Adtalem Global Education Inc.

Good afternoon, my name is Gabriel, and I will be your conference operator today. At this time, I would like to welcome everyone to the ADTALM second quarter conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you'd like to withdraw your question, simply press the pound key. Thank you. In RESAC, you may begin your conference.

Thank you and good afternoon. With me today from ADTELM's leadership team are Lisa Wardell, Chairman and Chief Executive Officer, and Mike Randolfi, Senior Vice President and Chief Financial Officer. I'd like to remind you that this conference call will contain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995 with respect to the future performance and financial condition of EDTALM Global Education that involve risks and uncertainties. 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 the most recent annual report on Form 10-K for the fiscal year ended June 30, 2019. filed with the SEC on August 28, 2019, and our other filings with the SEC. Any forward-looking statement made by us is based only on the information currently available to us and speaks only as of the date on which it was made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information future developments, or otherwise. During today's call, our commentary will refer to non-GAAP financial measures, which are intended to supplement, though not substitute, our most direct comparable GAAP measures. Our press release, which contains the GAAP financial and other quantitative information to be discussed today, as well as reconciliation of GAAP to non-GAAP measures, is available on our website. Please note that all financial comparisons made during today's call are in comparison to the prior year period, unless otherwise stated. It is also important to note that our second quarter results and guidance reflect the application of discontinued operations for our former business and law segment as a result of the pending divestiture of AdTal in Brazil, which made up the entire segment. Telephone and webcast replays of today's call are available for 30 days. To access the replays, please refer to today's press release. And with that, I'll now turn the call over to Lisa.

