DOWNERS GROVE, Ill., Apr 22, 2010 --
DeVry Inc.
/quotes/comstock/13*!dv
/quotes/nls/dv
(
DV
69.04,
-5.21,
-7.02%)
, a global provider of educational services, today
reported results for its fiscal 2010 third-quarter and nine-month
period
ended March 31, 2010. DeVry's strong performance was driven by
continued
solid execution of its growth and diversification strategy and
unwavering focus on academic quality.
Three Months Ended March 31, 2010:
--
Revenues increased 29 percent to $504.4 million
--
Net income increased 60 percent to $81.2 million
--
Diluted earnings per share increased 60 percent to $1.12
Nine Months Ended March 31, 2010:
--
Revenues rose 32 percent to $1,408.5 million
--
Net income increased 62 percent to $208.3 million
--
Diluted earnings per share increased 63 percent to $2.88
"We continued to achieve favorable enrollment trends during this
quarter, as students were attracted by the value proposition of
our
educational offerings, which includes high quality programs and
services
and a strong track record of academic outcomes for students," said
Daniel Hamburger, DeVry's president and chief executive officer.
"We
remain committed to investing in quality and providing the access
and
capacity needed to educate our country's workforce to compete in
the
midst of a tough economy."
Business Highlights
Business, Technology, and Management Segment
DeVry University
DeVry University continued to report strong undergraduate enrollment
growth, with new enrollments in the spring increasing 24.0 percent
to
17,715 students, compared with 14,288 last year. Total student
enrollment increased 25.6 percent to 66,909 students, compared
with
53,259 in spring 2009.
For the January 2010 session, graduate coursetakers enrolled in master's
degree programs at DeVry University and its Keller Graduate School
of
Management rose to 22,679, an increase of 16.5 percent over
January
2009. For the March 2010 session, the number of graduate
coursetakers
was 22,343, an increase of 15.4 percent over prior year.
The total number of online undergraduate and graduate coursetakers in
the March 2010 session increased 21.5 percent to 67,744 versus
55,745 in
the same session a year ago.
DeVry University continued to make investments in academic quality and
student outcomes during the quarter. It hired additional career
service
advisors and has accelerated the implementation of its successful
Student Central concept, which brings all key services together in
one
place, and proactively supports students from the time they enroll
to
when they graduate. Student Central will be implemented in all
DeVry
University locations by the end of fiscal 2010.
Medical and Healthcare Segment
Ross University
In the January 2010 term, new students increased 14.4 percent to 699,
compared to 611 students last year. Total students increased 8.0
percent
to 4,669 compared to 4,323 students in the same term last year.
An element of the growth strategy at Ross University School of Medicine
was the development of a clinical education center located in
Freeport,
Grand Bahama. The clinical site was expected to mitigate capacity
constraints at the main campus in Dominica. However, the projected
volume of Ross students studying in Freeport has not been realized
due
to factors including an unforeseen delay in the review process in
California (one of four states requiring notification) and caution
on
the part of existing students considering Freeport. Accordingly,
Ross is
executing revised plans to add capacity in Dominica as it
continues to
work toward resolution of these matters at its Freeport location.
The
Freeport site remains a part of Ross' long-term growth plans.
These
near-term challenges coupled with Ross' dedication to academic
quality
will mean slowing new student enrollment for at least the upcoming
May
and September terms. Management remains confident in Ross'
long-term
opportunities for growth.
Chamberlain College of Nursing
Chamberlain's new student enrollment in spring 2010 increased 75.4
percent to 2,168 students, compared to 1,236 in spring 2009. Total
student enrollment rose 72.2 percent to 6,691 students compared
with
3,885 during the same period last year.
Chamberlain received approvals by the boards of nursing in Virginia and
Illinois for its new campuses in Crystal City, Va., and Chicago,
which
are scheduled to open in July 2010. Both are co-locations with
DeVry
University.
