Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 6, 2024

ADTALEM GLOBAL EDUCATION INC.

(Exact name of registrant as specified in its charter)


Delaware	001-13988	36-3150143
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

500 West Monroe Chicago, IL		60661
(Address of principal executive offices)		(Zip Code)

(312) (651-1400)

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock $0.01 Par Value	ATGE	New York Stock Exchange
Common Stock $0.01 Par Value	ATGE	Chicago Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On August 6, 2024, Adtalem Global Education Inc. (“Adtalem”) issued a press release announcing its fourth quarter and full year fiscal 2024 academic, operating and financial results. The press release is attached hereto as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Adtalem under the Securities Act of 1933, as amended, or the Exchange Act.

Cautionary Disclosure Regarding Forward-Looking Statements

Certain statements contained in this Form 8-K and related press release are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and our other filings with the SEC. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.

Item 9.01 Financial Statements and Exhibits

99.1		Press Release of Adtalem Global Education Inc., dated August 6, 2024.
104		Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ADTALEM GLOBAL EDUCATION INC.

	By:	/s/ Robert J. Phelan
		Robert J. Phelan
		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

Date: August 6, 2024

Exhibit 99.1

	News Release

	Investor Contact Jay Spitzer Investor.Relations@Adtalem.com +1 312-906-6600

	Media Contact
	Britt Mitchell
	AdtalemMedia@Adtalem.com
	+1 872-270-0301

Adtalem Global Education Announces Strong Fiscal Year 2024 Performance;

Initiates Fiscal Year 2025 Guidance Exceeding June 2023 Investor Day Projections

Total enrollment up 10.0% YoY for fourth quarter 2024

Revenue up 9.2% YoY for fiscal year 2024

Fiscal year 2024 diluted earnings per share $3.39; Adjusted EPS $5.01, growth of 19.0% YoY

Fourth quarter and fiscal year highlights

●

Revenue $409.9 million, up 12.4% year-over-year for the fourth quarter, and fiscal year revenue $1,584.7 million, up 9.2% year-over-year

●

Total student enrollment 83,321, up 10.0% year-over-year for the fourth quarter

●

Chamberlain University sixth straight quarter of total enrollment growth, up 10.4% year-over-year

●

Walden University fourth straight quarter of total enrollment growth, up 11.3% year-over-year

●

Medical and Veterinary segment third straight enrollment period of sequentially improved year-over-year total enrollment trends

●

Execution against Growth with Purpose strategy, fiscal year GAAP net income $136.8 million and fiscal year adjusted EBITDA $377.5 million, up 9.9% year-over-year

Fiscal year capital allocation

●

Repurchased $261 million of shares, $212 million remaining under $300 million Board authorized share repurchase program through January 2027

●

Repaid $50 million of outstanding Term Loan B balance on Jan. 26, 2024; remaining $253 million Term Loan B balance repriced, reducing interest rate by 50 bps

●

Net leverage 1.2x as of June 30, 2024

Fiscal year 2025 guidance

●

Revenue $1,660 million to $1,700 million

●

Adjusted earnings per share $5.60 to $5.85

CHICAGO – Aug. 6, 2024 – Adtalem Global Education Inc. (NYSE: ATGE), the leading healthcare educator in the United States, today reported fourth quarter and fiscal year 2024 results (ended June 30, 2024) demonstrating disciplined operational performance with total enrollment growth resulting in strong earnings and robust cash generation.

“This year was a fundamental chapter in Adtalem's journey, further solidifying our market leading position in healthcare education. Through the rigorous implementation of our Growth with Purpose strategy, we have significantly broadened our impact culminating in 10% enrollment growth during the fourth quarter. This trajectory is a testament to our unwavering commitment to excellence,” said Steve Beard, president and chief executive officer, Adtalem Global Education. “We are confident that fiscal year 2025 will set new benchmarks for Adtalem, reflected in the forward-looking guidance we have established today.”

Financial Highlights

Selected financial data for the three months ended June 30, 2024:

●

Revenue of $409.9 million increased 12.4% compared with the prior year.

●

Operating income was $68.5 million, compared with $39.6 million in the prior year; adjusted operating income was $80.1 million, compared with $69.9 million in the prior year.

