Quarter Ending Mrch 31, 2006

27/04/2006


BALTIMORE--(BUSINESS WIRE)--April 27, 2006--Laureate Education, Inc. (NASDAQ:LAUR), the world's leading international provider of higher education, announced robust student enrollment and financial results for the quarter ended March 31, 2006.

 -- First quarter 2006 revenues increased 32% to $235.1 million, compared to $178.7 million in the first quarter of 2005. -- Laureate Education reported an after-tax loss from continuing operations of ($0.8) million or ($0.02) per diluted share, which includes ($0.02) from the impact of stock options expense. Excluding the impact of SFAS123(R), earnings would have been $0.01 per diluted share for the quarter ending March 31, 2006, the Company's seasonally weakest quarter. -- The Company reported first quarter increases of 31% and 34% in new and total student enrollment, respectively, at its network of campus-based and online institutions. The primary enrollment season for Laureate's institutions in South America occurs during the first quarter of the year. -- The Company's campus-based institutions reported a 32% increase in new student enrollment and a 36% increase in total student enrollment. -- Laureate Online Education reported total degree enrollment increased 24% to 28,322 students, driven by a 27% increase in new student enrollment. -- The Company reiterates its full-year 2006 earnings outlook of between $2.05 and $2.15 per diluted share, excluding the impact of SFAS123(R). -- Effective January 1, 2006, Laureate Education voluntarily adopted a weekly revenue recognition policy for its traditional campus-based institutions. All financial information for the prior year 2005 has been re-presented. -- Universidad del Valle de Mexico (UVM) announced the opening of two new campus locations, Mexicali and Cuernavaca. With the opening of these two locations, UVM now operates 23 campuses in Mexico. 

Douglas Becker, Chairman and Chief Executive Officer of Laureate Education, stated, "We are very pleased with the results of our enrollment activities during this important intake period. These overall enrollments illustrate that we are on track for our ambitious full-year plans. As highlighted by today's announcements, we are delighted to be recognized for the quality of our institutions by accreditors, journalists and employers throughout the world."

Today, Laureate International Universities consists of 24 institutions of higher education in 15 countries, offering academic programs to 225,952 students through 53 campuses and online.

Financial Results

Total revenues for the first quarter of 2006 were $235.1 million, an increase of 32% compared to total revenues of $178.7 million in the first quarter of 2005. Total operating income for the first quarter 2006 decreased to break even, versus operating income of $1.7 million in the first quarter of 2005. The decrease in campus-based segment operating profit is related to the growth of Laureate's campus-based universities in the Southern Hemisphere that are mostly out of session during the first quarter. The increase in segment operating profit at Laureate Online Education resulted from increasing enrollment. During the first quarter of 2006, the Company reported an after-tax loss from continuing operations of ($0.8) million or ($0.02) per diluted share, which includes ($0.02) from the impact of stock options expense.

Total cash and marketable securities at March 31, 2006 were approximately $145 million, while total company debt was approximately $212 million.

Student Enrollment

The primary enrollment season for Laureate's institutions in South America occurs during the first quarter of the year. South America region includes the Company's operations in Chile, Ecuador and Peru. Brazil is currently reported in the acquisition line of the enrollment table and will be included in the South America region after the first anniversary of the acquisition.

Bill Dennis, President of Latin America Operations stated, "We are pleased with our enrollment in the South America region, where total enrollment increased 17% quarter over quarter. This success is due to the strong enrollment growth in Peru and in our traditional universities in Chile."

"AIEP, our vocational/technical institute in Chile, has experienced strong growth over the last few years, although it only accounts for a small percentage of revenues in the region. We have changed our focus towards bringing this business to profitability rather than increasing the student count," added Mr. Dennis. New student enrollment in the South America region increased 11%, excluding AIEP, versus the reported 5%, which includes AIEP.

New student enrollment during the secondary intake period for Mexico/Central America region grew to over 10,000 students, an increase of 21% over the same period last year. "We are extremely encouraged by the strong secondary enrollment intake at our institutions in Mexico/Central America region, which now turn their attention to the primary intake season that concludes in September," stated Mr. Dennis.