U.S. Education (Apollo College/Western
Career College/Carrington Colleges)
New student enrollment at U.S. Education decreased 2.4 percent to 4,218
students, compared with 4,323 in spring 2009. New student
enrollment was
impacted by the recovering economy, internal execution issues and
capacity limitations as U.S. Education prepares to open new
locations in
the coming months. Total enrollment increased 9.9 percent to a
record
12,009 students, compared with 10,928 for the same period last
year.
In March, Western Career College and Apollo College announced that they
will be renamed Carrington College California and Carrington
College,
respectively. The name change takes effect on July 1, 2010. All 19
campuses will bear the Carrington name within California and
throughout
the Western U.S.
Professional Education Segment
Becker Professional Education
Results for this segment continue to be relatively flat. Nevertheless,
Becker continues to execute on its long-term growth strategy.
During the
quarter, Becker signed an agreement that makes its full array of
CFA
exam preparation offerings, including live classroom courses,
available
to CFA candidates in Switzerland. Becker is now a trusted partner
to 97
of the top 100 accounting firms and 15 of the top 20 CFA(R)
Societies
around the world.
Other Educational Services Segment
DeVry Brasil (Fanor/Ruy Barbosa/Area1)
For the March 2010 term, new students decreased 5.9 percent to 2,718,
compared to 2,887 students last year driven by volatility in
graduate
school enrollments and delays in new program rollouts. Total
students
increased 0.4 percent to 11,789 compared to 11,742 students in the
same
term last year. During the quarter, Fanor's Fortaleza campus
prepared
for the launch in the coming semester of two new programs in
environmental engineering and physical education, while Ruy
Barbosa
prepared to launch five new bachelor's degree programs, including
nursing, physiotherapy and nutrition, this coming semester. In
addition,
for the second year in a row, Ruy Barbosa was named the number one
school in Salvador and number one among all private institutions
in the
country based on academic outcomes on the OAB exam, which is
equivalent
to the bar exam in the U.S.
Balance Sheet/Cash Flow
For the first nine months of fiscal 2010, DeVry generated $481.3 million
of operating cash flow, driven by the continuation of strong
operating
results and working capital management. As of March 31, 2010,
cash,
marketable securities and investment balances totaled $501.7
million and
outstanding borrowings were $44.8 million.
Share Repurchase Plan
During the quarter, DeVry initiated its third share repurchase program,
repurchasing $6.4 million of common stock at an average cost of
$63.37
per share.
Conclusion
"We will continue to invest in our programs, services and infrastructure
to help our students succeed," said Hamburger. "With 32 million
more
Americans expected to be insured by 2014 and employment figures
showing
early signs of recovery, our schools are well-positioned at the
intersection of these two trends to help high school students and
working adults obtain the skills they need to achieve their career
aspirations."
Conference Call and Webcast Information
DeVry will host a conference call on April 22, 2010, at 3:30 p.m.
Central Daylight Time (4:30 p.m. Eastern Daylight Time) to discuss
its
fiscal 2010 third-quarter results. The conference call will be led
by
Daniel Hamburger, president and chief executive officer, and Rick
Gunst,
chief financial officer.
For those wishing to participate by telephone, dial (800) 798-2864
(domestic) or (617) 614-6206 (international). Use passcode
84712230 or say "DeVry Call." DeVry will also broadcast the
conference
call live via the Internet. Interested parties may access the
webcast
through the Investor Relations section of the company's Web site,
or http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=93880&eventID=2683566.
Please access the Web site at least 15 minutes prior to the start
of the
call to register, download and install any necessary audio
software.
DeVry will archive a telephone replay of the call until May 4, 2010. To
access the replay, dial (888) 286-8010 (domestic) or (617)
801-6888
(international), passcode: 80031472. To access the Webcast replay,
please visit DeVry's Web site at www.devryinc.com.
About DeVry Inc.
