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)
October
23, 2014
______________
DEVRY
EDUCATION GROUP INC.
(Exact
name of registrant as specified in its charter)
______________
Delaware |
1-13988 |
36-3150143 |
(State of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
3005 Highland Parkway Downers Grove, Illinois |
60515 |
(Address of principal executive offices) |
(Zip Code) |
(630) 515-7700
(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))
Item 2.02 | Results of Operations and Financial Condition |
On October 23, 2014, DeVry Education Group Inc. (“DeVry Group”) issued a press release announcing its fiscal 2015 first quarter operating and enrollment results. The full text of that press release is included in Exhibit 99.1 in this Form 8-K.
Forward Looking Statements
Certain statements contained in this Form 8-K and related press release, including those that affect DeVry Group’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 Education Group Inc. or its management “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “foresees,” “intends,” “plans” or other words or phrases of similar import.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause DeVry Group’s actual results to differ materially from those projected or implied by these forward-looking statements. Additional information regarding factors that could cause results to differ can be found in DeVry Group’s Annual Report on Form 10-K for the fiscal year ended June 30, 2014.
These forward-looking statements are based on information as of October 23, 2014, and DeVry Group 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.
Item 9.01 | Financial Statements and Exhibits |
99.1 | Press Release dated October 23, 2014 |
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.
DEVRY EDUCATION GROUP INC. |
||||
(Registrant) | ||||
Date: |
October 23, 2014 |
By: |
/s/ Patrick J. Unzicker |
|
Patrick J. Unzicker |
||||
Vice President, Finance and Chief Accounting Officer |
EXHIBIT INDEX
Exhibit Number |
Description |
|
99.1 |
Press Release dated October 23, 2014 |
Exhibit 99.1
DeVry Education Group Announces First-Quarter 2015 Results
DOWNERS GROVE, Ill.--(BUSINESS WIRE)--October 23, 2014--DeVry Education Group (NYSE:DV), a global provider of educational services, today reported academic, operational and financial results for its fiscal first quarter that ended Sept. 30, 2014. DeVry Group also reported enrollment results at Chamberlain College of Nursing, Carrington College, DeVry Medical International, DeVry Brasil, and DeVry University and its Keller Graduate School of Management.
Academic and operational accomplishments:
Selected financial data for the three months ended Sept. 30, 2014:
“DeVry Education Group’s strategy of quality plus diversification plus long-term focus continues to differentiate us and position us well for growth opportunities,” said Daniel Hamburger, DeVry Group’s president and CEO. “As an organization, DeVry Group continued to see growth in both new and total students. Our revenue increased for the second consecutive quarter. And except for DeVry University, we grew revenue in all of our institutions.”
The first quarter fiscal year 2015 results contained pretax charges of $13.3 million related to workforce reductions and real estate consolidations, primarily at DeVry University. (See “Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule”).
Operating Highlights
Medical and Healthcare Segment
Segment revenue of $206.0 million was strong, increasing 17 percent compared to the prior year. Excluding special items, segment operating income increased 52 percent to $38.3 million versus the previous year.
DeVry Medical International
Revenue at DeVry Medical International (DMI) grew 9 percent compared to the prior year reflecting an increase in clinical rotations and tuition. In the September 2014 term, new student enrollment declined 3.6 percent to 943 students, compared to 978 students in the prior year. Total students declined 0.8 percent to 6,406, compared to 6,458 students in the same term last year. DMI continues to make improvements in enrollment management and expects better new student enrollments in the January 2015 class.
Chamberlain College of Nursing
For the quarter, Chamberlain grew its revenue by nearly 36 percent, primarily driven by solid enrollment growth in its post-licensure programs. For the September 2014 session, new students grew 14.3 percent to 3,864 students, compared to 3,380 in the previous year. Total students increased 33.3 percent to 20,920, compared to 15,690 in the prior year.
During the quarter, Chamberlain opened a second campus in the Houston area and began taking applications for new students in Las Vegas, and Troy, Michigan, both scheduled to open in January 2015.
In October, Chamberlain president Susan Groenwald, PhD, RN, ANEF, FAAN, was inducted as a fellow in the American Academy of Nursing.
