Record Quarter Results

28/02/2005


 BALTIMORE--(BUSINESS WIRE)--Feb. 28, 2005-- Announces Accelerating Online Enrollment and Plan to Merge NTU into Walden University 

Laureate Education, Inc. (NASDAQ:LAUR), the world's leading international provider of higher education, announced record financial results for the quarter and year ended December 31, 2004.

 -- Full-year 2004 revenues increased 37% to $648.0 million, compared to $472.8 million in 2003. Fourth quarter 2004 revenues increased 37% to $211.5 million, compared to $154.9 million in 2003. -- Total operating income for 2004 increased to $91.2 million, compared to $35.1 million in 2003. Total operating income for the fourth quarter 2004 increased 31% to $47.8 million, compared to $36.4 million in 2003. -- Income from continuing operations for 2004 was $82.7 million or $1.69 per diluted share, compared to $9.7 million or $0.22 per diluted share in 2003. Income from continuing operations for the fourth quarter 2004 was $47.0 million or $0.92 per diluted share, compared to $29.4 million or $0.62 per diluted share in 2003. -- Pro forma after-tax income for 2004 was $62.6 million or $1.28 per diluted share and compares to pro forma after-tax income in 2003 of $41.5 million or $0.92 per diluted share, an increase of 39% per share. For the fourth quarter of 2004, pro forma after-tax income was $30.6 million or $0.60 per diluted share, an increase of 25% per share over pro forma after-tax income in the fourth quarter of 2003. (See Reconciliation - GAAP to Pro Forma Results for details.) -- The Company announced the sale of Wall Street Institute, its English language instruction subsidiary, in exchange for estimated total consideration of approximately $40 million. In connection with the transaction, the Company recognized a net tax benefit of $12.0 million or $0.23 per diluted share for the year and $0.25 per diluted share for the fourth quarter. -- As previously announced during the fourth quarter, the Company acquired the remaining 22.3% interest in Universidad Europea de Madrid (UEM) from the minority shareholders in exchange for Euros 29 million and a parcel of non-adjacent land owned but not used by the University. The Company recognized an after-tax gain of $4.4 million or $0.09 per diluted share based on the realized appreciation in the land tendered in partial payment of the purchase price. -- Laureate Online Education reported total degree enrollments increased 33% to 20,988 students at December 31, 2004, compared to 15,768 students at December 31, 2003. Excluding the acquisition of Netherlands-based Laureate Online Education B.V. (formerly KIT eLearning), total online degree enrollment increased 23%, driven by a 146% increase in new student enrollment. At December 31, 2004, Walden University reported a 66% year-over-year increase in total degree enrollments and a 122% increase in new student enrollments. Campus-Based enrollment increased 35% year-over-year to 138,394 students. -- The Company announced that it is merging its wholly owned National Technological University with Walden University and creating the NTU School of Engineering & Applied Sciences at Walden University. This follows the previously announced transaction wherein the Company acquired the remaining 49% interest in Walden from its minority shareholder allowing Laureate Online Education to combine and integrate its online assets around its centerpiece, Walden University. -- To enhance its working-adult strategy in Europe, Laureate Education acquired a 51% interest in Institut Francais de Gestion (IFG), an accredited higher education institution with ten locations in France. IFG offers degree programs to over 2,000 working adult students and professional development courses in partnership with large corporations. -- The Company also announced the hiring of Daniel Nickel as Executive Vice President, Corporate Operations with global responsibility for Human Resources. Prior to joining the Company, Mr. Nickel was Senior Vice President, Human Resources for Motorola, Inc.'s $13 Billion cellular phone business and has worked extensively throughout Latin America, Europe and Asia. 

Douglas Becker, Chairman and Chief Executive Officer of Laureate Education stated, "Our outstanding financial performance in 2004 was driven by strong enrollment growth at our campuses and accelerating growth in Online programs. This success enabled us to deliver earnings growth of nearly 40%, while making substantial investments for future growth such as opening new campuses, developing new online programs and laying groundwork for our entry into new countries."

"We have also made important investments in the launch of working adult programs in Mexico, Chile, France and Spain which can produce strong increases in Campus Based and Online enrollments. These investments will pay off through continued revenue growth and increased operating margins in the coming year and beyond."

Financial Information

Income from continuing operations for the year ended December 31, 2004 was $82.7 million or $1.69 per share on diluted shares outstanding of 49.0 million, including $0.07 per share net gain from the early repayment of the K-12 seller note, $0.09 relating to the gain on UEM land in Spain and a $0.25 net tax benefit resulting from the WSI disposition. Excluding these items, pro forma after-tax income from continuing operations was $62.6 million or $1.28 per diluted share as compared to our previously issued guidance (similarly excluding these items) of $1.24 to $1.26 per diluted share.

