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ITT Educational Services Inc. Message Board

  • auagboy auagboy Aug 5, 2014 10:12 AM Flag

    I'm out...20% loss in 1 day...here's what's wrong at ESI

    the problem at ESI is one that has been in the news for a while. The issues as I see it are: the $300M Peak Student Loan Trust that was carried off balance sheet. ESI is the guarantor of the Trust's notes and has been making payments to keep the trust from being in default. It needed the property sale to cover Trust losses, but its lenders wanted to secure their loans with the property that ESI sought to sell. Now ESI will have to carry the Peak Trust on its balance sheet, the company's net worth could be negative. This is a real mess and the firing of the CEO may and failure to file financial statements may indicate accounting irregularities. The risk in buying ESI is incalculable without up to date financials. Stay away.

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    • The new Credit Agreement says they have to furnish AUDITED financial statements by September 15, 2014
      That is your D-Day, about 1 month and two weeks away.
      _____________________________________________________

      � The audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Company, and the certificate of a financial officer of the Company as described in Section 5.01(c) of the Credit Agreement, in each case, as of and for the fiscal year ending December 31, 2013, required to be furnished by the Company, are required to be furnished by September 15, 2014, instead of July 31, 2014 (the date established by the Third Amendment to Credit Agreement).

      � The internally prepared consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Company, and the certificate of a financial officer of the Company as described in
      Section 5.01(c) of the Credit Agreement, in each case, as of and for the fiscal quarter ending March 31, 2014, required to be furnished by the Company, are required to be furnished by September 15, 2014, instead of July 31, 2014 (the date established by the Third Amendment to Credit Agreement).

      � The internally prepared consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Company, and the certificate of a financial officer of the Company as described in
      Section 5.01(c) of the Credit Agreement, in each case, as of and for the fiscal quarter ending June 30, 2014, required to be furnished by the Company, are required to be furnished by September 30, 2014, instead of August 14, 2014 (the original date required pursuant to the Credit Agreement).

    • A quick note from Merrill Lynch on Monday contains very firm fears, but interestingly enough they have some upside despite the call. The analyst report said that ITT has yet to submit its audited 2013 financial statements with the Department of Education. Their worry is that the Education Department could place ITT on heightened cash monitoring, or on a provisional certification status. There is also the fear that the department could require ITT to post a new letter of credit.

    • A quick note from Merrill Lynch on Monday contains very firm fears, but interestingly enough they have some upside despite the call. The analyst report said that ITT has yet to submit its audited 2013 financial statements with the Department of Education. Their worry is that the Education Department could place ITT on heightened cash monitoring, or on a provisional certification status. There is also the fear that the department could require ITT to post a new letter of credit.

      Read more: ITT Educational Services New Credit Agreement: Going From Bad to Worse (NYSE: ESI) - 24/7 Wall St.

    • ITT Credit

      The company also said on July 30 that it was arranging financing for a letter of credit of as much as $98 million, an increase from $80 million, in case the Education Department demands it.

    • looks like the nyse market maker was waiting for you to sell

    • Most newbies don't understand the Department of Education will shut them out of any education loans if they don't come up with the audited 2013 financial statements. So yes, they can go bankrupt overnight.

    • Most people don't know they have a September end deadline to sell the properties. It's a race against the clock.

 
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