,681 | ) | ||||||||
| Net Cash Used in Investing Activities-Discontinued Operations | - | (972 | ) | |||||||||
| NET CASH USED IN INVESTING ACTIVITIES | (37,213 | ) | (79,653 | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Proceeds from Exercise of Stock Options | 3,576 | 1,139 | ||||||||||
| Proceeds from Stock issued Under Employee Stock Purchase Plan | 708 | 756 | ||||||||||
| Repurchase of Common Stock for Treasury | - | (38,567 | ) | |||||||||
| Cash Dividends Paid | (10,941 | ) | (20,707 | ) | ||||||||
| Excess Tax Benefit from Stock-Based Payments | - | 58 | ||||||||||
| Payments of Seller Financed Debt | (2,138 | ) | - | |||||||||
| NET CASH USED IN FINANCING ACTIVITIES | (8,795 | ) | (57,321 | ) | ||||||||
| Effects of Exchange Rate Differences | (2,223 | ) | (1,048 | ) | ||||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 64,890 | 42,183 | ||||||||||
| Cash and Cash Equivalents at Beginning of Period | 197,144 | 174,076 | ||||||||||
| Cash and Cash Equivalents at End of Period | 262,034 | 216,259 | ||||||||||
| Less: Cash and Cash Equivalents of Discontinued Operations at End of Period | - | 308 | ||||||||||
| Cash and Cash Equivalents at End of Period | $ | 262,034 | $ | 216,567 | ||||||||
| DEVRY EDUCATION GROUP INC. | ||||||||||||||||||||||||
|
SEGMENT INFORMATION |
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| (Dollars in Thousands) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| PRELIMINARY | ||||||||||||||||||||||||
| For The Quarter | For The Six Months | |||||||||||||||||||||||
| Ended December 31, | Ended December 31, | |||||||||||||||||||||||
| Increase | Increase | |||||||||||||||||||||||
| 2013 | 2012 | (Decrease) | 2013 | 2012 | (Decrease) | |||||||||||||||||||
| REVENUES: | ||||||||||||||||||||||||
| Medical and Healthcare | $ | 190,447 | $ | 167,746 | 13.5 | % | $ | 366,303 | $ | 326,103 | 12.3 | % | ||||||||||||
| International and Professional Education | 61,430 | 52,681 | 16.6 | % | 105,151 | 89,630 | 17.3 | % | ||||||||||||||||
| Business, Technology and Management | 239,913 | 280,239 | -14.4 | % | 472,222 | 564,853 | -16.4 | % | ||||||||||||||||
| Intersegment Elimination | (521 | ) | - | NM | (1,495 | ) | - | NM | ||||||||||||||||
| Total Consolidated Revenues | 491,269 | 500,666 | -1.9 | % | 942,181 | 980,586 | -3.9 | % | ||||||||||||||||
| OPERATING INCOME: | ||||||||||||||||||||||||
| Medical and Healthcare | 35,311 | 26,705 | 32.2 | % | 60,827 | 51,887 | 17.2 | % | ||||||||||||||||
| International and Professional Education | 16,409 | 15,227 | 7.8 | % | 17,489 | 18,576 | -5.9 | % | ||||||||||||||||
| Business, Technology and Management | 9,947 | 38,835 | -74.4 | % | (1,114 | ) | 64,405 | -101.7 | % | |||||||||||||||
| Reconciling Items: | ||||||||||||||||||||||||
| Amortization Expense | (1,612 | ) | (2,412 | ) | NM | (3,261 | ) | (4,690 | ) | NM | ||||||||||||||
| Depreciation and Other | (1,493 | ) | (11,160 | ) | NM | (5,108 | ) | (13,535 | ) | NM | ||||||||||||||
| Total Consolidated Operating Income | 58,562 | 67,195 | -12.8 | % | 68,833 | 116,643 | -41.0 | % | ||||||||||||||||
| INTEREST (EXPENSE) INCOME: | ||||||||||||||||||||||||
| Interest Income | 310 | 230 | 34.8 | % | 893 | 791 | 12.9 | % | ||||||||||||||||
| Interest Expense | (1,052 | ) | (759 | ) | 38.6 | % | (2,052 | ) | (2,250 | ) | -8.8 | % | ||||||||||||
| Net Interest and Other Income (Expense) | (742 | ) | (529 | ) | 40.3 | % | (1,159 | ) | (1,459 | ) | -20.6 | % | ||||||||||||
