-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VoIjFFKUYYmtT1I+k7pgYvcuR86PF9pZhiZRdfzhMSc3tfrkOTsTpSp60XawvWoX nt00lN6iEbebzO6nXozV5g== 0001157523-07-007435.txt : 20070727 0001157523-07-007435.hdr.sgml : 20070727 20070727163842 ACCESSION NUMBER: 0001157523-07-007435 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070727 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070727 DATE AS OF CHANGE: 20070727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAUREATE EDUCATION, INC. CENTRAL INDEX KEY: 0000912766 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 521492296 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22844 FILM NUMBER: 071007114 BUSINESS ADDRESS: STREET 1: 650 S. EXETER STREET CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 4108436100 MAIL ADDRESS: STREET 1: 650 S. EXETER STREET CITY: BALTIMORE STATE: MD ZIP: 21202 FORMER COMPANY: FORMER CONFORMED NAME: SYLVAN LEARNING SYSTEMS INC DATE OF NAME CHANGE: 19930929 8-K 1 a5455351.txt LAUREATE EDUCATION, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - -------------------------------------------------------------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 27, 2007 LAUREATE EDUCATION, INC. (Exact name of registrant as specified in its charter) Maryland 0-22844 52-1492296 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 650 S. Exeter Street, Baltimore, Maryland 21202 (Address of principal executive offices) (ZIP Code) Registrant's telephone number, including area code: (410) 843-6100 - -------------------------------------------------------------------------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Section 2 - Financial Information Item 2.02 Results of Operations and Financial Condition On July 27, 2007, the Company issued a press release announcing its financial results for the second quarter and six-months ended June 30, 2007. A copy of the release is furnished as Exhibit 99.01 to this Current Report on Form 8-K. The Registrant has posted this Current Report on Form 8-K on its internet website at www.laureate-inc.com. Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits (c) Exhibits 99.01 Press Release issued July 27, 2007. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Exchange Act of 1933, except as shall be expressly set forth by specific reference in such filing. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. LAUREATE EDUCATION, INC. /s/Rosemarie Mecca ----------------------------- Name: Rosemarie Mecca Title: Executive Vice President and Chief Financial Officer Date: July 27, 2007 Exhibit Index Exhibit Description - ------- ----------- 99.01 Press Release issued July 27, 2007. EX-99.01 2 a5455351ex99-01.txt EXHIBIT 99.01 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 -----END PRIVACY-ENHANCED MESSAGE-----