Exhibit 99.01
Laureate Education, Inc. Reports Record Fourth Quarter and
Year End 2005 Results;
Company Raises 2006 Financial Outlook;
Achieves Record Enrollment of 217,000 Students Worldwide
BALTIMORE--(BUSINESS WIRE)--Feb. 27, 2006--Laureate Education,
Inc. (NASDAQ: LAUR), the world's leading international provider of
higher education, announced robust student enrollment and strong
financial results for the quarter and year ended December 31, 2005.
-- Full-year 2005 revenues increased 35% to $875.4 million,
compared to $646.9 million in 2004. Fourth quarter 2005
revenues increased 32% to $277.8 million, compared to $210.4
million in 2004.
-- Total operating income for 2005 increased 42% to $130.4
million, compared to $91.5 million in 2004. Total operating
income for the fourth quarter 2005 increased 47% to $70.5
million, compared to $48.1 million in 2004.
-- The Company reported earnings from continuing operations for
the full-year and quarter ending December 31, 2005 of $1.65
and $0.91 per diluted share, respectively.
-- The Company's campus-based institutions reported total student
enrollment of 190,679 students at December 31, 2005, an
increase of 41% over 2004.
-- Laureate Online Education reported fourth quarter total
student enrollment increased 27% to 26,750 students. Walden
University, the centerpiece of Laureate Online Education,
reported fourth quarter total student enrollment increased 41%
to 20,493 students.
-- In 2005, Laureate Education extended its international
leadership by entering the higher education markets of Brazil,
Honduras, and Cyprus. Additionally, the Company's university
in Mexico opened a new campus in Torreon and acquired a campus
in Hermosillo (UNO) during the year.
-- Throughout 2005, Laureate expanded capacity at several campus
locations in Europe and Latin America and launched new
academic programs, including the UVM/Walden University
dual-degree program, a masters degree program in nursing at
Walden, new study abroad programs and programs for working
adults.
-- The Company increased full-year 2006 earnings outlook by $0.05
to between $2.05 and $2.15 per diluted share, excluding the
impact of SFAS123(R).
Douglas Becker, Chairman and Chief Executive Officer of Laureate
Education stated, "The implementation of Laureate's unique global
strategy gained significant momentum in 2005. We extended our
leadership by launching innovative academic programs, leveraging best
management practices across our network, expanding capacity and
entering new markets."
Mr. Becker added, "I am proud that we achieved very ambitious
operational and financial goals for 2005, while investing for future
growth. This success positions us for an exciting 2006 and beyond --
where we expect continued growth and improved efficiencies."
Financial Results
Total revenues for the fourth quarter of 2005 were $277.8 million,
an increase of 32% compared to total revenues of $210.4 million in the
fourth quarter of 2004. Total operating income for the fourth quarter
2005 increased 47% to $70.5 million, versus operating income of $48.1
million in the fourth quarter of 2004. After-tax income from
continuing operations for the fourth quarter of 2005 was $47.6 million
or $0.91 per diluted share, compared to $47.2 million or $0.92 per
diluted share for the same period of 2004. Excluding the after-tax
gain on the divestment of UEM land and the impact from the early
repayment of the K-12 seller note, the growth of after-tax income from
continuing operations would have been 47%, from $0.62 in the fourth
quarter of 2004 to $0.91 per diluted share for the same period of
2005.
For the twelve-month period ended December 31, 2005, total
revenues were $875.4 million, an increase of 35% compared to total
revenues of $646.9 million in the same period of 2004. Total operating
income for the twelve-month period increased 42% to $130.4 million,
versus operating income of $91.5 million in the same period of 2004.
After-tax income from continuing operations for the twelve-month
period ended December 31, 2005 was $85.7 million or $1.65 per diluted
share, compared to $82.8 million or $1.69 per diluted share for the
same period of 2004. Excluding the after-tax gain on the divestment of
UEM land and the net gain from the early repayment of the K-12 seller
note, the growth of after-tax income from continuing operations would
have been 29%, from $1.28 in 2004 to $1.65 per diluted share in 2005.
During the second quarter of 2005, the Company recorded a loss of
$3.1 million on the disposal of WSI. The Company is restating that
loss to be $10.5 million. The adjustment relates to a reversal of a
deferred tax asset for this business. This is reflected in the loss
from discontinued operations in the Company's results for the twelve
months ended December 31, 2005. As a result of this change, the
Company is evaluating the impact on its assessment of internal
controls relating to tax processes over non-core operations.
Total cash and marketable securities at December 31, 2005 were
approximately $110 million, while total corporate debt was
approximately $228 million.