| Total Consolidated Income before Income Taxes | $ | 57,820 | $ | 66,666 | -13.3 | % | $ | 67,674 | $ | 115,184 | -41.2 | % | ||||||||||||
| Restructuring charges and adjustments to these charges were recorded for the three and six months ended December 31, 2013. These charges are related to DeVry Education Group (not related to any segment), DeVry Medical International and Carrington Colleges Group which are part of the Medical and Healthcare segment, Becker Professional Education which is part of the International and Professional and Education segment and the Business, Technology and Management segment. DeVry University also realized a gain on the sale of its Decatur, Georgia facility which was recorded during the six months ended December 31, 2013. Restructuring charges were recorded for the three and six months ended December 31, 2012. These charges are related to DeVry Education Group (not related to any segment), Carrington Colleges Group which is part of the Medical and Healthcare segment and the Business, Technology and Management segment. The following table illustrates the effects of these restructuring charges and the gain on the asset sale 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 Group’s ongoing operations and are useful for period-over-period comparisons of such operations given the special nature of these transactions. DeVry Group 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 Group’s reported results prepared in accordance with GAAP. The following table reconciles these items to the relevant GAAP information: | ||||||||||||||||||||||||
| For The Quarter | For The Six Months | |||||||||||||||||||||||
| Ended December 31, | Ended December 31, | |||||||||||||||||||||||
| Increase | Increase | |||||||||||||||||||||||
| 2013 | 2012 | (Decrease) | 2013 | 2012 | (Decrease) | |||||||||||||||||||
| Medical and Healthcare Operating Income | $ | 35,311 | $ | 26,705 | 32.2 | % | $ | 60,827 | $ | 51,887 | 17.2 | % | ||||||||||||
| Restructuring Charge | 4,803 | 1,416 | NM | 5,522 | 1,416 | NM | ||||||||||||||||||
| Medical and Healthcare Operating Income | ||||||||||||||||||||||||
| Excluding Restructuring Charge | $ | 40,114 | $ | 28,121 | 42.6 | % | $ | 66,349 | $ | 53,303 | 24.5 | % | ||||||||||||
| International and Professional Education Operating Income | $ | 16,409 | $ | 15,227 | 7.8 | % | $ | 17,489 | $ | 18,576 | -5.9 | % | ||||||||||||
| Restructuring Charge | 24 | - | NM | 24 | - | NM | ||||||||||||||||||
| International and Professional Education Operating Income | ||||||||||||||||||||||||
| Excluding Restructuring Charge | $ | 16,433 | $ | 15,227 | 7.9 | % | $ | 17,513 | $ | 18,576 | -5.7 | % | ||||||||||||
| Business, Technology and Management Operating Income | $ | 9,947 | $ | 38,835 | -74.4 | % | $ | (1,114 | ) | $ | 64,405 | -101.7 | % | |||||||||||
| Restructuring Charge | (41 | ) | 200 | NM | 7,910 | 200 | NM | |||||||||||||||||
| Gain on Sale of Assets | - | - | NM | (1,918 | ) | - | NM | |||||||||||||||||
| Business, Technology and Management Operating Income | ||||||||||||||||||||||||
| Excluding Restructuring Charge and Gain on Sale of Assets | $ | 9,906 | $ | 39,035 | -74.6 | % | $ | 4,878 | $ | 64,605 | -92.4 | % | ||||||||||||
CONTACT:
DeVry Education Group Inc.
Investor Contact:
Joan
Bates, (630) 353-3800
jbates@devrygroup.com
or
Media
Contact:
Larry Larsen, (312) 497-0655
llarsen@greentarget.com