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Corinthian Colleges Reports First Quarter 2013 Results

Corinthian Colleges Reports First Quarter 2013 Results

SANTA ANA, Calif., Oct. 31, 2012 (GLOBE NEWSWIRE) -- Corinthian Colleges, Inc.
(Nasdaq:COCO) reported financial results today for the first quarter ended
September 30, 2012. Results for the quarter exceeded the company's most
current guidance ranges for revenue, earnings per share and new student
enrollment growth. (Guidance excludes all one-time charges; the Company
recorded a $3.2 million impairment, facility closing and severance charge in
the quarter.)

"During the first quarter we continued to focus on improving the value
proposition of our programs and rejuvenating growth in our ground schools,"
said Jack Massimino, Corinthian's chairman and chief executive officer. "We
reduced tuition for several programs during the quarter, and our third-party
lender reduced interest rates on gap financing for our students. We expect
these reductions to help make our programs more affordable and attractive to
prospective students."

As the Company previously reported, effective July 1, 2012 federal student
loans and grants are no longer available to students who lack a high school
diploma or GED. Such aid had previously been available under the federal
Ability-to-Benefit (ATB) program. Given the loss of funding, the Company
stopped enrolling new ATB students as of July 1.

"Despite the loss of ATB students, our first quarter growth in new students
was higher than expected," Massimino said. "During the quarter we continued to
experience strong growth in on-line new student enrollment and new enrollments
at our Everest ground schools were better than expected."

"We are pursuing a number of initiatives to help offset the loss of ATB
students and achieve more consistent growth," Massimino said. "In addition to
our price reductions, we are on schedule to launch several new diploma
programs across our ground schools beginning in the second quarter. We began
offering free GED preparation programs at most of our U.S. Everest campuses in
October. These programs will help serve the large population of high school
dropouts in our service areas, and we expect some portion of successful GED
completers to enroll at Everest or other post-secondary institutions."

Comparing the first quarter of fiscal 2013 with the same quarter of the prior
year (Note: results for continuing operations):

  *Net revenue was $408.6 million versus $398.2 million, an increase of 2.6%.
    
  *Total student population at September 30, 2012 was 92,070 versus 91,107 at
    September 30, 2011, an increase of 1.1%.
    
  *Total new students were 31,458 versus 30,386, an increase of 3.5%.
    
  *Operating income was $10.5 million, which includes a $3.2 million
    impairment and severance charge, compared with an operating loss of $6.3
    million, which includes$9.2 million in impairment and severance charges.
    
  *Income from continuing operations was $3.1 million, which includes $1.9
    million in impairment and severance charges, after tax, compared with a
    loss of $5.7 million, which includes $5.5 million in impairment and
    severance charges, after tax.
    
  *Diluted earnings per share from continuing operations were $0.04 versus a
    diluted loss per share of $0.07. Excluding the impairment and severance
    charges and the related tax effect, diluted earnings per share from
    continuing operations were $0.06 in Q1 13 and $0.00 in Q1 12.

Financial Review

Educational services expenses were 61.7% of revenue in Q1 13 versus 62.7% in
Q1 12.The decrease is primarily the result of a decrease in compensation and
facilities expense, partially offset by an increase in bad debt expense.Bad
debt expense was 4.8% of revenue in Q1 13 versus 4.2% in Q1 12.The increase
in bad debt expense is primarily the result of a delay in drawing down Title
IV funds associated with a student information systems conversion.

Marketing and admissions expenses were 24.4% of revenue in Q1 13 versus 25.0%
in Q1 12.The decrease is primarily the result of efficiencies in admissions.

General and administrative expenses were 10.5% of revenue in Q1 13 versus
11.6% in Q1 12. The decrease is primarily due to cost saving measures.

The operating margin was 3.4% in Q1 13 versus 0.7% in Q1 12, excluding
impairment and severance charges.The increase is primarily the result of
lower operating expenses partially offset by higher bad debt.

Cash and cash equivalents totaled $37.6 million at September 30, 2012,
compared with $72.5 million at June 30, 2012. The decrease in cash is
primarily due to the net repayment of cash borrowed at fiscal year-end,
partially offset by the timing of cash receipts and payments.

Debt and capital leases (including current portion) totaled $112.0 million at
September 30, 2012, compared with $149.0 million at June 30, 2012.

Cash flow from operations was $20.4 million for Q1 13, versus $54.1 million in
Q1 12. The decrease was primarily due to a decrease in cash provided by
working capital.

Capital expenditures were $7.4 million in Q1 13, versus $11.2 million in Q1
12.

Guidance

The following guidance is for continuing operations and excludes any one-time
charges. The company expects that three schools currently in teach-out will be
reclassified to discontinued operations in the second quarter.

                                             
Time Period Revenue              Diluted EPS    New Student Growth
Q2 13       $402 -- $412 million $0.05 -- $0.07 flat

Conference Call Today

We will host a conference call today at 12:00 p.m. Eastern Time (9:00 a.m.
PT), to discuss first quarter results.The call will be open to all interested
investors through a live audio web cast at www.cci.edu (Investors/Events &
Presentations.) The call will be archived on www.cci.edu after the call.A
telephonic playback of the conference call will also be available through
11:00 p.m. PT, Tuesday, November 6th.The playback can be reached by dialing
(855) 859-2056 and using passcode 33902281.

