Sylvan Learning Systems, Inc. Reports Strong Second Quarter 2001 Results; Execution of Business Strategy Fuels 59% Revenue Growth.Business Editors BALTIMORE--(BUSINESS WIRE)--July 26, 2001 Sylvan Learning Sylvan Learning (formerly Sylvan Learning Center) is a chain of franchised tutoring centers which provide personalized tutoring in reading, writing, mathematics, study skills and test-prep for college entrance and state exams. Systems, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SLVN) today announced financial results for the quarter and six months ended June June: see month. 30, 2001. Recent Financial and Business Highlights -- Second quarter 2001 EPS from continuing operations were $0.23 per share, excluding Sylvan Ventures and previously announced charges relating to certain unpaid obligations and costs related to Sylvan's investment in and advances to Caliber Learning Network, Inc. as a result of Caliber's Chapter 11 bankruptcy filing. These results were $0.02 per share above the Company's prior guidance of $0.20 to $0.21 per share, and compare to $0.20 per share for the same quarter in 2000. -- Second quarter 2001 EPS from continuing operations, including Sylvan Ventures and previously announced Caliber charges, were a loss of $0.35 per share. -- The Company raises its full-year 2001 EPS guidance to $0.66 - $0.68 per share, from $0.63 - $0.65 per share, excluding Sylvan Ventures and previously announced Caliber charges. Post-Secondary -- Sylvan sylvan emanating from or pertaining to woods. See also sylvatic. International Universities announces the expected opening of two new campuses at Universidad Universidad (English: University) may refer to:
See America. (UDLA UDLA Universidad de las Américas (Mexico) ) in Chile and the expected opening of one new campus at Universidad del Valle The term Universidad del Valle could refer to the following:
Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. (UVM UVM University of Vermont UVM Universidad del Valle de México UVM Universitas Viridis Montis (University of the Green Mountains aka University of Vermont) UVM Universal Voice Module (Cisco) ) in Mexico. The campuses are expected to be open for the 2002 academic year. -- Sylvan International Universities is increasing its ownership in Universidad Europea CEES CEES Committee on Earth and Environmental Sciences (USA) CEES Central and Eastern European States CEES Centro de Estudios Económicos y Sociales (Guatemala) CEES C3I Engineering Evaluation System (UEM UEM Universidade Estadual de Maringa (State University of Maringa, Brazil) UEM Universidade Eduardo Mondlane (Maputo, Mozambique) UEM Unione Economica e Monetaria ) in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. from 54% to approximately 78% as a result of a soon-to-be completed capital increase. -- Sylvan created an Online Higher Education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. division to broaden its leading presence in the fast-growing sector of post-secondary and adult continuing education continuing education: see adult education. continuing education or adult education Any form of learning provided for adults. In the U.S. the University of Wisconsin was the first academic institution to offer such programs (1904). delivered through distance learning. -- Paula Singer, a senior Sylvan executive since 1993 who has been serving as president of Sylvan's Education Solutions division, has been named president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the Online Higher Education division. Her management responsibilities for the new division include Canter canter a gallop at an easy pace. The rhythm is three-time, first one hind, then the opposite hind with the diagonal fore, then the opposite fore, the leading limb. collected canter , Sylvan Teachers Institute, OnlineLearning.net, and Sylvan Ventures' 41% interest in Walden University Walden University is a private, for-profit, specialized distance learning institution of higher learning. Headquartered in the Mills District in Minneapolis, Minnesota, Walden University embraces a post-baccalaureate educational system. . -- Summer enrollments in Canter's distance learning master's degree program increased 29% over the same period last year, fueling revenue growth of 28%. -- Wall Street Institute (WSI See wafer scale integration. ) reported that it has 400 center locations worldwide. Now operating in 23 countries, Wall Street Institute expects to open as many as 10 new center locations by the end of 2001. K-12 -- Sylvan Learning Centers added 11 new franchise locations and two new company-owned locations, bringing the total number of North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. franchise and company-owned locations to 784 and 89, respectively. -- Sylvan Learning Centers, through master franchisees, opened its first center locations in the United Kingdom and France. -- Sylvan Education Solutions named Jeffrey H. Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. president, with management responsibilities for Sylvan At School and Career Starters. Previously a Sylvan executive, and most recently senior vice president of Business Unit Management at Thomson Prometric, Mr. Cohen will take over duties previously handled by Ms. Singer. Sylvan Ventures -- Sylvan Ventures committed $2.5 million for approximately 30% ownership in EdVerify, an educational credential credential verb To determine or verify titles, qualifications, documents, completion of required training, and continuing education, in those persons who function in a professional or official capacity–eg, ER physician, neurosurgeon, etc. Cf Credentials. verification service. Sylvan Ventures also holds the option to increase its total ownership to 50% for an additional investment of $2.5 million. -- As of June 30, 2001, Sylvan Ventures has made funding commitments of $252 million, of which $209 million has been invested. Financial Results Total revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the second quarter of 2001 were $130.4 million, an increase of 59% compared to total revenues of $82.2 million in the second quarter of 2000. Total operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the quarter, excluding Sylvan Ventures and previously announced Caliber charges, was $18.2 million in the second quarter of 2001 compared to $8.3 million in the second quarter of 2000. Income from continuing operations after tax for the second quarter, excluding Sylvan Ventures and previously announced Caliber charges, was $9.7 million, or $0.23 per share on diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding of 45.5 million. This compares to $9.0 million (on a full-year tax rate basis), or $0.20 per share on diluted shares outstanding of 45.8 million for the same period in 2000. Growth at Sylvan Learning Centers, Sylvan Education Solutions and acquisitions at Sylvan International Universities drove operating results in the second quarter of 2001. For the quarter ended June 30, 2001, Sylvan reported a loss from continuing operations of $13.4 million (including $13.8 million of after tax losses associated with Sylvan Ventures and its portfolio companies and $9.4 million of after tax losses associated with the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of Caliber related receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and guarantee commitments). For the six month period ended June 30, 2001, total revenues from continuing operations were $250.8 million, an increase of 59% compared to total revenues of $157.8 million in the same period of 2000. Total operating income for the six month period, excluding Sylvan Ventures and previously announced Caliber charges, was $24.5 million compared to $14.6 million in the same period of 2000. For the six month period ended June 30, 2001, income from continuing operations after tax, excluding Sylvan Ventures and previously announced Caliber charges, was $13.6 million, or $0.34 per share on diluted shares outstanding of 45.3 million. This compares to $13.5 million, or $0.28 per share on diluted shares outstanding of 48.7 million for the same six month period in 2000. For the six month period ended June 30, 2001, Sylvan reported a loss from continuing operations (which includes $29.3 million of after tax losses associated with Sylvan Ventures and its portfolio companies and $9.4 million of after tax losses associated with the write-off of Caliber related receivables and guarantee commitments) of $25.0 million. Total cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has at the end of the second quarter 2001 stood at approximately $182 million, while total corporate debt stood at approximately $41 million, excluding the $100 million convertible debenture Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. . Douglas Becker Douglas Becker is a choreographer and teacher working in many idioms, including contemporary ballet and improvisation throughout Europe and the United States. A founding member and principal dancer of the Frankfurt Ballet, where he performed with distinction for over 10 years under , Chairman and CEO, commented, "We are proud to report on another quarter of outstanding growth, fueled by rapid expansion of our post-secondary businesses, and bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by our thriving thrive intr.v. thrived or throve , thrived or thriv·en , thriv·ing, thrives 1. To make steady progress; prosper. 2. K-12 operations. In post-secondary, we are very excited about the direction of enrollments and financial performance across the institutions that comprise Sylvan International Universities. At the same time, we are aggressively expanding our leadership position in adult continuing education delivered through distance learning by bringing together our existing online, post-secondary businesses to form the new Online Higher Education division." Mr. Becker continued, "In K-12, our Sylvan Learning Center and Sylvan Education Solutions divisions are benefiting from strong consumer demand and continued emphasis on school accountability by political leaders at the federal and state levels, who view supplemental education as an important component in raising the academic achievement of our children." Mr. Becker also stated, "This quarter's performance gives us confidence in achieving our 2001 goals. Therefore, we are raising our year-end 2001 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. guidance to $0.66 - $0.68 per share, from $0.63 - $0.65 per