Exhibit 99.1
DeVry Education Group Announces Fourth-Quarter and Full-Year 2015 Results
2015 Results Demonstrate Strength of DeVry Group Diversification Strategy;
Medical and Healthcare now Largest Segment
DOWNERS GROVE, Ill.--(BUSINESS WIRE)--August 18, 2015--DeVry Education Group (NYSE:DV), a global provider of educational services, today reported academic, operational and financial results for its fiscal 2015 fourth quarter and full year ended June 30, 2015. DeVry Group also reported enrollment results at DeVry University/Keller Graduate School of Management, DeVry Medical International, Chamberlain College of Nursing, and Carrington College.
“Driven by our diversification into healthcare and international institutions, DeVry Group continued to grow total postsecondary enrollments in fiscal 2015, while making progress in repositioning DeVry University,” said Daniel Hamburger, DeVry Group’s president and CEO. “Despite near-term market challenges, DeVry Group’s five-year strategic plan positions us to deliver strong student outcomes, attractive growth, and significant value creation.”
Academic and operational accomplishments:
- DeVry University made substantial progress on restructuring its campus footprint and is on track to deliver $125 million in cost savings in fiscal 2016
- DeVry University launched a new Medical Billing and Coding certificate program and enrolled more than 700 students in the May and July sessions combined
- Chamberlain College of Nursing announced the opening of its new Irving, Texas, campus in September and the approval of a new location in Charlotte, N.C., set to open in January 2016
- The two-year residency match rates at American University of the Caribbean School of Medicine and Ross University School of Medicine were 87 percent and 89 percent, respectively, for 2013-2014 graduates
- DeVry Brasil completed three acquisitions during fiscal year 2015; post-secondary student enrollment is now more than 58,000
- 53 of the 59 2014 Elijah Watt Sells Award recipients prepared with Becker’s CPA Exam Review
Selected financial data for the three months ended June 30, 2015:
- Total revenue decreased 2.5 percent to $473.2 million
- Medical and Healthcare and International and Professional Education segment revenue grew 8.0 percent and 15.5 percent, respectively, while Business, Technology and Management revenue decreased 18.3 percent
- Reported net income was $29.9 million, compared to $37.5 million last year; net income from continuing operations and excluding special items was $37.2 million, compared to $47.7 million last year
- Reported diluted earnings per share was $0.46, compared to diluted earnings per share of $0.58 last year; earnings per share from continuing operations and excluding special items was $0.57, compared to $0.73 last year
Selected financial data for the twelve months ended June 30, 2015:
- Total revenue decreased 0.7 percent to $1,909.9 million
- Medical and Healthcare and International and Professional Education segment revenue grew 11.7 percent and 13.5 percent respectively, while Business, Technology and Management revenue decreased 14.6 percent
- Reported net income was $139.9 million, compared to $134.0 million last year; net income from continuing operations and excluding special items was $162.4 million, compared to $170.0 million last year
- Reported diluted earnings per share was $2.14, compared to diluted earnings per share of $2.07 last year; earnings per share from continuing operations and excluding special items was $2.49, as compared to $2.62 last year
- Operating cash flow was $203.1 million compared to $265.6 million last year
- Cash and cash equivalents were $353.0 million as of June 30, 2015, as compared to $358.2 million as of June 30, 2014
- Achieved over $111 million in cost savings and value creation during fiscal 2015
The fourth quarter fiscal year 2015 results contained an after-tax charge of $5.5 million related to workforce reductions and real estate consolidations, primarily at DeVry University. Also during the quarter Becker Professional Education wrote off an intangible asset related to its operations in Eastern Europe and Russia, resulting in an after-tax charge of $1.8 million (See “Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule” on page 9).
Operating Highlights
Medical and Healthcare Segment
For the fourth quarter, segment revenue of $214.1 million increased 8.0 percent compared to the prior year. For fiscal 2015, revenue increased 11.7 percent to $859.5 million and segment operating income, excluding special items, rose 6.6 percent to $153.5 million versus prior year.
DeVry Medical International
Revenue for the quarter at DeVry Medical International declined 0.4 percent. In the May 2015 term, new students increased 11.2 percent to 617 students compared to 555 in the prior year semester. Total students increased 0.9 percent to 5,978 compared to 5,925 students in the same semester last year.
Chamberlain College of Nursing
For the fourth quarter, Chamberlain revenue increased 20.5 percent. For the May 2015 session, new students grew 2.0 percent to 3,205 students versus 3,142 in the prior year. Total students increased 21.7 percent to 23,044 versus 18,929 in the prior year. For the July 2015 session, new students grew 5.5 percent to 2,180 students versus 2,066 in the prior year. Total students increased 23.6 percent to 21,760 versus 17,603 in the prior year.
During the year, Chamberlain opened four new campuses. Chamberlain recently received approval to open two new campuses in fiscal 2016, including an Irving, Texas, campus in September 2015 and a Charlotte, N.C., location in January 2016.
