Exhibit 99.1
Laureate Education Reports Record Second
Quarter 2004 Financial Results
BALTIMORE--(BUSINESS WIRE)--July 22, 2004--
Online Higher Education Reports 28% New Student Enrollment Growth;
Universidad del Valle de Mexico Announces Two New Campus Locations
Laureate Education, Inc. (NASDAQ: LAUR), the world's leading
international provider of higher education, today reported continued
strong financial results for the three and six-month periods ending
June 30, 2004.
-- Second quarter 2004 revenues increased 36% to $158.3 million, compared
to $116.2 million in the second quarter of 2003.
-- Total operating income for the second quarter 2004 increased to $22.2
million versus a loss of $10.9 million in the second quarter of 2003.
-- The Company reported second quarter 2004 EPS from continuing operations
of $0.50 per diluted share. These results included a net benefit of
$0.13 from certain non-recurring items, primarily the early repayment of
the Company's note receivable relating to the prior sale of its K-12
business.
-- Universidad del Valle de Mexico (UVM) announced the opening of a new
campus location in Saltillo, Mexico. This location represents UVM's
entry into the northeastern region of Mexico. Laureate Education also
announced the acquisition of Universidad Hispanoamericana, a fully
accredited university located in Ecatepec, a suburb of Mexico City. The
university will be re-branded as a campus of Universidad del Valle de
Mexico.
-- Laureate Education announced its agreement to offer Les Roches
Hospitality Management School programs in the United States through a
license agreement with Kendall College, a regionally accredited
Chicago-based school known for excellence in culinary programs.
Additionally, Laureate announced program transplants of its Swiss
Hospitality offerings to an existing UVM campus in Mexico City and its
new campus in Guadalajara.
-- The Company's online division reported 33% new student enrollment growth
and a 17% increase in total student enrollment. Excluding the recent
acquisition of KIT, new and total online degree enrollment increased 28%
and 7%, respectively. Walden University reported a 65% increase in new
student enrollment and a 72% increase in total student enrollment at
June 30, 2004.
Douglas Becker, Laureate Education's Chairman and Chief Executive Officer
stated, "I am delighted with the continued strong financial performance at our
company. I am especially pleased with the accelerating growth in our Online
Higher Education division, and the announcement of the new Saltillo and Ecatepec
campuses for Universidad del Valle de Mexico (UVM), which along with the new
site in Guadalajara will bring us to 19 campuses in Mexico."
Mr. Becker added, "The four and five year stay of our students affords us a
unique opportunity to look further ahead than most businesses. As a result, we
are focused on next year at a time when most companies are only focused on next
quarter. Heading into 2005, it is clear to us that the new UVM campuses and the
accelerating enrollment of Online Higher Education will play an important role
in the overall growth of our business."
Financial Results
Total revenues for the second quarter of 2004 were $158.3 million, an
increase of 36% compared to total revenues of $116.2 million in the second
quarter of 2003. Total operating income for the second quarter increased to
$22.2 million, versus an operating loss of $10.9 million in the second quarter
of 2003. After-tax income from continuing operations for the second quarter of
2004 was $23.8 million or $0.50 per share on diluted shares outstanding of 48.1
million.
For the six-month period ended June 30, 2004, total revenues were $290.4
million, an increase of 37% compared to total revenues of $211.6 million in the
same period of 2003. Total operating income for the six-month period increased
to $25.8 million, versus an operating loss of $12.6 million in the same period
of 2003. After-tax income from continuing operations for the six-month period
ended June 30, 2004 was $26.3 million or $0.55 per share on diluted shares
outstanding of 47.8 million.
During the quarter, the Company received payment in full on its note
receivable from Educate, Inc. in the amount of $55 million plus accrued
interest. This results in the Company recognizing the remaining unamortized
original issue discount on the note. In addition, the Company recorded a
one-time, non-cash charge related to a modification to its administration of
stock option exercises. The net benefit to the results from continuing
operations for these items was $0.13 in the quarter. The full year impact, after
adjusting for the foregone interest otherwise due on the note over the balance
of the year, is $0.07.
Total cash and marketable securities at June 30, 2004 were approximately
$161.6 million, while total corporate debt was approximately $90.2 million.
