Education Management Corporation Reports Fiscal 2014 Third Quarter Results - Reported net loss of $467.6 million or $3.71 per diluted share - - Net income of $20.4 million or $0.16 per diluted share excluding certain expenses - - EBITDA of $95.0 million excluding certain expenses - PR Newswire PITTSBURGH, April 30, 2014 PITTSBURGH, April 30, 2014 /PRNewswire/ --Education Management Corporation (NASDAQ: EDMC), one of the largest providers of post-secondary education in North America, today reported its financial results for the three months ended March 31, 2014. Net revenues during the quarter were $595.2 million, a decrease of 6.8 percent from the prior year quarter, and, primarily as a result of non-cash goodwill and indefinite-lived intangible asset impairment charges of $509.2 million, the company reported a net loss of $467.6 million, or $3.71 per diluted share. Excluding these non-cash impairment charges and certain other expenses detailed below, EBITDA would have been $95.0 million and net income would have been $20.4 million, or $0.16 per diluted share, for the three months ended March 31, 2014. "The current operating conditions continue to be challenging, as evidenced by enrollments being down across post-secondary education. As a result of our expectations for a continuation of the challenging operating environment in the near-term combined with the strategic changes that are being made across our education systems, we are adjusting our financial outlook for the remainder of fiscal year 2014," said Edward H. West, Education Management's president and CEO. "We believe these changes to concentrate on programs where we see solid student outcomes and demand, and our continued efforts to improve efficiencies and lower the cost structure are the right course of action for the long-term benefit for our students. Our entire organization remains focused on providing our students an affordable, quality education to position them for success in their chosen fields." Due primarily to changes in current and projected enrollment trends, the company performed impairment reviews of the carrying value of goodwill and indefinite-lived intangible assets at all of its four reporting units at March 31, 2014. The reviews resulted in a goodwill impairment of $433.7 million and an indefinite-lived intangible asset impairment of $75.5 million at The Art Institutes reporting unit, both of which are non-cash charges. Goodwill and indefinite-lived intangible asset impairments were not required at the Argosy University, South University or Brown Mackie Colleges reporting units. After giving effect to these impairment charges, the company's goodwill and intangible assets decreased from $1,077.1 million at December 31, 2013 to $566.7 million at March 31, 2014. The goodwill impairment charges from fiscal 2013 and 2012 have been adjusted as further described below under "Revisions to Impairment Charges." Financial and Operational Highlights Financial and operational highlights for the third quarter of fiscal 2014 included the following: oTotal new students were approximately 22,140, a decrease of 9.8 percent from approximately 24,540 new students in the prior year quarter. oFor the three months ended March 31, 2014, average enrolled student body was approximately 119,500, a 6.9 percent decline from 128,330 in the prior year quarter. Net revenues were $595.2 million, a decrease of 6.8 percent from $638.9 million recorded in the third quarter of fiscal 2013. The revenue decrease was primarily due to the decline in average enrolled student body. oThe company recorded a net loss of $467.6 million, or $3.71 per diluted share, compared to a net loss of $260.4 million, or $2.09 per diluted share, for the prior year quarter. Earnings before interest, taxes and depreciation and amortization ("EBITDA") was a loss of $431.7 million in the current quarter compared to a loss of $183.3 million in the prior year quarter. oAfter adjusting for certain expenses described below, net income would have been $20.4 million, or $0.16 per diluted share, in the current quarter compared to $30.5 million, or $0.24 per diluted share, in the prior year quarter and EBITDA would have been $95.0 million in the current quarter compared to $122.0 million in the prior year quarter. For the Three Months Ended (dollars in millions except per share data) March 31, 2014 2013 EBITDA $ (431.7) $ (183.3) Long-lived asset impairments 509.2 300.1 Lease abandonment charge 6.3 — Restructuring 5.8 — Loss on sale-leaseback transactions 3.5 — Settlement-related costs 1.9 — Loss on debt refinancing — 5.2 