DeVry Announces Fourth-Quarter And Full-Year 2013 Results

DeVry Inc. (NYSE:DV), a global provider of educational services, today reported academic, operational and financial results for its fiscal 2013 fourth-quarter and full year ended June 30, 2013. DeVry also reported enrollment results at DeVry Medical International, Chamberlain College of Nursing, Carrington Colleges Group, and DeVry University and its Keller Graduate School of Management.

Academic and operational accomplishments included:
  • Carrington College California received reaccreditation from the Western Association of Schools and Colleges (WASC) for a six year period
  • The percentage of DeVry University graduates who were actively seeking employment and had careers in their field within 6 months of graduation increased to 90 percent in calendar 2012
  • Chamberlain College of Nursing graduates achieved an average of 92 percent NCLEX pass rate in calendar 2012
  • DeVry Brasil completed the acquisition of Faculdade Differential Integral on July 1, 2013
  • DeVry decided to divest Advanced Academics Inc.
  • DeVry achieved more than $100 million in savings and value creation during fiscal 2013

Selected financial data for the three months ended June 30, 2013:
  • Revenues decreased 4.4 percent to $480 million
  • Reported a net loss of $32 million, compared to net income of $8 million last year; net income from continuing operations and excluding discrete items was $34 million, flat to prior year
  • Reported diluted per share loss of $0.51, compared to earnings per share of $0.12 last year; earnings per share from continuing operations and excluding discrete items was $0.54, up 3.8 percent

Selected financial data for the 12 months ended June 30, 2013:
  • Revenues decreased 5.2 percent to $1,964 million
  • Reported net income decreased 24.6 percent to $107 million; net income from continuing operations and excluding discrete items was $185 million, down 18.5 percent
  • Reported diluted earnings per share decreased 21.1 percent to $1.65; earnings per share from continuing operations and excluding discrete items was $2.86, down 14.6 percent
  • Operating cash flow of $263.9 million was down from $277.4 million last year
  • Repurchased approximately 2.2 million shares of common stock at an average price of $24.47

“We are responding to a challenging environment by executing a turnaround plan at DeVry University and Carrington including aligning our cost structure, regaining enrollment growth and making targeted investments to drive future growth,” said Daniel Hamburger, DeVry’s president and chief executive officer. “Our formula of quality plus diversification equals growth is helping us as we work through the cyclical weakness and we remain confident in the opportunities for long-term growth in career-oriented education.”

The fourth quarter fiscal year 2013 results contain discrete items:

  • A non-cash goodwill and intangible asset impairment charge of $49.4 million after-tax, or $0.78 per share, for Carrington Colleges;
  • A $9.0 million after-tax, or $0.14 per share, restructuring charge for workforce reductions and real estate consolidations.
  • A benefit of $4.4 million after-tax, or $0.07 per share, recorded during the fourth quarter as a result of an adjustment to an earn out accrual from a previous acquisition.

During the fourth quarter of fiscal year 2013, management decided to sell Advanced Academics Inc. As a result, the assets of this institution are reclassified as “held for sale” on the Consolidated Balance Sheets and the operating results are reported as “discontinued operations” in the Consolidated Statements of Income. The fiscal 2013 fourth quarter loss on discontinued operations of $12.4 million, net of tax, includes: operating losses; an asset impairment charge related to the write down of long-term assets to their fair market value; and restructuring charges related to real estate consolidations (see ''Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule'' on p.8).

Business Highlights

Medical and Healthcare Segment

Segment revenue of $171 million was strong, increasing 13.9 percent in the quarter and growing 9.9 percent to $672.6 million in fiscal year 2013. Segment earnings, excluding discrete items, increased 97.6 percent to $28.2 million in the quarter and increased to $117.2 million for the full year, up 35.3 percent.

DeVry Medical International

In the May 2013 term for DeVry Medical International, new students decreased 19.4 percent to 518 following a strong increase in the prior year of 643 students. Total students decreased 2.4 percent to 5,800 compared to 5,944 students in the same term last year. Turnover of key roles within enrollment management at Ross University School of Medicine impacted what is typically the smallest enrollment intake of the year. This operational issue has been addressed and enrollments in the September semester are expected to be solid.

In recent months, DeVry’s medical schools have positioned themselves for future growth and academic success by expanding their education affiliations with a number of highly regarded teaching hospitals.