●

Net income was $49.4 million, compared with $22.2 million in the prior year; adjusted net income was $52.8 million, compared with $45.3 million in the prior year.

●

Diluted earnings per share was $1.28, compared with $0.50 in the prior year; adjusted earnings per share was $1.37, compared with $1.03 in the prior year.

●

Adjusted EBITDA was $97.4 million, compared with $83.3 million in the prior year; adjusted EBITDA margin was 23.8%, compared with 22.8% in the prior year.

Selected financial data for the fiscal year ended June 30, 2024:

●

Revenue of $1,584.7 million increased 9.2% compared with the prior year.

●

Operating income was $217.1 million, compared with $168.2 million in the prior year; adjusted operating income was $308.8 million, compared with $287.6 million in the prior year.

●

Net income was $136.8 million, compared with $93.4 million in the prior year; adjusted net income was $201.8 million, compared with $192.2 million in the prior year.

●

Diluted earnings per share was $3.39, compared with $2.05 in the prior year; adjusted earnings per share was $5.01, compared with $4.21 in the prior year.

●

Adjusted EBITDA was $377.5 million, compared with $343.4 million in the prior year; adjusted EBITDA margin was 23.8%, compared with 23.7% in the prior year.

Business Highlights

●

Today, we announced the intention to expand into the Kansas City market with our 24th Chamberlain location designed to accommodate approximately 550 students, poised to address provider shortages in the area.

●

In July, Chamberlain welcomed students at its newly relocated Phoenix campus, featuring a modernized learning environment and expanded SIMCARE CENTER^TM, with location capacity of approximately 1,100 students. This hybrid campus is built to house our second Physician Assistant program location.

●

Chamberlain expanded its specialized nursing education Practice Ready. Specialty Focused.™ (PRSF) model through a partnership with the American Association of Critical-Care Nurses (AACN), offering an in-depth introduction to caring for acutely and critically ill patients and their families. The AACN offering joins other specializations in the PRSF model, including emergency nursing, nephrology, home healthcare and perioperative nursing.

●

Walden launched the first phase of its website redesign in July, offering students simplified navigation, comprehensive program information and admissions resources. The updates lay the foundation for further enhancements to Walden’s digital learning platform, with more planned throughout fiscal year 2025.

●

Adtalem is expanding its community impact in Barbados. Thirty registered Barbadian nurses will have the opportunity to pursue the Nurse Practitioner program at Chamberlain University following the signing of a Memorandum of Understanding (MOU). The MOU launches the first-ever Nurse Practitioners program in Barbados, which will commence in September. The Pan American Health Organization, regional office of the World Health Organization (PAHO/WHO) and Ross University School of Medicine have forged an alliance to strengthen health systems in Barbados and the Eastern Caribbean, enhancing the health workforce’s capacity to handle emergencies, disasters and non-communicable diseases.

Segment Highlights

Chamberlain

$in millions	Three Months Ended June 30,					Year Ended June 30,
	2024		2023		% Change	2024		2023		% Change
Revenue	$	167.0	$	144.5	15.6%	$	633.5	$	571.0	10.9%
Operating Income	$	40.5	$	35.7	13.5%	$	137.8	$	134.7	2.3%
Adj. Operating Income	$	40.5	$	35.7	13.5%	$	137.8	$	135.5	1.7%
Adj. EBITDA	$	47.3	$	41.1	15.1%	$	166.2	$	157.5	5.5%
Total Students (1)		36,750		33,284	10.4%

●

Total student enrollment increased 10.4% compared with the prior year, driven by continued growth in pre-licensure and post-licensure nursing programs.

Walden


$in millions	Three Months Ended June 30,					Year Ended June 30,
	2024		2023		% Change	2024		2023		% Change
Revenue	$	156.3	$	138.0	13.3%	$	595.3	$	533.7	11.5%
Operating Income	$	30.1	$	9.8	206.4%	$	77.2	$	35.9	115.1%
Adj. Operating Income	$	37.4	$	32.2	16.2%	$	130.5	$	110.4	18.3%
Adj. EBITDA	$	41.1	$	35.3	16.6%	$	146.8	$	123.7	18.7%
Total Students (1)		41,845		37,582	11.3%

●

Total student enrollment increased 11.3% compared with prior year, driven by growth in healthcare and non-healthcare programs.

