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Adtalem Global Education Inc. (NYSE:ATGE)
Q3 2021 Earnings Call
Apr 29, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to Adtalem Global Education Third Quarter Earnings Conference Call. [Operator Instructions] [Operator Instructions]

I will now turn the conference over to your host, Maureen Resac, Vice President of Treasury and Investor Relations. You may begin.

Maureen Resac -- Vice President of Investor Relations and Treasury

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 Adtalem 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 on August 18, 2020, 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 statements, whether written or verbal that may be made 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 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 Lisa Wardell, Adtalem's Chairman and Chief Executive Officer; Bob Phelan, Interim Chief Financial Officer. Following the prepared remarks, Stephen Beard, our Chief Operating Officer, will join us for the question-and-answer session.

And with that, I'll now turn the call over to Lisa.

Lisa W. Wardell -- Chairman and Chief Executive Officer

Thank you for joining us on our third quarter earnings call this afternoon. Before we discuss our financial results, I would like to start by welcoming Bob Phelan, our Interim Chief Financial Officer, to the call. Bob is an accomplished financial leader and has been with that talent since February of last year. He previously served as our Vice President and Chief Accounting Officer and has transitioned seamlessly into managing the finance team and partnering with our business leaders and with me. Welcome, Bob. Our third quarter performance was in line with expectations, delivering revenue of $281 million and diluted EPS of $0.72. And we are reaffirming our full year outlook of 5% to 7% revenue growth and 28% to 32% diluted EPS growth. Our Workforce Solutions strategy continues to deliver strong results. We achieved 9% new student enrollment growth at our Medical and Healthcare institutions and double-digit revenue growth in our Financial Services segment, which reinforces our confidence in the full year outlook.

Let me provide a brief update on our planned acquisition of Walden University. We remain enthusiastic about the complementary programs and online capabilities that ind brings to Adtalem. The acquisition of Walden University plays an important role in furthering our strategy, permitting us to achieve market-leading scale and reach and healthcare education, strengthening our core nursing offering expand into attractive high-demand adjacencies, including social and behavioral sciences and extend the customer life cycle from pre-licensure programs to graduate and advanced degrees, market an attractive mix of online, on-campus and hybrid learning modalities and engage our employee partners at further scale. As we announced during the quarter, we closed our $1.65 billion of financing related to the Walden acquisition, and we continue to expect the acquisition to close in the first quarter of fiscal 2022.

We are making good progress on integration planning, including our plans for realizing at least $60 million in cost synergies which we believe will result in enhanced service to our students, and we have increased confidence that these are achievable financial metrics. Through our integration planning, we have seen cultural compatibility between ourselves and Walden and forcing our belief that Walden is a fantastic fit for Adtalem Global Education. As it relates to the U.S. Department of Justice's Inquiry into the alleged misrepresentation by Walden related to its Master of Science in Nursing Program, I want to reiterate that we take these matters extremely seriously. Walden informed us that it completed its own investigation and did not find any evidence supporting the allegations contained in the DOJ letter. Walden presented those filings to the DOJ on November 24, 2020. As for our own investigation, that work is ongoing, although nearly complete.

We are nearing the completion of a thorough inquiry conducted by independent legal advisors and to date, have not identified any violations of the Federal Foss Claims Act with respect to the practical component of Walden's nursing program. With the addition of Walden, Adtalem will become the premier national healthcare educator providing comprehensive workforce solutions to employers through proven learning modalities with superior academic outcomes. The investment benefits from a compelling financial rationale, including attractive synergy opportunities and robust contributions to free cash flow. In our Medical and Healthcare segment, our scale, employer partnerships and superior student outcomes differentiate our institutions and position us well to meet the growing need to fill critical workforce gaps. With the projected nursing shortage of more than 500,000 registered nurses by 2030 and up to 139,000 physicians by 2033, it is a public health imperative to create a robust pipeline of qualified and diverse talent to meet these evolving needs.

Adtalem addresses these critical workforce shortages and facilitate training at scale by expanding access to education and establishing a robust employer partnerships. More than 860 Ross Med and AUC graduates have matched to Residency Programs this summer. AUC and RUSM grads will enter primary care residencies where the physician shortage is projected to be the most severe at about twice the rate of their U.S. medical school graduate counterparts. As our graduates take the next step in their medical education journey and go on to serve their communities, we applaud them for their resilience and dedication in achieving this incredible milestone during these challenging and unprecedented times. Diversity in the healthcare industry continues to be a critical issue that we're committed to addressing. Studies demonstrate that patients of color often receive better care and health outcomes when paired with the physician of the same rate. Ross Med and AUC graduate more positions than any other medical school in the United States. As we continue to scale a highly diverse workforce of healthcare professionals for our employer partners, we're addressing both the physician shortage and healthcare and equities.

