Career Education Corporation Reports Results for the Third Quarter 2005 and Announces Third Online Brand; Third Quarter Revenue Increased 14%; Third Quarter Net Income Increased 32%.HOFFMAN ESTATES Hoffman Estates A village of northeast Illinois, a suburb of Chicago. Population: 49,700. , Ill. -- 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 its third quarter ended September September: see month. 30, 2005. RESULTS OF OPERATIONS Three Months Ended September 30, 2005 --Third quarter 2005 consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenue increased 14% to $497.5 million, from $436.0 million during the third quarter 2004. The increase is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 12% increase in student population from July July: see month. 31, 2004, to July 31, 2005, as well as price increases and student enrollment mix changes. --Third quarter 2005 consolidated income from operations increased 21%, to $83.7 million, from $69.4 million during the third quarter 2004. Operating profit margin Operating profit margin The ratio of operating profit to net sales. percentage was 16.8%, an increase of 90 basis points from 15.9% during the third quarter 2004. --Third quarter 2005 consolidated net income was $54.9 million, or $0.53 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, an increase of 32% from third quarter 2004 net income of $41.5 million, or $0.40 per diluted share. Nine Months Ended September 30, 2005 --During the nine months ended September 30, 2005, consolidated revenue was $1.505 billion, a 22% increase from $1.237 billion during the nine months ended September 30, 2004. --Income from operations during the nine months ended September 30, 2005, increased 37% to $264.4 million, from $193.3 million during the nine months ended September 30, 2004. Operating profit margin percentage was 17.6%, an increase of 200 basis points from 15.6% during the nine months ended September 30, 2004. --For the nine months ended September 30, 2005, we reduced our effective income tax rate from 39.25% to 38.25%. The change was affected during the third quarter 2005. The reduction of our effective income tax rate increased third quarter net income per share by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.02. --During the nine months ended September 30, 2005, net income was $163.6 million, or $1.57 per diluted share, a 40% increase from $116.8 million, or $1.11 per diluted share, during the nine months ended September 30, 2004. CASH FLOWS AND FINANCIAL POSITION Cash Flows --Third quarter 2005 net cash provided by operating activities was $106.7 million, a 15% decrease from $125.6 million during the third quarter 2004. The decrease is primarily attributable to a decline in cash provided from changes in net operating assets Operating Assets Another term for working capital. and liabilities, offset, in part, by increases in net income and depreciation and amortization expense during the third quarter 2005 relative to the third quarter 2004. --Capital expenditures decreased 30% to $28.3 million, from $40.5 million during the third quarter 2004. Capital expenditures during the third quarter 2005 represented approximately 5.7% of total third quarter 2005 revenue. Financial Position --As of September 30, 2005 and 2004, respectively, cash, cash equivalents, and available-for-sale investments totaled $343.9 million and $274.5 million. --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 as of September 30, 2005, was $84.3 million, a 28% decrease from $116.8 million as of September 30, 2004. 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 as of September 30, 2005, increased to 37.5%, from 28.0% as of September 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). ("DSO See CSO. ") were 17 days as of September 30, 2005, representing a nine-day decrease from DSO as of September 31, 2004, of 26 days. We calculate DSO by dividing the sum of net student receivables and net other receivables by average daily revenue for the quarter. Average daily revenue for the quarter is computed by dividing total revenue by the total number of days in the quarter. STOCK REPURCHASE Stock repurchase A firm's repurchase of outstanding shares of its common stock. PROGRAM In August 2005, our Board of Directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the use of up to $300.0 million for the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of shares of our outstanding common stock. Pursuant to this stock repurchase program, we may repurchase shares of our outstanding common stock on the open market or in private transactions from time to time, depending on factors including market conditions and corporate and regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. . The stock repurchase program does not have an expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. and may be suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. or discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: at any time. During the third quarter 2005, we repurchased approximately 5.3 million shares of our common stock for approximately $200.2 million at an average price of approximately $37.97 per share. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the stock repurchase program, we are authorized to use up to an additional $99.8 million to repurchase additional shares of our outstanding common stock. Our stock repurchases during the third quarter 2005 decreased third quarter 2005 diluted weighted average shares outstanding by approximately 2.5 million shares and increased third quarter 2005 diluted net income per share by approximately $0.01. POPULATION AND NEW STUDENT START DATA 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. total student population and new student start data includes the results of both the Online Educational Group ("OEG OEG Olfactory Ensheathing Glia OEG Oberrheinische Eisenbahn-Gesellschaft (German Railroad Company) OEG Operations Evaluation Group OEG Old English Game (chicken breed) ") segment and the Colleges, Schools and University ("CSU See DSU/CSU. 1. CSU - California State University. 