Effective January 1, 2006, Laureate Education proactively and
preferentially adopted a consistent weekly revenue recognition policy
across all traditional campus-based units. The adoption will have no
material effect on the Company's full-year earnings or full-year 2006
financial outlook. However, the weekly revenue recognition policy will
change the quarterly seasonality of the overall business. For
comparison purposes, Laureate will provide historical 2004-2005
financials stated with the new revenue recognition method on the
Company's website and in an 8-K filing with the U.S. Securities and
Exchange Commission.
Today, Laureate International Universities consists of 24
institutions of higher education in 15 countries, offering programs to
217,429 students through 51 campuses (compared to 42 campuses in 2004)
and online to students worldwide.
Presentation materials for today's conference call with the
financial community will be available to listeners through the
investor relations section of the Company's website,
www.laureate-inc.com. The live webcast of Laureate's fourth quarter
and year-end conference call will be broadcast at 10:00 a.m. eastern
time today.
Revenue Growth - Organic and Acquisition
Three months ended December 31st
% Growth
Revenue Amount Constant
(In Thousands) 2005(4) 2004 in USD Currency
---- ---- ------ --------
Central America(1) $78,424 $62,171 26% 20%
South America(2) 76,521 55,232 39% 25%
Europe Region 52,121 52,354 0% 10%
Online 53,505 40,657 32% 32%
------- -------
Subtotal 260,571 210,414 24%
Acquisitions(3) 17,199 NA
------- -------
Total $277,770 $210,414 32%
======= =======
(1) Central America includes Mexico, Costa Rica and Panama.
(2) South America includes Chile, Ecuador and Peru.
(3) Includes revenues for acquired institutions from the respective
dates of their acquisitions through the anniversary date.
(4) Excludes 2005 revenues prior to anniversary date of acquisition.
Revenue Growth - Organic and Acquisition
Twelve months ended December 31st
% Growth
Revenue Amount Constant
(In Thousands) 2005(4) 2004 in USD Currency
---- ---- ------ --------
Central America(1) $237,475 $193,471 23% 19%
South America(2) 216,259 167,014 29% 18%
Europe Region 157,252 151,312 4% 4%
Online 181,474 135,134 34% 34%
------- -------
Subtotal 792,460 646,931 22%
Acquisitions(3) 82,916 NA
Total $875,376 $646,931 35%
======= =======
(1) Central America includes Mexico, Costa Rica and Panama.
(2) South America includes Chile, Ecuador and Peru.
(3) Includes revenues for acquired institutions from the respective
dates of their acquisitions through the anniversary date.
(4) Excludes 2005 revenues prior to anniversary date of acquisition.
Student Enrollment
As of December 31st
New Student Enrollment(1) 2005 2004 % Change
---- ---- --------
Central America 33,389 27,541 21%
South America 29,546 22,927 29%
Europe Region 6,804 5,001 36%
------ ------
New Campus Based 69,739 55,469 26%
New Student Enrollment
at Acquired Schools(3) 2,897 --
------- -------
Subtotal 72,636 55,469 31%
Online 19,365 14,147 37%
New Student Enrollment
with Acquisitions 92,001 69,616 32%
====== ======
Total Student Enrollment(2) 2005 2004
---- ----
Central America 73,763 63,639 16%
South America 67,157 56,319 19%
Europe Region 16,119 15,210 6%
------- -------
Total Campus Based 157,039 135,168 16%
Total Student Enrollment
at Acquired Schools(3) 33,640 --
------- -------
Subtotal 190,679 135,168 41%
Online 26,750 20,988 27%
Total Student Enrollment
with Acquisitions 217,429 156,156 39%
======= =======
(1) New Student Enrollment is YTD.
(2) Total Student Enrollment is census as of December 31st.
(3) Acquisitions (less than 1 year) include the following: UNO
(Mexico), UNITEC (Honduras), Cyprus College and Anhembi Morumbi
(Brazil).
Financial Outlook
The following statements are based on current expectations. These
statements are forward-looking and actual results may differ
materially.
First Quarter 2006:
-- For its campus-based and online businesses, Laureate Education
anticipates total revenue of $215 to $235 million for the
first quarter 2006.
-- The Company anticipates Campus-Based revenue of $165 to $180
million for the first quarter 2006, with operating margins
between 3% and 4%. Latin America revenue is expected to be
between $110 and $120 million with operating margins of (2%)
to (3%). Europe revenue is expected to be between $55 and $60
million with operating margins of 21% to 22%. Campus-based
general and administrative expenses are expected to be
approximately $4.0 million.
-- The Company anticipates Online revenue of $50 to $55 million
for the first quarter 2006, with operating margins between 7%
and 8%.
