Exhibit 99.1
CAREER EDUCATION CORPORATION REPORTS
RESULTS FOR FIRST QUARTER 2007
Hoffman Estates, Ill. (May 3, 2007) — Career Education Corporation (NASDAQ: CECO) today reported consolidated revenue from continuing operations of $424.0 million and income from continuing operations, net of tax, of $34.6 million for the quarter ended March 31, 2007.
“Career Education’s results for the first quarter of 2007 reflect the effects of challenges the company has faced as it makes the changes necessary to position the company for future growth,” said Pat Pesch, Chief Financial Officer. “Importantly, positive forward-looking indicators and the satisfactory conclusion of several legal and regulatory matters demonstrate the company’s progress in building long-term value for its stakeholders.”
RESULTS OF CONTINUING OPERATIONS
As previously reported, in November 2006, the company announced its decision to sell 13 of its schools and campuses, including the nine campuses that comprise the Gibbs division, McIntosh College, the two campuses of Brooks College (Long Beach and Sunnyvale), and Lehigh Valley College. The results of these 13 schools and campuses are noted in all presentations as discontinued operations. Except as otherwise noted, financial data and non-financial metrics reflected in this release exclude discontinued operations.
Three Months Ended March 31, 2007
· Consolidated revenue was $424.0 million during the first quarter of 2007, a 12.5 percent decrease from consolidated revenue of $484.6 million during the first quarter of 2006. Revenue generated by the University segment’s fully-online platforms decreased 28.8 percent to $137.4 million during the first quarter of 2007, from $193.0 million during the first quarter of 2006.
· Consolidated income from operations declined to $48.2 million during the first quarter of 2007, from $99.7 million during the first quarter of 2006. Operating profit margin percentage was 11.4 percent during the first quarter of 2007, compared to operating profit margin percentage of 20.6 percent during the first quarter of 2006. The decrease in operating profit margin percentage was primarily due to:
a. an unfavorable student population mix change resulting in disproportionately larger revenue declines in our University segment, which has historically produced the highest operating profit margin percentages,
b. a decrease in the operating profit margin percentage generated by our University segment, driven by decreased revenue, increased administrative expenses, and the disproportionate growth of CTU Online, which operates at a lower operating profit margin percentage than that of AIU Online,
c. price decreases in our AIU Online associate degree programs, and
d. increased occupancy expense and other fixed costs as a percentage of revenue due to declines in revenue.
The adverse impact on operating profit margin percentage of the factors discussed above was offset, in part, by a decrease in bad debt expense as a percentage of revenue.
The University segment’s fully-online platforms’ income from operations declined to $34.4 million during the first quarter of 2007, from $77.2 million during the first quarter of 2006.
· Consolidated income from continuing operations, net of tax, during the first quarter of 2007 was $34.6 million, or $0.36 per diluted share, compared to consolidated income from continuing operations, net of tax, of $65.5 million, or $0.65 per diluted share, during the first quarter of 2006.
RESULTS OF DISCONTINUED OPERATIONS
Loss from discontinued operations associated with our 13 schools and campuses currently held for sale was $4.6 million, net of tax, during the first quarter of 2007, compared to loss from discontinued operations of $12.8 million, net of tax, during the first quarter of 2006. Loss from discontinued operations during the first quarter of 2006 includes a goodwill impairment charge of $6.5 million, net of income tax benefit of $3.9 million, and depreciation expense of $2.0 million, net of income tax benefit of $1.2 million. Loss from discontinued operations during the first quarter of 2007 includes no goodwill impairment charge or depreciation expense, in accordance with applicable accounting standards.
CONSOLIDATED CASH FLOWS AND FINANCIAL POSITION
Cash Flows
· Cash provided by operating activities was $89.1 million during the first quarter of 2007, compared to $122.6 million during the first quarter of 2006. The decrease is primarily attributable to the decrease in net income during the first quarter of 2007.
· Capital expenditures decreased to $16.8 million during the first quarter of 2007, from $17.5 million during the first quarter of 2006. Capital expenditures represented 3.7 percent of total consolidated revenue, including revenue generated by schools and campuses held for sale, during the first quarter of 2007.