2. CSU - Cleveland State University. 3. CSU - Channel Service Unit. ") segment. Student Population --CEC total student population as of October October: see month. 31, 2005, was approximately 107,300, representing a 8% increase from total student population as of October 31, 2004, of approximately 99,500. --OEG student population as of October 31, 2005, was approximately 32,000, representing a 53% increase from OEG student population as of October 31, 2004, of approximately 20,900. --As previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). , the Gibbs Gibbs , Josiah Willard 1839-1903. American mathematician and physicist who formulated the theoretical foundation of physical chemistry, developed vector analysis, and conducted optical and thermodynamic research. Noun 1. division schools, which are included in the CSU segment, have experienced a significant decline in student population relative to student population in prior periods. Excluding the student population of the Gibbs division schools, CEC student population increased 12% from October 31, 2004, to October 31, 2005. We have devoted increased attention to our schools within the Gibbs division to improve the division's performance. New Student Starts --New student starts during the third quarter 2005, including results of both our OEG and CSU segments, were approximately 33,750, compared to new student starts during the third quarter 2004 of approximately 33,500. NEW STUDENT OFFERING "We are pleased with the progress we are making on many fronts of our business" said John Larson John B. Larson (born July 22 1948), American politician, has been a Democratic member of the United States House of Representatives since 1999, representing Connecticut's At-large congressional district (map). , Chairman and Chief Executive Officer and President of Career Education Corporation. "In addition, we have instituted a variety of exciting corporate and student focused initiatives this quarter." Among the new initiatives this quarter is the announcement of a third online brand called StoneCliffe College Online, a division of 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. . StoneCliffe is a new online offering targeted at students who are looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. a part-time part-time adj. For or during less than the customary or standard time: a part-time job. part , slower paced education. BUSINESS OUTLOOK Please note that the following 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. . Fourth Quarter --We expect CEC consolidated fourth quarter 2005 revenue to be approximately $522 to $532 million and CEC consolidated fourth quarter 2005 diluted net income per share to be approximately $0.66 to $0.69. This guidance represents an increase of 6% to 8% from CEC consolidated fourth quarter 2004 revenue of $491 million and an increase of 10% to 15% from CEC consolidated fourth quarter 2004 diluted net income per share of $0.60. --We expect OEG segment fourth quarter 2005 revenue, included in the preceding amounts, to be approximately $170 million. --We expect our CEC consolidated fourth quarter 2005 effective income tax rate to be approximately 38.25%. --We expect diluted weighted average shares outstanding to be approximately 101.0 million during the fourth quarter 2005. CONFERENCE CALL INFORMATION Career Education Corporation will host a conference call today, November November: see month. 2nd, 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) 614-3946 (international) or (800) 638-5495 (domestic) and citing code 16492278. 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 7:00 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 61247115. Career Education Corporation (www.careered.com) is one of the largest providers of private, for-profit for-prof·it adj. Established or operated with the intention of making a profit: a for-profit organization. , post secondary education and has a presence in both on-campus on-campus adjective Referring to an on-site site of a medical complex with multiple buildings. Cf 'Off campus.'. and online education. CEC's Colleges, Schools and Universities segment operates more than 80 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 business studies, visual communication and design technologies, health education, information technology, and culinary cu·li·nar·y adj. Of or relating to a kitchen or to cookery. [Latin cul  n arts. 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
Online and offers a variety of degrees in information technology,
business, visual communication, and education. CEC's total student
population as of October 31, 2005, was approximately 107,300 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 "anticipate," "believe," "plan," "expect," "intend," "project," "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. 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , 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: 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 derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. , and other lawsuits; 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; risks related to our ability to manage and continue growth; future financial and operational results; risks related to competition, general economic conditions, and other risk factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our industry and business, and the factors discussed 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, 2004, and from time to time in our other reports filed with the Securities and Exchange Commission.
