DeVry Education Group Announces Second Quarter 2014 Results

DeVry Education Group Inc. (NYSE:DV), a global provider of educational services, today reported academic, operational and financial results for its fiscal 2014 second-quarter ended Dec. 31, 2013. DeVry Group 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 for the quarter:
  • Carrington College California obtained conditional approval to add the campuses of Carrington College from its accreditor, which will result in one, regionally accredited institution
  • Chamberlain College of Nursing received full approval for its Houston campus from the Texas Board of Nursing and was granted initial approval for a second campus in the Houston area
  • The American University of the Caribbean School of Medicine completed its new $30 million academic building
  • DeVry Group completed the divestiture of Advanced Academics to, and formed a strategic partnership with, Connections Education/Pearson

Selected financial data for the three months ended Dec. 31, 2013:
  • Total revenues decreased 1.9 percent to $491.3 million
  • Medical and Healthcare and International and Professional Education segment revenues grew 13.5 percent and 16.6 percent respectively, while Business, Technology and Management revenues declined 14.4 percent
  • Reported net income of $48.2 million, compared to $50.3 million last year; net income from continuing operations and excluding special items was $52.0 million, down 9.0 percent from prior year
  • Reported diluted earnings per share of $0.74, compared to earnings per share of $0.78 last year; earnings per share from continuing operations and excluding special items was $0.80, compared to $0.88 last year

Selected financial data for the six months ended Dec. 31, 2013:
  • Total revenues decreased 3.9 percent to $942.2 million
  • Medical and Healthcare and International and Professional Education segment revenues grew 12.3 percent and 17.3 percent respectively, while Business, Technology and Management revenues declined 16.4 percent
  • Reported net income of $41.0 million, compared to $82.3 million last year; net income from continuing operations and excluding special items was $66.2 million, down 27.5 percent from prior year
  • Reported diluted earnings per share of $0.63, compared to earnings per share of $1.27 last year; earnings per share from continuing operations and excluding special items was $1.02, as compared to $1.41 last year
  • Operating cash flow of $113.1 million compared to $180.2 million last year
  • Cash and cash equivalents increased to $262.0 million as of Dec. 31, 2013, from $216.6 million as of Dec. 31, 2012
  • Generated $35 million in cost savings and value creation in its institutions in transition during the first six months, putting these institutions on track to achieve $75 million in savings for the fiscal year

The second quarter fiscal year 2014 results contained the following special items:
  • A $2.9 million after-tax, or $0.04 per share, restructuring charge for real estate consolidations and workforce reductions.
  • A $0.9 million net of tax loss, or $0.01 per share, on discontinued operations at Advanced Academics

See “Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule”.

“Our formula of quality plus diversification equals growth is mitigating the current weakness in certain segments of U.S. postsecondary education,” said Daniel Hamburger, DeVry Group’s president and chief executive officer. “We are investing in the expansion of our growing institutions, particularly healthcare, professional and international education, as we execute our turnaround plans at DeVry University and Carrington.”

Operating Highlights

Medical and Healthcare Segment

During the quarter, segment revenue of $190.4 million increased 13.5 percent compared to the prior year. Excluding special charges, segment operating income increased 42.6 percent to $40.1 million versus the previous year. For the six-month period, revenues increased 12.3 percent to $366.3 million and segment operating income, excluding special charges, rose 24.5 percent to $66.3 million versus prior year.

DeVry Medical International

In the January 2014 term for DeVry Medical International, new students decreased 3.5 percent to 582 compared to 603 students for prior year session. Total students increased 5.6 percent to 6,673 compared to 6,318 students in the same session last year.

Chamberlain College of Nursing

During the quarter, Chamberlain grew its revenue by 26.2 percent, primarily driven by new locations, campus expansions, and new programs.

For the November 2013 session, new online students grew by 50.3 percent to 1,952 students. Total students increased 28.5 percent to 15,732.