Medical and Veterinary


$in millions	Three Months Ended June 30,					Year Ended June 30,
	2024		2023		% Change	2024		2023		% Change
Revenue	$	86.6	$	82.1	5.4%	$	355.8	$	346.1	2.8%
Operating Income	$	11.9	$	10.5	13.8%	$	71.1	$	59.6	19.1%
Adj. Operating Income	$	12.0	$	10.8	10.7%	$	71.5	$	67.3	6.2%
Adj. EBITDA	$	16.5	$	14.7	12.3%	$	88.9	$	82.8	7.3%
Total Students (1)		4,726		4,869	(2.9)%

●

Total student enrollment decreased 2.9% compared with the prior year, driven by declines at medical.

Fiscal Year 2025 Outlook

Adtalem initiates guidance for fiscal year 2025, revenue in the range of $1,660 million to $1,700 million, approximately 5% to 7.5% growth year-over-year. Adjusted earnings per share to be in the range of $5.60 to $5.85, approximately 12% to 17% growth year-over-year.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its fiscal 2024 fourth quarter and fiscal year results today at 4:30 p.m. CT (5:30 p.m. ET).

The call can be accessed by dialing +1 877-407-6184 (U.S. participants) or +1 201-389-0877 (international participants) and stating “Adtalem earnings call” or by using conference ID: 13747739. The call will be simulcast through the Adtalem investor relations website at: https://investors.adtalem.com.

Adtalem will archive a replay of the call for 30 days. To access the replay, dial +1 877-660-6853 (U.S.) or +1 201-612-7415 (international), conference ID: 13747739, or visit the Adtalem investor relations website.

About Adtalem Global Education

Adtalem Global Education is the leading provider of healthcare education in the U.S., shaping the future of healthcare by preparing a diverse workforce with high-quality academic programs. We innovate education pathways, align with industry needs and empower individuals to reach their full potential. Our commitment to excellence and inclusivity is reflected in our expansive network of institutions, serving over 80,000 students and supported by a strong community of over 300,000 alumni and nearly 10,000 dedicated employees. Discover more Adtalem.com for more information and follow us on LinkedIn, Instagram and Facebook.

Cautionary Disclosure Regarding Forward-Looking Statements

Certain statements contained in this release are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and our other filings with the SEC. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of special items that may be incurred in the future, although these special items could be material to Adtalem's results in accordance with GAAP.

¹Represents total students attending sessions during each institution’s most recent enrollment period in Q4 FY 2024 and Q4 FY 2023.

###

Adtalem Global Education Inc.

Consolidated Balance Sheets

(unaudited)

(in thousands, except per share data)

	June 30,
	2024		2023
Assets:
Current assets:
Cash and cash equivalents	$	219,306	$	272,194
Restricted cash		1,896		2,881
Accounts and financing receivables, net		126,833		102,749
Prepaid expenses and other current assets		70,050		102,473
Total current assets		418,085		480,297
Noncurrent assets:
Property and equipment, net		248,524		244,649
Operating lease assets		176,755		174,677
Deferred income taxes		49,088		56,694
Intangible assets, net		776,694		812,338
Goodwill		961,262		961,262
Other assets, net		103,184		80,624
Assets held for sale		7,825		—
Total noncurrent assets		2,323,332		2,330,244
Total assets	$	2,741,417	$	2,810,541

Liabilities and shareholders' equity:
Current liabilities:
Accounts payable	$	102,626	$	81,812
Accrued payroll and benefits		71,373		52,041
Accrued liabilities		96,957		105,806
Deferred revenue		185,272		153,871
Current operating lease liabilities		31,429		37,673
Total current liabilities		487,657		431,203
Noncurrent liabilities:
Long-term debt		648,712		695,077
Long-term operating lease liabilities		167,712		163,441
Deferred income taxes		29,526		26,068
Other liabilities		38,675		37,416
Total noncurrent liabilities		884,625		922,002
Total liabilities		1,372,282		1,353,205
Commitments and contingencies
Total shareholders' equity		1,369,135		1,457,336
Total liabilities and shareholders' equity	$	2,741,417	$	2,810,541

Adtalem Global Education Inc.

Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)


	Three Months Ended				Year Ended
	June 30,				June 30,
	2024		2023		2024		2023

Revenue	$	409,907	$	364,641	$	1,584,652	$	1,450,826
Operating cost and expense:
Cost of educational services		182,540		163,718		698,548		648,486
Student services and administrative expense		154,597		153,296		632,965		586,009
Restructuring expense		653		1,111		1,870		18,817
Business acquisition and integration expense		3,594		6,959		34,215		42,661
Gain on sale of assets		—		—		—		(13,317)
Total operating cost and expense		341,384		325,084		1,367,598		1,282,656
Operating income		68,523		39,557		217,054		168,170
Interest expense		(14,749)		(15,294)		(63,659)		(63,100)
Other income, net		1,894		3,664		10,542		6,965
Income from continuing operations before income taxes		55,668		27,927		163,937		112,035
Provision for income taxes		(5,068)		(4,377)		(26,224)		(10,283)
Income from continuing operations		50,600		23,550		137,713		101,752
Discontinued operations:
Loss from discontinued operations before income taxes		(1,091)		(1,730)		(762)		(8,464)
Loss on disposal of discontinued operations before income taxes		—		—		—		(3,576)
(Provision for) benefit from income taxes		(90)		424		(174)		3,646
Loss from discontinued operations		(1,181)		(1,306)		(936)		(8,394)
Net income	$	49,419	$	22,244	$	136,777	$	93,358

Earnings (loss) per share:
Basic:
Continuing operations	$	1.34	$	0.54	$	3.49	$	2.27
Discontinued operations	$	(0.03)	$	(0.03)	$	(0.02)	$	(0.19)
Total basic earnings per share	$	1.31	$	0.51	$	3.47	$	2.08
Diluted:
Continuing operations	$	1.31	$	0.53	$	3.42	$	2.23
Discontinued operations	$	(0.03)	$	(0.03)	$	(0.02)	$	(0.18)
Total diluted earnings per share	$	1.28	$	0.50	$	3.39	$	2.05

Weighted-average shares outstanding:
Basic shares		37,642		43,292		39,413		44,781
Diluted shares		38,595		44,129		40,307		45,600

Adtalem Global Education Inc.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Year Ended June 30,
	2024		2023
Operating activities:
Net income	$	136,777	$	93,358
Loss from discontinued operations		936		8,394
Income from continuing operations		137,713		101,752
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation		25,947		14,299
Amortization and impairments to operating lease assets		32,641		48,470
Depreciation		39,676		41,376
Amortization of acquired intangible assets		35,644		61,239
Amortization and write-off of debt discount and issuance costs		5,663		9,129
Provision for bad debts		53,175		32,999
Deferred income taxes		11,073		(5,087)
Loss on disposals, accelerated depreciation, and impairments to property and equipment		466		3,999
Gain on extinguishment of debt		—		(71)
(Gain) loss on investments		(1,365)		3,689
Gain on sale of assets		—		(13,317)
Unrealized loss on assets held for sale		647		—
Changes in assets and liabilities:
Accounts and financing receivables		(76,355)		(56,309)
Prepaid expenses and other current assets		(8,781)		9,324
Cloud computing implementation assets		(27,154)		(13,873)
Accounts payable		18,330		24,744
Accrued payroll and benefits		19,422		(15,683)
Accrued liabilities		27,422		241
Deferred revenue		40,622		5,807
Operating lease liabilities		(36,692)		(59,188)
Other assets and liabilities		(9,727)		1,150
Net cash provided by operating activities-continuing operations		288,367		194,690
Net cash provided by (used in) operating activities-discontinued operations		7,408		(2,776)
Net cash provided by operating activities		295,775		191,914
Investing activities:
Capital expenditures		(48,893)		(26,014)
Proceeds from sales of marketable securities		1,732		7,635
Purchases of marketable securities		(689)		(1,508)
Proceeds from note receivable related to property sold		—		46,800
Net cash (used in) provided by investing activities-continuing operations		(47,850)		26,913
Payment for working capital adjustment for sale of business		—		(3,174)
Net cash (used in) provided by investing activities		(47,850)		23,739
Financing activities:
Proceeds from exercise of stock options		17,089		2,625
Employee taxes paid on withholding shares		(7,731)		(4,592)
Proceeds from stock issued under Colleague Stock Purchase Plan		810		608
Repurchases of common stock for treasury		(261,966)		(123,133)
Payment on equity forward contract		—		(13,162)
Proceeds from issuance of long-term debt		1,896		—
Repayments of long-term debt		(51,896)		(150,861)
Net cash used in financing activities		(301,798)		(288,515)
Net decrease in cash, cash equivalents and restricted cash		(53,873)		(72,862)
Cash, cash equivalents and restricted cash at beginning of period		275,075		347,937
Cash, cash equivalents and restricted cash at end of period	$	221,202	$	275,075

Adtalem Global Education Inc.