Financial Position
· As of March 31, 2007 and December 31, 2006, cash and cash equivalents and investments totaled $449.8 million and $447.8 million, respectively. This increase is primarily attributable to cash generated by operating activities during the first quarter of 2007, offset substantially by first quarter 2007 cash expenditures in connection with stock repurchase activity and the acquisition of Istituto Marangoni.
· Quarterly days sales outstanding (DSO) were 11 days as of March 31, 2007, which is consistent with DSO as of March 31, 2006, of 11 days.
Stock Repurchase Program
Since July 2005, CEC’s Board of Directors has authorized the use of a total of $500.2 million to repurchase outstanding shares of the company’s common stock. Stock repurchases under this program may be made on the open market or in privately negotiated transactions from time to time, depending on factors including market conditions and corporate and regulatory requirements. The stock repurchase program does not have an expiration date and may be suspended or discontinued at any time.
During the first quarter of 2007, the company repurchased 1.6 million shares of its common stock for approximately $50.0 million at an average price of $30.42 per share. Since the inception of the program, the company has repurchased 12.4 million shares of its common stock for approximately $416.3 million.
As of March 31, 2007, the company was authorized under the stock repurchase program to use an additional $83.8 million to repurchase outstanding shares of the company’s common stock.
POPULATION AND NEW STUDENT START DATA
Student Population
Total student population by reportable segment as of April 30, 2007 and 2006, was as follows:
Segment | | Population
April 30, 2007 | | Population
April 30, 2006 | | Percentage
Difference | |
Academy | | 9,000 | | 9,100 | | (1 | %) |
Colleges | | 7,500 | | 9,000 | | (17 | %) |
Culinary Arts | | 10,500 | | 10,600 | | (1 | %) |
Health Education | | 12,200 | | 10,900 | | 12 | % |
International | | 6,200 | | 4,300 | | 44 | % |
University (1) | | 42,200 | | 44,000 | | (4 | %) |
CEC Consolidated | | 87,600 | | 87,900 | | — | |
(1) As of April 30, 2007 and 2006, the University segment population included approximately 30,600 students and 31,500 students, respectively, who were taking classes at such dates in fully-online academic programs offered by University segment schools.
Total student population for schools held for sale as of April 30, 2007 and 2006, was as follows:
| | Population
April 30, 2007 | | Population
April 30, 2006 | | Percentage
Difference | |
Colleges held for sale | | 1,900 | | 2,500 | | (24 | %) |
Gibbs held for sale | | 6,400 | | 6,500 | | (2 | %) |
Total | | 8,300 | | 9,000 | | (8 | %) |
New Student Starts
New student starts by reportable segment during the first quarter of 2007 and 2006, were as follows:
Segment | | First quarter
2007 | | First quarter
2006 | | Percentage
Difference | |
Academy | | 1,220 | | 1,540 | | (21 | %) |
Colleges | | 1,080 | | 1,340 | | (19 | %) |
Culinary Arts | | 2,720 | | 2,510 | | 8 | % |
Health Education | | 4,040 | | 3,710 | | 9 | % |
International | | 400 | | 460 | | (13 | %) |
University (1) | | 14,540 | | 17,020 | | (15 | %) |
CEC Consolidated | | 24,000 | | 26,580 | | (10 | %) |
(1) University segment new student starts includes approximately 12,600 students and 14,800 students, respectively, who began taking classes in fully-online academic programs offered by University segment schools during the first quarter of 2007 and 2006.
New student starts for schools held for sale during the first quarter of 2007 and 2006, were as follows:
| | First quarter
2007 | | First quarter
2006 | | Percentage
Difference | |
Colleges held for sale | | 260 | | 400 | | (35 | %) |
Gibbs held for sale | | 1,330 | | 1,270 | | 5 | % |
Total | | 1,590 | | 1,670 | | (5 | %) |
“During my first two months at the company, I have seen first hand the tremendous strengths in the organization, particularly the talent and commitment of our employees and the opportunity for future success,” said Gary McCullough, Career Education’s new President and Chief Executive Officer. “However, changes need to be made to ensure that we fulfill our potential. By ensuring that we are service-oriented and market-responsive, we can generate value for our students and all stakeholders as we drive the business forward.”
