Exhibit 99.1
DeVry Inc. Announces Strong Fiscal 2008 First-Quarter Results
Increased revenue and operating leverage drive significant
earnings growth during the quarter
OAKBROOK TERRACE, Ill.--(BUSINESS WIRE)--Oct. 25, 2007--DeVry Inc.
(NYSE:DV), a global provider of educational services, reported
financial results for the fiscal 2008 first quarter and September 2007
enrollment at Ross University and Keller Graduate School of
Management.
Revenues in the first quarter increased 14.2 percent to $250.3
million, compared with $219.2 million for the same quarter one year
ago. Net income for the first quarter was $26.8 million, or $0.37 per
diluted share, compared to $20.9 million, or $0.29 per diluted share
last year.
Net income in the first quarter of fiscal 2008 includes the up
front loss of $2.3 million, net of tax, or $0.03 per share, from the
sale/leaseback transactions at Phoenix, Seattle, and Alpharetta, Ga.,
while last year's results included the gain from the West Hills
facility sale, which was $11.8 million, net of tax, or $0.16 per
share. Excluding these discrete items from both years, net income for
the first quarter totaled $29.1 million in fiscal 2008 versus $9.1
million in fiscal 2007, an increase of 221 percent, while earnings per
share totaled $0.40 in fiscal 2008 versus $0.13 in fiscal 2007, an
increase of 208 percent. Preliminary operating segment results are
included in the financial statements in today's announcement.
"The strong earnings results during the first quarter were driven
by double-digit revenue growth across all three of our operating
segments, combined with the operating leverage we achieved from our
cost management focus and the impact of our real estate optimization
plan," said Daniel Hamburger, DeVry's president and chief executive
officer. "While we expect to achieve further operating leverage in the
coming quarters, we anticipate higher levels of spending on
facilities, personnel and systems infrastructure to support long-term
growth."
During the first quarter, DeVry University opened new locations in
Nashville, Tenn., Detroit, and Bakersfield, Calif.
For the September 2007 session, the total number of coursetakers
at DeVry University's Keller Graduate School of Management (KGSM)
reached a record high of 15,857 coursetakers compared to 14,069
coursetakers in the September 2006 session, an increase of 12.7
percent. Fall 2007 enrollment results for DeVry University and the
November session at KGSM will be reported December 6.
The number of new students enrolled at Ross University for the
September 2007 term was 572 compared to 628 in the previous year, a
decrease of 8.9 percent. The decrease is related to a higher number of
transfer students last year along with near term capacity constraints
during Ross' peak September enrollment period. The total number of
students enrolled for the same period increased 4.3 percent to 3,885,
compared to 3,724 last year. Ross University continues to make
investments in faculty, classrooms, laboratories, and student housing
to respond to capacity constraints and continued strong student demand
for medical and veterinary medical education.
During the first quarter of fiscal 2008, DeVry repurchased
approximately 155,000 shares of its common stock at cost of
approximately $5.4 million. To date, approximately 510,500 shares of
DeVry stock have been purchased on the open market as part of this
program for a total of $15.9 million at an average cost of $31.22 per
share.
Recently, DeVry signed an agreement to acquire Advanced Academics
Inc. (AAI), a leading provider of online secondary education. AAI
supplements traditional classroom programs through online course
instruction using highly qualified teachers and a proprietary
technology platform specifically designed for secondary education. The
acquisition is an investment in a high growth market and consistent
with DeVry's strategy to aggressively grow online and to diversify its
program offerings.
DeVry Inc. will hold a conference call to discuss its fiscal 2008
first-quarter results on October 25, 2007, at 3:30 p.m. Central Time
(4:30 p.m. Eastern Time). The conference call will be led by Daniel
Hamburger, president and chief executive officer, and Rick Gunst,
chief financial officer.
For those wishing to participate by telephone, dial 866-203-3206
(domestic) or 617-213-8848 (international). DeVry Inc. will also
broadcast the conference call live via the Internet. Interested
parties may access the Webcast through the Investor Relations section
of the company's Web site, or
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=93880&
eventID=1425760. (Due to its length, this URL may need to be
copied/pasted into your Internet browser's address field. Remove the
extra space if one exists.) Please access the Web site at least 15
minutes prior to the start of the call to register, download and
install any necessary audio software.
The company will archive a telephone replay of the call until
November 8, 2007. To access the replay, dial 888-286-8010 (domestic)
or 617-801-6888 (international), passcode 28771493. To access the
Webcast replay, please visit the company's Web site, or
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=93880&
eventID=1425760. (Due to its length, this URL may need to be
copied/pasted into your Internet browser's address field. Remove the
extra space if one exists.)