For the January 2014 session, new online students grew by 55.7 percent to 2,328 students. New onsite students totaled 1,173 in the period. Total students for the session increased 32.2 percent to a record 18,136 for the session.

Chamberlain’s Cleveland campus celebrated its grand opening in October. During the quarter, the Texas Board of Nursing granted full approval to Chamberlain’s Houston campus and preliminary approval for a second campus in the Houston area.

Carrington Colleges Group

During the quarter, revenue grew 3.4 percent during the second quarter as Carrington is benefitting from executing on its turnaround plan.

For the three-month period ending Dec. 31, 2013, new student enrollment declined 3.2 percent to 1,706 versus 1,763 in the previous year. Total enrollment decreased 0.6 percent to 7,358 from 7,405 in the previous year. Carrington College California recently announced it has obtained conditional approval from its accreditor to add the campuses of Carrington College to its existing campus network. Pending successful site visits and final approval by its accreditor, Carrington College California will encompass 17 campuses located in California, Arizona, New Mexico, Idaho, Nevada, Texas and Washington.

International and Professional Education Segment

Segment revenue increased 16.6 percent to $61.4 million compared to the prior year. Segment operating income grew 7.8 percent to $16.4 million versus the previous year. For the six-month period, revenues increased 17.3 percent to $105.2 million while segment operating income declined $1.1 million to $17.5 million versus prior year.

Becker Professional Education

During the quarter, Becker grew its revenue by 5 percent, primarily driven by growth in sales of its CPA exam preparation program. Becker also continues to experience growth in the United States Medical Licensing Exam (USMLE), Association of Chartered Certified Accountants (ACCA), and Continuing Professional Education (CPE) markets.

DeVry Brasil

Revenue grew nearly 29 percent over the previous year. During the quarter, temporary admission constraints were lifted on two of the three restricted programs at one of DeVry Brasil’s institutions, Area1.

Recently DeVry Brasil’s Favip was granted Centro Universitário status from the Brazilian Ministry of Education and Culture based on the number of recognized courses that it offers, the breadth of the institution’s programs, and the quality of its faculty, including contributions to scientific research and community outreach.

Business, Technology, and Management Segment

DeVry University

Segment revenue of $239.9 million declined 14.4 percent compared to the prior year. Excluding special items, the segment generated $9.9 million of operating income during the quarter. For the six-month period, revenues declined 16.4 percent to $472.2 million and the segment reported operating income of $4.9 million, excluding special items.

For the November 2013 session at DeVry University new undergraduate enrollments decreased 12 percent to 4,824 compared to 5,482 the previous year. Total undergraduate students decreased 11.7 percent to 43,726 versus 49,515 for the session a year ago. In addition to overall cyclical weakness across higher education, the impact of the government shutdown in late October affected November enrollment results. The rate of decline in new student enrollment narrowed in the January session. January 2014 new undergraduate enrollments decreased 7.9 percent to 4,911 compared to 5,330 the previous year. Total undergraduate students decreased 15.1 percent to 45,097 versus 53,138 for the January session a year ago.

At the graduate level, including Keller Graduate School of Management, total coursetakers in the November session decreased 14.1 percent to 16,778 versus 19,540 for the same session a year ago. For the January session, total graduate coursetakers decreased 18 percent to 17,322 versus 21,131 for the same session a year ago.

DeVry University recently announced that it is offering a Career Catalyst Scholarship to qualified students who enroll for the March session.

Balance Sheet/Cash Flow

For fiscal second quarter, DeVry Group generated $113.1 million of operating cash flow. As of Dec. 31, 2013, cash and cash equivalents increased 21 percent to $262.0 million. DeVry Group has no outstanding borrowings.

