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Career
Education Corporation Announces Company-Wide Restructuring as Part
of Long
Term Growth Strategy
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New
Structure to Increase Efficiency, Build Brand Strength, and Enhance
Competitive Advantage
HOFFMAN
ESTATES, Ill., Feb 12, 2008 (BUSINESS WIRE) -- Career Education
Corporation (NASDAQ:CECO) today announced that it would implement
a
company-wide restructuring. The plan specifically addresses unproductive
marketing and admissions costs and operating inefficiencies. "We
are
transforming the culture of the organization to one that is more
focused
on student outcomes," said Gary E. McCullough, president and CEO
of the
company.
McCullough
said the primary goals of the restructuring plan are to simplify
the
organizational structure in order to eliminate redundancies; to scale
select business services through shared operations; and to create
more
consistent management processes throughout the company.
The
company will remove duplicative management layers by eliminating
the
current Group President positions and appointing senior executives
to lead
multi-disciplinary strategic business units (SBUs). These SBUs will
be
organized by key market segments to enhance brand focus and operational
alignment within each segment. The new SBUs are Art & Design,
University, Culinary and Health. Colleges within the former College
Division will become a part of the Art & Design or University SBU, as
appropriate. International will be designated as an SBU but will
not
undergo any management restructuring at this time. Consistent with
the
goals of the restructuring, local campuses within each SBU will be
restructured to better focus their efforts on student satisfaction,
educational delivery and outcomes, and to develop deeper local community
roots and relationships.
The
restructuring allows the company to capitalize on size and scale
through
the development of centralized, shared services that deliver certain
business services to the SBUs and campuses with greater quality,
speed and
cost-effectiveness. Inherent in the restructuring is the streamlining
of
corporate support functions and a keener focus on process consistency
and
best practice sharing in a number of areas, including strategic planning,
information management, admissions and people management. Relevant
financial data, including cost savings resulting from the restructuring,
will be presented on the company's regularly scheduled earnings call
on
February 21, 2007.
In
connection with the restructuring, Paul Ryan, current group president,
will assume the role of senior vice president leading the Culinary
SBU.
George Grayeb, current managing director for the Health Division,
will
lead the Health SBU. Todd Steele, current group president for
International and Start-Up, will continue to manage the International
and
Start-Up SBU and acquisitions. Steve Fireng, former group president,
has
left the company to pursue other opportunities after a long career
with
CEC. Leaders of the Art & Design and University SBUs will be named
shortly.
"We
are building a foundation for sustainable, long-term growth," said
McCullough. "Aggressive change is an imperative for us to become
more
competitive, better serve our students, and rebuild our
brands."
About
Career Education Corporation
The
colleges, schools, and universities that are part of the Career Education
Corporation (CEC) family offer high quality education to a diverse
population of approximately 90,000 students across the world in a
variety
of career-oriented disciplines. The more than 75 campuses that serve
these
students are located throughout the U.S. and in Canada, France, Italy,
and
the United Kingdom, and offer doctoral, master's, bachelor's, and
associate degrees and diploma and certificate programs. Approximately
one
third of our students attend the web-based virtual campuses of American
InterContinental University Online and Colorado Technical University
Online.
CEC
is an industry leader whose gold-standard brands are recognized globally.
Those brands include Le Cordon Bleu Schools North America; Harrington
College of Design; Brooks Institute; International Academy of Design
&
Technology; American InterContinental University; Colorado Technical
University and Sanford-Brown Institutes and Colleges. Through its
schools,
CEC is committed to providing quality education, enabling students
to
graduate and pursue rewarding careers.
For
more information, see the company's website at http://www.careered.com.
The company's website includes a detailed listing of individual campus
locations and web links to its more than 75 colleges, schools, and
universities.
Except
for the historical and present factual information contained herein,
the
matters set forth in this release, including statements identified
by
words such as "anticipate," "believe," "plan," "expect," "intend,"
"project," "will," 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 risks, uncertainties and other factors
that
could cause our actual growth, results of operations, performance
and
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 such factors or to publicly announce the results of 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 outcome of which could materially and
adversely affect our financial condition and operations, include,
but are
not limited to, the following: risks associated with unfavorable
changes
in the cost or availability of financing, including alternative loans,
for
our students; potential higher bad debt expense or reduced revenue
associated with requiring students to pay more of their educational
expenses while in school; increased competition; the effectiveness
of our
regulatory compliance efforts; future financial and operational results,
including the impact of the impairment of goodwill and other intangible
assets; risks related to our ability to comply with accrediting agency
requirements or obtain accrediting agency approvals; risks related
to our
ability to comply with, and the impact of changes in, legislation
and
regulations that affect our ability to participate in student financial
aid programs; costs, risks, and effects of legal and administrative
proceedings and investigations and governmental regulations, and
class
action and other lawsuits; costs, risks and uncertainties associated
with
our company-wide restructuring, including risks and uncertainties
associated with changes in management and reporting responsibilities;
costs and difficulties related to the integration of acquired businesses;
risks related to our ability to manage and continue growth; risks
related
to the sale or teach-out of any campuses; risks related to general
economic conditions (including credit market conditions), and other
risk
factors relating to our industry and business and the factors discussed
in
our Annual Report on Form 10-K for the year ended December 31, 2006,
and
from time to time in our other reports filed with the Securities
and
Exchange Commission.
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