Sylvan's second-quarter earnings set record

$11.4 million tops analysts' predictions

July 23, 1999|By Amanda J. Crawford | Amanda J. Crawford,SUN STAFF

Sylvan Learning Systems Inc. reported yesterday record earnings of $11.4 million, or 21 cents a share, for the second quarter, slightly better than analysts' predictions.

For the same quarter of last year, the Baltimore educational and testing services consultant reported a net loss of $1.5 million, or 3 cents a diluted share, which included a one-time charge of $8.9 million relating to an acquisition.

Net revenue for the three months that ended June 30 increased 49 percent, to $148.5 million from $99.3 million, in the second quarter last year.

"It was an extremely positive quarter," said Lee McGee, executive vice president and chief financial officer. "All of the businesses within our company were performing very well, with few minor exceptions."

McGee said the company's computer-based testing division, which includes the Graduate Record Examination and testing for the National Board of Medical Examiners, was one of the strongest producers, with a revenue increase of $24.3 million, to $82.5 million, compared with the same period last year.

Although the earnings for the quarter exceeded analysts' predictions of 20 cents a share, shares of Sylvan closed yesterday at $24.75, down $2.4375.

"I think it was a terrific quarter for the company, despite what the stock market seems to be saying," said Scott Soffen, an education analyst with Legg Mason Wood Walker.

"They do have a very aggressive growth strategy and management has shown an ability to execute that strategy."

The recent acquisition of Universidad Europea de Madrid, a private, for-profit university in Spain, accounted for $14.7 million in revenue for the quarter. Schulerhilfe, a German tutorial business acquired in October, accounted for $3.9 million in revenue.

Excluding the revenue from these acquisitions, the company's revenue was 31 percent higher than it was last year.

McGee said the company plans to continue exploring the post-secondary education market outside the United States, particularly in Latin America, Europe and Asia, and intends to acquire three to five additional institutions within two to three years.

Soffen said the expansion into international post-secondary education could prove lucrative for the company.

"The post-secondary education market is vastly under-served outside the U.S., and Sylvan is the first corporation that is going to actively pursue that market."

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.