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Officials at Education Management Corp. may want to consider expanding their stock repurchase program: The stock price plummeted nearly 20 percent this morning after being traded “more heavily than usual,” according to CBS Marketwatch.
The stock price closed at $25.60 per share Wednesday afternoon — right around the time the company released its second-quarter earnings statement announcing that both revenues and enrollment had dropped. This morning, the stock price dropped to$20.55 before rebounding slightly. As this post went up, it was trading at around $21.20 per share.
EDMC CEO Todd Nelson and Chief Financial Officer Ed West held a conference call with investors Thursday morning. They reported earnings for the quarter were $737.2 million — down from $771.9 million from the same quarter a year ago. West also reported that enrollment fell 4.5 percent.
Nelson attributed a lot of the school’s problems to the country’s still struggling economy while also mentioning that the current regulatory climate isn’t helping matters either.
While fielding questions from analysts, Nelson was asked a couple of times about EDMC’s recent layoffs … and whether current EDMC employees should feel comfortable with their positions in the company.
“The goal is to always be efficient,” Nelson said. “If there are opportunities to streamline the organization, we want to do that. Given the economy and the enrollment trends, that impacted what we wanted to do with online [employees, who were targeted in last week’s layoffs].
“Going forward it’s hard to predict, but at this point in time we feel comfortable where we are,” Nelson added. “But to say we know exactly what the future is going to bring is difficult. One of the things we’ve always done here is try to come up with ways to become more efficient in our operations and sometimes, unfortunately, that results in employee reductions. But you need people to take care of our students.”
This article appears in Feb 1-7, 2012.
So, if you’re reading the last three paragraphs, what Nelson is saying is essentially, “for those still left, don’t get too comfortable.” What a slimeball.
Last week wasn’t the end of it. Some faculty cuts were made Monday.
What was the criteria for laying off the faculty that they did? Was it seniority or something else?
The layoffs are over. I was spared my job (for now) but the uncertainty of the last few weeks has been very hard on me and family. This has been a real eye opener. What an unholy bunch of turds these guys are.
anybody knows if for sure are done for now?
To Anxious Annie,
Faculty were told they were being reviewed for the following things: Contributions to the college, contributions to their departments, student retention, student survey scores, and yearly review scores. Online program directors had no say so in the process and were often surprised to learn of who was impacted.
It is not unlikely that the suit will be dismissed. However the losses are enormous. Not so much from an immediate revenue position but from the insight into the nature and fraudulent character of the organization, its goals, practices, and not only the leadership but one needs to ask “just what kind of a person would even work at EDMC?”
The DOJ argument is very broad and includes a wide web of offenses. That having been said there are other more significant issues. The investigations related to this suit have exposed the fraud, political corruption, and gross inadequacies of the EDMC education in specific and on line and for profit schooling in general. It is most likely that EDMC will bare the brunt of any number of other actions and certainly the reformulated action at hand. The overwhelmingly obvious corrupt relationship among Olympia Snow, John McKernan, and Romney is very likely to become a major issue following the elections. In the even that Romney would become president the nefarious relationship between Romney and Todd Nelson will become a liability. In the event that Obama would remain as president it will become necessary that he address the coming student loan bubble. At that point Snowe will become the sacrifice and at this point who cares about McKernan’s past connections. As the student loan bubble becomes more visible and more urgent the fraudulent practices addressed far beyond the present lawsuit will become major issues. Given the damage that the Pittsburgh company has inflicted on individuals and their their employers the Congress is likely to investigate the conversion of Title IV loans. At that point the instructors who lacked appropriate credentials, the students who plagiarized and were passed, the incoherent courses that were designed by unqualified employees, and the nebulous relationships with the accreditation agencies will come under scrutiny. EDMC will not stand alone in this. Even some well established state schools are as guilty as this company. However the long pattern of abuse by Todd Nelson and the executives that he brought from Apollo do suggest conspiracy. Give the unique relationship between Todd Nelson, Romney, and the LDS Church in juxtaposition with the McKernan-Snowe duet, there is very likely to be a criminal investigation. I’s sell short if I had it