Adtalem Global Education Inc.

Greetings. Welcome to the fourth quarter fiscal year 2022 earnings call for Atelum Global Education. At this time, all participants are on 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. Please note this conference is being recorded. I'll now turn the conference over to your host, Sandrika Nigam, Senior Night Director, Investor Relations. 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 a talent global education that involves 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 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 the 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 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 Steve Beard, a Talents President and Chief Executive Officer, and then hear from 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, Shantrika. Good afternoon, everyone, and thank you for taking the time to join our fourth quarter and full year 2022 earnings call today. I'd like to begin with a high-level review of our progress on the strategic priorities we laid out just under a year ago. 2022 was a transformational year for AdTalent, capped off by a solid finish in the fourth quarter. Despite the headwinds faced by our sector, we met our expectations on both the top and bottom lines, and continue to expand margins. These results reflect a commitment to execution by our colleagues across the portfolio. To recap, we made good progress on the integration of Walden, delivering our first year target of $30 million in run rate cost synergies, and using the integration as a catalyst for transforming the whole of Attalam, starting with the introduction of a more dynamic, efficient, and better integrated operating model. During the year, we completed a successful divestiture of our financial services segment, which enabled us to significantly reduce our net leverage and strengthen our balance sheet, while focusing on our go-forward strategy to be the leading provider of professional talent to the healthcare industry. And finally, we began a $150 million accelerated share repurchase program with the goal of returning capital to shareholders using existing cash while demonstrating our confidence in the long-term prospects of the company. I'm encouraged by our progress to date. Our clarity of purpose and sharpened focus on the attractive healthcare education space positions us well to deliver substantial value for all of our stakeholders. Now let's take a closer look at the highlights for the full year. We delivered fourth quarter and four-year results in line with our expectations despite the challenging environment for our institutions. Total enrollment of over 77,000 students resulted in revenue of $1.4 billion. As the year progressed, we expanded operating margins through the rollout of our new operating model and the realization of synergies from the Walden acquisition. For the full year, We grew operating margins by 230 basis points year over year, and we reported adjusted EPS of $3.24, which was 40% higher than the prior year. Our performance in the fourth quarter reflects an 11-month drive to reposition the organization and enhance operational effectiveness. And while we are still in the early stages of this effort, we believe the results will prove compelling. Although enrollments have been negatively impacted by pandemic-related headwinds, particularly in nursing, we are better positioned today to capture higher returns as the overall demand environment improves. Last quarter, I shared several initiatives focused on enhancing operational effectiveness, most notably in customer experience and marketing. That work is ongoing, but I'm pleased to report that we're making good progress. For example, on the customer experience side, we've recently launched a new approach to measuring student engagement across our institutions that empowers our faculty with predictive analytics that can support our efforts to drive improved persistence. And on the marketing side of the house, we recently introduced new rigor to measuring the efficacy of our brand and media investments, including brand tracking, media attribution, campaign effectiveness, and A-B testing tools that allow us to test variations of our campaigns to determine which elements perform best. Finally, these efforts at enhancing operational effectiveness are complemented by an ongoing focus on strengthening our financial position and driving improved long-term financial performance. With a reduction in our net leverage to 1.5 times, we have a strong balance sheet, And we maintain an enterprise-wide cost discipline that allows us to thoughtfully manage expenses while making targeted investments in enhanced capabilities. In summary, we believe that we are taking the necessary and proper steps to position ourselves for success as we look to maximize the academic and economic value of our market-leading breadth, depth, and scale. With respect to academics, we're proud to produce highly trained, practice-ready professionals at scale who are a collective force for good in the communities and organizations they serve. Expanding access and driving superior student outcomes are foundational to this dynamic, and our commitment to delivering this value has never been stronger. Let me share a few examples from the fourth quarter. Chamberlain University secured a grant of over $1 million for its Practice Ready Specialty