Expansion of the American University of the Caribbean School of Medicine’s campus continues. The new academic building currently under construction is expected to open in January 2014 and will help meet expected enrollment.

Chamberlain College of Nursing

For the May 2013 session, new online students grew by 42.1 percent to 1,457 students, compared to 1,025 students in the prior year session. Total students increased 24.4 percent to 13,953. Chamberlain’s new online student enrollment in the July session increased 5.9 percent to 1,283 students, compared with 1,211 students in the prior year. Total students in the July session (onsite and online) increased 16.5 percent to 12,648, compared to 10,852 in the prior year.

The fiscal fourth quarter marked the completion of Chamberlain’s realignment of its campus-based academic calendar from July, November and March sessions to September, January and May. The calendar transition artificially made comparisons in the May session appear better, and those of the July session appear worse.

During the quarter, Chamberlain signed an agreement with Catholic Health Initiatives (CHI) to expand access to Chamberlain’s post licensure programs for nurses across the CHI system, which includes 75 hospitals and 40 long-term care facilities across 17 states.

Chamberlain recently received approval from the Higher Learning Commission for a Family Nurse Practitioner program, which is expected to launch in September. In addition, Chamberlain is expanding its existing Atlanta and Chicago campuses to accommodate continued growth.

During calendar year 2012, Chamberlain students sitting for the National Council Licensure Examination (NCLEX) had an overall pass rate of 92 percent.

Carrington Colleges Group

For the three month period ending June 30, 2013, new student enrollment for Carrington Colleges Group decreased 1.5 percent to 1,607 versus 1,632 in the previous year. During the quarter, Carrington reduced the number of non-core programs in order to accelerate its return to profitability. Total enrollment increased 9.6 percent to 7,111 compared to 6,486 in the prior year.

Carrington College California recently received reaccreditation from the Western Association of Schools and Colleges (WASC) for a six year period.

International and Professional Education Segment

Segment revenue increased 21.6 percent to $61.0 million in the quarter and increased 25.8 percent to $196.0 for the year. Excluding discrete items, segment earnings increased 25.9 percent to $17.7 million during the quarter and increased 22.3 percent to $47.0 million for the year.

Becker Professional Education

During the year, Becker grew its revenue by 4 percent. In addition, the recently acquired Falcon Physician Reviews, which provides exam review programs for medical boards, officially changed its name to Becker Professional Education.

DeVry Brasil

On July 1, 2013, DeVry Brasil completed the acquisition of Faculdade Differential Integral (Facid), which serves about 2,500 students primarily in healthcare, including a Doctor of Medicine (MD) program. Along with its MD program, Facid offers undergraduate degrees in other healthcare fields such as nursing, pharmacy, and dentistry, as well as a law program.

DeVry Brasil continues to benefit from recent acquisitions and strong integration execution. Faculdade do Vale do Ipojuca (Favip), acquired in September 2012, is one of the fastest growing institutions in northern Brazil and has exceeded expectations of DeVry’s acquisition plan.

Business, Technology, and Management Segment

Segment revenue of $248.3 million declined 17.7 percent in the fourth quarter and decreased 15.9 percent to $1,096.7 million for the full year. The segment generated a loss in the fourth quarter, excluding discrete items, declining $23.1 million. For the full-year, segment earnings of $99.1 million declined 51.9 percent.

DeVry University

For the May 2013 session at DeVry University new undergraduate enrollments decreased 19.4 percent to 4,616 versus 5,730 the previous year. Total undergraduate students decreased 18.7 percent to 48,842 versus 60,044 for the session a year ago. July 2013 new undergraduate enrollments decreased 24.7 percent to 5,674 compared to 7,532 the previous year. Total undergraduate students decreased 16.1 percent to 42,374 versus 50,503 for the July session a year ago.

At the graduate level, including Keller Graduate School of Management, total coursetakers in the May session decreased 17.1 percent to 18,836 versus 22,732 for the same session a year ago. For the July session, total coursetakers decreased 18.0 percent to 16,107 versus 19,635 for the same session a year ago.

The total number of online undergraduate and graduate coursetakers in the May session decreased 17.3 percent to 61,016 versus 73,803 in the same session a year ago. For July, total online coursetakers decreased 2.2 percent to 55,099 versus 56,340.

DeVry University and its Keller Graduate School of Management continue to be negatively impacted by prospective students’ lack of confidence in the job market.