DeVry's purpose is to empower its students to achieve their educational
and career goals. DeVry
/quotes/comstock/13*!dv
/quotes/nls/dv
(
DV
69.04,
-5.21,
-7.02%)
is a global
provider of educational services and the parent organization of
Advanced
Academics, Apollo College, Becker Professional Education,
Chamberlain
College of Nursing, DeVry Brasil, DeVry University, Ross
University
Schools of Medicine and Veterinary Medicine, and Western Career
College.
These institutions offer a wide array of programs in business,
healthcare and technology and serve students in secondary through
postsecondary education as well as accounting and finance
professionals.
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 Inc. or its management
"believes,"
"expects," "anticipates," "foresees," "forecasts," "estimates" or
other
words or phrases of similar import. Actual results may differ
materially
from those projected or implied by these forward-looking
statements.
Potential risks, uncertainties and other factors that could cause
results to differ are described more fully in Item 1A, "Risk
Factors,"
in DeVry's most recent Annual Report on Form 10-K for the year
ending
June 30, 2009 and filed with the Securities and Exchange
Commission on
August 26, 2009.
Selected Operating Data (in thousands, except per share data)
Third Quarter
FY 2010 FY 2009 Change
Revenues $504,385 $391,882 +28.7 %
Net Income $81,152 $50,886 +59.5 %
Earnings per Share (diluted) $1.12 $0.70 +60.0 %
Number of common shares (diluted) 72,387 72,653 (0.4 %)
Nine Months
FY 2010 FY 2009 Change
Revenues $1,408,507 $1,065,214 +32.2 %
Net Income $208,333 $128,581 +62.0 %
Earnings per Share (diluted) $2.88 $1.77 +62.7 %
Number of common shares (diluted) 72,271 72,624 (0.5 %)
Use of Non-GAAP Financial Information and Supplemental Reconciliation
Schedule
DeVry executed certain real estate transactions in the three and nine
month periods ended March 31, 2009, which resulted in significant
lease
termination charges and/or losses on the sale of facilities. The
following table illustrates the effects of the real estate
transactions
on DeVry's earnings. Management believes that the non-GAAP
disclosure of
net income and earnings per share 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 these real estate transactions. DeVry uses these
supplemental
financial measures internally in its 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 items to the relevant
GAAP
information (in thousands, except per share data):
Third Quarter First Nine-Months
FY2010 FY2009 FY2010 FY2009
Net Income $81,152 $50,886 $208,333 $128,581
Earnings per Share (diluted) $1.12 $0.70 $2.88 $1.77
Loss on Real Estate Transaction (net of tax) -- $2,543 -- $2,543
Effect on Earnings per Share (diluted) -- $0.04 -- $0.04
Net Income Excluding the Loss on Real Estate Transaction (net of tax) $81,152 $53,429 $208,333 $131,124
Earnings per Share (diluted) Excluding the Loss on Real Estate $1.12 $0.74 $2.88 $1.81
Transaction
Spring 2010 Enrollment Results
2010 2009 Change
DeVry University
Undergraduate(1)
New students 17,715 14,288 +24.0%
Total students 66,909 53,259 +25.6%
Graduate coursetakers(1)(2)
January 22,679 19,475 +16.5%
March 22,343 19,357 +15.4%
Online coursetakers(2)(3) - March 67,744 55,745 +21.5%
Chamberlain College of Nursing - March(1)
New students 2,168 1,236 +75.4%
Total students 6,691 3,885 +72.2%
Ross University - January
New students 699 611 +14.4%
Total students 4,669 4,323 +8.0%
Apollo College/Western Career College
(U.S. Education) - March
New students 4,218 4,323 (2.4)%
Total students 12,009 10,928 +9.9%