We firmly believe that Adtalem's unparalleled ability to create a tangible social impact continues to distinguish us in the industry, and we intend to build on these initiatives moving forward. Not only doesn't Adtalem address diversity in the industry we serve, but is also committed to advancing diversity, equity and inclusion within the company. These long-term efforts were recently recognized by Adtalem being named one of America's Best Employers for Diversity 2021 by four. I'm pleased to share the Chamberlain performed well in the third quarter, reflecting operational improvements, targeted marketing investments and superior student outcomes of our programs. Chamberlain's national average NCLEX first-time pass rate for the 2020 calendar year reached 90.7%, exceeding the current national average of 90.3%. The school achieved these results through our efforts over the past several years to promote student success with an enhanced curriculum, increased student support and leading technology.

Chamberlain's new student enrollment increased by approximately 7% in the March session is with growth in total student enrollment of about 6%. Growth in our Campus BSN, masters and doctor level programs was partially offset by a slight decline in RM's BSN as frontline healthcare workers continue to be a challenge during the pandemic. Based on March 2021 data released by the American Association of Critical Care Nurses, Chamberlain's market share grew between 20 and 50 basis points over prior year for each of the programs it operates, including pre-licensure BSN, RN BSN, MSN Family Nurse Practitioner and Doctor of Nursing Practice. Based on the AACN data, in 2020, Chamberlain was the largest nursing educator in the country. Early last month, Chamberlain announced the opening of its second California campus in Pasadena to meet demand in a key area of the country. In addition, the enrollment cap at our Sacramento campus was raised in January.

Chamberlain now has 23 campus locations, the vast majority of which do not have cap on enrollment and offers evening and weekend classes and three or more starts per year in several campuses. We are pleased that the Chamberlain's New Orleans campus cap was recently lifted. This location, which is on the National Health campus graduated its first 54 students during the pandemic of 100% of those graduates passing NCLEX and 2/3 of the students accepting job offers with Asha Health. This is a strong example of the power of our Workforce Solutions model. As a further demonstration of our Workforce Solutions Partnerships, we recently started a hybrid BSN program with University Hospital in Cleveland to allow working healthcare professionals as EMTs, paramedics to earn their BSN while also balancing families, jobs and other responsibilities. This leverages our existing campus program and infrastructure while finding a new way to reach prospective students. In the Medical and Veterinary schools, the January new student enroll increased 21%, the highest January new student start in over eight years.

As we anticipated in our commentary last quarter, Total student enrollment declined 6% as the winter surge in COVID-19 cases reduced the number of available clinical slots at our hospital partners, negatively impacting enrollment of clinical science students. We anticipate those students who were awaiting clinical at the beginning of January as well as newly qualified clinical students will be placed into clinicals over the coming quarters, reversing the temporary decline in total students. Approximately 20% of the students who are waiting for clinical placement at the beginning of this quarter have now been placed. I'm proud to share that Ross Vet set records for both the largest number of students as well as highest enrollment for January semester, reflecting the strong interest in the veterinary professions, improvements in student support and the success of our brand investments. We believe that the strong appeal of veterinary medicine will continue as pet ownership has significantly grown during the pandemic.

In addition, Ross Vet recently announced it will benefit from a grant from PetSmart charities, which will allow students to receive enhanced training opportunities while providing access to veterinary service to under-resourced populations within the community. The strength of our healthcare brands has been supported by our institutions thought leadership in their respective sectors. For example, yesterday, AUC, in concert with the Caribbean Center for Disaster Medicine hosted its international conference on Disaster Healthcare Education virtually, emphasizing a one health approach to disasters. At Ross Vet, the school has been highlighting its alumni to pre-veterinary students through a wide range of topics via free webinars and live streams to show the value of a DVM degree from Rate. The series so far has attracted over 2,000 attendees. In our Financial Services segment, we had a very strong performance in Q3, highlighted by double-digit revenue growth as we continue to capture demand generated by strong secular trends.