During the fourth quarter, DeVry University made more strategic use of scholarships, focused on two objectives: attracting new students and improving student persistence. The Career Catalyst Scholarship aims to achieve both, as it is attractive to new students, and is awarded in progressively higher amounts over a three year period to motivate retention. The scholarship provides up to $20,000 for eligible students enrolling for the September session. New student enrollment in the September session is expected to decline at a more moderate pace than the July session.

In calendar 2012, 90 percent of DeVry University graduates who were actively seeking employment had careers in their field within 6 months of graduation (6). DeVry University continues to execute its turnaround plan, which includes aligning its cost structure with enrollment levels; regaining enrollment growth; and making targeted investments to drive future growth. DeVry University is focused on highlighting the university’s strong value proposition to students.

During the quarter, DeVry University earned specialized accreditation of its business and accounting degree programs from the Accreditation Council for Business Schools and Programs (ACBSP). DeVry University became only the ninth institution to achieve separate accounting accreditation from the Council.

Balance Sheet/Cash Flow

For fiscal 2013, DeVry generated $263.9 million of operating cash flow. As of June 30, 2013, cash, marketable securities and investment balances totaled $199.6 million with no outstanding debt.

Share Repurchase Plan

During the quarter, DeVry repurchased 185,216 shares of its common stock for approximately $5.5 million, at an average cost of $29.87 per share.

Conference Call and Webcast Information

DeVry will host a conference call on August 8, 2013, at 4:00 p.m. Central Daylight Time (5:00 p.m. Eastern Daylight Time) to discuss its fiscal 2013 fourth-quarter and year-end results and other developments with respect to DeVry. The conference call will be led by Daniel Hamburger, president and chief executive officer, Tim Wiggins, chief financial officer and Pat Unzicker, vice president of finance.

For those wishing to participate by telephone, dial 888-317-6016 (domestic) or 412-317-6016 (international). Please say “DeVry Call”. DeVry Inc. will also broadcast the conference call live online. Interested parties may access the webcast through the Investor Relations section of DeVry’s website, or http://services.choruscall.com/links/dv130808.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 will archive a telephone replay of the call until Sept. 4, 2013, 9:00 am EDT. To access the replay, dial 877-344-7529 (domestic) or 412-317-0088 (international), conference number 10031847. To access the webcast replay, please visit the company's website, or http://services.choruscall.com/links/dv130808.html.

About DeVry Inc.

DeVry's purpose is to empower its students to achieve their educational and career goals. DeVry (NYSE: DV; member S&P MidCap 400 Index) is a global provider of educational services and the parent organization of Advanced Academics, American University of the Caribbean School of Medicine, Becker Professional Education, Carrington College, Carrington College California, Chamberlain College of Nursing, DeVry Brasil, DeVry University, Ross University School of Medicine and Ross University School of Veterinary Medicine. These institutions offer a wide array of programs in business, healthcare, technology, accounting and finance. For more information, please call 630-353-3800 or 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 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's most recent Annual Report on Form 10-K for the year ending June 30, 2012 and filed with the Securities and Exchange Commission on August 28, 2012.

Selected Operating Data (in thousands, except per share data)
  Fourth Quarter
FY 2013   FY 2012   Change
Revenues $479,964 $501,962 -4.4 %
Net Income $(32,310 ) $8,085 $(40,395 )
Earnings per Share (diluted) $(0.51 ) $0.12 $(0.63 )
Number of common shares (diluted) 63,751 66,141 -3.6 %
 
  Fiscal Year
FY 2013   FY 2012   Change
Revenues $1,964,375 $2,071,783 -5.2%
Net Income $106,786 $141,565 -24.6%
Earnings per Share (diluted) $1.65 $2.09 -21.1%
Number of common shares (diluted) 64,611 67,705 -4.6%
 

Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule

During fiscal year 2013, DeVry recorded impairment charges related to its Carrington Colleges Group reporting unit. In addition, DeVry recorded restructuring charges primarily related to workforce reductions and real estate consolidations to align its cost structure with enrollments at DeVry University, Carrington Colleges and the DeVry Inc. home office. DeVry also recorded the operating results of its Advanced Academic Inc. reporting unit as discontinued operations beginning in the fourth quarter of the fiscal year. Also, DeVry recorded an adjustment to reduce an accrual for an earn out payment from a previous acquisition. During fiscal year 2012, DeVry recorded impairment charges related to its Carrington Colleges Group reporting unit and its Advanced Academics reporting unit. In addition, DeVry recorded a restructuring charge primarily related to workforce reductions to align its cost structure with enrollments at DeVry University and Carrington Colleges. DeVry also recorded a gain from the sale of Becker’s Stalla CFA review operations. The following table illustrates the effects of the impairment charges, restructuring charges, discontinued operations and gain on the sale of assets on DeVry’s earnings. Management believes that the non-GAAP disclosure of net income and earnings per share excluding these discrete items and discontinued operations provides investors with useful supplemental information regarding the underlying business trends and performance of DeVry’s ongoing operations and is useful for period-over-period comparisons of such operations given the discrete nature of the impairment and restructuring charges and gain on the sale of assets. DeVry 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’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 For The Year
Ended June 30, Ended June 30,
2013   2012 2013   2012
Net Income $(32,310 ) $8,085 $106,786 $141,565
Earnings per Share (Diluted) $(0.51 ) $0.12 $1.65 $2.09
Discontinued Operations (net of tax) $12,357 $21,645 $16,902 $27,541
Effect on Earnings per Share (Diluted) $0.19 $0.33 $0.26 $0.41
Earn-out Accrual Adjustment (net of tax) $(4,381 ) $ - $(4,381 ) $ -

Effect on Earnings per Share (Diluted)
$(0.07 ) $ - $(0.07 ) $ -
Impairment Charges (net of tax) $49,448 $ - $49,448 $55,751
Effect on Earnings per Share (Diluted) $0.78 $ - $0.77 $0.82
Restructuring Expenses (net of tax) $9,029 $4,334 $16,240 $4,334
Effect on Earnings per Share (Diluted) $0.14 $0.07 $0.25 $0.06
Gain on Sale of Assets (net of tax) $ - $ - $ - $(2,216 )
Effect on Earnings per Share (Diluted) $ - $ - $ - $(0.03 )
Net Income from Continuing Operations
Excluding the Impairment and Restructuring Charges; Earn
Out Adjustment; and Gain on Sale of Assets $34,143 $34,064 $184,995 $226,975
Earnings per Share from Continuing Operations
Excluding the Impairment and
Restructuring Charges and Gain on Sale of Assets (Diluted) $0.54 $0.52 $2.86 $3.35
 
Shares used in Diluted EPS Calculation 63,751 66,141 64,611 67,705

     
2013 2012 % Change
DeVry Inc. Student Enrollments (1)
 
Total students 110,297 117,315 -6.0
 
DeVry University
Undergraduate: May Session
New students 4,616 5,730 -19.4
Total students 48,842 60,044 -18.7
Undergraduate: July Session
New students 5,674 7,532 -24.7
Total students 42,374 50,503 -16.1
Graduate: May Session
Coursetakers (2) 18,836 22,732 -17.1
Graduate: July Session
Coursetakers (2) 16,107 19,635 -18.0
Online
May Session
Total coursetakers (2)(3) 61,016 73,803 -17.3
July Session
Total coursetakers (2)(3) 55,099 56,340 -2.2
 
Chamberlain College of Nursing (4)
May Session
New students (online only) 1,457 1,025 42.1
New students (onsite only) (5) 826 58 N/A
Total students 13,953 11,214 24.4
July Session
New students (online only) 1,283 1,211 5.9
New students (onsite only) 0 7634 N/A
Total students 12,648 10,852 16.5
 
Carrington Colleges Group
3 months ending June 30
New students 1,607 1,632 -1.5
Total students 7,111 6,486 9.6
 
DeVry Medical International
May Term
New students 518 643 -19.4
Total students 5,800 5,944 -2.4
   

Graduate Employment Statistics (6)

 
Percent Employed Average Salary
 
DeVry University (Undergraduate) 90.4% $43,539
 
1) Excludes Becker and Advanced Academics.
2) The term “coursetaker” refers to the number of courses taken by a student. Thus one student taking two courses equals two coursetakers.
3) Includes both undergraduate and graduate students.
4) New enrollment comparisons for the May and July sessions were impacted by a realignment of Chamberlain’s academic calendar, which resulted in no new campus-based students in July.
5) Chamberlain’s Atlanta campus was the first to enroll onsite students in the May 2012 session.
6) Figures based on 2012 graduates’ self-reported data to DeVry University Career Services who were employed at graduation or who were actively seeking employment after graduation and found employment in their field within six months. Does not include graduates who were not actively seeking employment, as determined by DeVry University Career Services, or who did not report data on employment status to DeVry University Career Services.