DeVry Brasil
New students 2,718 2,887 (5.9)%
Total students 11,789 11,742 +0.4%
Graduate Employment Statistics Period Percent Employed (3) Average Salary
DeVry University (Undergraduate)(4) Oct 08-Feb 09-Jun 09 87.7% $44,186
(1) Includes both onsite and online students
(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 all degree levels at DeVry University
(4 )Three-term average; includes graduates of associate
and bachelor's degree programs
Chart 1: Remaining DeVry Inc. Calendar 2010
Announcements & Events
Aug 12, 2010 Fiscal 2010 Year-End Earnings and Summer Enrollment
DeVry University, (Undergraduate and Graduate)
Chamberlain College of Nursing
Ross University
Carrington Colleges
Oct 26, 2010 Fiscal 2011 First Quarter Earnings and Enrollment
DeVry University (graduate)
Ross University
DeVry Brasil
Dec 9, 2010 Most recent enrollment results; press release, no conference
call
DeVry University (Undergraduate and Graduate)
Chamberlain College of Nursing
Carrington Colleges
DEVRY INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
March 31, June 30, March 31,
2010 2009 2009
ASSETS
Current Assets
Cash and Cash Equivalents $ 439,897 $ 165,202 $ 294,979
Marketable Securities and Investments 61,781 60,174 1,743
Restricted Cash 55,869 5,339 22,246
Accounts Receivable, Net 155,902 104,413 179,954
Deferred Income Taxes, Net 22,489 21,562 17,850
Prepaid Expenses and Other 32,645 28,756 33,033
Total Current Assets 768,583 385,446 549,805
Land, Buildings and Equipment
Land 53,965 53,694 50,816
Buildings 283,367 250,542 237,581
Equipment 385,703 328,637 313,053
Construction In Progress 8,958 10,587 8,420
731,993 643,460 609,870
Accumulated Depreciation and Amortization (359,981 ) (335,889 ) (332,132 )
Land, Buildings and Equipment, Net 372,012 307,571 277,738
Other Assets
Intangible Assets, Net 196,003 203,195 184,654
Goodwill 515,052 512,568 494,579
Perkins Program Fund, Net 13,450 13,450 13,450
Investments - - 57,461
Other Assets 15,127 12,069 13,182
Total Other Assets 739,632 741,282 763,326
TOTAL ASSETS $ 1,880,227 $ 1,434,299 $ 1,590,869
DEVRY INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
March 31, June 30, March 31,
2010 2009 2009
LIABILITIES
Current Liabilities
Current Portion of Debt $ 44,757 $ 104,811 $ 115,063
Accounts Payable 89,152 71,564 66,212
Accrued Salaries, Wages and Benefits 69,552 74,174 53,724
Accrued Expenses 55,019 39,162 48,923
Advance Tuition Payments 24,170 27,642 26,413
Deferred Tuition Revenue 366,113 74,664 276,104
Total Current Liabilities 648,763 392,017 586,439
Non-Current Liabilities
Revolving Loan - 20,000 20,000
Deferred Income Taxes, Net 48,281 51,895 58,518
Deferred Rent and Other 51,059 40,257 29,274
Total Non-current Liabilities 99,340 112,152 107,792
TOTAL LIABILITIES 748,103 504,169 694,231
NON-CONTROLLING INTEREST 4,518 3,188 -
SHAREHOLDERS' EQUITY
Common Stock, $0.01 par value, 200,000,000 Shares Authorized;
71,231,000, 71,233,000 and 71,582,000 Shares issued
and outstanding at March 31, 2010, June 30, 2009
and March 31, 2009, respectively. 733 729 729
Additional Paid-in Capital 217,805 197,096 186,815
Retained Earnings 991,295 791,677 760,350
Accumulated Other Comprehensive Income 9,995 7,157 737
Treasury Stock, at Cost (2,077,000, 1,663,000 and 1,267,000
Shares, Respectively) (92,222 ) (69,717 ) (51,993 )
TOTAL SHAREHOLDERS' EQUITY 1,127,606 926,942 896,638
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,880,227 $ 1,434,299 $ 1,590,869
DEVRY INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except for Per Share Amounts)
(Unaudited)
PRELIMINARY
For The Quarter For The Nine Months