CONFERENCE CALL INFORMATION
Career Education Corporation will host a conference call today, May 3, 2007, at 5:00 PM (Eastern Time). Interested parties can access the live webcast of the conference call at www.careered.com. Participants can also listen to the conference call by dialing 617-614-3523 (international) or 800-561-2693 (domestic) and citing code 41457192. Please log-in or dial-in at least ten minutes prior to the conference call start time to ensure a connection. An archived version of the conference call webcast will be accessible for 90 days at www.careered.com. A replay of the conference call will also be available for seven days by calling 617-801-6888 (international) or 888-286-8010 and citing code 73712939.
About Career Education Corporation
The colleges, schools and universities that are part of the Career Education Corporation (CEC) family offer high quality education to approximately 90,000 students across the world in a variety of career-oriented disciplines. The 75-plus campuses that serve these students are located throughout the U.S., and in Canada, France, Italy and the United Kingdom, and offer doctoral, master’s, bachelor’s, and associate degrees and diploma and certificate programs. Approximately one-third of our students attend the web-based virtual campuses of American InterContinental University Online and Colorado Technical University Online.
Career Education is an industry leader whose gold-standard brands are recognized globally. Those brands include, among others, the Le Cordon Bleu Schools North America; the Harrington College of Design; the Brooks Institute of Photography; the Katharine Gibbs Schools; American InterContinental University; Colorado Technical University and Sanford-Brown Institutes and Colleges. The mission of CEC, through its schools, its educators, and its employees is education-their primary goal, to enable students to graduate successfully and pursue rewarding careers.
For more information, see http://www.careered.com. The company’s website also has a detailed listing of individual campus locations and web links for its 75-plus colleges, schools and universities.
Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as “anticipate,” “believe,” “plan,” “expect,” “intend,” “project,” “will,” and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various risks, uncertainties, and other factors that could cause our actual growth, results of operations, performance and business prospects, and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by federal securities laws, we undertake no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. These risks and uncertainties, the outcome of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: future financial and operational results, including the impact of the impairment of goodwill and other intangible assets; risks related to our ability to comply with accrediting agency requirements or obtain accrediting agency approvals, including the adverse impact of negative publicity concerning the continued probation status of American InterContinental University and ongoing review by its accrediting body; risks related to our ability to comply with, and the impact of changes in, legislation and regulations that affect our ability to participate in student financial aid programs; costs, risks, and effects of legal and administrative proceedings and investigations and governmental regulations, including the pending Securities and Exchange Commission and Justice Department investigations and class action, derivative, and other lawsuits; costs and difficulties related to the integration of acquired businesses; risks related to our ability to manage and continue growth; risks related to the sale of any campuses; risks related to competition, general economic conditions, and other risk factors relating to our industry and business and the factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2006, and from time to time in our other reports filed with the Securities and Exchange Commission.