We are also establishing prominent growth factors to enable expansion and diversification into new markets. Investments in new offerings are positioning the segment for long-term growth. ACAMS remains the gold standard in the growing anti-financial crime marketplace, which has become even more important as online commerce volumes continued to increase. We continue to see strong demand for anti-financial crime expertise across both traditional financial firms as well as newer fintech companies. Despite facing significant COVID-related headwinds, which impacted in-person conferences, ACAMS has performed well. Non-conference revenue grew about 25% year-over-year in the third quarter, driven by strong certification and risk assessment sales. This performance reinforces the continued long-term opportunities in the overall anti-financial crime market and the strength of ACAMS brand as it continues to address customer needs to its product and global diversification strategy.

An example of this diversification is our Sanctioned Certification, which has seen solid sales and membership growth since its introduction in fiscal year 2020. ACAMS is also a leader in fighting human trafficking and illegal wildlife trafficking through its certifications in these areas. Our anti-human trafficking certificate, the first of its comment was developed in conjunction with the lichen sign initiative for finance against labor and trafficking. In addition, ACAMS and the Worldwide Fund for Nature have developed a training certificate for individuals seeking to protect their organizations from the threats of elicit finance linked to the illegal wildlife trade. Both certificates have gained significant traction. ACAMS members continue to see the value in our global conferences, and we look forward to a return to in-person conferences when it's possible to do so. We do plan to use a hybrid conference model to expand participation and supplement future growth of in-person conferences.

We continue to hold successful virtual conferences and our most recent the Virtual Hollywood Conference on April 13 was attended by over 1,000 professionals. OnCourse Learning is capitalizing on its leadership position and capturing the heightened demand in the mortgage and banking sectors. We continue to meet the needs of our customers through various offerings such as pre-licensure, exam preparation and continuing education. OCL has continued to build new relationships and expand its existing ones to drive long-term growth. Overall, OCL's ability is scale volume to match client demand has driven significant growth outperforming our expectations. At Becker, we're maintaining our leadership position in the CPA test preparation market despite the COVID-related hiring headwinds impacting large CPA firms and our institutional clients. Becker is well positioned for future CPA review growth when the test taker market returns to pre-COVID levels. Our targeted investments continue to drive strong growth in continuing education. Becker's reputation has attracted both B2B and B2C customers seeking a variety of quality continuing education programs.

We are growing our enterprise relationships with significant expansion into the CPA firms and corporate segments, adding two notable accounting firms in the third quarter. Becker offering new ways to meet demand, including targeted certificate programs and always on webcast, both designed to meet the evolving learning needs of busy professionals. The recent change by the Biden administration to the 90-10 rule, which requires including military benefits along with other Title IV federal funding will not impact our count. In fact, accounts institutions have been voluntarily operating at a commitment of 85-15, inclusive of military funding since 2016. We believe that proactive policies like these and strong student outcomes are the formula for success under any administration. Adtalem institutions regularly provides superior student outcomes with strong pass rates and match rates in addition to favorable cohort default rates compared with their peers and the nonprofit education sector.

Each one of Adtalem's institutions received an improved cohort default rate for the most recently evaluated year and Adtalem as a whole have a draft rate of 2.5% even lower than the extremely low cohort depo aggregate rate of 3.1% published last year. Adtalem institutions have historically significantly outperformed relative to their peers, highlighting the quality of Adtalem's programs and our focus on delivering superior student outcomes. I will now provide an update on our strong corporate governance practices. In line with our commitment to regularly refresh our Board of Directors with high-quality diverse representation, we were pleased to announce the recent appointment of Dr. Charles. The shares are at an independent member of Adtalem Dr to shape the currently serves as Director of Clinical products at Google. As technology accelerates changes in the way patients seek and receive care to unique perspective will greatly help us in further enhancing our programs and offerings to meet the evolving needs of our healthcare employer partners and addressing the critical talent shortages facing this sector.

In background as a Board certified MD in internal medicine will enable us to leverage his expertise in executing our strategy becoming a leading provider of workforce solutions to the rapidly evolving healthcare industry. Finally, as it relates to our transformation, I am excited about the progress we're making toward our Workforce Solutions strategy, which is driving new and expanded partnerships in both medical and healthcare and financial services. Our academic outcomes and the demand for our offerings continue to position us well for growth. Adtalem's role in helping graduate healthcare professionals in response to significant demand for diverse and qualified talent is just one compelling example of this strategy in action. These talent shortages exacerbated by the pandemic create a large and unmet market opportunity for qualified graduates in the healthcare and behavioral sciences professions.

