Covista Inc. · NYSE:CVSA
Covista — Adtalem Global Education — Baird Global Consumer, Technology and Services Conference 2022
29 slides from Covista's conference presentation, Jun 7, 2022
Slide 1: Baird Global Consumer, Technology and Services Conference
Baird Global Consumer, Technology and Services Conference June 7, 2022
Slide 2: Safe Harbor
Safe Harbor Forward-Looking Statements Certain statements contained in this presentation are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and includ
Slide 3: Agenda
Agenda 1 Company Overview 2 Target Market Outlook 3 The Adtalem Advantage 4 Performance and Earnings Review 5 Investment Thesis Steve W. Beard Robert J. Phelan President & CEO Senior Vice President & CFO 3 ©2022 Adtalem Global Education Inc. All rights reserved. 3 ©2022 Adtalem Global Education Inc.
Slide 4: Adtalem Global Education Overview
Adtalem Global Education Overview Adtalem Business Segments A leading healthcare educator that offers a wide array of programs across healthcare and behavioral sciences, which provide aspiring Chamberlain physicians, nurses, veterinarians, and other healthcare professionals Walden access to the acad
Slide 5: Adtalem is a Leading Healthcare Educator
Adtalem is a Leading Healthcare Educator Scale & Breadth Degree Mix Rankings >80,000 #1 Enrollment1 Undergraduate and Graduate Nursing 34% Enrollment in the US 21% $1.37B #1 Revenue2 Provider of US Licensed Physicians 45% ~80% #1 Online Modality Provider of MDs, PhDs and Nursing Bachelors Masters Do
Slide 6: Changing Landscape of Healthcare Utilization and Professionals
Changing Landscape of Healthcare Utilization and Professionals Faster Aging Population and Healthcare Utilization U.S. Population Aged 65+ in millions • Nearly 10,000 people turn 65 every day in the U.S. and will represent over 20% of the population by 20501 72 • Over 65 – 3x more hospital days • In
Slide 7: Rising Demand for Healthcare Professionals
Rising Demand for Healthcare Professionals • The Institute of Medicine1 calls for increasing the number of pre-licensure nurses by 16% and doubling the nurses with doctoral degrees • Demand for healthcare practice and healthcare support professionals currently exceeds supply by 44% and 9%, respectiv
Slide 8: Market Leading Positions in Several Nursing Programs
Market Leading Positions in Several Nursing Programs • Chamberlain and Walden dominate enrollment in MSN programs with ~3x more enrollment on a combined basis than the next largest provider • Chamberlain enjoys a significant enrollment advantage over its competitors in its BSN and MSN-FNP programs •
Slide 9: The Adtalem Advantage
The Adtalem Advantage Adtalem Advantage Market-Leading Strong Integrated Innovative Institutions Academic Operating Workforce Outcomes Model Partnerships 9 ©2022 Adtalem Global Education Inc. All rights reserved. 9 ©2022 Adtalem Global Education Inc. All rights reserved.
Slide 10: Unmatched Presence and Scale
Unmatched Presence and Scale CHAMBERLAIN + MEDICAL / VETERINARY CAMPUS LOCATIONS Large footprint and presence allow for a seamless undergraduate to graduate degree journey Adtalem’s medical schools graduate more physicians than any U.S. medical school on an annual basis 23 Chamberlain is the largest
Slide 11: Focus on Student Success
Focus on Student Success FIRST-TIME RESIDENCY ATTAINMENT RATES COHORT DEFAULT RATES Avg. for-profit schools = 11.2% 95% 96% Avg. all schools = 7.3% 4.7% 2.6% 0.9% 0.7% 0.4% First-time residency rate includes current and former Note: 2018 CDRs graduates entering US residency programs in 2022 11 ©2022
Slide 12: FY 2022 Q3 Takeaways
FY 2022 Q3 Takeaways Expansion in operating margins1 for the second consecutive quarter Updating FY 2022 EPS1 guidance $366 million $93 million $70 million Q3 Revenue Q3 Adj. EBITDA1 Q3 Free Cash Flow 25% margin Committed to disciplined 230 bps margin expansion y-o-y capital allocation priorities Ev
Slide 13: Committed to Creating Significant Value for Shareholders
Committed to Creating Significant Value for Shareholders Focus on core assets / Successful divestiture of Financial Services for $1 billion Investing in Deployed $770 million in net proceeds towards Strengthening differentiated debt repayment, significantly reducing net our Balance capabilities
