Career Education Corporation ( CECO) Q4 2011 & Year End Earnings Call February 28, 2011 10:00 am ET Executives John Springer – Vice President Strategy & Investor Relations Steven H. Lesnik – Chairman of the Board, President & Chief Executive Officer Michael J. Graham – Chief Financial Officer & Executive Vice President Analyst Gary Bisbee – Barclays Capital Robert Craig – Stifel Nicolaus & Company, Inc. Jeff Mueller – Robert W. Baird & Company Suzanne Stein – Morgan Stanley Jeff M. Silber – BMO Capital Markets Corey Greendale – First Analysis Trace Urdan – Wunderlich Securities, Inc. James Samford – Citi Patrick Elgrably – Credit Suisse Analyst for Peter Appert – Piper Jaffray Presentation Operator
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Except as expressly required by the Securities’ laws, we undertake no obligation to update those risk factors or to publically announce the results of any of these forward-looking statements to reflect future events, developments, or changed circumstances, or for any other reason.Now, let me turn the call over to Steve Lesnik. Steven H. Lesnik It’s been an eventful four months since I arrived and I can assure you of that with some authority. 2011 was a challenging year for post secondary education, some might say a watershed year. I myself, have been heavily involved in higher education for more than 25 years and there are unprecedented challenges in front of both public non-profit and public sector institutions. Today, we all to one degree or another, face a challenging landscape in post secondary education whether it be a shrinking of tax payer dollars available to public sector schools or regulatory change aimed at private sector schools. These restrictive developments are occurring even though the need for post secondary educated students in our country has never been higher and never been more out of reach for so many. We are responding to these industry wide challenges. During the year we undertook initiatives across the company to adapt as did our peers. Nevertheless, the downward pressures on student population, revenues, and margins for everyone, was readily apparent and we were no exception. Our Career Ed institutions also faced some unique challenges in 2011 leading to my arrival here in November with a clear set of priorities to immediately address. This morning I’d like to cover a few of those priorities with you. Then I’ll turn the call over to Mike Graham, who you all know, who will talk about our current business metrics, trends, and indicators. The priorities the board and I have adopted that I am going to provide you with an update of our progress on is as follows: first, ameliorate the current legal, accreditation, and regulatory issues facing us when I arrived; second, establish a clear strategic path for the company; and third, address where we are regarding leadership of the company and our institutions.
Even before we get to those priorities, let me share with you the core cultural value we have emphasized throughout the organization. It is a simple thought, students first. Every decision we make now goes through the filter of how it impacts our students from the moment they consider us for enrollment until the day they graduate and even beyond as they progress in their careers. That idea permeates every action we take.Now, let’s talk about the external issues that we face today. You all know we, along with a number of other companies, received a subpoena from the New York Attorney General’s Office last year. Discussion between the AG’s office and ourselves are ongoing and we continue to cooperate in every way we can. Nevertheless, I don’t think anyone can determine when these discussions will conclude. One consequence of the subpoena was that in preparing to respond, we discovered some anomalies in the determination of placement rates at our New York based health schools. We quickly informed the AG as well as the accreditors of these schools. Our board also mandated a review of placement determination and reporting practices in all our schools across the country. Read the rest of this transcript for free on seekingalpha.com