Carrington College
Revenue at Carrington College grew 0.8 percent during the quarter. For the three-month period ending June 30, 2015, new student enrollment increased 56.9 percent to 2,771 versus 1,766 in the previous year, driven by an additional class start at the end of the fourth quarter compared to the prior year. Total enrollment increased 2.1 percent to 7,508 from 7,353 in the previous year. Revenue for the full year increased 2 percent in fiscal 2015 and Carrington achieved positive operating income at the institutional level.
Carrington recently launched a hybrid, onsite and online pilot within the Dental Assisting certificate program that is driving strong student outcomes and also began enrolling students for the new fully online Medical Billing and Coding and Medical Administrative Assistant programs.
International and Professional Education Segment
In the fourth quarter, segment revenue increased 15.5 percent to $83.3 million compared to the prior year driven by three strategic acquisitions, which included Faculdade Martha Falcão (FMF), Faculdade Ideal (Faci), and Damásio Educacional. Segment operating income in the fourth quarter, excluding special items, decreased to $18.8 million versus $20.5 million in the previous year, as a result of the impact of foreign currency in Brazil and increased growth investments in Brazil. For fiscal 2015, revenue increased 13.5 percent to $258.8 million, while segment operating income, excluding special items, decreased $4.2 million to $38.6 million versus prior year.
Becker Professional Education
During the quarter, revenue increased 3.1 percent, driven by strong enrollments at Becker CPA Review. In fiscal 2015, Becker served more than 58,000 students.
Becker recently announced that 53 of the 59 2014 Elijah Watt Sells Award recipients prepared with Becker’s CPA Exam Review. Since the American Institute of Certified Public Accountants (AICPA) began naming award recipients in 2005, over 90 percent of the winners have prepared for the exam with Becker’s CPA Exam Review.
DeVry Brasil
Revenue in the quarter grew 24.3 percent over the previous year. Revenue for the full year grew 26.9 percent. The increase at DeVry Brasil was driven both by the acquisitions of FMF, Faci and Damásio, as well as organic growth.
Business, Technology, and Management Segment
DeVry University
For the fourth quarter, segment revenue of $176.4 million decreased 18.3 percent compared to the prior year. The segment recorded an operating loss of $1.9 million during the seasonally weak quarter, excluding special items. The loss reflects an increase in marketing spending versus the prior year to support the transformation strategy. For fiscal 2015, revenue decreased 14.6 percent to $794.2 million, and the segment reported operating income of $14.9 million, excluding special items. For the May session, new undergraduate enrollments decreased 13.0 percent to 3,817 compared to 4,388 the previous year. Total undergraduate students decreased 17.8 percent to 34,524 versus 41,977 for the session a year ago. Graduate coursetakers decreased 13.0 percent to 13,798, compared to 15,866 in the prior year.
For the July session, new undergraduate enrollments decreased 18.6 percent to 4,000 compared to 4,915 the previous year. Total undergraduate students decreased 15.9 percent to 31,293 versus 37,210 for the session a year ago. Graduate coursetakers decreased 12.7 percent to 12,084, compared to 13,845 in the prior year.
On a same-campus basis, new undergraduate student enrollment decreased 13.0 percent and total students decreased 8.7 percent in the July session.
During the fourth quarter, DeVry University made substantial progress on restructuring its campus footprint, positioning the University to achieve the previously announced cost savings goal of $125 million in fiscal 2016.
Balance Sheet/Cash Flow
For fiscal 2015, DeVry Group generated $203.1 million of operating cash flow. As of June 30, 2015, cash and cash equivalents totaled $353.0 million.
Outlook
DeVry Group provided the following outlook for the first quarter and full year of fiscal 2016:
- During the first quarter, revenue is expected to decrease about five percent year over year
- Operating costs are expected to be down two to three percent versus the prior year quarter
- For the full year, revenue is expected to be down about five percent and earnings before special items to be flat to slightly up year over year
- Full year capital spending is expected to be about $90 million, roughly flat compared to fiscal 2015
- The effective income tax rate is expected to be 18 to 19 percent, before special items
DeVry Group will provide a long-term outlook including enrollments, revenue, and EBITDA on a segment and institutional basis at its upcoming investor day on Sep. 16, 2015.
Conference Call and Webcast Information
DeVry Group will hold a conference call to discuss its fiscal 2015 fourth-quarter and year-end financial results on August 18, 2015 at 4 p.m. Central Time (5 p.m. Eastern Time). The conference call will be led by Daniel Hamburger, president and chief executive officer, 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/dv150818.
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 Sep. 15, 2015. To access the replay, dial 877-344-7529 (domestic) or 412-317-0088 (international), passcode 10069139. To access the webcast replay, please visit DeVry Group's website, or http://services.choruscall.com/links/dv150818.