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended September 30, 2005 and 2004
(In thousands, except per share data and percentages)
% of % of
2005 Revenue 2004 Revenue
------------------ ------------------
(Restated)
Revenue:
Tuition and registration
fees $472,231 94.9% $404,083 92.7%
Other 25,251 5.1% 31,951 7.3%
----------- -----------
Total revenue 497,482 100.0% 436,034 100.0%
----------- -----------
Operating expenses:
Educational services and
facilities 154,797 31.1% 145,433 33.4%
General and administrative 238,075 47.9% 206,374 47.3%
Depreciation and
amortization 20,899 4.2% 14,855 3.4%
----------- -----------
Total operating expenses 413,771 83.2% 366,662 84.1%
----------- -----------
Income from operations 83,711 16.8% 69,372 15.9%
Other income (expense):
Interest income 1,890 0.5% 651 0.1%
Interest expense (343) -0.1% (525) -0.1%
Share of affiliate earnings 428 0.1% 209 0.0%
Miscellaneous income
(expense) 228 0.0% (181) 0.0%
----------- -----------
Total other income 2,203 0.5% 154 0.0%
----------- -----------
Income before provision for
income taxes 85,914 17.3% 69,526 15.9%
Provision for income taxes 30,979 6.3% 27,985 6.4%
----------- -----------
Income from continuing
operations 54,935 11.0% 41,541 9.5%
Loss on disposition of
discontinued operations - 0.0% - 0.0%
Write-off of goodwill of
discontinued operations - 0.0% - 0.0%
----------- -----------
Loss from discontinued
operations - 0.0% - 0.0%
----------- -----------
Net Income $54,935 11.0% $41,541 9.5%
=========== ===========
======================================================================
Income per share - Diluted
Income from continuing
operations $0.533 $0.396
Loss from discontinued
operations - -
----------- -----------
Net income $0.533 $0.396
=========== ===========
Diluted weighted average
shares outstanding 103,125 104,893
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
For the Nine Months Ended September 30, 2005 and 2004
(In thousands, except per share data and percentages)
% of % of
2005 Revenue 2004 Revenue
------------------ ------------------
(Restated)
Revenue:
Tuition and registration
fees $1,433,044 95.2% $1,146,613 92.7%
Other 72,337 4.8% 90,848 7.3%
----------- -----------
Total revenue 1,505,381 100.0% 1,237,461 100.0%
----------- -----------
Operating expenses:
Educational services and
facilities 464,596 30.9% 410,502 33.2%
General and administrative 718,468 47.7% 592,781 47.9%
Depreciation and
amortization 57,933 3.8% 40,842 3.3%
----------- -----------
Total operating expenses 1,240,997 82.4% 1,044,125 84.4%
----------- -----------
Income from operations 264,384 17.6% 193,336 15.6%
Other income (expense):
Interest income 7,877 0.5% 1,541 0.1%
Interest expense (1,199) -0.1% (2,067) -0.2%
Share of affiliate earnings 3,670 0.2% 2,799 0.3%
Miscellaneous expense (530) 0.0% (196) 0.0%
----------- -----------
Total other income 9,818 0.6% 2,077 0.2%
----------- -----------
Income before provision for
income taxes 274,202 18.2% 195,413 15.8%
Provision for income taxes 104,882 7.0% 78,655 6.4%
----------- -----------
Income from continuing
operations 169,320 11.2% 116,758 9.4%
Loss on disposition of
discontinued operations (2,179) -0.1% - 0.0%
Write-off of goodwill of
discontinued operations (3,521) -0.2% - 0.0%
----------- -----------
Loss from discontinued
operations (5,700) -0.3% - 0.0%
----------- -----------
Net Income $163,620 10.9% $116,758 9.4%
=========== ===========
======================================================================
Income per share - Diluted
Income from continuing
operations $1.620 $1.112
Loss from discontinued
operations $(0.054) -