-- General and administrative expenses are expected to be
approximately $9 million in the first quarter 2006.
-- The Company currently believes that it will achieve a loss of
($0.01) to ($0.03) per diluted share (excluding the impact of
SFAS123R) for the first quarter 2006, the Company's seasonally
weakest quarter. The Company's first quarter seasonality is
slightly more pronounced due to the voluntary adoption of a
weekly revenue recognition policy across all business units.
-- Fully-diluted weighted average shares outstanding is expected
to be approximately 52.3 million for the quarter ending March
31, 2006.
Full-Year 2006:
-- For its campus-based and online businesses, Laureate Education
anticipates total revenue of $1,080 to $1,150 million for the
full-year 2006.
-- The Company anticipates Campus-Based revenue of $845 to $900
million in 2006, with operating margins between 19% and 20%.
Latin America expects revenue of $645 to $690 million with
operating margins of 22% to 24%. Europe expects revenue of
$200 to $210 million with operating margins of 14% to 15%.
Campus-based general and administrative expenses are expected
to be $15 to $17 million.
-- The Company anticipates Online revenue of $235 to $250 million
in 2006, with operating margins between 17% and 18%.
-- General and administrative expenses are expected to be $38 to
$42 million in 2006.
-- Laureate Education increased its full-year 2006 earnings
outlook by $0.05 to between $2.05 and $2.15 per diluted share,
excluding the impact of SFAS123(R). Stock option expense for
the full-year 2006 is expected to be between $0.10 and $0.12
per diluted share.
-- Fully-diluted weighted average shares outstanding is expected
to be approximately 53.6 million for the year ending December
31, 2006.
About Laureate Education, Inc.
Laureate Education, Inc. (NASDAQ: LAUR) is focused exclusively on
providing a superior university experience to over 217,000 students
through the leading global network of accredited campus-based and
online universities. Addressing the rapidly growing global demand for
higher education, Laureate offers a broad range of career-oriented
undergraduate and graduate programs through campus-based universities
located in Latin America, Europe, and Asia. Through online
universities, Laureate offers the growing population of
non-traditional, working-adult students the convenience and
flexibility of distance learning to pursue undergraduate, master's and
doctorate degree programs in major career fields including
engineering, education, business, and healthcare. For more
information, please visit our website, www.laureate-inc.com.
Forward Looking Statements
This release includes information that could constitute
forward-looking statements made pursuant to the safe harbor provision
of the Private Securities Litigation Reform Act of 1995. Any such
forward-looking statements may involve risk and uncertainties.
Although the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, the
Company's actual results could differ materially from those described
in the forward-looking statements.
The following factors might cause such a difference:
-- The Company's operations can be materially affected by
competition in its target markets and by overall market
conditions, among other factors.
-- The Company's foreign operations, in particular, are subject
to political, economic, legal, regulatory and currency-related
risks.
Additional information regarding these risk factors and
uncertainties is detailed from time to time in the Company's filings
with the Securities and Exchange Commission, including but not limited
to our most recent Forms 10-K and 10-Q, available for viewing on our
website. (To access this information on our website,
www.laureate-inc.com, please click on "Investor Relations", "SEC
Filings")
Laureate Education, Inc. & Subsidiaries
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
Three Months Ended December 31,
-----------------------------------------
2005 2004 $ Variance % Variance
-----------------------------------------
Revenues
Central America (a) $85,626 $62,171 $23,455 38%
South America (b) 82,822 55,232 27,590 50%
--------- --------- ---------- ----------
Campus Based - Latin
America 168,448 117,403 51,045 43%
Mediterranean Region (c) 29,063 28,013 1,050 4%
Hospitality 13,390 13,539 (149) -1%
France 13,364 10,802 2,562 24%
--------- --------- ---------- ----------
Campus Based - Europe 55,817 52,354 3,463 7%
--------- --------- ---------- ----------
Campus Based Total 224,265 169,757 54,508 32%
--------- --------- ---------- ----------
