BALTIMORE, May 09, 2018 (GLOBE NEWSWIRE) -- Laureate Education, Inc. (NASDAQ:LAUR), the global leader in higher education, today announced financial results for the first quarter 2018.

First Quarter 2018 Highlights (compared to first quarter 2017):

• New enrollments increased 8% on an organic basis (excluding divestitures); adjusted for timing of the intake, organic new enrollments increased 5%.
• Total enrollments increased 2% on an organic basis (excluding divestitures).
• Revenue increased by $29.4 million to $885.3 million; up 3% on an organic constant currency basis.¹
• Operating loss, in a seasonally low quarter, decreased by $35.4 million to $27.5 million.
• Net income for the quarter was $171.5 million, which included a $298.0 million gain related to the completion of the previously announced sales of our Cyprus, Italy and China institutions during the quarter, as compared to a net loss of $120.4 million in the first quarter of 2017.
• Adjusted EBITDA decreased by $1.1 million to $47.5 million; up 16% on an organic constant currency basis in part due to timing impacts.

“I'm pleased to report that 2018 is off to a strong start,” said Eilif Serck-Hanssen, Chief Executive Officer. “Our first quarter results were ahead of guidance and new enrollment growth was robust, increasing 5% for the cycle. We continue to make good progress on all our key strategic initiatives, including simplifying the business while strengthening our balance sheet and improving free cash flow generation. We are well positioned to deliver on our commitment for a strong 2018.”

First Quarter 2018 Results

New enrollments for the first quarter of 2018, excluding divestitures, increased 8% compared to our new enrollment activity for first quarter of 2017. Adjusted for timing of the intake (i.e. through April 30, 2018) compared to the prior year, new enrollment growth was 5%, which was in-line with expectations. New enrollment performance reflects strong growth in Brazil, which was up 12%, led by 80% growth in new enrollments in Distance Learning in that segment. Andean & Iberian grew new enrollments 2%, and in the EMEAA segment our Australia business is scaling nicely, with enrollments increasing 15% as compared to the intake period in the prior year. Online & Partnerships new enrollments were down slightly for the intake period, with Walden returning to growth and our partnership business still executing on a planned transition away from lower revenue and margin producing students. Total enrollments at March 31, 2018 increased 2% compared to March 31, 2017 on an organic basis.

For the first quarter of 2018, revenue was $885.3 million, an increase of $29.4 million compared to the first quarter of 2017. Operating loss decreased $35.4 million compared to the first quarter of 2017. Net income was $171.5 million, which included a $298.0 million gain related to the sale of the Cyprus, Italy and China institutions, compared to a net loss of $120.4 million in the first quarter of prior year. Diluted earnings per share was $0.59 for the first quarter of 2018.

Adjusted EBITDA was $47.5 million in the first quarter of 2018, a 2% decrease compared to the first quarter of 2017. On an organic constant currency basis, revenue increased 3% and Adjusted EBITDA increased 16% compared to the first quarter of 2017.

¹ Organic constant currency results exclude the period-over-period impact from currency fluctuations, acquisitions and divestitures, and other items.

Balance Sheet and Capital Structure

Laureate ended the first quarter of 2018 with $479.0 million of cash on hand and $798.5 million in total liquidity, including our undrawn revolver capacity.

On February 1, 2018, we completed an amendment of our Senior Secured Credit Facility that effectively reduced the current interest rate margin applicable to the term loans outstanding under the Senior Secured Credit Facility (the 2024 Term Loan) by 100 basis points. In connection with this amendment, we repaid $350.0 million of the principal balance of the 2024 Term Loan using the proceeds from the sale of our Cyprus and Italy operations, along with borrowings on our revolving credit facility that were subsequently repaid with the China sale proceeds. As a result of the $350.0 million repayment, there will be no further quarterly principal payments required with respect to the 2024 Term Loan and the remaining balance will be due at maturity.

Series A Convertible Redeemable Preferred Stock (Series A Preferred Stock)

In December 2016 and January 2017, the Company issued shares of Series A Preferred Stock for total gross proceeds of $400.0 million. The outstanding liquidation value at March 31, 2018 was approximately $420 million as the Company paid in kind certain dividends on the Series A Preferred Stock as provided for in the Certificate of Designations for the Series A Preferred Stock. On April 23, 2018, immediately after the Company’s shelf registration statement on Form S-3 became effective, all of the issued and outstanding shares of the Company’s Series A Preferred Stock were converted into 36.1 million shares of the Company’s Class A common stock, significantly simplifying our capital structure and eliminating the preferred dividend obligation going forward.

Outlook for Fiscal 2018

On March 27, 2018, the Chilean Constitutional Court declared unconstitutional Article 63 of the New Higher Education Law, which would have prohibited for-profit organizations from controlling the boards of universities in Chile. As a result, the Company is updating guidance for full-year 2018 to reflect the fully consolidated impact of its operations in Chile, and to reflect a partial year impact for asset sales which have been announced but not yet closed and recent changes in foreign currency rates.

Based on the current foreign exchange spot rates², Laureate currently expects its performance for full-year 2018 to be as follows:

• Total enrollments in the range of 1,025,000 to 1,030,000;
• Revenues to be in the range of $4,260 to $4,300 million;
• Adjusted EBITDA to be in the range of $810 to $820 million;
• Capex spending at approximately 7% of revenue;
• Cash interest expense of approximately $250 million, reflecting the improvements in our capital structure;
• Free cash flow, defined as operating cash flow less capex, expected to be approximately $100 million for 2018; and

² Based on actual FX rates for January-April 2018, and current spot FX rates (local currency per US dollar) of MXN 19.02, BRL 3.47, CLP 614.72, PEN 3.27, EUR 0.83 for May - December 2018. FX impact may change based on fluctuations in currency rates in future periods.

An outlook for 2018 net income and a reconciliation of the forward-looking 2018 Adjusted EBITDA outlook to net income are not being provided as Laureate does not currently have sufficient data to accurately estimate the variables and individual adjustments for such outlook and reconciliation.

Please see the “Forward-Looking Statements” section in this release for a discussion of certain risks related to this outlook.

About Laureate Education, Inc.

Laureate Education, Inc. is the largest global network of degree-granting higher education institutions, with more than one million students enrolled at 60 institutions in nearly 20 countries at campuses and online. Laureate offers high-quality, undergraduate, graduate and specialized degree programs in a wide range of academic disciplines that provide attractive employment prospects. Laureate believes that when our students succeed, countries prosper and societies benefit. This belief is expressed through the company’s philosophy of being ‘Here for Good’ and is represented by its status as a certified B Corporation® and conversion in 2015 to a Delaware public benefit corporation, a new class of corporation committed to creating a positive impact on society.