Exhibit 99.01
Laureate Education Reports Second Quarter 2007 Results
Investor Group Completes Tender Offer
BALTIMORE--(BUSINESS WIRE)--July 27, 2007--Laureate Education,
Inc. (NASDAQ:LAUR) ("the Company"), the world's leading international
provider of higher education, announced increases in student
enrollment and financial results for the quarter ended June 30, 2007.
-- Second quarter 2007 revenues increased 24% to $375.8 million,
compared to $303.1 million in the second quarter of 2006.
-- Income from continuing operations available to common
shareholders in the second quarter of 2007 was $52.9 million
or $0.98 per diluted share, compared to $44.7 million or $0.84
per diluted share in the same period of 2006. Excluding the
impact of the accounting for minority share ownership purchase
arrangements ("minority put arrangements") of ($0.12) per
share and the additional expense of ($0.07) per share related
to the transaction contemplated by the merger agreement, EPS
would have been $1.17 per diluted share in the second quarter
of 2007.
-- The Company's campus-based institutions reported second
quarter total enrollment increased 17% to 233,100 students.
-- Laureate Online Education reported total enrollment increased
27% to 36,900 students, driven by a 24% increase in new
student enrollment.
-- Laureate Education announced that on May 17, 2007, Universidad
del Valle de Mexico ("UVM") acquired Universidad del
Desarrollo Profesional ("UNIDEP"), an accredited university
with 23 locations in 9 states in Mexico.
-- The investor group led by Douglas L. Becker, Laureate's
Chairman and CEO, recently announced a successful tender offer
that resulted in the tender of approximately 89% of the
outstanding shares. On July 25, 2007, the investor group
notified the Company of the exercise of its top-up option.
This will enable the group to eventually acquire all of the
outstanding shares of Laureate's common stock at a price of
$62.00 per share through a short-form merger that is expected
to be completed in August 2007.
Financial and Other Results
Total revenues for the second quarter of 2007 were $375.8 million,
an increase of 24% compared to total revenues of $303.1 million in the
second quarter of 2006. Total operating income for the second quarter
of 2007 was $66.5 million, versus total operating income of $56.9
million in the second quarter of 2006, an increase of 17%. Income from
continuing operations available to common shareholders in the second
quarter of 2007 was $52.9 million or $0.98 per diluted share. This
includes an EPS impact from minority share ownership purchase
arrangements ("minority put arrangements") of ($0.12) per share and
additional expense of ($0.07) per share related to the transaction
contemplated by the merger agreement.
For the six-month period ended June 30, 2007, total revenues were
$659.3 million, an increase of 22% compared to total revenues of
$538.2 million in the same period of 2006. Total operating income for
the six-month period was $56.7 million, which included $12.8 million
of transaction costs, versus operating income of $56.8 million in the
same period of 2006. Income from continuing operations available to
common shareholders for the six-month period ended June 30, 2007 was
$26.5 million or $0.49 per diluted share, a decrease of (37%) over the
same period of 2006. This includes an EPS impact from minority share
ownership purchase arrangements ("minority put arrangements") of
($0.39) per share and additional expense of ($0.24) per share related
to the transaction contemplated by the merger agreement.
Total cash and marketable securities at June 30, 2007 was $138.5
million, while total company debt was $526.3 million.
On June 22, 2007, the Company amended its current credit agreement
and received additional U.S. sub-facility commitments in an aggregate
amount of $175 million from certain of the existing lenders under the
Credit Agreement as well as two additional lenders that joined the
Credit Agreement. The total amount available under the Credit
Agreement is now $525 million. In connection with the new commitments
under the Credit Agreement, the Company shortened the maturity date to
December 31, 2009.
Acquisition in Mexico
Laureate Education announced that on May 17, 2007, it acquired
Universidad del Desarrollo Profesional, an accredited university with
23 locations in 9 states in Mexico.
The university opened with one location in 2003 in Hermosillo and
now serves approximately 6,700 students. UNIDEP is authorized to
operate by the Mexican Secretary of Education (SEP) and offers high
school, undergraduate and graduate degrees. The mission of UNIDEP is
to provide a high-quality degree that is accessible for students
coming from a lower socio-economic segment, a segment that is growing
and under-served in Mexico. UNIDEP provides a platform for expansion
in this segment. UNIDEP offers degrees in Law, IT, Teaching, Graphic
Design, Communications, Business and Marketing.
