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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Greetings, and welcome to the Adtalem Global Education Fourth Quarter Fiscal Year 2021 Earnings Call. [Operator Instructions].
I will now turn the conference over to our host, John Kristoff, Vice President of Communications and Investor Relations. Thank you. 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 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 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 due to 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, excludes 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; and Steve Beard, Chief Operating Officer. Following the prepared remarks, we'll have a question-and-answer session.
And with that, I'll now turn the call over to Lisa.
Thank you, John. Thank you all for joining us on our fourth quarter and full year 2021 earnings call. Fiscal 2021 was a year of significant progress at Adtalem as we continue to strengthen our position as a leading workforce solutions provider. This year, we further extended our mission to be the market leader in health care education, helping employers address the critical workforce shortages and talent gaps that exist in the medical and health care sectors, while continuing to expand access to education within diverse communities. With the completion of the Walden acquisition, we are even better positioned going forward to address the increasing demand for health care workers, and we are uniquely positioned to help underserved communities.
Before we get into the results for the quarter and fiscal year, I wanted to briefly outline our agenda for today's call. I'll start off by discussing our results for the fiscal year and quarter, our decision to begin exploring strategic alternatives for our Financial Services segment and the ongoing CEO transition. I'll then hand over to Bob to discuss our results in greater detail. Steve will then conclude by discussing the successful close of the Walden transaction, which we announced on August 12, and perspective on future growth under his leadership as the incoming CEO.
The path of the COVID-19 virus and the broader macroeconomic environment remain unpredictable, and the alarming rise in the new cases and hospitalizations related to the Delta variant magnify the increasing need for skilled health care workers, particularly in underserved communities. We are energized that Adtalem will be able to play an even greater role in solving these worker shortages through the increased scale and differentiated capabilities made possible by our acquisition of Walden.
Now turning to our results for the quarter and the fiscal year, starting with the fourth quarter. We had a solid finish to the year as our strategy continued to deliver results. Our strong financial performance was driven by increasing demand for our programs and offerings, strong student outcomes across our institutions and programs and previous investments in marketing. Financial Services delivered particularly strong performance with nearly 18% revenue growth in the quarter as the leadership changes and prior investments continue to drive improved operating performance.
Our full year performance was in line with our outlook despite lingering COVID-19 headwinds. Our health care institutions performed well as strong student outcomes continue to drive demand for the programs. New student enrollment at our medical and veterinary institutions, for example, grew 12% in the May session. Starting with the Medical and Healthcare segment, at Chamberlain, new student enrollment increased approximately 4% in the May session, with growth in total student enrollment of about 5%, driven by growth in our campus-based BSN and doctorate level programs. We continue to see strength in total enrollment across our campuses, including evening, weekend and hybrid options. We also had the cap on our New Orleans program listed, while our new Brunswick campus had their cap increased.
In May, Chamberlain and LCMC Health established a program to address LCMC's workforce needs. This innovative Called-to-Care Scholars Program is the first-of-its-kind nursing program that addresses the need for more nurses by expanding access for RNs to obtain a BSN degree. Through a forgivable loan program, LCMC Health will fund 100% of tuition costs for up to 90 BSN students per year through this alliance with Chamberlain, in exchange for those students committing to work for LCMC Health for up to 3 years after graduation and passing the NCLEX exam.
And just last week, we signed an agreement with Emory Healthcare in Atlanta, one of our most innovative and forward-thinking partners. Emory is working to address the enormous nurse staffing challenges across the country and is committed to supporting their experienced registered nurses achieve a BSN. Emory chose to partner with Chamberlain based on the depth and quality of its RN to BSN program and the superior student outcomes that Chamberlain continues to demonstrate in all of its nursing programs. These partnerships are perfect examples of our workforce solutions-provided strategy in action.