Carrington College
Revenue at Carrington College grew 4 percent during the quarter. For the three-month period ending Sept. 30, 2014, new student enrollment declined 4 percent to 2,623, compared to 2,733 in the previous year. Total enrollment declined 0.9 percent to 7,634, compared to 7,706 in the prior year period. The decline was related to the timing of session start dates in the current period, which resulted in one less session start versus the prior year.
During the quarter, Carrington continued its consolidation under one Carrington College institution. Carrington also has established an agreement with recently closed Anthem Education in multiple markets, assisting student transfers in Arizona, California, Oregon, and Nevada.
International and Professional Education Segment
Segment revenue increased 22 percent to $53 million compared to the prior year. Segment operating income was $4.7 million versus $0.4 million in the previous year.
Becker Professional Education
During the quarter, Becker grew its revenue by 18 percent. This increase was driven by revenue related to the launch of Becker One. Becker One is a new curriculum delivery system that allows Becker students to receive content updates on a continuous basis versus once a year.
Becker recently was awarded 3-year accreditation from the Accrediting Council for Continuing Education & Training, which enables Becker to extend its certified public accountant, continuing professional education, United States Medical Licensing and project management exam preparatory courses to additional organizations, such as governmental agencies and armed forces as well as international students.
DeVry Brasil
Revenue at DeVry Brasil increased 25 percent during the quarter. New student enrollment increased 37.8 percent to 5,217, compared to 3,785 in the prior year. Total student enrollment for the September term increased 14.5 percent to 33,591, compared to 29,340 in the prior year. In addition to these student enrollments, DeVry Brasil enrolled nearly 2,400 total students in Pronatec, a federal government-sponsored certificate program that aims to increase the number of technical and vocational students in Brazil.
On Oct. 1, 2014, DeVry Brasil completed the acquisition of Faculdade Martha Falcão (FMF). Located in the city of Manaus in the state of Amazonas in northern Brazil, FMF currently serves approximately 3,500 students and offers undergraduate and graduate programs in high-demand career fields such as business, accounting, law, information technology and engineering. The acquisition expands DeVry Brasil into the northern region of Brazil.
Business, Technology, and Management Segment
Segment revenue of $203.6 million declined 12 percent compared to the prior year. Excluding special items, the segment generated operating income of $135 thousand during the quarter compared to an operating loss of $5.0 million in the year ago quarter.
DeVry University and its Keller Graduate School of Management
For the September session at DeVry University, new undergraduate student enrollments declined 20.0 percent to 5,268, compared to 6,589 in the prior year. Total undergraduate student enrollments declined 15.1 percent to 39,857 versus 46,966 in previous year period. At the graduate level, including Keller Graduate School of Management, total coursetakers in the September session decreased 13.4 percent to 15,532, compared to 17,925 in the prior year.
During the quarter, DeVry University continued to execute its transformation plan led by DeVry University’s new executive team. Key elements of the plan include enhancing the institution’s programmatic focus, optimizing its pricing structure, enhancing its marketing and recruiting efforts, and reducing the cost structure of the organization.
DeVry University Advantage Academy celebrated its 10th anniversary. A partnership between Chicago Public Schools (CPS) and DeVry University, Advantage Academy is a dual-enrollment, dual-degree CPS high school located on DeVry University’s Chicago campus. High school juniors and seniors have the opportunity to earn a college associate degree while completing high school at no tuition cost. As of August 2014, almost 1,000 students have graduated from the program. According to the Illinois Board of Higher Education, Advantage Academy’s most recent high school graduation rate was 99 percent, and the cumulative associate degree completion rate was 86 percent.
Balance Sheet/Cash Flow
For fiscal first quarter, DeVry Group generated $141.1 million of operating cash flow. As of Sept. 30, 2014, cash and cash equivalents balances totaled $473.1 million.
Conference Call and Webcast Information
DeVry Group will host a conference call on Oct. 23, 2014, at 4 p.m. Central Daylight Time (5 p.m. Eastern Daylight Time) to discuss its fiscal 2015 first-quarter results. The conference call will be led by Daniel Hamburger, president and CEO, Tim Wiggins, chief financial officer and Pat Unzicker, vice president of finance.
For those wishing to participate by telephone, dial 877-506-6380 (domestic) or 412-902-6690 (international). Please say “DeVry Group Call.” DeVry Group will also broadcast the conference call live online. Interested parties may access the webcast through the Investor Relations section of DeVry Group’s website, using the following link: http://services.choruscall.com/links/dv141023.html.
Please access the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.