EBITDA excluding certain expenses $ 95.0 $ 122.0 Net loss $ (467.6) $ (260.4) Long-lived asset impairments and certain 491.0 291.6 other expenses presented above, net of tax Reversal of uncertain tax position liability (3.0) (0.7) Net income, excluding certain expenses $ 20.4 $ 30.5 Diluted loss per share $ (3.71) $ (2.09) Diluted earnings per share, excluding certain $ 0.16 $ 0.24 expenses oCash flows provided by operating activities for the nine months ended March 31, 2014 were $172.2 million compared to $286.2 million for the nine months ended March 31, 2013. The decrease in cash flow from operations in the current quarter compared to the prior year quarter was primarily due to lower operating results. At March 31, 2014, cash and cash equivalents were $177.5 million, compared to $183.6 million at March 31, 2013. oOn a cash basis, capital expenditures were $52.8 million, or 3.0 percent of net revenues, for the nine months ended March 31, 2014 compared to $64.6 million, or 3.4 percent of net revenues, for the nine months ended March 31, 2013. oDuring the quarter ended March 31, 2014, the company completed a sale-leaseback transaction with an unrelated third party for net cash proceeds of $9.6 million. The company recorded a net loss of $3.5 million in connection with the transaction during the quarter ended March 31, 2014. Fiscal 2014 Outlook For the fiscal year ending June 30, 2014, capital expenditures are projected to be approximately $80 million, compared to $83.2 million in the fiscal year ended June 30, 2013. Based on current business trends, including the recent April starting student body enrollment, the impact of an increase in scholarships, and excluding long-lived asset impairments and certain other expenses, including costs related to debt restructuring, that have been or may be incurred, the company provided the following outlook for fiscal 2014. Reconciliation of Fiscal Year 2014 Fourth Quarter and Annual Outlook of Net Income to EBITDA (Dollars in millions, except earnings per share) (Unaudited) For the Three Months Ending Fiscal 2014 Outlook – 4th Quarter: June 30, 2014 Low High Loss per diluted share $ (0.17) $ (0.14) Net loss $ (21) $ (18) Income tax benefit (13) (11) Net interest expense 33 33 Depreciation and amortization 37 37 EBITDA $ 36 $ 41 For the Twelve Months Ending Fiscal 2014 Outlook – Annual: June 30, 2014 Low High Loss per diluted share $ (3.96) $ (3.94) Earnings per diluted share excluding long-lived $ 0.03 $ 0.05 asset impairments and certain other expenses Net loss $ (497) $ (494) Expenses related to long-lived asset impairments 501 501 and certain other expenses, net of tax Net income excludinglong-lived asset $ 4 $ 7 impairments and certain other expenses Income tax benefit $ (14) $ (12) Net interest expense 128 128 Depreciation and amortization 152 152 EBITDA excluding long-lived asset impairments $ 270 $ 275 and certain other expenses The above discussion of the company's fiscal 2014 outlook includes information that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. As more fully described below under the heading "Cautionary Statement," these and other forward-looking statements are based on information currently available to management and involve estimates, assumptions, risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially and unpredictably from any future results, performance or achievements expressed or implied by such forward-looking statements. The company's quarterly revenues and income fluctuate primarily as a result of the pattern of student enrollments, and its first fiscal quarter is typically the lowest revenue quarter of the fiscal year due to student vacations. The presentation of EBITDA as well as the presentations excluding certain expenses, do not comply with U.S. generally accepted accounting principles ("GAAP"). For an explanation of EBITDA and EBITDA and net income excluding certain expenses, together with a reconciliation to net loss, which is the most directly comparable GAAP financial measure, see the "Non-GAAP Financial Measures" disclosure in the financial tables section below. Revisions toImpairment Charges The financial statements for fiscal year 2013 have been revised to include an adjustment to the goodwill impairment charges recorded during the fiscal 2013 and 2012 periods. These revisions do not impact EBITDA excluding certain expenses, net income excluding certain expenses or earnings perdilutedshare excluding certain expenses nor do they affect the company's compliance with debt covenants. The goodwill impairment charges in fiscal 2013 and 2012 