Conference Call and Webcast Information

DeVry Group will host a conference call on Feb. 4, 2014, at 4:00 p.m. Central Standard Time (5:00 p.m. Eastern Standard Time) to discuss its fiscal 2014 second-quarter results and other developments with respect to DeVry Group. 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 Group Call”. DeVry Group will also broadcast the conference call via webcast. Interested parties may access the webcast through the Investor Relations section of DeVry Group's website, or http://services.choruscall.com/links/dv140204.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 Feb. 26, 2014. To access the replay, dial 877-344-7529 (domestic) or 412-317-0088 (international), passcode 10039633. To access the webcast replay, please visit the company's website, or http://services.choruscall.com/links/dv140204.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, 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 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, 2013 and filed with the Securities and Exchange Commission on August 29, 2013.

Selected Operating Data (in thousands, except per share data)
      Second Quarter
FY 2014     FY 2013     Change
Revenues $491,269 $500,666 -1.9%
Net Income $48,155 $50,286 -4.2%
Earnings per Share (diluted) $0.74 $0.78 -5.1%
Number of common shares (diluted) 64,719 64,536 -0.3%
 
      Six Months
FY 2014     FY 2013     Change
Revenues $942,181 $980,586 -3.9%
Net Income $41,023 $82,275 -50.1%
Earnings per Share (diluted) $0.63 $1.27 -50.4%
Number of common shares (diluted) 64,616 64,788 -0.3%
 

Use of Non-GAAP Financial Information and Supplemental Reconciliation Schedule

During the second quarter and first six months of fiscal year 2014, DeVry Group recorded expenses related to workforce reductions and real estate consolidations to align its cost structure at DeVry University, Carrington Colleges and DeVry Education Group home office with enrollments. DeVry Group also recorded a gain from the sale of a former DeVry University campus in Decatur, Georgia. Additionally, DeVry Group recorded the operating results of Advanced Academics Inc. reporting unit as discontinued operations. The following table illustrates the effects of restructuring charges, discontinued operations and gain on the sale of assets on DeVry Group’s earnings. Management believes that the non-GAAP disclosure of net income and earnings per share excluding these special items and discontinued operations 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):
 

 
Non-GAAP Earnings Disclosure
PRELIMINARY
           
 
For The Three Months For The Six Months
Ended December 31, Ended December 31,
 
2013 2012 2013 2012

Net Income
$ 48,155 $ 50,286 $ 41,023 $ 82,275

Earnings per Share (Diluted)
$ 0.74 $ 0.78 $ 0.63 $ 1.27
 
Discontinued Operations (net of tax) $ 920 $ 838 $ 16,248 $ 3,012
Effect on Earnings per Share (Diluted) $ 0.01 $ 0.01 $ 0.25 $ 0.05
 
Restructuring Expenses (net of tax) $ 2,877 $ 5,940 $ 10,057 $ 5,940
Effect on Earnings per Share (Diluted) $ 0.04 $ 0.09 $ 0.16 $ 0.09
 
Gain on Sale of Assets (net of tax) $ - $ - $ (1,167 ) $ -
Effect on Earnings per Share (Diluted) $ - $ - $ (0.02 ) $ -
 
Net Income from Continuing Operations
Excluding the Restructuring Expense and
Gain on Sale of Assets (Diluted) $ 51,952 $ 57,064 $ 66,161 $ 91,227
 
Earnings per Share from Continuing Operations
Excluding the Restructuring Expense and
Gain on Sale of Assets (Diluted) $ 0.80 $ 0.88 $ 1.02 $ 1.41
 

Enrollment Results
                       
2013/14         2012/13         % Change
DeVry Education Group Student Enrollments (1)
 
Total students 120,798 124,007 -2.6
                               
Chamberlain College of Nursing
November Session
New students (online only) 1,952 1,299 50.3
New students (onsite only) (2) - 822 N/A
Total students 15,732 12,247 28.5
January Session
New students (online only) 2,328 1,495 55.7
New students (onsite only) (2) 1,173 625 87.7
Total students 18,136 13,714 32.2
 
Carrington Colleges Group
3 months ending Dec. 31, 2013
New students 1,706 1,763 -3.2
Total students 7,358 7,405 -0.6
 