Focus Program, which prepares nurses to contribute day one to a variety of specialized settings, such as perioperative services. Also, our medical schools graduated more than 750 students, with over 74% entering primary care specialties that help to combat the critical shortages of physicians across the country. In 2022, 26% of Ad Talens Medical School graduates are underrepresented minorities, of whom more than 100 identify as Black or African American. Taken together with last quarter's first-time residency attainment rates at these schools, which were the highest ever since we've operated these institutions, we continue to be encouraged in our ability to expand the value we create for our medical students. At Walden, Dr. Doug Gilbert, a member of our faculty, was named a Fulbright Scholar. He'll travel to Lithuania, which is the host country supporting his work. And he's one of nearly 40 members of the Walden community that have taken part in what is one of the most widely recognized and prestigious scholarships in the world. Also during the quarter, we made two promising additions to our senior leadership team. with the appointment of Michael Betts as the President of Walden University and the promotion of Evan Trent to Senior Vice President, Chief Strategy and Transformation Officer. Michael has extensive operational and strategic marketing experience. Before joining our team, he was a leader at McKinsey & Company's growth transformation practice, where he led a number of successful transformations across various B2C industries, including retail, education, and media. Prior to joining McKinsey, he served as the Chief Marketing Officer and Chief Strategy Officer for Strayer University, where he drove improvements in marketing, pricing, and product innovation. I'm excited to have Michael on the team, and I'm confident that his deep industry experience in driving large-scale growth programs across the higher education sector will help Walden realize its full potential. Since joining Atalem in 2019, Evan Trent has played a critical role in the formulation and execution of our strategies. He was central to the acquisition and integration of Walden University and the divestitures of our Brazil and financial services businesses. He has also served as a valuable thought partner to me and other senior leaders across Atalem. Evan will lead the next phase of our integration work. where we transition to accelerating the performance of our institutions across all of our value-creating activities. With that, let me now provide some color on our outlook for fiscal 23. With respect to enrollments, over the past year, pandemic-fatigued healthcare professionals have been under tremendous pressure, resulting in continued enrollment declines in post-licensure nursing programs. and COVID-related hospitalizations have risen again recently. Suffice it to say, it remains a challenging time for the higher education industry overall, and a robust job market and high inflation have only added to those challenges. Having said that, we are cautiously optimistic that the demand environment will improve in the latter half of fiscal 23, which should enable us to leverage the benefits of the investments we're making across the full range of enrollment and student support activities. We're closely watching market signals that affect demand, and some early indicators are worth noting, including, first, a rise in the number of federal student aid applications by 5% year over year, notably driven by low-income and underrepresented students. Next, after a year of declines, online search for nursing programs began trending upwards in the fourth quarter of fiscal 22, potentially signaling improved market dynamics in the coming months. Moreover, our employer partners have suggested that travel nurse compensation is coming off its pandemic highs and beginning to trend downward, which could favorably affect demand for post-licensure nursing programs. And finally, Our employer partners are focused on creating predictable pipelines for nursing talent by deploying financial incentives to minimize economic barriers. Considering these indicators, we anticipate having the opportunity to grow enrollment in fiscal 23 with the benefit of an enhanced operating model, better operating leverage, and of course, high quality student outcomes. And I'd be remiss if I didn't point out that our business is not materially exposed to economic impact from the volatile supply chain disruptions or oil price fluctuations that are a hallmark of the current global macro environment. It's against this backdrop that we announced that we expect our revenue for fiscal 2023 to be within the range of $1.38 billion and $1.45 billion. and that we expect adjusted diluted earnings per share to be within the range of $3.95 to $4.20. Bob will elaborate further on our guidance in his remarks. Despite the uncertainty that has come to characterize life for all of us during these times, our colleagues here at Antalum are working tirelessly to enhance the value we create for students. Now more than ever, we are mission-driven and purpose-led, and we have exciting opportunities ahead of us with a new focus, with market-leading brands, and an experienced management team, all of which I believe positions us for long-term profitable growth. With that, I'll turn the call over to Bob for discussion of our financial results.