In our medical and veterinary schools' may session, new student enrollment increased 12%, the highest May session new student start in over 6 years. Total student enrollment declined 1% as we continue to work through the pandemic-induced backlog of students waiting to begin clinicals in Q4. I also want to say I'm very proud of the more than 1,000 Ross Med and AUC students who graduated in May, an incredible achievement in the face of the pandemic. First-time residency match rates at Ross Med and AUC were both 91%. Historically, Ross Med and AUC graduates have entered primary care where the physician shortage is projected to be most severe, at twice the rate of their U.S. medical school graduate counterparts, and that trend continues for our 2021 graduates.
To round out the Medical and Healthcare segment, Ross Vet May session new enrollment was in line with last year's strong May session, reflecting continued interest in the veterinary profession and returns on previous investments in student support and marketing. We believe that the strong demand for veterinarians will continue post pandemic.
Turning to our Financial Services segment. Strong revenue growth continued in Q4. Our ability to capture demand generated by strong secular trends delivered double-digit revenue growth. We're 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.
With respect to each of our individual programs, ACAMS, the premier anti-financial crimes organization, continued to see strong demand in the fourth quarter. Nonconference revenue increased 19% in the quarter, driven by demand for compliance certifications. In Q4, year-over-year conference revenue was substantially higher as ACAMS held its first in-person conference since the start of the pandemic. The Australia conference in June was the inaugural event in the region and successfully hosted nearly 260 in-person attendees. The next planned in-person event is the Las Vegas conference scheduled for the end of September for both in-person and virtual participants. The pandemic remains a dynamic situation, and we will continue to monitor closely.
The favorable mortgage environment continued in the fourth quarter, and OnCourse Learning leveraged its leading position to drive strong mortgage pre-licensing sales results. Continuing education sales also grew as businesses are retaining a high number of mortgage loan officers to meet refinance and new purchase mortgage needs. OCL is well positioned to drive long-term growth as we continue to build new relationships and expand existing ones.
Becker continues its leading position in the CPA test preparation market. Becker's CPA test preparation sales grew slightly in the quarter as hiring among large CPA firms and our institutional clients improved. Becker is poised to capture future CPA review demand as the test-taker market returns to pre-COVID levels. Becker's continuing education offerings performed well and remain a source of future growth, attracting B2B and B2C customers. In July, we named Josh Braunstein as President and Managing Director of Becker, in addition to his role as President of OCL. Josh was the interim leader of Becker, and he will continue to scale and leverage the 2 organizations' core competencies and strength to help drive continued growth.
On August 4, we announced that we are beginning to explore strategic alternatives for our Financial Services segment. This decision is consistent with our longstanding commitment to delivering long-term shareholder value and is a natural progression of our efforts to focus the portfolio on the health care industry. Each of the brands within our Financial Services portfolio are the leaders in their respective markets. Together, they comprise a premium platform in an industry with attractive tailwinds as the regulatory and compliance burdens on the financial services industry proliferate, driving increased demand for the unique solutions that these businesses offer.
As we said at the time of the announcement, no timetable has been established for the completion of the strategic review. And as the Adtalem Board approved specific actions or otherwise concludes the strategic review, we will disclose further developments to our stakeholders. I want to take this opportunity to reiterate my thanks to the entire Financial Services team whose hard work and dedication have created a highly attractive set of businesses, enabling us to take this path. I am extraordinarily proud of the teams at ACAMS, OCL and Becker.
Alongside the Financial Services news, we also announced on August 4 that Steve Beard will succeed me as the CEO, and I will transition to the role of Executive Chairman of our Board of Directors effective September 8. It has been a great honor serving as the CEO of Adtalem over the last 5 years. During that time, we have redefined the company's identity, built a diverse, inclusive and mission-driven culture, streamlined our portfolio of institutions and brands, delivered strong returns and value to our shareholders and reposition the company to become a pure-play health care educator through our successful acquisition of Walden University, which we'll discuss in further detail later in the call.