DeVry Group will archive a telephone replay of the call until Nov. 14, 2014. To access the replay, dial 877-344-7529 (domestic) or 412-317-0088 (international), conference number 10054565. To access the webcast replay, please visit DeVry Group’s website, or http://services.choruscall.com/links/dv141023.html.
About DeVry Education Group
The purpose of DeVry Education Group is to empower its students to achieve their educational and career goals. DeVry Education Group Inc. (NYSE: DV; member S&P MidCap 400 Index) is a global provider of educational services and the parent organization of American University of the Caribbean School of Medicine, Becker Professional Education, Carrington College, Chamberlain College of Nursing, DeVry Brasil, DeVry University and its Keller Graduate School of Management, Ross University School of Medicine and Ross University School of Veterinary Medicine. These institutions offer a wide array of programs in healthcare, business, technology, accounting and finance. For more information, please visit http://www.devryeducationgroup.com.
Certain statements contained in this release concerning DeVry Group's future performance, including those statements concerning DeVry Group'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 Group 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 DeVry Group's most recent Annual Report on Form 10-K for the year ending June 30, 2014 and filed with the Securities and Exchange Commission on August 27, 2014.
Selected Operating Data (in thousands, except per share data) |
||||||
First Quarter | ||||||
FY 2015 | FY 2014 | Change | ||||
Revenues | $462,044 | $450,913 | +2.5% | |||
Income from Continuing Operations | $20,437 | $8,151 | +150.7% | |||
Net Income/(Loss) | $20,440 | $(7,132) | NM | |||
Earnings/(Loss) per Share (diluted) | ||||||
Continuing Operations | $0.31 | $0.13 | +138.5% | |||
Discontinued Operations | -- | $(0.24) | +$0.24 | |||
Number of common shares (diluted) | 65,429 | 64,510 | +1.4 % |
Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule
During the first quarter of fiscal year 2015, DeVry Group recorded restructuring charges related to workforce reductions at DeVry University which is part of the Business, Technology and Management segment and real estate consolidations at DeVry University, Carrington College which is part of the Medical and Healthcare segment and DeVry Group home office (not related to any segment) in order to align its cost structure with enrollments. During fiscal first quarter 2014, DeVry Group recorded restructuring charges primarily related to workforce reductions and real estate consolidations at DeVry University, Carrington College and the DeVry Group home office. DeVry Group also recorded the operating results of its Advanced Academics reporting unit as discontinued operations. DeVry Group recorded a gain from the sale of a former DeVry University campus in Decatur, Georgia, during the first quarter of fiscal year 2014. The following table illustrates the effects of restructuring charges and gain on the sale of assets on DeVry Group’s operating income. Management believes that the non-GAAP disclosure of operating income excluding these special items provides investors with useful supplemental information regarding the underlying business trends and performance of DeVry Group’s ongoing operations and is useful for period-over-period comparisons of such operations given the special nature of the restructuring charges and gain on the sale of assets. DeVry Group uses these supplemental financial measures internally in its management and budgeting process. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, DeVry Group’s reported results prepared in accordance with GAAP. The following table reconciles these non-GAAP measures to the most directly comparable GAAP information (in thousands, except per share data):
For The Three Months | |||||||