Slide 14: Building a Resilient Foundation for Future Growth
Building a Resilient Foundation for Future Growth Balance Sheet Operational Execution As of March 31, 2022 • Repaid $397 million of Term Loan B in Q3, reducing • Deployment of a more efficient operating model to debt by 24% support long-term growth • Repurchased $373 million of the 2028 Senior • Cos
Slide 15: Enterprise Performance
Q3 RESULTS Enterprise Performance Top line, earnings and margin growth primarily driven by the accretive Walden acquisition In millions, Revenue up 58.8% reflects the Walden except EPS Q3 2022 Q3 2021 Change % acquisition partially offset by COVID-related headwinds Revenue 365.6 230.2 58.8% Operatin
Slide 16: Chamberlain Performance
Q3 RESULTS Chamberlain Performance Margin expansion despite COVID-related headwinds negatively impacting post-licensure nursing programs Total Enrollment down 4.3% and Revenue In millions Q3 2022 Q3 2021 Change % down 2.6% reflects COVID-related headwinds in Chamberlain’s post-licensure programs par
Slide 17: Walden Performance
Q3 RESULTS Walden Performance COVID-related headwinds negatively impacted total enrollment Total Enrollment decline reflects In millions Q3 20221 COVID-related headwinds in Walden’s post-licensure nursing programs and decline in the management and technology Revenue 139.1 programs Operating Income2
Slide 18: Medical & Veterinary Performance
Q3 RESULTS Medical & Veterinary Performance Significant margin expansion despite COVID-related headwinds In millions Q3 2022 Q3 2021 Change % Total Enrollment down 1.2% and Revenue essentially flat at 0.1% reflects uncertainties caused by COVID-19 impacting Revenue 84.0 83.9 0.1% the enrollment deci
Slide 19: Investment Thesis
Investment Thesis • Attractive positioning in long-term growth market • Focused portfolio with market-leading brands and institutions with strong academic outcomes • Unmatched scale with competitive advantage to engage healthcare systems and employer partners • Experienced leadership team focused on
Slide 20: Appendix
Appendix ADTALEM
Slide 21: Non-GAAP Financial Measures and Reconciliations
Non-GAAP Financial Measures and Reconciliations We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations and are useful for period-over-period comparisons. We us
Slide 22: Total Enrollment
Total Enrollment 3Q 2022 3Q 2021 % Change Adtalem Global Education Student Enrollments Total students(1) 82,174 87,685 -6.3% Chamberlain University Total students 34,158 35,702 -4.3% Walden University(2) Total students 42,788 46,691 -8.4% Medical & Veterinary Total students 5,228 5,292 -1.2% 1) Repr
Slide 23: Historical Q3 Total Enrollment Trends
Historical Q3 Total Enrollment Trends 46,691 45,418 45,160 42,788 35,702 33,748 34,158 32,104 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Walden Chamberlain Note: Prior year Walden enrollment figures are as calculated by Walden while owned and operated by Laureate Education, Inc., and are included here for comp
Slide 24: Non-GAAP Operating Income by Segment
Non-GAAP Operating Income by Segment ©2022 Adtalem Global Education Inc. All rights reserved. 24
Slide 25: Non-GAAP Adjusted EBITDA by Segment
Non-GAAP Adjusted EBITDA by Segment ©2022 Adtalem Global Education Inc. All rights reserved. 25
Slide 26: Non-GAAP Earnings Disclosure
Non-GAAP Earnings Disclosure ©2022 Adtalem Global Education Inc. All rights reserved. 26
Slide 27: Non-GAAP Free Cash Flow Disclosure
Non-GAAP Free Cash Flow Disclosure (unaudited) (in thousands) Three Months Ended Twelve Months Ended FY22 FY21 FY22 FY22 FY22 FY21 Q3 Q3 Q3 Q2 Q1 Q4 Net cash provided by operating activities-continuing operations (GAAP) $ 77,365 $ 67,719 $ 101,481 $ 91,835 $ 124,742 $ 168,760 Capital expenditures (7
Slide 28: Non-GAAP Outlook Disclosure
Non-GAAP Outlook Disclosure ©2022 Adtalem Global Education Inc. All rights reserved. 28
Slide 29: Non-GAAP Net Leverage Disclosure
Non-GAAP Net Leverage Disclosure (unaudited) (in thousands) Three Months Ended Nine Months Ended Twelve Months Ended June 30, 2021 March 31, 2022 March 31, 2022 Adtalem Global Education: Net income attributable to Adtalem (GAAP) $ 9,012 $ 309,691 $ 318,703 Net income from discontinued operations att
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