Exhibit 99.01
Sylvan Learning Systems, Inc. Reports 30% Increase in Chilean
Enrollment
BALTIMORE--(BUSINESS WIRE)--April 22, 2004--
Company Releases First Quarter 2004 Results and 2005 Earnings
Guidance of $1.60 to $1.65 Per Diluted Share
Sylvan Learning Systems, Inc. (NASDAQ: SLVN), the world's leading
international provider of higher education, announced robust
enrollment growth and strong financial results for the quarter ended
March 31, 2004.
-- First quarter 2004 revenues increased 39% to $132.2 million,
compared to $95.3 million in the first quarter of 2003.
-- Total operating income for the first quarter 2004, the
seasonally weakest quarter due to the Chilean summer recess,
increased to $3.6 million versus a loss of $1.7 million in the
first quarter of 2003.
-- The Company achieves first quarter 2004 EPS from continuing
operations of $0.05 per diluted share. In addition, 2004 full
year guidance for EPS from continuing operations is increased
by $0.02 to a new range of $1.24 to $1.26 per diluted share to
reflect the discontinuation of its operations in India.
-- At the Company's Chilean campus-based institutions, a 32%
increase in new student enrollments fueled a 30% increase in
total student enrollment.
-- Walden University reports a 112% increase in new student
enrollment and a 69% increase in total student enrollment at
March 31, 2004.
-- The Company announces the opening of a Les Roches hotel
management training school in Shanghai, China.
-- The Company introduces 2005 guidance for EPS from continuing
operations of $1.60 to $1.65 per diluted share.
-- The Company intends to unveil its new corporate name and
NASDAQ ticker in May 2004 as previously contemplated under the
terms of its 2003 sale of the Sylvan Learning Center business.
Douglas Becker, Sylvan's Chairman and Chief Executive Officer
stated, "I am very proud of our team in Chile, which continues to
produce extraordinary growth in enrollments at all three of our
Chilean institutions. Because the majority of our campus-based
students are enrolled in four- and five-year undergraduate programs,
this success in Chile gives us tremendous visibility into our
enrollment and revenues well into next year. That is why we are so
confident in our 2004 guidance and are able to introduce earnings
guidance for 2005."
"I am also very pleased with the impressive growth in new students
in our Online Higher Education division, which shows that we are on
track to bring the total enrollment growth rate in this division up
dramatically over the balance of the year."
Financial Results
Total revenues for the first quarter of 2004 were $132.2 million,
an increase of 39% compared to total revenues of $95.3 million in the
first quarter of 2003. Total operating income for the first quarter
increased to $3.6 million, versus an operating income loss of $1.7
million in the first quarter of 2003. After-tax income from continuing
operations for the first quarter of 2004 was $2.5 million or $0.05 per
share on diluted shares outstanding of 47.5 million.
Total cash and marketable securities at March 31, 2004 were
approximately $114.6 million, while total corporate debt was
approximately $92.7 million.
Results from discontinued operations for the first quarter 2004
include the K-12 related operations of Sylvan UK and Sylvan France as
well as Wall Street Institute (WSI) and Sylvan's former operations in
India. Sylvan UK and the India operations were shut down and Sylvan
France was sold during the quarter. WSI is expected to be sold within
the year.
Enrollment
Sylvan announces campus-based enrollment for its institutions
following each primary intake period. The Company's institutions in
Chile, Universidad de las Americas (UDLA), Universidad Nacional Andres
Bello (UNAB), and Academia de Idiomas y Estudios Profesionales (AIEP),
have primary intake periods in the first quarter. The Company's
universities in France, Mexico Region (including Panama and Costa
Rica), Spain, and Switzerland have their primary intake periods in the
third quarter. Given the frequency of enrollment periods at Sylvan's
online institutions, the Company reports online enrollment as of the
end of each quarter.
New student enrollment at the Company's Chilean campus-based
institutions increased 32% to 20,635 students, compared to 15,624
students in the same period last year. Total student enrollment at the
Chilean campus-based institutions increased to 53,026 students
compared to 40,914 at the same period last year, an increase of 30%.