Delivering superior academic outcomes has been a primary focus for Adtalem throughout my 5-year tenure as CEO, and I am immensely proud of everything we've achieved. This year, first-time residency match rates at Ross Med and AUC were both 91%; more than 70% of our 2019-2020 medical graduates chose to enter critical roles in the primary care across all 50 U.S. states and Puerto Rico. And at Chamberlain, we have received -- we have first-time NCLEX pass rates of over 91%. These outcomes demonstrate that our dedication has paid off, and we remain committed to building a pipeline of highly qualified talent to solve complex issues in the health care industry. Adtalem is in a position of strength and is set up for long-term growth.
Following a solid end to the year, I am so excited about the future of Adtalem under Steve's leadership. Many of you have witnessed Steve's operational and strategic expertise over the last 4 years in the various positions he's held at Adtalem, first, serving as our General Counsel and then as our Chief Operating Officer. Steve's leadership has been instrumental as we divested noncore assets, such as Adtalem Brazil, DeVry University and Carrington College; repositioned our financial services companies for long-term profitable growth; attracting key leadership talent to the company; and energize and align the team around our enterprise strategy.
Under Steve's leadership of the Financial Services segment, the brands have enhanced their market leadership positions, diversified and expanded their product portfolios and customer bases and recruited world-class talent, and leverage best-in-class capabilities across the segment resulting in double-digit revenue growth and expanded operating margins. Steve also spearheaded our successful acquisition of Walden and drove the integration planning process, marking a pivotal step in expanding our scale as a leading workforce solutions provider.
Navigating leadership transitions is a core competency of a highly effective Board, and I am gratified that a well-designed and well-executed succession plan has presented the opportunity to promote an internal successor who has been instrumental to the strategic direction and execution of Adtalem for the last 4 years. I'm looking forward to continuing to partner with Steve, my fellow directors and our leadership team to continue driving results and superior student outcomes.
Now I'd like to turn over to Bob to discuss our results in further detail. After which, Steve will provide some thoughts on recent announcements and the year ahead.
Thank you, Lisa, and hello, everyone. We delivered fiscal year 2021 revenue growth in the middle of the range of our prior full year outlook and EPS growth near the top of that range. Fiscal 2021 revenue increased 5.7% to $1.1 billion, driven by growth in both Medical and Healthcare and Financial Services. Diluted earnings per share from continuing operations, excluding special items, for the fiscal year 2021 was $2.98, a 30.7% increase from the prior year.
In the fourth quarter, revenue increased 7.9% to $280.4 million on strong demand across our businesses, driven by the strength of our student outcomes and our investments in marketing and new offerings. Cost of educational services was $125.6 million in the fourth quarter, an increase of 8.3% compared with the prior year. Student services and administrative expense was $107.9 million in the fourth quarter, a 4.1% increase when compared with the prior year.
Consolidated operating income, excluding special items in the fourth quarter increased 17.1% to $46.9 million, primarily driven by increased revenue and operating leverage across the business. Net income from continuing operations, excluding special items, was $35.1 million, a 14.9% increase compared with the prior year, and diluted earnings per share from continuing operations, excluding special items, was $0.70 compared to $0.58, a 20.7% year-over-year increase.
Now turning to our segment results for the quarter. In Medical and Healthcare, revenue for the vertical was $223.5 million, a 5.7% increase compared with the prior year. Revenue in Chamberlain in the fourth quarter increased 5.3% compared with the prior year period, driven by continued growth in new student enrollment. New and total student enrollment increased 3.6% and 4.6%, respectively, for the May session.
Revenue for the medical and vet schools in the fourth quarter increased 6.3% compared with the prior year, primarily driven by new student enrollment growth. New student med and vet enrollment in the May session grew 12.3%, while total enrollment in the session decreased 1.2%. As Lisa mentioned, total enrollment was negatively impacted by the clinical placement headwinds we view as transitory. Medical and Healthcare segment operating income, excluding special items, for the fourth quarter was $41.3 million, a 3.4% increase. The increase was driven by higher revenue in the segment, partially offset by higher operating costs.