Adtalem is playing an important role in helping meet market demand for these healthcare professionals at a time when global health has never been more important. We continue to invest in our Financial Services segment as part of our Workforce Solutions strategy. Financial Services is experiencing double-digit revenue growth as the segment captured strong secular trends, and we continue to see strong demand for our certifications and continuing education offerings. Our Institutions and Programs remain focused on superior student outcomes that impact the lives and communities in which we serve and provide access to education to those who may otherwise not have had the opportunity to pursue higher education. This is a strong differentiator for Adtalem and one we believe will deliver long-term value for all of our stakeholders.

And now I'll turn the call over to Bob to review the financials in detail.

Bob Phelan -- Interim Chief Financial Officer

Thank you, Lisa, and hello, everyone. I'm pleased to have the opportunity to share our solid third quarter financial results today. In the third quarter, we continued to execute on our strategy delivering results that were in line with our expectations. Revenue increased 3.4% to $280.7 million. We are seeing strong demand across our businesses, driven by the strength of our student outcomes. in our investments in marketing and new offerings. As anticipated, we faced incremental COVID-19 headwind, primarily related to reduced capacity from some of our clinical partners, which modestly impacted the top and bottom lines. We expect these transitory food-related headwinds to continue in the fourth quarter. Looking ahead as the number of people being vaccinated increases daily, we remain cautiously optimistic that the environment will continue to improve as we enter into the next fiscal year. Cost of Educational Services was $123.1 million in the third quarter, an increase of 3.7% compared with the prior year.

This increase was primarily driven by increased costs at Chamberlain to support growth. Student Services and Administrative expense was $108.5 million in the third quarter, a 12.5% increase when compared with the prior year. This increase was primarily driven by added sales and marketing expense to support continued growth and an increase in employee benefit costs. Consolidated operating income, excluding special items, decreased 12.9% to $49.1 million in the third quarter of fiscal year 2021, primarily driven by lower clinical revenue and increased administrative expense. This was partially offset by enrollment growth over the last 18 months in Chamberlain and revenue growth in Financial Services. Net income from continuing operations, excluding special items, was $36.9 million compared with $43.2 million in the prior year and diluted earnings per share from continuing operations, excluding special items, was $0.72 compared to $0.81 and 11.1% year-over-year decrease.

Now turning to our segment results for the quarter. In Medical and Healthcare, revenue for the vertical was $230.2 million, a 1.3% increase compared with the prior year. The increase was driven by enrollment growth at Chamberlain over the last 18 months. This was partially offset by lower clinical and housing revenue at Ross Med. As Lisa discussed, clinicals were impacted by the winter surge in COVID-19 cases, which reduced the availability of clinical slabs at some of our partners. Revenue at Chamberlain in the third quarter increased 8.3% compared with the prior year period. Total student enrollment increased 5.8% for the March session. Revenue for the Medical and Vet schools in the third quarter decreased 9.1% compared with the prior year, driven by lower clinical and housing revenue at Ross Med.

We view the clinical revenue headwinds as transitory and expect that and adhesives, we will resume growth in Medical and Vet school revenue. Medical and Healthcare segment operating income, excluding special items, for the third quarter was $51.1 million, an 11.2% decrease. The decrease was driven by lower clinical and housing revenue of Ross Med and increased administrative expense. Turning now to our Financial Services segment. Third quarter revenue was $50.4 million, an increase of 14.3% compared with the prior year, driven by revenue growth at ACAMS, OnCourse Learning and Becker. ACAMS revenue was strong in the quarter as they continue to diversify their offerings to address a broader range of customer needs, providing future growth opportunities. OnCourse Learning grew through revenue in the quarter by leveraging its leadership position in a favorable mortgage market and growth in continuing in professional education. At Becker, revenue was up slightly as continuing education revenue growth was partially offset by a decrease in CPA test prep revenue.

Becker continues to be impacted by softness in test taking activity and hiring by accounting firms. Third quarter operating income in the Financial Services segment decreased 6.8% to $3.9 million. The decrease in segment operating income was primarily driven by increased sales and marketing expenses. Turning now to our balance sheet. We closed the third quarter with cash and cash equivalents $497.7 million and outstanding bank borrowings under our existing Term Loan B of $291.8 million. During the quarter, we finalized the financing for our planned acquisition of Walden University by closing an $800 million of senior secured notes and pricing $850 million of Term Loan B to replace our existing Term Loan B upon close of the acquisition. This $1.65 billion of permanent financing, along with its $400 million revolver is in line with the committed financing that accompanied our acquisition announcement last September. We repurchased 975,000 shares in the third quarter for a total of $37 million.