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, 2014 and filed with the Securities and Exchange Commission (SEC) on August 27, 2014 and its most recent Form 10-Q for the quarter ending March 31, 2015 and filed with the SEC on May 8, 2015.
Selected Operating Data (in thousands, except per share data)
| | Fourth Quarter |
| | FY 2015 | | FY 2014 | | Change |
| Revenue | | $473,189 | | $485,073 | | -2.4% |
| Net Income | | $29,926 | | $37,484 | | -20.2% |
| Earnings per Share (diluted) | | $0.46 | | $0.58 | | -20.7% |
| Number of common shares (diluted) | | 65,213 | | 64,988 | | +0.4% |
| | Fiscal Year |
| | FY 2015 | | FY 2014 | | Change |
| Revenue | | $1,909,943 | | $1,923,371 | | -0.7% |
| Net Income | | $139,899 | | $134,032 | | +4.4% |
| Earnings per Share (diluted) | | $2.14 | | $2.07 | | +3.4% |
| Number of common shares (diluted) | | 65,277 | | 64,853 | | +0.7% |
Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule
During the three and twelve months ended June 30, 2015, DeVry Group recorded restructuring charges related to workforce reductions and real estate consolidations at DeVry University, workforce reductions at Becker Professional Education, and real estate consolidations at Chamberlain College of Nursing and Carrington College to align its cost structure with enrollments. DeVry University is reported in the Business, Technology and Management segment; Becker Professional Education is reported in the International and Professional Education segment; and both Chamberlain College of Nursing and Carrington College are reported in the Medical and Healthcare segment. DeVry Group also recorded and asset impairment charge at Becker Professional Education related to the write-off of intangible assets at Becker Europe. During the three and twelve months ended June 30, 2014, DeVry Group recorded restructuring charges primarily related to workforce reductions and real estate consolidations at DeVry University, Carrington College and the DeVry Group home office in order to align its cost structure with enrollments. DeVry Group recorded a gain from the sale of a former DeVry University campus in Decatur, Georgia, during fiscal year 2014. The following table illustrates the effects of restructuring charges and gain on the sale of assets 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 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):
| | | | | | | | | | |
| | | For The Three Months | | For The Year |
| | | Ended June 30, | | Ended June 30, |
| | | 2015 | | 2014 | | 2015 | | 2014 |
| Net Income | | $ | 29,926 | | $ | 37,484 | | $ | 139,899 | | | $ | 134,032 | |
| Earnings per Share (Diluted) | | $ | 0.46 | | $ | 0.58 | | $ | 2.14 | | | $ | 2.07 | |
| | | | | | | | | |
| Discontinued Operations (net of tax) | | $ | - | | $ | 102 | | $ | (5,576 | ) | | $ | 16,957 | |
| Effect on Earnings per Share (Diluted) | | $ | - | | $ | - | | $ | (0.08 | ) | | $ | 0.26 | |
| | | | | | | | | |
| Restructuring Expenses (net of tax) | | $ | 5,457 | | $ | 10,100 | | $ | 26,325 | | | $ | 20,160 | |
| Effect on Earnings per Share (Diluted) | | $ | 0.08 | | $ | 0.15 | | $ | 0.40 | | | $ | 0.31 | |
| | | | | | | | | |
| Asset Impairment Charge (net of tax) | | $ | 1,780 | | $ | - | | $ | 1,780 | | | $ | - | |
| Effect on Earnings per Share (Diluted) | | $ | 0.03 | | $ | - | | $ | 0.03 | | | $ | - | |
| | | | | | | | | |
| 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, Asset | | | | | | | | |
| Impairment Charge and Gain on Sale | | | | | | | | |
| of Asset (net of tax) | | $ | 37,163 | | $ | 47,686 | | $ | 162,428 | | | $ | 169,982 | |
| | | | | | | | | |
| Earnings per Share from Continuing Operations | | | | | | | | |
| Excluding the Restructuring Expense, Asset | | | | | | | | |
| Impairment Charge and Gain on Sale | | | | | | | | |
| of Asset (Diluted) | | $ | 0.57 | | $ | 0.73 | | $ | 2.49 | | | $ | 2.62 | |
| | | | | | | | | |
| Shares used in diluted EPS calculation | | | 65,213 | | | 64,988 | | | 65,277 | | | | 64,853 | |