Turning now to our Financial Services segment. Fourth quarter revenue was $56.9 million, an increase of 17.8% compared with the prior year, driven by revenue growth at ACAMS, OnCourse Learning and Becker. ACAMS revenue increased as the nonconference certification offerings continue to perform well and conference revenue began to show a recovery.
OnCourse Learning's continued focus on execution in a favorable mortgage market and strength in its continuing education business drove increased revenue in the quarter. Becker's revenue increase was driven by growth in its continuing education program offerings and an increase in CPA exam prep. Fourth quarter operating income, excluding special items in the Financial Services segment increased 29.8% to $11 million.
Turning now to our balance sheet. We ended the fiscal year with cash and cash equivalents of $494.6 million and outstanding bank borrowings under our existing Term Loan B of $291 million. We repurchased 481,000 shares in the fourth quarter for a total of $18.4 million. In fiscal year 2021, we repurchased 2.9 million shares for a total of $100 million. As of June 30, 2021, we had 49.3 million shares outstanding.
Turning to cash flow in the fourth quarter. Net cash provided by continuing operations was $56 million. Our capital expenditures for the quarter totaled $13.8 million. As a result, free cash flow in the fourth quarter was $42.1 million. As a reminder, we define free cash flow as cash provided by continuing operations less capital expenditures. For the full fiscal year, net cash provided by continuing operations was $223.2 million.
Capital expenditures totaled $48.7 million, resulting in a free cash flow of $174.5 million compared with a free cash flow of $105.4 million in the prior period. As discussed -- as previously discussed, we continue to expect significant free cash flow growth in the coming years. Post Walden integration, we would expect 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 2x net leverage within 24 months.
Moving on to our outlook. With the close of the Walden acquisition, we will present our future financials on an adjusted basis. For the full fiscal year 2022, we expect revenue to be within the range of $1.685 billion and $1.735 billion and adjusted diluted earnings per share of $4.20 to $4.45 from continuing operations, excluding special items.
With that, I will now turn the call over to Steve.
Thanks, Bob. I'm honored to serve as Adtalem's next CEO and to lead the organization during such an exciting and pivotal time. Over the last 4 years, Lisa and I have worked closely together as she led the company's repositioning to a leading workforce solutions provider with the scale to help solve complex challenges for our employer partners. Anyone who works with Lisa knows she is deeply committed to high performance and positive social impact. Her leadership has resulted in superior student outcomes and significant value creation for our shareholders, leaving us well positioned for long-term growth.
On behalf of the entire Adtalem family, I want to thank Lisa for her extraordinary contributions to our collective mission. Whatever success we enjoy in the future rests fully and entirely on the strength of the foundation she has built. Thank you, Lisa. I look forward to partnering with you as Chairman of the Adtalem Board.
Last Thursday, we announced the successful close of our acquisition of Walden University, positioning Adtalem as a leading health care educator, providing more licensed physicians than any other school in the United States and having the largest undergraduate and graduate nursing enrollment in the United States. This transaction is a pivotal step in expanding our scale as a workforce solutions provider and enables us to better address critical workforce shortages and inequities that exist in the health care sector.
As you know, there continues to be strong demand for health care practice and health care support professionals, with demand currently exceeding supply by 44% and 9%, respectively. With the concentration of online graduate-level health and behavioral sciences programs that are highly complementary to our core curriculum, Walden significantly expands our national health care education footprint and will further enable us to reimagine the future of health care education. Walden immediately strengthens our core nursing offering and allows us to expand into attractive, high demand adjacencies, including the social and behavioral sciences, while also extending the customer life cycle from pre-licensure programs to graduate and advanced degrees.
All of this will have a direct benefit to our employer partners, make us more competitive and ultimately generate significant long-term shareholder value. Walden is a high-quality asset with market-leading programs, an innovative business model and dynamic leadership. We're pleased to have completed the acquisition in the first quarter of fiscal 2022 as planned.