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Investors: | | Karen M. King | |
| | 847/585-3899 | |
| | www.careered.com | |
| | | |
Media: | | Lynne Baker | |
| | 847/851-7006 | |
| | | | | |
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| | March 31,
2007 | | December 31,
2006 | |
| | | | | |
ASSETS | | | | | |
CURRENT ASSETS: | | | | | |
Cash and cash equivalents | | $ | 165,593 | | $ | 188,058 | |
Investments | | 284,234 | | 259,766 | |
Total cash and cash equivalents and investments | | 449,827 | | 447,824 | |
Receivables: | | | | | |
Students, net of allowance for doubtful accounts
of $26,791 and $28,532 as of March 31, 2007,
and December 31, 2006, respectively | | 45,063 | | 48,160 | |
Other, net | | 7,768 | | 8,084 | |
Prepaid expenses | | 42,188 | | 29,457 | |
Inventories | | 18,318 | | 16,713 | |
Deferred income tax assets | | 6,705 | | 10,970 | |
Assets held for sale | | 64,455 | | 69,171 | |
Other current assets | | 16,822 | | 32,064 | |
Total current assets | | 651,146 | | 662,443 | |
PROPERTY AND EQUIPMENT, net | | 341,606 | | 349,414 | |
GOODWILL | | 379,454 | | 349,703 | |
INTANGIBLE ASSETS, net | | 45,708 | | 33,984 | |
OTHER ASSETS | | 28,432 | | 30,119 | |
TOTAL ASSETS | | $ | 1,446,346 | | $ | 1,425,663 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
CURRENT LIABILITIES: | | | | | |
Current maturities of long-term debt | | $ | 12,840 | | $ | 12,098 | |
Accounts payable | | 27,468 | | 29,861 | |
Accrued expenses: | | | | | |
Payroll and related benefits | | 23,804 | | 26,678 | |
Income taxes | | 19,588 | | — | |
Other | | 79,728 | | 78,513 | |
Deferred tuition revenue | | 143,507 | | 131,651 | |
Liabilities held for sale | | 32,008 | | 33,702 | |
Total current liabilities | | 338,943 | | 312,503 | |
| | | | | |
LONG-TERM LIABILITIES: | | | | | |
Long-term debt, net of current maturities | | 3,293 | | 2,763 | |
Deferred rent obligations | | 89,710 | | 90,013 | |
Deferred income tax liabilities | | 16,244 | | 16,527 | |
Other | | 8,946 | | 7,979 | |
Total long-term liabilities | | 118,193 | | 117,282 | |
| | | | | |
SHARE-BASED AWARDS SUBJECT TO REDEMPTION | | 12,084 | | 13,477 | |
| | | | | |
STOCKHOLDERS’ EQUITY: | | | | | |
Common stock | | 1,074 | | 1,069 | |
Additional paid-in capital | | 678,945 | | 666,780 | |
Accumulated other comprehensive income | | 6,774 | | 5,683 | |
Retained earnings | | 706,619 | | 675,188 | |
Cost of shares in treasury | | (416,286 | ) | (366,319 | ) |
Total stockholders’ equity | | 977,126 | | 982,401 | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 1,446,346 | | $ | 1,425,663 | |
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 2007 and 2006
(In thousands, except per share amounts and percentages)
| | 2007 | | % of
Revenue | | 2006 | | % of
Revenue | |
| | | | | | | | | |
REVENUE: | | | | | | | | | |
Tuition and registration fees | | $ | 405,054 | | 95.5 | % | $ | 465,281 | | 96.0 | % |
Other | | 18,954 | | 4.5 | % | 19,360 | | 4.0 | % |
Total revenue | | 424,008 | | 100.0 | % | 484,641 | | 100.0 | % |
| | | | | | | | | |
OPERATING EXPENSES: | | | | | | | | | |
Educational services and facilities | | 141,647 | | 33.4 | % | 138,992 | | 28.7 | % |
General and administrative | | 215,375 | | 50.8 | % | 228,193 | | 47.0 | % |
Depreciation and amortization | | 18,781 | | 4.4 | % | 17,776 | | 3.7 | % |
Total operating expenses | | 375,803 | | 88.6 | % | 384,961 | | 79.4 | % |
Income from operations | | 48,205 | | 11.4 | % | 99,680 | | 20.6 | % |
| | | | | | | | | |
OTHER INCOME (EXPENSE): | | | | | | | | | |
Interest income | | 4,705 | | 1.1 | % | 4,294 | | 0.9 | % |
Interest expense | | (354 | ) | -0.1 | % | (338 | ) | -0.1 | % |
Share of affiliate earnings | | 1,712 | | 0.4 | % | 903 | | 0.2 | % |
Miscellaneous income | | 238 | | 0.1 | % | 156 | | 0.0 | % |
Total other income | | 6,301 | | 1.5 | % | 5,015 | | 1.0 | % |
| | | | | | | | | |
Income before provision for income taxes | | 54,506 | | 12.9 | % | 104,695 | | 21.6 | % |
PROVISION FOR INCOME TAXES | | 19,895 | | 4.7 | % | 39,157 | | 8.1 | % |
| | | | | | | | | |
INCOME FROM CONTINUING OPERATIONS | | $ | 34,611 | | 8.2 | % | $ | 65,538 | | 13.5 | % |
| | | | | | | | | |
DISCONTINUED OPERATIONS: | | | | | | | | | |
