Adtalem Global Education (ATGE) 8-K Adtalem Global Education Announces First Quarter Fiscal 2018 Results

Exhibit 99.1

Adtalem Global Education Announces First Quarter Fiscal 2018 Results

Response to Hurricanes Demonstrates Resiliency of the Organization

Professional Education and Technology and Business Segments Posted Solid Revenue and Operating Income Growth

DOWNERS GROVE, Ill.--(BUSINESS WIRE)--November 2, 2017--Adtalem Global Education (NYSE: ATGE), a leading global education provider, today reported academic, operational and financial results for its fiscal 2018 first quarter ended September 30, 2017, including enrollment results at Adtalem Education of Brazil, Carrington College, Chamberlain University, DeVry University/Keller Graduate School of Management and its medical and veterinary schools.

“The strength of our organization, the resiliency of our schools and the determination of our faculty, administrators and students was evident in our rapid response to the hurricanes during the quarter,” said Lisa Wardell, president and CEO of Adtalem Global Education. “I’m proud of our team for successfully driving our transitional efforts, including safely transporting our medical students and their families and securing temporary facilities so they can continue their education.

“We’re continuing to make progress in executing our plan to return our organization to organic revenue growth and deliver returns for our owners,” Ms. Wardell added.

Selected financial data for the three months ended September 30, 2017:

• Total revenue of $421.0 million decreased 6.4 percent versus the prior year
• Net income of $12.8 million compared to net income of $25.2 million in the prior year; net income excluding special items was $18.9 million, compared to $28.8 million in the prior year
• Diluted earnings per share was $0.20, compared to $0.39 in the prior year; diluted earnings per share excluding special items was $0.30, compared to $0.45 in the prior year
• Operating cash flow for the first quarter was $90.3 million, compared to $98.8 million in the prior year
• Cash and cash equivalents were $273.8 million as of September 30, 2017, compared to $189.0 million as of September 30, 2016. Outstanding bank borrowings were $135.0 million as of September 30, 2017, compared to $130.0 million as of September 30, 2016
• Repurchased approximately 1,478,000 shares of common stock during the first quarter of fiscal 2018

The fiscal 2018 first quarter results contained special items for restructuring charges of $8.0 million (pre-tax) primarily related to reductions in force at DeVry University and Adtalem’s home office.

Academic and Operating Highlights

Medical and Healthcare Segment

First quarter segment revenue of $191.3 million decreased 4.2 percent compared to the prior year, with growth at Chamberlain University offset by decreased revenue at the medical and veterinary schools. Chamberlain revenue in the quarter increased 2.2 percent from the prior year to $113.9 million, while revenue for the medical and veterinary schools decreased 12.4 percent from the prior year to $77.4 million.

First quarter operating income for the segment was $26.2 million, representing a decrease of 40.2 percent from the prior year.

Both American University of the Caribbean School of Medicine and Ross University School of Medicine were adversely impacted by damages sustained as a result of Hurricane Irma that made landfall in St. Maarten on Sept. 6, 2017, and Hurricane Maria that struck the island of Dominica on Sept. 19, 2017. Adtalem evacuated students, faculty and staff from both islands. The interruption to the schools’ September basic science semester reduced first quarter revenue by approximately $7.0 million, most of which is expected to be realized in the fiscal year. For the first quarter, operating income was approximately $21 million lower from the reduced revenue and additional expenses incurred due to the impacts of the hurricanes. Management expects lost revenue and incremental costs for fiscal 2018 to be reimbursable under its insurance policies, net of deductibles.

Chamberlain University president Susan Groenwald, PhD, RN, ANEF, FAAN released a book, “Designing & Creating a Culture of Care for Students and Faculty: The Chamberlain University College of Nursing Model,” which serves as a guide for any organization seeking to make cultural and structural changes to improve student or employee satisfaction, engagement and achievement. The book describes Chamberlain Care, the unique organizational culture and work climate developed at the university.

Professional Education

First quarter segment revenue increased 15.3 percent to $40.0 million compared to the prior year, primarily driven by growth in the Association of Certified Anti Money Laundering Specialists (ACAMS) business unit. Segment operating income for the first quarter was $10.5 million, up from $6.1 million from the prior year driven by revenue growth at ACAMS.

Becker Professional Education recently confirmed that 52 of the 58 Elijah Watt Sells Award recipients in 2016 prepared with Becker’s CPA Exam Review course. From 2005 to 2016, over 90 percent of all Watt Sells Award winners have prepared with Becker, totaling 358 award winners throughout the last decade. In total, Becker has helped more than one million candidates pass the CPA Exam, attesting to the quality and effectiveness of the organization’s program and teaching methods.

