Adtalem Global Education Inc.

Greetings and welcome to Atalem Global Education First Quarter Fiscal Year 2022 Earnings Conference 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 the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. John Christophe, Vice President, Global Communications and Investor Relations. Thank you, sir. You may begin your presentation.

Thank you, Jen. 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 Antalum 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 is 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 as a result of 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 with 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 Steve Beard, Atalem's President and Chief Executive Officer, and Bob Phelan, Senior Vice President and Chief Financial Officer. Following the prepared remarks, we will have a question and answer session. And with that, I'll now turn the call over to Steve.

Thank you, John. I'm pleased to welcome you all to our first quarter fiscal year 2022 earnings call today. My first in my new role as President and Chief Executive Officer of Ad Talent. During the quarter, we made significant progress against key initiatives that will allow us to accelerate the performance of our healthcare focused assets. We are well on our way to becoming a pure play healthcare education provider with the scale and capabilities to capitalize on the robust and durable demand for skilled healthcare professionals. This scale and these capabilities are valued by our employer partners and our students alike. As CEO, I intend to fully leverage these strengths to drive significantly improved operational and financial performance for our stakeholders. Key to this objective has been the addition of Walden University to our portfolio. As part of the integration process, we've introduced a new enterprise-level operating model that allows for a more efficient and strategic use of shared services across the portfolio. This new model will also enable our academic outcomes, and student success, while providing consistent, high-quality support across the entire student journey, from admissions to matriculation to completion. The efficiency inherent in this new model complements the value-catcher elements of the integration, bringing greater speed and certainty to our efforts to realize cost-energy goals of $60 million in annual run-rate cost savings by the second anniversary of completing the transaction. The new operating model also requires executive leadership with proven track records of success in matrixed organizations and a proven ability to drive consistent and profitable organic growth. In August, we announced the appointment of John Danaher, a physician executive with extensive experience across higher education, hospital systems, and healthcare-focused education as the new president of ADTALA Medical and Veterinary. Also, we announced the appointment of James Bartholomew as Senior Vice President, Chamberlain, and Institutional Shared Services. James has a proven track record in leading academic institutions of scale and assumes responsibility for the strategy, operations, and growth of Chamberlain at a critically important time. He takes on the key role of optimizing our shared services model to drive enhanced quality and efficiency. I have also refreshed and enhanced the capabilities of my senior team to include Bob Phelan as our permanent chief financial officer, Maurice Herrera as our chief marketing officer, and Stephen Tong as our new chief customer officer. Bob brings more than 30 years of finance and operations experience, along with a passion for developing and leading high-performing teams. Maurice brings nearly 30 years of marketing leadership experience and has a proven track record of successfully shaping and accelerating growth through a blend of innovative brand and digital marketing strategies. Stephen has led Walden's digital transformation at the intersection of customer experience and technology, improving personalization omnichannel engagement, innovation, and self-service. With these appointments, I firmly believe that we are much better equipped to meet the needs of our students and employer partners as a leading provider of healthcare education. Taken together, we expect these changes to our operating model and leadership team to drive enrollment growth, improve persistence, and significant cost savings while maintaining superior student outcomes, all of which are key to significantly improving our financial results and long-term value creation. And speaking of student outcomes, I would be remiss if I failed to note that we remain dedicated to student success as a critical measure of our performance. Our outcomes continue to compare favorably across the higher education landscape even as we expand access to high-quality education to diverse and underserved communities. As but one measure of those outcomes, the U.S. Department of Education published its 2018 cohort default rates in late September. I'm proud to say that all ATALM institutions came in well below the overall national averages for proprietary and not-for-profit institutions, public or private. Before I hand it over to Bob for more detail on the quarter and segment-level performance, let me provide a high-level overview of our financial performance in the quarter. We delivered revenue and operating income within expectations, including 29.9% year-over-year revenue growth due to the acquisition of Walden and 4.3% organic revenue growth. Within our segments, total new student enrollments decreased 14.1%, driven primarily by Chamberlain and Walden, while total enrollment decreased 4.5%. At Chamberlain, we had a challenging comparison to the record new student enrollment levels we achieved in September 2020, with new student enrollment for the September 2021 session trending closer to historical levels. The declines are primarily attributable to COVID-related headwinds in our post-licensure nursing program, at both Chamberlain and Walden, as the Delta variant surge this summer placed much greater demands on working nurses, negatively impacting the demand for ongoing education. We expect these headwinds to subside over time as COVID transitions to more of an endemic stage. In the interim, we're increasing our investments in marketing while taking a more targeted approach in our efforts to capture an increasing share of the existing demand. Longer term, We believe market demand among healthcare providers for highly qualified nurses will continue to accelerate, creating opportunities to improve growth rates for both Chamberlain and Walden. Along these lines, we are encouraged by Chamberlain's continued expansion of its healthcare provider partner programs, as we highlighted in our earnings release. At Walden, social and behavioral sciences programs continue to perform well, Similar to Chamberlain, the decrease in new student enrollment at Walden represents a return to more historical trends in Walden's nursing programs following a surge in enrollment levels in the prior period, and we too believe that is attributable to COVID-related headwinds in post-licensure programs. We also believe new and total enrollment at Walden was adversely impacted by negative publicity surrounding the now-concluded U.S. Department of Justice inquiry. By way of reminder, This inquiry concluded with no determinations of any misconduct by Walton. Operationally, the integration process is proceeding according to plan, and we remain very confident in delivering our projected cost synergies. Overall performance in our medical and veterinary segment is solid. However, at RossMed, we're seeing some challenges given the convergence of a surge in COVID-19 cases on the island of Barbados, with the timing of our return to in-person campus instruction this fall. This quarter, we appointed Heidi Chumley as the new dean of Ross Med. And Heidi brings more than 20 years of experience in medical education, including eight years of leadership at AUC, where she elevated the academic, operational, and financial outcomes at that institution. It's new leadership's top priority to drive operational improvements at Ross Med in future quarters and mitigate near-term headwinds. Finally, our financial services segment showed very strong performance in the quarter, aided by strong demand and ongoing innovation in product mix and customer support. The new financial services senior leaders I appointed last year continue to drive strong growth and operational improvements across each of our financial services businesses. As we announced in August, we're exploring strategic alternatives for our financial services segment, and that process is underway and proceeding very well. The level of interest we've received in these businesses is extremely high, and I'm confident that we'll be able to execute a strategy that unlocks significant value, allows for substantial de-levering of the balance sheet, and yields a pure play portfolio with an attractive healthcare focus. In closing, the first quarter of fiscal 2022 yielded solid results in the face of lingering pandemic-related headwinds. But to be clear, the long-term prospects for Antalum could not be more encouraging. As we execute successful integration of Walden, realize the full benefit of our cost synergies, implement a more efficient operating model, unlock the value of our financial services segment, and turn our full attention to competing in the very attractive healthcare space with market-leading scale and brands, I'm extremely bullish on the opportunity to create superior value for our stakeholders. I'm grateful for the opportunity to lead this great organization at this important time, and I have no doubt that we will meet our moment and emerge as the leading provider of professional talent to the dynamic healthcare industry. And with that, I'd like to pass it over to Bob to discuss our financial results and performance within each of our segments in greater detail.