EX-99.1 2 a5528418ex99_1.txt EXHIBIT 99.1 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