Enrollment Results
| | 2015 | | 2014 | | % Change |
| DeVry Education Group Postsecondary Enrollments(1)(3) | | | | | | |
| New students | | 10,726 | | 10,871 | | -1.3% |
| Total students | | 135,308 | | 112,571 | | +20.2% |
| | | | | | | |
| | | | | | |
| Chamberlain College of Nursing | | | | | | |
| May Session | | | | | | |
| New students | | 3,205 | | 3,142 | | +2.0% |
| Total students | | 23,044 | | 18,929 | | +21.7% |
| July Session | | | | | | |
| New students(2) | | 2,180 | | 2,066 | | +5.5% |
| Total students | | 21,760 | | 17,603 | | +23.6% |
| | | | | | |
| Carrington College | | | | | | |
| 3 months ending June 30, 2015 | | | | | | |
| New students | | 2,771 | | 1,766 | | +56.9% |
| Total students | | 7,508 | | 7,353 | | +2.1% |
| | | | | | |
| DeVry Medical International(3)(4) | | | | | | |
| May Semester | | | | | | |
| New students | | 617 | | 555 | | +11.2% |
| Total students | | 5,978 | | 5,925 | | +0.9% |
| | | | | | |
| DeVry University | | | | | | |
| Undergraduate – May Session | | | | | | |
| New students | | 3,817 | | 4,388 | | -13.0% |
| Total students | | 34,524 | | 41,977 | | -17.8% |
| Graduate – May Session | | | | | | |
| Coursetakers(5) | | 13,798 | | 15,866 | | -13.0% |
| | | | | | |
| Undergraduate – July Session | | | | | | |
| New students | | 4,000 | | 4,915 | | -18.6% |
| Total students | | 31,293 | | 37,210 | | -15.9% |
| Graduate – July Session | | | | | | |
| Coursetakers(5) | | 12,084 | | 13,845 | | -12.7% |
| 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 medical and veterinary preparatory programs offered through DeVry Medical International |
| 4) | | DeVry Medical International will report its September enrollment results on October 22, 2015. The number of new students reported in the September 2014 semester has been revised to 842 students versus 943 students as previously reported due to a typographical error |
| 5) | | 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 2015 Announcements & Events
| September 16, 2015 | | | Investor Day |
| October 22, 2015 | | | Fiscal 2016 First Quarter Results and September Enrollment |
| November 5, 2015 | | | Annual Shareholders’ Meeting |
| DEVRY EDUCATION GROUP INC. |
CONSOLIDATED BALANCE SHEETS |
(Dollars in Thousands) |
| (Unaudited) |
| PRELIMINARY |
| | | | | | | | | | | |
| | | | | | | | June 30, | | June 30, |
| | | | | | | | 2015 | | 2014 |
| | | | | | | | (Dollars in thousands, except for
share and par value amounts) |
ASSETS | | | | | | | | | |
| Current Assets | | | | | | | |
| | Cash and Cash Equivalents | | | | $ | 353,022 | | | $ | 358,188 | |
| | Marketable Securities and Investments | | | | 3,579 | | | | 3,448 | |
| | Restricted Cash | | | | | 10,743 | | | | 8,347 | |
| | Accounts Receivable, Net | | | | | 139,163 | | | | 132,621 | |
| | Deferred Income Taxes, Net | | | | | 41,458 | | | | 39,679 | |
| | Prepaid Expenses and Other | | | | | 53,092 | | | | 34,808 | |
| | | Total Current Assets | | | | | 601,057 | | | | 577,091 | |
| Land, Building and Equipment | | | | | | |
| | Land | | | | | | 59,691 | | | | 68,185 | |
| | Building | | | | | | 485,288 | | | | 464,944 | |
| | Equipment | | | | | | 521,361 | | | | 488,322 | |
| | Construction In Progress | | | | | 26,664 | | | | 17,405 | |
| | | | | | | | | 1,093,004 | | | | 1,038,856 | |
| | Accumulated Depreciation | | | | | (547,130 | ) | | | (483,019 | ) |
| | | Land, Building and Equipment, Net | | | | 545,874 | | | | 555,837 | |
| Other Assets | | | | | | | |
| | Intangible Assets, Net | | | | | 323,731 | | | | 294,932 | |
| | Goodwill | | | | | | 552,329 | | | | 519,879 | |
| | Perkins Program Fund, Net | | | | | 13,450 | | | | 13,450 | |
| | Other Assets | | | | | | 37,752 | | | | 36,447 | |
| | | Total Other Assets | | | | | 927,262 | | | | 864,708 | |
| TOTAL ASSETS | | | | | $ | 2,074,193 | | | $ | 1,997,636 | |
| | | | | | | | | | |
LIABILITIES | | | | | | | |
| Current Liabilities | | | | | | | |
| | Accounts Payable | | | | $ | 63,083 | | | $ | 52,260 | |
