Career Education Corporation (NASDAQ: CECO) today reported operating and financial results for the fourth quarter of 2013, posting its fourth consecutive quarter of sequential improvement in the decline of new enrollments and total enrollment across its family of ongoing schools.
Non-financial metrics indicating positive trends for the fourth quarter of 2013 as compared to fourth quarter of 2012, excluding Transitional Schools, include:
- New student enrollment growth for CTU (4%), Health Education (21%) and Design & Technology (12%),
- a 49% improvement in the rate at which we convert a prospective student to a new student enrollment, cumulatively reflecting improvement across all segments,
- higher student applications across all segments with a 38% overall improvement,
- slight improvement in retention rates, and
- a 2.1% decline in new student acquisition costs.
“We continue to make solid operational progress in the turnaround of the Company,” said President and CEO Scott W. Steffey. “We had new student enrollment growth in the last part of the fourth quarter at CTU, Design & Technology, and Health Education and the early results in 2014 are encouraging, which I will speak to in more detail on the earnings call. Furthermore, we expect Culinary Arts’ total enrollments to improve as we mark the one year anniversary, in April, of the re-introduction of the associates program.”
The Company disclosed that operating expenses dropped by $59.0 million in the fourth quarter and by more than $200.0 million for the full year (excluding significant items disclosed in the non-GAAP reconciliation referred to below). Net cash used in operating activities dropped to $8.0 million in the fourth quarter versus $10.9 million in the third quarter and $52.8 million in the second quarter.
“We significantly reduced operating expenses, completed the sale of our International operations and continued winding down campuses in our Transitional Schools segment during 2013,” said Steffey. “There is still more room for operating expense reduction in 2014, without negatively impacting our improving results, over and above the Transitional School closures.”