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ITT Educational Services Inc. Message Board

  • aaatiles aaatiles Jun 22, 2008 7:00 PM Flag

    Potential Liquidity Issues

    This is for egghead, from the filed 10-Q at www.sec.gov [Edgar Reports]

    "Student Financing Update. As previously announced, in February 2008, the agreement between us and the primary provider of private education loans to our students was terminated. Although we continue to work with new lenders for them to provide private education loans to our students, the continuing and increasing tightening of the credit markets, along with the time required to integrate third-party lenders, has resulted in us providing increased internally funded financing to our students. We intend to maintain our current admission standards and to continue providing internally funded financing to our students who fail to qualify for private education loans made by third-party lenders.

    In 2008, we anticipate a decline in the percentage of our revenue that we indirectly derive from private loans, including internally funded student financing, but we cannot predict with certainty what that percentage will be due to the challenging lending environment and other variables. Accordingly, at this time, we cannot estimate the amount of internally funded financing that our students will require, in addition to other sources of financial aid, to finance the cost of their education.

    The increased internally funded financing that we are providing to our students will negatively impact our liquidity and expose us to new and greater credit risk. Internally funded financing provides for payments to us by our students over an extended term, which could have a material adverse effect on our cash flows from operations in 2008. In addition, we have the risk of collection with respect to our internally funded financing, which we believe will cause us to increase our allowance for doubtful accounts in 2008 compared to prior year periods, and result in a significant increase in our bad debt expense as a percentage of revenue in 2008 compared to prior year periods. We believe that our bad debt expense as a percentage of revenue in 2008 will exceed the historical range of 1% to 3%. Increases in our bad debt expense in 2008 will result in increased student services and administrative expenses in 2008 compared to prior year periods.

    Further, increases in internally funded financing will increase our accounts receivable and our days sales outstanding in 2008 compared to prior year periods. We believe that our days sales outstanding in 2008 will exceed the historical range of six to eight days.

    In our experience so far in 2008, lenders have continued to make Title IV Program loans to our students. We have taken steps, however, to prepare our systems in the event that our students need to access the William D. Ford Federal Direct Loan Program for Title IV Program loans in the future. "has resulted in us providing increased internally funded financing to our students. We intend to maintain our current admission standards and to continue providing internally funded financing to our students who fail to qualify for private education loans made by third-party lenders.

    Pay special attention to this line: "has resulted in us providing increased internally funded financing to our students. We intend to maintain our current admission standards and to continue providing internally funded financing to our students who fail to qualify for private education loans made by third-party lenders."

    We'll see how much cash ESI generates this quarter when they announce earnings in August.

    I don't know what kind of plant you are smoking on your gas-guzzling yacht, but it must be good because when this thing goes down, you'll have a "for sale" sign up on that money pit pretty fast. Too bad there won't be any takers....

    Keep on buying ESI at these prices, dork.

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    • yp_dave_fort_myers_beach yp_dave_fort_myers_beach Jul 17, 2008 10:55 AM Flag

      Comparing the ITT of yesteryear as it exists today is a fallacy. ITT WAS a really terrific school, but it cannot rest on the laurels of its past. Maybe a poor analogy, but a woman is good looking when she's young, and then they get fat and old. ITT is fat and old and no cosmetic surgery will save the ol'-egg-fart ITT SKOOL. They've done a great job of BSg you and others, but it will not last forever. Hey, you still haven't had the guts to identify yourself. Get real, and let's see who are the ITT employees on this board looking to get brownie pts. All to obvious that ITT monitors this board, and their newspeak lackies are posting here. For those of us that you have conveniently labelled "disgruntled," use a thesaurus and think of some more appropriate terminology. Let me ask you this in all seriousness: why do you think that so many employees/ex-employees/staff/students hate ITT. I can answer that question: they've been ripped off in one way or another.

    • AAATILES- The earnings release is next week, not August.

      Your post is nothing more than cya boilerplate risk disclosures.

      This thing is lining up perfect for another kill come earnings release. This could not happen any better. Next week, I will show you how the big boys make money.

      • 3 Replies to egg_salad_fart
      • This is hilarious! I put in a limit sell short order for 500 shares at 79.00 when ESI was at 78.70. I went on an errand, came back 40 minutes later and the order went through while I was gone. When I got back, ESI was down to 78.30, so I put in a limit buy to cover order for the full 500 shares at 77.85. It went through a few minutes later for $575 gross profit, $555 net profit.

        Add that to the $1,970 gain already today and that's $2,525...and the day's not over yet.

        Egg, why don't you disclose the EPS figure or or are you too afraid to because of your inside connection?

      • wow. I must be retarded.

        I just sold the 700 shares of FRE bought earlier this morning at 4.97 for 6.00, for $701 profit after commissions.

        and sold the 500 shares of FNM bought earlier this morning at 7.50 for 8.10, for $280 profit after commissions.

        Those two trades coupled with the 500 shares of ESI bought and sold today as posted earlier totaled $990.

        Let's see, that's $1,970 gain today while the entire market is down, AND I still have all cash, and I have my job and the real estate.

        Yeah, I'm an idiot....

      • I know the release is next week. I think when I wrote that it was before the announcement of when earnings would be. And since usually has a 5-week delay from quarter-end to earnings, I figured it would originally be in August.

        cover-my-ass boiler plate risk disclosure? what the hell are you talking about?

        Besides, here are some more trades for you to digest with your egg salad:

        7/14: bought 500 shares at 77.66, sold at 77.61, lost $45 [disappointed there was no rally in the afternoon]

        7/15: bought 500 shares at 76.10, just sold at 78.16, made $990.