Turning to our financial expectations for Walden. We're excited about the incredible opportunities for revenue and margin expansion, and we remain extremely confident in achieving at least $60 million in annual run rate cost synergies. Moreover, we expect to realize half of those run rate savings within the first year. Post integration, we believe we'll generate more than $300 million of free cash flow annually and significant adjusted earnings share accretion of $1.15 in the first 12 months and $2.35 by year 4.
Our integration of Walden kicked off immediately after close, and we're delighted to welcome more than 6,000 new Walden colleagues to Adtalem. We're also pleased to officially welcome Paula Singer, who will continue to serve as Walden's President, managing strategy and operations for the university. In closing, I am bullish on Adtalem's future and excited about our next phase of growth. With our acquisition of Walden now complete, we are establishing a market-leading position in the rapidly growing health care sector. And we do so while continuing to deliver superior academic outcomes for our students. Outcomes that propel the kind of successful career journeys that change lives and lift communities.
Our role in helping to meet the significant demand for diverse and qualified health care professionals is one of the more compelling attributes of our strategy. These talent shortages, worsened by the pandemic, create a tremendous market opportunity for qualified graduates in the health and behavioral sciences professions. We are extremely gratified to be able to play an increasingly important role in meeting this market demand and do so at a time when global health has never been more important.
And with that, I'll turn the call over to the operator for Q&A.
[Operator Instructions]. Our first question comes from Jeff Silber with BMO Capital Markets.
Lisa, I want to wish you all the luck in the world, and thank you for everything. And Steve, best of luck to you as well in your new role.
Thank you.
You talked a bit on the call about some of the clinical issues that you've been facing in some of the programs, and you're hoping that they're just transitory. Can you get say a little bit more color what's been happening with that and when you think they'll become nontransitory?
Yes, absolutely. And let me start by saying this is in the medical pool. So those clinicals for medical students at AUC and Ross who are -- who just finished the best basic sciences, so not on the other side of med health. So as we talked about last quarter, there was a backlog simply because, obviously, there were hospitals that weren't taking clinical patients through COVID and sort of getting to a place where clinical could be in place. But certainly, we then had a backlog of students. And then, of course, we've got students coming through and enrollments have increased. And so it's really getting through that backlog into those hospital systems, which now have, for the most part, figured out -- in a real surge area, figured out how to do both because, of course, it's helpful for them to have the -- frankly, of course, the students in there and working, et cetera.
And so if you think about it now, we've got some -- we prioritize those students who were waiting, right? We've got more students coming through the queue, but we see that over the next couple of quarters being able to level out. One of the things that the team has been able to do is actually expand our clinical partnerships through this whole process because, of course, we were having to sort of move regionally as COVID surged. I'm sure there'll be more of that with the Delta variant and sort of the risk there. So in the medium and long term, Jeff, this is going to be beneficial for us because it really does expand the number of slots that we have across the network of our clinical operations.
In the short term, we've got to get those newer students through step 1 and into clinicals, some of them taking longer to get there, and then those students who are in the backlog into clinical. So another couple of quarters, I think last quarter, we said this was going to be something that was going to rectify in FY '22. We got a bit of that done this past Q4, and we'll see more of that as we go into FY '22.
And our next question comes from Jeff Meuler with Baird.
Congratulations to both of you. So just on the starting point on the guidance, I'm just trying to understand like what the Adtalem growth is. So you said if the transaction closed at the end of the quarter, I think it would have been an $0.86 contribution. If it's on a 12-month basis, it's $1.15. So I guess, do we split the difference? Or just anything that you can say about what kind of Adtalem growth is assumed in the guidance.
Yes. I think the best answer is to split that difference, and you wind up at about $1 in terms of the incremental EPS accretion at that point.
Okay. So can you give us any sense of -- you have, I guess, 3 different pieces. You have RemainCo Adtalem, Medical and Health. You have acquired co Walden and then, I guess, DivestCo, Financial Services, is still in the guidance. Can you give us any sense of what kind of growth you're expecting for different parts of the business, especially since that part of what's in guidance is expected no longer be in the company by the end of the year?