Laureate Online Education 53,505 40,657 12,848 32%
--------- --------- ---------- ----------
Total revenues 277,770 210,414 67,356 32%
--------- --------- ---------- ----------
Core operating expenses 198,844 155,305 43,539 28%
Non-cash stock compensation
expense 2,059 1,832 227 12%
General and administrative
expenses 6,386 5,210 1,176 23%
--------- --------- ---------- ----------
Total operating expenses 207,289 162,347 44,942 28%
--------- --------- ---------- ----------
Operating income 70,481 48,067 22,414 47%
Non-operating items
Interest and other
income(d) 3,224 7,674 (4,450) -58%
Interest expense (2,753) (2,450) (303) -12%
Foreign exchange loss (726) (510) (216) -42%
--------- --------- ---------- ----------
Total non-operating items (255) 4,714 (4,969) N/A
--------- --------- ---------- ----------
Income from continuing
operations before minority
interest, equity in net
income (loss) of affiliates,
and income taxes 70,226 52,781 17,445 33%
Minority interest in income
of consolidated
subsidiaries, net of income
tax (11,239) (8,426) (2,813) -33%
Equity in net loss of
affiliates, net of income
tax (165) (315) 150 48%
Income tax (expense) benefit (11,261) 3,113 (14,374) N/A
--------- --------- ---------- ----------
Income from continuing
operations 47,561 47,153 408 1%
(Loss) income from
discontinued operations, net
of income tax (e) (2,745) (578) 451 78%
Gain (loss) on disposal of
discontinued operations, net
of income tax (g) 1,547 (13,324) 12,253 92%
--------- --------- ---------- ----------
Net Income $46,363 $33,251 $13,112 39%
========= ========= ========== ==========
Weighted average shares
(basic) 49,881 48,624
Weighted average shares
(diluted) 52,267 51,310
EPS-Net Income (basic) $0.93 $0.68
EPS-Net Income (diluted) $0.89 $0.65
EPS-Income from continuing
operations (basic) $0.95 $0.97
EPS-Income from continuing
operations (diluted) $0.91 $0.92
Reconciliation - Pro Forma
Income from Continuing
Operations (f)
- -----------------------------
Income from continuing
operations before income
taxes $44,040
Impact from early
repayment of Educate Inc.
note receivable 2,183
Gain on UEM Land (5,169)
---------
Subtotal $41,054
Pro Forma tax expense (9,023)
---------
Pro Forma income from
continuing operations $32,031
---------
Pro Forma weighted average
shares (diluted) 51,310
EPS - Pro Forma income from
continuing operations
(diluted) $0.62
Segment operating profit
(loss):
Campus Based - Latin
America $54,257 $35,046 $19,211 55%
Campus Based - Europe 14,493 13,327 1,166 9%
Campus Based - Overhead (4,405) (4,094) (311) -8%
--------- --------- ---------- ----------
Campus Based - Total $64,345 $44,279 $20,066 45%
--------- --------- ---------- ----------
Laureate Online $14,581 $10,830 $3,751 35%
--------- --------- ---------- ----------
a) Central America includes Mexico, Costa Rica, Panama and Honduras.
b) South America includes Chile, Brazil, Ecuador and Peru.
c) The Mediterranean region includes Spain and Cyprus
d) For the three months ended December 31, 2004, includes acceleration
of original issue discount triggered by the early repayment of the
K-12 seller note and the gain on the divestment of land at UEM.
e) The 2005 and 2004 operating results present the K-12 (including
UK/France), WSI and India business units as discontinued
operations.
f) The pro forma measures used in this press release are non-generally
acceptable accounting principle ("GAAP") financial measures. Non-
GAAP should not be considered as a substitute for, or superior to,
measures financial measures of financial performance prepared in
accordance with GAAP. The Company's management refers to these
non-GAAP financial measures in making operating decisions because
they provide meaningful supplemental information regarding the
Company's historical operating results. In addition, the Company
has historically reported similar non-GAAP financial measures to
investors and believes that the inclusion of comparative numbers
provides consistency in its financial reporting. Investors are
encouraged to review the reconciliation of the non-GAAP financial
measures used in this press release to their most directly
comparable GAAP financial measure as provided with the financial
results attached to this press release.
g) The Company is restating in the second quarter of 2005 to reflect
the change in income tax expense of $7.4 million related to a
reversal of a deferred tax asset of WSI. As a result, the Company
is evaluating the impact on our assessment of internal controls
relating to tax processes over non-core operations.
