Laureate Education Announces New $100 Million Share Repurchase Program

Rhea-AI Summary

Laureate Education (NASDAQ: LAUR) has announced a new $100 million share repurchase program, approved by its board of directors. This follows the completion of a previous $100 million repurchase program announced in February 2024. The company plans to finance these repurchases using free cash flow, excess cash, and available credit.

Since early 2019, Laureate has returned nearly $3 billion to shareholders through various capital return initiatives. The new repurchases may be executed through open market transactions, private negotiations, or block trades, subject to market conditions and regulations. A Rule 10b5-1 trading plan may be implemented for these repurchases.

Positive

• New $100 million share repurchase program approved
• Completion of previous $100 million repurchase program
• Nearly $3 billion returned to shareholders since 2019
• Multiple financing options available for repurchases
• Flexibility in repurchase methods (open market, private negotiations, block trades)

Negative

• Potential reduction in cash reserves or increased debt to finance repurchases
• Possible opportunity cost of capital that could be used for growth initiatives

Insights

Financial Analyst

Laureate Education's new $100 million share repurchase program signals strong confidence in the company's financial health and future prospects. This move, following the completion of a previous $100 million program, demonstrates a consistent commitment to returning value to shareholders. The total capital return of nearly $3 billion since 2019 is substantial, indicating robust cash flow generation.

The flexibility in repurchase methods, including open market, private transactions and block trades, allows for strategic execution. The use of free cash flow and existing liquidity for financing suggests a balanced approach to capital allocation. However, investors should monitor the impact on the company's cash reserves and debt levels, particularly if the Revolving Credit Facility is utilized extensively.

Market Research Analyst

This repurchase program could have several market implications. Firstly, it may provide support for the stock price by reducing the number of outstanding shares, potentially increasing earnings per share. The program's size, relative to Laureate's market cap, could significantly impact stock liquidity and trading dynamics.

Interestingly, the education sector has faced challenges recently, making this move a potential vote of confidence in Laureate's business model. It may also signal that management believes the stock is undervalued. However, investors should consider whether this capital could be better utilized for growth initiatives or debt reduction in the current economic climate.

Corporate Governance Expert

The board's decision to implement another repurchase program reflects a shareholder-friendly approach to capital management. The periodic review clause demonstrates good governance practices, allowing for adjustments based on market conditions and company performance.

The use of Rule 10b5-1 trading plans is a prudent measure to avoid potential insider trading concerns. However, shareholders should remain vigilant about the balance between returning capital and reinvesting in the business for long-term growth. The substantial capital return since 2019 raises questions about the company's growth opportunities and whether this strategy is sustainable in the long run without compromising future competitiveness.

MIAMI, Sept. 13, 2024 (GLOBE NEWSWIRE) -- Laureate Education, Inc. (NASDAQ: LAUR) (the “Company”) announced that its board of directors has approved a new stock repurchase program to acquire up to $100 million of the Company’s common stock. The Company intends to finance the repurchases with free cash flow, excess cash and liquidity on-hand, including available capacity under its Revolving Credit Facility. The Company has completed the $100 million repurchase program that had previously been announced in February 2024. After giving effect to this new authorization, the Company will have returned nearly $3 billion of capital to shareholders since the beginning of 2019 through a combination of share repurchases, cash distributions and cash dividends.

The Company’s proposed repurchases may be made from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Repurchases may be effectuated pursuant to a trading plan adopted in accordance with Rule 10b5-1 under the Exchange Act. The Company’s board will review the share repurchase program periodically and may authorize adjustments to its terms and size or suspend or discontinue the program.

Forward-Looking Statements
This press release includes certain statements which contain "forward-looking statements" within the meaning of the federal securities laws, which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates" or "anticipates" or similar expressions that concern our strategy, plans or intentions. In particular, statements regarding the impact of the forward-looking statements are based on the Company's current expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from our expectations are disclosed in our Annual Report on Form 10-K filed with the SEC on February 22, 2024, our subsequent Quarterly Reports on Form 10-Q filed and to be filed with the SEC and other filings made with the SEC.

About Laureate Education, Inc.
Laureate Education, Inc. operates five higher education institutions across Mexico and Peru, enrolling approximately 450,000 students in high-quality undergraduate, graduate, and specialized degree programs through campus-based and online learning. Our universities have a deep commitment to academic quality and innovation, strive for market-leading employability outcomes, and work to make higher education more accessible. At Laureate, we know that when our students succeed, countries prosper, and societies benefit. Learn more at laureate.net.

Investor Relations Contact:
ir@laureate.net

Media Contact:
Adam Smith
Laureate Education, Inc.
adam.smith@laureate.net
U.S.: +1 (443) 255 0724

FAQ

What is the size of Laureate Education's new share repurchase program?

Laureate Education (LAUR) has announced a new $100 million share repurchase program.

How does Laureate Education plan to finance the share repurchases?

LAUR intends to finance the repurchases using free cash flow, excess cash, liquidity on-hand, and available capacity under its Revolving Credit Facility.

How much capital has Laureate Education returned to shareholders since 2019?

Laureate Education (LAUR) has returned nearly $3 billion of capital to shareholders since the beginning of 2019 through share repurchases, cash distributions, and cash dividends.

When did Laureate Education complete its previous share repurchase program?

Laureate Education (LAUR) completed its previous $100 million repurchase program that was announced in February 2024.

How will Laureate Education execute the new share repurchases?

LAUR may execute repurchases through open market transactions, privately negotiated transactions, block trades, or other legally permissible means, depending on market conditions and regulations.