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MarketScreener Homepage  >  Equities  >  Nyse  >  Adtalem Global Education Inc.    ATGE

ADTALEM GLOBAL EDUCATION INC.

(ATGE)
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Adtalem Global Education : Q1 2021 Presentation

11/19/2020 | 06:43am EST

Q1 2021 Earnings Presentation

November 5, 2020

Safe Harbor

Certain statements contained in this presentation 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 the future impacts of the COVID-19 pandemic and the pending Walden University acquisition. Forward-looking statements can also be identified by words 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 risk and uncertainties include the risk factors described in Item 1A. "Risk Factors" of our most recent Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the Securities

and Exchange Commission (SEC) on August 18, 2020 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 we do not undertake any obligation to update any forward-looking statement, except as required by law.

Non-GAAP Financial Measures

This presentation includes references to certain financial measures that are not calculated in accordance with generally accepted accounting principles in the United States ("GAAP"). Management believes that the non-GAAP disclosures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem's ongoing operations and are useful for period-over-period comparisons of such operations. Adtalem uses 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. For how we define the non-GAAPfinancial measures, and a reconciliation of each non-GAAPfinancial measure to the most directly comparable GAAP measure, please refer to the reconciliation at the end of this presentation.

©2020 Adtalem Global Education Inc. All rights reserved.

2

Q1 2021 Highlights

Q1 2021

Revenue

$268.2 million

Net Income1

$41.2 million

Diluted Earnings Per Share1

$0.78

TTM Free Cash Flow2

$152.6 million

Delivered double-digit enrollment growth in Medical and Healthcare vertical

Strength of results underscores Workforce Solutions strategy

Superior academic outcomes and low cohort default rates

Drove robust revenue and EPS growth, and generated significant free cash flow in Q1 2021

  1. From continuing operations, excluding special items.
  2. For twelve months ended September 30, 2020; Free cash flow is a non-GAAP financial measure defined as net cash provided by continuing operations less capital expenditures. Differences may occur due to rounding.

©2020 Adtalem Global Education Inc. All rights reserved.

3

Medical & Healthcare

Strong enrollmentsand return to clinicalsdrove growth acrossthe vertical

  • Chamberlain University:

- Largest enrollment in the university's history with new student enrollment increasing 13.2% and totalstudentenrollmentincreasing 11.9%in September session

  • Strong student academic success with NCLEX first time pass rates over 92%, FNP overall pass rates of 90%
  • Over half of Chamberlain's on-campus growth came from existing programs at nearly all of our campuses, bolstered by cap increases, increased mid-session starts, and the expansionof our evening and weekend programs
  • Strategic refinements and investments in new program offerings and marketing are

showingtraction and are generating the returns we originallyexpected

Medical and VeterinarySchools:

  • Ross University School of Medicine: Exceptional residency match rate exceeding 95%, saw highsingle-digitnewstudentenrollmentgrowth

- American University of the Caribbean School of Medicine: Solid 92% residency

match rate,achieveddouble-digitnew studentenrollmentgrowth

  • Ross University School of Veterinary Medicine: Maintained its high level of total student enrollment which is currently at capacity for the September session; NAVLE first-timepassrateof88%

©2020 Adtalem Global Education Inc. All rights reserved.

4

Financial Services

Adding talented leadership and expanded offeringsto enable long-term growth

  • ACAMS:
    • Successful virtualLas Vegas conference,attracting 1,500 paidattendees
    • Continuedleadership talentacquisitionwith the hiring ofVP ofGlobal Sales
    • Further established as a trusted partner by adding institutional relationships across the globe,includingING Bank
  • Becker:
    • Approximately 90% of CPA testing centers are now open and near capacity, resulting in a substantialrecoveryfrom Q4 to Q1

- Captured growth within Becker's B2C channel, which largely offset test prep enrollment declines by accounting firms due to COVID-related contingency measures

    • - including reducedhiringof CPAcandidates

    • Growth in B2C reflects ongoing investments in sales, e-commerce and digital marketingcapabilities
    • Strong growthanddemand for continuing educationin all marketsegments
  • OnCourse Learning:
    • Delivered increases in both B2C and B2B offerings, driven by execution to capture demandas new loan originators enter a strong mortgagemarket
    • Scaling of online training in lieu of traditional onsite instruction allowed for a seamless transitionto accommodateB2B clientneeds

©2020 Adtalem Global Education Inc. All rights reserved.

5

Q1 2021 Financial Highlights

$255

Revenue

$268

($ in millions)

5.4%

Q1 2020Q1 2021

Operating Income1

($ in millions)

$54

97.7%

$27

Q1 2020

Q1 2021

Diluted EPS1

$0,78

129.4%

$0,34

Q1 2020

Q1 2021

©2020 Adtalem Global Education Inc. All rights reserved.

