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Q2 FY09 revenue surged 35.0% to $369.62 million from $273.74 million in the prior year's quarter, driven by the acquisition of U.S. Education, increasing student enrollments and tuition price increases.

Tuition revenue advanced 36.4% to $342.04 million, while other educational revenue climbed 19.7% to $27.57 million. Revenue from the DeVry University spiked 18.9% to $253.67 million from $213.39 million, helped by strong enrollment growth from its continued online expansion and improved onsite enrollments. The Medical and Healthcare revenue more than doubled to $97.98 million from $42.59 million, driven by the addition of U.S .Education, higher student enrollments and tuition rates at both Ross University and Chamberlain College of Nursing. Finally, revenue from Professional and Training segment inched up 1.2% to $17.97 million from $17.76 million in Q2 FY08. Geographically, revenue from Domestic operations ascended 39.2% to $326.35 million from $234.38 million, while International revenue increased 9.9% to $43.26 million from $39.36 million.

During the quarter under review, gross profit margin narrowed 396 basis points to 16.92% from 20.88% a year ago. Total operating costs and expenses mounted 35.4% to $307.08 million from $226.80 million, led by a 34.9% increase in costs for educational services and a 36.0% jump in student services and administrative expenses. Subsequently, operating margin declined 23 basis points to 16.92% from 17.15% in the year-ago quarter. Interest expense increased several times to $1.18 million from $0.10 million, thereby deteriorating the interest coverage ratio to 53.18 from 478.91. Finally, net income for the quarter soared 19.7% to $42.87 million or $0.59 per share from $35.81 million or $0.49 per share in the prior year's quarter, on higher enrollment and revenue.

DeVry's cash and cash equivalents dipped 5.5% to $237.14 million from $250.88 million. Return on assets declined 53 basis points to 9.66% from 10.19%, while return on equity widened 229 basis points to 16.73% from 14.44% in Q2 FY08. Total debt for the quarter stood at $155.12 million compared to zero in the comparable quarter of the last year. Stockholders' equity spiked 19.5% to $840.17 million from $703.17 million. As a result, the debt-to-equity ratio stood worsened to 0.18 from zero. Moreover, the company has a quick ratio of 0.75, which shows its lack of ability to its meet short-term cash requirements.

During the quarter under review, DeVry repurchased 98,100 shares of its common stock at an average price of $54.62 per share, as a part of its ongoing $50.00 million repurchase program. The company also increased its annual dividend by 33.0% to $0.16 per share from $0.12 per share. Furthermore, total course takers in Keller Graduate school of Management (KGSM) increased 13.7% during November 2008, while DeVry University new undergraduate and total undergraduate enrollments escalated 19.7% and 16.9%, respectively.

Recently, the company paid a semiannual dividend of $0.08 per share.

Looking forward to FY09, the company expects capital expenditures to be in the range of $65.00 million to $70.00 million.

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