were decreased by $23.6 million and $84.5 million, respectively, which decreased the previously reported net losses by $23.6 million (net of tax) and $82.2 million (net of tax), respectively. The goodwill balance at June 30, 2013 and March 31, 2013 was increased by $108.1 million. The company does not believe these revisions are material to the previously reported financial results. Conference Call and Webcast Education Management Corporation will host a conference call to discuss its fiscal 2014 third quarter results on Thursday, May 1, at 9 a.m. (Eastern Time). Those wishing to participate in this call should dial 412-317-6789 approximately 10 minutes prior to the start of the call. A listen-only audio of the conference call will also be broadcast live over the Internet at www.edmc.edu. A replay of the conference call will be available at www.edmc.edufor up to one year. EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) For the Three Months Ended For the Nine Months Ended March 31, March 31, 2014 2013 % 2014 2013 % Change Change Net revenues $ 595,202 $ 638,903 (6.8)% $ 1,769,255 $ 1,903,363 (7.0)% Costs and expenses: Educational 356,858 350,134 1.9% 1,060,074 1,091,808 (2.9)% services ^(1) General and administrative 160,837 166,814 (3.6)% 509,480 512,496 (0.6)% ^(2) Depreciation and 37,109 40,266 (7.8)% 114,307 123,667 (7.6)% amortization Long-lived asset 509,248 300,104 69.7% 513,095 300,104 71.0% impairments Total costs and 1,064,052 857,318 24.1% 2,196,956 2,028,075 8.3% expenses Loss before interest and (468,850) (218,415) 114.7% (427,701) (124,712) 243.0% income taxes Interest 31,076 30,464 2.0% 94,557 92,924 1.8% expense, net Loss on debt — 5,232 N/M — 5,232 N/M refinancing Loss before (499,926) (254,111) 96.7% (522,258) (222,868) 134.3% income taxes Income tax (benefit) (32,280) 6,297 N/M (46,186) 19,489 N/M expense Net loss $ (467,646) $ (260,408) 79.6% $ (476,072) $ (242,357) 96.4% Loss per share: Basic $ (3.71) $ (2.09) $ (3.80) $ (1.95) Diluted $ (3.71) $ (2.09) $ (3.80) $ (1.95) Weighted average number of shares outstanding: Basic 125,933 124,602 125,347 124,546 Diluted 125,933 124,602 125,347 124,546 (1) Includes the following charges: oa lease abandonment charge of $6.3 million in the current quarter; orestructuring charges of $4.3 million in the three months ended March 31, 2014 and $9.0 million and $8.2 million in the nine months ended March 31, 2014 and 2013, respectively; and olosses on sale-leaseback transactions of $3.5 million in the current quarter and $3.9 million in the nine months ended March 31, 2013. Includes restructuring costs of $1.5 million in the three months ended March 31, 2014 and $7.9 million and $0.9 million in the nine months ended March 31, (2) 2014 and 2013, respectively. Also includes settlement-related costs of $1.9 million and $7.9 million in the three and nine months ended March 31, 2014, respectively. EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) March31, 2014 June30, 2013 March31, 2013 (Unaudited) (Unaudited) Assets Current assets: Cash and cash equivalents $ 177,468 $ 130,695 $ 183,614 Restricted cash 272,090 271,340 272,029 Total cash, cash equivalents and 449,558 402,035 455,643 restricted cash Student receivables, net of allowances of $176,039, $174,760 and 176,847 206,406 153,069 $177,802 Notes, advances and other 43,176 32,547 27,509 receivables Deferred income taxes 76,813 76,927 102,793 Prepaid income taxes 29,147 20,854 — Other current assets 36,983 32,850 40,547 Total current assets 812,524 771,619 779,561 Property and equipment, net 442,902 525,625 543,731 Goodwill 343,406 777,153 777,153 Intangible assets, net 223,282 300,435 301,039 Other long-term assets 55,236 48,524 55,878 Total assets $ 1,877,350 $ 2,423,356 $ 2,457,362 Liabilities and shareholders' (deficit) equity Current liabilities: Current portion of long-term $ 11,875 $ 12,076 $ 12,076 debt Revolving credit facility — 75,000 — Accounts payable 31,594 32,559 20,955 Accrued liabilities 171,248 157,417 148,782 Accrued income taxes — — 3,174 Unearned tuition 74,051 113,371 78,473 Advance payments 165,253 95,675 222,942 Total current liabilities 454,021 486,098 486,402 Long-term debt, less current 1,271,986 1,273,164 1,283,344 portion Deferred rent 187,739 201,202 206,847 Deferred income taxes 40,487 72,622 90,522 Other long-term liabilities 24,090 34,414 39,250 Shareholders' (deficit) equity: Common stock, at par 1,451 1,435 1,435 Additional paid-in capital 1,813,308 1,794,846 1,789,672 Treasury stock, at cost (331,812) (328,605) (328,605) Accumulated deficit (1,574,251) (1,098,179) (1,096,146) Accumulated