Yes. I think at this point, what I would say is that our guidance is relatively consistent with what we've done with guidance in the past, which is in that 5% to 7% range, whether you're talking about the Adtalem -- previous Adtalem or Adtalem plus Walden. So that's the way I would look at that range on the low and high end.
And just to jump in a little bit on the Financial Services side. Obviously, they had a great quarter. And certainly, for both -- we don't break them out, but certainly on ACAMS and OCL, you look at double-digit growth in those organizations, and Becker also grew. So we expect that trajectory to continue into FY '22.
Okay. And then just given your response, Lisa, to the last question that it sounds like the clinical headwinds should lessen. And your -- as you said in the prepared remarks, you're getting back to some in-person conferences. The COVID estimated impact was a $0.50 EPS headwind in 2021. What are you assuming in the 2022 guidance? Just wondering how much of the kind of Adtalem growth in the guidance is coming from a lessening of COVID headwinds versus maybe more core growth.
Yes, I'll let Bob jump in on the EPS piece, but let me just say from sort of those risks and the continuing COVID risk, you can sort of see in med health that the total students, we're lessening that gap, as I said, as the clinical gets filled, but we do have to continue to monitor a couple of things, right, one, on the ACAMS conferences. We had a successful in-person in Australia. We are scheduled to do so in Vegas, and you'll recall that, Jeff, that, that September conference is a big one.
We also have -- that's going to be hybrid. So we have options both ways. But we'll need to continue to look at that. And just in general, across nursing enrollment, right? To date, we've really been able to navigate that. And in fact, the demand has been quite strong, but we all know, right, that nursing, the profession in general, right, just like all health care workers is seeing some fatigue and things like that. So that's how I think about sort of the overall risks from a qualitative perspective, and I'll let Bob jump in on the guidance.
Sure. On the guidance, I guess, what I would say is it's part of the reason on the low end that we're actually at $4.20 because if you just did a calculation, you'd come up slightly higher than that. But with the variation due to not knowing where we're going to be with COVID, we wanted to provide a little bit more of a wider range there on the guidance, and that's both on the low end as well as the high end.
Okay. And then just one last one for me. Not sure if it's best for Steve or Lisa or maybe you both want to chime in. But I guess, why is now the right time for a CEO transition, while you have a large divestiture pending and a large acquisition closing? It seems like a lot to -- and you have an Interim CFO for the time being. So it seems like a lot going on to time a CEO transition. That's it for me.
Yes. So I will start, and I'll let Steve jump in. So for me, this is actually a perfect time as I think about my time in this seat and in this role a little over 5 years now. So if you think about the portfolio where it started, how we thought about streamlining that portfolio and where we wanted that focus for the organization to be as we gravitated and, in fact, really proved out our right to win on the med health care side, it made sense to pursue this transition.
As you know, with this transition -- I mean transaction as well as most transactions in this space, we had 10 months to really do 2 things: one, prepare for the synergies; and two, to prepare for what does the future look like and who is best served to take us on that next piece of the journey. And as I said, internally here at Adtalem, Steve has been a partner in this journey for almost -- a little over, actually, 4 years now. So he is not coming into the seat without a great understanding both of our mission and where we need to really focus from an academic outcome perspective.
That's important both for our internal stakeholders, but also external. I mean that's why we're here and why we come in every day. But he also understands the challenges across the institution and what we really need to do to drive synergies. And so from my perspective, this really derisks this entire transition because I am not going anywhere. I am going to be in that Executive Chairman role. I'm going to be working with the team and with the Board to make sure not only that this transaction and integration is successful, but also to continue to tell our story as it relates to what we're really trying to do and change in the health care education industry. So that's my 2 cents. So I'll let Steve jump in.
