"As of March 31, 2013 and December 31, 2012 , cash and cash equivalents and short-term investments totaled $299.2 million and $402.3 million , respectively. During the first quarter of 2013, the Company repaid the $80 million of outstanding borrowings under its Credit Agreement. Accordingly, restricted cash balances decreased to $11.4 million at March 31, 2013 from $97.9 million at December 31, 2012 ."
Cash / CE / ST Investments is 2X the current market cap of the company.
the university/international segments are wildly profitable compared to the rest of the business. once the teachouts are finished (i think majority should be done by 1Q14), that will relieve a big drain on operating income... transitional had $13.7m operating loss this quarter vs. $54.1m loss in 4Q12.
career segment is also losing a lot of money ($30.6m operating loss in 1Q, down from $42.2m in 4Q12). they would be better off teaching these suckers out and leaving aiu, ctu, and the international schools so we could get to break-even sooner.
As for the career education segment, back in 2009, CECO paid about $135 million for the exclusive right to the Le Cordon Bleu brand name for cooking schools in U.S. and Canada. So, Le Cordon Bleu is not going anywhere anytime soon. Strangely, one would think the healthcare sector would be profitable. I wonder what's driving the lack of profitability there? Likewise, at some point, one would expect to see some return on the acquisition of Everblue Training Institute (green jobs training).
They had negative free cash flow of $18 million in the quarter. That means with $299 million cash they have enough cash to cover 4 to 5 years worth of operations assuming they can't turn things around between now and then. When those transitional schools get wound down (or taught out) cash burn will be much different. I think down 91% in 2 years kind of prices this in no?
teamonfuego, you made the case and I agree. This is precisely why I'm here. As for the negative cash flow analysis and 4 to 5 years to turnaround, thats a worst case scenario. Things should start to get better. The incremental improvement I was looking for is happening.
If not Apollo then some venture capitalist should jump on this. VC's love lots of cash on the balance sheet. Start doing 'teachouts' on the programs with no future and sell off the schools that are still viable. Teachouts are actually a very affordable way to phase out a program - you still receive tuition revenue from the remaining students, pay adjuncts to teach them, while no longer spending marketing dollars on recruiting new students or other operational costs. Real estate market is getting better so sub-leasing any extra space should be doable.
Sentiment: Strong Buy
I have wondered the same. Once consolidation fever takes hold, some acquisition momentum will take place. Career Ed just needs to bring costs more in line with lower enrollments. Still very cheap. IMO.