EX-99.1 2 a5812185ex99_1.htm EXHIBIT 99.1

Exhibit 99.1

DeVry Inc. Announces Fiscal 2009 First-Quarter Results

Increased revenues continue to drive strong earnings growth

Diluted EPS increases nearly 30 percent to $0.48

OAKBROOK TERRACE, Ill.--(BUSINESS WIRE)--October 23, 2008--DeVry Inc. (NYSE:DV), a global provider of education services, reported today its fiscal 2009 first quarter financial results and September 2008 graduate enrollment at DeVry University, including its Keller Graduate School of Management, and Ross University.

Three Months Ended September 30

  • Revenues increased 21.3 percent to $303.7 million, compared with $250.3 million a year ago.
  • Operating income increased 38.1 percent to $46.8 million, compared with $33.9 million for the same period last year.
  • Net income increased 29.8 percent to $34.8 million from $26.8 million in the same period last year, while fully diluted earnings per share in the quarter increased 29.7 percent to $0.48, compared with $0.37 per diluted share last year.

Please note that fiscal 2008 first quarter net income included a $2.3 million loss, net of tax, or $0.03 per share, from the sale/leaseback transactions at Phoenix, Seattle, and Alpharetta, Ga. Excluding this discrete item from last year, fiscal 2009 first quarter operating income would have increased 24.4 percent; net income and earnings per share would have increased approximately 20.0 percent.

“Our strong results in the first quarter of fiscal 2009 demonstrate that we are executing our strategic plan – increasing enrollment through improved marketing and recruiting, as well as further diversifying our offerings with the completion of the U.S. Education acquisition," said Daniel Hamburger, DeVry’s president and chief executive officer. “We continue to show sustained growth and believe that even in tough economic times, our diversified portfolio positions us well to achieve our long term growth goals and to maximize shareholder value.”

Business Highlights

DeVry completed its acquisition of U.S. Education, the parent organization of Apollo College and Western Career College on September 18, 2008. Apollo College and Western Career College operate 17 campus locations in the western United States and prepare students for careers in the high-growth allied healthcare sector through certificate and associate degree programs. As previously disclosed, DeVry expects the addition of Apollo College and Western Career College to be marginally dilutive to earnings by about $0.01 per share in fiscal 2009 primarily because of amortization expense, and accretive to earnings in fiscal 2010 and beyond.

DeVry University

For the September 2008 session, total DeVry University graduate coursetakers, including its Keller Graduate School of Management, totaled 17,799, up 12.2 percent versus 15,857 for the same period in 2007. DeVry University’s Fall 2008 undergraduate enrollment and November session graduate enrollment will be reported on December 4, 2008.

Ross University

At Ross University, in the 2008 September term, total students increased 8.8 percent to 4,219 compared to 3,876 students in the same term last year. New students increased 6.3 percent to 608, compared to 572 students last year. Ross University continues to make investments in faculty, classrooms, clinical affiliations, and student housing to respond to capacity constraints and continued strong demand for medical and veterinary medical education. Ross University is also making investments in preparation for its new clinical center in Freeport, Grand Bahama, scheduled to open January 2009.

Balance Sheet/Cash Flow

DeVry generated $96.8 million of operating cash flow during the fiscal 2009 first quarter, driven primarily by strong operating results. As of September 30, 2008, cash and short- and long-term investment balances totaled $242.3 million. Outstanding borrowings of $165.9 million were incurred to fund the acquisition of U.S. Education.

Conclusion

“DeVry continues to provide access to high-quality education for career-minded students, while responding to the overwhelming market need for professionals in the healthcare, business, and technology sectors,” added Hamburger. “To that end, we are very pleased to add the quality programs of U.S. Education to our offerings. The integration of U.S. Education is on track and we look forward to realizing the numerous opportunities that this combination provides.”

“As we look to the future, I am pleased to work with Dr. Harold Shapiro, president emeritus of Princeton University, who will take over as board chair of DeVry Inc. at our annual stockholder’s meeting next month. Harold’s experience, along with the continued support and counsel of Dennis Keller as a director emeritus, will help to guide our long-term strategies in the years to come,” concluded Hamburger.