other comprehensive (9,669) (13,641) (15,359) loss Total shareholders' (deficit) (100,973) 355,856 350,997 equity Total liabilities and $ 1,877,350 $ 2,423,356 $ 2,457,362 shareholders' (deficit) equity EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) For the Nine Months Ended March 31, 2014 2013 Cash flows from operating activities: Net loss $ (476,072) $ (242,357) Adjustments to reconcile net loss to net cash flows from operating activities: Depreciation and amortization of property 109,647 118,814 and equipment Amortization of intangible assets 4,660 4,853 Bad debt expense 124,979 129,659 Long-lived asset impairments 513,095 300,104 Amortization of debt issuance costs 10,694 5,032 Loss on debt refinancing — 5,232 Share-based compensation 13,536 11,938 Non cash adjustments related to deferred (13,886) (12,610) rent Amortization of deferred gains on (1,689) (1,012) sale-leaseback transactions Changes in assets and liabilities: Restricted cash (750) (4,149) Receivables (106,255) (91,473) Reimbursements for tenant improvements 1,168 7,102 Inventory (674) 1,383 Other assets 5,170 3,635 Accounts payable 1,483 (29,792) Accrued liabilities, including income (43,355) (3,096) taxes Unearned tuition (39,320) (37,804) Advance payments 69,744 120,743 Total adjustments 648,247 528,559 Net cash flows provided by operating 172,175 286,202 activities Cash flows from investing activities: Expenditures for long-lived assets (52,766) (64,586) Proceeds from sale of fixed assets 9,565 65,065 Reimbursements for tenant improvements (1,168) (7,102) Net cash flows used in investing (44,369) (6,623) activities Cash flows from financing activities: Payments under revolving credit facility (75,000) (111,300) Repayment of senior notes — (162,246) Issuance of common stock as a result of 2,958 3 stock-option exercises Gross excess tax benefit from share-based 3,417 — compensation Minimum tax withholding requirements upon (3,207) — restricted stock unit vesting Principal payments on long-term debt (9,082) (9,117) Debt issuance costs — (4,436) Net cash flows used in financing (80,914) (287,096) activities Effect of exchange rate changes on cash (119) 123 and cash equivalents Net change in cash and cash equivalents 46,773 (7,394) Cash and cash equivalents, beginning of 130,695 191,008 period Cash and cash equivalents, end of period $ 177,468 $ 183,614 Cash paid (received) during the period for: Interest (including swap settlement) $ 94,442 $ 89,705 Income taxes, net of refunds (2,048) 34,960 As of March 31, Noncash investing activities: 2014 2013 Capital expenditures in current $ 7,497 $ 7,756 liabilities EDUCATION MANAGEMENT CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) The company reports results in four segments - The Art Institutes, Argosy University, Brown Mackie Colleges and South University. The company evaluates segment performance based on EBITDA excluding certain expenses. Adjustments to reconcile segment results to consolidated results are included under the caption "Corporate and Other," which primarily includes unallocated corporate activity. EBITDA, a measure used by management to measure operating performance, is defined as net income before net interest expense, income taxes and depreciation and amortization. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Management believes EBITDA is helpful in highlighting trends because EBITDA excludes the results of decisions that are outside the control of operating management and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Management also presents diluted earnings per share, net income and EBITDA after adjusting for certain expenses, which also are non-GAAP financial measures. Management believes this presentation is also helpful in highlighting trends in our business because it excludes certain expenses management believes are not indicative of ongoing operations. Management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to similarly titled measures of other companies. A reconciliation of EBITDA excluding certain expenses by segment to consolidated net loss to consolidated net income, excluding certain expenses is detailed below: Segment Information and Reconciliation of EBITDA to Net Loss to Net Income Excluding Certain Expenses (In thousands, except per share amounts) (Unaudited) For the Three Months Ended March For the Nine Months Ended March 31, 31, 2014 2013 % 2014 2013 % Change Change Net revenues: The Art Institutes $ 358,624 $ 393,560 (8.9)% $ 1,086,613 $ 1,185,232 (8.3)% Argosy University 91,729 94,430 (2.9)% 251,518 268,663 (6.4)% Brown Mackie 65,858 