Other Highlights
Today, Laureate Education announced its agreement to offer Les Roches
Hospitality Management School programs in the United States through a license
agreement with Kendall College, a regionally accredited Chicago-based school
known for excellence in culinary programs. As part of the agreement, the Company
will loan a total of $18.3 million to Kendall College to fund the buildout,
equipment and opening costs for Kendall's new campus. In addition, Laureate
Education obtains a two-year option to acquire the operating and real estate
assets of Kendall for forgiveness of the loan amount and assumption of a $25
million real estate mortgage.
Universidad del Valle de Mexico announced the opening of a new campus
location in Saltillo, Mexico. Currently enrolling students for classes that
begin in late August, the campus will offer undergraduate and graduate degrees
to students in the city of Saltillo and the surrounding areas of North Mexico.
With a population of nearly 700,000 residents, Saltillo is home to many
multinational corporations and is a suburb of Monterrey, the third largest city
in Mexico.
In addition, Laureate Education announced the acquisition of Universidad
Hispanoamericana, a fully accredited university located in Ecatepec, a suburb of
Mexico City. Founded in 1976, Universidad Hispanoamericana has been consistently
ranked among top institutions by the leading newspaper, La Reforma. The
university will be re-branded as a campus of Universidad del Valle de Mexico
(UVM). The Ecatepec campus currently offers 15 undergraduate degree programs
including accounting, architecture, business, communications, education,
engineering/IT, and law.
With the opening of the Guadalajara Campus announced in March and the new
Saltillo and Ecatepec campuses, Laureate Education now operates a total of 38
campus locations worldwide.
- -0-
*T
Revenue Growth Impact of FX (excluding acquisitions)
- ----------------------------------------------------
(In Thousands)
Three Months Ended
June 30, 2004
% Growth
Revenue Amount Constant
2004 2003 in USD Currency
-------- -------- -------- ------------
Chile Region(1) $ 22,440 $ 15,345 46% 30%
Mexico Region(2) 34,452 31,086 11% 21%
France 2,542 2,011 26% 19%
Hospitality(3) 12,129 11,415 6% 1%
Spain(4) 24,807 23,296 6% 1%
(1) Excludes UNAB/AIEP and UDLA Ecuador. (2) Excludes Universidad Interamericana
(3) Excludes Les Roches Jin Jiang
(4) Excludes IEDE
*T
Student Enrollment
During the quarter, total online enrollment increased 17% to 17,788
students, compared to 15,163 students in the same period last year. New student
enrollment increased 33% to 3,865 students, compared to 2,900 new students in
the same period last year. Excluding the acquisition of KIT, total student
enrollment at the Company's online division increased 7% driven by a 28%
increase in new student enrollment. Online student enrollment reflects the
impact of Canter's discontinuation in 2003 of certain third-party university
partnerships in order to focus on Walden University and other strategic
partners.
Note: Laureate Education's universities in the Mexico Region, Spain,
Switzerland, France and China have their primary intake periods in the third
quarter. Laureate Education's institutions in Chile have primary intake periods
in the first quarter.
Third Quarter and Full-Year Guidance
The following statements are based on current expectations. These statements
are forward-looking and actual results may differ materially.
-- Laureate Education, Inc. anticipates total revenues of between $130 and
$145 million for third quarter 2004, an increase of 22% or more over the
same quarter in 2003.
-- The Company anticipates campus-based revenue to be between $100 and $110
million for third quarter 2004, with operating margins between 16% and
17%.
-- The Company anticipates online revenue to be between $30 and $35 million
for third quarter 2004, with operating margins between 13% and 14%.
-- General and administrative expenses are expected to be approximately
$5.5 million in the third quarter of 2004.
-- The Company currently believes that it will achieve EPS of $0.18 to
$0.19 per diluted share for the quarter ending September 30, 2004.
-- Laureate Education, Inc. also increases its 2004 EPS guidance to $1.31
to $1.33 per diluted share to contemplate the $0.07 full year positive
impact from the non-recurring transactions detailed above less forgone
interest income.
About Laureate Education, Inc.
Laureate Education Inc. (NASDAQ:LAUR), formerly Sylvan Learning Systems,
Inc., is focused exclusively on providing a superior university experience to
over 130,000 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 and Europe. 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.