Ended September 30, | |||||||
2014 | 2013 | ||||||
Net Income | $ | 20,440 | $ | (7,132 | ) | ||
Earnings per Share (Diluted) | $ | 0.31 | $ | (0.11 | ) | ||
Restructuring Expenses (net of tax) | $ | 10,452 | $ | 7,181 | |||
Effect on Earnings per Share (Diluted) | $ | 0.16 | $ | 0.11 | |||
Discontinued Operations (net of tax) | $ | - | $ | 15,328 | |||
Effect on Earnings per Share (Diluted) | $ | - | $ | 0.24 | |||
Gain on Sale of Assets (net of tax) | $ | - | $ | (1,167 | ) | ||
Effect on Earnings per Share (Diluted) | $ | - | $ | (0.02 | ) | ||
Net Income from Continuing Operations Excluding | |||||||
Restructuring Charges and Gain on Sale of Assets | $ | 30,892 | $ | 14,210 | |||
Earnings per Share from Continuing Operations Excluding | |||||||
Restructuring Charges and Gain on Sale of Assets (Diluted) | $ | 0.47 | $ | 0.22 | |||
Shares used in Diluted EPS Calculation | 65,429 | 64,510 |
Enrollment Results |
|||||||
2014 | 2013 | % Change | |||||
DeVry Education Group Student Enrollments(1)(3) | |||||||
New students | 19,867 | 19,555 | +1.6% | ||||
Total students | 121,232 | 120,793 | +0.4% | ||||
Chamberlain College of Nursing | |||||||
September Session | |||||||
New students | 3,864 | 3,380 | +14.3% | ||||
Total students | 20,920 | 15,690 | +33.3% | ||||
Carrington College (2) | |||||||
3 months ending September 30, 2014 | |||||||
New students | 2,623 | 2,733 | -4.0% | ||||
Total students | 7,634 | 7,706 | -0.9% | ||||
DeVry Medical International | |||||||
September Term | |||||||
New students | 943 | 978 | -3.6% | ||||
Total students | 6,406 | 6,458 | -0.8% | ||||
DeVry Brasil (3) | |||||||
September Term | |||||||
New students | 5,217 | 3,785 | +37.8% | ||||
Total students | 33,591 | 29,340 | +14.5% | ||||
DeVry University | |||||||
Undergraduate – September Session | |||||||
New students | 5,268 | 6,589 | -20.0% | ||||
Total students | 39,857 | 46,966 | -15.1% | ||||
Graduate – September Session | |||||||
Coursetakers(4) | 15,532 | 17,925 | -13.4% |
1) | Excludes Becker Professional Education. Includes the most recently reported enrollments at DeVry Group’s degree-granting institutions. | ||
2) | Year over year comparisons were impacted by a shift in the timing of enrollment dates, resulting in one less session start in the period. | ||
3) | Does not include enrollments from Faculdade Martha Falcão and Pronatec. | ||
4) | The term “coursetaker” refers to the number of courses taken by a student. Thus one student taking two courses equals two coursetakers. |
Chart 1: DeVry Education Group Fiscal 2015 Announcements & Events |
||
November 6, 2014 | 2014 Annual Shareholders’ Meeting | |
February 5, 2015 | Fiscal 2015 Second Quarter Results | |
April 23, 2015 | Fiscal 2015 Third Quarter Results | |
August 13, 2015 | Fiscal 2015 Fourth Quarter and Year-End Results |
DEVRY EDUCATION GROUP INC. | ||||||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||||||
(Unaudited) | ||||||||||||
PRELIMINARY | ||||||||||||
September 30, | June 30, | September 30, | ||||||||||
2014 | 2014 | 2013 | ||||||||||
ASSETS |
(Dollars in thousands, except for share and par value amounts) | |||||||||||
Current Assets |
||||||||||||
Cash and Cash Equivalents | $ | 473,108 | $ | 358,188 | $ | 308,544 | ||||||
Marketable Securities and Investments | 3,414 | 3,448 | 3,104 | |||||||||
Restricted Cash | 12,057 | 8,347 | 7,251 | |||||||||
Accounts Receivable, Net | 170,280 | 132,621 | 183,487 | |||||||||
Deferred Income Taxes, Net | 46,741 | 39,679 | 33,336 | |||||||||
Prepaid Expenses and Other | 30,272 | 34,808 | 51,701 | |||||||||
Current Assets of Divested Business | - | - | 5,053 | |||||||||
Total Current Assets | 735,872 | 577,091 | 592,476 | |||||||||
Land, Building and Equipment |
||||||||||||
Land | 67,060 | 68,185 | 67,101 | |||||||||
Building | 465,930 | 464,944 | 427,194 | |||||||||
Equipment | 488,783 | 488,322 | 471,905 | |||||||||