About Corinthian Colleges

Corinthian is one of the largest post-secondary education companies in North
America. Our mission is to change students' lives. We offer diploma and degree
programs that prepare students for careers in demand or for advancement in
their chosen fields. Our program areas include health care, business, criminal
justice, transportation technology and maintenance, construction trades and
information technology. We have 116 Everest, Heald and WyoTech campuses, and
also offer degrees online. For more information, go to http://www.cci.edu.

The Corinthian Colleges, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=8848

Certain statements in this press release may be deemed to be forward-looking
statements under the Private Securities Litigation Reform Act of 1995.The
company intends that all such statements be subject to the "safe-harbor"
provisions of that Act.Such statements include, but are not limited to, those
regarding our belief that reduced tuition for several programs and lower
interest rates on third-party loans will make our programs more affordable and
attractive to prospective students; our belief that launching new diploma
programs in ground schools and offering free GED preparation programs at some
Everest campuses will help offset the loss of ATB students; our expectation
that some portion of successful GED completers will enroll at Everest or other
post-secondary institutions; growth in exclusively on-line students; overall
enrollment growth or declines in future periods; our ability to manage student
outcomes and improve the student value proposition; and the statements under
the heading "Guidance" above.Many factors may cause the company's actual
results to differ materially from those discussed in any such forward-looking
statements or elsewhere, including: potential negative effects from the loss
of ATB students; the uncertain outcome of the Department of Education's rule
making related to gainful employment, which could change the manner in which
we conduct our business; the company's effectiveness in its regulatory and
accreditation compliance efforts; changes by the California legislature that
impact the eligibility of the Company's students to receive Cal Grants; the
Company's potential inability to affect the default rates of its students on
their federal student loans; the outcome of ongoing reviews and inquiries by
accrediting, state and federal agencies; the outcome of pending litigation
against the company; risks associated with variability in the expense and
effectiveness of the company's advertising and promotional efforts; potential
increased competition; changes in general macroeconomic and market conditions
(including credit and labor market conditions, the unemployment rate, and the
rates of change of each such item); and the other risks and uncertainties
described in the company's filings with the U.S. Securities and Exchange
Commission. The historical results achieved by the company are not necessarily
indicative of its future prospects.The company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.

Corinthian Colleges, Inc.
(In thousands, except per share data)
                                                                
Condensed Consolidated Statements of Operations
                                                 For the three months ended
                                                 September 30,
                                                 2012            2011
                                                 (Unaudited)     (Unaudited)
                                                                
Net revenues                                      $408,560      $398,197
Operating expenses:                                              
Educational services                              252,173        249,682
General and administrative                        42,950         46,100
Marketing and admissions                          99,736         99,476
Impairment, facility closing, and severance       3,206          9,226
charges
Total operating expenses                          398,065        404,484
                                                                
Income (loss) from operations                     10,495         (6,287)
                                                                
Interest (income)                                 (202)          (159)
Interest expense                                 1,292          2,576
Other expense, net                                4,245          943
Pre-tax income (loss) from continuing operations  5,160          (9,647)
Provision (benefit)for income taxes              2,064          (3,941)
Income (loss) from continuing operations          3,096          (5,706)
Loss from discontinued operations, net of tax     (1,518)        (3,930)
Net (loss) income                                 $1,578        $(9,636)
                                                                
                                                                
Income (loss) per common share --- Basic:                        
Income (loss) from continuing operations          $0.04         $(0.07)
Loss from discontinued operations                 (0.02)         (0.04)
Net (loss) income                                 $0.02         $(0.11)
                                                                
Income (loss) per common share --- Diluted:                      
Income (loss) from continuing operations          $0.04         $(0.07)
Loss from discontinued operations                 (0.02)         (0.04)
Net (loss) income                                 $0.02         $(0.11)
                                                                
Weighted average number of common shares                         
outstanding:
Basic                                             85,486         84,807
Diluted                                           86,194         84,807
                                                                
                                                                
                                                                
Selected CondensedConsolidated Balance Sheet                    
Data
                                                 September 30, June 30,
                                                 2012          2012
                                                 (Unaudited)    (Unaudited)
                                                                
Cash and cash equivalents                         $37,603       $72,525
Receivables, net (including long term notes       $241,494      $199,094
receivable)
Current assets                                    $345,213      $352,607
Total assets                                      $1,060,212    $1,064,513
Current liabilities                               $309,592      $282,758
Debt and capital leases (including current        $112,044      $148,974
portion)
Total liabilities                                 $492,163      $499,598
Total stockholders' equity                        $568,049      $564,915

CONTACT: Investors:
         Anna Marie Dunlap
         SVP Investor Relations
         714-424-2678
        
         Media:
         Kent Jenkins
         VP Public Affairs Communications
         202-682-9494

Corinthian Colleges, Inc. Logo
 
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