Total campus-based enrollments as of the end of the first quarter
were 113,026, an increase of 22% over the same period last year.
The Company's online division reported new student enrollment of
3,510 students at March 31, 2004 compared to 2,604 at the same time
last year, an increase of 35%. Total degree enrollments increased 2%
to 16,276 students, compared to 15,965 students at the same period
last year. This modest growth in total enrollments reflects the 2003
impact of Canter's discontinuation of certain third-party university
partnerships in order to focus on Walden and other strategic partners.
The recently announced acquisition of Amsterdam-based KIT, the
Company's entry into international online higher education, adds an
additional 1,700 students, bringing total online enrollments to
17,976.
Les Roches Jin Jiang International Hotel Management College
Sylvan Learning Systems announced the opening of Les Roches Jin
Jiang International Hotel Management College, the Company's first
post-secondary campus in China. The initiative is a 50/50 partnership
with Jin Jiang International, one of the largest and most diversified
hospitality and tourism groups in China. The new campus is not
expected to have a material impact on 2004 and 2005 financial results.
This new hospitality management school, located in the Fengxian
suburb of Shanghai, is enrolling students for Fall 2004 session. Les
Roches Jin Jiang International Hotel Management College will offer a
rigorous two-year program in hospitality management. Students
successfully completing the program will be well equipped to begin
their careers in the hospitality industry and will have the
opportunity to pursue a Bachelors or Master's degree at Sylvan's Les
Roches Hospitality Management School in Switzerland.
Second Quarter 2004 and Full Year 2005 Guidance
The following statements are based on current expectations. These
statements are forward-looking and actual results may differ
materially.
-- Sylvan Learning Systems anticipates total revenues of between
$145 and $160 million for second quarter 2004, an increase of
25% or more over the same quarter in 2003.
-- The Company anticipates campus-based revenue to be between
$115 and $125 million for second quarter 2004, with operating
margins between 18% and 19%.
-- The Company anticipates online revenue to be between $30 and
$35 million for second quarter 2004, with operating margins
between 14% and 15%.
-- General and administrative expenses are expected to be
approximately $5 million in the second quarter of 2004.
-- The Company currently believes that it will achieve EPS of
$0.30 to $0.32 per diluted share for the quarter ending June
30, 2004.
-- 2004 total enrollment at Sylvan's network of campus-based and
online universities is expected to grow at 18% to 20% versus
the prior year
-- The Company introduces 2005 guidance for EPS from continuing
operations of $1.60 to $1.65 per diluted share and anticipates
enrollment increases of 15% to 20% and a weighted average
tuition pricing increase of 5%.
About Sylvan Learning Systems
Sylvan Learning Systems, Inc. (NASDAQ: SLVN) is focused
exclusively on providing a superior university experience to over
130,000 students through the leading international network of
accredited campus-based and online universities and institutions.
Addressing the rapidly growing global demand for higher education,
Sylvan offers a broad range of career-oriented undergraduate and
graduate programs through universities and institutions located in
Latin America and Europe. Through two owned universities and several
other partner institutions, Sylvan offers the growing population of
working professionals 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.
Note: As a result of the completed sale of the Company's K-12
assets, the publicly traded Sylvan Learning Systems is expected to
change its corporate name and NASDAQ ticker in May 2004.
