Adtalem Global Education Inc.

Greetings and welcome to the Ad Talum Global Education Fourth Quarter Fiscal Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to our host, John Kristof, Vice President of Communications and Investor Relations. Thank you. You may begin.

Thank you. 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 ad talum 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 of our most recent annual report on Form 10-K filed with the SEC 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 verbal, that may be made from time to time, whether due to new information, future developments, or otherwise, except as required by law. During today's call, our commentary will refer to non-GAAP financial measures, which are intended to supplement, though not substitute for, 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 results and comparisons made during today's call are on a continuing operations basis, exclude special items, and are in comparison to the prior year period unless otherwise stated. Telephone and webcast replays of today's call are available for 30 days. To access the replays, please refer to today's press release. We'll begin today's presentation with prepared remarks from Lisa Wardell, ATALM's Chairman and Chief Executive Officer, Bob Phelan, Interim Chief Financial Officer, and Steve Beard, Chief Operating Officer. Following the prepared remarks, we'll have a question and answer session. And with that, I'll now turn the call over to Lisa.

Thank you, John. Thank you all for joining us on our fourth quarter and full year 2021 earnings call. Fiscal 2021 was a year of significant progress at EdTalum as we continue to strengthen our position as a leading workforce solutions provider. This year, we further extended our mission to be the market leader in healthcare education, helping employers address the critical workforce shortages and talent gaps that exist in the medical and healthcare sectors, while continuing to expand access to education within diverse communities. With the completion of the Walden acquisition, we are even better positioned going forward to address the increasing demand for healthcare workers, and we are uniquely positioned to help underserved communities. Before we get into the results for the quarter and fiscal year, I wanted to briefly outline our agenda for today's call. I'll start off by discussing our results for the fiscal year and quarter, our decision to begin exploring strategic alternatives for our financial services segment, and the ongoing CEO transition. I'll then hand over to Bob to discuss our results in greater detail. Steve will then conclude by discussing the successful close of the Walden transaction, which we announced on August 12th and perspectives on future growth under his leadership as the incoming CEO. The path of the COVID-19 virus and the broader macroeconomic environment remain unpredictable, and the alarming rise in the new cases and hospitalizations related to the Delta variant magnify the increasing need for skilled healthcare workers, particularly in underserved communities. We are energized that ADTALM will be able to play an even greater role in solving these worker shortages through the increased scale and differentiated capabilities made possible by our acquisition of Walden. Now, turning to our results for the quarter and the fiscal year. Starting with the fourth quarter, we had a solid finish to the year as our strategy continued to deliver results. Our strong financial performance was driven by increasing demand for our programs and offerings, strong student outcomes across our institutions and programs, and previous investments in marketing. Financial services delivered particularly strong performance with nearly 18% revenue growth in the quarter as the leadership changes and prior investments continue to drive improved operating performance. Our full year performance was in line with our outlook despite lingering COVID-19 headwinds. Our healthcare institutions performed well as strong student outcomes continue to drive demand for the programs. New student enrollment at our medical and veterinary institutions, for example, grew 12% in the May session. Starting with the medical and healthcare segment, at Chamberlain, new student enrollment increased approximately 4% in the May session, with growth in total student enrollment of about 5%, driven by growth in our campus-based BSN and doctorate-level programs. We continue to see strength in total enrollment across our campuses, including evening, weekend, and hybrid options. We also had the cap on our New Orleans program lifted while our New Brunswick campus had their cap increased. In May, Chamberlain and LCMC Health established a program to address LCMC's workforce needs. This innovative call to care scholars program is the first of its kind nursing program that addresses the need for more nurses by expanding access for RNs to obtain a BSN degree. Through a forgivable loan program, LCMC Health will fund 100% of tuition costs for up to 90 BSM students per year through this alliance with Chamberlain in exchange for those students committing to work for LCMC Health for up to three years after graduation and passing the NCLEX exam. And just last week, we signed an agreement with Emory Healthcare in Atlanta, one of our most innovative and forward-thinking partners. Emory is working to address the enormous nurse staffing challenges across the country and is committed to supporting their experienced registered nurses achieve a BSN. Emory chose to partner with Chamberlain based on the depth and quality of its RN to BSN program and the superior student outcomes that Chamberlain continues to demonstrate in all of its nursing programs. These partnerships are perfect examples of our workforce solutions provided strategy in action. In our medical and veterinary schools May session, new student enrollment increased 12%. the highest May session new students start in over six years. Total student enrollment declined 1% as we continue to work through the pandemic-induced backlog of students waiting to begin clinicals in Q4. I also want to say I'm very proud of the more than 1,000 Ross Med and AUC students who graduated in May, an incredible achievement in the face of the pandemic. First-time residency match rates at Ross Med and AUC were both 91%. Historically, Ross Med and AUC graduates have entered primary care where the physician shortage is projected to be most severe at twice the rate of their U.S. medical school graduate counterparts, and that trend continues for our 2021 graduates. To round out the medical and healthcare segment, Ross Vet May Session New Enrollment was in line with last year's Strong May Session, reflecting continued interest in the veterinary profession, and returns on previous investments in student support and marketing. We