Laureate Education(LAUR) - 2023 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The company reported increased revenue and a reduced net loss for Q1 2023, though net cash from operations declined Consolidated Statements of Operations Highlights (Q1 2023 vs Q1 2022) | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | | :--- | :--- | :--- | | Revenues | $251,255 | $209,563 | | Operating income | $15,629 | $9,034 | | Loss from continuing operations | $(26,748) | $(45,415) | | Net loss | $(26,762) | $(44,680) | | Net loss attributable to Laureate | $(26,607) | $(44,211) | | Basic and diluted loss per share | $(0.17) | $(0.25) | Consolidated Balance Sheet Highlights (As of March 31, 2023) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $130,636 | $85,167 | | Total current assets | $279,388 | $226,199 | | Total assets | $2,095,474 | $1,972,237 | | Total current liabilities | $407,776 | $381,387 | | Total liabilities | $1,273,144 | $1,196,482 | | Total stockholders' equity | $820,932 | $774,357 | Consolidated Statements of Cash Flows Highlights (Q1 2023 vs Q1 2022) | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $26,469 | $53,877 | | Net cash (used in) provided by investing activities | $(5,579) | $7,938 | | Net cash provided by (used in) financing activities | $21,144 | $(104,138) | | Net change in Cash and cash equivalents | $45,496 | $(31,133) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue growth was driven by higher enrollment and favorable currency exchange, while liquidity remains sufficient Overview The company operates five higher education institutions in Mexico and Peru with a seasonal business model - The company operates a portfolio of five degree-granting higher education institutions in Mexico and Peru, with a total enrollment of approximately 437,900 students as of March 31, 2023[71][75] - The business experiences seasonality, with the second and fourth quarters being stronger revenue periods, while the first and third quarters are weaker but coincide with primary enrollment intakes[84] Segment Overview (as of March 31, 2023) | Segment | Institutions | Enrollment | YTD Revenues ($ in millions) | % Contribution to YTD Revenues | | :--- | :--- | :--- | :--- | :--- | | Mexico | 2 | 213,900 | $182.0 | 72% | | Peru | 3 | 224,000 | $69.2 | 28% | | Total | 5 | 437,900 | $251.3 | 100% | Results of Operations Q1 2023 revenue and operating income increased, driven by strong performance in the Mexico segment - Q1 2023 revenue increased by $41.7 million year-over-year, driven by higher organic enrollment, favorable foreign currency exchange rates, and improved pricing[90] - The Mexico segment's revenue grew 28% to $182.0 million, and its Adjusted EBITDA increased 32% to $48.9 million, driven by an 11% increase in organic enrollment[101][102][104] - The Peru segment's revenue grew 6% to $69.2 million, but its Adjusted EBITDA decreased to a loss of $(6.5) million due to return-to-campus expenses[101][106][107] Adjusted EBITDA Reconciliation (Q1 2023 vs Q1 2022) | (in millions) | 2023 | 2022 | | :--- | :--- | :--- | | Loss from continuing operations | $(26.7) | $(45.4) | | Operating income | $15.6 | $9.0 | | EBITDA | $32.3 | $23.4 | | Adjusted EBITDA | $33.5 | $27.2 | Liquidity and Capital Resources Liquidity is supported by cash flow and a credit facility, though operating cash flow decreased due to higher tax payments - Primary liquidity sources are cash flow from operations and a $410.0 million Senior Secured Credit Facility, which had an outstanding balance of $138.0 million as of March 31, 2023[112][115] - As of March 31, 2023, total cash and cash equivalents were $130.6 million, with $119.2 million held by foreign subsidiaries[114][118] - Cash provided by operating activities decreased by $27.4 million year-over-year, primarily due to a $35.0 million increase in cash paid for taxes[127] - Cash flow from financing activities was a $21.1 million inflow, a significant shift from a $104.1 million outflow in Q1 2022, which included $102.2 million in stock repurchases[129] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no significant changes in its market risk exposures since year-end 2022 - There have been no significant changes in the company's market risk exposures since its December 31, 2022 fiscal year end[132] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that as of the end of Q1 2023, the company's disclosure controls and procedures were effective[133] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[134] PART II - OTHER INFORMATION Item 1. Legal Proceedings No new material legal proceedings or developments have occurred since the last annual report - There have been no new material legal proceedings and no material developments in previously disclosed legal proceedings[136] Item 1A. Risk Factors No material changes to previously disclosed risk factors were reported - No material changes have been made to the risk factors previously disclosed in the 2022 Form 10-K[137] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q report