DeVry Medical International
January Term
New students 582 603 -3.5
Total students 6,673 6,318 5.6
 
DeVry University
Undergraduate: November Session
New students 4,824 5,482 -12.0
Total students 43,726 49,515 -11.7
Undergraduate: January Session
New students 4,911 5,330 -7.9
Total students 45,097 53,138 -15.1
Graduate : November Session
Coursetakers (3) 16,778 19,540 -14.1
Graduate : January Session
Coursetakers (3) 17,322 21,131 -18.0
Online
November Session
Total coursetakers (3)(4) 57,258 62,899 -9.0
January Session
Total coursetakers (3)(4) 59,645 67,983 -5.2
   
1) Excludes Becker Professional Education. Includes the most recently reported enrollments at DeVry Group’s other institutions.
2) New enrollment comparisons for the November and January sessions were impacted by a realignment of Chamberlain’s academic calendar.
3) The term “coursetaker” refers to the number of courses taken by a student. Thus one student taking two courses equals two coursetakers.
4) Includes both undergraduate and graduate students.

 

Chart 1: DeVry Education Group 2014 Announcements & Events
April 24, 2014     Fiscal 2014 Third Quarter Results and March Enrollment
DeVry University

Chamberlain College of Nursing

Carrington Colleges Group

DeVry Brasil
 
August 7, 2014 Fiscal 2014 Fourth Quarter/Year-End and May/July Enrollment
DeVry University

Chamberlain College of Nursing

Carrington Colleges Group

DeVry Medical International
 
October 23, 2014 Fiscal 2015 First Quarter Results and September Enrollment
DeVry University

Chamberlain College of Nursing

Carrington Colleges Group

DeVry Medical International

DeVry Brasil
 
November 5, 2014 Annual Shareholders’ Meeting

 
DEVRY EDUCATION GROUP INC.

CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
               
December 31, June 30, December 31,
2013 2013 2012
 

ASSETS

Current Assets
Cash and Cash Equivalents $ 262,034 $ 196,576 $ 216,567
Marketable Securities and Investments 3,263 2,975 2,752
Restricted Cash 11,873 7,019 3,894
Accounts Receivable, Net 117,812 139,778 118,322
Deferred Income Taxes, Net 31,169 29,758 25,008
Refundable Income Taxes 6,969 154 23,827
Prepaid Expenses and Other 42,625 49,685 31,695
Current Assets of Divested Business   -     16,219     28,706  
Total Current Assets   475,745     442,164     450,771  
 

Land, Buildings and Equipment
Land 66,539 71,122 65,963
Buildings 429,463 424,902 388,010
Equipment 472,944 475,656 459,711
Construction In Progress   44,115     33,724     48,143  
1,013,061 1,005,404 961,827
Accumulated Depreciation and Amortization (455,018 ) (433,747 ) (407,991 )
Land, Buildings and Equipment of Divested Business, Net   -     -     5,521  
Land, Buildings and Equipment, Net   558,043     571,657     559,357  
 

Other Assets
Intangible Assets, Net 293,720 281,998 294,177
Goodwill 514,757 508,937 566,199
Perkins Program Fund, Net 13,450 13,450 13,450
Other Assets 33,398 33,025 30,112
Other Assets of Divested Business   -     5,787     718  
Total Other Assets   855,325     843,197     904,656  
 
TOTAL ASSETS $ 1,889,113   $ 1,857,018   $ 1,914,784  
 

 
 
DEVRY EDUCATION GROUP INC.

CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
                 
December 31, June 30, December 31,
2013 2013 2012
 

LIABILITIES

Current Liabilities
Accounts Payable $ 62,721 $ 55,131 $ 60,383
Accrued Salaries, Wages and Benefits 77,447 88,444 63,607
Accrued Expenses 69,259 74,451 71,432
Advance and Deferred Tuition 97,725 97,478 140,576
Current Liabilities of Divested Business   -     713     1,530  
Total Current Liabilities   307,152     316,217     337,528  
 

Other Liabilities
Deferred Income Taxes, Net 59,941 60,103 64,444
Deferred Rent and Other   91,054     82,576     107,553  
Total Non-current Liabilities 150,995 142,679 171,997
Other Liabilities of Divested Business   -     112     -  
 
TOTAL LIABILITIES   458,147     459,008     509,525  
 
NON-CONTROLLING INTEREST 5,975 854 8,901
 

SHAREHOLDERS' EQUITY
Common Stock, $0.01 par value, 200,000,000 Shares Authorized;
63,332,000, 62,946,000 and 63,287,000 Shares issued
and outstanding at December 31, 2013, June 30, 2013
and December 31, 2012, respectively. 752 745 744
Additional Paid-in Capital 304,807 291,269 280,901
Retained Earnings 1,599,985 1,575,009 1,560,130
Accumulated Other Comprehensive Income (25,573 ) (17,101 ) (6,696 )
Treasury Stock, at Cost (11,661,000, 11,581,000 and 11,079,000
Shares, Respectively)   (454,980 )   (452,766 )   (438,721 )
 
TOTAL SHAREHOLDERS' EQUITY   1,424,991     1,397,156     1,396,358  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,889,113   $ 1,857,018   $ 1,914,784  

 
DEVRY EDUCATION GROUP INC.

CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except for Per Share Amounts)
(Unaudited)
PRELIMINARY
                   
For The Quarter For The Six Months
Ended December 31, Ended December 31,
 
2013 2012 2013 2012
 
REVENUES:
Tuition $ 457,888 $ 471,881 $ 877,205 $ 920,566
Other Educational   33,381     28,785     64,976     60,020  
 
Total Revenues   491,269     500,666     942,181     980,586  
 
OPERATING COSTS AND EXPENSES:
Cost of Educational Services 242,997 240,244 484,732 479,697
Student Services and Administrative Expense 185,046 183,743 374,205 374,762
Gain on Sale of Asset - - (1,918 ) -
Restructuring Expenses   4,664     9,484     16,329     9,484  
 
Total Operating Costs and Expenses   432,707     433,471     873,348     863,943  
 
Operating Income 58,562 67,195 68,833 116,643
 
INTEREST (EXPENSE) INCOME:
Interest Income 310 230 893 791
Interest Expense   (1,052 )   (759 )   (2,052 )   (2,250 )
 
Net Interest (Expense) Income   (742 )   (529 )   (1,159 )   (1,459 )
 
Income from Continuing Operations Before Income Taxes 57,820 66,666 67,674 115,184
 
Income Tax Provision   (8,492 )   (14,604 )   (10,195 )   (29,126 )
 
Income from Continuing Operations 49,328 52,062 57,479 86,058
 
DISCONTINUED OPERATIONS
Loss from Operations of Divested Component (1,387 ) (1,290 ) (17,711 ) (4,948 )
Income Tax Benefit   467     452     1,463     1,936  
Loss on Discontinued Operations   (920 )   (838 )   (16,248 )   (3,012 )
 
NET INCOME 48,408 51,224 41,231 83,046
 
Net Income Attributable to Noncontrolling Interest   (253 )   (938 )   (208 )   (771 )
 
NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP INC. $ 48,155   $ 50,286   $ 41,023   $ 82,275  
 
AMOUNTS ATTRIBUTABLE TO DEVRY EDUCATION GROUP INC.:
Income from Continuing Operations, Net of Income Taxes 49,075 51,124 57,271 85,287
Loss from Discontinued Operations, Net of Income Taxes   (920 )   (838 )   (16,248 )   (3,012 )
NET INCOME ATTRIBUTABLE TO DEVRY EDUCATION GROUP INC. $ 48,155   $ 50,286   $ 41,023   $ 82,275  
 