 

Chart 1: DeVry Inc. Remaining Calendar 2013 Announcements & Events
 
October 24, 2013   Fiscal 2014 First Quarter Results and September Enrollment
 
DeVry University

Chamberlain College of Nursing

Carrington Colleges Group

DeVry Medical International

DeVry Brasil
 
November 6, 2013 Annual Shareholders’ Meeting

 
DEVRY INC.

CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
       
June 30, June 30,
2013 2012

ASSETS
 

Current Assets
Cash and Cash Equivalents $ 196,576 $ 173,984
Marketable Securities and Investments 2,975 2,632
Restricted Cash 7,019 2,498
Accounts Receivable, Net 139,778 93,046
Deferred Income Taxes, Net 32,515 27,845
Refundable Income Taxes 154 40,278
Prepaid Expenses and Other   35,166     35,823  
 
Total Current Assets   414,183     376,106  
 

Land, Buildings and Equipment
Land 71,122 65,172
Buildings 424,902 385,779
Equipment 475,656 422,590
Construction In Progress   33,724     61,752  
1,005,404 935,293
Accumulated Depreciation and Amortization   (433,747 )   (382,242 )
 
Land, Buildings and Equipment, Net 571,657 553,051
 

Other Assets
Intangible Assets, Net 281,998 285,220
Goodwill 508,937 549,961
Perkins Program Fund, Net 13,450 13,450
Other Assets   33,025     29,894  
Total Other Assets 837,410 878,525
 
Assets of Business Held for Sale   16,647     30,934  
 
TOTAL ASSETS $ 1,839,897   $ 1,838,616  

 
DEVRY INC.

CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
       
June 30, June 30,
2013 2012

LIABILITIES
 

Current Liabilities
Accounts Payable $ 55,131 $ 61,831
Accrued Salaries, Wages and Benefits 88,444 77,385
Accrued Expenses 57,423 76,209
Advance Tuition Payments 27,135 20,580
Deferred Tuition Revenue   70,343     77,501  
 
Total Current Liabilities   298,476     313,506  
 

Non-Current Liabilities
Deferred Income Taxes, Net 57,501 62,276
Deferred Rent and Other   85,088     96,826  
 
Total Non-current Liabilities 142,589 159,102
 
Liabilities of Business Held for Sale   825     1,373  
 
TOTAL LIABILITIES   441,890     473,981  
 
NON-CONTROLLING INTEREST 854 8,242
 

SHAREHOLDERS' EQUITY
 
Common Stock, $0.01 par value, 200,000,000 Shares Authorized;
62,946,000 and 64,722,000 Shares issued
and outstanding at June 30, 2013
and 2012, respectively. 745 741
Additional Paid-in Capital 291,269 272,962
Retained Earnings 1,575,006 1,488,988
Accumulated Other Comprehensive Income (17,101 ) (5,889 )
Treasury Stock, at Cost (11,581,000 and 9,386,000
Shares, Respectively)   (452,766 )   (400,409 )
 
TOTAL SHAREHOLDERS' EQUITY   1,397,153     1,356,393  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,839,897   $ 1,838,616  

               

DEVRY INC.

CONSOLIDATED  STATEMENTS  OF  INCOME

(Dollars in Thousands Except for Per Share Amounts)

(Unaudited)

PRELIMINARY
 
For The Quarter For The Year
Ended June 30, Ended June 30,
 
2013 2012 2013 2012 2011

REVENUES:
Tuition $ 452,155 $ 475,550 $ 1,840,033 $ 1,949,909 $ 2,023,483
Other Educational   27,809     26,412     124,342     121,874     136,781  
 
Total Revenues   479,964     501,962     1,964,375     2,071,783     2,160,264  
 

OPERATING COSTS AND EXPENSES:
Cost of Educational Services 245,698 247,472 962,223 960,814 914,389
Student Services and Administrative Expense 192,301 207,459 756,384 789,903 744,369
Earn-out Accrual Adjustment (4,381 ) - (4,381 ) - -
Asset Impairment Charge 56,992 - 56,992 75,039 -
Restructuring Expenses   14,716     7,102     26,229     7,102     -  
 
Total Operating Costs and Expenses   505,326     462,033     1,797,447     1,832,858     1,658,758  
 

