Fiscal 2017 was a year of transformation for Adtalem Global Education. While we have some challenges ahead in fiscal 2018, I am confident that we are moving in the right direction and have a solid strategic roadmap to build on the successes we achieved in the past year. We continue to lead our team with a sense of urgency and accountability to all of our stakeholders. Student outcomes remain a priority and our mission is fully aligned with delivering better financial performance.
It has truly been gratifying to lead such a mission-based organization and watch so many students, many of whom are first generation graduates just like me, walk across stages at our institutions’ graduation ceremonies. It’s equally gratifying to engage in conversations with faculty who wake up every morning eager to serve our students. They know who these students are and where they come from – and they are committed to supporting and empowering them.
We have a viable opportunity to democratize access to education by better pairing our programs with the students who can benefit most from them in a manner that improves their ability to learn. This effort will increasingly call for us to partner with corporations, hospitals, government agencies and professional organizations to design education programs aimed at teaching new skills to employees. These organizations understand the need to adapt to changes in technology, business processes and customer preferences. We’re focused on helping them do that, while creating employment opportunities for our students. I believe we can pursue these important endeavors, which are aimed at addressing unmet workforce skills gaps, while continuing to improve the underlying economics of how we operate. A stronger Adtalem is good for all of our constituents – our students, our business partners and our owners.
Adtalem Global Education is a new name, but our mission of empowering students through successful outcomes remains the same. In fact, Adtalem is now more inclusive of our portfolio as it aligns with all of our institutions. We are united in bringing to education what many traditional academic institutions do not: innovation, scale and continuous investment in academic quality.
Laying the Groundwork to Return to Growth
Our fiscal 2017 operating results demonstrate that we have the right team in place to execute on our strategy and provide us with significant momentum to return to organic revenue growth in fiscal 2018. We generated operating cash flow of $228 million in fiscal 2017. Net income excluding special items was $178 million for fiscal 2017, which resulted in earnings per share excluding special items of $2.79, up nearly 16 percent from fiscal 2016.
We strategically utilized our cash flow to invest in the academic quality and expansion of our programs aimed at enhancing our long-term growth profile, while further strengthening our balance sheet and enhancing returns to shareholders.
Executing our Plan – Four Core Priorities
Our four priorities remain the same; they start with our students, allowing us to excel in a competitive industry:
- A heightened student-centric focus. We are a leading education provider, and to continue to be a leader we need to make sure that everything we do reflects academic quality and student services that empower our students to excel
- Return to organic revenue growth and increase operating income and earnings per share to unlock shareholder value. The education sector is rapidly changing as students and employers demand new program offerings and skillsets. Therefore, we need to remain nimble and focus on innovation and respond to the market in order to grow revenue in high-demand areas such as healthcare
- Operate more efficiently to not only manage costs but also to operate smarter with a focus on results for our students
- Maintain a proactive approach to government relations.
The for-profit higher education industry, including Adtalem, has to work harder to make key stakeholders aware of the extraordinary students we are educating – from medical doctors who are educated in the international medical schools and then return to the U.S. and Canada to obtain residencies and practice in rural and underserved areas – to technology and business graduates who successfully upskill and use their newfound skills to expand their career opportunities.
Building on our Momentum – Fiscal 2018 and Beyond
I am excited about the year ahead. Our team is energized as we continue to transform Adtalem Global Education. Our mission to empower our students influences everything we do – from the programs we develop, to the delivery channels we offer, to the corporate partnerships we pursue.
On behalf of our board and all of our colleagues across Adtalem, I would like thank you, our fellow owners, for your support and ongoing feedback. We still have much work ahead of us, but the steps we are taking are leading to improved results. We are very fortunate to have partners in education and investment who understand what’s at stake and have confidence in our ability to execute on our strategy.