Loss from discontinued operations, net of income tax benefit | | (4,573 | ) | -1.1 | % | (12,839 | ) | -2.6 | % |
| | | | | | | | | |
NET INCOME | | $ | 30,038 | | 7.1 | % | $ | 52,699 | | 10.9 | % |
| | | | | | | | | |
NET INCOME PER SHARE - DILUTED: | | | | | | | | | |
Income from continuing operations | | $ | 0.358 | | | | $ | 0.654 | | | |
Loss from discontinued operations | | (0.047 | ) | | | (0.128 | ) | | |
Net income | | $ | 0.311 | | | | $ | 0.526 | | | |
| | | | | | | | | |
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING: | | 96,798 | | | | 100,220 | | | |
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| | For the Three Months Ended
March 31, | |
| | 2007 | | 2006 | |
| | | | | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | |
Net income | | $ | 30,038 | | $ | 52,699 | |
Adjustments to reconcile net income to net cash provided by | | | | | |
operating activities: | | | | | |
Goodwill impairment charge | | — | | 10,389 | |
Depreciation and amortization expense | | 18,781 | | 21,009 | |
Compensation expense related to share-based awards | | 3,101 | | 4,015 | |
Loss on disposition of property and equipment | | 1 | | 23 | |
Share of affilate earnings, net of dividends received | | 230 | | (903 | ) |
Changes in operating assets and liabilities, net of acquisition | | 36,996 | | 35,405 | |
Net cash provided by operating activities | | 89,147 | | 122,637 | |
| | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | |
Business acquisition, net of acquired cash | | (30,324 | ) | — | |
Acquisition transaction costs | | (1,106 | ) | — | |
Purchases of property and equipment | | (16,812 | ) | (17,543 | ) |
Purchases of available-for-sale investments | | (209,454 | ) | (361,619 | ) |
Sales of available-for-sale investments | | 186,955 | | 243,772 | |
Other | | 6 | | (5 | ) |
Net cash used in investing activities | | (70,735 | ) | (135,395 | ) |
| | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | |
Purchase of treasury stock | | (49,967 | ) | (24,925 | ) |
Issuance of common stock | | 7,144 | | 2,932 | |
Tax benefit associated with stock option exercises | | 1,925 | | 720 | |
Payments of capital lease obligations and other long-term debt | | (29 | ) | (89 | ) |
Net cash used in financing activities | | (40,927 | ) | (21,362 | ) |
| | | | | |
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE | | | | | |
CHANGES ON CASH AND CASH EQUIVALENTS | | 706 | | 834 | |
| | | | | |
NET DECREASE IN CASH AND CASH EQUIVALENTS | | (21,809 | ) | (33,286 | ) |
DISCONTINUED OPERATIONS CASH ACTIVIITY INCLUDED ABOVE: | | | | | |
Add: Cash balance of discontinued operations at beginning of the period | | 1,758 | | 3,033 | |
Less: Cash balance of discontinued operations at end of the period | | 2,414 | | 1,995 | |
CASH AND CASH EQUIVALENTS, beginning of the period | | 188,058 | | 129,275 | |
CASH AND CASH EQUIVALENTS, end of the period | | $ | 165,593 | | $ | 97,027 | |
CAREER EDUCATION CORPORATION
SELECTED SEGMENT INFORMATION - CONTINUING OPERATIONS
For the Three Months Ended March 31, 2007 and 2006
(Dollars in thousands)
| | 2007 | | 2006 | |
| | | | | |
REVENUE: | | | | | |
Academy segment | | $ | 42,366 | | $ | 43,027 | |
Colleges segment | | 45,474 | | 51,836 | |
Culinary Arts segment | | 88,697 | | 90,628 | |
Health Education segment | | 44,871 | | 40,578 | |
International segment | | 21,900 | | 14,883 | |
University segment | | 180,575 | | 243,582 | |
Corporate and other (1) | | 125 | | 107 | |
| | $ | 424,008 | | $ | 484,641 | |
| | | | | |
SEGMENT PROFIT (LOSS) (2): | | | | | |
Academy segment | | $ | 4,005 | | $ | 4,681 | |
Colleges segment | | 7,304 | | 11,252 | |
Culinary Arts segment | | 11,424 | | 14,009 | |
Health Education segment | | 3,444 | | 1,213 | |
International segment | | 6,207 | | 3,862 | |
University segment | | 33,723 | | 82,390 | |
Corporate and other (1) | | (16,190 | ) | (16,824 | ) |
| | $ | 49,917 | | $ | 100,583 | |
| | | | | |
SEGMENT PROFIT PERCENTAGE: | | | | | |
Academy segment | | 9.5 | % | 10.9 | % |
Colleges segment | | 16.1 | % | 21.7 | % |
Culinary Arts segment | | 12.9 | % | 15.5 | % |
Health Education segment | | 7.7 | % | 3.0 | % |
International segment | | 28.3 | % | 25.9 | % |
University segment | | 18.7 | % | 33.8 | % |
(1) Operating results of Blish.com and Chefs.com are included in Corporate and other.