believe that the strong demand for veterinarians will continue post-pandemic. Turning to our financial services segment, strong revenue growth continued in Q4. Our ability to capture demand generated by strong secular trends delivered double-digit revenue growth. We're also establishing prominent growth factors to enable expansion and diversification into new markets. Investments in new offerings are positioning the segment for long-term growth. With respect to each of our individual programs, ACAMS, the premier anti-financial crimes organization, continued to see strong demand in the fourth quarter. Non-conference revenue increased 19% in the quarter, driven by demand for compliance certification. In Q4, year-over-year conference revenue was substantially higher as ACAMS held its first in-person conference since the start of the pandemic. The Australia Conference in June was the inaugural event in the region and successfully hosted nearly 260 in-person attendees. The next planned in-person event is the Las Vegas Conference scheduled for the end of September for both in-person and virtual participants. The pandemic remains a dynamic situation and we will continue to monitor it closely. The favorable mortgage environment continued in the fourth quarter, and on-course learning leveraged its leading position to drive strong mortgage pre-licensing sales results. Continuing education sales also grew, as businesses are retaining a high number of mortgage loan officers to meet refinance and new purchase mortgage needs. OCL is well positioned to drive long-term growth as we continue to build new relationships and expand existing ones. Becker continues its leading position in the CPA test preparation market. Becker CPA test preparation sales grew slightly in the quarter as hiring among large CPA firms and our institutional clients improved. Becker is poised to capture future CPA review demand as the test taker market returns to pre-COVID levels. Becker's continuing education offerings performed well and remain a source of future growth, attracting B2B and B2C customers. In July, we named Josh Bronstein as President and Managing Director of Becker, in addition to his role as President of OCL. Josh was the interim leader at Becker, and he will continue to scale and leverage the two organizations' core competencies and strengths to help drive continued growth. On August 4th, we announced that we are beginning to explore strategic alternatives for our financial services segment. This decision is consistent with our longstanding commitment to delivering long-term shareholder value and is a natural progression of our efforts to focus the portfolio on the healthcare industry. Each of the brands within our financial services portfolio are the leaders in their respective markets. Together, they comprise a premium platform in an industry with attractive tailwinds as the regulatory and compliance burdens on the financial services industry proliferate, driving increased demand for the unique solutions that these businesses offer. As we said at the time of the announcement, no timetable has been established for the completion of the strategic review. And as the Ad Talent Board approves specific actions or otherwise concludes the strategic review, we will disclose further developments to our stakeholders. I want to take this opportunity to reiterate my thanks to the entire financial services team whose hard work and dedication have created a highly attractive set of businesses, enabling us to take this path. I am extraordinarily proud of the teams at ACAMS, OCL, and Becker. Alongside the financial services news, we also announced on August 4th that Steve Baird will succeed me as the CEO, and I will transition to the role of executive chairman of our board of directors effective September 8th. It has been a great honor serving as the CEO of AdTalum over the last five years. During that time, we have redefined the company's identity, built a diverse, inclusive, and mission-driven culture, streamlined our portfolio of institutions and brands, delivered strong returns and value to our shareholders, and repositioned the company to become a pure-play healthcare educator through our successful acquisition of Walden University, which we'll discuss in further detail later in the call. Delivering superior academic outcomes has been a primary focus for AdTal throughout my five-year tenure as CEO, and I am immensely proud of everything we've achieved. This year, first-time residency match rates at Ross Med and AUC were both 91%. More than 70% of our 2019-2020 medical graduates chose to enter critical roles in the primary care across all 50 U.S. states and Puerto Rico. And at Chamberlain, we have first-time NCLEX pass rates of over 91%. These outcomes demonstrate that our dedication has paid off. and we remain committed to building a pipeline of highly qualified talent to solve complex issues in the healthcare industry. AdTalem is in a position of strength and is set up for long-term growth. Following a solid end to the year, I am so excited about the future of AdTalem under Steve's leadership. Many of you have witnessed Steve's operational and strategic expertise over the last four years in the various positions he's held at AdTalem, first serving as our general counsel, and then as our Chief Operating Officer. Steve's leadership has been instrumental as we divested non-core assets such as AdTal in Brazil, DeVry University, and Carrington College, repositioned our financial services companies for long-term profitable growth, attracted key leadership talent to the company, and energized and aligned the team around our enterprise strategy. Under Steve's leadership, of the financial services segment, the brands have enhanced their market leadership positions, diversified and expanded their product portfolios and customer bases, and recruited world-class talent, and leveraged best-in-class capabilities across the segment, resulting in double-digit revenue growth and expanded operating margins. Steve also spearheaded our successful acquisition of Walden and drill the integration planning process, marking a pivotal step in expanding our scale as a leading workforce solutions provider. Navigating leadership transitions is a core competency of a highly effective board, and I am gratified that a well-designed and well-executed succession plan has presented the opportunity to promote an internal successor who has been instrumental to the strategic direction and execution of Antalum for the last four years. I'm looking forward to continuing to partner with Steve, my fellow directors, and our leadership team to continue driving results and superior student outcomes. Now, I'd like to turn over to Bob to discuss our results in further detail, after which Steve will provide some thoughts on recent announcements and the year ahead.