Operating Income (Loss)
(25,362 ) 39,929 166,928 238,925 501,506
 

INTEREST AND OTHER INCOME (EXPENSE):
Interest Income 446 297 1,652 817 1,538
Interest Expense (605 ) (959 ) (3,611 ) (2,612 ) (1,282 )
Net Gain on Sale of Assets   -     -     -     3,695     -  
 
Net Interest and Other Income (Expense)   (159 )   (662 )   (1,959 )   1,900     256  
 

Income (Loss) from Continuing Operations Before Income Taxes
(25,521 ) 39,267 164,969 240,825 501,762
 

Income Tax Benefit (Provision)
  6,512     (9,137 )   (39,227 )   (70,903 )   (166,542 )
 
Income (Loss) from Continuing Operations (19,009 ) 30,130 125,742 169,922 335,220
 

DISCONTINUED OPERATIONS

Loss from Operations of Held for Sale Component
(18,864 ) (24,766 ) (25,856 ) (34,687 ) (7,330 )

Income Tax Benefit
  6,507     3,121     8,954     7,146     2,940  

Loss on Discontinued Operations
  (12,357 )   (21,645 )   (16,902 )   (27,541 )   (4,390 )
 

NET INCOME (LOSS)
(31,366 ) 8,485 108,840 142,381 330,830
 
Net Income Attributable to Noncontrolling Interest   (944 )   (400 )   (2,054 )   (816 )   (427 )
 

NET INCOME (LOSS) ATTRIBUTABLE TO DEVRY INC.
$ (32,310 ) $ 8,085   $ 106,786   $ 141,565   $ 330,403  
 

AMOUNTS ATTRIBUTABLE TO DEVRY INC.:
Income (Loss) from Continuing Operations, Net of Income Taxes (19,953 ) 29,730 123,688 169,106 334,793
Loss from Discontinued Operations, Net of Income Taxes   (12,357 )   (21,645 )   (16,902 )   (27,541 )   (4,390 )

NET INCOME (LOSS) ATTRIBUTABLE TO DEVRY INC.
$ (32,310 ) $ 8,085   $ 106,786   $ 141,565   $ 330,403  
 

EARNINGS PER COMMON SHARE ATTRIBUTABLE

TO DEVRY INC. SHAREHOLDERS

Basic
Continuing Operations $ (0.32 ) $ 0.45 $ 1.92 $ 2.52 $ 4.79
Discontinued Operations   (0.19 )   (0.33 )   (0.26 )   (0.41 )   (0.06 )
$ (0.51 ) $ 0.12   $ 1.66   $ 2.11   $ 4.73  

Diluted
Continuing Operations $ (0.32 ) $ 0.45 $ 1.91 $ 2.50 $ 4.74
Discontinued Operations   (0.19 )   (0.33 )   (0.26 )   (0.41 )   (0.06 )
$ (0.51 ) $ 0.12   $ 1.65   $ 2.09   $ 4.68  
 

Cash Dividend Declared per Common Share
$ 0.17   $ 0.15   $ 0.34   $ 0.30   $ 0.24  

 
DEVRY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
    For The Year
Ended June 30,
2013   2012   2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $108,837 $142,381 $330,830
Loss from Discontinued Operations 16,902 28,096 4,390
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
 
Stock-Based Compensation Expense 15,493 18,530 14,251
Depreciation 83,111 74,472 56,462
Amortization 10,139 10,002 4,732
Impairment of Goodwill and Intangible Assets 56,992 75,039 -
Provision for Refunds and Uncollectible Accounts 80,557 89,928 89,987
Deferred Income Taxes (12,462 ) (10,160 ) 23,966
Loss on Disposals and Adjustments to Land, Buildings and Equipment 10,633 1,185 468
Realized Gain on Sale of Assets - (3,695 ) -
Changes in Assets and Liabilities, Net of Effects from
Acquisitions and Divestitures of Businesses:
Restricted Cash (4,521 ) (190 ) (206 )
Accounts Receivable (124,448 ) (90,254 ) (77,981 )
Prepaid Expenses And Other 24,389 (36,348 ) 782
Accounts Payable (6,697 ) (2,687 ) (26,876 )
Accrued Salaries, Wages, Expenses and Benefits 15,446 (10,329 ) 5,769
Advance Tuition Payments 6,648 (1,652 ) 1,291
Deferred Tuition Revenue (7,158 ) (3,382 ) (12,329 )
 
