Career Education Corp. (CECO, Financial) filed Quarterly Report for the period ended 2010-03-31.
Career Education Corp. has a market cap of $2.48 billion; its shares were traded at around $29.47 with a P/E ratio of 18.3 and P/S ratio of 1.4. 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, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.
Effective January 19, 2010, we entered into a real estate lease for our new corporate center and administrative facilities for both our AIU Online and CTU Online campuses in Schaumburg, Illinois. We will be consolidating our corporate center facilities which will reduce the number of our corporate center buildings and related square footage and allow us to maximize efficiencies and reduce overhead expenses. The lease for the new location results in a $48.1 million real estate obligation through 2022. In addition, we intend to make capital improvements to our new corporate center totaling approximately $52.0 million over the next two years, with the majority of the investment expected in 2010. As a result of the real estate consolidation, our first quarter 2010 results include $3.7 million of pretax lease termination costs related to our existing space.
General and administrative expense increased $45.6 million as compared to the prior year quarter driven by increases in our overall student population. As a percentage of revenue, expenses declined as we continue to leverage our existing infrastructure. The $11.7 million and $11.2 million increases in administrative expense and admissions expense, respectively, were driven by the expansion of student population. The $6.3 million increase in advertising expense as compared to the prior year quarter was driven by increased spending within University and Health Education, as we continued to experience strong levels of student interest.
Operating income increased $36.9 million, or approximately 72% as compared to the prior year quarter, as we experienced increased profitability across the majority of our reporting segments. The increase in revenue from the growth in student population more than offset the increases in operating expenses to sustain this continuing growth. Additionally, Internationals increase in operating income was partially attributable to a $0.8 million favorable impact of foreign currency exchange rates.
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Career Education Corp. has a market cap of $2.48 billion; its shares were traded at around $29.47 with a P/E ratio of 18.3 and P/S ratio of 1.4. 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, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
On April 15, 2010, the Company acquired the IUM for total consideration of approximately $12.2 million, which includes $7.9 million of purchase price and $4.3 million related to the assumption of outstanding shareholder loans. Subsequent adjustments may be made upon the finalization of purchase price and related purchase accounting adjustments. IUM is a leading international business university located in Monte Carlo, offering bachelors, masters and doctoral programs in such areas as finance, international business and luxury goods and services, and its current enrollment includes nearly 400 students representing 62 countries. IUM has joined the INSEEC group and will position INSEEC for continued growth as a leader in postsecondary education in Europe.Effective January 19, 2010, we entered into a real estate lease for our new corporate center and administrative facilities for both our AIU Online and CTU Online campuses in Schaumburg, Illinois. We will be consolidating our corporate center facilities which will reduce the number of our corporate center buildings and related square footage and allow us to maximize efficiencies and reduce overhead expenses. The lease for the new location results in a $48.1 million real estate obligation through 2022. In addition, we intend to make capital improvements to our new corporate center totaling approximately $52.0 million over the next two years, with the majority of the investment expected in 2010. As a result of the real estate consolidation, our first quarter 2010 results include $3.7 million of pretax lease termination costs related to our existing space.
General and administrative expense increased $45.6 million as compared to the prior year quarter driven by increases in our overall student population. As a percentage of revenue, expenses declined as we continue to leverage our existing infrastructure. The $11.7 million and $11.2 million increases in administrative expense and admissions expense, respectively, were driven by the expansion of student population. The $6.3 million increase in advertising expense as compared to the prior year quarter was driven by increased spending within University and Health Education, as we continued to experience strong levels of student interest.
Operating income increased $36.9 million, or approximately 72% as compared to the prior year quarter, as we experienced increased profitability across the majority of our reporting segments. The increase in revenue from the growth in student population more than offset the increases in operating expenses to sustain this continuing growth. Additionally, Internationals increase in operating income was partially attributable to a $0.8 million favorable impact of foreign currency exchange rates.
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