Career Education Corporation Reports Results for 2004 Third Quarter and Provides Additional Information on Special Committee Investigation.HOFFMAN ESTATES Hoffman Estates A village of northeast Illinois, a suburb of Chicago. Population: 49,700. , Ill. -- Quarterly Revenue up 39% & Net Income Up 60%; 3Q Starts Up 28%; Total October October: see month. Student Population Up 22%; Online Population Up 125% Career Education Corporation (Nasdaq:CECO CECO Council of Engineering Companies of Oregon CECO Cost Estimate Change Order CECO Center for Economic and Community Outreach CECO CENTCOM Engineer Contingency Organization CECO Concrete Engineering Company of Omaha (Ceco Concrete Construction LLC) ) today reported financial results for the third quarter ended September September: see month. 30, 2004 and provided additional information concerning the ongoing independent investigation being conducted by the special committee of its Board of Directors. Three Months Ended September 30 --Third quarter 2004 total revenue increased 39% to $438.5 million from $315.7 million for the same period last year. The increase in revenue is primarily attributable to a 34% increase in same-school revenue driven by an approximate 24% increase in same-school population at July July: see month. 31st and an approximate 7% increase in average revenue per student during the third quarter. --Income from operations rose 57% to $71.6 million from $45.5 million for the same period last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. margin percentage was 16.3%, up 190 basis points from 14.4% in the same period last year. --Net income was $43.0 million, or $0.41 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, up 60% from last year's third quarter net income of $26.9 million, or $0.26 per diluted share, after adjusting for the 2-for-1 stock split affected in August 2003. --Net income includes approximately $3.0 million of pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta expense related to legal and other costs related to the SEC investigation, the investigation being conducted by the special committee of the board of directors, and the shareholder class action and derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. lawsuits. This expense of $1.8 million, net of the related tax benefit of $1.2 million, represented $0.02 per diluted share. Nine Months Ended September 30 --For the nine months ended September 30, 2004, total revenue increased 53% to $1.3 billion from $817.3 million for the same period last year. The increase in revenue is primarily attributable to a 39% increase in same-school revenue driven by an approximate average 27% increase in same-school population for the period and an approximate 3% increase in average revenue per student during the first nine months of the year. --Income from operations rose 89% to $206.0 million from $108.8 million for the same period last year. Operating income margin percentage was 16.5%, up 320 basis points from 13.3% in the same period last year. --Net income was $124.4 million, or $1.18 per diluted share, up 89% from $65.8 million, or $0.66 per diluted share, after adjusting for the 2-for-1 stock split affected in August 2003. Balance Sheet and Cash Flow --At September 30, 2004, we had cash and cash equivalents of $274.5 million, compared with $78.3 million on September 30, 2003. Short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. and long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. as of September 30, 2004 was $23.0 million. --Net cash provided by operating activities for the third quarter of 2004 was $125.6 million compared to $57.5 million for the same period of 2003. The third quarter cash flow improvement was attributable primarily to the increase in net income and a decrease in net operating assets Operating Assets Another term for working capital. and liabilities, offset by a decrease in the non-cash tax benefit of option exercises from $24.3 million during third quarter 2003 to $0.6 million during the third quarter of 2004. --Purchases of property and equipment for the quarter were $40.5 million compared to $25.5 million for the same period last year. --Net student receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed increased $20.3 million, from $106.2 million as of June June: see month. 30, 2004 to $126.6 million as of September 30, 2004, and our allowance for doubtful accounts Allowance for Doubtful Accounts An estimation made by a company and documented on its balance sheet for receivables that might go uncollected. Notes: It is standard practice for a company to have funds set aside for money that cannot be collected. as a percentage of gross student receivables decreased from 29.7% as of June 30, 2004 to 26.4% as of September 30, 2004. The decrease in our allowance percentage reflects a shift in the proportionate pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. composition of our gross student receivables toward in-school student receivables. Gross in-school student receivables as a percentage of total gross student receivables increased from 58% as of June 30, 2004 to 64% as of September 30, 2004. Write-offs of student receivables during third quarter of 2004 totaled $23.4 million, compared to write-offs during the second quarter of 2004 of $21.4 million. --Bad