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Laureate Education, Inc. (NASDAQ:LAUR), the world’s leading international provider of higher education, announced record financial results for the quarter ended September 30, 2006. Third quarter 2006 revenues increased 35% to $260.9 million, compared to $193.8 million in the third quarter of 2005. Income from continuing operations in the third quarter of 2006 was $9.9 million or $0.19 per diluted share. Excluding the ($0.03) impact of stock option expense, income from continuing operations would have been $0.22 per diluted share, an increase of 29% over the third quarter of 2005. The third quarter 2006 net impact of the previously announced Chilean buy-out, which includes changes in minority interest as well as severance and other non-operating items, was ($0.02) per diluted share. (For details see Reg G Reconciliation in the investor relations section of www.laureate-inc.com). The Company’s campus-based institutions reported third quarter total student enrollment increased 28% to 209,480 students. The primary enrollment season for Laureate’s Northern Hemisphere institutions occurs during the third quarter of the year. Laureate Online Education reported a 10% increase in new student enrollment and a 20% increase in total student enrollment to 31,136 students. Laureate Education closed previously announced transactions to acquire the remaining 20% interest in its Chilean businesses and negotiated all remaining earnout obligations to its former business partner in Chile in exchange for a total settlement of $161 million before any additional deal or related costs. The Company believes that it will achieve earnings of between $1.09 and $1.14 per diluted share for the quarter ending December 31, 2006, excluding ($0.03) to ($0.04) per diluted share impact of SFAS123R. Fourth Quarter 2006 Earnings Outlook including SFAS123R expense is between $1.05 and $1.11 per diluted share. Laureate Education updates its full-year 2006 earnings outlook of between $2.11 and $2.16 per diluted share, an increase of 27% or more over full-year 2005. This excludes estimated SFAS123R impact of ($0.10) to ($0.12) per diluted share. Full-year 2006 Earnings Outlook including SFAS123R expense is $1.99 to $2.06 per diluted share. The full-year 2006 Outlook includes the one time $0.04 net gain related to the continued liquidation of Sylvan Ventures, as reported in the second quarter of 2006. The Company reiterates its full-year 2007 earnings outlook of between $2.59 and $2.67 per diluted share, an increase of 20% or more over full-year 2006. This excludes estimated stock option expense of ($0.12) to ($0.14) per diluted share. Full-year 2007 Earnings Outlook including SFAS123R expense is $2.45 to $2.55 per diluted share. Douglas Becker, Chairman and Chief Executive Officer of Laureate Education stated, “The third quarter marks the end of the primary enrollment season for Laureate’s Northern Hemisphere institutions and is our largest intake season of the year. Our strong enrollment growth in this period, coupled with substantial margin improvement in our Laureate Online division, positions us well to achieve our goals for 2006. I am proud of the investments that we continue to make in new campuses, new programs, and especially in the management team. These investments make it possible for us to achieve our ambitious objectives for 2007 and beyond.” Financial and Other Results As previously announced, all financial information for the prior year 2005 has been restated to reflect a preferential change in accounting for tuition revenue. Total revenues for the third quarter of 2006 were $260.9 million, an increase of 35% compared to total revenues of $193.8 million in the third quarter of 2005. Total operating income for the third quarter of 2006 decreased to $13.5 million, versus operating income of $15.4 million in the third quarter of 2005. Income from continuing operations in the third quarter of 2006 was $9.9 million or $0.19 per diluted share. Excluding the ($0.03) impact of stock option expense, income from continuing operations would have been $0.22 per diluted share, an increase of 29% over the third quarter of 2005. The third quarter 2006 net impact of the previously announced Chilean buy-out, which includes changes in minority interest as well as severance and other non-operating items, was ($0.02) per diluted share. (For details see Reg G Reconciliation in the investor relations section of www.laureate-inc.com). For the nine-month period ended September 30, 2006, total revenues were $799.1 million, an increase of 33% compared to total revenues of $599.4 million in the same period of 2005. Total operating income for the nine-month period increased to $70.5 million, versus operating income of $61.8 million in the same period of 2005. Income from continuing operations for the nine-month period ended September 30, 2006 was $49.8 million or $0.94 per diluted share, an increase of 19% over the same period of 2005. Total cash and marketable securities at September 30, 2006 were $173.6 million, while total company debt was $463.9 million. Laureate Education closed previously announced transactions to acquire the remaining 20% interest in its Chilean businesses and negotiated all remaining earnout obligations to its former business partner in Chile in exchange for a total settlement of $161 million before any additional deal or related costs. In the South America region, total student enrollment in the third quarter 2005, previously reported as 69,997 students, has been revised to 66,668 students to reflect student attrition and graduations at 3 campuses which had been incorrectly reported. Laureate Education operates 25 institutions of higher education in 15 countries, offering academic programs to 240,616 students through 58 campuses and online. Management Appointments As part of Laureate’s continuing efforts to develop and recruit exceptional executive talent for its rapidly growing network of universities, the Company announced several appointments: Jorge Brake has been hired as President and CEO of Laureate Education’s Mexico and Central America Region. Mr. Brake brings extensive management, marketing and product development experience to Laureate, having served as President and CEO of Procter & Gamble in Mexico and Central America. Gary Wojtaszek has been hired Senior Vice President - Treasurer for Laureate Education. Mr. Wojtaszek was previously Vice President of Finance and Principal Accounting Officer of Agere Systems, a global semi-conductor manufacturer with operations throughout North America, Europe and Asia. Cristina O’Naghten, CPA, has been hired as Vice President of Internal Audit for Laureate Education. Mrs. O’Naghten brings over 20 years of financial and audit experience to Laureate, having recently served as General Motors Corporation’s Audit Services Director for Latin America, Africa, and Middle East Region. Anthony Viola, CPA, has been hired as Senior Vice President of Tax for Laureate Education. Mr. Viola most recently served as the Vice President of Taxes for Sodexho, a $6.5 billion management services subsidiary of Sodexho Alliance.
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