Good afternoon, and thank you for joining us. Before I discuss our results, I would like to welcome Maureen to our organization. Maureen recently joined our column as Vice President of Treasury and Investor Relations, and we are excited to have her on the team. We delivered solid performance in the second quarter, reflecting both continued investment in our portfolio and as well as our ongoing focus on execution. Overall, we grew revenue 4.8% with growth across both verticals, and we maintained our focus on profitability as we balanced increased investment in marketing and recruiting with diligent management of corporate costs to deliver second quarter revenue and EPS within our expectations. Given our second quarter results and enrollment momentum, we believe we're well on track to reach our performance goals for the year, And as a result, we are reaffirming our revenue and EPS guidance for fiscal 2020. Now, let me walk you through the highlights of each of our segments. Our long-term investments in marketing and recruiting strategies within the medical and healthcare vertical are beginning to deliver results as we grow both revenue and enrollments during the quarter. Chamberlain University delivered solid results, posting increases in both new and total student enrollments for the November 2019 session. Of note, the November enrollment period is online only and made up primarily of the RN to BSN program, which drove overall enrollment growth. This represents a year-over-year new start growth in RN to BSN enrollment and is the direct result of the initiatives we put in place to improve our competitive positioning. More specifically, on our last quarterly call, we discussed our initiative to optimize our investment in marketing and recruiting, as well as our new pricing and messaging initiative better align our advertised pricing with what students actually pay in order to attract more students and bolster top line growth. Chamberlain also launched a strong new branding campaign, Step Forward, which has shown strong performance with disciplined investment. We're beginning to see the early benefit of all of these efforts, and I'm confident the initiatives we implemented will continue to make a positive impact as the year progresses. In addition to the approved trajectory of the RN to BSN program, our other programs also performed well. Our graduate programs delivered revenue growth during the quarter, as the BMP program in particular delivered strong results. And our on-campus BSN program also continued to grow during the quarter. The San Antonio campus is open and operating at capacity for its first session. Chamberlain has also restructured its workforce solutions team to better understand the needs of hospital systems and healthcare providers as they seek more comprehensive answers to their anticipated healthcare workforce needs. As we increase our program offerings and post-academic student outcomes that allow for caps to be lifted and greater capacity, we're able to fill critical shortages for our employer partners. During the quarter, we continued to work to further institutional partnerships at Ross University School of Medicine. To that end, we announced our partnership with Oakwood University in October, which marked the eighth such agreement between Ross Med and a minority-serving institution, which is part of our continued commitment to addressing physician diversity and medical training access. This quarter, we have over 20 students from our HBCU-HSI school partnerships enrolled at RUSM, with a growing pipeline of prospective applicants. This quarter, Ross Med held its new student white coat ceremony with students from 17 different countries represented, highlighting the school's increasingly global reach. We had an impressive residency match rate at Ross Med of 92%, which is a key driver in prospective student inquiries. At Ross University School of Veterinary Medicine, we launched a new graduate certificate in One Health, the interdisciplinary approach to understanding the interconnectivity between the health of humans, animals, and the environment. This online program utilizes courses from RUSVM and Chamberlain, leveraging the assets of two additional AgPALM institutions to provide an opportunity for students to gain expertise in public policy and public health. In addition, RASVET formed a disaster research working group to elevate the understanding, knowledge, and capacity to prepare for and respond to disasters, both regionally and globally. RUSVM became the first veterinary school accepted as an affiliate organization of the World Association for Disaster and Emergency Medicine, joining AUC's Caribbean Center for Disaster Medicine to use a One Health focus on a global scale to the safety and security of people, animals, and the environment. RUSVM also hosted the largest West Indies Veterinary Conference to date, bringing veterinary professionals from around the world to St. Kitts. to share the latest research and new trends in the field of veterinary medicine, underscoring RASVET's leadership position in the global veterinary community. At the American University of the Caribbean School of Medicine, we have continued to progress our international partnerships during the quarter. To date, we are seeing overall progress in the school's partnership with the University of Central Lancashire School of Medicine. I was proud to attend a ribbon cutting ceremony there in October which marked the official launch of our joint program aimed at educating medical students from around the world. AUC's Caribbean Center for Disaster Medicine continues to grow, partnering with the Caribbean Disaster Emergency Management Agency to improve healthcare preparedness in the region. The Caribbean Center for Disaster Medicine's upcoming conference will include keynote addresses from two prominent experts in the field of disaster medicine, former U.S. Surgeon General Dr. Richard Carmona and World Association of Disaster and Emergency Medicine President, Dr. Greg Theaton, will speak at the conference, which will focus on the physical and mental impact of mass disasters. AUC also holds an excellent match rate of 91% that allows it to remain a compelling choice for medical school applicants. Finally, leveraging the capabilities of each institution, Chamberlain and AUC announced a partnership with the National Institute for Professional Advancement, NEPA, in November. As partners, they will develop an associate-level nursing degree program in St. Martin, the first of its kind for the nation and a significant step toward meeting the healthcare needs of the Caribbean region. In summary, our medical and healthcare vertical is performing well, and we are confident of continued growth potential. We have a robust strategy in place and have made great strides in increasing our partnerships and programs, as well as demonstrating our ability to leverage the significant assets and expertise across our institutions, which provides us with a competitive advantage and ultimately benefits our students. Turning to our financial services segment, we delivered strong, high single-digit revenue growth, which includes the addition of OnCourse Learning as it ramps up post-integration. OnCourse continues to serve the needs of the banking and credit union sector broadly for frontline compliance training, and now with broader product offerings between OnCourse and ACAMS, we have begun to capitalize on the substantial cross-selling opportunities in this market as well. In addition, the organizations recently launched their first co-developed product, an online course centered around human trafficking awareness. OnCourse has also seen positive growth in its mortgage education segment, where it continues to be a category leader due to favorable market conditions. ACAM's revenue was impacted during the second quarter due to the shift of the Las Vegas Conference, in the second quarter of 2019, resulting in an unfavorable comparison. Excluding the impact of this conference, ACAMS revenue grew during the quarter. Membership in ACAMS is up 10% year-over-year and now exceeds 77,000 members worldwide. We continue to be bullish regarding ACAMS' near and long-term growth prospects. In January, ACAMS officially launched its Certified Global Sanctions Specialist Certification Exam. Pre-sales leading up to the launch were strong, and we expect this new program to contribute to ACAMS revenue growth later this fiscal year. In addition, through a new testing center offering, ACAMS has significantly expanded its reach and ability to serve more of its certification exam customers by tripling the number of available testing locations to more than 5,000 locations globally. In January, ACAMS formed a partnership with MasterCard International. Under the five-year agreement, MasterCard, in partnership with ACAMS, is introducing MasterCard ACAMS Risk Assessment, a comprehensive risk assessment tool offered as a fast solution to help financial institutions assess their AML risk. MasterCard ACAMS Risk Assessment will provide financial institutions worldwide with a standardized means of measuring, understanding, and explaining their money laundering risks as they relate to MasterCard products, countries of operation, and customer portfolio. This new offering, which is expected to launch later this calendar year, allows ACAMS to further position itself not only as a best-in-class membership organization, but also as a workforce solution provider and employer partner to multinational companies with complex compliance needs. Becker revenue declined on a year-over-year basis, primarily due to the divestiture of the Becker courses for healthcare students during the prior quarter. Despite this, Becker had success during the quarter in its core accounting business, which continues to see strong momentum based on recent product and marketing enhancements to its CPA product offering, along with several enterprise renewals amongst its largest customers and strong double-digit growth in its continuing professional education, or CPE, product line. This momentum should serve the business well as it heads into the latter half of fiscal year 2020. Overall, I'm encouraged by the progress we're making in financial services to build sustainable, long-term growth. We are building a strong foundation for our programs, which will support continued expansion in this vertical. At our Investor Day last May, our leadership team laid out a strategy that centered our evolution to become a leading workforce solutions provider. This transformation, while ambitious, allows our talent to accelerate growth, enhance our operational effectiveness, and invest in academic quality and superior student outcomes. I'm proud to say that during the first half of the fiscal year, we have aligned around this enterprise strategy without losing our students' first mission, and our second quarter results are beginning to deliver on our team's tremendous efforts. That said, we are not done yet. We remain focused on the core tenets of our strategy. First, embracing our education missions. Second, broadening our customer base and building upon our core strengths to drive value creation across our verticals. Third, enhancing our solutions for students, and in particular, employers looking for talent acquisition, development, and retention. Fourth, strengthening our new product development across the portfolio and setting the stage for long-term organic growth. And finally, leveraging our corporate partnership capabilities to drive incremental revenue for all our business units. As I have said in the past, superior academic student outcomes drive financial performance, and that's always going to be the case for us. This new era for ADTALM has enabled our organization to be more agile, more sales-focused, while at the same time maintaining our values and education mission. We are excited for what the future holds for the organization, our employees, our students, and our employer partners. we believe we are in an excellent position to unlock significant value creation opportunities for our shareholders going forward. With that, let me turn the call over to Mike for a deeper look at our financials.