![]() Career Education Corporation UBS Global Technology and Services Conference June 8, 2010 Copyright Career Education Corporation 2010 Exhibit 99.1 |
![]() Mike Graham Executive Vice President and Chief Financial Officer Copyright Career Education Corporation 2010 |
![]() During this presentation, we will make forward-looking statements subject to known and unknown risks and uncertainties that could cause actual performance to differ materially from that expressed or implied by the statements. These statements are based on information currently available to us. Some factors that could cause actual results and performance to differ are: •Our ability to comply with the extensive regulatory requirements and accreditation requirements for school operations •Changes and uncertainties in student lending markets and federal and state student financial aid programs •Financial and operating results, including new student starts •Our ability to manage and grow our business in current and changing economic, political, regulatory and competitive environments •Litigation, claims and administrative proceedings involving the company •Other risks described from time to time in our press releases and our filings with the Securities and Exchange Commission We undertake no obligation to publicly release any revisions to forward-looking statements to reflect events or expectations after the date of this presentation. We provide a detailed discussion of risk factors in our SEC filings and encourage you to review the filings. Safe Harbor |
![]() The Company has included some non-GAAP financial measures in this presentation to discuss the Company's financial results and outlook. As a general matter, the Company uses these non-GAAP measures in addition to and in conjunction with results presented in accordance with GAAP. Among other things, the Company may use such non-GAAP financial measures in addition to and in conjunction with corresponding GAAP measures, to help analyze the performance of its core business, in connection with the preparation of annual budgets, and in measuring performance for some forms of compensation. In addition, the Company believes that non-GAAP financial measures are used by analysts and others in the investment community to analyze the Company's historical results and in providing estimates of future performance and that failure to report these non-GAAP measures could result in confusion among analysts and others and a misplaced perception that the Company's results have underperformed or exceeded expectations. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company's operations that, when viewed with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company's results of operations and the factors and trends affecting the Company's business. However, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Non-GAAP Financial Measures |
![]() Career Education Overview Purpose: To change lives through education. Purpose: To change lives through education. Bachelors 28% Masters 4% Certificate 24% Associates 44% 21 to 30 43% Under 21 16% Over 30 41% Students by Degree Type Students by Age *Demographics as of December 31, 2009 *Student Population and Graduates as of March 31, 2010 Over 116,000 Students Over 467,000 Graduates |
![]() Population 66,700 28,200 12,200 9,500 % Online 70% <1% <1% # of Campuses 26 38 18 13 Accreditation Regional National National Program Emphasis Business, IT Health, Design, Protective Health Culinary Business, Design Bachelors Masters Certificate Associates Career Education: Diversified Institutions University TM TM International Career-focused *Demographics as of December 31, 2009 * Student Population as of March 31, 2010 |
![]() 2009: A Watershed Year 2007-2008 2009 Recognize > Redefine > Reach Strengthen foundation Accelerate growth 2005 2006 2007 2008 2009 Revenue +11% “Watershed”: “…an important point or transition between two phases, conditions, etc.” |
![]() Results… 2007 2008 2009 Operating Income +75% In Millions Student Population 2007 2008 2009 +19% |
![]() Continued Momentum in First Quarter 2010 • Revenue increased 22% • Operating income increased 72% • Earnings per share increased 154% …results position us well for the balance of the year Achieved Record Student Population Levels Achieved Record Student Population Levels 117,000 +24% |
![]() Career Education: Path Forward 2007-2008 2009 2010+ Recognize > Redefine > Reach Next Level •Focus •Growth Strengthen foundation Accelerate growth |
![]() Largest Future Opportunities Well Positioned in Key Segments University • Significant online presence • Presence in high- demand programs Career- focused • Strong position in largest growth programs • Premier brands in niche markets International TM TM |
![]() Enablers for Growth • Quality • Programs • Technology • Geographic Expansion |
![]() University 42% Graduation Rate /1 73% Placement Rate /2 Career- focused 57% Graduation Rate /1 81% Placement Rate /2 Enablers for Growth: Continued Focus on Quality Outcomes A Simplified View of Complicated Metrics /1: Based on internal data available of students who graduated within 150% of the program length. University cohort is for students starting calendar year 2003 and Career- focused cohort is for students starting calendar year 2006. Certain students are excluded from cohort such as those who died or were disabled or those serving in the armed forces, a foreign aid service or on church missions. /2: Based on internal data available of students graduating between 7/1/2008 and 6/30/2009 who have obtained employment within their field or a related field by 12/31/2009. Certain graduates are excluded from cohort such as those who are continuing their education and those that have waived employment assistance due to death, disability or incarceration, those serving in the armed forces, those of non-immigrant status and those voluntarily not seeking employment utilizing skills directly or indirectly taught in their field of study. TM TM |
![]() • CEC institutions expect to significantly increase 2010 new program introductions Transplant existing programs within institutions Augment current program areas Enter new program areas Expand into higher degrees • Developed 3-year Pipelines 70 89 150 2008 2009 2010 Est Number of New Programs New Programs: Accelerate Development |
![]() ![]() Technology: Innovative Learning Options University • Flexible learning model to suit learner’s preference TM Health • Simpro online simulators for cognitive skills training |
![]() • Measured expansion into new markets 6 to 8 new campuses per year • Externship-driven • Disciplined real estate approach • Program extensions into higher degrees leveraging regional accreditation Geographic Expansion: Health Education 2008 2009 2010 Est. 26 34 40 - 42 Number of Health Campuses |
![]() 2010 Student Population Growth 15%+ Revenue Growth 15%+ Operating Income Growth 40%+ Annual Growth Short-term Milestones - 2010 2010+ Next Level •Focus •Growth •Value |
![]() 8-10% Low 20’s% Annual Revenue Growth 2010 Target Operating Margin Short-term Milestones - 2010 International TM TM |
![]() 2011 - 2014 Student Population Growth 8-10% Revenue Growth 8-10% Operating Income Growth 15-20% Annual Growth Long-term Milestones 2010+ Next Level •Focus •Growth •Value |
![]() 8-10% Low 20’s% Annual Revenue Growth 2014 Target Operating Margin Long-term Milestones International TM TM |
![]() Continue to Generate Strong Cash Flow 2007 - 2009 |
![]() Share Repurchase • Remain committed to returning excess cash to shareholders • $306 million total authorization as of April 30, 2010 High ROI Strategic Investments $85 million in 2010 • Health Education Start-Ups • Chicago-area Real Estate consolidation • Culinary Real Estate optimization Strong Balance Sheet • Maintain appropriate ED ratios • Disciplined approach to student payment plans M&A • Disciplined approach • Potential for accretive tuck-in acquisitions across University, Career Focused and International • New Locations • New Programs Areas Uses of Cash |
![]() CEC Strategic Summary $3 Billion in 2014 Revenue 1Million Graduates Outstanding Share Price Growth $3 Billion in 2014 Revenue 1Million Graduates Outstanding Share Price Growth Growth Growth Strong Market Trends Enhance Program Development Investment in Leading IT Platform Utilize Scale & Resources Accelerate M & A and Geographic Expansion + Focus Focus Continue Culture of Quality and Compliance Intentional Portfolio Choices Improved Marketing Effectiveness Leverage Shared Services Improve Human Capital Management = Value Value For: For: Students Students Employees Employees Shareholders Shareholders |
![]() Thank You! Thank You! Copyright Career Education Corporation 2010 |