Roger Lindsley

Inside Career Education Corp: Not All For-Profits Are Alike

Bottom line, Career Education (NASDAQ:CECO) is dependent on student enrollments for income. CECO's enrollments are declining faster than its stated forecasts. CECO's cash position continues to erode and regulators require a reserve in order to enroll new students. This conflict between enrollment trends and cash requirements presents a significant challenge to CECO's future in the medium to long term.

The bullet points on CECO

· Enrollments 2011 decline 18%, decline 2012 23%, expected decline 2013 25%.

· CFO O'Sullivan predicted 2% decline for 2013 in '12 Q4 and '13 Q1 conference calls. (O'Sullivan is a newly minted internal promotion without previous CFO experience.)

· CEO Steffey refuses to confirm enrollment projections for '13 in '13 Q2 conference

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