debt expense was 5.5% of total revenue for the quarter ended September 30, 2004, compared to 4.8% for the quarter ended September 30, 2003 and 5.2% for the quarter ended June 30, 2004. --Quarterly days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSOs) for total net receivables Net Receivables A company's accounts receivable (money owed to the company) minus bad debts. Notes: If a company estimates that 2% of its sales are never going to be paid, then net receivables equals 98% (100% - 2%) of the accounts receivable. were 28 days at September 30, 2004. This represents a five-day decrease from the quarterly DSOs at September 30, 2003 of 33 days. We calculate DSOs by dividing the sum of net student receivables and net other receivables by average daily revenue. Average daily revenue is computed by dividing quarterly "total revenue" by the total number of days in the quarter. --Prepaid expenses and other current assets Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. decreased $21.1 million, to $33.9 million as of September 30, 2004 from $55.0 million as of June 30, 2004. The decrease is primarily attributable to a $25.4 million change in our net current income tax asset/liability. As of June 30, 2004, our balance sheet reflected a net current income tax asset of approximately $17.7 million. As of September 30, 2004, our balance sheet reflected a net current income tax liability of $7.7 million. The change is attributable primarily to income taxes currently payable on third quarter 2004 pre-tax income and a decrease in the volume of stock option exercises and the related current income tax benefit. --Goodwill increased $2.3 million, to $445.7 million as of September 30, 2004 from $443.4 million as of June 30, 2004. The change is attributable primarily to our recognition during the third quarter of an estimated refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies liability of approximately $2.0 million that existed as of the date of our acquisition of Western School of Health and Business The Western School of Health and Business is a private, diploma granting institution based in Pittsburgh, Pennsylvania with branch campuses in both Pittsburgh and Monroeville, Pennsylvania. Careers. The liability is related to the previously disclosed lawsuit lawsuit: see procedure; tort. that we filed against the former owners of Western School of Health and Business Careers that alleges that they made material misrepresentations of fact and breached certain representations and warranties regarding the accreditation accreditation, n a process of formal recognition of a school or institution attesting to the required ability and performance in an area of education, training, or practice. status of several programs. --Accrued expenses increased $22.6 million, to $118.5 million as of September 30, 2004 from $95.9 million as of June 30, 2004. The increase is due primarily to the previously discussed increase in our net current income tax liability, an approximate $4.0 million increase in accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. advertising costs, and an approximate $3.0 million increase in accrued legal fees attributable primarily to costs incurred in connection with the SEC investigation, the special committee investigation, and the shareholder class action and derivative lawsuits. Population Data --Third quarter 2004 new student starts rose 28% to approximately 33,500, up from approximately 26,100 for the same period last year. Summer and fall (July through October) new student starts are expected to rise 24% to approximately 54,000, up from approximately 43,400 a year ago. --Total CEC (Central Electronic Complex) The set of hardware that defines a mainframe, which includes the CPU(s), memory, channels, controllers and power supplies included in the box. Some CECs, such as IBM's Multiprise 2000 and 3000, include data storage devices as well. student population on October 31, 2004 is expected to be approximately 97,300, up 22.4% from approximately 79,500 on October 31, 2003. On a same school basis, total CEC student population is expected to increase year-over-year by approximately 21.5%. --Total student population of CEC's Online Education Group on October 31, 2004 is expected to be approximately 20,900, up 125% from approximately 9,300 students on October 31, 2003. Additional Information Concerning Special Committee Investigation --As previously reported, our Board of Directors formed a special committee to conduct an independent investigation of allegations of securities laws violations against the company, including allegations relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's accounting practices and reported statistics relating to starts, student population and placement. At that time, we announced that the special committee had retained the law firm of McDermott McDermott is a surname, and may refer to:
emery Granular rock consisting of a mixture of the mineral corundum (aluminum oxide, Al2O3) and iron oxides such as magnetite (Fe3O4) or hematite (Fe2O3). LLP LLP - Lower Layer Protocol to represent and assist it in its review. --At the special committee's direction, McDermott, Will & Emery has retained Navigant Consulting, Inc. to assist in the investigation. Navigant Consulting is providing independent forensic accounting Forensic accounting, sometimes called investigative accounting, involves the application of accounting concepts and techniques to legal problems. Forensic accountants investigate and document financial Fraud and white-collar crimes services in connection with the special committee's review of allegations relating to previously reported financial information and related matters, including the company's methodology for establishing the allowance for doubtful accounts. Navigant Consulting is in the process of conducting, but has not completed, this review. The ongoing review may have an impact on the company's reported financial statements. The special committee's investigation is ongoing. "Career Education's strong financial results in the third quarter demonstrate the continuing appeal of our quality education programs and customer service to career-focused students," said John M. Larson Larson may refer to: People with the surname Larson:
AIU Allegheny Intermediate Unit (Homestead, PA) AIU Atlantic International University AIU Association of Indian Universities AIU Association Internationale des Universités Online and CTU CTU Colorado Technical University CTU Czech Technical University in Prague CTU Counter Terrorist Unit CTU Clinical Trials Unit CTU Catholic Theological Union CTU Chicago Teachers Union CTU Computer Training Unit CTU Control Unit Online that underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. our quality of education product, as more than 90% of respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. said they would recommend their school to a friend." Business Outlook Please note that this is an update from previously issued guidance. While we may make further acquisitions, none are contemplated by these forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . --We expect full year 2004 revenues to be approximately $1.725 billion to $1.730 billion and full year 2004 earnings per share to be approximately $1.85. We expect the Online Education Group's full year 2004 revenues, included in the preceding amounts, to be approximately $375 million. Our earnings expectations include higher costs for legal and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. matters than previously anticipated. --We expect fourth quarter 2004 revenues to be approximately $470 to $475 million and fourth quarter 2004 earnings per share to be approximately $0.66. We expect diluted weighted average shares outstanding to be approximately 105 million for fourth quarter 2004. --We expect full year 2004 operating profit margin Operating profit margin The ratio of operating profit to net sales. improvement to be approximately 175 to 200 basis points, with lesser improvement in the fourth quarter of 2004. The Online Education Group's margins, implicit in Adj. 1. implicit in - in the nature of something though not readily apparent; "shortcomings inherent in our approach"; "an underlying meaning" underlying, inherent the preceding amounts, are expected to be approximately 40% for the full year, reflecting spending to support planned growth initiatives. --We continue to expect our 2004 effective income tax rate will be approximately 40.25%. --We continue to expect that 2004 capital expenditures will be approximately 8.5% of total revenue. --The 2004 guidance reflects expenses and capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. associated with nine new branch campuses, four of which have already opened this year and five of which are planned to have their first student starts in 2005. Conference Call Information --Career Education Corporation will host a conference call today at 4:30 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) 614-4072 (international) or (800) 688-0836 (domestic) and citing code 38875046. Please log-in Verb 1. log-in - enter a computer; "Have you logged in lately?" log in, log on access - obtain or retrieve from a storage device; as of information on a computer or dial-in at least 10 minutes prior to the start time to ensure a connection. After 6:30 PM (Eastern Time) the same day, an archived version of the webcast will be accessible for 90 days at www.careered.com. A replay of the call will also be available for seven days by calling (617) 801-6888 (international) or (888) 286-8010 and citing code 27500077. Career Education Corporation (www.careered.com) is the world's largest on-campus on-campus adjective Referring to an on-site site of a medical complex with multiple buildings. Cf 'Off campus.'. provider of private, for-profit for-prof·it adj. Established or operated with the intention of making a profit: a for-profit organization. , postsecondary education and has a rapidly-growing presence in online education. CEC's Colleges, Schools and Universities Group operates 82 campuses in the U.S., Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , France, the United Kingdom and the United Arab Emirates United Arab Emirates, federation of sheikhdoms (2005 est. pop. 2,563,000), c.30,000 sq mi (77,700 sq km), SE Arabia, on the Persian Gulf and the Gulf of Oman. and offers doctoral degree, master's degree master's degree n. An academic degree conferred by a college or university upon those who complete at least one year of prescribed study beyond the bachelor's degree. Noun 1. , bachelor's bach·e·lor's n. A bachelor's degree. degree, associate degree and diploma DIPLOMA. An instrument of writing, executed by, a corporation or society, certifying that a certain person therein named is entitled to a certain distinction therein mentioned. 2. programs in the career-oriented disciplines of visual communication and design technologies, information technology, business studies, culinary cu·li·nar·y adj. Of or relating to a kitchen or to cookery. [Latin cul  n arts