73,876 (10.9)% 205,507 226,122 (9.1)% Colleges South University 78,991 77,037 2.5% 225,617 223,346 1.0% Total EDMC 595,202 638,903 (6.8)% 1,769,255 1,903,363 (7.0)% EBITDA excluding certain expenses: The Art Institutes 78,988 101,081 (21.9)% 226,077 288,250 (21.6)% Argosy University 19,176 16,250 18.0% 25,108 31,269 (19.7)% Brown Mackie 4,560 7,638 (40.3)% 17,967 25,824 (30.4)% Colleges South University 13,178 15,777 (16.5)% 30,727 32,140 (4.4)% Corporate and (20,877) (18,791) (11.1)% (65,603) (65,341) (0.4)% other Total EDMC 95,025 121,955 (22.1)% 234,276 312,142 (24.9)% Reconciliation to EBITDA: Long-lived asset 509,248 300,104 69.7% 513,095 300,104 71.0% impairments Lease abandonment 6,367 — N/M 6,367 — N/M charge Restructuring 5,760 — N/M 16,858 9,145 84.3% Loss on sale-leaseback 3,491 — N/M 3,491 3,938 (11.4)% transactions Settlement-related 1,900 — N/M 7,859 — N/M costs Loss on debt — 5,232 N/M — 5,232 N/M refinancing EBITDA (431,741) (183,381) N/M (313,394) (6,277) N/M Reconciliation to net loss: Depreciation and 37,109 40,266 (7.8)% 114,307 123,667 (7.6)% amortization Net interest 31,076 30,464 2.0% 94,557 92,924 1.8% expense Income tax expense (32,280) 6,297 N/M (46,186) 19,489 N/M (benefit) Net loss $ (467,646) $ (260,408) 79.6% $ (476,072) $ (242,357) 96.4% Long-lived asset impairments, net $ 480,558 $ 288,412 66.6% $ 482,866 $ 288,412 67.4% of tax Lease abandonment 3,820 — N/M 3,820 — N/M charge, net of tax Restructuring, net 3,456 — N/M 10,115 5,488 84.3% of tax Loss on sale-leaseback transactions, net 2,095 — N/M 2,095 2,363 (11.3)% of tax Settlement-related 1,140 — N/M 4,715 — N/M costs, net of tax Loss on debt refinancing, net — 3,139 N/M — 3,139 N/M of tax Loss on disposal of asset, net of — — N/M — 2,753 N/M tax Reversal of uncertain tax (2,976) (691) N/M (2,976) (691) N/M position liability Net income, excluding certain $ 20,447 $ 30,452 (32.9)% $ 24,563 $ 59,107 (58.4)% expenses Diluted loss per $ (3.71) $ (2.09) $ (3.80) $ (1.95) share Diluted earnings per share, $ 0.16 $ 0.24 $ 0.19 $ 0.47 excluding certain expenses Weighted average number of diluted shares 129,283 125,167 129,697 124,802 outstanding, excluding certain expenses New Student Enrollment For the Three Months Ended March 31, 2014 2013 % Change The Art Institutes 9,450 11,210 (15.7)% Argosy University 4,500 5,130 (12.3)% Brown Mackie Colleges 3,590 4,110 (12.7)% South University 4,600 4,090 12.5% Total EDMC 22,140 24,540 (9.8)% The new student enrollment data shown above includes the number of new students who enrolled in fully online programs at The Art Institute of Pittsburgh, Argosy University and South University. Total new students who enrolled in fully online programs for the three months ended March 31, 2014 were approximately 7,010 as compared to 7,650 in the three months ended March 31, 2013. Average Enrolled Student Body For the Three Months Ended March 31, 2014 2013 % Change The Art Institutes 62,070 67,070 (7.5)% Argosy University 23,480 25,260 (7.0)% Brown Mackie Colleges 15,380 17,040 (9.7)% South University 18,570 18,960 (2.1)% Total EDMC 119,500 128,330 (6.9)% Average enrolled student body is the three month average of the unique students who met attendance requirements within each month of the quarter. The data above includes the number of students enrolled in fully online programs at The Art Institute of Pittsburgh, Argosy University and South University. The average enrolled student body in fully online programs was approximately 29,040 for the three months ended March 31, 2014 as compared to 31,790 in the three months ended March 31, 2013. For April 2014, starting student body enrollment for Total EDMC was approximately 114,440, a decrease of 8.1 percent from April 2013. Starting student body reflects the campus-based student census after the add/drop period for the first month of the fiscal quarter plus the average of fully online students who met attendance requirements in the third month of the prior fiscal quarter. About Education Management Corporation Education Management Corporation (www.edmc.edu), with approximately 125,560 students as of October 2013, is among the largest providers of post-secondary education in North America, based on student enrollment and revenue, with a total of 110 locations in 32 U.S. states and Canada. The company offers academic programs to students through campus-based and online instruction, or through a combination of both. The company is committed to offering quality academic programs and strives to improve the learning experience for its students. Its educational institutions offer students