Total cash and marketable securities at December 31, 2004 were approximately $110 million, while total corporate debt was approximately $134 million.

Laureate Education now operates institutions of higher education in 11 countries, offering programs through 42 campus locations and online to students from over 80 countries.

Revenue Growth - Constant Currency (excluding acquisitions) Three months ended December 31, 2004 % Growth Revenue Amount Constant (In Thousands) 2004 2003 in USD Currency ---- ---- ------ -------- Chile Region $ 47,616 $ 41,003 16% 13% Mexico Region 61,502 48,339 27% 29% France 3,074 2,572 20% 10% Hospitality 13,640 12,885 6% -4% Spain 27,176 23,759 14% 5% Online 37,927 26,355 44% 44% Year ended December 31, 2004 % Growth Revenue Amount Constant (In Thousands) 2004 2003 in USD Currency ---- ---- ------ -------- Chile Region $ 75,976 $ 57,323 33% 22% Mexico Region 182,214 150,121 21% 26% France 9,495 7,921 20% 9% Hospitality 51,557 48,046 7% -1% Spain 80,211 70,588 14% 4% Online 127,586 95,815 33% 33% Note: Excludes acquisitions not owned during the full periods presented. Reconciliation - 2004 GAAP to Pro Forma Results (Per share) Three Months Twelve Months Ended 12/31/04 Ended 12/31/04 -------------- -------------- Income from Continuing Operations (Diluted) $ 0.92 $ 1.69 Adjustments: Net K12 Note Impact - (0.07) UEM Land Gain (0.09) (0.09) Net WSI Tax Benefit (0.23) (0.25) ------ ------ Pro forma Income from Continuing Operations (Diluted) $ 0.60 $ 1.28 ====== ====== Fully diluted shares outstanding 51,310 49,016 ====== ====== 

First Quarter And Full-year 2005 Outlook

The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially.

 Full-year 2005 Outlook: -- Laureate Education anticipates total revenues of between $820 and $865 million for 2005, an increase of 27% or more over 2004. -- The Company anticipates Campus-Based revenue to be between $640 and $675 million for 2005, with operating margins between 19% and 20%. -- The Company anticipates Online revenue to be between $180 and $190 million for 2005, with operating margins between 15% and 16%. -- General and administrative expenses are expected to be $25 to $26 million in 2005. -- Non-cash stock compensation expense, prior to adoption of SFAS123R, is expected to be $3 million. -- The Company currently believes that it will achieve EPS of $1.60 to $1.65 per diluted share for the year ending December 31, 2005. This represents a 25% or greater increase over proforma full-year 2004 EPS(excluding the net impact of the repayment of the K-12 seller note, the UEM land gain, and the WSI tax benefit)of $1.28 per diluted share. -- Fully diluted shares outstanding for 2005 are projected to be approximately 52.0 million. -- Total enrollment at Laureate's network of campus-based and online universities is expected to grow at 15% to 20% in 2005. -- The Company anticipates its tax rate to be between 15% and 17% in 2005. First Quarter 2005 Outlook: -- Laureate Education anticipates total revenue of $175 to $190 million for the first quarter 2005. -- The Company anticipates Campus-Based revenue of $137 to $151 million for the first quarter 2005, with operating margin between 8% and 9%. -- The Company anticipates Online revenue of $38 to $39 million for the first quarter 2005, with operating margin between 1% and 2%. -- General and administrative expenses are expected to be approximately $6 million in the first quarter 2005. -- Non-cash stock compensation expense is expected to be approximately $1 million in the first quarter 2005. -- The Company currently believes that it will achieve EPS of $0.04 to $0.05 per diluted share for the quarter ending March 31, 2005, the Company's seasonally weakest quarter. -- Fully diluted shares outstanding for the first quarter 2005 are projected to be approximately 51.7 million. About Laureate Education, Inc. 

Laureate Education Inc. (NASDAQ: LAUR) is focused exclusively on providing a superior university experience to nearly 160,000 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.