| | Accrued Salaries, Wages and Benefits | | | | 83,491 | | | | 94,501 | |
| | Accrued Expenses | | | | | 85,103 | | | | 70,891 | |
| | Deferred Revenue | | | | | 90,232 | | | | 99,160 | |
| | | Total Current Liabilities | | | | | 321,909 | | | | 316,812 | |
| Other Liabilities | | | | | | | |
| | Deferred Income Taxes, Net | | | | | 56,092 | | | | 47,921 | |
| | Deferred Rent and Other | | | | | 101,762 | | | | 93,117 | |
| | | Total Other Liabilities | | | | | 157,854 | | | | 141,038 | |
| | | | | | | | | | |
| TOTAL LIABILITIES | | | | | | 479,763 | | | | 457,850 | |
| | | | | | | | | | |
| NONCONTROLLING INTEREST | | | | | 9,620 | | | | 6,393 | |
SHAREHOLDERS' EQUITY | | | | | | |
| Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized; | | | | |
| 63,623,000 and 63,624,000 Shares Issued and Outstanding | | | | |
| at June 30, 2015 and June 30, 2014, respectively | | | 760 | | | | 753 | |
| Additional Paid-in Capital | | | | | 350,256 | | | | 320,703 | |
| Retained Earnings | | | | | | 1,796,361 | | | | 1,682,071 | |
| Accumulated Other Comprehensive Loss | | | | (77,114 | ) | | | (15,394 | ) |
| Treasury Stock, at Cost, 12,414,000 and 11,655,000 | | | | |
| Shares, respectively) | | | | | (485,453 | ) | | | (454,740 | ) |
| TOTAL SHAREHOLDERS' EQUITY | | | | | 1,584,810 | | | | 1,533,393 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | | $ | 2,074,193 | | | $ | 1,997,636 | |
| DEVRY EDUCATION GROUP INC. |
CONSOLIDATED STATEMENTS OF INCOME |
| (Dollars in Thousands Except for Per Share Amounts) |
| (Unaudited) |
| PRELIMINARY |
| | | | | | | | | | | | | | | | | |
| | | | | | | For The Three Months | | | For The Year |
| | | | | | | Ended June 30, | | | Ended June 30, |
| | | | | | | 2015 | | 2014 | | | 2015 | | 2014 | | 2013 |
| | | | | | | | | | | | | | | | |
| REVENUE: | | | | | | | | | | | | | | |
| Tuition | | | | | $ | 435,784 | | | $ | 452,011 | | | | $ | 1,755,981 | | | $ | 1,784,638 | | | $ | 1,840,033 | |
| Other Educational | | | | | 37,405 | | | | 33,062 | | | | | 153,962 | | | | 138,733 | | | | 124,342 | |
| | | | | | | | | | | | | | | | |
| | Total Revenue | | | | | 473,189 | | | | 485,073 | | | | | 1,909,943 | | | | 1,923,371 | | | | 1,964,375 | |
| OPERATING COST AND EXPENSE: | | | | | | | | | | | |
| Cost of Educational Services | | | 249,729 | | | | 256,073 | | | | | 1,000,055 | | | | 983,436 | | | | 962,223 | |
| Student Services and Administrative Expense | | | 175,407 | | | | 169,716 | | | | | 708,285 | | | | 727,870 | | | | 756,384 | |
| Restructuring Expense | | | | | 12,426 | | | | 16,386 | | | | | 42,913 | | | | 32,715 | | | | 26,229 | |
| Asset Impairment Charge | | | | 1,780 | | | | - | | | | | 1,780 | | | | - | | | | 56,992 | |
| Gain on Sale of Asset | | | | | - | | | | - | | | | | - | | | | (1,918 | ) | | | - | |
| Earn-out Accrual Adjustment | | | - | | | | - | | | | | - | | | | - | | | | (4,381 | ) |
| | | | | | | | | | | | | | | | |
| | Total Operating Cost and Expense | | | 439,342 | | | | 442,175 | | | | | 1,753,033 | | | | 1,742,103 | | | | 1,797,447 | |
| | | | | | | | | | | | | | | | |
| Operating Income | | | | | | 33,847 | | | | 42,898 | | | | | 156,910 | | | | 181,268 | | | | 166,928 | |
| INTEREST: | | | | | | | | | | | | | | |
| Interest Income | | | | | | 48 | | | | 233 | | | | | 2,063 | | | | 1,731 | | | | 1,652 | |
| Interest Expense | | | | | | (1,755 | ) | | | (507 | ) | | | | (5,313 | ) | | | (3,632 | ) | | | (3,611 | ) |
| | | | | | | | | | | | | | | | |
| | Net Interest Expense | | | | (1,707 | ) | | | (274 | ) | | | | (3,250 | ) | | | (1,901 | ) | | | (1,959 | ) |
| | | | | | | | | | | | | | | | |
| Income from Continuing Operations Before Income Taxes | | | 32,140 | | | | 42,624 | | | | | 153,660 | | | | 179,367 | | | | 164,969 | |
| Income Tax Provision | | | | | (1,884 | ) | | | (4,586 | ) | | | | (18,537 | ) | | | (27,699 | ) | | | (39,227 | ) |
| | | | | | | | | | | | | | | | |
| Income from Continuing Operations | | | 30,256 | | | | 38,038 | | | | | 135,123 | | | | 151,668 | | | | 125,742 | |