Segment Information

(unaudited)

(in thousands)


	Three Months Ended							Year Ended
	June 30,							June 30,
					Increase/(Decrease)							Increase/(Decrease)
	2024		2023		$		%	2024		2023		$		%

Revenue:
Chamberlain	$	167,035	$	144,496	$	22,539	15.6%	$	633,522	$	571,034	$	62,488	10.9%
Walden		156,309		138,010		18,299	13.3%		595,332		533,725		61,607	11.5%
Medical and Veterinary		86,563		82,135		4,428	5.4%		355,798		346,067		9,731	2.8%
Total consolidated revenue	$	409,907	$	364,641	$	45,266	12.4%	$	1,584,652	$	1,450,826	$	133,826	9.2%
Operating income (loss):
Chamberlain	$	40,487	$	35,683	$	4,804	13.5%	$	137,800	$	134,685	$	3,115	2.3%
Walden		30,058		9,809		20,249	206.4%		77,179		35,880		41,299	115.1%
Medical and Veterinary		11,923		10,477		1,446	13.8%		71,065		59,649		11,416	19.1%
Home Office		(13,945)		(16,412)		2,467	15.0%		(68,990)		(62,044)		(6,946)	(11.2)%
Total consolidated operating income	$	68,523	$	39,557	$	28,966	73.2%	$	217,054	$	168,170	$	48,884	29.1%

Non-GAAP Financial Measures and Reconciliations

We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial measures used in the subsequent GAAP to non-GAAP reconciliation tables:

Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.

Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.

Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for loss from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, business acquisition and integration expense, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.

Free cash flow (most comparable GAAP measure: net cash provided by operating activities-continuing operations) – Defined as net cash provided by operating activities-continuing operations less capital expenditures.

Net debt – Defined as long-term debt less cash and cash equivalents.

Net leverage – Defined as net debt divided by adjusted EBITDA.

A description of special items in our non-GAAP financial measures described above are as follows:

●

Restructuring expense primarily related to real estate consolidations at Walden, Medical and Veterinary, and Adtalem’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.

●

Business acquisition and integration expense include expenses related to the Walden acquisition and certain costs related to growth transformation initiatives. We do not include normal, recurring, cash operating expenses in our business acquisition and integration expense.

●

Amortization of acquired intangible assets.

●

Amortization of cloud computing implementation assets.

●

Gain on sale of Adtalem’s Chicago, Illinois, campus facility.

●

Write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, reserves related to significant litigation, impairment of an equity investment, loss on assets held for sale related to a fair value write-down on assets, and debt modification costs related to refinancing our Term Loan B loan.

●

Tax benefit due to change in valuation allowance.

●

Tax benefit due to change in unrecognized tax benefits.

●

Loss from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, a loss on sale of ACAMS, Becker, and OCL for working capital adjustments to the initial sales prices and a tax return to provision adjustment, and the earn-outs we received.

Adtalem Global Education Inc.

Non-GAAP Operating Income by Segment

(unaudited)

(in thousands)


	Three Months Ended									Year Ended
	June 30,									June 30,
							Increase/(Decrease)									Increase/(Decrease)
	2024			2023			$		%	2024			2023			$		%
Chamberlain:
Operating income (GAAP)	$	40,487		$	35,683		$	4,804	13.5%	$	137,800		$	134,685		$	3,115	2.3%
Restructuring expense		—			—			—			—			818			(818)
Adjusted operating income (non-GAAP)	$	40,487		$	35,683		$	4,804	13.5%	$	137,800		$	135,503		$	2,297	1.7%
Operating margin (GAAP)		24.2	%		24.7	%					21.8	%		23.6	%
Operating margin (non-GAAP)		24.2	%		24.7	%					21.8	%		23.7	%