Conference Call and Webcast Information

DeVry will host a conference call on October 23, 2008, at 3:30 p.m. Central Time (4:30 p.m. Eastern Time) to discuss the fiscal 2009 first quarter results. 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 800-561-2813 (domestic) or 617-614-3529 (International). DeVry will also broadcast the conference call live via the Internet http://www.investors.devry.com/phoenix.zhtml?c=93880&p=irol-EventDetai ls&EventId=1745047.

(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.) Interested parties may access the Webcast through the link noted above. 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.

DeVry will archive a telephone replay of the call until October 30,, 2008. To access the replay, dial 888-286-8010 (domestic) or 617-801-6888 (international), passcode 29338872. To access the Webcast replay, please visit DeVry’s Web site, or http://www.investors.devry.com/phoenix.zhtml?c=93880&p=irol-EventDetai ls&EventId=1745047.

(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, Advanced Academics, Ross University, Chamberlain College of Nursing, U.S. Education 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. Advanced Academics provides online secondary education to school districts throughout the U.S. 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. U.S. Education's programs, offered through Apollo College and Western Career College, prepare students for careers in healthcare through certificate and associate degree programs. 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.

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, 2008 and filed with the Securities and Exchange Commission on August 27, 2008.

Selected Operating Data (in thousands, except per share data)

 
First Quarter
FY 2009   FY 2008   Change
Revenues $303,717   $250,318   +21.3 %
Net Income $34,830 $26,835 +29.8 %
Earnings per Share (diluted) $0.48 $0.37 +29.7 %
Number of common shares (diluted) 72,560 71,947 +0.9 %

Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule

The following table illustrates the effects of the loss on the sale of facilities on DeVry’s earnings. The non-GAAP disclosure of net income and earnings per share, excluding these items, is not preferable to GAAP net income but is shown as a supplement to such disclosure for comparability to the year-ago period. The following table reconciles these items to the relevant GAAP information (in thousands, except per share data):

For the Three Months
Ended September 30,

2008   2007
Net Income $34,830   $26,835
Earnings per Share (diluted) $0.48 $0.37
Loss on Sale of Assets (net of tax) -- $ 2,279
Effect on Earnings per Share (diluted) -- $0.03
Net Income Excluding the Loss on Sale of Assets (net of tax) $34,830 $29,114
Adjusted Earnings per Share (diluted) $0.48 $0.40

September 2008 Enrollment Results

  September 2008   September 2007   Change
DeVry University
Graduate coursetakers 1,2 17,799 15,857 +12.2 %
 
Ross University
New students 608 572 +6.3 %
Total students 4,219 3,876 +8.8 %

Graduate Employment Statistics

 

Period

 

Percent Employed3

  Average Salary
DeVry University (Undergraduate) Jun ’07-Oct ’07-Feb ‘08 92.1 % $44,422

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 Includes Keller Graduate School of Management and other Master’s degree programs offered at DeVry University

3 System-wide, graduates in the active job market who held positions in their fields within 6 months of graduation. Includes graduates of associate and bachelor’s degree programs.

DEVRY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)
(Unaudited)
PRELIMINARY
           
September 30, June 30, September 30,
2008 2008 2007
 

ASSETS

 

Current Assets

 
Cash and Cash Equivalents $ 183,059 $ 217,199 $ 150,011
Marketable Securities 2,136 2,308 72,745
Restricted Cash 8,564 4,113 21,218
Accounts Receivable, Net 154,654 55,214 75,790
Deferred Income Taxes, Net 15,635 14,975 15,491
Prepaid Expenses and Other 28,279   31,779   18,474  
 
Total Current Assets 392,327   325,588   353,729  
 

Land, Buildings and Equipment

 
Land 51,193 50,726 51,707
Buildings 231,812 216,048 201,884
Equipment 288,731 282,273 266,677
Construction In Progress 5,536   4,874   5,038  
 
577,272 553,921 525,306
 
Accumulated Depreciation and Amortization (316,624 ) (314,606 ) (292,442 )
 
Land, Buildings and Equipment, Net 260,648   239,315   232,864  
 

Other Assets

 
Intangible Assets, Net 140,632 62,847 55,874
Goodwill 523,395 308,024 291,113
Perkins Program Fund, Net 13,450 13,450 13,450
Marketable Securities 57,128 57,171 -
Other Assets 11,176   11,961   5,510  
 