Revenue Growth - Organic and Acquisition
- ----------------------------------------------------------------------
For three months ended June 30th
% Growth
Revenue Amount Constant
(In Thousands) 2007 2006 in USD Currency
------- ------- ------ --------
Mexico/Central America(1) $ 83,995 $ 67,714 24% 20%
South America(2) 145,072 123,091 18% 18%
Europe(3) 67,642 57,297 18% 12%
Online 73,096 55,017 33% 33%
------- -------
Subtotal 369,805 303,119 22%
Acquisitions(4) 5,971 -
------- --------
Total $375,776 $303,119 24%
======= =======
(1) Mexico/Central America includes Mexico, Costa Rica, Honduras
and Panama.
(2) South America includes Chile, Ecuador, Peru and Brazil.
(3) Europe includes Cyprus, France, Hospitality, and Spain
(4) Acquisitions include: CH Holdings Netherlands B.V. (4Q 2006),
Universidad Valle del Bravo Mexico (1Q 2007) and Universidad del
Desarrollo Profesional (2Q 2007)
Revenue Growth - Organic and Acquisition
- ----------------------------------------------------------------------
For six months ended June 30th
% Growth
Revenue Amount Constant
(In Thousands) 2007 2006 in USD Currency
------- ------- ------ --------
Mexico/Central America(1) $175,234 $146,957 19% 19%
South America(2) 194,067 166,349 17% 17%
Europe(3) 139,444 117,200 19% 13%
Online 142,689 107,723 32% 32%
------- -------
Subtotal 651,434 538,229 21%
Acquisitions(4) 7,866 -
------- --------
Total $659,300 $538,229 22%
======= =======
(1) Mexico/Central America includes Mexico, Costa Rica, Honduras
and Panama.
(2) South America includes Chile, Ecuador, Peru and Brazil.
(3) Europe includes Cyprus, France, Hospitality, and Spain
(4) Acquisitions include: CH Holdings Netherlands B.V. (4Q 2006),
Universidad Valle del Bravo Mexico (1Q 2007) and Universidad del
Desarrollo Profesional (2Q 2007)
Student Enrollment
- -----------------------------------------
As of June 30, 2007
New Student Enrollment (1) 2007 2006 % Growth
-------- --------- ---------
Online 14,700 11,900 24%
Total Student Enrollment (2) 2007 2006 % Growth
-------- --------- ---------
Mexico/Central America 95,500 83,100 15%
South America 106,700 97,000 10%
Europe 20,700 19,300 7%
-------- ---------
Total Campus Based 222,900 199,400 12%
Total Student Enrollment at Acquired
Schools(3) 10,200 --
-------- ---------
Subtotal 233,100 199,400 17%
Online 36,900 29,100 27%
-------- ---------
Total Student Enrollment 270,000 228,500 18%
======== =========
(1) New Student Enrollment is YTD, reported as of 6/30/2007 and
6/30/2006, respectively. There are no major enrollment intakes at
campus-based institutions during the second quarter.
(2) Total Student Enrollment is census, reported as of 6/30/2007
and 6/30/2006, respectively.
(3) Acquisitions include: UVB (Mexico) and UNIDEP (Mexico).
Student enrollment rounded to the nearest hundred.
Non-GAAP Financial Measures
This earnings release contains certain non-GAAP financial
measures. Management believes these non-GAAP items provide useful
information to management and investors by excluding certain items
that may not be indicative of the Company's core operating and
financial results. Non-GAAP financial measures exclude certain
non-cash charges including expense related to stock options; and other
charges; net gain or loss from the sale of operating assets, certain
tax adjustments, and certain nonrecurring charges. Reconciliations of
non-GAAP financial measures to corresponding GAAP amounts can be found
in the table below and in the investor relations section of the
Company's web site, www.laureate-inc.com.
Reg G Reconciliation - 2007 GAAP to Adjusted Results
(in thousands, except per share)
Three Months EPS
Ended 6/30/07 Impact
-------------- --------------
Income from continuing operations
available to Common shareholders $ 52,861 $ .98
Adjustment:
Effect of minority put arrangements 6,176 0.12
Non- Recurring Transaction Costs 3,546 0.07
------------- -------------
Adjusted Income from Continuing
Operations $ 62,583 $ 1.17
Weighted Average Shares Outstanding -
Diluted 53,696
Six Months EPS
Ended 6/30/07 Impact
-------------- --------------
Income from continuing operations
available to Common shareholders $ 26,484 $ 0.49
Adjustment:
Effect of minority put arrangements 20,937 0.39
Non- Recurring Transaction Costs 12,849 0.24
------------- -------------
Adjusted Income from Continuing
Operations $ 60,270 $ 1.13
Weighted Average Shares Outstanding -
Diluted 53,553
About Laureate Education, Inc.
Laureate Education, Inc. (NASDAQ:LAUR) is focused on providing a
superior university experience to 270,000 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. Many of the factors that will
determine the outcome of the subject matter of this press release are
beyond Laureate's ability to control or predict. Laureate undertakes
no obligation to revise or update any forward-looking statements, or
to make any other forward-looking statements, whether as a result of
new information, future events or otherwise.