(2) Segment profit equals the sum of income from operations and share of affiliate earnings.
CAREER EDUCATION CORPORATION
SELECTED ACCOUNTS RECEIVABLE AND ALLOWANCE INFORMATION - CONTINUING OPERATIONS
(Dollars in thousands)
DAYS SALES OUTSTANDING
| | March 31, | |
| | 2007 | | 2006 | |
Total revenue during the quarter ended | | $ | 424,008 | | $ | 484,641 | |
Number of days in the quarter ended | | 90 | | 90 | |
Total revenue per day | | $ | 4,711 | | $ | 5,385 | |
Total receivables, net (1) | | $ | 52,831 | | $ | 58,967 | |
Days sales outstanding | | 11 | | 11 | |
ALLOWANCE AS A PERCENTAGE OF STUDENT RECEIVABLES
| | March 31, | |
| | 2007 | | 2006 | |
Allowance for doubtful accounts | | $ | 26,791 | | $ | 35,680 | |
Gross student receivables (1) | | $ | 71,854 | | $ | 88,082 | |
Allowance as a percentage of student receivables | | 37.3 | % | 40.5 | % |
STUDENT RECEIVABLES VALUATION ALLOWANCE
| | Balance, | | | | Amounts | | Purchase | | Balance, | |
| | Beginning of | | Charges | | Written- | | Accounting | | End of | |
| | Period | | to Expense | | Off | | Adjustment | | Period | |
For the three months ended March 31, 2007 | | $ | 28,532 | | $ | 7,725 | | $ | (9,475 | ) | $ | 9 | | $ | 26,791 | |
| | | | | | | | | | | |
For the three months ended March 31, 2006 | | $ | 37,961 | | $ | 13,268 | | $ | (15,549 | ) | $ | — | | $ | 35,680 | |
(1) Total receivables, net and gross student receivables as of March 31, 2006, have been adjusted from amounts previously reported to eliminate unearned student receivable balances attributable to our INSEEC schools. The adjustments were necessary to conform to our current presentation method.