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") -0- *T
Laureate Education, Inc. & Subsidiaries Consolidated Statements of Operations
(Amounts in thousands, except per share data)
Three Months Ended June 30,
----------------------------------------
2004 2003 $Variance %Variance
--------- ---------- --------- ---------
(Restated)(c)
Revenues
Spain $ 25,764 $ 23,296 $ 2,468 11%
Hospitality/Switzerland(a) 12,169 11,415 754 7%
Chile region 45,974 20,173 25,801 128%
Mexico region 37,167 31,086 6,081 20%
France 2,542 2,011 531 26%
--------- ---------- --------- ---------
Campus Based total 123,616 87,981 35,635 41%
--------- ---------- --------- ---------
Online Higher Education 34,635 27,793 6,842 25%
Ventures - 468 (468) N/A
--------- ---------- --------- ---------
Total revenues 158,251 116,242 42,009 36%
--------- ---------- --------- ---------
Core operating expenses 128,376 97,647 30,729 31%
Ventures operating expenses - 654 (654) N/A
Non-cash stock compensation
expense 2,283 22,158 (19,875) -90%
Core general and
administrative expenses 5,431 5,900 (469) -8%
Ventures general and
administrative expenses - 780 (780) N/A
--------- ---------- --------- ---------
Total operating expenses 136,090 127,139 8,951 7%
--------- ---------- --------- ---------
Operating income (loss) 22,161 (10,897) 33,058 N/A
Non-operating items
Interest and other
income(e) 16,043 257 15,786 GT200%
Interest expense (1,595) (3,155) 1,560 49%
Exchange gain (loss) (297) 305 (602) N/A
Ventures non-operating
expense - (53) 53 N/A
--------- ---------- --------- ---------
Total non-operating items 14,151 (2,646) 16,797 N/A
--------- ---------- --------- ---------
Income (loss) from continuing
operations before minority
interest, equity in net
income of affiliates,
and income taxes 36,312 (13,543) 49,855 N/A
Minority interest in income
of consolidated subsidiaries,
net of income tax
Ventures - - - N/A
Other (6,066) (2,507) (3,559) -142%
Equity in net income of
affiliates, net of income tax
Ventures - 510 (510) N/A
Other - 71 (71) N/A
Income tax (expense) benefit (6,409) 2,456 (8,865) N/A
--------- ---------- --------- ---------
Income (loss) from continuing
operations 23,837 (13,013) 36,850 N/A
Loss from discontinued
operations, net of income tax (3,027) (776) (2,251) LT-200%
Gain on disposal of
discontinued operations, net
of income tax - 44,640 (44,640) N/A
--------- ---------- --------- ---------
Net income $ 20,810 $ 30,851 $(10,041) -33%
========= ========== ========= =========
Weighted average shares -
basic 45,344 41,164
Weighted average shares -
diluted 48,131 41,164
EPS-Net income (basic) $ 0.46 $ 0.75
EPS-Net Income (diluted) $ 0.43 $ 0.75
EPS-Income (loss) from
continuing operations
(basic) $ 0.53 $ (0.32)
EPS-Income (loss) from
continuing operations
(diluted) $ 0.50 $ (0.32)
Reconciliation - Pro Forma Income from
Continuing Operations
- ---------------------------------------
Loss from continuing
operations before income taxes $ (15,469)
Income tax (benefit) expense in
equity in net income (loss) of
affiliates (763)
Non-strategic Ventures
losses 1,269
Non-cash stock
compensation 22,158
G&A attributable to
discontinued operations 3,557
Core operations - non-
operating 2,282
----------
Subtotal $ 13,034
Tax impact at 28% (3,650)
----------
Pro Forma income from
continuing operations (b) $ 9,384
Weighted average shares -
Pro Forma 45,847
EPS - As if transaction
happened January 1, 2003(d) $ 0.21
Segment operating profit
(loss):
Campus Based $ 24,831 $ 12,903 $ 11,928 92%
Online Higher Education 5,044 5,224 (180) -3%
Ventures - (966) 966 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 to dispose of the non-strategic Venture assets occurred
January 1, 2003.
c) The 2004 operating results present (and 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 numerator.
e) Includes acceleration of original issue discount triggered by the early
repayment of the K-12 seller note.