Global demand for education and training in financial crimes prevention remains strong and ACAMS remains well positioned to grow. ACAMS continues to provide its various member groups with a broad set of tools, training modules and technological resources so they can build their online communities, expand seminar participation and consistently update their curriculum.

Technology and Business

First quarter segment revenue increased 7.2 percent to $62.4 million compared to the prior year. On a constant currency basis, revenue in the segment grew 4.3 percent. Segment operating income in the first quarter was $1.9 million compared to a loss of $2.0 million in the prior year as a result of revenue growth and cost efficiencies.

US Traditional Postsecondary

First quarter segment revenue decreased 19.0 percent to $127.9 million. Revenue at DeVry University decreased 20.8 percent to $95.8 million compared to the prior year and revenue at Carrington declined 13.1 percent to $32.1 million compared to the prior year.

The segment reported an operating loss of $20.2 million compared to an operating loss of $10.0 million in the prior year. Excluding special items, the segment reported an operating loss of $13.3 million for the quarter, compared to an operating loss of $6.9 million in the prior year.

DeVry University achieved $22.3 million of cost savings in the first quarter compared to prior year, excluding special items. Additional cost reductions are expected throughout fiscal 2018 to maintain positive operating income.

Adtalem Outlook

Fiscal 2018 second quarter revenue is expected to decrease 4 to 5 percent versus the prior year. Revenue growth within the Medical and Healthcare, Professional Education and Technology and Business segments is expected to offset declining revenue within the US Traditional Postsecondary segment. Second quarter operating costs before special items are expected to decline 1 to 2 percent versus the prior year as a result of continued cost reductions at DeVry University and Carrington College. Second quarter expenses will be impacted by the timing of the receipt of insurance proceeds for the reimbursement of hurricane-related expenses.

Fiscal 2018 full year revenue is expected to decline 2 to 3 percent compared to the prior year and earnings before special items are expected to grow in the low single digit range as compared to the prior year. Full year capital spending is expected to be in the $60 to $65 million range. The effective income tax rate for the fiscal year is expected to be in the range of 19 to 20 percent, before special items.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its fiscal 2018 first-quarter earnings on Thursday, Nov. 2, at 4 p.m. CDT (5 p.m. EDT). The conference call will be led by Lisa Wardell, president and chief executive officer; and Patrick Unzicker, chief financial officer.

For those wishing to participate by telephone, dial 877-407-6184 (domestic) or 201-389-0877 (international). Ask for the “Adtalem Call” or use conference ID: 13671827. Adtalem will also broadcast the conference call on Adtalem's website at: https://hd.choruscall.com/InComm/?callme=true&passcode=13666580&h=true&info=companyemail&r=true&B=6.

Please access the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

Adtalem will archive a telephone replay of the call until Dec. 2, 2017. To access the replay, dial 877-660-6853 (domestic) or 201-612-7415 (international), passcode 10099693. To access the webcast replay, please visit Adtalem's website, or http://www.investorcalendar.com/event/20912.

About Adtalem Global Education

The purpose of Adtalem Global Education is to empower students to achieve their goals, find success, and make inspiring contributions to our global community. Adtalem Global Education Inc. (NYSE: ATGE; member S&P MidCap 400 Index) is a leading global education provider and the parent organization of Adtalem Educacional do Brasil, American University of the Caribbean School of Medicine, Association of Certified Anti-Money Laundering Specialists, Becker Professional Education, Carrington College, Chamberlain University, DeVry University and its Keller Graduate School of Management, Ross University School of Medicine and Ross University School of Veterinary Medicine. For more information, please visit adtalem.com.

Enrollment Results:

	FY2018	FY2017	% Change
Adtalem Global Education Student Enrollments(1)
New students	26,165	28,629	-8.6%
Total students	145,473	151,503	-4.0%
Adtalem Education of Brazil(2)
September Semester
New students	14,507	15,892	-8.7%
Total students	78,340	76,862	+1.9%
Chamberlain University
September Session
New students	4,962	5,003	-0.8%
Total students	30,062	28,781	+4.5%
Medical and Veterinary
September Semester
New students	812	806	+0.7%
Total students	5,744	6,168	-6.9%
Carrington College
3 months ending September 30, 2017
New students	2,155	2,338	-7.8%
Total students	5,258	6,638	-20.8%
DeVry University
Undergraduate – September Session
New students	2,825	3,432	-17.7%
Total students	19,287	24,540	-21.4%
Graduate – September Session
Coursetakers (3)	7,915	10,146	-22.0%

1) Includes the most recently reported enrollments at Adtalem’s postsecondary institutions

2) Excludes Damásio test prep students.