Total Other Assets 745,781   453,453   365,947  
 
TOTAL ASSETS $ 1,398,756   $ 1,018,356   $ 952,540  
DEVRY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)
(Unaudited)
PRELIMINARY
           
September 30, June 30, September 30,
2008 2008 2007
 

LIABILITIES

 

Current Liabilities

 
Current Portion of Debt $ 145,876 $ - $ -
Accounts Payable 81,153 70,368 32,799
Accrued Salaries, Wages and Benefits 43,786 51,300 35,392
Accrued Expenses 42,966 31,175 41,491
Advance Tuition Payments 19,964 16,972 14,828
Deferred Tuition Revenue 173,953   40,877   122,415  
 
Total Current Liabilities 507,698   210,692   246,925  
 

Non-Current Liabilities

 
Revolving Loan 20,000 - -
Deferred Income Taxes, Net 43,963 22,163 8,689
Deferred Rent and Other 29,342   29,512   30,950  
 
Total Non-current Liabilities 93,305   51,675   39,639  
 
TOTAL LIABILITIES 601,003   262,367   286,564  
 

SHAREHOLDERS' EQUITY

 
Common Stock, $0.01 par value, 200,000,000 Shares Authorized;
71,484,000, 71,377,000 and 71,098,000 Shares issued
and outstanding at September 30, 2008, June 30, 2008
and September 30, 2007, respectively. 725 724 717
Additional Paid-in Capital 174,236 168,405 147,511
Retained Earnings 661,894 627,064 536,933
Accumulated Other Comprehensive Loss (2,557 ) (2,963 ) (1,550 )

Treasury Stock, at Cost (969,360, 989,579 and
589,393 Shares, Respectively)

(36,545 ) (37,241 ) (17,635 )
 
TOTAL SHAREHOLDERS' EQUITY 797,753   755,989   665,976  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,398,756   $ 1,018,356   $ 952,540  
DEVRY INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands Except for Per Share Amounts)
       
PRELIMINARY
 
For The Quarter
Ended September 30,
 
2008 2007
 
REVENUES:
Tuition $ 279,127 $ 230,221
Other Educational 24,590   20,097  
 
Total Revenues 303,717   250,318  
 
OPERATING COSTS AND EXPENSES:
Cost of Educational Services 139,613 121,028
Loss (Gain) on Sale of Assets - 3,743
Student Services and Administrative Expense 117,292   91,645  
 
Total Operating Costs and Expenses 256,905   216,416  
 
Operating Income 46,812 33,902
 
INTEREST:
Interest Income 2,142 2,407
Interest Expense (353 ) (221 )
 
Net Interest Income (Expense) 1,789   2,186  
 
Income Before Income Taxes 48,601 36,088
 
Income Tax Provision 13,771   9,253  
 
NET INCOME $ 34,830   $ 26,835  
 
EARNINGS PER COMMON SHARE:
Basic $ 0.49   $ 0.38  
Diluted $ 0.48   $ 0.37  
DEVRY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

PRELIMINARY
 
        For The Quarter
Ended September 30,
2008   2007
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $34,830 $26,835

Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:

 
Stock-Based Compensation Charge 3,110 1,514
Depreciation 8,825 8,405
Amortization 952 1,081
Provision for Refunds and Uncollectible Accounts 15,985 14,725
Deferred Income Taxes (923 ) (6,785 )
Loss (Gain) on Disposals of Land, Buildings and Equipment 24 3,735

Changes in Assets and Liabilities,
Net of Effects from Acquisitions of Businesses:

Restricted Cash (4,313 ) (6,729 )
Accounts Receivable (86,442 ) (47,401 )
Prepaid Expenses And Other 5,835 741
Accounts Payable 9,091 (1,509 )
Accrued Salaries, Wages, Benefits and Expenses 2,706 (60 )
Advance Tuition Payments (1,826 ) 390
Deferred Tuition Revenue 108,964   85,067  
 