Ended March 31, Ended March 31,
2010 2009 2010 2009
REVENUES:
Tuition $ 468,143 $ 360,629 $ 1,318,491 $ 981,800
Other Educational 36,242 31,253 90,016 83,414
Total Revenues 504,385 391,882 1,408,507 1,065,214
OPERATING COSTS AND EXPENSES:
Cost of Educational Services 214,300 178,201 610,748 484,921
Loss on Real Estate Transactions - 3,977 - 3,977
Student Services and Administrative Expense 168,065 137,917 487,425 395,177
Total Operating Costs and Expenses 382,365 320,095 1,098,173 884,075
Operating Income 122,020 71,787 310,334 181,139
INTEREST AND OTHER INCOME (EXPENSE):
Interest Income 476 776 1,550 4,628
Interest Expense (336 ) (484 ) (1,253 ) (2,013 )
Net Investment Gain (Loss) 81 970 1,225 (748 )
Net Interest and Other Income (Expense) 221 1,262 1,522 1,867
Income Before Income Taxes 122,241 73,049 311,856 183,006
Income Tax Provision 41,321 22,163 103,775 54,425
NET INCOME 80,920 50,886 208,081 128,581
Net Loss Attributable to Noncontrolling Interest 232 - 252 -
NET INCOME ATTRIBUTABLE TO DEVRY INC. $ 81,152 $ 50,886 $ 208,333 $ 128,581
EARNINGS PER COMMON SHARE ATTRIBUTABLE
TO DEVRY INC. SHAREHOLDERS
Basic $ 1.14 $ 0.71 $ 2.92 $ 1.80
Diluted $ 1.12 $ 0.70 $ 2.88 $ 1.77
Cash Dividend Declared per Common Share $ - $ - $ 0.10 $ 0.08
DEVRY INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
For The Nine Months
Ended March 31,
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $208,081 $128,581
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Stock-Based Compensation Expense 7,901 6,513
Depreciation 38,381 29,480
Amortization 9,328 6,897
Provision for Refunds and Uncollectible Accounts 71,094 53,103
Deferred Income Taxes (4,807 ) 83
Loss on Disposals of Land, Buildings and Equipment 398 2,297
Unrealized Net (Gain) Loss on Investments (1,225 ) 2,014
Changes in Assets and Liabilities, Net of Effects from
Acquisitions of Businesses:
Restricted Cash (50,516 ) (18,012 )
Accounts Receivable (122,113 ) (148,927 )
Prepaid Expenses And Other 2,834 (2,324 )
Accounts Payable 17,560 (5,834 )
Accrued Salaries, Wages, Expenses and Benefits 16,558 18,250
Advance Tuition Payments (3,595 ) 4,696
Deferred Tuition Revenue 291,449 211,115
NET CASH PROVIDED BY OPERATING ACTIVITIES 481,328 287,932
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (101,599 ) (50,708 )
Payments for Purchases of Businesses, Net of Cash Acquired - (287,462 )
Marketable Securities Purchased (47 ) (49 )
Other (700 ) -
NET CASH USED IN INVESTING ACTIVITIES (102,346 ) (338,219 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Exercise of Stock Options 9,632 11,048
Proceeds from Stock issued Under Employee Stock Purchase Plan 756 1,805
Repurchase of Common Stock for Treasury (22,671 ) (15,703 )
Cash Dividends Paid (12,839 ) (10,015 )
Excess Tax Benefit from Stock-Based Payments 2,728 3,350
Borrowings Under Revolving Credit Facility 70,000 230,000
Repayments Under Revolving Credit Facility (150,000 ) (140,000 )
Borrowings Under Collateralized Line of Credit 242 46,306
Repayments Under Collateralized Line of Credit (296 ) (1,243 )
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (102,448 ) 125,548
Effects of Exchange Rate Differences (1,839 ) 2,519
NET INCREASE IN CASH AND CASH EQUIVALENTS 274,695 77,780
Cash and Cash Equivalents at Beginning of Period 165,202 217,199
Cash and Cash Equivalents at End of Period $439,897 $294,979
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Period for:
Interest $684 $1,845
Income Taxes, Net 92,126 33,130
Non-cash Investing Activity:
Accretion of Noncontrolling Interest Put Option 1,582 -
DEVRY INC.