Construction In Progress | 25,806 | 17,405 | 44,226 | |||||||||
1,047,579 | 1,038,856 | 1,010,426 | ||||||||||
Accumulated Depreciation | (495,165 | ) | (483,019 | ) | (439,933 | ) | ||||||
Land, Building and Equipment, Net |
552,414 | 555,837 | 570,493 | |||||||||
Other Assets |
||||||||||||
Intangible Assets, Net | 288,620 | 294,932 | 298,419 | |||||||||
Goodwill | 514,220 | 519,879 | 517,655 | |||||||||
Perkins Program Fund, Net | 13,450 | 13,450 | 13,450 | |||||||||
Other Assets | 30,051 | 36,447 | 32,805 | |||||||||
Other Assets of Divested Business | - | - | 1,509 | |||||||||
Total Other Assets | 846,341 | 864,708 | 863,838 | |||||||||
TOTAL ASSETS | $ | 2,134,627 | $ | 1,997,636 | $ | 2,026,807 | ||||||
LIABILITIES |
||||||||||||
Current Liabilities |
||||||||||||
Accounts Payable | $ | 68,183 | $ | 52,260 | $ | 57,798 | ||||||
Accrued Salaries, Wages and Benefits | 83,241 | 94,501 | 96,100 | |||||||||
Accrued Expenses | 64,957 | 70,891 | 82,496 | |||||||||
Deferred and Advance Tuition | 234,884 | 99,160 | 243,353 | |||||||||
Total Current Liabilities | 451,265 | 316,812 | 479,747 | |||||||||
Other Liabilities |
||||||||||||
Deferred Income Taxes, Net | 50,552 | 47,921 | 64,026 | |||||||||
Deferred Rent and Other | 86,022 | 93,117 | 87,999 | |||||||||
Total Other Liabilities | 136,574 | 141,038 | 152,025 | |||||||||
TOTAL LIABILITIES | 587,839 | 457,850 | 631,772 | |||||||||
NON-CONTROLLING INTEREST | 6,617 | 6,393 | 5,890 | |||||||||
SHAREHOLDERS' EQUITY |
||||||||||||
Common Stock, $0.01 par value, 200,000,000 Shares Authorized; | ||||||||||||
63,887,000, 63,624,000 and 63,198,000 Shares Issued | ||||||||||||
and Outstanding at September 30, 2014, June 30, 2014 | ||||||||||||
and September 30, 2013, respectively | 767 | 753 | 751 | |||||||||
Additional Paid-in Capital | 331,251 | 320,703 | 298,386 | |||||||||
Retained Earnings | 1,702,289 | 1,682,071 | 1,562,662 | |||||||||
Accumulated Other Comprehensive Loss | (32,015 | ) | (15,394 | ) | (17,605 | ) | ||||||
Treasury Stock, at Cost (12,156,000, 11,655,000 and 11,662,000 | ||||||||||||
Shares, respectively) | (462,121 | ) | (454,740 | ) | (455,049 | ) | ||||||
TOTAL SHAREHOLDERS' EQUITY | 1,540,171 | 1,533,393 | 1,389,145 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,134,627 | $ | 1,997,636 | $ | 2,026,807 |
DEVRY EDUCATION GROUP INC. | ||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||
(Unaudited) | ||||||||
PRELIMINARY | ||||||||
For The Three Months | ||||||||
Ended September 30, | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands except for per share amounts) |
||||||||
REVENUES: | ||||||||
Tuition | $ | 421,873 | $ | 419,318 | ||||
Other Educational | 40,171 | 31,595 | ||||||
Total Revenues | 462,044 | 450,913 | ||||||
OPERATING COSTS AND EXPENSES: | ||||||||
Cost of Educational Services | 246,331 | 241,737 | ||||||
Student Services and Administrative Expense | 177,753 | 189,158 | ||||||
Gain on Sale of Assets | - | (1,918 | ) | |||||
Restructuring Expenses | 13,317 | 11,665 | ||||||
Total Operating Costs and Expenses | 437,401 | 440,642 | ||||||
Operating Income | 24,643 | 10,271 | ||||||
INTEREST INCOME: | ||||||||
Interest Income | 397 | 583 | ||||||
Interest Expense | (393 | ) | (1,000 | ) | ||||
Net Interest Income | 4 | (417 | ) | |||||
Income from Continuing Operations Before Income Taxes | 24,647 | 9,854 | ||||||
Income Tax Provision | (4,210 | ) | (1,703 | ) | ||||
Income from Continuing Operations | 20,437 | 8,151 | ||||||
DISCONTINUED OPERATIONS: | ||||||||
Loss from Operations of Divested Component | - | (16,324 | ) | |||||
Income Tax Benefit | - | 996 | ||||||
Loss on Discontinued Operations | - | (15,328 | ) | |||||
NET INCOME (LOSS) | 20,437 | (7,177 | ) | |||||
Net Loss Attributable to Noncontrolling Interest | 3 | 45 | ||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DEVRY EDUCATION GROUP | $ | 20,440 | $ | (7,132 | ) | |||