NET CASH PROVIDED BY OPERATING ACTIVITIES 96,818   80,009  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (10,638 ) (18,140 )
Net Proceeds from Sales of Land and Building - 38,528
Payment for Purchase of Business, Net of Cash Acquired (286,254 ) -
Marketable Securities Purchased (13 ) (82,738 )
Marketable Securities-Maturities and Sales -   10,000  
 
NET CASH USED IN INVESTING ACTIVITIES (296,905 ) (52,350 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 2,078 2,394
Reissuance of Treasury Stock 1,340 182
Repurchase of Common Stock for Treasury - (5,402 )
Cash Dividend Paid (4,282 ) (3,557 )
Excess Tax Benefit from Stock-Based Payments 420 167
Borrowings Under Collateralized Line of Credit 45,876 -
Borrowings Under Revolving Credit Facility 120,000 25,000
Repayments Under Revolving Credit Facility -   (25,000 )
 
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 165,432   (6,216 )
 
Effects of Exchange Rate Differences 515   (587 )
 
NET INCREASE IN CASH AND CASH EQUIVALENTS (34,140 ) 20,856
 
Cash and Cash Equivalents at Beginning of Period 217,199   129,155  
 
Cash and Cash Equivalents at End of Period $183,059   $150,011  
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid (Refunded) During the Period for:
Interest $51 $177
Income Taxes, Net (6,868 ) 6,392
DEVRY INC.

SEGMENT INFORMATION

(Dollars in Thousands)
     
PRELIMINARY
 
 
For The Quarter
Ended September 30,
Increase
2008 2007 (Decrease)
 
REVENUES:
DeVry University $ 230,680 $ 194,765 18.4 %
Medical and Healthcare 53,278 37,240 43.1 %
Professional and Training 19,759   18,313   7.9 %
 
Total Consolidated Revenues 303,717   250,318   21.3 %
 
OPERATING INCOME:
DeVry University 25,288 15,561 62.5 %
Medical and Healthcare 15,351 11,601 32.3 %
Professional and Training 7,723 8,358 -7.6 %
Reconciling Items:
Amortization Expense (916 ) (1,046 ) -12.4 %
Depreciation and Other (634 ) (572 ) 10.8 %
 
Total Consolidated Operating Income 46,812 33,902 38.1 %
 
INTEREST:
Interest Income 2,142 2,407 -11.0 %
Interest Expense (353 ) (221 ) 59.7 %
 
Net Interest Income 1,789   2,186   ($397 )
 
Total Consolidated Income before Income Taxes $ 48,601   $ 36,088   34.7 %
 
 
The following table displays the discrete income statement items
related to the 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
2008 2007 (Decrease)
 
DeVry University Operating Income $ 25,288 $ 15,561 62.5 %
Loss on Sale of Assets -   3,743   NM
DeVry University Operating Income
Excluding Loss on Sale of Assets $ 25,288   $ 19,304   31.0 %
 
 
The following table displays the pro forma results of operations for
the Medical and Healthcare segment as if U.S. Education Corp. was a
part of the Company's business for the entire quarterly periods ended
September 30, 2008 and 2007. 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
2008 2007 (Decrease)
 
Medical and Healthcare Revenue as Reported $53,278 $37,240 43.1 %
U.S. Education Revenue 41,483 33,889 22.4 %
Adjustments (1) (5,576 ) -   NM
Pro forma Medical & Healthcare Revenue $89,185   $71,129   25.4 %
 
Medical and Healthcare Operating Income as Reported $15,351 $11,601 32.3 %
U.S. Education Operating Income as Adjusted (2) 6,481 3,786 71.2 %
Adjustments (1) (1,131 ) -   NM
Pro forma Medical & Healthcare Operating Income $20,701   $15,387   34.5 %
 
(1) Adjustment for 12 days of results that are included in the Medical
and Healthcare operations as Reported.

 

(2) Adjusted for non-recurring acquisition related charges in the
quarter ended September 30, 2008, along with an allocation of
corporate charges in the quarters ended September 30, 2008 and 2007.

CONTACT:
DeVry Inc.
Investor Contact:
Joan Bates
jbates@devry.com
(630) 574-1949
or
Media Contact:
Michelle Yokoyama
myokoyama@sardverb.com
(312) 895-4701