And as a result, we had 49.7 million shares outstanding as of March 31, 2021. We are planning to repurchase up to $100 million of shares during fiscal year 2021. Turning to cash flow in the third quarter. Net cash provided by continuing operations of $81.9 million was $34.4 million lower than the third quarter of last year, due to the timing of receipt of $35.5 million of Title IV funds in December that normally would be received in January. Our capital expenditures for the quarter totaled $10.7 million. As a result, free cash flow in the third quarter was $71.3 million compared with free cash flow of $104.6 million in the prior year period. As a reminder, we define free cash flow as cash provided by continuing operations less capital expenditures. Strong free cash flow generation is a hallmark of Adtalem's operating model. Adtalem has generated $177.7 million of free cash flow on a trailing 12-month basis through March 31, 2021. As discussed last quarter, we continue to expect significant free cash flow growth in the coming years.

We anticipate that Adtalem's stand-alone free cash flow will grow in line with earnings or a low double-digit rate. Post wealth in integration, we would expect to Adtalem to generate over $300 million of free cash flow on an annual basis. The strong free cash flow generation supports our commitment to delever the balance sheet, to below two times net leverage in 24 months of the close of the acquisition. Moving on to our outlook. For the full fiscal year 2021, we continue to anticipate revenue this fiscal year to increase 5% to 7% and diluted earnings per share from continuing operations excluding special items, to grow 28% to 32%, inclusive of share repurchases. As previously stated, we believe our stand-alone business in the coming years will generate revenue growth in the mid-single digits and earnings-per-share growth in the low double digits. Additionally, we're excited about the future cost synergies and earnings trajectory that the planned Walden acquisition will provide that talent. We continue to expect adjusted earnings per share accretion of $1.15 per share during the 12 months following the close date, excluding special items and versus accounting effects. If we are able to close the Walden acquisition in the first quarter of fiscal 2022, the combined company would be expected to generate over $4 of adjusted earnings per share for fiscal year 2022.

With that, I'll now turn the call over to the operator for Q&A.

Operator

Before commencing the Q&A portion of the call, I would like to turn the call over to Stephen Beard, Chief Operating Officer at Adtalem.

Stephen W. Beard -- Chief Operating Officer

Thank you, operator. Before we turn to Q&A, I have an important update on the Department of Justice Matter. Last evening, Walden and Lorie informed us that the Department of Justice has concluded its investigation into Walden's Master of Science and Nursing Program. In addition, they indicated that the DOJ has decided that it will not intervene in the underlying lawsuit that sought to bring claims on behalf of the government. For more information on the DOJ's determination, I would refer you to disclosures on Form 8-K filed with the SEC earlier this evening. As for our own investigation, we are nearing the completion of a thorough inquiry conducted by independent legal advisors. And to date, we have not identified any violations on the Claims Act. We are pleased that the DOJ has declined to intervene, and we remain optimistic that these developments will pave the way for closing the transaction in the first quarter of next fiscal year as planned.

And with that update, I will turn the call back to the operator for questions from our audience.

Questions and Answers:

Operator

[Operator Instructions] Our first question is with Jeff Meuler with Baird.

Jeff Meuler -- Baird -- Analyst

So you're maintaining your full year guidance But there is this disruption to clinical availability and it sounds like RN BSN remains under pressure understandably because of the frontline nursing workers with the covet surges. But I guess my question is, the revenue is quite a bit below this quarter, then at least consensus had it modeled. You're saying Q3 in line and I guess you're saying as anticipated increases in COVID-19 headwind. So should -- to be prudent, should we assume that full year revenue is more likely to come in, in the bottom half of the range? Or are you not viewing it that way?

Lisa W. Wardell -- Chairman and Chief Executive Officer

Yes, Jeff, thanks for the question. Let me start with the nursing side and then movement to clinicals. Look, I think the good news here is that this is both a pure COVID story and and a telephone timing story, right? Because as I -- actually, I'll start with Medical. As a reminder, these are students who have completed all of their basic sciences. They've taken their step one exam. They're in the queue. One of the things I've been helpful to look at the silver lining of this pandemic is that both medical schools were Ross and AUC, but obviously, Ross has a greater volume of students have really had to expand the partnership base for clinical. So while we have many hospital partners that are not yet up to 100% or even 80%, 85% capacity. We also added partners to that network. So while we do see and have said in our scripted remarks as well here that there will be COVID impact into the next quarter as we ramp up those clinicals versus 25% or so of the students that were current.