  • Revenue growth driven primarily by Chamberlain enrollment growth and solid revenue growth in Financial Services
  • Operating income1 driven by increased revenue across the organization, cost efficiencies and lower variable expenses
  • Diluted earnings per share1 increase driven by solid revenue growth coupled with strong gross margins, which have strong flow through to bottom line results

6

1) From continuing operations excluding special items

Q1 2021 Financials by Vertical

Revenue ($M)

Revenue increased

Operating Income1 ($M)

Operating income driven

Healthcare

5.5%

year-over-year, driven

by strong student

enrollment growth at

&

Chamberlain, partially

Medical

$207

$219

offset by lower clinical

and housing revenue

at our medical schools

Q1 2020

Q1 2021

85.2%

$53

$29

Q1 2020

Q1 2021

by solid revenue growth, cost efficiencies as well as lower variable expenses due to campus closures

Revenue increase

Operating income driven

Services

4.9%

driven by increased

revenue at OnCourse

Learning from the

Financial

ability to capture

$47

$49

higher demand

associated with the

strong mortgage

Q1 2020

Q1 2021

market

1) From continuing operations excluding special items

111.5%

$9

$4

Q1 2020

Q1 2021

by increased revenue, cost efficiency measures as well as lower variable expenses driven by a shift to online delivery

©2020 Adtalem Global Education Inc. All rights reserved.

7

Generating Strong Free Cash Flow

Key Metrics

Q1 2021 Results2

Trailing Twelve Months3

OperatingCash Flow1

$84.7 million

$200.7 million

Free Cash Flow1

$70.2 million

$152.6 million

($72)

($125)

($125)

($163)

1)From continuing operations

  1. For three months ended September 30, 2020
  2. For the twelve months ended September 30, 2020

Note: Free cash flow is a non-GAAP financial measure defined as net cash provided by continuing operations less capital expenditures. Differences may occur due to rounding.

©2020 Adtalem Global Education Inc. All rights reserved.

8

Liquidity and Capital Structure

Key Metrics

June 30, 2020

September 30, 2020

Cash, cash equivalents

$501 million

$562 million

Capacity available under revolver

$232 million

$232 million

Total Debt

$294 million

$293 million

Capex1

$12 million2

$14 million3

1)From continuing operations 2)Three months ended June 30, 2020 3)Three months ended September 30, 2020

©2020 Adtalem Global Education Inc. All rights reserved.

9

Appendix

Non-GAAP Financial Measures andReconciliations

  • We believe that certain non-GAAP financial measures 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. 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:

Net income from continuing operations attributable to Adtalem excluding special items (most comparable GAAP measure: net income attributable to Adtalem) - Measure of Adtalem's

net income attributable to Adtalem

adjusted for restructuring expense, business acquisition and integration

expense, gain on sale of assets, and loss from discontinued operations.

Earnings per share from continuing

operations excluding special items (most comparable GAAP measure:

earnings per share) - Measure of Adtalem's diluted earnings per share

adjusted for restructuring expense,

business acquisition and integration expense, gain on sale of assets, and loss from discontinued operations.

  • Operating income excluding special items (most comparable GAAP measure: operating income) - Measure of Adtalem's operating income adjusted for restructuring expense, business

acquisition and integration expense, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.

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.

A description of special

items in our non-GAAP financial measures described above are as follows:

- Restructuring charges primarily related to real estate consolidations at Adtalem's home office and ACAMS and the sale of Becker's courses for healthcare students.

- Business acquisition and integration expense include expenses related to the pending Walden University acquisition.

  • Gain on the sale of Adtalem's Columbus, Ohio, campus facility.
  • Loss from discontinued operations include the operations of Adtalem Brazil, Carrington, and DeVry University.

©2020 Adtalem Global Education Inc. All rights reserved.

11

Non-GAAP Reconciliation Tables

©2020 Adtalem Global Education Inc. All rights reserved.

12

Non-GAAP Reconciliation Tables

©2020 Adtalem Global Education Inc. All rights reserved.

13

Non-GAAP Reconciliation Tables

©2020 Adtalem Global Education Inc. All rights reserved.

14

Non-GAAP Reconciliation Tables

©2020 Adtalem Global Education Inc. All rights reserved.

15

Disclaimer

Adtalem Global Education Inc. published this content on 05 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 November 2020 11:42:01 UTC


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Financials (USD)
Sales 2021 1 113 M - -
Net income 2021 128 M - -
Net cash 2021 233 M - -
P/E ratio 2021 16,4x
Yield 2021 -
Capitalization 1 922 M 1 922 M -
EV / Sales 2021 1,52x
EV / Sales 2022 1,35x
Nbr of Employees 3 971
Free-Float 63,3%
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Mean consensus OUTPERFORM
Number of Analysts 3
Average target price 42,33 $
Last Close Price 36,90 $
Spread / Highest target 38,2%
Spread / Average Target 14,7%
Spread / Lowest Target -2,44%
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Managers and Directors
NameTitle
Lisa W. Wardell Chairman, President & Chief Executive Officer
Stephen Wayne Beard COO, Secretary, Senior VP & General Counsel
Michael O. Randolfi Chief Financial Officer, Treasurer & Senior VP
Christopher C. Nash Chief Information Officer & Senior Vice President
Lyle L. Logan Independent Director
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