Net Cash Provided by Operating Activities-Continuing Operations 273,861 280,936 415,536
Net Cash Used by Operating Activities-Discontinued Operations (9,913 ) (3,514 ) (7,546 )
 
NET CASH PROVIDED BY OPERATING ACTIVITIES 263,948   277,422   407,990  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (111,775 ) (125,298 ) (132,602 )
Payment for Purchase of Businesses, Net of Cash Acquired (31,386 ) (255,369 ) (3,027 )
Marketable Securities Purchased (93 ) (61 ) (101 )
Marketable Securities Sales - - 13,495
Cash Received from Sale of Assets - 4,475 -
Purchase of Non-controlling Interest of Subsidiary (7,649 ) - -
Other -   -   (627 )
 
Net Cash Used in Investing Activities-Continuing Operations (150,903 ) (376,253 ) (122,862 )
Net Cash Used in Investing Activities-Discontinued Operations (1,729 ) (3,757 ) (3,124 )
 
NET CASH USED IN INVESTING ACTIVITIES (152,632 ) (380,010 ) (125,986 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 4,976 6,134 9,098
Proceeds from Stock issued Under Employee Stock Purchase Plan 1,700 1,716 1,460
Repurchase of Common Stock for Treasury (53,886 ) (158,093 ) (132,940 )
Cash Dividends Paid (31,529 ) (18,369 ) (15,529 )
Excess Tax Benefit from Stock-Based Payments (2,443 ) 664 1,012
Payment of Seller Financed Debt (3,822 ) - -
Payment of Debt Financing Fees - (70 ) (3,290 )
     
NET CASH USED IN FINANCING ACTIVITIES (85,004 ) (168,018 ) (140,189 )
     
Effects of Exchange Rate Differences (3,244 ) (2,463 ) (2,372 )
     
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 23,068 (273,069 ) 139,443
 
Cash and Cash Equivalents at Beginning of Year 174,076   447,145   307,702  
Cash and Cash Equivalents at End of Year 197,144 174,076 447,145
Less: Cash and Cash Equivalents of Discontinued Operations at End of Year 568 92 100
     
Cash and Cash Equivalents of Continuing Operations at End of Year $196,576   $173,984   $447,045  

 
DEVRY INC.

SEGMENT INFORMATION
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
           
For The Quarter For The Year
Ended June 30, Ended June 30,
Increase Increase
2013 2012 (Decrease) 2013 2012 (Decrease)
REVENUES:
Business, Technology and Management $ 248,302 $ 301,597 (17.7 %) $ 1,096,695 $ 1,303,556 (15.9 %)
Medical and Healthcare 171,376 150,497 13.9 % 672,604 611,953 9.9 %
International and Professional Education 60,664 49,868 21.6 % 196,576 156,284 25.8 %
Intersegment Elimination   (378 )   -   NM   (1,500 )   -   NM
Total Consolidated Revenues   479,964     501,962   (4.4 %)   1,964,375     2,071,793   (5.2 %)
 
OPERATING INCOME (LOSS):
Business, Technology and Management (8,791 ) 17,272 NM 90,045 201,122 (55.2 %)
Medical and Healthcare (32,446 ) 12,283 NM 54,076 9,602 463.2 %
International and Professional Education 21,418 13,899 54.1 % 50,620 38,198 32.5 %
Reconciling Items:
Amortization Expense (2,369 ) (3,041 ) (22.1 %) (9,480 ) (10,885 ) (12.9 %)
Depreciation and Other   (3,174 )   (484 ) 555.8 %   (18,333 )   888   NM
 
Total Consolidated Operating Income (Loss)   (25,362 )   39,929   NM   166,928     238,925   (30.1 %)
 
INTEREST AND OTHER INCOME (EXPENSE):
Interest Income 446 297 50.2 % 1,652 817 102.2 %
Interest Expense (605 ) (959 ) (36.9 %) (3,611 ) (2,612 ) 38.2 %
Net Gain on Sale of Assets   -     -   -   -     3,695   NM
 
Net Interest and Other (Expense) Income   (159 )   (662 ) (76.0 %)   (1,959 )   1,900   NM
 
Total Consolidated Income before Minority Interest
and Income Taxes $ (25,521 ) $ 39,267   NM $ 164,969   $ 240,825   (31.5 %)
 
