Glenn Waters via Compfight

November 13, 2012 | Erica Perez, California Watch

For-profit college giant Career Education Corp. announced that it will close 23 of its 90 campuses and eliminate 900 jobs after the company reported a net loss this quarter of $33 million and a 23 percent drop in new student enrollment.

The company, which owns six campuses in California, has not said which of its campuses will close, but stated in a disclosure [1] to the U.S. Securities and Exchange Commission that it wants to invest in campuses that have the strongest likelihood of delivering solid job placement rates for students and are the most efficient.

The company has not yet notified the campuses that will close but will begin to in the next 30 days, Chief Financial Officer Colleen O’Sullivan said in a conference call Friday.

In California, Career Education runs the California Culinary Academy in San Francisco, the International Academy of Design & Technology in Sacramento, the Brooks Institute in Santa Barbara and Ventura, and two Le Cordon Bleu campuses in Los Angeles and Sacramento.

Career Education is among several publicly traded for-profit education companies downsizing amid steep declines in enrollment and profits. The University of Phoenix said last month that it will close [2] 115 locations, and Corinthian Colleges Inc. disclosed [3] earlier this year that it will close three Everest College locations and sell four others…

Via California Watch

Here’s how other media reported the story:

Reuters reported:

The for-profit education company said its $185 million credit agreement expired on October 31 and it has still not been able to renew it.

Career Education said it cannot predict with certainty whether it will be able to obtain a replacement credit agreement due to the expected decline in its operating performance and a weak economic recovery.

“We currently expect that if we are able to obtain a replacement agreement it will provide less credit availability than our expired credit agreement, and it is likely to contain more restrictive financial and non-financial covenants,” the company said in its quarterly report with the U.S. Securities and Exchange Commission.

The company expects to post a loss of $140 million to $160 million for 2012, according to the filing. Career Education, which runs the American InterContinental University, Le Cordon Bleu North America and the Sanford-Brown colleges among others, has been struggling along with other for-profit colleges to attract students.

Via Reuters 

Steve Lesnik, CEO of Career Education Corp. said in a conference call:

I have been here almost exactly a year. You may recall that when I arrived at the end of 2012, I said this year would be a year of transition for both, the sector and for Career Education. That turned out to be an understatement. In fact, the year wasn’t just transitional, it was transformational.

In our judgment, those companies and institutions that haven’t or don’t transform will see the shrinkage of the past two years continue, if not accelerate well into the future. At Career Ed, we believe we are in the process of making the changes necessary to be a sustainable educational organization providing post-secondary, academic and vocational education where it’s needed most here in America as well as in Europe to our premier institutions there.

When I arrived last year, I said to you that Career Ed needed to immediately address three critical areas. First, we needed to rectify the placement and related issues that arose last year and the year before. Secondly, we needed to strengthen the breadth and depth of our operations and staff leaders. And, third, we needed to adopt a long range strategy. We’ve done all three, which I’ll talk about it in a moment and there is no question at this time that we are on a right long-term path in my judgment.

However, the deterioration in operating results in 2011 and 2012 has raised the stakes on achieving improved financial results. Even as we pursue our long range strategy, we need to adjust to the current environment and make [adjustments] right now.

Via Seeking Alpha