AMOUNTS ATTRIBUTABLE TO DEVRY EDUCATION GROUP: | ||||||||
Income from Continuing Operations, Net of Income Taxes | 20,440 | 8,196 | ||||||
Loss from Discontinued Operations, Net of Income Taxes | - | (15,328 | ) | |||||
NET INCOME (LOSS) ATTRIBUTABLE TO DEVRY EDUCATION GROUP | $ | 20,440 | $ | (7,132 | ) | |||
EARNINGS PER COMMON SHARE ATTRIBUTABLE | ||||||||
TO DEVRY EDUCATION GROUP SHAREHOLDERS | ||||||||
Basic: | ||||||||
Continuing Operations | $ | 0.32 | $ | 0.13 | ||||
Discontinued Operations | - | (0.24 | ) | |||||
$ | 0.32 | $ | (0.11 | ) | ||||
Diluted: | ||||||||
Continuing Operations | $ | 0.31 | $ | 0.13 | ||||
Discontinued Operations | - | (0.24 | ) | |||||
$ | 0.31 | $ | (0.11 | ) |
DEVRY EDUCATION GROUP INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) | ||||||||
PRELIMINARY | ||||||||
For The Three Months | ||||||||
Ended September 30, | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income (Loss) | $ | 20,437 | ($7,177 | ) | ||||
Loss from Discontinued Operations | - | 15,328 | ||||||
Adjustments to Reconcile Net Income to Net | ||||||||
Cash Provided by Operating Activities: | ||||||||
Stock Based Compensation Expense | 5,522 | 5,816 | ||||||
Depreciation | 20,448 | 19,980 | ||||||
Amortization | 764 | 1,649 | ||||||
Provision for Refunds and Uncollectible Accounts | 20,575 | 17,819 | ||||||
Deferred Income Taxes | (2,640 | ) | (1,122 | ) | ||||
Loss on Disposals and Adjustments to Land, Buildings and Equipment | 53 | 592 | ||||||
Realized Gain on Sale of Assets | - | (1,918 | ) | |||||
Changes in Assets and Liabilities, Net of Effects from | ||||||||
Acquisition and Divestiture of Components: | ||||||||
Restricted Cash | (3,710 | ) | (232 | ) | ||||
Accounts Receivable | (61,021 | ) | (60,565 | ) | ||||
Prepaid Expenses And Other | 9,311 | (3,163 | ) | |||||
Accounts Payable | 15,925 | 2,666 | ||||||
Accrued Salaries, Wages, Expenses and Benefits | (20,562 | ) | 7,984 | |||||
Deferred and Advance Tuition | 135,961 | 144,840 | ||||||
Net Cash Provided by Operating Activities-Continuing Operations | 141,063 | 142,497 | ||||||
Net Cash Used by Operating Activities-Discontinued Operations | - | (1,277 | ) | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 141,063 | 141,220 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Capital Expenditures | (21,152 | ) | (22,180 | ) | ||||
Payment for Purchase of Businesses, Net of Cash Acquired | - | (12,343 | ) | |||||
Marketable Securities Purchased | (11 | ) | (9 | ) | ||||
Cash Received from Sale of Assets | - | 6,662 | ||||||
NET CASH USED IN INVESTING ACTIVITIES | (21,163 | ) | (27,870 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from Exercise of Stock Options | 3,266 | 1,197 | ||||||
Proceeds from Stock Issued Under Employee Stock Purchase Plan | 309 | 339 | ||||||
Repurchase of Common Stock for Treasury | (2,485 | ) | - | |||||
Cash Dividends Paid | - | (14 | ) | |||||
Payment of Seller Financed Obligations | (4,097 | ) | (2,138 | ) | ||||
NET CASH USED IN FINANCING ACTIVITIES | (3,007 | ) | (616 | ) | ||||
Effects of Exchange Rate Differences | (1,973 | ) | (1,334 | ) | ||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 114,920 | 111,400 | ||||||
Cash and Cash Equivalents at Beginning of Period | 358,188 | 197,144 | ||||||
Cash and Cash Equivalents at End of Period | $ | 473,108 | $ | 308,544 |
DEVRY EDUCATION GROUP INC. | |||||||||||
SEGMENT INFORMATION |
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(Unaudited) | |||||||||||
PRELIMINARY | |||||||||||
For The Three Months | |||||||||||
Ended September 30, | |||||||||||
Increase | |||||||||||
2014 | 2013 | (Decrease) | |||||||||
(Dollars in thousands) | |||||||||||
REVENUES: | |||||||||||
Medical and Healthcare | $ | 206,012 | $ | 175,856 | 17.1 | % | |||||
International and Professional Education | 53,203 | 43,721 | 21.7 | % | |||||||
Business, Technology and Management | 203,641 | 232,309 | (12.3 | %) | |||||||