3) The term “coursetaker” refers to the number of courses taken by a student. Thus one student taking two courses equals two coursetakers

Supplemental Reconciliations

The following tables present revenue and total expenses by reporting segment detailing the changes from the year-ago comparative periods including disclosure of the effect of Hurricanes Irma and Maria and the effect of restructuring charges and changes in the value of the Brazilian Real compared to the U.S. dollar.

SUPPLEMENTAL RECONCILIATIONS
(Unaudited)
PRELIMINARY
		Three Months Ended September 30, 2017
		(in thousands)
								Technology			U.S.			Home Office
		Medical and			Professional			and			Traditional			and
Revenue:		Healthcare			Education			Business			Postsecondary			Other			Consolidated
Fiscal Year 2017 as Reported	$	199,769		$	34,730		$	58,240		$	157,875		$	(722	)	$	449,892
Organic Growth (Decline)		(1,140	)		5,312			2,510			(29,994	)		100			(23,212	)
Hurricane Impact		(7,344	)		-			-			-			-			(7,344	)
Effect of Currency Change		-			-			1,689			-			-			1,689
Fiscal Year 2018 as Reported	$	191,285		$	40,042		$	62,439		$	127,881		$	(622	)	$	421,025
Fiscal Year 2018 % Change:
Organic Growth (Decline)		(0.6	%)		15.3	%		4.3	%		(19.0	%)		NM			(5.2	%)
Hurricane Impact		(3.7	%)		-			-			-			NM			(1.6	%)
Effect of Currency Change		-			-			2.9	%		-			NM			0.4	%
Fiscal Year 2018 % Change
as Reported		(4.2	%)		15.3	%		7.2	%		(19.0	%)		NM			(6.4	%)
		Three Months Ended September 30, 2017
		(in thousands)
								Technology			U.S.			Home Office
		Medical and			Professional			and			Traditional			and
Total Expenses:		Healthcare			Education			Business			Postsecondary			Other			Consolidated
Fiscal Year 2017 as Reported	$	155,906		$	28,673		$	60,216		$	167,881		$	4,109		$	416,785
Cost (Reduction) Investment		(4,582	)		862			(1,102	)		(23,587	)		186			(28,223	)
Hurricane Impact		13,617			-			-			-			-			13,617
Restructuring Expense Change		112			-			-			3,790			(956	)		2,946
Effect of Currency Change		-			-			1,464			-			-			1,464
Fiscal Year 2018 as Reported	$	165,053		$	29,535		$	60,578		$	148,084		$	3,339		$	406,589
Fiscal Year 2018 % Change:
Cost (Reduction) Investment		(2.9	%)		3.0	%		(1.8	%)		(14.0	%)		NM			(6.8	%)
Hurricane Impact		8.7	%		-			-			-			NM			3.3	%
Restructuring Expense Change		0.1	%		-			-			2.3	%		NM			0.7	%
Effect of Currency Change		-			-			2.4	%		-			NM			0.4	%
Fiscal Year 2018 % Change
as Reported		5.9	%		3.0	%		0.6	%		(11.8	%)		NM			(2.4	%)

ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
PRELIMINARY
					September 30,			June 30,			September 30,
					2017			2017			2016
ASSETS:					(in thousands, except share and par value amounts)
	Current Assets:
		Cash and Cash Equivalents		$	273,751		$	241,979		$	189,017
		Marketable Securities and Investments			4,139			4,013			3,738
		Restricted Cash			7,442			9,117			5,795
		Accounts Receivable, Net			189,783			173,362			184,294
		Prepaid Expenses and Other			66,511			42,736			40,814
			Total Current Assets		541,626			471,207			423,658
	Land, Building and Equipment:
		Land			49,088			48,947			54,967
		Building			470,347			474,942			484,104
		Equipment			524,054			514,118			523,492
		Construction in Progress			19,091			22,461			24,201
					1,062,580			1,060,468			1,086,764
		Accumulated Depreciation			(597,732	)		(582,922	)		(572,320	)
		Land, Building and Equipment Held for Sale, Net			11,280			11,280			-
			Land, Building and Equipment, Net		476,128			488,826			514,444
	Other Assets:
		Deferred Income Taxes, Net			31,222			33,772			32,037
		Intangible Assets, Net			417,761			413,803			426,089
		Goodwill			860,865			851,282			854,188
		Perkins Program Fund, Net			13,450			13,450			13,450
		Other Assets, Net			42,544			41,695			60,490
			Total Other Assets		1,365,842			1,354,002			1,386,254
TOTAL ASSETS				$	2,383,596		$	2,314,035		$	2,324,356
LIABILITIES:
	Current Liabilities:
		Accounts Payable		$	71,371		$	64,285		$	57,423
		Accrued Salaries, Wages and Benefits			67,950			96,241			65,841
		Accrued Expenses			89,686			99,243			96,863
		Deferred Revenue			221,511			117,558			224,713
			Total Current Liabilities		450,518			377,327			444,840
	Other Liabilities:
		Revolving Loan			135,000			125,000			130,000
		Deferred Income Taxes, Net			34,755			34,712			30,769
		Deferred Rent and Other			98,718			101,672			112,026
			Total Other Liabilities		268,473			261,384			272,795
TOTAL LIABILITIES					718,991			638,711			717,635
NONCONTROLLING INTEREST					6,566			6,285			5,043
SHAREHOLDERS' EQUITY:
	Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized;
		61,194,000, 62,371,000 and 62,728,000 Shares Outstanding at
		September 30, 2017, June 30, 2017 and September 30, 2016, respectively			785			781			772
	Additional Paid-in Capital				422,358			415,912			383,815
	Retained Earnings				1,894,372			1,881,397			1,796,099
	Accumulated Other Comprehensive Loss				(35,720	)		(59,119	)		(49,223	)
	Treasury Stock, at Cost, 17,271,000, 15,691,000 and 14,454,000 Shares at
		September 30, 2017, June 30, 2017 and September 30, 2016, respectively			(623,756	)		(569,932	)		(529,785	)
TOTAL SHAREHOLDERS' EQUITY					1,658,039			1,669,039			1,601,678
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND
	SHAREHOLDERS' EQUITY			$	2,383,596		$	2,314,035		$	2,324,356

ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
PRELIMINARY
				Three Months Ended September 30,
				2017			2016
				(in thousands, except per
				share amounts)
REVENUE:
	Tuition		$	366,691		$	399,027
	Other Educational			54,334			50,865
		Total Revenue		421,025			449,892
OPERATING COST AND EXPENSE:
	Cost of Educational Services			248,116			250,673
	Student Services and Administrative Expense			150,480			161,065
	Restructuring Expense			7,993			5,047
		Total Operating Cost and Expense		406,589			416,785
Operating Income				14,436			33,107
INTEREST:
	Interest Income			2,118			1,058
	Interest Expense			(1,916	)		(2,115	)
		Net Interest Income (Expense)		202			(1,057	)
Income Before Income Taxes				14,638			32,050
Income Tax Provision				(1,678	)		(6,901	)
Equity Method Investment Loss				(44	)		-
NET INCOME				12,916			25,149
	Net (Income) Loss Attributable to Noncontrolling Interest			(131	)		3
NET INCOME ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION			$	12,785		$	25,152
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO ADTALEM
	GLOBAL EDUCATION SHAREHOLDERS:
		Basic	$	0.20		$	0.40
		Diluted	$	0.20		$	0.39

ADTALEM GLOBAL EDUCATION INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
PRELIMINARY
					Three Months Ended September 30,
					2017			2016
					(in thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
	Net Income			$	12,916		$	25,149
	Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
		Stock-Based Compensation Expense			4,985			5,750
		Depreciation			16,972			17,476
		Amortization			2,673			3,439
		Provision for Refunds and Uncollectible Accounts			21,300			22,481
		Deferred Income Taxes			2,406			3,328
		Loss on Disposals, Accelerated Depreciation and Adjustments to Land, Building and Equipment			11,307			418
		Changes in Assets and Liabilities, Net of Effects from Acquisition of Components:
			Accounts Receivable		(33,895	)		(45,280	)
			Prepaid Expenses and Other		(21,661	)		(6,017	)
			Accounts Payable		9,107			(3,717	)
			Accrued Salaries, Wages, Benefits and Expenses		(39,451	)		(33,617	)
			Deferred Revenue		103,678			109,348
	NET CASH PROVIDED BY OPERATING ACTIVITIES				90,337			98,758
CASH FLOWS FROM INVESTING ACTIVITIES:
	Capital Expenditures				(13,895	)		(11,318	)
	Payment for Purchase of Businesses, Net of Cash Acquired				-			(331,070	)
	Marketable Securities Purchased				(13	)		(10	)
	NET CASH USED IN INVESTING ACTIVITIES				(13,908	)		(342,398	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from Exercise of Stock Options				1,884			6,350
	Employee Taxes Paid on Withholding Shares				(3,486	)		(2,378	)
	Proceeds from Stock Issued Under Colleague Stock Purchase Plan				195			211
	Repurchase of Common Stock for Treasury				(50,375	)		(8,255	)
	Payments of Seller Financed Obligations				(6,315	)		(3,518	)
	Borrowings Under Revolving Credit Facility				76,000			240,000
	Repayments Under Revolving Credit Facility				(66,000	)		(110,000	)
	NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES				(48,097	)		122,410
Effects of Exchange Rate Differences					1,765			695
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH					30,097			(120,535	)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period					251,096			315,347
Cash, Cash Equivalents and Restricted Cash at End of Period				$	281,193		$	194,812

