Career Education Corp. (CECO, Financial) filed Quarterly Report for the period ended 2010-09-30.
Career Education Corp. has a market cap of $1.45 billion; its shares were traded at around $17.95 with a P/E ratio of 7.3 and P/S ratio of 0.8. Career Education Corp. had an annual average earning growth of 12.8% over the past 10 years.CECO is in the portfolios of Richard Blum of Blum Capital Partners, RS Investment Management, Steve Mandel of Lone Pine Capital, Columbia Wanger of Columbia Wanger Asset Management, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Paul Tudor Jones of The Tudor Group, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC.
income included $47.3 million of pretax expense associated with the settlements of legal matters. See Note 9 Commitments and Contingencies of the notes to our unaudited consolidated financial statements for further discussion. The prior year quarter included $18.8 million of additional pretax performance-based compensation expense related to incentive plan outperformance, for which a similar level of outperformance is not expected for 2010. Student population grew 16% over the prior year quarter driven by double-digit new student starts in the first half of 2010 and a 6% increase in third quarter new student starts as compared to the prior year quarter.
Within our International segment, revenue decreased approximately $0.3 million, as compared to the prior year quarter, primarily due to a $2.9 million unfavorable impact of foreign currency exchange rates being partially offset by increased revenue resulting from higher student population at both INSEEC and Istituto Marangoni. In addition, the current quarters revenue included approximately $0.5 million of revenue attributable to our April 2010 acquisition of IUM. Operating loss increased $2.2 million as compared to the prior year quarter due to increased administrative expenses as a result of increased spending related to the integration of IUM and other support services.
In the third quarter 2010, Culinary Arts increased new student starts by 4% which, combined with strong student population at the beginning of the current quarter, resulted in a 20% increase in student population as compared to the prior year quarter. The increase in student population drove an 18.2% increase in revenue for the third quarter 2010 as compared to the prior year quarter. The current year quarter included a $40.0 million charge related to the settlement of an outstanding legal matter. In addition, the third quarter 2010 results include a $7.3 million increase in bad debt expense related to increasing the reserve rates attributable to our student extended payment plans. These charges were partially offset by decreased operating costs in academics and advertising as we continued to leverage existing cost structures and optimize marketing channels.
Total revenue increased $65.9 million, or 14.4% as compared to the prior year quarter, driven by revenue growth in the majority of our operating segments: University, Health Education and Culinary Arts. The overall increase in revenue is due to a 16% increase in student population. Internationals revenue, which decreased slightly as compared to the prior year quarter, was negatively impacted by a $2.9 million unfavorable effect of foreign currency exchange rates.
General and administrative expense increased $56.7 million, or 22.5%, and increased 3.9% as a percentage of revenue as compared to the prior year quarter. The current year quarter results include $47.3 million of pretax charges related to legal matters within Culinary Arts and University and a $17.7 million increase in bad debt expense. The prior year quarter includes $18.8 million of pretax additional performance-based compensation expense related to incentive plan outperformance. The increased costs as compared to the prior year quarter were partially offset by decreases in advertising and admissions expenses as a percent of revenue, as we continue to focus on cost effectiveness in key acquisition channels and leverage our existing infrastructure.
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Career Education Corp. has a market cap of $1.45 billion; its shares were traded at around $17.95 with a P/E ratio of 7.3 and P/S ratio of 0.8. Career Education Corp. had an annual average earning growth of 12.8% over the past 10 years.CECO is in the portfolios of Richard Blum of Blum Capital Partners, RS Investment Management, Steve Mandel of Lone Pine Capital, Columbia Wanger of Columbia Wanger Asset Management, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Paul Tudor Jones of The Tudor Group, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:
Total revenue increased 14.4% to $524.2 million as compared to $458.3 million in the prior year quarter. Operating income increased slightly from $38.1 million in the prior year quarter to $38.3 million for the third quarter 2010, and operating margin decreased 100 basis points to 7.3%. The current year quarters operatingincome included $47.3 million of pretax expense associated with the settlements of legal matters. See Note 9 Commitments and Contingencies of the notes to our unaudited consolidated financial statements for further discussion. The prior year quarter included $18.8 million of additional pretax performance-based compensation expense related to incentive plan outperformance, for which a similar level of outperformance is not expected for 2010. Student population grew 16% over the prior year quarter driven by double-digit new student starts in the first half of 2010 and a 6% increase in third quarter new student starts as compared to the prior year quarter.
Within our International segment, revenue decreased approximately $0.3 million, as compared to the prior year quarter, primarily due to a $2.9 million unfavorable impact of foreign currency exchange rates being partially offset by increased revenue resulting from higher student population at both INSEEC and Istituto Marangoni. In addition, the current quarters revenue included approximately $0.5 million of revenue attributable to our April 2010 acquisition of IUM. Operating loss increased $2.2 million as compared to the prior year quarter due to increased administrative expenses as a result of increased spending related to the integration of IUM and other support services.
In the third quarter 2010, Culinary Arts increased new student starts by 4% which, combined with strong student population at the beginning of the current quarter, resulted in a 20% increase in student population as compared to the prior year quarter. The increase in student population drove an 18.2% increase in revenue for the third quarter 2010 as compared to the prior year quarter. The current year quarter included a $40.0 million charge related to the settlement of an outstanding legal matter. In addition, the third quarter 2010 results include a $7.3 million increase in bad debt expense related to increasing the reserve rates attributable to our student extended payment plans. These charges were partially offset by decreased operating costs in academics and advertising as we continued to leverage existing cost structures and optimize marketing channels.
Total revenue increased $65.9 million, or 14.4% as compared to the prior year quarter, driven by revenue growth in the majority of our operating segments: University, Health Education and Culinary Arts. The overall increase in revenue is due to a 16% increase in student population. Internationals revenue, which decreased slightly as compared to the prior year quarter, was negatively impacted by a $2.9 million unfavorable effect of foreign currency exchange rates.
General and administrative expense increased $56.7 million, or 22.5%, and increased 3.9% as a percentage of revenue as compared to the prior year quarter. The current year quarter results include $47.3 million of pretax charges related to legal matters within Culinary Arts and University and a $17.7 million increase in bad debt expense. The prior year quarter includes $18.8 million of pretax additional performance-based compensation expense related to incentive plan outperformance. The increased costs as compared to the prior year quarter were partially offset by decreases in advertising and admissions expenses as a percent of revenue, as we continue to focus on cost effectiveness in key acquisition channels and leverage our existing infrastructure.
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