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DeVry Inc. Reports Operating Results (10-Q)

May 03, 2012 | About:
10qk

10qk

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DeVry Inc. (DV) filed Quarterly Report for the period ended 2012-03-31.

Devry Inc has a market cap of $2.15 billion; its shares were traded at around $31.46 with a P/E ratio of 8.5 and P/S ratio of 1. The dividend yield of Devry Inc stocks is 0.9%. Devry Inc had an annual average earning growth of 15% over the past 10 years.

Highlight of Business Operations:

Total consolidated revenues for the third quarter of fiscal year 2012 of $540.8 million decreased $21.9 million, or 3.9%, as compared to the year-ago quarter. For the first nine months of fiscal year 2012, total consolidated revenues decreased $51.7 million, or 3.2%, to $1,583.9 million. For both the third quarter and first nine months of fiscal year 2012, revenues decreased within DeVrys Business, Technology and Management segment as a result of a decline in student enrollments due to the challenging economic environment, persistent unemployment and heightened competition. This decrease was partially offset by revenue increases within DeVrys Medical and Healthcare segment as a result of growth in total student enrollments, improved student retention and tuition price increases. In addition, AUC, which was acquired on August 3, 2011, contributed to offsetting the revenue decline during both the quarter and first nine months of the current year.

Medical and Healthcare segment revenues increased 12.6% to $160.5 million in the third quarter and grew 9.5% to $461.5 million for the first nine months of fiscal year 2012. Higher total student enrollments at Chamberlain College of Nursing (Chamberlain) and Ross University Schools of Medicine and Veterinary Medicine were the key drivers of the segment revenue growth, which more than offset a decline in total student enrollments at Carrington Colleges Group (Carrington). In addition, AUC, which was acquired on August 3, 2011, contributed to the revenue growth in the segment during the current year periods. Key trends for DeVry Medical International (which is composed of Ross University Schools of Medicine and Veterinary Medicine and American University of the Caribbean School of Medicine), Chamberlain and Carrington are set forth below.

Total consolidated operating income for the third quarter of fiscal year 2012 of $95.5 million decreased 30.4% as compared to the prior year quarter. For the first nine months of fiscal year 2012, total consolidated operating income of $189.1 million declined 50.8% as compared to the prior year period. Revenue declines within DeVry University and Carrington were the primary factors for the decline in operating income during the third quarter. The largest driver of the decline in operating income for the first nine months of fiscal year 2012 was the $75.0 million non-cash asset impairment charge. In addition, revenue declines within DeVry University and Carrington also contributed to the decline in operating income.

International, K-12 and Professional Education operating income decreased 29.7% to $7.2 million during the third quarter and declined 9.3% to $14.4 million during the first nine months of fiscal year 2012 as compared to the respective year-ago periods. The decreased in operating income were the result of lower revenue and decreased operating leverage at Becker and Advanced Academics partially offset by increased operating income from DeVry Brasil.

Cash generated from operations in the first nine months of fiscal year 2012 was $355.1 million, compared to $485.2 million in the prior year period. The decrease in cash flow from operations was due in part to a $121.2 million decline in net income which includes a $75.0 million non-cash asset impairment charge. In addition, cash flow from operations decreased by $35.6 million compared to the prior year due to an increase in accounts receivable, net of related reserves, as a result of a delay in the timing of receipt of student financial aid as discussed earlier (such funds were subsequently received in April 2012). Also, cash flow from operations decreased by $43.0 million due to a decline in deferred tuition revenue and advanced tuition payments resulting from decreased enrollments at DeVry University and Carrington Colleges. These decreases in cash flow from operations were partially offset by an increase in non-cash expenses for depreciation, amortization and stock-based compensation which resulted in $18.7 million greater source of cash.

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