        Also, bought 500 shares FNM at 7.50, 500 shares FRE at 4.97

        So, AGAIN, tell us how you know for a fact that it is going to be another "kill" earnings release. You offer no insight whatsoever. Yawn.

        By big boys, do you mean morbidly obese?

    • Somebody call the SEC. AAATILEs is selling $200 worth of options. Maybe we need to suspend trading to give the market time to absorb this block.

      Time to head to the bay.

    • this stock is holding like a champ, hardly gave in any gains at all. you lost your credo, sorry...

    • You are such an amateur. I have been reading your negativity on this stock since it was in the low 50s. now, some 30 dollars higher you continue to sprout negativity. most would have thrown in the towel and disappeared from the board out of disgrace. i encourage everyone to listen to the web cast of investor presentation at WB conference. At the end of CEO's presentation, he expressed that the company will be raising guidance when it reports results next. Recent increases in federal awards have reduced the company's reliance on private loans since the company reduced guidance in Feb. As a result, the low end of the range previously supplied is now too low. couple this with an absolute blow out last qtr (ended Mar) along with what's likely to be equally strong results for qtr ending Jun, there is even more reason to take guidance up.. while some of this is behind the recent appreciation in shares, there is far more appreciation ahead supported by historically strong earnings growth (25%+ since IPO) and multiple expansion more consistent with industry averages.

      best of luck. IMO, this stock will see $100 soon

      • 4 Replies to CutToIt
      • per my earlier note on 6/26, $100 stock price will arrive. very strong earnings report this morning. new student enrollment along with all other financial metrics, including eps, were much better than street expectations. furthermore, as expected and as hinted at recent WB investor conference, the company raised its guidance for the year. there are no liquidity issues to speak of here and this will be demonstrated by management's desire to again resume share BB.

        continue to ignore the negativity on this board.. it is not justified and will only lose you money.

      • yp_dave_fort_myers_beach yp_dave_fort_myers_beach Jun 27, 2008 5:23 PM Flag

        Yeah, in your dreams a-hole. Just look at the posts from all the illiterate ITT students. Keep it up and don't wonder why we have become a 2nd-class country. We use to laugh at "made in Japan." Now, one wonders why we have have to suck in our gut when we look at ITT grads...It's not an issue of money, it's an issue of national pride at what we produce...YUCH at ITT grads!

      • so, how did your call on 12-30-05 that Learning Tree (LTFE) when it was at $13 would go to $20 within 12 month go, accusing all the naysayers of being jackasses?
        Let's see:
        It slid down to $7.40 in Aug. 2006 and finished at $9.25 Dec. 2006. GOOD CALL!
        It didn't hit $20 until mid-October 2007, went as high as $27 and now resides at $16.30.
        So, a 9.5% compound annual growth rate over the 2.5 years. WOW! Outstanding. Get more of those stocks in your portfolio.
        Who's the amateur? Yea, look in the mirror.
        Who cares about a $260 million market cap company?
        NEXT!!!!

      • oh, so all of the people, including me, who bought puts in ABK, MBIA, LEH, IMB, BS, MER, C, MTG, MGIC, RDN, PMI, WCG, CFC, WM, ETFC, when analysts were all saying the worst was over are idiots. I guess I am an idiot for making money on all those trades. And that those trades were pure luck and amateurish.

        The capital position of this company is impaired. And when it stops opening up new schools to find more suckers (and because it is dependent on these suckers), the wheels will fall off. I could care less that the price was driven up $30/share since March, partly because of the short supply of available shares since 96% of the outstanding shares are owned by 20 institutions and the stock is shorted something like 150%. I still believe that the remainder of 2008/2009 and the fall-out from the sub-prime credit crisis into that period will seal the doom.

        Why don't you look at the students/campus open at least one year over the last four years and you will see there is NO growth there [see one of my posts for that info if you're too lazy to get it from their filed statements]. The only "growth" comes from the management-mandated 5% annual tuition raise and the opening of new "campuses", which is costly. Why have assets (along with equity) decreased and liabilities increased each of the last three years? Does that sound like good internal growth to you?

        And also check out the average purchase price of those treasury shares in 2006, 2007 and 2008 and see if that was a good return on capital.

        Buddy, if you keep blindly following analyst guidance or even management guidance without doing your own research, you will not achieve stellar results.

        I don't throw in the towel because my research hasn't produced the expected results by a specific date. I don't feel disgraced at all. I still firmly believe that, in the end, this one produces a service that perhaps only 30% of the students can afford or use, is poorly run and the results will eventually that bear out.

    • I guess those 75 July 75 puts I bought on 6/20 at $45 each when ESI was at $88 are only worth $105 each right now for a 133% return in less than a week with ESI down to $81.5.... Hope you sold at $90. I did sell 15 of them on Monday at $75 each for a 67% two-day gain. Remaining 60 worth $105 each and probably will go higher in the next two weeks. Sure, I have no idea what I'm doing.

      • 1 Reply to aaatiles
      • I have no idea what you are looking at or where you are getting your quotes. The numbers you quote make no sense.

        July 75 puts are bid $.50 ask $.65 on contracts of 100. They closed at $.55 on 6/24. The stock is trading about $10 above its target strike price. Get out now because soon this is going be worthless soon.

        Stick to cleaning the men's room at Juniper. One of these days, they are going to catch you sneaking into someone's office and using their computer.

 
ESI
7.57+0.05(+0.66%)Feb 26 4:02 PMEST

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