----------- -----------
Net income $1.566 $1.112
=========== ===========
Diluted weighted average
shares outstanding 104,489 105,022
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31, September 30,
2005 2004 2004
------------- ------------- -------------
(Restated)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $90,241 $349,458 $274,545
Available-for-sale
investments 253,613 - -
------------- ------------- -------------
Total cash, cash
equivalents, and
available-for-sale
investments $343,854 $349,458 $274,545
Receivables:
Students, net of
allowance for
doubtful accounts
of $50,626, $61,136,
and $45,466 as of
September 30, 2005,
December 31, 2004,
and September 30,
2004, respectively 84,251 85,982 116,827
Other, net 5,327 5,378 5,181
Inventories 17,265 17,347 16,560
Prepaid expenses 37,284 29,649 36,717
Other current assets 34,744 5,980 7,827
Deferred income tax assets 18,807 18,806 5,032
------------- ------------- -------------
Total current assets 541,532 512,600 462,689
------------- ------------- -------------
PROPERTY AND EQUIPMENT, net 394,858 351,140 317,780
GOODWILL 444,137 448,896 446,989
INTANGIBLE ASSETS, net 35,589 35,881 35,841
OTHER ASSETS 34,650 38,495 37,831
------------- ------------- -------------
TOTAL ASSETS $1,450,766 $1,387,012 $1,301,130
------------- ------------- -------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term debt $1,629 $2,274 $1,909
Accounts payable 24,440 38,263 27,576
Accrued expenses:
Payroll and related
benefits 42,338 38,193 41,393
Income taxes 13,336 4,663 -
Other 75,798 70,520 69,280
Deferred tuition revenue 184,972 166,743 177,430
------------- ------------- -------------
Total current
liabilities 342,513 320,656 317,588
------------- ------------- -------------
LONG-TERM LIABILITIES:
Long-term debt, net of
current maturities 18,377 21,591 21,104
Long-term contratual
obligation - - 9,679
Deferred rent obligations 83,718 15,293 12,627
Deferred income tax
liabilities 39,884 39,972 18,366
Other 4,874 4,669 4,297
------------- ------------- -------------
Total long-term
liabilities 146,853 81,525 66,073
------------- ------------- -------------
COMMITMENTS AND
CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock $- $- $-
Common stock 1,032 1,025 1,024
Additional paid-in capital 588,015 571,192 568,524
Accumulated other
comprehensive income 673 4,396 2,564
Retained earnings 571,838 408,218 345,357
Cost of shares in treasury (200,158) - -
------------- ------------- -------------
Total stockholders'
equity 961,400 984,831 917,469
------------- ------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,450,766 $1,387,012 $1,301,130
------------- ------------- -------------
CAREER EDUCATION CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Restated) (Restated)
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Income $54,935 $41,541 $163,620 $116,758
Adjustments to
reconcile net income
to income from
continuing operations:
Loss from
disposition of
discontinued
operations - - 2,179 -
Write-down of
goodwill of
discontinued
operations - - 3,521 -
----------- ----------- ----------- -----------
Income from
continuing
operations 54,935 41,541 169,320 116,758
----------- ----------- ----------- -----------
Adjustments to
reconcile income
from continuing
operations to net
cash provided by
operating activities:
Depreciation and
amortization 20,899 14,855 57,933 40,842
Loss on
disposition of
property and
equipment 22 408 572 416
Other 193 143 593 607
Changes in
operating assets
and liabilities,
net of
acquisitions
Tax benefit
associated
with option
exercises 2,410 577 4,826 42,716
Other 28,202 68,026 55,886 58,804