Total student enrollment at Laureate's worldwide network of campus-based and online institutions increased 34% in the first quarter 2006 to 225,952 students. The Company's campus-based institutions reported a 32% increase in new student enrollment and a 36% increase in total degree enrollment to 197,630 students. Laureate Online Education reported total degree enrollments increased 24% to 28,322 students, driven by a 27% increase in new student enrollment.

Additional Highlights

Universidad del Valle de Mexico (UVM) was awarded "academic excellence status" by the Mexican Ministry of Education, making it one of only six universities in the country with this designation.

Universidad Europea de Madrid announced the creation of a new school of Sports Management, Health and Communications, in partnership with Real Madrid, one of the world's leading sports franchises and a top global brand.

Ecole Superieure du Commerce Exterieur (ESCE) was recently authorized by the French Government to upgrade its degree program from a four-year to a five-year program, joining the elite group of Grandes Ecoles.

Ecole Centrale d'Electronique (ECE), Laureate's other Grande Ecole, earned the maximum extension of accreditation, six-years, from the accrediting body of the French Ministry of Education for engineering schools.

Walden University's Masters of Science in Nursing received accreditation from the Commission on Collegiate Nursing Education (CCNE), a national accrediting association recognized by the U.S. Department of Education.

 Revenue Growth - Organic and Acquisition ----------------------------------------- Three months ended March 31st % Growth Revenue Amount Constant (In Thousands) 2006 2005 in USD Currency -------- --------- -------- ---------- Mexico/Central America(1) $ 75,889 $ 62,930 21% 15% South America(2) 25,307 20,042 26% 18% Europe 54,744 56,243 -3% 8% Online 52,706 39,462 34% 34% --------- --------- Subtotal 208,646 178,677 17% Acquisitions(3) 26,464 NA --------- --------- Total $235,110 $178,677 32% ========= ========= (1) Central America includes Mexico, Costa Rica and Panama. (2) South America includes Chile, Ecuador and Peru. (3) Acquisitions include: Honduras (UNITEC), Brazil (Anhembi Morumbi) and Cyprus (Cyprus College). Student Enrollment -------------------- As of April 26, 2006 New Student Enrollment(1) 2006 2005 % Change -------- -------- ---------- Mexico/Central America 10,662 8,803 21% South America 24,141 23,096 5% Europe 544 514 6% -------- -------- New Campus Based 35,347 32,413 9% New Student Enrollment at Acquired Schools(3) 7,340 -- -------- -------- Subtotal 42,687 32,413 32% Online 6,120 4,828 27% New Student Enrollment with Acquisitions 48,807 37,241 31% ======== ======== Total Student Enrollment(2) 2006 2005 -------- -------- Mexico/Central America 76,935 66,279 16% South America 74,420 63,767 17% Europe 16,002 15,276 5% -------- -------- Total Campus Based 167,357 145,322 15% Total Student Enrollment at Acquired Schools(3) 30,273 -- -------- -------- Subtotal 197,630 145,322 36% Online 28,322 22,918 24% Total Student Enrollment with Acquisitions 225,952 168,240 34% ======== ======== (1) 2006 and 2005 New Student Enrollment is YTD, reported as of 4/26/2006 and 4/20/2005, respectively. (2) 2006 and 2005 Total Student Enrollment is census, reported as of 4/26/2006 and 4/20/2005, respectively. (3) Acquisitions (less than 1 year) include the following: 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.

 Second Quarter 2006: -- For its campus-based and online businesses, Laureate Education anticipates total revenue of $275 to $300 million for the second quarter 2006. -- The Company anticipates Campus-Based revenue of $225 to $245 million for the second quarter 2006, with operating margins between 24% and 25%. Latin America revenue is expected to be between $175 and $190 million with operating margins of 29% to 30%. Europe revenue is expected to be between $50 and $55 million with operating margins of 13% to 14%. General and administrative expenses for the Campus-Based division are expected to be approximately $4 million. -- The Company anticipates Online revenue of $50 to $55 million for the second quarter 2006, with operating margins between 14% and 15%. -- Corporate general and administrative expenses are expected to be approximately $10 million in the second quarter 2006. -- The Company currently believes that it will achieve earnings of $0.68 to $0.73 per diluted share (excluding the impact of SFAS123(R)) for the second quarter 2006. -- The impact of SFAS123(R) in the second quarter 2006 is expected to be between ($0.02) and ($0.03) per diluted share. -- Fully-diluted weighted average shares outstanding is expected to be approximately 53.6 million for the quarter ending June 30, 2006. Full-Year 2006: -- Laureate Education reiterates its full-year 2006 earnings outlook of 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. 

