Strong leadership team remains focused on executing strategic
plan;
Company continues to expect to achieve positive Adjusted EBITDA
from ongoing operations for Q4 2014 and full year 2015
SCHAUMBURG, Ill.--(BUSINESS WIRE)--
The Board of Directors of Career Education Corporation (NASDAQ: CECO)
today announced the resignation of President and Chief Executive Officer
Scott W. Steffey. Ronald D. McCray will serve as Interim President and
CEO. Thomas B. Lally, the current Chairman of the Nominating and
Governance Committee, will serve as lead independent director of Career
Education’s Board of Directors. These leadership changes, which are
effective immediately, are not the result of any changes in the
company’s operational, regulatory or financial position, performance or
reporting, and should have no impact on students.
“I look forward to working with Career Education’s experienced
management team and dedicated employees to execute our current strategic
plan. We will continue to simplify our business model, generate growth
in total university student enrollment, strengthen academic outcomes at
our institutions, while remaining focused on shareholder value and our
return to profitability,” McCray said. “Most importantly, this
leadership change should have no impact on our financial objectives. As
previously communicated, we expect positive Adjusted EBITDA from ongoing
operations for both the fourth quarter of 2014 and the full year 2015,
assisted in part by our previously announced $40 million of expense
reductions which were implemented last year.”
McCray, a graduate of Cornell University and Harvard Law School, joined
the Board of Directors in November 2012 and has served as Chairman since
June 2014. He previously served as chief administrative officer of Nike,
Inc. as well as senior vice president for law and government affairs at
Kimberly-Clark Corporation, where he also served as chief compliance
officer. McCray’s higher education experience includes service on the
board of trustees of Cornell University, the visiting committee of
Harvard Law School and the executive board of the Southern Methodist
University Dedman School of Law. He was nominated by President Obama to
be a member of the Federal Retirement Thrift Investment Board, receiving
Senate confirmation in 2011.
“We thank Scott for his contributions and wish him well in his future
endeavors,” said McCray, Career Education’s Chairman, Interim President
and CEO. “We will move quickly to identify a new CEO. In the meantime,
we have a deep bench of talented executives and employees, and we are
well-positioned to continue to execute our strategic plan and meet our
financial objectives.”
The Board of Directors is launching an executive search for a new CEO.
“Ron McCray is ideally suited to lead Career Education through this
transition while we conduct a thorough search for a new chief
executive,” said Lally, Career Education’s lead independent director.
“In addition to his familiarity with and knowledge of Career Education’s
business and strategic direction, McCray also has a wealth of higher
education and executive experience. We have tremendous confidence in his
leadership and the entire executive team, and we look forward to a
successful 2015.”
Note Regarding Non-GAAP Measures and Ongoing Operations
The Company believes it is useful to present non-GAAP financial measures
which exclude certain significant items that it does not consider
reflective of underlying operating performance as a means to understand
the performance of its ongoing business. Adjusted EBITDA excludes items
such as those described in our Form 10-Q for the quarter ended September
30, 2014 under “Management’s Discussion and Analysis of Financial
Condition and Results of Operations - 2014 THIRD QUARTER OVERVIEW.” The
Company defines ongoing operations as continuing operations excluding
our transitional group, which consists of campuses that are being taught
out. Continuing operations does not include the Company’s Culinary Arts
campuses as they are assets held for sale. As a general matter, the
Company uses non-GAAP financial measures in conjunction with results
presented in accordance with GAAP to help analyze the performance of its
ongoing business, assist with preparing the annual operating plan, and
measure performance for some forms of compensation. In addition, the
Company believes that non-GAAP financial information is used by analysts
and others in the investment community to analyze the Company's
historical results and to provide estimates of future performance and
that failure to report non-GAAP measures could result in a misplaced
perception that the Company's results have underperformed or exceeded
expectations.
Non-GAAP financial measures, when viewed in a reconciliation to
corresponding GAAP financial measures, provide an additional way of
viewing the Company's results of operations and the factors and trends
affecting the Company's business. Non-GAAP financial measures should be
considered as a supplement to, and not as a substitute for, or superior
to, the corresponding financial results presented in accordance with
GAAP.
ABOUT CAREER EDUCATION CORPORATION
The colleges, institutions and universities that are part of the Career
Education Corporation (“CEC”) family offer high-quality education to a
diverse student population in a variety of career-oriented disciplines
through online, on-ground and hybrid learning program offerings. In
addition to its online offerings, Career Education serves students from
campuses throughout the United States offering programs that lead to
doctoral, master’s, bachelor’s and associate degrees, as well as to
diplomas and certificates.
CEC’s institutions include both universities that provide degree
programs through the master or doctoral level and colleges that provide
programs through the associate and bachelor level. The University group
includes American InterContinental University (“AIU”) and Colorado
Technical University (“CTU”) – predominantly serving students online
with career-focused degree programs that meet the educational demands of
today’s busy adults. The Career Schools group offers career-centered
education primarily through ground-based campuses and includes
Briarcliffe College, Brooks Institute, Harrington College of Design, Le
Cordon Bleu North America (“LCB”), Missouri College and Sanford-Brown
Institutes and Colleges (“SBI” and “SBC,” respectively). Through its
colleges, institutions and universities, CEC is committed to providing
high-quality education, enabling students to graduate and pursue
rewarding career opportunities.
A detailed listing of individual campus locations and web links to
Career Education’s colleges, institutions and universities can be found
at www.careered.com.
Except for the historical and present factual information contained
herein, the matters set forth in this release, including statements
identified by words such as “expect,” “anticipate,” “believe,”
“continue,” “will,” “should” and similar expressions, are
forward-looking statements as defined in Section 21E of the Securities
Exchange Act of 1934, as amended. These statements are based on
information currently available to us and are subject to various
assumptions, risks, uncertainties and other factors that could cause our
results of operations, financial condition, cash flows, performance,
business prospects and opportunities to differ materially from those
expressed in, or implied by, these statements. Except as expressly
required by the federal securities laws, we undertake no obligation to
update or revise such factors or any of the forward-looking statements
contained herein to reflect future events, developments or changed
circumstances, or for any other reason. These risks and uncertainties,
the outcomes of which could materially and adversely affect our
financial condition and operations, include, but are not limited to, the
following: declines in enrollment; rulemaking by the U.S. Department of
Education or any state and increased focus by Congress, the President
and governmental agencies on for-profit education institutions; our
continued compliance with and eligibility to participate in Title IV
Programs under the Higher Education Act of 1965, as amended, and the
regulations thereunder (including the “90-10 Rule” and financial
responsibility and student loan default rate standards prescribed by the
U.S. Department of Education), as well as national and regional
accreditation standards and state regulatory requirements; the impact of
management changes; our ability to successfully defend litigation and
other claims brought against us; and changes in the overall U.S. or
global economy. Further information about these and other relevant risks
and uncertainties may be found in the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2013 and its subsequent
filings with the Securities and Exchange Commission.
Investors:
Alpha IR Group
Chris Hodges or Sam Gibbons
(312)
445-2870
[email protected]
Media:
Career
Education Corporation
Mark Spencer
Director, Corporate
Communications
(847) 585-3802
Source: Career Education Corporation