and health education. The Online Education Group operates American
InterContinental University American InterContinental University, commonly called AIU, is an international for-profit university owned by Career Education Corporation (stock symbol CECO). It was founded in 1977 as the American College of Applied Arts. Online and Colorado Technical University Colorado Technical University (CTU) is a system of proprietary for-profit colleges in the United States providing career training, accredited programs, and college degrees in a variety of areas. CTU grants bachelor's, master's and doctoral degrees. Online and offers a variety of degrees in information technology,
business, visual communication and education. CEC's total student
population on October 31, 2004 is expected to be approximately 97,300
students.Except for the historical and present factual information contained herein, the matters set forth in this release, including statements under "Business Outlook" and statements identified by words such as "anticipates," "expects," "projects," "plans," "will," and similar expressions, are forward-looking statements within the meaning of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements are based on information currently available to us and involve risks and uncertainties that could cause our actual growth, results, performance and business prospects and opportunities to differ materially from those expressed in, or implied by these statements. These risks and uncertainties, the outcome of which could materially and adversely affect our financial condition and operations, include, but are not limited to: 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 An administrative proceeding is a non-judicial determination of fault or guilt and may include in some cases penalties of various forms. A "Captain's Mast", held by a commanding officer of a warship is one such proceeding. and investigations and governmental regulations, including the pending Securities and Exchange Commission and Justice Department investigations and, class action, derivative, Qui Tam QUI TAM, remedies. Who as well. When a statute imposes a penalty, for the doing or not doing an act, and gives that penalty in part to whosoever will sue for the same, and the other part to the commonwealth, or some charitable, literary, or other institution, and makes it recoverable by , and other lawsuits; cost and potential impact of findings by the special committee of our Board of Directors that is investigating allegations of securities laws violations against CEC; risks related to our ability to comply with accrediting agency requirements or obtain accrediting agency approvals; costs and difficulties related to the integration of acquired businesses; future financial and operational results; competition; general economic conditions; ability to manage and continue growth; and other risk factors relating to our industry and business, as detailed in our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2003, and from time to time in our other reports filed with the SEC. We disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any responsibility to update these forward-looking statements.
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ----------------------
2004 2003 2004 2003
--------- --------- ----------- ----------
REVENUE:
Tuition and registration
fees $406,556 $287,575 $1,159,803 $746,192
Other 31,951 28,121 90,848 71,121
--------- --------- ----------- ----------
Total revenue 438,507 315,696 1,250,651 817,313
--------- --------- ----------- ----------
OPERATING EXPENSES:
Educational services and
facilities 145,523 112,587 410,842 296,775
General and
administration 206,555 145,838 592,977 380,934
Depreciation and
amortization 14,855 11,736 40,842 30,764
--------- --------- ----------- ----------
Total operating
expenses 366,933 270,161 1,044,661 708,473
--------- --------- ----------- ----------
Income from
operations 71,574 45,535 205,990 108,840
--------- --------- ----------- ----------
OTHER INCOME (EXPENSE):
Interest income 651 37 1,541 874
Interest expense (525) (423) (2,067) (1,374)
Share of affiliate
earnings 209 96 2,799 2,167
--------- --------- ----------- ----------
Total other income 335 (290) 2,273 1,667
--------- --------- ----------- ----------
Income before
provision for
income taxes 71,909 45,245 208,263 110,507
PROVISION FOR INCOME TAXES 28,944 18,324 83,826 44,755
--------- --------- ----------- ----------
NET INCOME $42,965 $26,921 $124,437 $65,752
========= ========= =========== ==========
NET INCOME PER SHARE:
Basic $0.42 $0.27 $1.23 $0.69
========= ========= =========== ==========
Diluted $0.41 $0.26 $1.18 $0.66
========= ========= =========== ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 102,376 99,159 101,370 94,911
========= ========= =========== ==========
