2016 Q4 Form 10-K Financial Statement

#000156459017002207 Filed on February 23, 2017

View on sec.gov

Income Statement

Concept 2016 Q4 2016 Q3 2016
Revenue $155.3M $167.6M $3.867M
YoY Change -22.35% -17.62% -99.54%
Cost Of Revenue $64.10M $51.40M $235.1M
YoY Change -49.41% -31.38% -18.88%
Gross Profit $91.10M $116.2M $469.3M
YoY Change -54.77% -9.64% -15.82%
Gross Profit Margin 58.68% 69.32% 12136.02%
Selling, General & Admin $140.4M $111.7M $477.7M
YoY Change -26.49% -16.14% -15.33%
% of Gross Profit 154.12% 96.13% 101.79%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $5.700M $5.200M $22.75M
YoY Change 14.0% -13.33% -8.79%
% of Gross Profit 6.26% 4.48% 4.85%
Operating Expenses $146.2M $116.9M $736.7M
YoY Change -25.41% -15.96% -21.58%
Operating Profit -$55.91M -$706.0K -$267.4M
YoY Change 1322.93% -98.4% 190.16%
Interest Expense $200.0K $200.0K $584.0K
YoY Change -300.0% -30.06%
% of Operating Profit
Other Income/Expense, Net $300.0K $0.00 $978.0K
YoY Change -400.0% -100.0% -143.08%
Pretax Income -$55.40M -$500.0K -$31.37M
YoY Change 16.14% -95.65% -66.79%
Income Tax -$25.30M $0.00 -$16.55M
% Of Pretax Income
Net Earnings -$32.88M -$686.0K -$18.71M
YoY Change -123.03% -98.48% -136.06%
Net Earnings / Revenue -21.18% -0.41% -483.89%
Basic Earnings Per Share -$0.48 -$0.01 -$0.27
Diluted Earnings Per Share -$0.48 -$0.01 -$0.27
COMMON SHARES
Basic Shares Outstanding 68.49M 68.37M
Diluted Shares Outstanding 68.37M

Balance Sheet

Concept 2016 Q4 2016 Q3 2016
SHORT-TERM ASSETS
Cash & Short-Term Investments $197.2M $206.8M $197.2M
YoY Change 8.47% 11.36% 8.47%
Cash & Equivalents $49.51M $55.70M $49.50M
Short-Term Investments $147.7M $151.2M $147.7M
Other Short-Term Assets $817.0K $24.80M $25.30M
YoY Change -67.62% 1484.66% -62.24%
Inventory $1.868M $1.800M $1.900M
Prepaid Expenses $14.45M
Receivables $22.83M $25.50M $22.80M
Other Receivables $1.000M $800.0K $1.000M
Total Short-Term Assets $248.2M $259.8M $248.2M
YoY Change -14.11% -6.68% -14.12%
LONG-TERM ASSETS
Property, Plant & Equipment $40.51M $45.20M $40.50M
YoY Change -30.45% -17.37% -30.41%
Goodwill $87.36M
YoY Change 0.0%
Intangibles $8.500M
YoY Change -8.6%
Long-Term Investments
YoY Change
Other Assets $7.608M $147.3M $172.0M
YoY Change -54.06% 771.55% 5.46%
Total Long-Term Assets $311.4M $291.7M $311.4M
YoY Change -3.28% 71.1% -3.26%
TOTAL ASSETS
Total Short-Term Assets $248.2M $259.8M $248.2M
Total Long-Term Assets $311.4M $291.7M $311.4M
Total Assets $559.6M $551.5M $559.6M
YoY Change -8.4% 22.86% -8.4%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $10.10M $16.00M $10.10M
YoY Change -61.02% -43.45% -61.0%
Accrued Expenses $110.4M $58.70M $110.4M
YoY Change 75.52% 9.72% 75.52%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0%
Long-Term Debt Due $0.00 $0.00 $0.00
YoY Change -100.0% -100.0%
Total Short-Term Liabilities $169.2M $130.8M $169.2M
YoY Change -12.24% -30.09% -12.24%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities $31.75M $65.70M $68.90M
YoY Change 26.01% -2.52% -14.41%
Total Long-Term Liabilities $68.89M $65.70M $68.90M
YoY Change -14.43% -2.52% -14.41%
TOTAL LIABILITIES
Total Short-Term Liabilities $169.2M $130.8M $169.2M
Total Long-Term Liabilities $68.89M $65.70M $68.90M
Total Liabilities $238.1M $196.5M $238.1M
YoY Change -12.88% -22.76% -12.88%
SHAREHOLDERS EQUITY
Retained Earnings -$76.23M
YoY Change 32.53%
Common Stock $614.2M
YoY Change 0.42%
Preferred Stock
YoY Change
Treasury Stock (at cost) $216.2M
YoY Change 0.26%
Treasury Stock Shares $15.02M
Shareholders Equity $321.5M $355.0M $321.5M
YoY Change
Total Liabilities & Shareholders Equity $559.6M $551.5M $559.6M
YoY Change -8.4% 22.86% -8.4%