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")

Laureate Education, Inc. & Subsidiaries Consolidated Statements of Operations (Amounts in thousands, except per share data) Three Months Ended December 31, ------------------------------------ $ % 2004 2003 Variance Variance -------- -------- -------- --------- (Restated) (e) Revenues Mexico region (c) 62,171 48,339 13,832 29% Chile region (b) 55,232 41,003 14,229 35% -------- -------- -------- --------- Campus Based - Latin America 117,403 89,342 28,061 31% Spain 28,013 23,759 4,254 18% Hospitality/Switzerland (a) 13,539 12,885 654 5% France 11,890 2,572 9,318 GT200% -------- -------- -------- --------- Campus Based - Europe 53,442 39,216 14,226 36% -------- -------- -------- --------- Campus Based total 170,845 128,558 42,287 33% -------- -------- -------- --------- Laureate Online Education 40,657 26,355 14,302 54% Ventures - - - N/A -------- -------- -------- --------- Total revenues 211,502 154,913 56,589 37% -------- -------- -------- --------- Core operating expenses 156,672 114,702 41,970 37% Ventures operating expenses - - - N/A Non-cash stock compensation GT200% expense 1,832 362 1,470 Core general and administrative expenses 5,210 3,488 1,722 49% Ventures general and administrative expenses - - - N/A -------- -------- -------- --------- Total operating expenses 163,714 118,552 45,162 38% -------- -------- -------- --------- Operating income 47,788 36,361 11,427 31% Non-operating items Interest and other income (g) 7,674 3,269 4,405 135% Interest expense (2,450) (1,450) (1,000) -69% Exchange gain (loss) (510) 48 (558) N/A Ventures non-operating expense - - - N/A -------- -------- -------- --------- Total non-operating items 4,714 1,867 2,847 152% -------- -------- -------- --------- Income from continuing operations before minority interest, equity in net income (loss) of affiliates, and income taxes 52,502 38,228 14,274 37% Minority interest in (income) loss of consolidated subsidiaries, net of income tax Ventures - - - N/A Other (8,289) (7,938) (351) -4% Equity in net income (loss) of affiliates, net of income tax Ventures - (64) 64 N/A Other (315) 39 (354) N/A Income tax (expense) benefit 3,113 (860) 3,973 N/A -------- -------- -------- --------- Income from continuing operations 47,011 29,405 17,606 60% Loss from discontinued operations, net of income tax (436) (6,087) 5,651 93% Gain (loss) on disposal of discontinued operations, net of income tax (13,324) 2,507 (15,831) N/A -------- -------- -------- --------- Net income $33,251 $25,825 $7,426 29% ======== ======== ======== ========= Weighted average shares - basic 48,624 43,785 Weighted average shares - diluted 51,310 47,130 EPS-Net income (basic) $0.68 $0.59 EPS-Net Income (diluted) (f) $0.65 $0.54 EPS-Income from continuing operations (basic) $0.97 $0.67 EPS-Income from continuing operations (diluted) (f) $0.92 $0.62 Reconciliation - Pro Forma Income from Continuing Operations --------------------------------------------------- Income from continuing operations before income taxes $43,898 $30,265 Impact from early repayment of Educate Inc. note receivable - - Gain on UEM Land (5,169) - Income tax expense (benefit) in equity in net income (loss) of affiliates - 53 Non-strategic Ventures losses - - Non-cash stock compensation - - G&A attributable to discontinued operations - - Core non-operating - - -------- -------- Subtotal $38,729 $30,318 Pro Forma Tax (8,150) (7,580) -------- -------- Pro Forma income from continuing operations (d) (g) $30,579 $22,738 Weighted average shares - Pro Forma 51,310 47,130 EPS - from Pro Forma continuing operations (f) $0.60 $0.48 Segment operating profit (loss): Campus Based - Latin America $35,046 $28,070 $6,976 25% Campus Based - Europe 13,048 8,804 4,244 48% Campus Based - Overhead (4,094) (3,051) (1,043) -34% -------- -------- -------- --------- Campus Based - Total 44,000 33,823 10,177 30% Laureate Online 10,830 6,388 4,442 70% Ventures - - - N/A a) Hospitality includes the operating results of Les Roches, Marbella and Glion. b) The Chile region includes Chile, Ecuador and Peru. c) The Mexico region includes Mexico, Costa Rica and Panama. d) Reconciling items in 2003 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. e) 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. f) In calculating 2003 EPS, interest related to the convertible debentures must be added back to the numerator. g) Includes acceleration of original issue discount triggered by the early repayment of the K-12 seller note. GT = Greater Than Laureate Education, Inc. & Subsidiaries Consolidated Statements of Operations (Amounts in thousands, except per