A live webcast of Laureate Education's first quarter 2006 conference call will be broadcast at 5:00 p.m. eastern time today. The webcast of the 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.

About Laureate Education, Inc.

Laureate Education, Inc. (NASDAQ:LAUR) is focused on providing a superior university experience to nearly 226,000 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 March 31, ------------------------------------------- 2006 2005 $ Variance % Variance ------------------------------------------- (re-presented) Revenues Central America (a) $ 79,243 $ 62,930 $ 16,313 26% South America (b) 43,258 20,042 23,216 116% ---------- ---------- ---------- ---------- Campus Based - Latin America 122,501 82,972 39,529 48% Mediterranean Region (c) 33,202 29,140 4,062 14% Hospitality 14,895 14,601 294 2% France 11,806 12,502 (696) -6% ---------- ---------- ---------- ---------- Campus Based - Europe 59,903 56,243 3,660 7% ---------- ---------- ---------- ---------- Campus Based Total 182,404 139,215 43,189 31% ---------- ---------- ---------- ---------- Laureate Online Education 52,706 39,462 13,244 34% ---------- ---------- ---------- ---------- Total revenues 235,110 178,677 56,433 32% ---------- ---------- ---------- ---------- Core operating expenses 225,232 170,247 54,985 32% General and administrative expenses 9,851 6,696 3,155 47% ---------- ---------- ---------- ---------- Total operating expenses 235,083 176,943 58,140 33% ---------- ---------- ---------- ---------- Operating income 27 1,734 (1,707) -98% Non-operating items Interest and other income 3,722 2,416 1,306 54% Interest expense (3,606) (2,373) (1,233) -52% Foreign exchange (loss) income (111) 249 (360) N/A ---------- ---------- ---------- ---------- Total non-operating items 5 292 (287) -98% ---------- ---------- ---------- ---------- Income from continuing operations before minority interest, equity in net income (loss) of affiliates, and income taxes 32 2,026 (1,994) -98% Minority interest in income of consolidated subsidiaries, net of income tax (457) (381) (76) -20% Equity in net loss of affiliates, net of income tax (109) (90) (19) -21% Income tax expense (233) (227) (6) -3% ---------- ---------- ---------- ---------- (Loss) Income from continuing operations (767) 1,328 (2,095) N/A (Loss) Income from discontinued operations, net of income tax (d) (169) 612 (781) N/A Gain on disposal of discontinued operations, net of income tax 261 - 261 N/A ---------- ---------- ---------- ---------- Net (Loss) Income $ (675) $ 1,940 $ (2,615) N/A ========== ========== ========== ========== Weighted average shares (basic) 50,436 49,237 Weighted average shares (diluted) 50,436 51,814 EPS-Net (Loss) Income (basic) $ (0.01) $ 0.04 EPS-Net (Loss) Income (diluted) $ (0.01) $ 0.04 EPS-(Loss) Income from continuing operations (basic) $ (0.02) $ 0.03 EPS-(Loss) Income from continuing operations (diluted) $ (0.02) $ 0.03 Segment operating profit (loss): Campus Based - Latin America $ (2,310) $ (298) $ (2,012) LT-200% Campus Based - Europe 12,535 10,404 2,131 20% Campus Based - Overhead (4,667) (2,844) (1,823) -64% ---------- ---------- ---------- ---------- Campus Based - Total $ 5,558 $ 7,262 $ (1,704) -23% ---------- ---------- ---------- ---------- Laureate Online $ 4,320 $ 1,168 $ 3,152 GT200% ---------- ---------- ---------- ---------- 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) The 2006 and 2005 operating results present the WSI and India business units as discontinued operations. GT = Greater Than, LT = Less Than 

 CONTACT: Laureate Education, Inc. Rosemarie Mecca, 410-843-8070 or Chris Symanoskie, 410-843-6394 SOURCE: Laureate Education, Inc.