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NATIONAL EDUCATION CORP. ANNOUNCES EDUCATION CENTERS RESTRUCTURING AND TRAINING GROUP WRITE-DOWN

 IRVINE, Calif., Sept. 9 /PRNewswire/ -- J.W. Cwiertnia, president and chief executive officer of National Education Corp., today announced that the company's National Education Centers subsidiary will restructure its operations and record a pretax charge of approximately $23,600,000, or $16,944,000 after-tax ($.57 loss per share) during the third quarter ending Sept. 30, 1993. The restructuring charge includes a write-down of assets, estimated costs of closing selected schools and the write-off of intangible assets in connection with a previous acquisition. Of the $23,600,000 pretax restructuring charge, approximately $8,400,000 is expected to be paid in cash over the next three years.
 As a result of the restructuring, the Education Centers will cease new student enrollments at 14 of its 47 locations, while allowing existing students to complete their educational programs at these schools. For the six months ended June 30, 1993, the revenues of the 14 schools represent approximately 8 percent of National Education Corp.'s consolidated revenues and approximately 21 percent of the Education Centers' revenues. Operating losses at these schools for the six months ended June 30, 1993, aggregated $82,000. As part of the restructuring, the Education Centers intends to reposition itself to offer broader skill-based training programs to adults and corporations.
 Cwiertnia said that the Education Centers' restructuring was prompted by the increasing difficulty for students to obtain access to federally guaranteed student loan funding at a number of locations, especially in urban areas. This, in turn, has resulted from certain provisions of the Higher Education Act of 1992 and the recent Omnibus Budget Reconciliation Act which have caused some lenders to terminate participation in federally guaranteed student loan programs. The reduced access would have resulted in anticipated operating losses for these schools for the year ending Dec. 31, 1993.
 Cwiertnia also announced that the company's National Education Training Group subsidiary will report a pretax charge of approximately $9,200,000, or $6,072,000 after-tax ($.20 loss per share) during the third quarter ending Sept. 30, 1993. This charge is in connection with the write-down of certain intangible assets acquired in the 1986 acquisition of Deltak.
 Cwiertnia noted that the above after-tax restructuring charge for the schools of approximately $16,944,000 and write-down of NETG's intangible assets of approximately $6,072,000 will be significantly offset by the after-tax gain of approximately $21,260,000 ($.71 per share) which resulted from the recent successful initial public offering of approximately 18 percent of the stock of the company's Steck-Vaughn Publishing subsidiary.
 -0- 9/9/93
 /CONTACT: Corporate Communications, 714-474-9400/


CO: National Education Corp. ST: California IN: SU: RCN

MF-JL -- LA018 -- 0235 09/09/93 10:36 EDT
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Publication:PR Newswire
Date:Sep 9, 1993
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