EARNINGS PER COMMON SHARE ATTRIBUTABLE
TO DEVRY EDUCATION GROUP INC. SHAREHOLDERS
Basic
Continuing Operations $ 0.76 $ 0.79 $ 0.89 $ 1.32
Discontinued Operations   (0.01 )   (0.01 )   (0.25 )   (0.05 )
$ 0.75   $ 0.78   $ 0.64   $ 1.27  
Diluted
Continuing Operations $ 0.75 $ 0.79 $ 0.88 $ 1.32
Discontinued Operations   (0.01 )   (0.01 )   (0.25 )   (0.05 )
$ 0.74   $ 0.78   $ 0.63   $ 1.27  
 
Cash Dividend Declared per Common Share $ 0.17   $ 0.17   $ 0.17   $ 0.17  
 

 
DEVRY EDUCATION GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
        For The Six Months
Ended December 31,
2013     2012
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 41,231 $ 83,046
Loss from Discontinued Operations 16,248 3,012
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
 
Stock-Based Compensation Expense 9,860 8,370
Depreciation 40,719 40,842
Amortization 3,590 5,019
Provision for Refunds and Uncollectible Accounts 37,274 40,777
Deferred Income Taxes 1,699 2,075
Loss on Disposals of Land, Buildings and Equipment 1,333 2,237
Unrealized Loss on Assets Held for Sale 244 6,250
Realized Gain on Sale of Assets (1,918 ) -
Changes in Assets and Liabilities, Net of Effects from
Acquisitions and Divestitures of Businesses:
Restricted Cash (4,854 ) (1,396 )
Accounts Receivable (17,170 ) (62,674 )
Prepaid Expenses And Other 1,338 29,040
Accounts Payable 7,592 (1,449 )
Accrued Salaries, Wages, Expenses and Benefits (23,279 ) (11,590 )
Deferred and Advance Tuition   (589 )   42,332  
 
Net Cash Provided by Operating Activities-Continuing Operations 113,318 185,891
Net Cash Provided by Operating Activities-Discontinued Operations   (197 )   (5,686 )
NET CASH PROVIDED BY OPERATING ACTIVITIES   113,121     180,205  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (33,426 ) (47,213 )
Payment for Purchase of Business, Net of Cash Acquired (12,343 ) (31,386 )
Marketable Securities Purchased (106 ) (82 )
Cash Received from Sale of Assets   8,662     -  
 
Net Cash Used in Investing Activities-Continuing Operations (37,213 ) (78,681 )
Net Cash Used in Investing Activities-Discontinued Operations   -     (972 )
NET CASH USED IN INVESTING ACTIVITIES   (37,213 )   (79,653 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 3,576 1,139
Proceeds from Stock issued Under Employee Stock Purchase Plan 708 756
Repurchase of Common Stock for Treasury - (38,567 )
Cash Dividends Paid (10,941 ) (20,707 )
Excess Tax Benefit from Stock-Based Payments - 58
Payments of Seller Financed Debt   (2,138 )   -  
 
NET CASH USED IN FINANCING ACTIVITIES   (8,795 )   (57,321 )
 
Effects of Exchange Rate Differences   (2,223 )   (1,048 )
 
NET INCREASE IN CASH AND CASH EQUIVALENTS 64,890 42,183
 
Cash and Cash Equivalents at Beginning of Period 197,144 174,076
Cash and Cash Equivalents at End of Period 262,034 216,259
Less: Cash and Cash Equivalents of Discontinued Operations at End of Period   -     308  
Cash and Cash Equivalents at End of Period $ 262,034   $ 216,567  
 

 
DEVRY EDUCATION GROUP INC.