ADTALEM GLOBAL EDUCATION INC.
SEGMENT INFORMATION
(Unaudited)
PRELIMINARY
				Three Months Ended September 30,
									Increase
				2017			2016		(Decrease)
				(in thousands)
REVENUE:
	Medical and Healthcare		$	191,285		$	199,769		(4.2	)%
	Professional Education			40,042			34,730		15.3	%
	Technology and Business			62,439			58,240		7.2	%
	U.S. Traditional Postsecondary			127,881			157,875		(19.0	)%
	Home Office and Other			(622	)		(722	)	13.9	%
		Total Consolidated Revenue		421,025			449,892		(6.4	)%
OPERATING INCOME (LOSS):
	Medical and Healthcare			26,232			43,863		(40.2	)%
	Professional Education			10,507			6,057		73.5	%
	Technology and Business			1,861			(1,976	)	NM
	U.S. Traditional Postsecondary			(20,203	)		(10,006	)	(101.9	)%
	Home Office and Other			(3,961	)		(4,831	)	18.0	%
	Total Consolidated Operating Income		$	14,436		$	33,107		(56.4	)%

NON-GAAP INFORMATION

During the first quarter of fiscal year 2018, Adtalem recorded special items related to the following: (i) Restructuring charges primarily related to workforce reductions at DeVry University which is part of the U.S. Traditional Postsecondary segment and Adtalem's home office (not related to any segment) in order to align its cost structure with enrollments. During the first quarter of fiscal year 2017, Adtalem recorded special items related to the following: (i) Restructuring charges primarily related to real estate consolidations at DeVry University and Carrington College ("Carrington"), which are part of the U.S. Traditional Postsecondary segment, and Adtalem's home office in order to align its cost structure with enrollments. The following tables illustrate the effects of the special items on Adtalem’s operating income and net income. Management believes that the non-GAAP disclosure of operating income and net income excluding these special items provides investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations and is useful for period-over-period comparisons of such operations given the special nature of the restructuring charges. Adtalem 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, Adtalem’s reported results prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The following tables reconcile these non-GAAP measures to the most directly comparable GAAP information (in thousands):

			Three Months Ended September 30,
								Increase
			2017			2016		(Decrease)
Medical and Healthcare Operating Income		$	26,232		$	43,863		(40.2	)%
	Restructuring Expense		112			-		NM
Medical and Healthcare Operating Income Excluding Special Items		$	26,344		$	43,863		(39.9	)%
U.S. Traditional Postsecondary Operating Loss		$	(20,203	)	$	(10,006	)	(101.9	)%
	Restructuring Expense		6,856			3,066		123.6	%
U.S. Traditional Postsecondary Operating Loss Excluding Special Items		$	(13,347	)	$	(6,940	)	(92.3	)%
Home Office and Other Operating Loss		$	(3,961	)	$	(4,831	)	18.0	%
	Restructuring Expense		1,025			1,981		(48.3	)%
Home Office and Other Operating Loss Excluding Special Items		$	(2,936	)	$	(2,850	)	(3.0	)%

ADTALEM GLOBAL EDUCATON INC.
NON-GAAP EARNINGS DISCLOSURE
(Unaudited)
PRELIMINARY
			Three Months Ended September 30,
			2017			2016
			(in thousands, except per
			share amounts)
Net Income		$	12,785		$	25,152
	Earnings per Share (diluted)	$	0.20		$	0.39
Restructuring Expense		$	7,993		$	5,047
	Effect on Earnings per Share (diluted)	$	0.13		$	0.08
Income Tax Impact on Non-GAAP Adjustments		$	(1,864	)	$	(1,434	)
	Effect on Earnings per Share (diluted)	$	(0.03	)	$	(0.02	)
Net Income Excluding Special Items, net of tax		$	18,914		$	28,765
	Earnings per Share Excluding Special Items (diluted)	$	0.30		$	0.45
Shares used in EPS calculation			63,432			63,896

CONTACT:
Adtalem Global Education
Investor Contact:
Joan Walter
Joan.Walter@Adtalem.com
630-353-3800
or
Media Contact:
Ernie Gibble
Ernie.Gibble@Adtalem.com
630-353-9920