| DISCONTINUED OPERATIONS: | | | | | | | | | | | |
| Income (Loss) from Operations of Divested Component | | | - | | | | (157 | ) | | | | 1,011 | | | | (18,802 | ) | | | (25,856 | ) |
| Income Tax Benefit | | | | | - | | | | 55 | | | | | 4,565 | | | | 1,845 | | | | 8,954 | |
| Income (Loss) on Discontinued Operations | | | - | | | | (102 | ) | | | | 5,576 | | | | (16,957 | ) | | | (16,902 | ) |
| | | | | | | | | | | | | | | | |
| NET INCOME | | | | | | 30,256 | | | | 37,936 | | | | | 140,699 | | | | 134,711 | | | | 108,840 | |
| Net Income Attributable to Noncontrolling Interest | | | (330 | ) | | | (452 | ) | | | | (800 | ) | | | (679 | ) | | | (2,054 | ) |
| | | | | | | | | | | | | | | | |
| NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP | | $ | 29,926 | | | $ | 37,484 | | | | $ | 139,899 | | | $ | 134,032 | | | $ | 106,786 | |
| | | | | | | | | | | | | | | | |
| AMOUNTS ATTRIBUTABLE TO DEVRY EDUCATION GROUP | | | | | | | | | | | |
| Income from Continuing Operations, Net of Income Taxes | | | 29,926 | | | | 37,586 | | | | | 134,323 | | | | 150,989 | | | | 123,688 | |
| Income (Loss) from Discontinued Operations, Net of Income Taxes | | | - | | | | (102 | ) | | | | 5,576 | | | | (16,957 | ) | | | (16,902 | ) |
| NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP | | $ | 29,926 | | | $ | 37,484 | | | | $ | 139,899 | | | $ | 134,032 | | | $ | 106,786 | |
| | | | | | | | | | | | | | | | |
| EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE | | | | | | | | | | | |
| TO DEVRY EDUCATION GROUP SHAREHOLDERS | | | | | | | | | | | |
| Basic | | | | | | | | | | | | | | |
| | Continuing Operations | | | $ | 0.46 | | | $ | 0.58 | | | | $ | 2.08 | | | $ | 2.35 | | | $ | 1.92 | |
| | Discontinued Operations | | | - | | | | - | | | | | 0.09 | | | | (0.26 | ) | | | (0.26 | ) |
| | | | | | | $ | 0.46 | | | $ | 0.58 | | | | $ | 2.17 | | | $ | 2.09 | | | $ | 1.66 | |
| Diluted | | | | | | | | | | | | | | |
| | Continuing Operations | | | $ | 0.46 | | | $ | 0.58 | | | | $ | 2.06 | | | $ | 2.33 | | | $ | 1.91 | |
| | Discontinued Operations | | | - | | | | - | | | | | 0.08 | | | | (0.26 | ) | | | (0.26 | ) |
| | | | | | | $ | 0.46 | | | $ | 0.58 | | | | $ | 2.14 | | | $ | 2.07 | | | $ | 1.65 | |
| | | | | | | | | | | | | | | | |
| Cash Dividend Declared per Common Share | | $ | 0.18 | | | $ | 0.17 | | | | $ | 0.36 | | | $ | 0.34 | | | $ | 0.34 | |
| DEVRY EDUCATION GROUP INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited) |
| PRELIMINARY |
| | | | | | | | | |
| | | | | | | | For The year |
| | | | | | | | Ended June 30, |
| | | | | | | | 2015 | | 2014 |
| | | | | | | | (Dollars in Thousands) |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | |
| Net Income | | | | | | $ | 140,699 | | | $ | 134,711 | |
| (Income) Loss from Discontinued Operations | | | | (5,576 | ) | | | 16,957 | |
| Adjustments to Reconcile Net Income to Net | | | | | |
| Cash Provided by Operating Activities: | | | | | |
| | | | | | | | | | |
| | Stock-Based Compensation Expense | | | | 17,440 | | | | 17,685 | |
| | Depreciation | | | | | | 85,008 | | | | 82,739 | |
| | Amortization | | | | | | 5,548 | | | | 7,078 | |
| | Impairment of Intangible Assets | | | | 1,780 | | | | - | |
| | Provision for Refunds and Uncollectible Accounts | | | 89,886 | | | | 88,506 | |
| | Deferred Income Taxes | | | | | 3,563 | | | | (18,115 | ) |
| | Loss on Disposals of Land, Building and Equipment | | | 6,774 | | | | 9,150 | |
| | Unrealized Loss on Assets Held for Sale | | | | - | | | | 244 | |
| | Realized Gain on Sale of Assets | | | | | - | | | | (1,918 | ) |
| | Changes in Assets and Liabilities, Net of Effects from | | | | |
| | Acquisitions and Divestitures of Businesses: | | | | |
| | | Restricted Cash | | | | | (2,396 | ) | | | (1,328 | ) |
| | | Accounts Receivable | | | | | (96,534 | ) | | | (82,262 | ) |
| | | Prepaid Expenses and Other | | | | (19,716 | ) | | | 18,148 | |
| | | Accounts Payable | | | | | 10,830 | | | | (2,883 | ) |