SEGMENT INFORMATION
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
               
For The Quarter For The Six Months
Ended December 31, Ended December 31,
Increase Increase
2013 2012 (Decrease) 2013 2012 (Decrease)
REVENUES:
Medical and Healthcare $ 190,447 $ 167,746 13.5 % $ 366,303 $ 326,103 12.3 %
International and Professional Education 61,430 52,681 16.6 % 105,151 89,630 17.3 %
Business, Technology and Management 239,913 280,239 -14.4 % 472,222 564,853 -16.4 %
Intersegment Elimination   (521 )   -   NM   (1,495 )   -   NM
 
Total Consolidated Revenues   491,269     500,666   -1.9 %   942,181     980,586   -3.9 %
 
OPERATING INCOME:
Medical and Healthcare 35,311 26,705 32.2 % 60,827 51,887 17.2 %
International and Professional Education 16,409 15,227 7.8 % 17,489 18,576 -5.9 %
Business, Technology and Management 9,947 38,835 -74.4 % (1,114 ) 64,405 -101.7 %
Reconciling Items:
Amortization Expense (1,612 ) (2,412 ) NM (3,261 ) (4,690 ) NM
Depreciation and Other   (1,493 )   (11,160 ) NM   (5,108 )   (13,535 ) NM
 
Total Consolidated Operating Income 58,562 67,195 -12.8 % 68,833 116,643 -41.0 %
 
INTEREST (EXPENSE) INCOME:
Interest Income 310 230 34.8 % 893 791 12.9 %
Interest Expense   (1,052 )   (759 ) 38.6 %   (2,052 )   (2,250 ) -8.8 %
 
Net Interest and Other Income (Expense)   (742 )   (529 ) 40.3 %   (1,159 )   (1,459 ) -20.6 %
 
Total Consolidated Income before Income Taxes $ 57,820   $ 66,666   -13.3 % $ 67,674   $ 115,184   -41.2 %
 
Restructuring charges and adjustments to these charges were recorded for the three and six months ended December 31, 2013. These charges are related to DeVry Education Group (not related to any segment), DeVry Medical International and Carrington Colleges Group which are part of the Medical and Healthcare segment, Becker Professional Education which is part of the International and Professional and Education segment and the Business, Technology and Management segment. DeVry University also realized a gain on the sale of its Decatur, Georgia facility which was recorded during the six months ended December 31, 2013. Restructuring charges were recorded for the three and six months ended December 31, 2012. These charges are related to DeVry Education Group (not related to any segment), Carrington Colleges Group which is part of the Medical and Healthcare segment and the Business, Technology and Management segment. The following table illustrates the effects of these restructuring charges and the gain on the asset sale 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 Group’s ongoing operations and are useful for period-over-period comparisons of such operations given the special nature of these transactions. DeVry Group 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 Group’s reported results prepared in accordance with GAAP. The following table reconciles these items to the relevant GAAP information:
 
For The Quarter For The Six Months
Ended December 31, Ended December 31,
Increase Increase
2013 2012 (Decrease) 2013 2012 (Decrease)
 
Medical and Healthcare Operating Income $ 35,311 $ 26,705 32.2 % $ 60,827 $ 51,887 17.2 %
Restructuring Charge   4,803     1,416   NM   5,522     1,416   NM
Medical and Healthcare Operating Income
Excluding Restructuring Charge $ 40,114   $ 28,121   42.6 % $ 66,349   $ 53,303   24.5 %
 
International and Professional Education Operating Income $ 16,409 $ 15,227 7.8 % $ 17,489 $ 18,576 -5.9 %
Restructuring Charge   24     -   NM   24     -   NM
International and Professional Education Operating Income
Excluding Restructuring Charge $ 16,433   $ 15,227   7.9 % $ 17,513   $ 18,576   -5.7 %
 
Business, Technology and Management Operating Income $ 9,947 $ 38,835 -74.4 % $ (1,114 ) $ 64,405 -101.7 %
Restructuring Charge (41 ) 200 NM 7,910 200 NM
Gain on Sale of Assets   -     -   NM   (1,918 )   -   NM
Business, Technology and Management Operating Income
Excluding Restructuring Charge and Gain on Sale of Assets $ 9,906   $ 39,035   -74.6 % $ 4,878   $ 64,605   -92.4 %

Copyright Business Wire 2010

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