Cashflow Statement

Concept 2016 Q4 2016 Q3 2016
OPERATING ACTIVITIES
Net Income -$32.88M -$686.0K -$18.71M
YoY Change -123.03% -98.48% -136.06%
Depreciation, Depletion And Amortization $5.700M $5.200M $22.75M
YoY Change 14.0% -13.33% -8.79%
Cash From Operating Activities -$9.800M $9.700M $6.475M
YoY Change 4800.0% 73.21% -130.48%
INVESTING ACTIVITIES
Capital Expenditures -$700.0K -$1.400M $4.129M
YoY Change -81.58% -51.72% -64.69%
Acquisitions
YoY Change
Other Investing Activities $4.300M -$2.500M -$30.20M
YoY Change 2050.0% -178.13% -916.22%
Cash From Investing Activities $3.500M -$3.900M -$34.35M
YoY Change -197.22% -1400.0% 329.87%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $773.0K
YoY Change -44.83%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 200.0K 200.0K -37.79M
YoY Change -99.3% -300.0% -230.49%
NET CHANGE
Cash From Operating Activities -9.800M 9.700M 6.475M
Cash From Investing Activities 3.500M -3.900M -34.35M
Cash From Financing Activities 200.0K 200.0K -37.79M
Net Change In Cash -6.100M 6.000M -65.86M
YoY Change -124.5% 3.45% 23761.59%
FREE CASH FLOW
Cash From Operating Activities -$9.800M $9.700M $6.475M
Capital Expenditures -$700.0K -$1.400M $4.129M
Free Cash Flow -$9.100M $11.10M $2.346M
YoY Change -352.78% 30.59% -107.12%