| | | Accrued Salaries, Wages, Benefits and Expenses | | | (24,725 | ) | | | (2,943 | ) |
| | | Deferred Revenue | | | | | (9,314 | ) | | | 301 | |
| | | | | | | | | | |
| Net Cash Provided by Operating Activities-Continuing Operations | | 203,267 | | | | 266,070 | |
| Net Cash Used in Operating Activities-Discontinued Operations | | | (160 | ) | | | (509 | ) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | | | 203,107 | | | | 265,561 | |
| | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | |
| Capital Expenditures | | | | | | (88,707 | ) | | | (79,355 | ) |
| Payment for Purchase of Business, Net of Cash Acquired | | | (73,117 | ) | | | (13,570 | ) |
| Marketable Securities Purchased | | | | | (158 | ) | | | (135 | ) |
| Cash Received from Sale of Assets | | | | | 6,100 | | | | 8,727 | |
| | | | | | | | | | |
| NET CASH USED IN INVESTING ACTIVITIES | | | (155,882 | ) | | | (84,333 | ) |
| | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | |
| Proceeds from Exercise of Stock Options | | | | 8,828 | | | | 10,482 | |
| Proceeds from Stock Issued Under Employee Stock Purchase Plan | | 1,204 | | | | 1,372 | |
| Repurchase of Common Stock for Treasury | | | | (25,918 | ) | | | - | |
| Cash Dividends Paid | | | | | | (23,230 | ) | | | (21,903 | ) |
| Payments of Seller Financed Obligations | | | | (5,978 | ) | | | (9,095 | ) |
| Payments of Debt Refinancing Fees | | | | | (3,519 | ) | | | - | |
| | | | | | | | | | |
| NET CASH USED IN FINANCING ACTIVITIES | | | (48,613 | ) | | | (19,144 | ) |
| | | | | | | | | | |
| Effects of Exchange Rate Differences | | | | | (3,778 | ) | | | (1,040 | ) |
| | | | | | | | | | |
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | | (5,166 | ) | | | 161,044 | |
| | | | | | | | | | |
| Cash and Cash Equivalents at Beginning of Period | | | | 358,188 | | | | 197,144 | |
| Cash and Cash Equivalents at End of Period | | | | $ | 353,022 | | | $ | 358,188 | |
| DEVRY EDUCATION GROUP INC. |
SEGMENT INFORMATION |
| (Dollars in Thousands) |
| (Unaudited) |
| PRELIMINARY |
| | | | | | | | | | | | | | | |
| | | | | For The Three Months | | For The Year |
| | | | | Ended June 30, | | Ended June 30, |
| | | | | | | | | Increase | | | | | | Increase |
| | | | | 2015 | | 2014 | | (Decrease) | | 2015 | | 2014 | | (Decrease) |
| REVENUE: | | | | | | | | | | | | | | | |
| Medical and Healthcare | | | $ | 214,053 | | | $ | 198,213 | | | 8.0 | % | | $ | 859,477 | | | $ | 769,126 | | | 11.7 | % |
| International and Professional Education | | | | 83,301 | | | | 72,124 | | | 15.5 | % | | | 258,839 | | | | 228,057 | | | 13.5 | % |
| Business, Technology and Management | | | | 176,351 | | | | 215,830 | | | -18.3 | % | | | 794,162 | | | | 929,948 | | | -14.6 | % |
| Intersegment Elimination and Other | | | (516 | ) | | | (1,094 | ) | | NM | | | | (2,535 | ) | | | (3,760 | ) | | NM | |
| Total Consolidated Revenue | | | | 473,189 | | | | 485,073 | | | -2.4 | % | | | 1,909,943 | | | | 1,923,371 | | | -0.7 | % |
| OPERATING INCOME (LOSS) (NOTE 1): | | | | | | | | |
| Medical and Healthcare | | | | 28,696 | | | | 32,348 | | | -11.3 | % | | | 146,503 | | | | 136,035 | | | 7.7 | % |
| International and Professional Education | | | | 16,938 | | | | 20,343 | | | -16.7 | % | | | 36,796 | | | | 42,744 | | | -13.9 | % |
| Business, Technology and Management | | | | (10,446 | ) | | | (10,626 | ) | | -1.7 | % | | | (17,658 | ) | | | 10,777 | | | NM | |
| Reconciling Item: | | | | | | | | | | | | | | |
| Home Office and Other | | | | (1,341 | ) | | | 833 | | | NM | | | | (8,731 | ) | | | (8,288 | ) | | NM | |
| Total Consolidated Operating Income | | | 33,847 | | | | 42,898 | | | -21.1 | % | | | 156,910 | | | | 181,268 | | | -13.4 | % |
| INTEREST: | | | | | | | | | | | | | | |
| Interest Income | | | | | 48 | | | | 233 | | | -79.4 | % | | | 2,063 | | | | 1,731 | | | 19.2 | % |
| Interest Expense | | | | | (1,755 | ) | | | (507 | ) | | 246.2 | % | | | (5,313 | ) | | | (3,632 | ) | | 46.3 | % |
| Net Interest Expense | | | | (1,707 | ) | | | (274 | ) | | 523.0 | % | | | (3,250 | ) | | | (1,901 | ) | | 71.0 | % |