SEGMENT INFORMATION
(Dollars in Thousands)
(Unaudited)
PRELIMINARY
For The Quarter For The Nine Months
Ended March 31, Ended March 31,
Increase Increase
2010 2009 (Decrease) 2010 2009 (Decrease)
REVENUES:
Business, Technology and Management $ 334,603 $ 260,180 28.6 % $ 931,365 $ 738,334 26.1 %
Medical and Healthcare 132,640 105,013 26.3 % 375,572 256,270 46.6 %
Professional Education 22,828 22,545 1.3 % 58,823 60,273 -2.4 %
Other Educational Services 14,314 4,144 245.4 % 42,747 10,337 313.5 %
Total Consolidated Revenues 504,385 391,882 28.7 % 1,408,507 1,065,214 32.2 %
OPERATING INCOME:
Business, Technology and Management 85,751 39,712 115.9 % 219,964 102,037 115.6 %
Medical and Healthcare 30,951 26,115 18.5 % 89,249 68,132 31.0 %
Professional Education 8,147 9,524 -14.5 % 17,840 21,773 -18.1 %
Other Educational Services (1,414 ) (220 ) NM (7,231 ) (2,422 ) NM
Reconciling Items:
Amortization Expense (1,618 ) (2,958 ) -45.3 % (9,189 ) (6,793 ) 35.3 %
Depreciation and Other 203 (386 ) NM (299 ) (1,588 ) -81.2 %
Total Consolidated Operating Income 122,020 71,787 70.0 % 310,334 181,139 71.3 %
INTEREST AND OTHER INCOME (EXPENSE):
Interest Income 476 776 -38.7 % 1,550 4,628 -66.5 %
Interest Expense (336 ) (484 ) -30.6 % (1,253 ) (2,013 ) -37.8 %
Net Investment Gain (Loss) 81 970 -91.6 % 1,225 (748 ) NM
Net Interest and Other Income (Expense) 221 1,262 -82.5 % 1,522 1,867 -18.5 %
Total Consolidated Income before Income Taxes $ 122,241 $ 73,049 67.3 % $ 311,856 $ 183,006 70.4 %
The following table displays the pro forma results of operations for
the Medical and Healthcare segment as if U.S. Education was a part
of DeVry's business for the entire nine month periods ended March
31, 2010 and 2009. No quarterly pro forma information is presented
because U.S. Education was a part of DeVry's business for the entire
quarterly periods ended March 31, 2010 and 2009. This non-GAAP
disclosure of operating results is not preferable to GAAP disclosure
but is shown as a supplement to such disclosure to aid comparability
between the periods.
For The Nine Months
Ended March 31,
2010 2009 Increase
Medical and Healthcare Revenue as Reported $375,572 $256,270 46.6 %
U.S. Education Revenue (1) - 35,907 NM
Pro forma Medical and Healthcare Revenue $375,572 $292,177 28.5 %
Medical and Healthcare Operating Income as Reported $89,249 $68,132 31.0 %
U.S. Education Operating Income as Adjusted (1) (2) - 5,350 NM
Pro forma Medical and Healthcare Operating Income $89,249 $73,482 21.5 %
(1) For the portion of the period not owned by DeVry. U.S.
Education, which was acquired on September 18, 2008, contributed $64
million of revenue growth in the nine months ended March 31, 2010.
(2) Adjusted for non-recurring acquisition related charges along
with an allocation of home office expenses in the first quarter
ended September 30, 2008.
SOURCE: DeVry Inc.
