Career Education Corporation Reports Results For Third Quarter 2012

Career Education Corporation (NASDAQ: CECO) today reported total revenue of $332.8 million, and a net loss of $33.1 million, or -$0.50 per diluted share, for the third quarter of 2012 compared to total revenue of $428.4 million and net income of $10.6 million, or $0.14 per diluted share, for the third quarter of 2011.

“We are taking the difficult step of closing campuses and reducing our workforce because these measures are essential to advancing the turnaround of Career Education,” Chairman, President and Chief Executive Officer Steven H. Lesnik said. “To move forward successfully, we must align the organization to the new market realities in private postsecondary education.”

“As we rationally reduce the size and scope of the organization, we are ultimately positioning the Company to execute and embark upon our long-term strategic direction. Our strategy envisions a simplified and more nimble organization, fewer ground campuses, more differentiated brands serving distinct student populations and the leading student-centric, personalized learning technology in higher education. I am confident that this is the right strategic course for the Company and will ensure a leaner, stronger Career Education that continues to provide access to high-quality, career-focused postsecondary education long into the future.”

CONSOLIDATED RESULTS

Quarter Ended September 30, 2012
  • Total revenue was $332.8 million for the third quarter of 2012, a 22.3 percent decrease from $428.4 million for the third quarter of 2011.
  • An operating loss of $48.2 million was reported for the third quarter of 2012, compared to operating income of $19.9 million for the third quarter of 2011. The operating margin was -14.5 percent for the third quarter of 2012 versus 4.6 percent for the third quarter of 2011.
  • The loss from continuing operations for the third quarter of 2012 was $30.8 million, or -$0.47 per diluted share, versus income from continuing operations of $14.1 million, or $0.19 per diluted share, for the third quarter of 2011.

Year to Date Ended September 30, 2012
  • Total revenue was $1,135.9 million for the year to date ended September 30, 2012, compared to $1,445.0 million for the year to date ended September 30, 2011.
  • The operating loss for the year to date ended September 30, 2012 was $109.7 million, versus operating income of $208.1 million for the year to date ended September 30, 2011. The operating margin decreased to -9.7 percent for the year to date ended September 30, 2012, from 14.4 percent for the year to date ended September 30, 2011.
  • The loss from continuing operations for the year to date ended September 30, 2012, was $78.3 million, or -$1.18 per diluted share, compared to income from continuing operations of $138.1 million, or $1.83 per diluted share, for the year to date ended September 30, 2011.

The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant items, as a means to understand the performance of its core business. There are no significant items included for the third quarters ended 2012 or 2011. For the year to date ended September 30, 2012, on a non-GAAP basis, loss per diluted share from continuing operations was -$0.14, as compared to earnings per diluted share of $1.79 for the year to date ended September 30, 2011. (See table below and the GAAP to non-GAAP reconciliation attached to this press release for further details.)

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