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CY2016 us-gaap Nature Of Operations
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<div> <p style="margin-bottom:0pt;margin-top:0pt;text-indent:0%;font-weight:bold;font-family:Times New Roman;font-size:10pt;font-style:normal;text-transform:none;font-variant: normal;">1. DESCRIPTION OF THE COMPANY</p> <p style="margin-top:6pt;margin-bottom:0pt;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;text-indent:4.54%;"> Career Education&#8217;s academic institutions offer a quality education to a diverse student population in a variety of disciplines through online, campus-based and blended learning programs. Our two universities &#8211; American InterContinental University (&#8220;AIU&#8221;) and Colorado Technical University (&#8220;CTU&#8221;) &#8211; provide degree programs through the master&#8217;s or doctoral level as well as associate and bachelor&#8217;s levels. Both universities predominantly serve students online with career-focused degree programs that are designed to meet the educational demands of today&#8217;s busy adults. AIU and CTU continue to show innovation in higher education, advancing new personalized learning technologies like their intelli<font style="font-weight:bold;">path</font>&#8482; adaptive learning platform. Career Education is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.</p> <p style="margin-top:6pt;margin-bottom:0pt;text-indent:4.54%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">Additionally, CEC is in the process of teaching out campuses within our Transitional Group and Culinary Arts segments. Students enrolled at these campuses have been afforded the reasonable opportunity to complete their program of study prior to the final teach-out date. </p> <p style="margin-top:6pt;margin-bottom:0pt;text-indent:4.54%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">A listing of individual campus locations and web links to Career Education&#8217;s colleges, institutions and universities can be found at <font style="font-style:italic;">www.careered.com</font>.</p> <p style="margin-top:6pt;margin-bottom:0pt;text-indent:4.54%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">As used in this Annual Report on Form 10-K, the terms &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our,&#8221; &#8220;the Company&#8221; and &#8220;CEC&#8221; refer to Career Education Corporation and our wholly-owned subsidiaries. The terms &#8220;college,&#8221; &#8220;institution&#8221; and &#8220;university&#8221; refer to an individual, branded, for-profit educational institution, owned by us and includes its campus locations. The term &#8220;campus&#8221; refers to an individual main or branch campus operated by one of our colleges, institutions or universities.</p></div>
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<div> <p style="margin-top:12pt;margin-bottom:0pt;text-indent:0%;font-style:italic;font-family:Times New Roman;font-size:10pt;font-weight:normal;text-transform:none;font-variant: normal;">b. Management&#8217;s Use of Estimates</p> <p style="margin-top:6pt;margin-bottom:0pt;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;text-indent:4.54%;">The preparation of financial statements in conformity with generally accepted accounting principles in the U.S. (&#8220;GAAP&#8221;) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reported period. Significant estimates, among others, include the allowance for doubtful accounts, the assumptions surrounding sublease income utilized in determining the fair value of remaining lease obligations, assumptions utilized in calculating income tax related matters including our deferred tax balances and any respective valuation allowance, fair values used in asset impairment evaluations including goodwill, intangible assets and long-lived assets and the assumptions used in determining the fair value of accruals for severance and related costs. Although these estimates are based upon management&#8217;s best knowledge of current events and actions that we may undertake in the future, actual results could differ from these estimates.</p></div>
CY2016 us-gaap Concentration Risk Credit Risk
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<div> <p style="margin-top:12pt;margin-bottom:0pt;text-indent:0%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">c<font style="font-style:italic;">. Concentration of Credit Risk</font></p> <p style="margin-top:6pt;margin-bottom:0pt;text-indent:4.54%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">A substantial portion of credit extended to students is repaid through the students&#8217; participation in various federal financial aid programs authorized by Title IV of the Higher Education Act of 1965, as amended (&#8220;Higher Education Act&#8221;), which we refer to as &#8220;Title IV Programs.&#8221; For the years ended December&#160;31, 2016, 2015 and 2014, approximately 76%, 77% and 78%, respectively, of our institutions&#8217; cash receipts from tuition payments came from Title IV Program funding.</p> <p style="margin-top:6pt;margin-bottom:0pt;text-indent:4.54%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">Transfers of funds received from Title IV Programs are made in accordance with the U.S. Department of Education&#8217;s (&#8220;ED&#8221;) requirements. Changes in ED funding of Title IV Programs could have a material impact on our ability to attract students and the realizability of our student receivables. See Item&#160;1A, &#8220;Risk Factors,&#8221; of this Annual Report on Form 10-K for further discussion of the risks associated with Title IV Programs.</p></div>
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2
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67000
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421927000
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110013000
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ComputerHardwareAndSoftwareGross
124899000
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59639000
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17822000
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16413000
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814000
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2417000
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736000
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229000
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16344000
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7900000
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0
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4191000
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6232000
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32998000
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32998000
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32998000
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61982000
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12415000
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3967000
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CY2015Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Weighted Average Exercise Price
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620000
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189000
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10399000
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