Year Ended December 31,
-----------------------------------------
2005 2004 $ Variance % Variance
--------- --------- ---------- ----------
Revenues
Central America (a) $263,996 $193,471 $70,525 36%
South America (b) 243,264 167,014 76,250 46%
--------- --------- ---------- ----------
Campus Based - Latin
America 507,260 360,485 146,775 41%
Mediterranean Region (c) 87,483 82,532 4,951 6%
Hospitality 53,393 51,557 1,836 4%
France 42,885 17,223 25,662 149%
--------- --------- ---------- ----------
Campus Based - Europe 183,761 151,312 32,449 21%
--------- --------- ---------- ----------
Campus Based Total 691,021 511,797 179,224 35%
--------- --------- ---------- ----------
Laureate Online Education 184,355 135,134 49,221 36%
--------- --------- ---------- ----------
Total revenues 875,376 646,931 228,445 35%
--------- --------- ---------- ----------
Core operating expenses 714,906 528,307 186,599 35%
Non-cash stock compensation
expense 4,588 5,718 (1,130) -20%
General and administrative
expenses 25,460 21,380 4,080 19%
--------- --------- ---------- ----------
Total operating expenses 744,954 555,405 189,549 34%
--------- --------- ---------- ----------
Operating income 130,422 91,526 38,896 42%
Non-operating items
Interest and other
income(d) 11,789 28,179 (16,390) -58%
Interest expense (10,440) (7,670) (2,770) -36%
Foreign exchange loss (1,503) (956) (547) -57%
--------- --------- ---------- ----------
Total non-operating items (154) 19,553 (19,707) N/A
--------- --------- ---------- ----------
Income from continuing
operations before minority
interest, equity in net
income (loss) of affiliates,
and income taxes 130,268 111,079 19,189 17%
Minority interest in income
of consolidated
subsidiaries, net of income
tax (24,320) (21,158) (3,162) -15%
Equity in net loss of
affiliates, net of income
tax (535) (323) (212) -66%
Income tax (expense) benefit (19,667) (6,798) (12,869) -189%
--------- --------- ---------- ----------
Income from continuing
operations 85,746 82,800 2,946 4%
(Loss) income from LT-200%
discontinued operations, net
of income tax (e) (2,359) (6,465) 6,724
Gain (loss) on disposal of
discontinued operations, net
of income tax (g) (8,204) (13,324) 2,502 19%
--------- --------- ---------- ----------
Net Income $75,183 $63,011 $12,172 19%
========= ========= ========== ==========
Weighted average shares
(basic) 49,625 46,356
Weighted average shares
(diluted) 52,028 49,016
EPS-Net Income (basic) $1.52 $1.36
EPS-Net Income (diluted) $1.45 $1.29
EPS-Income from continuing
operations (basic) $1.73 $1.79
EPS-Income from continuing
operations (diluted) $1.65 $1.69
Reconciliation - Pro Forma
Income from Continuing
Operations (f)
- -----------------------------
Income from continuing
operations before income
taxes $89,598
Impact from early
repayment of Educate Inc.
note receivable (6,014)
Gain on UEM Land (5,169)
---------
Subtotal $78,415
Pro Forma tax expense (15,655)
---------
Pro Forma income from
continuing operations $62,760
---------
Pro Forma weighted average
shares (diluted) 49,016
EPS - Pro Forma income from
continuing operations
(diluted) $1.28
Segment operating profit
(loss):
Campus Based - Latin
America $124,232 $85,458 $38,774 45%
Campus Based - Europe 23,532 24,063 (531) -2%
Campus Based - Overhead (15,528) (12,040) (3,488) -29%
--------- --------- ---------- ----------
Campus Based - Total $132,236 $97,481 $34,755 36%
--------- --------- ---------- ----------
Laureate Online $28,234 $21,143 $7,091 34%
--------- --------- ---------- ----------
a) Central America includes Mexico, Costa Rica, Panama and Honduras.
b) South America includes Chile, Brazil, Ecuador and Peru.
c) The Mediterranean region includes Spain and Cyprus
d) For the twelve months ended December 31, 2004, includes
acceleration of original issue discount triggered by the early
repayment of the K-12 seller note and the gain on the divestment
of land at UEM.
e) The 2005 and 2004 operating results present the K-12 (including
UK/France), WSI and India business units as discontinued
operations.
f) The pro forma measures used in this press release are non-generally
acceptable accounting principle ("GAAP") financial measures. Non-
GAAP should not be considered as a substitute for, or superior to,
measures financial measures of financial performance prepared in
accordance with GAAP. The Company's management refers to these
non-GAAP financial measures in making operating decisions because
they provide meaningful supplemental information regarding the
Company's historical operating results. In addition, the Company
has historically reported similar non-GAAP financial measures to
investors and believes that the inclusion of comparative numbers
provides consistency in its financial reporting. Investors are
encouraged to review the reconciliation of the non-GAAP financial
measures used in this press release to their most directly
comparable GAAP financial measure as provided with the financial
results attached to this press release.
g) The Company is restating in the second quarter of 2005 to reflect
the change in income tax expense of $7.4 million related to a
reversal of a deferred tax asset of WSI. As a result, the Company
is evaluating the impact on our assessment of internal controls
relating to tax processes over non-core operations.
LT = Less Than
CONTACT: Laureate Education
Rosemarie Mecca, 410-843-8070
or
Investor Relations:
Chris Symanoskie, 410-843-6394