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, please click on
"Investor Relations," "SEC Filings")
Sylvan Learning Systems, Inc. & Subsidiaries
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
Three Months Ended March 31,
-------------------------------------------
2004 2003 $Variance %Variance
-------------------------------------------
(Restated)
(c)
Revenues
Spain $ 25,911 $ 21,987 $ 3,924 18%
Hospitality/
Switzerland (a) 12,653 11,566 1,087 9%
Chile region 18,335 4,731 13,604 GT200%
Mexico region 47,938 37,212 10,726 29%
France 2,635 1,897 738 39%
--------------------------------------------
Campus Based total 107,472 77,393 30,079 39%
--------------------------------------------
Online Higher
Education 24,684 17,496 7,188 41%
Sylvan Ventures - 435 (435) N/A
--------------------------------------------
Total revenues 132,156 95,324 36,832 39%
--------------------------------------------
Core operating
expenses 122,563 88,600 33,963 38%
Ventures operating
expenses - 1,468 (1,468) N/A
Non-cash compensation
expense 712 175 537 GT200%
Core general and
administrative expenses 5,289 5,794 (505) -9%
Ventures general and
administrative expenses - 976 (976) N/A
--------------------------------------------
Total operating expenses 128,564 97,013 31,551 33%
--------------------------------------------
Operating income (loss) 3,592 (1,689) 5,281 N/A
Non-operating items
Interest and other
income 2,798 370 2,428 GT200%
Gain on sale of
investment 504 - 504 N/A
Interest expense (1,558) (2,374) 816 34%
Exchange gain (loss) 360 (69) 429 N/A
Sylvan ventures non-
operating expense - (8,384) 8,384 N/A
--------------------------------------------
Total non-operating items 2,104 (10,457) 12,561 N/A
--------------------------------------------
Income (loss) from
continuing operations
before minority interest,
equity in net income
(loss) of affiliates,
and income taxes 5,696 (12,146) 17,842 N/A
Minority interest in
(income) loss of
consolidated subsidiaries,
net of income tax
Sylvan Ventures - 487 (487) N/A
Other (2,474) (1,749) (725) -41%
Equity in net income
(loss) of affiliates,
net of income tax
Sylvan Ventures - (4,501) 4,501 N/A
Other (8) 40 (48) N/A
--------------------------------------------
Subtotal 3,214 (17,869) 21,083 N/A
Income tax (expense)
benefit (707) 5,038 (5,745) N/A
--------------------------------------------
Income (loss) from
continuing operations 2,507 (12,831) 15,338 N/A
Income (loss) from
discontinued
operations,
net of income tax (2,891) 2,082 (4,973) N/A
Loss on disposal
of discontinued
operations,
net of income tax - (5,217) 5,217 N/A
--------------------------------------------
Net loss $ (384) $(15,966) $15,582 98%
============================================
Weighted average shares
- basic 44,925 40,477
Weighted average shares
- diluted 47,484 40,477
EPS-Net loss (basic) $(0.01) $(0.39)
EPS-Net loss (diluted) $(0.01) $(0.39)
EPS-Income (loss) from
continuing operations
(basic) $0.06 $(0.32)
EPS-Income (loss) from
continuing operations
(diluted) $0.05 $(0.32)
Reconciliation - Pro Forma Income from Continuing
Operations
- ---------------------------------------------------
Income (loss) from continuing operations
before income taxes $(20,844)
Non-strategic ventures
losses 17,408
G&A attributable to
discontinued
operations 3,298
Core operation - non
operating 2,282
----------
Subtotal $2,144
Tax impact at 28% (600)
----------
Pro Forma income from continuing
operations (b) $1,544
Weighted average shares
- Pro Forma 45,305
EPS - As if transaction happened
January 1, 2003 (d) $0.04
Segment operating profit
(loss):
Campus Based $9,429 $8,754 $675 8%
Online Higher Education 164 (2,465) 2,629 N/A
Sylvan Ventures - (2,009) 2,009 N/A
a) Hospitality includes the operating results of Les Roches, Marbella
and Glion.
b) Reconciling items represent adjustments as if the sale of the K-12
business units and decision todispose of the non-Strategic venture
assets occurred January 1, 2003.
c) The 2003 operating results have been restated to present the K-12,
WSI and India business units as discontinued operations.
d) In calculating EPS, interest related to the convertible debentures
must be added back to the number.
GT = Greater Than
CONTACT: Sylvan Contacts:
Sean Creamer, 410-843-8991
or
Chris Symanoskie, 410-843-6394