About DeVry Inc.
DeVry Inc. (NYSE:DV) is the parent organization of DeVry
University, Ross University, Chamberlain College of Nursing and Becker
Professional Review. DeVry University, which includes Keller Graduate
School of Management, offers associate, bachelor's and master's degree
programs in technology, healthcare technology, business and
management. Ross University offers doctoral degree programs through
its schools of Medicine and Veterinary Medicine. Chamberlain College
of Nursing offers associate and bachelor's degree programs in nursing.
Becker Professional Review, which includes Becker CPA Review and
Stalla Review for the CFA Exams, provides professional education and
exam review for accounting and finance professionals. For more
information, visit http://www.devryinc.com.
Selected Operating Data (in thousands, except per share data)
- ----------------------------------------------------------------------
First Quarter
FY2008 FY2007
-------------------------
Revenues $250,318 $219,215
Net Income $26,835 $20,920
Earnings per Share (diluted) $0.37 $0.29
Number of common shares (diluted) 71,947 71,029
Use of Non-GAAP Financial Information and Supplemental
Reconciliation Schedule
The following table illustrates the effects of the gain/loss on
the sale of facilities on the company's earnings. The non-GAAP
disclosure of earnings is not preferable to GAAP net income but is
shown as a supplement to such disclosure for comparability to the
year-ago quarter's earnings (in thousands, except per share data):
First Quarter
FY2008 FY2007
-------------------------
Net Income $26,835 $20,920
Earnings per Share (diluted) $0.37 $0.29
(Loss)/Gain on Facility Sales (net of tax) $(2,279) $11,840
Earnings per Share (diluted) $(0.03) $0.16
Net Income Excluding the (Loss)/Gain on
Facility Sales $29,114 $9,080
Earnings per Share (diluted) $0.40 $0.13
September 2007 Enrollment Results
- ----------------------------------------------------------------------
Keller Graduate School of September September Increase
Management 2007 2006 (Decrease)
Total coursetakers(1)
(onsite/online) 15,857 14,069 12.7 %
Ross University
New students 572 628 (8.9)%
Total students 3,885 3,724 4.3%
Percent Average
Employment Statistics Period Employed(2) Salary
- ------------------------
DeVry University
(Undergraduate) Jun 06-Oct 06-Feb 07 92.6 $41,898
(1) The term "coursetaker" refers to the number of courses taken
by a student. Thus one student taking two courses is counted as two
coursetakers.
(2) Graduates who actively pursued employment or who were already
employed when they graduated and held positions in their chosen fields
within six months of graduation.
Supplemental Company Data:
Chart 1- Real Estate Optimization Strategy
Selected examples of DeVry's recent real estate optimization
efforts.
Date Site Actions Impact
8/06 Philadelphia Excess parking Proceeds of $1 million
9/06 West Hills Facility sale Proceeds of $36 million
9/06 DuPage Co-location of $360,000 annualized
academics savings
9/06 Phoenix Co-location of online $160,000 annualized
recruitment savings
3/07 Columbus Co-location of $250,000 annualized
Chamberlain savings
5/07 Calgary Sublease excess space $700,000 annualized
savings
5/07 Pomona Excess parking $190,000 annualized
savings
7/07 Dallas Leased 60% of existing $900,000 annualized
space savings
9/07 Alpharetta Sale/leaseback $200,000 annualized
savings
9/07 Phoenix- Sale/leaseback 60% of Proceeds of $28.4 million;
Seattle space $1 million annualized
savings
Certain statements contained in this release concerning DeVry's
future performance, including those statements concerning DeVry's
expectations or plans, may constitute forward-looking statements
subject to the Safe Harbor Provision of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
generally can be identified by phrases such as DeVry Inc. 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 the Company's most recent
Annual Report on Form 10-K for the year ending June 30, 2007 and filed
with the Securities and Exchange Commission on August 24, 2007.
DEVRY INC.