the opportunity to earn undergraduate and graduate degrees and certain specialized non-degree diplomas in a broad range of disciplines, including media arts, health sciences, design, psychology and behavioral sciences, culinary, business, fashion, legal, education and information technology. Cautionary Statement This press release includes information that could constitute forward-looking statements with the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which are based on information currently available to management, concern the company's strategy, plans, intentions or expectations and typically contain words such as "anticipates," "believes," "estimates," "expects," "intends," "may," "will," "should," "seeks," "approximately," "plans," "projects," or similar words, although the absence of such words does not mean that any particular statement is not forward-looking. All of the statements included in this press release that relate to estimated and projected earnings, margins, costs, expenditures, depreciation and amortization, impairments, cash flows, restructuring and other special charges, growth rates and financial results, including the fourth quarter and annual outlook for fiscal 2014, and including statements regarding expected enrollment, revenue, expense levels, capital expenditures and earnings, are forward-looking statements, as are any statements concerning the company's expected future operations, performance and operating environment, and other future developments, including expected strategic changes. These and other forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially and unpredictably from any future results, performance or achievements expressed or implied by such forward-looking statements. The company derives many of its forward-looking statements from its operating budgets and forecasts, which are based upon many detailed assumptions, and the company cautions that it is very difficult to predict the impact of unknown factors, and impossible to anticipate all factors, that could affect its actual results. Some of the factors that the company believes could affect its results and that could cause actual results to differ materially from expectations include, but are not limited to: the timing and magnitude of student enrollment and changes in student mix, including the relative proportions of campus-based and online students enrolled in its programs; challenges in the company's operating environment; changes in average registered credits taken by students; student retention; the company's ability to maintain eligibility to participate in Title IV programs; changes in government spending; other changes in its students' ability to access federal and state financial aid, as well as obtain loans from third-party lenders; difficulties the company may face in growing its academic programs; increased or unanticipated legal and regulatory costs; the success of cost-cutting initiatives; the results of program reviews and audits; changes in accreditation standards; the implementation of new operating procedures for the company's fully online programs and other strategic changes and the results thereof; the impact of the proposed gainful employment regulation issued by the U. S. Department of Education on March 14, 2014; adjustments to the company's programmatic offerings to comply with the 90/10 rule; its high degree of leverage and ability to maintain compliance with the covenants and other requirements in its loan agreements and generate sufficient cash to service all of its debt obligations and other liquidity needs; market and credit risks associated with the post-secondary education industry, adverse media coverage of the industry and the overall condition of the industry; changes in the overall U.S. or global economies and access to credit and capital markets; the effects of war, terrorism, natural disasters or other catastrophic events and other risks affecting the company, including but not limited to those described in its periodic reports filed with the Securities Exchange Commission pursuant to the Securities Exchange Act of 1934. Education Management does not undertake any obligation to update any forward-looking statements except as required by securities laws. Investor Contact: John Iannone Director of Investor Relations (412) 995-7727 Media Contact: Chris Hardman VP of Communications (412) 995-7187 SOURCE Education Management Corporation Website: http://www.edmc.edu
Education Management Corporation Reports Fiscal 2014 Third Quarter Results
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