share data) Twelve Months Ended December 31, ------------------------------------ $ % 2004 2003 Variance Variance -------- -------- -------- --------- (Restated) (e) Revenues Mexico region (c) 193,471 151,947 41,524 27% Chile region (b) 167,014 97,586 69,428 71% -------- -------- -------- --------- Campus Based - Latin America 360,485 249,533 110,952 44% Spain 82,532 70,588 11,944 17% Hospitality/Switzerland (a) 51,557 48,046 3,511 7% France 18,311 7,921 10,390 131% -------- -------- -------- --------- Campus Based - Europe 152,400 126,555 25,845 20% -------- -------- -------- --------- Campus Based total 512,885 376,088 136,797 36% -------- -------- -------- --------- Laureate Online Education 135,134 95,815 39,319 41% Ventures - 903 (903) N/A -------- -------- -------- --------- Total revenues 648,019 472,806 175,213 37% -------- -------- -------- --------- Core operating expenses 529,674 393,050 136,624 35% Ventures operating expenses - 2,122 (2,122) N/A Non-cash stock compensation expense 5,718 23,050 (17,332) -75% Core general and administrative expenses 21,380 17,774 3,606 20% Ventures general and administrative expenses - 1,756 (1,756) N/A -------- -------- -------- --------- Total operating expenses 556,772 437,752 119,020 27% -------- -------- -------- --------- Operating income 91,247 35,054 56,193 160% Non-operating items Interest and other income (g) 28,179 7,003 21,176 GT200% Interest expense (7,670) (8,844) 1,174 13% Exchange gain (loss) (956) 257 (1,213) N/A Ventures non-operating expense - (8,394) 8,394 N/A -------- -------- -------- --------- Total non-operating items 19,553 (9,978) 29,531 N/A -------- -------- -------- --------- Income from continuing operations before minority interest, equity in net income (loss) of affiliates, and income taxes 110,800 25,076 85,724 GT200% Minority interest in (income) loss of consolidated subsidiaries, net of income tax Ventures - 487 (487) N/A Other (21,021) (14,947) (6,074) -41% Equity in net income (loss) of affiliates, net of income tax Ventures - (4,055) 4,055 N/A Other (323) 194 (517) N/A Income tax (expense) benefit (6,798) 2,930 (9,728) N/A -------- -------- -------- --------- Income from continuing operations 82,658 9,685 72,973 GT200% Loss from discontinued operations, net of income tax (6,323) (5,480) (843) -15% Gain (loss) on disposal of discontinued operations, net of income tax (13,324) 41,930 (55,254) N/A -------- -------- -------- --------- Net income $63,011 $46,135 $16,876 37% ======== ======== ======== ========= Weighted average shares - basic 46,356 41,980 Weighted average shares - diluted 49,016 43,778 EPS-Net income (basic) $1.36 $1.10 EPS-Net Income (diluted) (f) $1.29 $1.05 EPS-Income from continuing operations (basic) $1.78 $0.23 EPS-Income from continuing operations (diluted) (f) $1.69 $0.22 Reconciliation - Pro Forma Income from Continuing Operations --------------------------------------------------- Income from continuing operations before income taxes $89,456 $6,755 Impact from early repayment of Educate Inc. note receivable (6,014) - Gain on UEM Land (5,169) - Income tax expense (benefit) in equity in net income (loss) of affiliates - (3,694) Non-strategic Ventures losses - 18,677 Non-cash stock compensation - 22,158 G&A attributable to discontinued operations - 6,855 Core non-operating - 4,564 -------- -------- Subtotal $78,273 $55,315 Pro Forma Tax (15,655) (13,829) -------- -------- Pro Forma income from continuing operations (d) (g) $62,618 $41,486 Weighted average shares - Pro Forma 49,016 46,229 EPS - from Pro Forma continuing operations (f) $1.28 $0.92 Segment operating profit (loss): Campus Based - Latin America $85,458 $57,626 $27,832 48% Campus Based - Europe 23,784 19,934 3,850 19% Campus Based - Overhead (12,040) (11,995) (45) 0% -------- -------- -------- --------- Campus Based - Total 97,202 65,565 31,637 48% Laureate Online 21,143 13,288 7,855 59% Ventures - (2,975) 2,975 N/A a) Hospitality includes the operating results of Les Roches, Marbella and Glion. b) The Chile region includes Chile, Ecuador and Peru. c) The Mexico region includes Mexico, Costa Rica and Panama. d) Reconciling items in 2003 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. e) 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. f) In calculating 2003 EPS, interest related to the convertible debentures must be added back to the numerator. g) Includes acceleration of original issue discount triggered by the early repayment of the K-12 seller note. GT = Greater Than 

 CONTACT: Laureate Education Sean Creamer, 410-843-8991 or Investor Relations: Chris Symanoskie, 410-843-6394 SOURCE: Laureate Education, Inc.