Diluted 104,893 103,713 105,022 99,259
========= ========= =========== ==========
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31, September 30,
2004 2003 2003
------------- ------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $274,545 $161,235 $78,328
Receivables:
Students, net of
allowance for
doubtful accounts
of $45,466, $47,467,
and $48,347 as of
Sept. 30, 2004,
Dec. 31, 2003,
and Sep. 30, 2004 126,573 110,445 102,452
Other, net 5,181 6,915 9,436
Inventories 16,560 11,652 11,719
Prepaid expenses 26,050 35,441 36,696
Other current assets 7,827 5,464 2,595
Deferred income tax assets 5,032 4,639 6,138
------------- ------------- -------------
Total current assets 461,768 335,791 247,364
------------- ------------- -------------
Property and equipment,
net 317,780 263,925 232,151
Goodwill, net 445,704 440,709 438,301
Intangible assets, net 35,841 36,326 36,178
Other assets 37,831 42,399 47,232
------------- ------------- -------------
TOTAL ASSETS $1,298,924 $1,119,150 $1,001,226
------------- ------------- -------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term debt $1,909 $79,822 $7,557
Accounts payable 27,576 30,627 20,161
Accrued expenses:
Payroll and related
benefits 41,393 25,671 34,378
Income taxes 6,933 14,472 12,863
Other 70,186 42,419 38,459
Deferred tuition revenue 141,055 113,610 105,590
------------- ------------- -------------
Total current
liabilities 289,052 306,621 219,008
------------- ------------- -------------
LONG-TERM LIABILITIES:
Long-term debt, net of
current maturities 21,104 25,453 75,833
Long-term contractual
obligations 9,679 9,679 9,679
Deferred income tax
liabilities 18,366 18,366 -
Other 16,924 11,211 9,430
------------- ------------- -------------
Total long-term
liabilities 66,073 64,709 94,942
------------- ------------- -------------
COMMITMENTS AND
CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock - - -
Common stock 1,024 1,002 1,000
Additional paid-in capital 568,524 496,582 489,509
Accumulated other
comprehensive income 2,564 2,986 2,933
Retained earnings 371,687 247,250 193,834
------------- ------------- -------------
Total stockholders'
equity 943,799 747,820 687,276
------------- ------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,298,924 $1,119,150 $1,001,226
------------- ------------- -------------
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $42,965 $26,921 $124,437 $65,752
Adjustments to reconcile net
income to net cash
provided by operating
activities:
Depreciation and
amortization 14,855 11,736 40,842 30,764
Deferred income taxes - (10,269) - (9,477)
Compensation expense
related to stock options (48) 46 (22) 219
Amortization of deferred
financing costs 73 68 275 193
Royalty expense related
to stock options 118 118 354 354
Loss on sale of property
and equipment 408 116 416 116
Changes in operating
assets and liabilities,
net of acquisitions
Tax benefit of option
exercises 577 24,269 42,716 37,682
Other 66,602 4,515 51,125 (5,634)
--------- --------- --------- ---------
Net cash provided by
operating activities 125,550 57,520 260,143 119,969
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Business acquisitions, net
of acquired cash (42) (73,749) (518) (81,479)
Acquisition transaction
costs (47) (5,247) (368) (6,723)
Purchases of property and
equipment, net (40,499) (25,505) (94,002) (53,370)
Change in investment in
affiliate 109 1,705 (65) 1,557
--------- --------- --------- ---------
Net cash used in
investing
activities (40,479) (102,796) (94,953) (140,015)
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock 2,257 13,134 29,268 24,956
Net proceeds from (payments
of) revolving loans - 38,480 (76,119) 42,244
Payments of capital lease
obligations and
other long-term debt (817) (1,843) (5,346) (4,291)
--------- --------- --------- ---------
Net cash provided
by (used in)
financing
activities 1,440 49,771 (52,197) 62,909
--------- --------- --------- ---------
EFFECT OF FOREIGN CURRENCY
EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 630 549 317 1,991
--------- --------- --------- ---------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 87,141 5,044 113,310 44,854
CASH AND CASH EQUIVALENTS,
beginning of period 187,404 73,284 161,235 33,474
--------- --------- --------- ---------
CASH AND CASH EQUIVALENTS,
end of period $274,545 $78,328 $274,545 $78,328
========= ========= ========= =========
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED SELECTED SEGMENT INFORMATION
(Dollars in thousands)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
--------------------- -------------------
2004 2003 2004 2003
---------- ---------- --------- ---------
Revenue
CSU (1) $334,101 $271,358 $977,393 $719,547
OEG (2) 104,406 44,338 273,258 97,766
Segment profit (3)
CSU $39,794 $31,790 $123,385 $93,065
OEG 41,106 22,405 117,190 43,305
Corporate and other (9,117) (8,564) (31,786) (25,363)
Segment profit percentage
CSU 11.9% 11.7% 12.6% 12.9%
OEG 39.4% 50.5% 42.9% 44.3%
(1) The Colleges, Schools, and Universities ("CSU") segment represents
an aggregation of our campus-based operating divisions.
(2) The Online Education Group ("OEG") segment represents an
aggregation of our online operating divisions.
(3) Segment profit equals the sum of income from operations and share
of affiliate earnings.
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