Not a lot I can add to that, except to reiterate that both sides of the leadership transition are really intended to ensure continuity and no loss momentum over time. So as Lisa pointed out, I've been involved in all these critical activities from their inception, very, very invested in the near-term activity, whether it's related to the integration of Walden or it's related to the divestiture of the finserv assets, whether it's related to what we're attempting to do in this coming fiscal year from a performance perspective. So I'm grateful for the opportunity. I'm equally grateful to have Lisa as a partner as the Chair of our Board. That's a critical role as we go through these activities. And you can believe I'm not letting her off the hook anytime soon.
Our next question comes from Alex Paris with Barrington Research.
Congratulations on the strong finish to the year and a special congratulations to Steve and Lisa, Steve on the promotion and Lisa on your numerous accomplishments during your tenure. It's been great working with you.
Thanks, Alex.
So a similar question to the last. Why is now the right time for a financial services strategic review, to start with?
Yes. Great question. So I will start it off and let Steve jump in. So we have always said that as we think about the portfolio, we want to make sure that we are focused on those areas where we can really drive momentum across the entire portfolio. Obviously, when we signed the transaction to acquire Walden University, we really had shifted the center of gravity of the organization to Medical and Healthcare. That certainly doesn't mean that we believe that Financial Services don't have a mission. I've always said, right, that we are helping people remain relevant in their current roles and have a career journey and not just a job, and we do that on both side.
But in terms of timing, this is a time where these businesses are on a great growth trajectory, where a lot of the investments that we've made and talked about with you all, quarter in and quarter out, have -- are starting to really come to fruition here, whether it's marketing, technology, et cetera. And we also have the right leadership and teams in those organizations now, which, as you all know, we went through those transitions over the last year or 2. So from our perspective, this is the right time for us to determine a home that can really focus on them and the financial services programs and offerings that they have.
Yes. I would concur with all of that, the overall trajectory of the finserv businesses is one that we're quite proud of at this point. We feel really good about the leadership that are in place. We think that we've got better visibility into the forward momentum of those businesses, COVID notwithstanding. And given the investments we've made in the -- what is now the core health care business, we think it's a great time to try to realize that value for our shareholders and provide a home for those businesses where they can continue to grow and continue to be the beneficiary of investments to grow consistent with their trajectory. So we're excited about that since the announcement. We've gotten lots of inbound interest. We think these are highly attractive assets that are going to attract a ton of interest from lots of high-quality suitors. So we're excited about that process, and we believe it will end in a way that is highly valuable to our owners.
Great. A question about Walden. At the time of the acquisition announcement last September, you gave trailing 12 months revenue and adjusted EBITDA. Can you do that now on a trailing 12-month basis? Or will you do that now?
No, I mean that's something we have not disclosed at this point. So I would just say we don't update at this time.
All right. And then has any of the assumptions changed? You had posted expectations for free cash flow in year 1 through 4 and adjusted EPS contribution year 1 through 4. It sounds like that hasn't changed at all.
That's correct. The only thing we've said -- we're saying at the beginning of this was, we obviously will have not the full 12 months in this fiscal year, just 1.5 months. But if you rightsize the EPS on that, absolutely, it's -- nothing has changed.
Okay. Great. And then the last question, and I'll let you go is, I think you said $60 million worth of synergies. I just didn't jot it down quick enough. Is it half in fiscal '22 and then the full $60 million in fiscal '23 and beyond? Is that what you said?
That's correct. I think the -- obviously, we expect to receive the full $60 million within the first 2 years of the transaction. We expect to realize half of that in the first year. We don't necessarily expect to realize that on a ratable basis across the year given we've just taken possession of the asset. So we expect that to be back-end loaded in year 1, but we are committed to delivering the $60 million within 24 months of close.
Great. And then what's the expectation for the onetime costs associated with those synergies?
The estimate was -- it was -- we've already incurred roughly $15 million. We estimate another $30 million for the current year. And then there will be roughly another $15 million in fiscal '23.
$60 million in aggregate.
Right.
Okay. So $60 million in synergies and at a one-to-one kind of cost basis.
Onetime $60 million cost for a $60 million run rate synergies.
Annually.
Annually.