GT = Greater Than, LT = Less Than
Laureate Education, Inc. & Subsidiaries
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
Six Months Ended June 30,
----------------------------------------
2004 2003 $Variance %Variance
--------- ---------- --------- ---------
(Restated)(c)
Revenues
Spain $ 51,675 $ 45,283 $ 6,392 14%
Hospitality/Switzerland(a) 24,822 22,981 1,841 8%
Chile region 64,309 24,904 39,405 158%
Mexico region 85,105 68,298 16,807 25%
France 5,177 3,908 1,269 32%
--------- ---------- --------- ---------
Campus Based total 231,088 165,374 65,714 40%
--------- ---------- --------- ---------
Online Higher Education 59,319 45,289 14,030 31%
Ventures - 903 (903) N/A
--------- ---------- --------- ---------
Total revenues 290,407 211,566 78,841 37%
--------- ---------- --------- ---------
Core operating expenses 250,939 186,247 64,692 35%
Ventures operating expenses - 2,122 (2,122) N/A
Non-cash stock compensation
expense 2,995 22,333 (19,338) -87%
Core general and
administrative expenses 10,720 11,694 (974) -8%
Ventures general and
administrative expenses - 1,756 (1,756) N/A
--------- ---------- --------- ---------
Total operating expenses 264,654 224,152 40,502 18%
--------- ---------- --------- ---------
Operating income (loss) 25,753 (12,586) 38,339 N/A
Non-operating items
Interest and other
income(e) 19,345 627 18,718 GT200%
Interest expense (3,153) (5,529) 2,376 43%
Exchange gain 63 236 (173) -73%
Ventures non-operating
expense - (8,437) 8,437 N/A
--------- ---------- --------- ---------
Total non-operating items 16,255 (13,103) 29,358 N/A
--------- ---------- --------- ---------
Income (loss) from continuing
operations before minority
interest, equity in net income
(loss) of affiliates,
and income taxes 42,008 (25,689) 67,697 N/A
Minority interest in (income)
loss of consolidated subsidiaries,
net of income tax
Ventures - 487 (487) N/A
Other (8,540) (4,256) (4,284) -101%
Equity in net income (loss)
of affiliates, net of
income tax
Ventures - (3,991) 3,991 N/A
Other (8) 111 (119) N/A
Income tax (expense) benefit (7,116) 7,494 (14,610) N/A
--------- ---------- --------- ---------
Income (loss) from
continuing operations 26,344 (25,844) 52,188 N/A
Income (loss) from
discontinued operations,
net of income tax (5,918) 1,306 (7,224) N/A
Gain (loss) on disposal of
discontinued operations,
net of income tax - 39,423 (39,423) N/A
--------- ---------- --------- ---------
Net income $ 20,426 $ 14,885 $ 5,541 37%
========= ========== ========= =========
Weighted average shares -
basic 45,134 40,825
Weighted average shares -
diluted 47,807 40,825
EPS-Net income (basic) $ 0.45 $ 0.36
EPS-Net Income (diluted) $ 0.43 $ 0.36
EPS-Income (loss) from
continuing operations
(basic) $ 0.58 $ (0.63)
EPS-Income (loss) from
continuing operations
(diluted) $ 0.55 $ (0.63)
Reconciliation - Pro Forma Income from
Continuing Operations
--------------------------------------
Loss from continuing operations
before income taxes $ (33,338)
Income tax (benefit) expense in
equity in net income (loss) of
affiliates (3,739)
Non-strategic Ventures
losses 18,677
Non-cash stock
compensation 22,333
G&A attributable to
discontinued operations 6,855
Core operations -
non-operating 4,564
----------
Subtotal $ 15,352
Tax impact at 28% (4,299)
----------
Pro Forma income from
continuing operations(b) $ 11,053
Weighted average shares -
Pro Forma 45,576
EPS - As if transaction
happened January 1, 2003(d) $ 0.26
Segment operating profit
(loss):
Campus Based $ 34,260 $ 21,657 $ 12,603 58%
Online Higher Education 5,208 2,759 2,449 89%
Ventures - (2,975) 2,975 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 to dispose of the non-strategic Venture assets occurred
January 1, 2003.
c) The 2004 operatingresults present (and 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 numerator.
e) Includes acceleration of original issue discount triggered by the early
repayment of the K-12 seller note.
GT = Greater Than, LT = Less Than
*T
CONTACT: Laureate Education
Chief Financial Officer
Sean Creamer, 410-843-8991
or
Director, Investor Relations
Chris Symanoskie, 410-843-6394