share, excluding Sylvan Ventures and previously announced Caliber charges." Third Quarter 2001 Outlook The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially. -- The Company anticipates total revenues of $98 to $105 million for the third quarter 2001. -- Third quarter 2001 operating income excluding Sylvan Ventures is expected to be $6.4 to $6.9 million. -- General and administrative expenses are expected to be approximately $6 million. -- The Company currently believes that it will achieve an EPS of $0.09 per share for third quarter of 2001 (excluding Sylvan Ventures). Sylvan Learning Group - Expects $61 to $66 million in revenue with approximately 16% operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: -- Sylvan Learning Centers expects revenues of $28 to $30 million with operating margins of approximately 22%. -- Sylvan Education Solutions anticipates revenues of $21 to $23 million with operating margins of approximately 20%. Included within Sylvan Education Solutions is Canter, which expects approximately 25% operating margins and revenues between $13 and $14 million. -- English Language English language, member of the West Germanic group of the Germanic subfamily of the Indo-European family of languages (see Germanic languages). Spoken by about 470 million people throughout the world, English is the official language of about 45 nations. Instruction revenues should range from $12 to $13 million with a break-even operating margin in the seasonally slow summer period. Sylvan International Universities (SIU SIU Southern Illinois University SIU Seafarers International Union SIU Special Investigations Unit SIU Schiller International University SIU Special Investigative Unit SIU Salem International University SIU Societá Italiana di Urologia ) - Anticipates $37 to $39 million in revenue, with operating margins of approximately 4%, in the seasonally slow summer period. Note on Presentation of Sylvan Learning Systems, Inc. Financial Results For purposes of this and all earnings announcements, Sylvan Learning Systems, Inc. reports on the financial results of its operating businesses (including its Sylvan Learning Center, Sylvan Education Solutions, Wall Street Institute and Sylvan International Universities units). Additionally, the Company reports on the impact of operating costs operating costs npl → gastos mpl operacionales and flow-through losses from its investment arm, Sylvan Ventures, and Sylvan Ventures' portfolio companies. Sylvan Learning Systems, Inc. and Apollo Management Apollo Management L.P. is a private equity L.P. firm, founded in 1990 by Leon Black (Apollo Advisors). Based in New York, it also has offices in Los Angeles and London. It has invested over $16 billion in companies inside and outside the of the United States. , LLP LLP - Lower Layer Protocol committed a total of $400 million to form Sylvan Ventures, with the express purpose of investing in start-up Start-up The earliest stage of a new business venture. and early-stage companies that offer emerging technology and Internet-based solutions to the education and training marketplace. It is characteristic of these early-stage companies to generate losses. Sylvan Learning Systems, Inc. is required to include its proportionate pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. share of these losses in its financial results. Forward Looking Statements This release includes information that could constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Any such forward-looking statements may involve risk and uncertainties. Political, economic, currency, tax, regulatory, technological, competitive and other factors could cause actual results to differ materially from those anticipated in the forward-looking statements. 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 Investor relations The process by which the corporation communicates with its investors. ," "SEC Filings"). Sylvan Learning Systems, Inc. (www.sylvan.net) is the leading provider of education services to families and schools worldwide. The Sylvan Learning Centers and Sylvan Education Solutions divisions provide personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. instruction services to K-12 students through direct consumer relationships and under contract to school systems. Sylvan provides courses to adult students throughout the world in the areas of teacher training, accredited accredited recognition by an appropriate authority that the performance of a particular institution has satisfied a prestated set of criteria. accredited herds cattle herds which have achieved a low level of reactors to, e.g. university offerings, and English language, through the Online Higher Education, Sylvan International Universities and Wall Street Institute businesses. Sylvan International Universities is pioneering the largest and most ambitious network of post-secondary education institutions worldwide. Sylvan Ventures, Sylvan's e-learning investment vehicle, focuses on bringing emerging Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the technology solutions to the education and training marketplace. TABLE FOLLOWS
Sylvan Learning Systems, Inc. & Subsidiaries
Consolidated Income Statements
Actual to Prior Period Actual Comparison