CONSOLIDATED BALANCE SHEETS
- ----------------------------------------------------------------------
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
September 30, June 30, September 30,
2007 2007 2006
------------- ------------- -------------
ASSETS
- ----------------------------
Current Assets
--------------------------
Cash and Cash
Equivalents $150,011 $129,155 $168,646
Marketable Securities 72,745 - -
Restricted Cash 21,218 14,483 30,198
Accounts Receivable, Net 75,790 43,084 76,803
Inventories 113 141 129
Deferred Income Taxes,
Net 15,491 13,915 15,485
Prepaid Expenses and
Other 18,361 18,207 22,463
------------- ------------- -------------
Total Current Assets 353,729 218,985 313,724
------------- ------------- -------------
Land, Buildings and
Equipment
--------------------------
Land 51,707 60,570 61,642
Buildings 201,884 218,836 209,668
Equipment 266,677 260,847 248,476
Construction In Progress 5,038 15,816 12,278
------------- ------------- -------------
525,306 556,069 532,064
Accumulated Depreciation
and Amortization (292,442) (296,742) (274,823)
------------- ------------- -------------
Land, Buildings and
Equipment, Net 232,864 259,327 257,241
------------- ------------- -------------
Other Assets
--------------------------
Intangible Assets, Net 55,874 56,920 61,955
Goodwill 291,113 291,113 291,113
Perkins Program Fund,
Net 13,450 13,450 13,450
Other Assets 5,510 4,318 2,639
------------- ------------- -------------
Total Other Assets 365,947 365,801 369,157
------------- ------------- -------------
TOTAL ASSETS $952,540 $844,113 $940,122
============= ============= =============
DEVRY INC.
CONSOLIDATED BALANCE SHEETS
- ----------------------------------------------------------------------
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
September 30, June 30, September 30,
2007 2007 2006
------------- ------------- -------------
LIABILITIES
- ----------------------------
Current Liabilities
--------------------------
Current Portion of Debt $- $- $75,000
Accounts Payable 32,799 34,295 34,313
Accrued Salaries, Wages
and Benefits 35,392 47,093 34,917
Accrued Expenses 41,491 32,737 45,268
Advance Tuition Payments 14,828 14,402 18,699
Deferred Tuition Revenue 122,415 37,348 103,745
------------- ------------- -------------
Total Current
Liabilities 246,925 165,875 311,942
------------- ------------- -------------
Non-Current Liabilities
--------------------------
Revolving Loan - - 10,000
Deferred Income Taxes,
Net 8,689 18,343 10,705
Accrued Postemployment
Agreements 4,661 4,901 5,565
Deferred Rent and Other 26,289 13,028 14,519
------------- ------------- -------------
Total Non-current
Liabilities 39,639 36,272 40,789
------------- ------------- -------------
TOTAL LIABILITIES 286,564 202,147 352,731
------------- ------------- -------------
SHAREHOLDERS' EQUITY
- ----------------------------
Common Stock, $0.01 par
value, 200,000,000 Shares
Authorized; 71,098,000,
71,131,000 and 70,823,000
Shares issued and
outstanding at September
30, 2007, June 30, 2007
and September 30, 2006,
respectively. 717 716 709
Additional Paid-in Capital 147,511 143,580 126,186
Retained Earnings 536,933 510,979 462,813
Accumulated Other
Comprehensive Loss (1,550) (918) (423)
Treasury Stock, at Cost
(589,393, 436,786 and
91,927 Shares,
Respectively) (17,635) (12,391) (1,894)
------------- ------------- -------------
TOTAL SHAREHOLDERS' EQUITY 665,976 641,966 587,391
------------- ------------- -------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $952,540 $844,113 $940,122
============= ============= =============
DEVRY INC.