Walden:
Operating income (GAAP)	$	30,058		$	9,809		$	20,249	206.4%	$	77,179		$	35,880		$	41,299	115.1%
Restructuring expense		—			71			(71)			(776)			3,245			(4,021)
Amortization of acquired intangible assets		7,348			12,303			(4,955)			35,644			61,239			(25,595)
Litigation reserve		—			10,000			(10,000)			18,500			10,000			8,500
Adjusted operating income (non-GAAP)	$	37,406		$	32,183		$	5,223	16.2%	$	130,547		$	110,364		$	20,183	18.3%
Operating margin (GAAP)		19.2	%		7.1	%					13.0	%		6.7	%
Operating margin (non-GAAP)		23.9	%		23.3	%					21.9	%		20.7	%

Medical and Veterinary:
Operating income (GAAP)	$	11,923		$	10,477		$	1,446	13.8%	$	71,065		$	59,649		$	11,416	19.1%
Restructuring expense		63			353			(290)			442			7,687			(7,245)
Adjusted operating income (non-GAAP)	$	11,986		$	10,830		$	1,156	10.7%	$	71,507		$	67,336		$	4,171	6.2%
Operating margin (GAAP)		13.8	%		12.8	%					20.0	%		17.2	%
Operating margin (non-GAAP)		13.8	%		13.2	%					20.1	%		19.5	%

Home Office:
Operating loss (GAAP)	$	(13,945)		$	(16,412)		$	2,467	15.0%	$	(68,990)		$	(62,044)		$	(6,946)	(11.2)%
Restructuring expense		590			687			(97)			2,204			7,067			(4,863)
Business acquisition and integration expense		3,594			6,959			(3,365)			34,215			42,661			(8,446)
Loss on assets held for sale		—			—			—			647			—			647
Debt modification costs		—			—			—			848			—			848
Gain on sale of assets		—			—			—			—			(13,317)			13,317
Adjusted operating loss (non-GAAP)	$	(9,761)		$	(8,766)		$	(995)	(11.4)%	$	(31,076)		$	(25,633)		$	(5,443)	(21.2)%

Adtalem Global Education:
Operating income (GAAP)	$	68,523		$	39,557		$	28,966	73.2%	$	217,054		$	168,170		$	48,884	29.1%
Restructuring expense		653			1,111			(458)			1,870			18,817			(16,947)
Business acquisition and integration expense		3,594			6,959			(3,365)			34,215			42,661			(8,446)
Amortization of acquired intangible assets		7,348			12,303			(4,955)			35,644			61,239			(25,595)
Litigation reserve		—			10,000			(10,000)			18,500			10,000			8,500
Loss on assets held for sale		—			—			—			647			—			647
Debt modification costs		—			—			—			848			—			848
Gain on sale of assets		—			—			—			—			(13,317)			13,317
Adjusted operating income (non-GAAP)	$	80,118		$	69,930		$	10,188	14.6%	$	308,778		$	287,570		$	21,208	7.4%
Operating margin (GAAP)		16.7	%		10.8	%					13.7	%		11.6	%
Operating margin (non-GAAP)		19.5	%		19.2	%					19.5	%		19.8	%

Adtalem Global Education Inc.

Non-GAAP Adjusted EBITDA by Segment

(unaudited)

(in thousands)


	Three Months Ended									Year Ended
	June 30,									June 30,
							Increase/(Decrease)									Increase/(Decrease)
	2024			2023			$		%	2024			2023			$		%
Chamberlain:
Operating income (GAAP)	$	40,487		$	35,683		$	4,804	13.5%	$	137,800		$	134,685		$	3,115	2.3%
Restructuring expense		—			—			—			—			818			(818)
Depreciation		4,912			4,240			672			18,752			17,175			1,577
Amortization of cloud computing implementation assets		382			39			343			1,332			89			1,243
Stock-based compensation		1,512			1,118			394			8,303			4,719			3,584
Adjusted EBITDA (non-GAAP)	$	47,293		$	41,080		$	6,213	15.1%	$	166,187		$	157,486		$	8,701	5.5%
Adjusted EBITDA margin (non-GAAP)		28.3	%		28.4	%					26.2	%		27.6	%

