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Corinthian Colleges Reports Second Quarter 2013 Results

During the second quarter ended December 31, 2012, we received an investigative subpoena from the California Attorney General which requires the production of a broad range of documents and other items related to cohort default rates, placement and completion data, marketing, admissions, enrollment and financial aid processes, and other matters. The subpoena appears to be part of a broader investigation of the for-profit education industry in California. On January 11, 2013, we received a request from the Wisconsin Attorney General, requiring the production of information related to the Everest Milwaukee campus, including student outcomes, employers and externships, enrollment processes, financial aid, and marketing. Our Milwaukee campus was placed in discontinued operations as of December 31, 2012. We expect to provide reasonable cooperation in responding to both of these Attorneys General.

Guidance

The following guidance is for continuing operations and excludes any one-time charges.

 
Time Period Revenue Diluted EPS Total New Student Growth Non-ATB   New Student Growth
Q3 13 $400 - $410 million $0.04 - $0.06 (4-6%) 1-3%

Conference Call Today

We will host a conference call today at 12:00 p.m. Eastern Time (9:00 a.m. PT), to discuss second quarter results. The call will be open to all interested investors through a live audio web cast at www.cci.edu (Investors/Events & Presentations.) The call will be archived on www.cci.edu after the call. A telephonic playback of the conference call will also be available through 11:00 p.m. PT, Wednesday, February 6th. The playback can be reached by dialing (855) 859-2056 and using passcode 82915219.

About Corinthian Colleges

Corinthian is one of the largest post-secondary education companies in North America. Our mission is to change students' lives. We offer diploma and degree programs that prepare students for careers in demand or for advancement in their chosen fields. Our program areas include health care, business, criminal justice, transportation technology and maintenance, construction trades and information technology. We have 113 Everest, Heald and WyoTech campuses, and also offer degrees online. For more information, go to http://www.cci.edu.

The Corinthian Colleges, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8848

Certain statements in this press release may be deemed to be forward-looking statements under the Private Securities Litigation Reform Act of 1995. The company intends that all such statements be subject to the "safe-harbor" provisions of that Act. Such statements include, but are not limited to, those regarding our belief that reduced tuition for several programs and lower interest rates on third-party loans has made or will make our programs more affordable and attractive to prospective students; our belief that launching new diploma programs in ground schools and offering free GED preparation programs at some Everest campuses will help increase enrollment; our expectation that some portion of successful GED completers will enroll at Everest or other post-secondary institutions; our expected return to growth in Online Learning; overall enrollment growth or declines in future periods; our ability to manage student outcomes and improve the student value proposition; and the statements under the heading "Guidance" above. Many factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements or elsewhere, including: potential negative effects from the loss of ATB students; the uncertain outcome of ED's determination related to our financial responsibility composite score; ED's possible responses to a U.S. District Court ruling that invalidated its gainful employment rule, which could change the manner in which we conduct our business; the company's effectiveness in its regulatory and accreditation compliance efforts; the outcome of ongoing reviews and inquiries by accrediting, state and federal agencies, including state attorneys general; the outcome of pending litigation against the company; risks associated with variability in the expense and effectiveness of the company's advertising and promotional efforts; potential increased competition; changes in general macroeconomic and market conditions (including credit and labor market conditions, the unemployment rate, and the rates of change of each such item); and the other risks and uncertainties described in the company's filings with the U.S. Securities and Exchange Commission. The historical results achieved by the company are not necessarily indicative of its future prospects. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Corinthian Colleges, Inc. 
(in thousands, except per share data)
         
         
Consolidated Statements of Operations  (unaudited)        
  For the three months ended For the six months ended
  December 31, December 31,
  2012 2011 2012 2011
         
Net revenues  $ 409,720  $ 392,111  $ 816,110  $ 783,432
Operating expenses        
Educational services 251,482 236,271 500,075 480,378
General and administrative 42,284 45,826 85,233 91,925
Marketing and admissions 101,818 96,604 201,202 194,239
Impairment, facility closing and severance charges 2,718 760 11,943
Total operating expenses 395,584 381,419 787,270 778,485
Income from operations 14,136 10,692 28,840 4,947
Interest income 162 745 365 904
Interest expense (1,213) (2,804) (2,505) (5,381)
Other expense, net (6,163) (2,207) (10,409) (3,150)
Income (loss) from continuing operations before        
Provision (benefit) for income taxes  6,922  6,426  16,291  (2,680)
Provision (benefit) for income taxes 2,669 2,522 6,321 (1,309)
Income (loss) from continuing operations 4,253 3,904 9,970 (1,371)
Loss from discontinued operations, net of tax (4,321) (2,110) (8,459) (6,471)
Net income (loss) $ (68) $ 1,794 $ 1,511 $ (7,842)
Income (loss) per share—basic        
Income (loss) from continuing operations  $ 0.05  $ 0.05  $ 0.12 $ (0.02)
Loss from discontinued operations $ (0.05) $ (0.03) $ (0.10) $ (0.07)
Income (loss) per share—diluted        
Income (loss) income from continuing operations  $ 0.05  $ 0.05  $ 0.12 $ (0.02)
Loss from discontinued operations $ (0.05) $ (0.03) $ (0.10) $ (0.07)
Weighted average number of common shares outstanding        
Basic 85,797 84,868 85,641 84,838
Diluted 86,548 85,222 86,363 84,838
         
Selected Consolidated Balance Sheet Data (unaudited)        
  December 31, June 30,    
  2012 2012    
         
Cash and cash equivalents  $ 43,633  $ 72,525    
Receivables, net (including long term notes receivable)  $ 173,320  $ 197,763    
Current assets  $ 289,878  $ 356,345    
Total assets  $ 996,259  $ 1,064,513    
Current liabilities  $ 313,510  $ 284,154    
Total debt and capital leases  $ 47,121  $ 148,974    
Total liabilities  $ 426,840  $ 499,598    
Total stockholders' equity  $ 569,419  $ 564,915    
CONTACT: Investors:
         Anna Marie Dunlap
         SVP Investor Relations
         714-424-2678
         
         Media:
         Kent Jenkins
         VP Public Affairs Communications
         202-682-9494

Corinthian Colleges, Inc. Logo

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