CONSOLIDATED STATEMENTS OF INCOME
- ----------------------------------------------------------------------
(Dollars in Thousands Except for Per Share Amounts)
PRELIMINARY
For The Quarter
Ended September 30,
-------------------------
2007 2006
------------ ------------
REVENUES:
Tuition $230,221 $202,633
Other Educational 20,097 16,582
------------ ------------
Total Revenues 250,318 219,215
------------ ------------
OPERATING COSTS AND EXPENSES:
Cost of Educational Services 121,028 120,304
Loss (Gain) on Sale of Assets 3,743 (19,855)
Student Services and Administrative
Expense 91,645 85,798
------------ ------------
Total Operating Costs and Expenses 216,416 186,247
------------ ------------
Operating Income 33,902 32,968
INTEREST:
Interest Income 2,407 1,438
Interest Expense (221) (2,169)
------------ ------------
Net Interest Income (Expense) 2,186 (731)
------------ ------------
Income Before Income Taxes 36,088 32,237
Income Tax Provision 9,253 11,317
------------ ------------
NET INCOME $26,835 $20,920
============ ============
EARNINGS PER COMMON SHARE:
Basic $0.38 $0.30
============ ============
Diluted $0.37 $0.29
============ ============
DEVRY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
- ----------------------------------------------------------------------
PRELIMINARY
For The Quarter
Ended September 30,
-------------------------
2007 2006
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $26,835 $20,920
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Stock-Based Compensation Charge 1,514 978
Depreciation 8,405 8,392
Amortization 1,081 2,200
Provision for Refunds and
Uncollectible Accounts 14,725 13,308
Deferred Income Taxes (6,785) (3,652)
Loss (Gain) on Disposals of Land,
Buildings and Equipment 3,735 (19,724)
Changes in Assets and Liabilities, Net
of Effects from Acquisitions of
Businesses:
Restricted Cash (6,729) (9,566)
Accounts Receivable (47,401) (43,544)
Inventories 37 4
Prepaid Expenses And Other 704 (4,837)
Accounts Payable (1,509) (5,364)
Accrued Salaries, Wages, Benefits
and Expenses (60) 16,946
Advance Tuition Payments 390 2,115
Deferred Tuition Revenue 85,067 71,976
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 80,009 50,152
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (18,140) (7,761)
Net Proceeds from Sales of Land, Building
and Equipment 38,528 34,778
Marketable Securities Purchased (82,738) -
Marketable Securities-Maturities and Sales 10,000 -
------------ ------------
NET CASH (USED IN) PROVIDED BY INVESTING
ACTIVITIES (52,350) 27,017
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 2,394 658
Proceeds from Stock Issued Under Employee
Stock Purchase Plan 182 227
Repurchase of Common Stock for Treasury (5,402) -
Cash Dividend Paid (3,557) -
Excess Tax Benefit from Stock-Based
Payments 167 8
Borrowings from Revolving Credit Facility 25,000 -
Repayments Under Revolving Credit Facility (25,000) -
Repayments Under Senior Notes - (40,000)
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (6,216) (39,107)
------------ ------------
Effects of Exchange Rate Differences (587) 1
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 20,856 38,063
Cash and Cash Equivalents at Beginning of
Period 129,155 130,583
------------ ------------
Cash and Cash Equivalents at End of Period $150,011 $168,646
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash Paid During the Period for:
Interest $177 $2,150
Income Taxes, Net 6,392 225
DEVRY INC.
SEGMENT INFORMATION
- ----------------------------------------------------------------------
(Dollars in Thousands)
PRELIMINARY
For The Quarter
Ended September 30,
-----------------------------------------
Increase
2007 2006 (Decrease)
------------- ------------- -------------
REVENUES:
DeVry University $194,765 $172,572 12.9%
Professional and Training 18,313 16,132 13.5%
Medical & Healthcare 37,240 30,511 22.1%
------------- -------------
Total Consolidated
Revenues 250,318 219,215 14.2%
------------- -------------
OPERATING INCOME:
DeVry University 15,561 18,298 -15.0%
Professional and Training 8,358 6,814 22.7%
Medical & Healthcare 11,601 10,583 9.6%
Reconciling Items:
Amortization Expense (1,046) (1,807) -42.1%
Depreciation and Other (572) (920) -37.8%
------------- -------------
Total Consolidated
Operating Income 33,902 32,968 2.8%
INTEREST:
Interest Income 2,407 1,438 67.4%
Interest Expense (221) (2,169) -89.8%
------------- -------------
Net Interest Income
(Expense) 2,186 (731) $2,917
------------- -------------
Total Consolidated
Income before Income
Taxes $36,088 $32,237 11.9%
------------- -------------
The following table displays the discrete income statement items
related to the gains and losses on the sales of operating facilities
as a separate component of operating income and income before income
taxes. This non-GAAP disclosure of operating results is not preferable
to GAAP disclosure but is shown as a supplement to such disclosure to
aid comparability between the quarters.
For The Quarter
Ended September 30,
----------------------------------------
Increase
2007 2006 (Decrease)
------------ ------------- -------------
DeVry University Operating
Income $15,561 $18,298 -15.0%
Loss (Gain) on Sale of Assets 3,743 (19,855) NM
------------ -------------
DeVry University Operating
Income (Loss)
Excluding Gain/Loss on
Sale of Assets $19,304 $(1,557) $20,861
------------ -------------
CONTACT: DeVry Inc.
Investor Contact:
Joan Bates, 630-574-1949
jbates@devry.com
or
Media Contact:
David Gutierrez, 312-780-7204
dutierrez@dresnerco.com