Sylvan Learning Systems Inc. said yesterday that its revenue in the fourth quarter rose 30 percent, although the company still reported a loss.
Revenue from continuing operations for the Baltimore-based education services company rose to $98.9 million in the quarter that ended Dec. 31, up from $76.2 million the year before.
The company lost $8.3 million, or 22 cents per share, from continuing operations in the quarter, a loss due to its venture capital subsidiary Sylvan Ventures.
In the fourth quarter the previous year, the company lost $17.2 million, or 34 cents per share.
Sylvan Ventures was launched a year ago to invest in technology-based education companies. Some are start-ups that typically post losses the first year or two, which are then passed to Sylvan Ventures based on its percentage of ownership, said Trace Urdan, an analyst with WR Hambrecht + Co. in San Francisco.
Excluding Sylvan Ventures, the parent company's quarterly income from continuing operations was $7 million, or 18 cents per share.
Analysts had expected fourth-quarter earnings of 16 cents per share, without Sylvan Ventures, the company said.
There were 44.4 million shares outstanding in the fourth quarter, compared with 50.9 million the year before.
"It was a very strong quarter; it was blemish-free," Urdan said. "They have so many different businesses that it's rare they get to report that every single one is firing on all cylinders."
For the year, Sylvan lost $1.6 million, or 4 cents per share, from continuing operations on revenue of $316.7 million. Excluding Sylvan Ventures, the company's income from operations reached $23.6 million, or 53 cents per share.
In 1999, Sylvan's earnings from continuing operations totaled $8.3 million, or 16 cents per share, on $277.1 million in revenue.
Sylvan's stock yesterday rose 94 cents to $21.06 per share.
In a conference call yesterday, Chief Executive Officer Douglas Becker discussed the company's transformation since late 1999, an effort he said was undertaken to attract those investors who have had difficulty understanding Sylvan's complex businesses.
Sylvan began by shedding some of its business-to-business ventures to focus more on the consumer market.
It sold PACE, a corporate training business, in December 1999. Last year, Sylvan sold Prometric Inc., a computer-based testing company, for $775 million and Aspect Inc., an English-instruction subsidiary, for $22 million.
Sylvan also boosted its post-secondary business last year. For instance, Sylvan International Universities division in the fourth quarter acquired a hotel management school in Switzerland and controlling interest in universities in Mexico and Chile.
Early this month, Sylvan Ventures said it agreed to invest $32.8 million in Walden University in exchange for a 41 percent stake in the Minneapolis-based distance-learning college.
"If last year was a transitional year for us, this year is a growth year," Becker said. "This is the year Sylvan is emerging from its cocoon."
The company expects to earn 63 cents to 65 cents per share this year, excluding Sylvan Ventures. Revenue is expected to reach $475 million to $490 million this year.
