Laureate Education, Inc.

Good day and thank you for standing by. Welcome to the first quarter 2021 Laureate Education Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then 1 on your telephone keypad. Please be advised that today's conference may be recorded. If you require any further assistance, please press star then 0 to reach an operator. I'd now like to hand the conference over to your host today, Mr. Adam Morse, Senior Vice President of Finance.

Good morning, and thank you for joining us on today's call to discuss Lardy Education's first quarter 2021 results. Joining me on the call today are Ilef Sircanson, President and Chief Executive Officer, and Rick Buskirk, Chief Financial Officer. Our earnings press release is available on the Investor Relations section of our website, at laureate.net. We have also posted a supplementary presentation to the website, which we will be referring to during today's call. The call is being webcast, and a complete recording will be available after the call. I'd like to remind you that some of the information we're providing today, including but not limited to our financial and operational guidance, constitutes forward-looking statements within the meaning of applicable U.S. securities laws. Forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected. Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K, followed with the U.S. Securities and Exchange Commission, our 10-Q, filed earlier this morning, as well as other filings made with the SEC. In addition, all forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements. Additionally, non-debt measures that we discuss, including, among others, adjusted EBITDA and its related margin, total debt net of cash, and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation. With that, let me turn the call over to Eilidh.

Thank you, Adam, and good morning, everyone. Having just completed our primary enrollment intake in Peru, I am pleased to report that 2021 is off to a good start. We experienced a return to growth in Peru with new enrollments increasing 11 percent year-over-year on a comparable basis in that market, and with 5 percent new enrollment growth overall for our continuing operations. Our first quarter results were ahead of expectations and very encouraging. We are optimistic on the outlook for the year, although we acknowledge continued uncertainties from the pandemic and recent weakness in APEX rates. In both Mexico and Peru, vaccinations are lagging well behind the United States, with less than 5 percent of the population having been fully vaccinated. And the general macro conditions have not yet experienced the pace of recovery that we have seen in the U.S. In Mexico, our large new enrollment intake cycle will occur in September. It is too early as of today to have a firm read on that intake, but we will have a better indication by the time we report second quarter results. Therefore, we are maintaining our previously issued full year 2021 guidance and 2022 outlook and plan to revisit our guidance as the September intake progresses. The robust performance during the primary intake in Peru, despite the continued challenges from the pandemic, highlights the strong value proposition to our students and the quality of our offerings. During the first quarter, we received some additional recognitions for our institutions, including in Peru, according to a survey conducted by Ipsos, UPC was recognized as the number one university brand in terms of top of mind, spontaneous awareness, consideration, and first option by high school seniors. And in Mexico, despite the pandemic, both our brands gained market share during 2020, which reflects our strong brand positions and leadership in digital learning. Let me now take a minute to provide an update on our strategic review process. In the month of March, we completed the divestiture of our operations in Honduras. Pending divestiture transactions as of today include our operations in Brazil and Walden University. Total net proceeds from these pending transactions is approximately $1.95 billion. Last week, the Brazilian Antitrust Authority published its approval recommendation without restrictions. We expect final approval by the CAGI commissioners shortly, and we anticipate that this sale will be closed by the end of May. The Walton University transaction is anticipated to close during the second half of this year. Last week, the Department of Justice inquiry was resolved when we received notice that the Department of Justice formally decided not to intervene in a civil third-party complaint against Walden. We have immense pride in Walden, its program quality, and the student outcomes, and we are pleased to now be able to move forward. Consistent with our prior discussions on use of proceeds, we continue to repay debt and return capital to shareholders as transactions are completed. Earlier this week, following the step down of the core premium, we redeemed 500 million of our eight and a quarter percent senior notes. We plan to retire the remaining balance of the notes once the Brazil sale transaction closes. In addition, I am pleased to report that our board has approved an expansion of our stock repurchase plan by an additional $200 million, bringing the total authorization to $500 million. Since beginning the plan in November, we have repurchased approximately $250 million worth of stock. We continue to believe that returning capital to shareholders through stock buyback is very accretive use of capital for our investors given the significant discount of our stock price versus the intrinsic value of the individual institutions in our portfolio. That concludes the opening remarks. But before discussing our detailed financial overview of the first quarter, I would like to welcome Rick Buskirk, our newly appointed chief financial officer to the call. Rick previously served as our Senior Vice President of Corporate Development and played an integral role in managing our portfolio optimization strategies. Rick has been with L'Oréal for over five years, and prior to joining the company, he held senior positions in the telecom industry, investment banking, and one of the big four accounting firms. Welcome, Rick, and over to you for the financial overview and guidance outlook.