----------- ----------- ----------- -----------
Net cash
provided by
operating
activities 106,661 125,550 289,130 260,143
----------- ----------- ----------- -----------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Business
dispositions/
acquisitions, net of
cash 26 (42) (908) (518)
Acquisition
transaction costs - (47) - (368)
Purchases of property
and equipment (28,336) (40,499) (99,232) (94,002)
Purchases of
available-for-sale
investments (284,012) - (700,636) -
Sales and maturities
of available-for-
sale investments 272,629 - 447,024 -
Change in investment
in affiliate (382) 109 (306) (65)
----------- ----------- ----------- -----------
Net cash
used in
investing
activities (40,075) (40,479) (354,058) (94,953)
----------- ----------- ----------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Purchase of treasury
stock (200,158) - (200,158) -
Issuance of common
stock 5,051 2,257 12,003 29,268
Net proceeds from
(payments of)
revolving loans (181) - (2,060) (76,119)
Payments of capital
lease obligations
and other long-
term debt 2,183 (817) 678 (5,346)
----------- ----------- ----------- -----------
Net cash
provided
by (used
in)
financing
activities (193,105) 1,440 (189,537) (52,197)
----------- ----------- ----------- -----------
EFFECT OF FOREIGN
CURRENCY EXCHANGE
RATE
CHANGES ON CASH AND
CASH EQUIVALENTS (284) 630 (4,752) 317
----------- ----------- ----------- -----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS (126,803) 87,141 (259,217) 113,310
CASH AND CASH
EQUIVALENTS,
beginning of period 217,044 187,404 349,458 161,235
----------- ----------- ----------- -----------
CASH AND CASH
EQUIVALENTS, end of
period $90,241 $274,545 $90,241 $274,545
=========== =========== =========== ===========
CAREER EDUCATION CORPORATION
SELECTED SEGMENT INFORMATION
(Dollars in thousands)
Three Months Nine Months
Ended September 30, Ended September 30,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Restated) (Restated)
Revenue
CSU (1) $328,430 $331,628 $1,008,425 $964,203
OEG (2) 169,052 104,406 496,956 273,258
Segment profit (3)
CSU $36,470 $37,592 $116,345 $111,460
OEG 62,425 41,106 201,218 117,190
Corporate and other (14,756) (9,117) (49,509) (32,515)
Segment profit
percentage
CSU 11.1% 11.3% 11.5% 11.6%
OEG 36.9% 39.4% 40.5% 42.9%
(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.
CAREER EDUCATION CORPORATION
SELECTED ACCOUNTS RECEIVABLE AND ALLOWANCE INFORMATION
(Dollars in thousands)
DAYS SALES OUTSTANDING
September 30,
-----------------------
2005 2004
----------- -----------
(Restated)
Total revenue during
the quarter ended $497,482 $436,034
Number of days in the
quarter ended 92 92
Total revenue per day $5,407 $4,740
Accounts receivable,
net $89,578 $122,008
Days sales
outstanding 17 26
ALLOWANCE AS A PERCENTAGE OF STUDENT RECEIVABLES
September 30, December 31, September 30,
2005 2004 2004
------------- ------------ -------------
(Restated)
Allowance for doubtful
accounts $50,626 $61,136 $45,466
Gross student
receivables $134,877 $147,118 $162,293
Allowance as a
percentage of
student
receivables 37.5% 41.6% 28.0%
STUDENT RECEIVABLES VALUATION ALLOWANCE
Balance, Amounts Balance,
Beginning Charges Written- End of
of Period to Expense Off Period
----------- ----------- ----------- -----------
For the three months
ended September 30,
2005 $50,726 $22,685 $(22,785) $50,626
For the three months
ended September 30,
2004 44,855 24,014 (23,403) 45,466
For the nine months
ended September 30,
2005 61,136 61,719 (72,229) 50,626
For the nine months
ended September 30,
2004 47,467 64,626 (66,627) 45,466
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