| Total Consolidated Income before Income Taxes | | | | | | | | |
| and Noncontrolling Interest | | | $ | 32,140 | | | $ | 42,624 | | | -24.6 | % | | $ | 153,660 | | | $ | 179,367 | | | -14.3 | % |
| Note 1 - Segment Operating Income (Loss) has been adjusted in both periods to reflect intangible asset amortization expense at the segment level. This amortization expense had previously been disclosed as a Reconciling Item. |
| | |
| During the three and twelve months ended June 30, 2015, DeVry Group recorded restructuring charges related to workforce reductions and real estate consolidations at DeVry University which is part of the Business, Technology and Management segment, Becker Professional Education which is part of the International and Professional Education segment and the DeVry Group home office and real estate consolidations at Chamberlain College of Nursing and Carrington College which are part of the Medical and Healthcare segment in order to align its cost structure with enrollments. DeVry Group also recorded and asset impairment charge at Becker Professional Education related to the write-off of intangible assets at Becker Europe. During the three and twelve months ended June 30, 2014, DeVry Group recorded restructuring charges primarily related to workforce reductions and real estate consolidations at DeVry University, Carrington College and the DeVry Group home office in order to align its cost structure with enrollments. DeVry Group recorded a gain from the sale of a former DeVry University campus in Decatur, Georgia, during fiscal year 2014. The following table illustrates the effects of restructuring charges and gain on the sale of assets 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 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): |
| | | | | | | | | | | | | | | |
| | | | | For The Three Months | | For The Year |
| | | | | Ended June 30, | | Ended June 30, |
| | | | | | | | | Increase | | | | | | Increase |
| | | | | 2015 | | 2014 | | (Decrease) | | 2015 | | 2014 | | (Decrease) |
| | | | | | | | | | | | | | | |
| Medical and Healthcare Operating Income | | $ | 28,696 | | | $ | 32,348 | | | -11.3 | % | | $ | 146,503 | | | $ | 136,035 | | | 7.7 | % |
| Restructuring Charge | | | | 2,499 | | | | 2,424 | | | 3.1 | % | | | 6,947 | | | | 7,946 | | | -12.6 | % |
| Medical and Healthcare Operating Income | | | | | | | | | | | |
| Excluding Restructuring Charge | | | $ | 31,195 | | | $ | 34,772 | | | -10.3 | % | | $ | 153,450 | | | $ | 143,981 | | | 6.6 | % |
| | | | | | | | | | | | | | | |
| International and Professional Education Operating Income | | $ | 16,938 | | | $ | 20,343 | | | -16.7 | % | | $ | 36,796 | | | $ | 42,744 | | | -13.9 | % |
| Restructuring Charge | | | | 66 | | | | 132 | | | -50.0 | % | | | 78 | | | | 158 | | | -50.6 | % |
| Asset Impairment Charge | | | | 1,780 | | | | - | | | NM | | | | 1,780 | | | | - | | | NM | |
| International and Professional Education Operating Income | | | | | | | | |
| Excluding Restructuring Charges and Asset Impairment | | | | | | | | |
| Charge | | | | | $ | 18,784 | | | $ | 20,475 | | | -8.3 | % | | $ | 38,654 | | | $ | 42,902 | | | -9.9 | % |
| | | | | | | | | | | | | | | |
| Business, Technology and Management Operating Income | | $ | (10,446 | ) | | $ | (10,626 | ) | | -1.7 | % | | $ | (17,658 | ) | | $ | 10,777 | | | -263.8 | % |
| Restructuring Charge | | | | 8,576 | | | | 13,829 | | | -38.0 | % | | | 32,607 | | | | 21,739 | | | 50.0 | % |
| Gain on Sale of Assets | | | | - | | | | - | | | - | | | | - | | | | (1,918 | ) | | NM | |
| Business, Technology and Management Operating Income | | | | | | | | |
| Excluding Restructuring Charge and Gain on Sale of Assets | | $ | (1,870 | ) | | $ | 3,203 | | | -158.4 | % | | $ | 14,949 | | | $ | 30,598 | | | -51.1 | % |
CONTACT:
DeVry Education Group
Investor Contact:
Joan Walter, 630-353-3800
jwalter@devrygroup.com
or
Media Contact:
Ernie Gibble, 630-353-9920
egibble@devrygroup.com