But then, of course, there are new students coming into the queue who passed step one. We do see that as being a greater and faster come back into the clinicals. We won't get them all in the next quarter or even the next two quarters. But certainly, we see that clinical revenue coming back much faster than it did, say, in that first timing of clinicals when they were shut down. A lot to do with the resiliency of the hospital partners. And then part of that to do with kind of vaccinations and the spread of that, that's now allowing for more less urgent procedures and those procedures that are up in these hospital systems where clinical a student can then get experience. So yes, it will continue, but we believe that we're going to see good traction in those clinical weeks. And of course, if you look at the actual student enrollments across Medical and Vet, great new student enrollment, so that will drive into the next couple of quarters. On the nursing side, on Chamberlain side, is, as you've pointed out, a good pressure in RN BSN, far more pressure in January than March, which is why you see that January session, new students a little bit lower.

But just as a reminder, we did gain share in RN BSN even though declined a bit, and we gained share also across most other programs of MSN, FFP and the pre-licensure. So if we combine that with the fact that about 9% of students in Chamberlain were actually through our evening and weekend classes, which you'll recall, the gain of I think calendar September 2019, we only had them on five campuses now, and we're rolling out another five campuses. We're pretty confident that we're going to be in good rate of the revenue. Certainly, would be prudent to say, as we look at 5% to 7%, we feel comfortable in the midrange based on what we know about visibility into May, but we certainly are confident we can reiterate that 5% to 7% guidance.

Jeff Meuler -- Baird -- Analyst

Okay. Helpful. And then I appreciate the update on the DOJ. In the 8-K, there's a line about, I guess, Walden still having this public government investigation designation with HLC, which that may be a matter of time post the DOJ decision before that falls away. But just reminding me, on accreditation, where does Walden stand, like when does this HLC or any other accreditation, CCNE, when does it run through or ones that renewed through?

Stephen W. Beard -- Chief Operating Officer

So just so I understand your question, accreditation in the ordinary course or credit or approval of the transaction?

Jeff Meuler -- Baird -- Analyst

Accreditation in the ordinary course for Walden from HLC, CCNE, any other kind of important creditors

Stephen W. Beard -- Chief Operating Officer

Yes. So as we sit here today, all Adtalem's programs are fully accredited and accreditors vary depending on the program as it relates to nursing. They were accreditors is the CCNE and their accreditation is up for renewal next month. And Walden and Lori expects that accreditation to be renewed in the ordinary course.

Operator

Our next question is Jeff Silber with BMO Capital Markets.

Jeff Silber -- BMO Capital Markets -- Analyst

Just one more on Walden. Can you just remind us what the time line is or what the -- what we need to expect before that deal closes?

Stephen W. Beard -- Chief Operating Officer

So at this point, the remaining stage gates are really regulatory approvals. So HLC reviews and approves the transaction. The HLC site visit has occurred. HLC is developing its report on the basis of that site visit to be presented to HLC formally at its June meeting. And we expect -- they will take it up at the June meeting. We are currently on that agenda, and we expect that they will approve the transaction at that time. After that, the last gating issue relates to Department of Education pre-acquisition review. That work is under way at Ed, and we have been responding to information requests from them related to their review and then once the Department of Education sides off, then we are in a position to satisfy the remaining procedural closing conditions and closed the transaction on the time line that we have previously indicated.

Jeff Silber -- BMO Capital Markets -- Analyst

Okay. That's helpful. I'm sorry to keep the discussion around Washington, but we had a pretty big announcement from the President yesterday regarding the American Stanley plan. And then looking at over, I'm thinking this could impact the company. There could be some positives, some negatives in there. I'm just wondering what you're thinking. And specifically, a lot more funding going to the not-for-profit sector. Do you see that as stronger competition? On the other hand, he talked a $2 billion pipeline for skilled healthcare workers with graduate degrees that in theory you could benefit from. So I'm just curating your thoughts.

Stephen W. Beard -- Chief Operating Officer

Yes. So I think the way we would characterize it is that the myriad of initiatives there represent a net positive for us, that there are obviously some things that to your point, the flow of dollars to not-for-profit institutions. But there's also quite a bit as we understand the package, their community college and those institutions often serve as a pipeline to our programs. And so we view that as a positive as well. And to your point, some of the investments related to broader healthcare workforce improvement also plays to our strength. So again, lots to digest. We're still studying the proposals, but our preliminary perspective is that it's a net positive.