Right. Annually. Got it. All right. Good. That sounds great. Thanks again. I appreciate the additional color.
Our next question comes from Gregory Pendy with Sidoti.
Just one quick one. I mean just in light of the annual guidance, you said on the prior question, it's not going to happen ratably. Can you give us a little bit of color on how to think about the cadence as it is back-half loaded as you sort of build to that $30 million in synergies, just so that we have kind of from a quarterly standpoint, a way to think about it.
Yes. I think there's a number of things. One is what Steve just went through in terms of the fact that the $30 million of synergies would be back-end loaded really for the first year. So that's one point. But also, what Lisa talked about is with the clinicals. That's another thing that we would be, again, looking at a little bit more back-end loaded in terms of getting that back.
And then the other thing I should point out is just the fact that we're closing in August on the Walden transaction is that we've only got half of a quarter for that. So really, once again, you're going to see lower numbers in the first quarter relative to that and more in the second, third and fourth.
Yes. And Greg, the one thing I want to add to that is we're confident in those numbers because we're hitting the ground running because we've had 10 months basically. For better or for worse, we had 10 months waiting for regulatory approvals, et cetera, to really put the planning process in place. So it's not so much we have the plan. It's just that, as Bob said, we will only have them about half of Q1.
Okay. Great. And then just one last final one. If I'm not mistaken, in the past, maybe a few years ago, you sold your test prep business for veterinary. And if I am correct, can you talk a little bit about the valuations that you received for that as we kind of think about Financial Services and Becker?
Yes. I think you're referring to the Becker Health test prep, which was a really small part of that business. Couple of thousands in revenues. We can get that for you, Greg, on the individual call, but not comparable to this type of October comparison.
Got it. Okay. Fair point.
[Operator Instructions]. Our next question comes from Jeff Silber with BMO Capital Markets.
I'm sorry, I got cut off earlier. I don't know if this was asked, but you did talk about the Walden impact for 2022. You mentioned that you only have half a quarter's worth this year and how the synergies are going to be back-end loaded. Beyond those two, can we talk about the cadence of the Walden business by quarter? Are there any peaks and valleys that we should be aware of on a seasonal basis?
Yes. So I think in some respects, it's a bit like Chamberlain, right? But it's all about the session. So by way of examples there, Q3 or Q1, they had a session in August, they will not have another session -- or before our Q1 session, they will not have another session until we get into Q2 for some of the programs. Some of the programs are more interval. So as we start reporting Walden as part of our ordinary course, you'll see that, that will highlight that. And you'll recall, for example, in July, we have that online-only session in Chamberlain, so it changes the numbers. We'll make sure that we get that to you so that you don't have to dig for it, as we add them to the reporting.
So are you going to be reporting Walden as a separate segment as well?
I think we have to work on determining how we're going to report segments at this point. That's something that's still in the works at this point.
Yes.
Okay. But hopefully, we'll get enrollment data and hopefully, revenue and EBITDA data from Walden separately even if it's not a separate cycle.
I think that we will be able to help you understand the trends as we do today, right, in both Chamberlain and Walden just as we do as we talk about that, et cetera. Have no fear, Jeff.
That concludes our question-and-answer session. I'll now turn it back to John Kristoff for closing remarks.
All right. Thank you, everyone, for joining us. And as always, if you have additional questions. Oh, sorry. Lisa has closing comments.
No, I just was going to say thank you to everybody who have been so supportive of us, certainly during my tenure. And I have to say, during this last year, the team here at Adtalem reminds us every day, and now soon to be Walden team also. We've had a lot of interaction with them, and reminds us every day why we come here and why we do what we do. And that this is really a social mission company. And for all of you who are listening to this call, I just so appreciate the support that you've shown me. And I'm really excited about partnering with Steve and watching him in this role. And I know that you will be just as supportive to him. So thank you to all of you for joining our call today.
Thanks, Lisa. That concludes our call. Thank you, everyone.
Thank you. This concludes today's call. All parties may disconnect. Have a great day. Thank you.