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA REGARDING ASSETS HELD FOR SALE
For the Three Months Ended March 31, 2007 and 2006
(In thousands)
| | For the Three Months Ended March 31, 2007 | | For the Three Months Ended March 31, 2006 | |
| | Gibbs | | Colleges | | | | Gibbs | | Colleges | | | |
| | Held for Sale | | Held for Sale | | Total | | Held for Sale | | Held for Sale | | Total | |
Total revenue | | $ | 26,011 | | $ | 10,398 | | $ | 36,409 | | $ | 29,505 | | $ | 14,484 | | $ | 43,989 | |
Total operating expenses | | 29,736 | | 13,758 | | 43,494 | | 46,336 | | 18,118 | | 64,454 | |
Loss from operations | | (3,725 | ) | (3,360 | ) | (7,085 | ) | (16,831 | ) | (3,634 | ) | (20,465 | ) |
Total other expense | | (4 | ) | (1 | ) | (5 | ) | (45 | ) | — | | (45 | ) |
Loss before income tax benefit | | (3,729 | ) | (3,361 | ) | (7,090 | ) | (16,876 | ) | (3,634 | ) | (20,510 | ) |
Income tax benefit | | (1,324 | ) | (1,193 | ) | (2,517 | ) | (6,311 | ) | (1,360 | ) | (7,671 | ) |
Net loss from discontinued operations | | (2,405 | ) | (2,168 | ) | (4,573 | ) | (10,565 | ) | (2,274 | ) | (12,839 | ) |
| | | | | | | | | | | | | | | | | | | |
CAREER EDUCATION CORPORATION
APRIL 2007 SEGMENT STUDENT START INFORMATION
| | For the Month Ended April 30, | |
| | 2007 | | 2006 | |
STUDENT STARTS: | | | | | |
Academy segment | | 1,220 | | 1,180 | |
Colleges segment | | 260 | | 380 | |
Culinary Arts segment | | 1,030 | | 850 | |
Health Education segment | | 1,080 | | 910 | |
International segment | | 270 | | 270 | |
University segment | | 6,900 | | 5,990 | |
| | 10,760 | | 9,580 | |
| | | | | |
Gibbs held for sale | | 1,170 | | 1,200 | |
Colleges held for sale | | 200 | | 310 | |
CAREER EDUCATION CORPORATION
SELECTED SUPPLEMENTAL DATA
(In thousands)
| | 2006 | | 2005 | |
| | 1Q | | 2Q | | 3Q | | 4Q | | Total | | 1Q | | 2Q | | 3Q | | 4Q | | Total | |
Consolidated Balance Sheet | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Cash and marketable securities | | $ | 487,018 | | $ | 377,037 | | $ | 442,437 | | $ | 447,824 | | $ | 447,824 | | $ | 431,057 | | $ | 457,469 | | $ | 343,202 | | $ | 401,369 | | $ | 401,369 | |
Gross student receivables (1) | | 88,082 | | 79,915 | | 90,013 | | 76,692 | | 76,692 | | 90,302 | | 95,575 | | 103,958 | | 95,562 | | 95,562 | |
Net student receivables (1) | | 52,402 | | 45,751 | | 56,221 | | 48,160 | | 48,160 | | 54,279 | | 54,593 | | 62,551 | | 57,601 | | 57,601 | |
Assets held for sale | | 89,436 | | 84,657 | | 84,673 | | 69,171 | | 69,171 | | 102,292 | | 97,378 | | 97,735 | | 101,499 | | 101,499 | |
Total assets | | 1,568,282 | | 1,377,430 | | 1,412,713 | | 1,425,663 | | 1,425,663 | | 1,460,016 | | 1,522,234 | | 1,437,897 | | 1,495,303 | | 1,495,303 | |
Shareholders' equity | | 1,072,102 | | 934,491 | | 946,202 | | 982,401 | | 982,401 | | 1,042,169 | | 1,099,059 | | 961,402 | | 1,036,247 | | 1,036,247 | |
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Consolidated Income Statement - Continuing Operations | | | | | | | | | | | | | | | | | | | | | |
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Total revenue | | $ | 484,641 | | $ | 448,182 | | $ | 423,672 | | $ | 429,124 | | $ | 1,785,619 | | $ | 452,660 | | $ | 447,289 | | $ | 448,935 | | $ | 479,614 | | $ | 1,828,498 | |
Educational services and facilities expense | | 138,992 | | 134,065 | | 136,881 | | 142,113 | | 552,051 | | 130,485 | | 129,158 | | 131,133 | | 140,577 | | 531,353 | |
General and administrative expense | | 228,193 | | 230,085 | | 227,240 | | 219,822 | | 905,340 | | 208,701 | | 214,049 | | 210,566 | | 211,915 | | 845,231 | |