Lisa W. Wardell -- Chairman and Chief Executive Officer

Yes. And the only thing I would add to that, Jeff, is on the not-for-profit side, we see those as real partners. There's lots of things that we do and have been with institutions, whether it's online capabilities or content or just partnering on curriculum, etc. That's something that we want to continue to do. And as Steve mentioned on the community college side, really, that's a pathway for us. We several programs. I'll just use Chamberlain as an example, where we provide community college students with free access to several of the RN BSN pre-licensure classes just to see whether that's something that they want to do and feel like they can pursue, and then we will enroll them from this. So it's a good pathway for us. And then I think just in general, in terms of healthcare and healthcare and equities and how that relates healthcare education, my view is great that money is being into that because it's just -- it's just such a dearth of programs and organizations and institutions that are serving that social mission, and we're proud to be a part of it.

Jeff Silber -- BMO Capital Markets -- Analyst

Okay. That's great to hear. I know you're not giving guidance for fiscal 2022 just yet. And obviously, there are going to be issues in terms of the timing of Walden. But let's assume for some reason, there's a delay in the acquisition closing. Just in terms of your core business, is it possible to give us some early read on where you think growth would come from next year and what we should be expecting, excluding Walden?

Lisa W. Wardell -- Chairman and Chief Executive Officer

Well, I will let Bob answer that, but I would just say in general, as we look at the trends and we look at how the portfolio has performed during the pandemic in terms of resiliency and adaptability and new programs and things like that. ACAMS is a perfect example, right, having to think through how to shift from that in-person conference model. Although it wasn't a large part of the model, that really is where a lot of the sort of sales and continuity for other things came from, and that has shifted. So we think that, that will continue And we certainly see as we have -- this is not really a pandemic thing because over the last few years, have shifted that healthcare portfolio to really meet the needs of our employer partners, which is why we're focused for managers and doctor, etc. And that talent from acquisition to retention to prevent churn in these large hospital partners. We think that that's where a lot of our growth is going to come from. From a qualitative perspective, we don't see that going anywhere we see it continuing.

Bob Phelan -- Interim Chief Financial Officer

I think from a financial perspective, I mean, what we've said is that we do expect to have low double-digit EPS growth and mid-single-digit revenue growth. So I wanted to just make sure we had that out there. And as you look at some of the disclosure we've got in the last part of the earnings release, you can see that the math there, even from the low end of our estimate, you can look at that and you can make some estimates off of that as well.

Operator

Our next question is with Greg Pendy with Sidoti.

Greg Pendy -- Sidoti -- Analyst

Just a couple of questions. First of all, just on the marketing at Chamberlain. Companies in your space have been talking about inflation in terms of marketing, and I know you've been involved in sort of a step-up on the value of a Chamberlain degree. Can you kind of talk about where that stands nine months year-to-date and kind of how we should be thinking about that going forward?

Lisa W. Wardell -- Chairman and Chief Executive Officer

Yes. Look, let me just start by saying, in general, we certainly continue to make incremental marketing investment in Chamberlain because we see it as a real driver of of growth. But -- and we'll continue to do that. It supports our enrollment. We got good and visibility -- good visibility into May and September. But what I would also say is that we are absolutely seeing the benefit of partnerships with the hospital systems and our partners who are really helping us, if you will, with that brand and marketing as we tie a lot of our social media marketing to mission, to our care to complete, to Chamberlain cares and we're able to really get or lift from some of the Chamberlain brand marketing that we've done over the last, I would say, 12 to 18 months. So yes, clearly, there's areas that are certainly more competitive. I mean RN BSN with people on, we've got to really think through region to region on a marketing basis, but we're seeing good return from the additional marketing dollars. And as long as that continues, we'll continue to invest in marketing on the Chamberlain side.

Greg Pendy -- Sidoti -- Analyst

Okay. Great. And then just shifting gears over to the regulatory side. I understand you have good standing, I guess, on the 90-10 and cohort default rates, but can you just talk a little bit about Gainesville employment specifically on veterinary and the medical schools and kind of how we should be thinking about that if that were to come back into the fall?