3 and 6 Months Ended June 30, 2001
(Amounts in Thousands)
Three Months Ended June 30,
-----------------------------------
2001 2000 % Variance
--------- --------- ---------
Revenues
Franchise Services $ 9,993 $ 9,019 11%
Company-owned Learning
Centers 16,726 12,994 29%
International 4,199 4,071 3%
--------- --------- ---------
Learning Centers total 30,918 26,084 19%
--------- --------- ---------
Sylvan At School 19,215 18,114 6%
Career Starters 1,733 792 119%
Canter 13,281 11,202 19%
--------- --------- ---------
Education Solutions total 34,229 30,108 14%
--------- --------- ---------
English Language Instruction
total 12,492 12,129 3%
--------- --------- ---------
Universidad Europea de
Madrid 15,136 13,905 9%
Les Roche 3,240 0 NA
Chile 7,522 0 NA
UVM 26,858 0 NA
--------- --------- ---------
International Universities
total 52,756 13,905 (GT)200%
--------- --------- ---------
Total Revenues 130,395 82,226 59%
Operating Expenses
Divisional Operating
Expenses 106,334 69,395 53%
General & Administrative 5,901 4,566 29%
--------- --------- ---------
Total Operating Expenses 112,235 73,961 52%
Operating Income 18,160 8,265 120%
Non-Operating items
Interest & Other Income 1,409 6,508 -78%
Loss on investment in
Caliber (14,231) 0 NA
Interest Expense (2,434) (752) (LT)-200%
Equity losses in Affiliates
of Sylvan (137) (282) 51%
Minority Interest (2,600) (315) (LT)-200%
Exchange Gain/(Loss) 328 317 3%
--------- --------- ---------
Total Non-Operating items (17,665) 5,476 (LT)-200%
--------- --------- ---------
Pretax Income (Loss) before
Sylvan Ventures 495 13,741 -96%
Income Tax (168) (4,697) 96%
Sylvan's Interest in Sylvan
Ventures (13,761) (2,419) (LT)-200%
--------- --------- ---------
Income (loss) from Continuing
Operations (13,434) 6,625 (LT)-200%
--------- --------- ---------
Discontinued Operations:
Income/(loss) from
operations of discontinued
operations, net of tax 0 (1,956) 100%
Gain (loss) on disposal of
discontinued operations,
after tax 0 0 0%
--------- --------- ---------
Net Income (loss) $ (13,434) $ 4,669 (LT)-200%
========= ========= =========
Earnings Per Share
Weighted Average Shares -
Basic 37,877 45,110
Weighted Average Shares -
Diluted 37,877 45,110
EPS -Net Income (loss) $ (0.35) $ 0.10
EPS-Continuing Operations $ (0.35) $ 0.15
EPS-Operations Prior to
Sylvan Ventures & Caliber
loss $ 0.23 $ 0.20
Weighted Average Shares Used
in Calculation 45,511 45,825
Operating Profit:
Learning Centers $ 8,967 $ 6,429 39%
Education Solutions $ 7,748 $ 5,913 31%
English Language $ 373 $ 385 -3%
Interational Universities $ 6,973 $ 104 (GT)200%
Six Months Ended June 30,
------------------------------------
2001 2000 % Variance
--------- --------- ----------
Revenues
Franchise Services $ 19,102 $ 16,615 15%
Company-owned Learning
Centers 31,441 24,108 30%
International 8,217 8,020 2%
--------- --------- ---------
Learning Centers total 58,760 48,743 21%
--------- --------- ---------
Sylvan At School 39,022 37,948 3%
Career Starters 3,539 1,595 122%
Canter 18,438 16,510 12%
--------- --------- ---------
Education Solutions total 60,999 56,053 9%
--------- --------- ---------
English Language
Instruction total 25,508 24,564 4%
--------- --------- ---------
Universidad Europea
de Madrid 31,199 28,406 10%
Les Roche 6,585 0 NA
Chile 10,251 0 NA
UVM 57,539 0 NA
--------- --------- ---------
International Universities
total 105,574 28,406 (GT)200%
--------- --------- ---------
Total Revenues 250,841 157,766 59%
Operating Expenses
Divisional Operating Expenses 214,409 133,823 60%
General & Administrative 11,887 9,367 27%
--------- --------- ---------
Total Operating Expenses 226,296 143,190 58%
Operating Income 24,545 14,576 68%
Non-Operating items
Interest & Other Income 4,541 9,229 -51%
Loss on investment in Caliber (14,231) 0 NA
Interest Expense (4,663) (2,670) -75%
Equity losses in Affiliates
of Sylvan (263) (878) 70%
Minority Interest (4,017) (1,066) (LT)-200%
Exchange Gain/(Loss) 520 415 25%
--------- --------- ---------
Total Non-Operating items (18,113) 5,030 (LT)-200%
--------- --------- ---------
Pretax Income (Loss) before
Sylvan Ventures 6,432 19,606 -67%
Income Tax (2,187) (6,155) 64%
Sylvan's Interest in Sylvan
Ventures (29,264) (3,416) (LT)-200%
--------- --------- ---------
Income (loss) from Continuing
Operations (25,019) 10,035 (LT)-200%
--------- --------- ---------
Discontinued Operations:
Income/(loss) from operations
of discontinued operations,
net of tax 0 (5,824) 100%
Gain (loss) on disposal of
discontinued operations,
after tax 0 288,454 -100%
--------- --------- ---------
Net Income (loss) $ (25,019) $ 292,665 -109%
========= ========= =========
Earnings Per Share
Weighted Average
Shares - Basic 37,665 47,955
Weighted Average
Shares - Diluted 37,665 47,955
EPS -Net Income (loss) $ (0.66) $ 6.10
EPS-Continuing
Operations $ (0.66) $ 0.21
EPS-Operations Prior to
Sylvan Ventures &
Caliber loss $ 0.34 $ 0.28
Weighted Average Shares
Used in Calculation 45,289 48,697
Operating Profit:
Learning Centers $ 14,657 $ 11,431 28%
Education Solutions $ 9,422 $ 7,780 21%
English Language $ 1,061 $ 1,943 -45%
Interational Universities $ 11,292 $ 2,789 (GT)200%
--------------------------
(GT) = Greater Than
(LT) = Less Than
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