Depreciation and amortization | | 17,776 | | 18,745 | | 18,802 | | 20,062 | | 75,385 | | 14,278 | | 16,342 | | 17,762 | | 17,726 | | 66,108 | |
Interest income, net of interest expense | | 3,956 | | 4,331 | | 4,153 | | 4,657 | | 17,097 | | 1,286 | | 3,866 | | 1,544 | | 3,443 | | 10,139 | |
Share of affiliate earnings | | 903 | | 696 | | 510 | | 1,857 | | 3,966 | | 1,826 | | 1,416 | | 428 | | 1,397 | | 5,067 | |
Miscellaneous income (expense) | | 156 | | (250 | ) | 124 | | (157 | ) | (127 | ) | (536 | ) | (179 | ) | 233 | | (451 | ) | (933 | ) |
Provision for income taxes | | 39,157 | | 23,762 | | 16,736 | | 13,037 | | 92,692 | | 39,946 | | 36,441 | | 33,058 | | 40,185 | | 149,630 | |
Bad debt expense (2) | | 13,268 | | 16,572 | | 16,482 | | 9,435 | | 55,757 | | 15,668 | | 19,437 | | 20,486 | | 18,320 | | 73,911 | |
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Consolidated Cash Flows | | | | | | | | | | | | | | | | | | | | | |
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Cash flows provided by operating activities (3) | | $ | 122,637 | | $ | 8,824 | | $ | 83,226 | | $ | 1,703 | | $ | 216,390 | | $ | 111,183 | | $ | 69,904 | | $ | 106,233 | | $ | 90,905 | | $ | 378,225 | |
Cash flows from discontinued operations | | (1,038 | ) | (1,073 | ) | 1,126 | | (290 | ) | (1,275 | ) | (548 | ) | 595 | | (1,153 | ) | 2,381 | | 1,275 | |
Capital expenditures (4) | | 17,543 | | 25,608 | | 16,870 | | 9,452 | | 69,473 | | 25,539 | | 45,359 | | 28,336 | | 26,392 | | 125,626 | |
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Discontinued Operations | | | | | | | | | | | | | | | | | | | | | |
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Revenue | | $ | 43,989 | | $ | 38,603 | | $ | 38,713 | | $ | 41,872 | | $ | 163,177 | | $ | 57,776 | | $ | 50,174 | | $ | 48,547 | | $ | 49,560 | | $ | 206,057 | |
Operating expenses | | (64,454 | ) | (52,730 | ) | (50,388 | ) | (69,056 | ) | (236,628 | ) | 58,074 | | 56,126 | | 54,310 | | 54,269 | | 222,779 | |
Loss from operations | | (20,465 | ) | (14,127 | ) | (11,675 | ) | (27,183 | ) | (73,450 | ) | (298 | ) | (5,952 | ) | (5,763 | ) | (4,709 | ) | (16,722 | ) |
Total other income (expense) | | (45 | ) | 12 | | 17 | | (130 | ) | (146 | ) | (36 | ) | (27 | ) | (3 | ) | 5 | | (61 | ) |
Loss before income tax benefit | | (20,510 | ) | (14,115 | ) | (11,658 | ) | (27,313 | ) | (73,596 | ) | (334 | ) | (5,979 | ) | (5,766 | ) | (4,704 | ) | (16,783 | ) |
Income tax benefit | | (7,671 | ) | (5,279 | ) | (4,360 | ) | (8,103 | ) | (25,413 | ) | (131 | ) | (2,347 | ) | (2,132 | ) | (1,660 | ) | (6,270 | ) |
Loss from disposal of IADT Montreal and IADT Ottawa | | — | | — | | — | | — | | — | | (5,700 | ) | — | | — | | (358 | ) | (6,058 | ) |
Net loss from discontinued operations | | (12,839 | ) | (8,836 | ) | (7,298 | ) | (19,210 | ) | (48,183 | ) | (5,903 | ) | (3,632 | ) | (3,634 | ) | (3,402 | ) | (16,571 | ) |
(1) Gross and net student receivables as of March 31 2006, June 30, 2006, September 30, 2006, March 31, 2005, June 30, 2005, and September 30, 2005, have been adjusted from the previously reported amounts to eliminate unearned student receivable balances attributable to our INSEEC schools. The adjustments were necessary to conform to our current presentation method.
(2) Bad debt expense is included in general and administrative expense in our condensed consolidated statements of income.
(3) Includes cash flows from our schools and campuses held for sale.
(4) Includes capital expenditures from our schools and campuses held for sale.