Lisa W. Wardell -- Chairman and Chief Executive Officer

Yes. So we do not have a gainful employment risk based on the starting salaries and sort of requirements of the doctor, the physician and veterinarian programs. You may recall that when this came up almost five years ago, the vet school was the one where we the most focus from a starting salary perspective because those first years that are really called -- I guess, apprenticeship in that school, which are very much like a residency in an allopathic MD degree were not counted that way until those early years of lower salaries accounted. Since then, we have partnered with some of our core veterinarian hospital partners field hospitals as an example, and really driven an increase salary for those veterinarians. About 9% of the vets who graduate and enter the workforce or in the U.S. workforce graduated from Ross Vet. And there's about, I don't know, less than one vet per opening for a veterinarian in the U.S. So those are stats that really allow us to place our students. And then you mentioned cohort default rate, very connected to gain employment, right? So our draft cohort default rate for the vet school is now 0.7%, meaning that 99.3% are paying back their loans. So we feel like we are in very good stead as it relates to our programs and gainful employment.

Operator

[Operator Instructions] Our next question is with Jeff Meuler from Baird.

Jeff Meuler -- Baird -- Analyst

I hope we'd be more efficient in your follow-up call later. So you've been repurchasing stock, but the plan is to post-acquisition close over the next 24 months. Now that, I guess, the DOJ has dropped its quarry and we're at this stage of the process, Are you planning to continue to repurchase stock until the close or at some point prior to the close stock repurchasing?

Bob Phelan -- Interim Chief Financial Officer

Well, what I would say is that, as you saw in the release, we've repurchased 37 million of shares in the current quarter, $82 million year-to-date. And what we would plan to do is continue purchasing up to the $100 million that we had talked about before. But we do have authorization under our existing authorization for up to or I should say, a little bit more than $200 million that we were authorized for, but we're only going up to the $100 million at this point.

Jeff Meuler -- Baird -- Analyst

Okay. And then for OnCourse Learning, if -- I mean I don't know what rates are going to do, but if the mortgage market does start to soften and the current mortgage underwriters become, I guess, less constrained and it has an impact on hiring activity. How tight is OnCourse Learning revenue to new hiring activity of mortgage underwriters?

Stephen W. Beard -- Chief Operating Officer

It's a not insignificant driver of the revenue there. So in the scenario that you just outlined, were that demand for mortgage origination professionals to slack, we would see that flow through the revenue trajectory as it relates to the mortgage product. That having been said, we are we are hard at work preparing to bolster our efforts in banking and credit union as well as our webinar business. It will never make up for the extraordinary run we've had in mortgage. But we would expect that proportionately, those would be larger than what we get from mortgage revenue and a steady-state run rate. So we plan to take full advantage of this tailwind for as long as it exists, but we do anticipate that it will revert to something more normalized.

Jeff Meuler -- Baird -- Analyst

Yes. Makes sense. And then just last for me. I'm not totally sure if I'm reading it correctly, but there is in Laureate slides, I guess it's discontinued ops online enrollment. I think that's Walden. But did Walden new enrollment declined 4% in the fourth quarter? And If so, I guess, why because it looks quite a bit worse than the year -- the prior year-to-date last year? And any kind of update on more current trends there?

Lisa W. Wardell -- Chairman and Chief Executive Officer

Yes. No,

Stephen W. Beard -- Chief Operating Officer

Yes. What I was going to say that I need to get back to you on that. The reporting segment for online for Laureate includes some other assets that are not part of the Walden business. So I don't have that data in front of me, but we can certainly come back to you with that.

Lisa W. Wardell -- Chairman and Chief Executive Officer

Actually if well is in the online, but they did not have a decline last quarter. They have not reported this quarter, but they did not have a decline last quarter. So we'll find out next week.

Operator

We have reached the end of the question-and-answer session, and I will now turn the call back over to Maureen Resac. Please proceed.

Maureen Resac -- Vice President of Investor Relations and Treasury

Thank you, and thank you all for joining our call this afternoon. As always, if you have any questions, please reach out to me. Thank you for joining.

Operator

[Operator Closing Remarks]

Duration: 52 minutes

Call participants:

Maureen Resac -- Vice President of Investor Relations and Treasury

Lisa W. Wardell -- Chairman and Chief Executive Officer

Bob Phelan -- Interim Chief Financial Officer

Stephen W. Beard -- Chief Operating Officer

Jeff Meuler -- Baird -- Analyst

Jeff Silber -- BMO Capital Markets -- Analyst

Greg Pendy -- Sidoti -- Analyst

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