Intangible asset and goodwill impairment charges were recorded for the three and twelve month periods ended June 30, 2013 and 2012. These charges are related to DeVry's Carrington Colleges Group, Inc. which is part of the Medical and Healthcare segment. Also, restructuring charges were recorded for the three and twelve month periods ended June 30, 2013 and 2012. These charges were made to reporting units in all three segments. The following table illustrates the effects of these impairment and restructuring charges on the operating income of the segments. Management believes that the non-GAAP disclosure of operating earnings provides investors with useful supplemental information regarding the underlying business trends and performance of DeVry’s ongoing operations and are useful for period-over-period comparisons of such operations given the discrete nature of these impairment transactions. DeVry uses these supplemental financial measures internally in its budgeting process. However, the non-GAAP financial measures should be viewed in addition to, and not as a substitute for, DeVry’s reported results prepared in accordance with GAAP. The following table reconciles these items to the relevant GAAP information:
     
For The Quarter For The Year
Ended June 30, Ended June 30,
    Increase     Increase
2013 2012 (Decrease) 2013 2012 (Decrease)
 
Business, Technology and Management Operating Income $ (8,791 ) $ 17,272 NM $ 90,045 $ 201,122 (55.2 %)
Restructuring Charge   7,892     4,962 59.0 %   9,078     4,962 NM
Business, Technology and Management Operating Income
Excluding Discrete Charges $ (899 ) $ 22,234 NM $ 99,123   $ 206,084 (51.9 %)
 
Medical and Healthcare Operating Income $ (32,446 ) $ 12,283 NM $ 54,076 $ 9,602 463.2 %
Asset Impairment Charge 56,992 - NM 56,992 75,039 (24.1 %)
Restructuring Charge   3,672     1,997 83.9 %   6,131     1,997 207.0 %
Medical and Healthcare Operating Income
Excluding Discrete Charges $ 28,218   $ 14,280 97.6 % $ 117,199   $ 86,638 35.3 %
 
International and Professional Education Operating Income $ 21,418 $ 13,899 54.1 % $ 50,620 $ 38,198 32.5 %
Earn-out Accrual Adjustment (4,381 ) - NM (4,381 ) - NM
Restructuring Charge   637     143 345.5 %   637     143 345.5 %
International and Professional Education Operating Income
Excluding Discrete Charges $ 17,674   $ 14,042 25.9 % $ 46,876   $ 38,341 22.3 %

     
For The Three Months For The Year
Ended June 30, Ended June 30,
   
2013 2012 2013 2012
Net Income $ (32,310 ) $ 8,085 $ 106,786 $ 141,565
Earnings per Share (Diluted) $ (0.51 ) $ 0.12 $ 1.65 $ 2.09
 
Discontinued Operations (net of tax) $ 12,357 $ 21,645 $ 16,902 $ 27,541
Effect on Earnings per Share (Diluted) $ 0.19 $ 0.33 $ 0.26 $ 0.41
 
Earn-out Accrual Adjustment (net of tax) $ (4,381 ) $ - $ (4,381 ) $ -
Effect on Earnings per Share (Diluted) $ (0.07 ) $ - $ (0.07 ) $ -
 
Impairment Charges (net of tax) $ 49,448 $ - $ 49,448 $ 55,751
Effect on Earnings per Share (Diluted) $ 0.78 $ - $ 0.77 $ 0.82
 
Restructuring Expenses (net of tax) $ 9,029 $ 4,334 $ 16,240 $ 4,334
Effect on Earnings per Share (Diluted) $ 0.14 $ 0.07 $ 0.25 $ 0.06
 
Gain on Sale of Assets (net of tax) $ - $ - $ - $ (2,216 )
Effect on Earnings per Share (Diluted) $ - $ - $ - $ (0.03 )
 
Net Income from Continuing Operations
Excluding the Impairment and
Restructuring Charges, Earn-out Accrual
Adjustment and Gain on Sale of Assets (Diluted) $ 34,143 $ 34,064 $ 184,995 $ 226,975
 
Earnings per Share from Continuing Operations
Excluding the Impairment and
Restructuring Charges, Earn-out Accrual
Adjustment and Gain on Sale of Assets (Diluted) $ 0.54 $ 0.52 $ 2.86 $ 3.35
 
Shares used in Diluted EPS Calculation 63,751 66,141 64,611 67,705
 

Copyright Business Wire 2010

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