Walden:
Operating income (GAAP)	$	30,058		$	9,809		$	20,249	206.4%	$	77,179		$	35,880		$	41,299	115.1%
Restructuring expense		—			71			(71)			(776)			3,245			(4,021)
Amortization of acquired intangible assets		7,348			12,303			(4,955)			35,644			61,239			(25,595)
Litigation reserve		—			10,000			(10,000)			18,500			10,000			8,500
Depreciation		1,654			2,157			(503)			7,389			9,419			(2,030)
Amortization of cloud computing implementation assets		385			32			353			1,331			73			1,258
Stock-based compensation		1,703			916			787			7,525			3,861			3,664
Adjusted EBITDA (non-GAAP)	$	41,148		$	35,288		$	5,860	16.6%	$	146,792		$	123,717		$	23,075	18.7%
Adjusted EBITDA margin (non-GAAP)		26.3	%		25.6	%					24.7	%		23.2	%

Medical and Veterinary:
Operating income (GAAP)	$	11,923		$	10,477		$	1,446	13.8%	$	71,065		$	59,649		$	11,416	19.1%
Restructuring expense		63			353			(290)			442			7,687			(7,245)
Depreciation		3,086			3,092			(6)			11,983			12,438			(455)
Amortization of cloud computing implementation assets		138			16			122			469			37			432
Stock-based compensation		1,243			712			531			4,930			3,003			1,927
Adjusted EBITDA (non-GAAP)	$	16,453		$	14,650		$	1,803	12.3%	$	88,889		$	82,814		$	6,075	7.3%
Adjusted EBITDA margin (non-GAAP)		19.0	%		17.8	%					25.0	%		23.9	%

Home Office:
Operating loss (GAAP)	$	(13,945)		$	(16,412)		$	2,467	15.0%	$	(68,990)		$	(62,044)		$	(6,946)	(11.2)%
Restructuring expense		590			687			(97)			2,204			7,067			(4,863)
Business acquisition and integration expense		3,594			6,959			(3,365)			34,215			42,661			(8,446)
Loss on assets held for sale		—			—			—			647			—			647
Debt modification costs		—			—			—			848			—			848
Gain on sale of assets		—			—			—			—			(13,317)			13,317
Depreciation		145			381			(236)			1,552			2,344			(792)
Stock-based compensation		2,084			645			1,439			5,189			2,716			2,473
Adjusted EBITDA (non-GAAP)	$	(7,532)		$	(7,740)		$	208	2.7%	$	(24,335)		$	(20,573)		$	(3,762)	(18.3)%

Adtalem Global Education:
Net income (GAAP)	$	49,419		$	22,244		$	27,175	122.2%	$	136,777		$	93,358		$	43,419	46.5%
Loss from discontinued operations		1,181			1,306			(125)			936			8,394			(7,458)
Interest expense		14,749			15,294			(545)			63,659			63,100			559
Other income, net		(1,894)			(3,664)			1,770			(10,542)			(6,965)			(3,577)
Provision for income taxes		5,068			4,377			691			26,224			10,283			15,941
Operating income (GAAP)		68,523			39,557			28,966			217,054			168,170			48,884
Depreciation and amortization		18,050			22,260			(4,210)			78,452			102,814			(24,362)
Stock-based compensation		6,542			3,391			3,151			25,947			14,299			11,648
Restructuring expense		653			1,111			(458)			1,870			18,817			(16,947)
Business acquisition and integration expense		3,594			6,959			(3,365)			34,215			42,661			(8,446)
Litigation reserve		—			10,000			(10,000)			18,500			10,000			8,500
Loss on assets held for sale		—			—			—			647			—			647
Debt modification costs		—			—			—			848			—			848
Gain on sale of assets		—			—			—			—			(13,317)			13,317
Adjusted EBITDA (non-GAAP)	$	97,362		$	83,278		$	14,084	16.9%	$	377,533		$	343,444		$	34,089	9.9%
Adjusted EBITDA margin (non-GAAP)		23.8	%		22.8	%					23.8	%		23.7	%

Adtalem Global Education Inc.