Certain additional factors could affect the outcome of the matters
described in this press release, including particularly the
transaction contemplated by the merger agreement. These factors
include, but are not limited to:
-- 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.
-- The tender offer and merger could disrupt current plans and
operations, cause difficulties in employee retention and
require the Company to expend significant costs, fees,
expenses and charges.
Additional information regarding various 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 June 30,
-------------------------------------------
2007 2006 $ Variance % Variance
-------------------------------------------
Revenues (restated)
Mexico & Central
America (a) $ 88,924 $ 67,714 $ 21,210 31%
South America (b) 145,072 123,091 21,981 18%
---------- ---------- ---------- ----------
Campus Based - Latin
America 233,996 190,805 43,191 23%
Mediterranean Region
(c) 37,819 32,607 5,212 16%
Hospitality 16,636 12,788 3,848 30%
France 14,229 11,902 2,327 20%
---------- ---------- ---------- ----------
Campus Based - Europe 68,684 57,297 11,387 20%
---------- ---------- ---------- ----------
Campus Based Total 302,680 248,102 54,578 22%
---------- ---------- ---------- ----------
Laureate Online
Education 73,096 55,017 18,079 33%
---------- ---------- ---------- ----------
Total revenues 375,776 303,119 72,657 24%
---------- ---------- ---------- ----------
Operating expenses 295,441 234,831 60,610 26%
General and
administrative expenses 10,330 11,420 (1,090) -10%
Transaction Costs 3,546 - 3,546 N/A
---------- ---------- ---------- ----------
Total operating expenses 309,317 246,251 63,066 26%
---------- ---------- ---------- ----------
Operating income 66,459 56,868 9,591 17%
Non-operating items
Interest and other
income 4,875 4,282 593 14%
Interest expense (7,903) (3,662) (4,241) -116%
Gain on sale of Chancery 809 9,322 (8,513) -91%
Foreign exchange loss (290) (203) (87) -43%
---------- ---------- ---------- ----------
Total non-operating items (2,509) 9,739 (12,248) N/A
---------- ---------- ---------- ----------
Income from continuing
operations before
minority interest, equity
in net income (loss) of
affiliates, and income
taxes 63,950 66,607 (2,657) -4%
Minority interest in
income of consolidated
subsidiaries, net of
income tax (4,363) (9,645) 5,282 55%
Equity in net (loss)
income of affiliates, net
of income tax (161) (102) (59) -58%
Income tax expense (389) (12,133) 11,744 97%
---------- ---------- ---------- ----------
Income from continuing
operations 59,037 44,727 14,310 32%
Loss from discontinued
operations, net of income
tax (d) (8) (1,504) 1,496 99%
Loss on disposal of
discontinued operations,
net of income tax (103) (1,182) 1,079 91%
---------- ---------- ---------- ----------
Net income $ 58,926 $ 42,041 $ 16,885 40%
========== ========== ========== ==========
Earnings available to
common shareholders:
Income from continuing
operations $ 59,037 $ 44,727 $ 14,310 32%
Effect of minority put
arrangements (6,176) - (6,176) N/A
---------- ---------- ---------- ----------
Income from continuing
operations available to
common shareholders $ 52,861 $ 44,727 $ 8,134 18%
========== ========== ========== ==========
Net income $ 58,926 $ 42,041 $ 16,885 40%
Effect of minority put
arrangements (6,176) - (6,176) N/A
---------- ---------- ---------- ----------
Net income available to
common shareholders $ 52,750 $ 42,041 $ 10,709 25%
========== ========== ========== ==========
Weighted average shares
(basic) 51,814 51,429
Weighted average shares
(diluted) 53,696 53,098
EPS-Net income available
to common shareholders
(basic) $ 1.02 $ 0.82
EPS-Net income available
to common shareholders
(diluted) $ 0.98 $ 0.79
EPS- Income from
continuing operations
available to common
shareholders (basic) $ 1.02 $ 0.87
EPS- Income from
continuing operations
available to common
shareholders (diluted) $ 0.98 $ 0.84
Segment operating profit
(loss):
Campus Based - Latin
America $ 66,783 $ 58,954 $ 7,829 13%
Campus Based - Europe 7,346 7,096 250 4%
Campus Based -
Overhead (6,619) (5,908) (711) -12%
---------- ---------- ---------- ----------
Campus Based - Total $ 67,510 $ 60,142 $ 7,368 12%
---------- ---------- ---------- ----------
Laureate Online $ 12,825 $ 8,146 $ 4,679 57%
---------- ---------- ---------- ----------
a) Mexico & 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) The 2007 and 2006 operating results present the WSI and IFG Langues
business units as discontinued operations.