Intersegment Elimination | (812 | ) | (973 | ) | NM | ||||||
Total Consolidated Revenues |
462,044 | 450,913 | 2.5 | % | |||||||
OPERATING INCOME (LOSS) (Note 1): | |||||||||||
Medical and Healthcare | 37,643 | 24,575 | 53.2 | % | |||||||
International and Professional Education | 4,738 | 372 | 1,173.7 | % | |||||||
Business, Technology and Management | (12,468 | ) | (11,061 | ) | NM | ||||||
Reconciling Items: | |||||||||||
Home Office and Other | (5,270 | ) | (3,615 | ) | 45.8 | % | |||||
Total Consolidated Operating Income | 24,643 | 10,271 | 139.9 | % | |||||||
INTEREST INCOME: | |||||||||||
Interest Income | 397 | 583 | (31.9 | %) | |||||||
Interest Expense | (393 | ) | (1,000 | ) | (60.7 | %) | |||||
Net Interest Income | 4 | (417 | ) | (101.0 | %) | ||||||
Total Consolidated Income from Continuing Operations before |
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Income Taxes and Noncontrolling Interest | $ | 24,647 | $ | 9,854 | 150.1 | % | |||||
Note 1 - Segment Operating Income (Loss) has been adjusted in both periods to reflect intangible asset amortization expense at the segment level. This amortization expense had previously been disclosed as a Reconciling Item. | |||||||||||
During the first quarter of fiscal year 2015, DeVry Group recorded restructuring charges related to workforce reductions at DeVry University which is part of the Business, Technology and Management segment and real estate consolidations at DeVry University, Carrington College which is part of the Medical and Healthcare segment and DeVry Group home office (not related to any segment) in order to align its cost structure with enrollments. During fiscal first quarter 2014, DeVry Group recorded restructuring charges primarily related to workforce reductions and real estate consolidations at DeVry University, Carrington College and the DeVry Group home office in order to align its cost structure with enrollments. DeVry Group recorded a gain from the sale of a former DeVry University campus in Decatur, Georgia, during the first quarter of fiscal year 2014. The following table illustrates the effects of restructuring charges and gain on the sale of assets on DeVry Group’s operating income. Management believes that the non-GAAP disclosure of operating income excluding these special items provides investors with useful supplemental information regarding the underlying business trends and performance of DeVry Group’s ongoing operations and is useful for period-over-period comparisons of such operations given the special nature of the restructuring charges and gain on the sale of assets. DeVry Group uses these supplemental financial measures internally in its management and budgeting process. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, DeVry Group’s reported results prepared in accordance with GAAP. The following table reconciles these non-GAAP measures to the most directly comparable GAAP information (in thousands): | |||||||||||
For The Three Months | |||||||||||
Ended September 30, | |||||||||||
Increase | |||||||||||
2014 | 2013 | (Decrease) | |||||||||
Medical and Healthcare Operating Income | $ | 37,643 | $ | 24,575 | 53.2 | % | |||||
Restructuring Charge | 684 | 719 | (4.9 | %) | |||||||
Medical and Healthcare Operating Income | |||||||||||
Excluding Special Charges | $ | 38,327 | $ | 25,294 | 51.5 | % | |||||
Business, Technology and Management Operating Income | $ | (12,468 | ) | $ | (11,061 | ) | NM | ||||
Restructuring Charge | 12,603 | 7,950 | 58.5 | % | |||||||
Gain on Sale of Assets | - | (1,918 | ) | NM | |||||||
Business, Technology and Management Operating Income | |||||||||||
Excluding Special Charges | $ | 135 | $ | (5,029 | ) | NM |
CONTACT:
DeVry Education Group
Investor Contact:
Joan Walter
630-353-3800
jwalter@devrygroup.com
Media
Contact:
Larry Larsen
312-497-0655
llarsen@greentarget.com