Perdoceo Education Corporation · NASDAQ:PRDO
Perdoceo Education — Career Education — BMO Capital Markets Back to School Conference 2008
31 slides from Perdoceo Education's conference presentation, Sep 10, 2008
Slide 1: Career Education Corporation at BMO Capital Markets Back to School Conference
© Career Education Corporation 2008 Career Education Corporation BMO Capital Markets Back to School Conference September 10, 2008 Exhibit 99.1 © Career Education Corporation 2008 Career Education Corporation BMO Capital Markets Back to School Conference
Slide 2: Mike Graham, Executive Vice President and Chief Financial Officer
Mike Graham EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER CAREER EDUCATION CORPORATION © Career Education Corporation 2008 Mike Graham EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER CAREER EDUCATION CORPORATION © Career Education Corporation 2008
Slide 3: Forward-looking statements
Except for the historical and present factual information contained herein, the matters set forth in this presentation, including statements identified by words such as "anticipate," "believe," "plan," "expect," "intend," "project," "will," and similar expressions, are forward-looking statements as
Slide 4: Non-GAAP financial measures
The Company has included some non-GAAP financial measures in this presentation to discuss the Company's financial results. As a general matter, the Company uses these non-GAAP measures in addition to and in conjunction with results presented in accordance with GAAP. Among other things, the Company m
Slide 5: Career Education Overview: Our Mission
A global educational company committed to quality outcomes and career opportunities for a diverse student population Career Education Overview Career Education Overview Our Mission: A global educational company committed to quality outcomes and career opportunities for a diverse student population O
Slide 6: A Leading For-Profit Post Secondary Education Company
A Leading For-Profit Post Secondary Education Company $1.7 Billion Over 90,000 students *Demographics as of June 30, 2008 Career Education Overview Career Education Overview A Leading For-Profit Post Secondary Education Company 2007 Revenue: $1.7 Billion Over 90,000 students 2007 Revenue:
Slide 7: Challenges: legal/regulatory, margin pressure, real estate
+ Legai/Regutatory ofentation Issues + Online entry + Slowing growth + High cost + Margin pressure structure + Unprofitable + Significant businesses. seal estate investment
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Slide 10: An Inflection Point in Our History
Strengthen Foundation Accelerate Growth New Management Team An Inflection Point in Our History An Inflection Point in Our History Transform Transform Strengthen Foundation Accelerate Growth Renovate/ Renovate/ Repair Repair Acquire/ Acquire/ Build Build High High Performance Performance
Slide 11: Competitive Strengths
Strong core brands… delivering quality outcomes Leading on-line platform Broad geographic presence Strong balance sheet Proven growth capability Competitive Strengths Competitive Strengths Strong core brands… delivering quality outcomes Leading on-line platform Broad geographic presence Strong balan
Slide 12: Strong Core Brands
TM Strong Core Brands . . . Strong Core Brands . . . Leading network of allied health schools Leading network of allied health schools National network of culinary schools National network of culinary schools Multi-national online and on-ground schools Multi-national online and on-ground schools Net
Slide 13: Delivering Quality Outcomes
“PAE Elite Twenty Program” Council of College and Military Educators 2007 Institution Award Wounded Warrior Scholarship Program Exceeded all benchmarks in the 2007 Noel - Levitz Priorities Survey for - Levitz Priorities Survey for Levitz Priorities Survey for Online Learners Brian Williams – Int
Slide 14: Leading On-Line Platform
Virtual Campus and full student services Proprietary learning management systems Rich online collaboration tools Access to the Virtual Campus using mobile devices Source: Echo Research AIU Online Brand Research 2008 Leading On-Line Platform Leading On-Line Platform Virtual Campus and full student se
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Slide 16: Strong Balance Sheet
Flexibility to absorb challenges along the way… /1 Free Cash Flow = Operating Cash Flow less Capital Expenditures Strong Balance Sheet Strong Balance Sheet Flexibility to absorb challenges along the way…
Slide 17: Proven Growth Capability
Proven Growth Capability Proven Growth Capability
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Slide 20: Transformation Underway
Unsustainable growth Low margins Sustainable growth Margin expansion . . . Unlocking sustainable growth potential Improve Organizational Effectiveness Targeted Growth Strategies Reputation Overhang Inefficient Brand Structure Independent Institutions/ Operations Performance Variability 2007 and Prio
Slide 21: Improve Organizational Effectiveness
Build reputation and external relationships Teach out unprofitable campuses Centralize support activities Create Strategic Business Units with New Leadership Action Progress Improve Organizational Effectiveness Improve Organizational Effectiveness
Slide 22: Centralize Support Activities
Select admissions functions Student financial aid processing Procurement Human resource systems Talent acquisition Training 25% reduction in admissions reps since Q107 Centralize Support Activities Centralize Support Activities Create shared service center Create shared service center to leverage sc
Slide 23: Teach Out Unprofitable Schools
Acted decisively on 14 underperforming schools Moved to transitional segment until closing Impact on P&L until 2010 Teach Out Unprofitable Schools Teach Out Unprofitable Schools Eliminate significant losses Eliminate significant losses from underperforming, non- from underperforming, non- strategic
Slide 24: Strategic Business Units
TM 3 4 5 2 2 43,500 15,200 12,800 10,200 7,000 78% - 4% - - 11 24 14 16 11 TM Strategic Business Units Strategic Business Units International International Health Education Health Education Art & Design Art & Design University University Culinary Arts Culinary Arts Core Institutions Total Brands Enr
Slide 25: Growth Opportunities
Local support Technology Longer Programs Consolidate Align Consolidate Optimize Strengthen local relationships Leverage quality and diversity Leverage Brand consolidation Retention and placement Renewal Growth Opportunities Growth Opportunities Health Education Health Education Art & Design Art & De
Slide 26: Financial Expectations
($ millions) 2007 Pro Forma 2010 Milestone Revenue $1,635 6% - 8% CAGR $1,950 - $2,050 Operating Income $151 Low to Mid Teens $225 - $270 Transitional Schools Operating Income N/A Total $65 $210 - $255 Est. Free Cash Flow $164 $195 - $235 Financial Expectations Financial Expectations ($ millions) Re
Slide 27: 1st Half 2008 Results
On plan through first six months Effectively managing short-term challenges Solid progress on expense control Teach-Out and Real estate initiatives ahead of plan st Half 2008 Results st Half 2008 Results On plan through first six months Effectively managing short-term challenges Solid progress on ex
Slide 28: 1st Half 2008 Results: Segment Performance Versus Plan
Segment Performance Versus Plan Comment University = Temporary PEER model transition issue… resolved in Q3 Culinary - Transition to new student loan environment… new process in place Art & Design - Health + Strong organic start growth International + Transitional Schools + Accelerated progress CEC T
Slide 29: Student Lending
Process working well Prudent front-end augmented by ongoing student support to ensure student success $14.5 million in student financing outstanding balances at end of Q2 Slower ramp than originally anticipated Expect outstanding balances to be <$45 million at end of 2008 Student Lending Student Len
Slide 30: Real Estate Efforts
Over 7 million square feet of space in global portfolio Focused on exiting unfavorable leases and Transitional segment Real estate 1H08 Released or back-filled approximately 90,000 square feet of real estate 2H08 4Q: $5.6M noncash charge Accelerated teach-out of Gibbs Piscataway Working to close sev
Slide 31: Summary
Leverage-able competitive strengths Transformation well underway Strategies in place to deliver sustainable earnings growth Performance on track in 2008 Summary Summary Leverage-able competitive strengths Transformation well underway Strategies in place to deliver sustainable earnings growth Perform
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