Non-GAAP Earnings Disclosure

(unaudited)

(in thousands, except per share data)


	Three Months Ended				Year Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net income (GAAP)	$	49,419	$	22,244	$	136,777	$	93,358
Restructuring expense		653		1,111		1,870		18,817
Business acquisition and integration expense		3,594		6,959		34,215		42,661
Amortization of acquired intangible assets		7,348		12,303		35,644		61,239
Gain on sale of assets		—		—		—		(13,317)
Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and debt modification costs		—		10,000		21,108		19,226
Tax benefit due to change in valuation allowance		—		—		—		(6,184)
Tax benefit due to change in unrecognized tax benefits		(5,657)		—		(5,657)		—
Income tax impact on non-GAAP adjustments ⁽¹⁾		(3,749)		(8,656)		(23,104)		(31,997)
Loss from discontinued operations		1,181		1,306		936		8,394
Adjusted net income (non-GAAP)	$	52,789	$	45,267	$	201,789	$	192,197

⁽¹⁾ Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.


	Three Months Ended				Year Ended
	June 30,				June 30,
	2024		2023		2024		2023
Diluted earnings per share (GAAP)	$	1.28	$	0.50	$	3.39	$	2.05
Effect on diluted earnings per share:
Restructuring expense		0.02		0.03		0.05		0.41
Business acquisition and integration expense		0.09		0.16		0.85		0.94
Amortization of acquired intangible assets		0.19		0.28		0.88		1.34
Gain on sale of assets		—		—		—		(0.29)
Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and debt modification costs		—		0.23		0.52		0.42
Tax benefit due to change in valuation allowance		—		—		—		(0.14)
Tax benefit due to change in unrecognized tax benefits		(0.15)		—		(0.14)		—
Income tax impact on non-GAAP adjustments ⁽¹⁾		(0.10)		(0.20)		(0.57)		(0.70)
Loss from discontinued operations		0.03		0.03		0.02		0.18
Adjusted earnings per share (non-GAAP)	$	1.37	$	1.03	$	5.01	$	4.21
Diluted shares used in non-GAAP EPS calculation		38,595		44,129		40,307		45,600

Note: May not sum due to rounding.

⁽¹⁾ Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

Adtalem Global Education Inc.

Non-GAAP Free Cash Flow Disclosure

(unaudited)

(in thousands)


	Twelve Months Ended
	FY23		FY24		FY24		FY24		FY24
	Q4		Q1		Q2		Q3		Q4
Net cash provided by operating activities-continuing operations (GAAP)	$	194,690	$	189,501	$	227,600	$	276,843	$	288,367
Capital expenditures		(26,014)		(31,070)		(38,713)		(44,137)		(48,893)
Free cash flow (non-GAAP)	$	168,676	$	158,431	$	188,887	$	232,706	$	239,474

Adtalem Global Education Inc.

Non-GAAP Net Leverage Disclosure

(unaudited)

(in thousands)


		Year Ended
		June 30, 2024
Adtalem Global Education:
Net income (GAAP)	$	136,777
Net loss from discontinued operations		936
Interest expense		63,659
Other income, net		(10,542)
Provision for income taxes		26,224
Depreciation and amortization		78,452
Stock-based compensation		25,947
Restructuring expense		1,870
Business acquisition and integration expense		34,215
Litigation reserve		18,500
Loss on assets held for sale		647
Debt modification costs		848
Adjusted EBITDA (non-GAAP)	$	377,533


		June 30, 2024
Long-term debt	$	658,283
Less: Cash and cash equivalents		(219,306)
Net debt (non-GAAP)	$	438,977

Net leverage (non-GAAP)		1.2 x

Document and Entity Information	Aug. 06, 2024
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Aug. 06, 2024
Entity File Number	001-13988
Entity Registrant Name	ADTALEM GLOBAL EDUCATION INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-3150143
Entity Address, Address Line One	500 West Monroe
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60661
City Area Code	3
Local Phone Number	651-1
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000730464
Amendment Flag	false
New York Stock Exchange
Document Information [Line Items]
Title of 12(b) Security	Common Stock $0.01 Par Value
Trading Symbol	ATGE
Security Exchange Name	NYSE
Chicago Stock Exchange
Document Information [Line Items]
Title of 12(b) Security	Common Stock $0.01 Par Value
Trading Symbol	ATGE
Security Exchange Name	CHX