Laureate Education, Inc. & Subsidiaries
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
Six Months Ended June 30,
-------------------------------------------
2007 2006 $ Variance % Variance
-------------------------------------------
Revenues (restated)
Mexico & Central
America (a) $ 181,146 $ 146,957 $ 34,189 23%
South America (b) 194,067 166,349 27,718 17%
---------- ---------- ---------- ----------
Campus Based - Latin
America 375,213 313,306 61,907 20%
Mediterranean Region
(c) 80,393 65,809 14,584 22%
Hospitality 33,922 27,683 6,239 23%
France 27,083 23,708 3,375 14%
---------- ---------- ---------- ----------
Campus Based - Europe 141,398 117,200 24,198 21%
---------- ---------- ---------- ----------
Campus Based Total 516,611 430,506 86,105 20%
---------- ---------- ---------- ----------
Laureate Online
Education 142,689 107,723 34,966 32%
---------- ---------- ---------- ----------
Total revenues 659,300 538,229 121,071 22%
---------- ---------- ---------- ----------
Operating expenses 568,372 460,191 108,181 24%
General and
administrative expenses 21,366 21,271 95 0%
Transaction Costs 12,849 - 12,849 N/A
---------- ---------- ---------- ----------
Total operating expenses 602,587 481,462 121,125 25%
---------- ---------- ---------- ----------
Operating income 56,713 56,767 (54) 0%
Non-operating items
Interest and other
income 10,970 8,004 2,966 37%
Interest expense (15,501) (7,783) (7,718) -99%
Gain on sale of Chancery 809 9,322 (8,513) -91%
Foreign exchange loss (622) (314) (308) -98%
---------- ---------- ---------- ----------
Total non-operating items (4,344) 9,229 (13,573) N/A
---------- ---------- ---------- ----------
Income from continuing
operations before
minority interest, equity
in net income (loss) of
affiliates, and income
taxes 52,369 65,996 (13,627) -21%
Minority interest in
income of consolidated
subsidiaries, net of
income tax (5,855) (11,963) 6,108 51%
Equity in net (loss)
income of affiliates, net
of income tax (350) (211) (139) -66%
Income tax benefit
(expense) 1,257 (12,365) 13,622 N/A
---------- ---------- ---------- ----------
Income from continuing
operations 47,421 41,457 5,964 14%
Loss from discontinued
operations, net of income
tax (d) (17) (1,673) 1,656 99%
Gain (Loss) on disposal of
discontinued operations,
net of income tax 337 (921) 1,258 N/A
---------- ---------- ---------- ----------
Net income $ 47,741 $ 38,863 $ 8,878 23%
========== ========== ========== ==========
Earnings available to
common shareholders:
Income from continuing
operations $ 47,421 $ 41,457 $ 5,964 14%
Effect of minority put
arrangements (20,937) - (20,937) N/A
---------- ---------- ---------- ----------
Income from continuing
operations available to
common shareholders $ 26,484 $ 41,457 $ (14,973) -36%
========== ========== ========== ==========
Net income $ 47,741 $ 38,863 $ 8,878 23%
Effect of minority put
arrangements (20,937) - (20,937) N/A
---------- ---------- ---------- ----------
Net income available to
common shareholders $ 26,804 $ 38,863 $ (12,059) -31%
========== ========== ========== ==========
Weighted average shares
(basic) 51,714 50,940
Weighted average shares
(diluted) 53,553 52,883
EPS-Net income available
to common shareholders
(basic) $ 0.52 $ 0.76
EPS-Net income available
to common shareholders
(diluted) $ 0.50 $ 0.73
EPS- Income from
continuing operations
available to common
shareholders (basic) $ 0.51 $ 0.81
EPS- Income from
continuing operations
available to common
shareholders (diluted) $ 0.49 $ 0.78
Segment operating profit
(loss):
Campus Based - Latin
America $ 61,207 $ 56,519 $ 4,688 8%
Campus Based - Europe 22,229 19,628 2,601 13%
Campus Based -
Overhead (13,082) (10,575) (2,507) -24%
---------- ---------- ---------- ----------
Campus Based - Total $ 70,354 $ 65,572 $ 4,782 7%
---------- ---------- ---------- ----------
Laureate Online $ 20,574 $ 12,466 $ 8,108 65%
---------- ---------- ---------- ----------
a) Mexico & 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) The 2007 and 2006 operating results present the WSI and IFG Langues
business units as discontinued operations.
CONTACT: Laureate Education
Rosemarie Mecca
Chief Financial Officer
410-843-8070