UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 17, 2015

 

 

Career Education Corporation

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   0-23245   36-3932190

(State or Other Jurisdiction

of Incorporation)

  (Commission File Number)  

(IRS Employer

Identification No.)

 

231 N. Martingale Rd., Schaumburg, IL   60173
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (847) 781-3600

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 17, 2015, Reid Simpson resigned as Senior Vice President and Chief Financial Officer of Career Education Corporation (the “Company”), effective as of March 31, 2015, to pursue another opportunity.

On March 23, 2015, the Board of Directors of the Company appointed David Rawden of AlixPartners, a business advisory firm which specializes in turnarounds and restructurings, to serve as the Company’s Interim Chief Financial Officer effective April 1, 2015.

David Rawden, age 57, has been a Director at AlixPartners since 2008, and also worked with AlixPartners from 1990 through 2002. Mr. Rawden’s assignments through AlixPartners have included being CFO for a privately held regional specialty trucking company where he helped the company restructure its debt, designed and implemented accounting and liquidity procedures while improving operating performance; Executive Vice President of Finance for Savannah College of Art and Design, a non-profit private college that also had some for-profit elements; and CFO for X-Rite, Inc., a $250 million private/public manufacturer of electro/optical color measurement devices. From 2006 to 2007, Mr. Rawden was Senior Vice President and Chief Financial Officer for Exopack Holdings SA, a privately held SEC registered $700 million manufacturer of flexible packaging, and from 2002 to 2005 was CFO for Allied Holdings, Inc., a $1 billion publicly traded transportation company. Mr. Rawden earned a Master of Management degree in finance and economics from Northwestern University and a Bachelor of Arts degree in accounting from Michigan State University. He is a certified public accountant.

The Company has entered into an agreement for the provision of interim management services with AP Services, LLC, an affiliate of AlixPartners, pursuant to which Mr. Rawden will serve as the Company’s Interim Chief Financial Officer. Under this agreement, the Company will pay AP Services, LLC a monthly fee of $130,000 for Mr. Rawden’s services, plus a 2% fee to cover indirect administrative costs, and the Company will directly pay or reimburse AP Services, LLC for Mr. Rawden’s reasonable expenses incurred in connection with his services to the Company.

On March 23, 2015, the Board of Directors of the Company designated Michele Peppers, Vice President, Accounting and Reporting, to act as the Company’s principal accounting officer effective April 1, 2015. Ms. Peppers, age 39, has served for nearly 11 years in the Company’s finance department in various roles of increasing responsibility. She has served in her current role of Vice President, Accounting and Reporting, since October 2014 and her prior positions with the Company have included Vice President and Assistant Controller from November 2012 to October 2014, Director of Financial Reporting from March 2009 to November 2012, as well as various other roles with increasing responsibility within the Accounting department since joining the Company in April 2004. Prior to joining the Company, she worked as an Accounting Manager for RJ Nelson Enterprises, an owner/operator of restaurants. Ms. Peppers received a Bachelor of Accounting degree from the University of Illinois at Chicago and is a certified public accountant.

Other than the agreement with AP Services, LLC mentioned above, there are no current arrangements between Mr. Rawden or Ms. Peppers and any other person pursuant to which either was selected to become principal financial and accounting officer, respectively, and neither Mr. Rawden nor Ms. Peppers has any family relationship with any director or executive officer of the Company, or with any person selected to become a director or executive officer. Neither Mr. Rawden nor Ms. Peppers nor any member of their immediate family is a party to any transaction or proposed transactions with the Company.

The Company’s Board of Directors intends to finalize its search for a permanent Chief Executive Officer before implementing its search for a permanent Chief Financial Officer.

The Company issued a press release regarding these matters on March 23, 2015, a copy of which is attached as Exhibit 99.1.

The Company has previously provided information about its expectations regarding certain future financial measures. The management changes discussed in this Current Report on Form 8-K do not impact those expectations.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit

Number

  

Description of Exhibits

99.1    Press release of the Company dated March 23, 2015


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

CAREER EDUCATION CORPORATION
By: /s/ Jeffrey D. Ayers
Jeffrey D. Ayers

Senior Vice President, General Counsel and

Corporate Secretary

Dated: March 23, 2015


Exhibit Index

 

Exhibit

Number

  

Description of Exhibits

99.1    Press release of the Company dated March 23, 2015


Exhibit 99.1

 

LOGO

CAREER EDUCATION ANNOUNCES CHIEF FINANCIAL OFFICER TRANSITION

David Rawden from AlixPartners named as Interim CFO

Schaumburg, Ill. (March 23, 2015) – The Board of Directors of Career Education Corporation, (NASDAQ: CECO), today announced that Chief Financial Officer Reid Simpson will be leaving the Company on March 31, 2015 to become Chief Financial Officer at ShopperTrak, a Chicago headquartered leading global retail analytics provider. David Rawden of AlixPartners, a business advisory firm which specializes in turnarounds and restructurings, will serve as Interim CFO effective April 1, 2015. Mr. Rawden’s experience includes interim CFO positions at Allied Holdings, Inc., Exopack Holdings SA, and X-Rite, Incorporated. It also includes prior education experience when he served as the Executive Vice President of Finance at Savannah College of Art and Design.

The Company also announced that Michele Peppers, Vice President Accounting & Reporting, who has served for nearly 11 years in the Company’s finance department in various roles of increasing responsibility, has been designated as the Company’s principal accounting officer effective April 1, 2015. Mr. Rawden and Ms. Peppers will oversee the Company’s financial reporting while its Board of Directors finalizes its search for a permanent replacement for its Chief Executive Officer. A search for a permanent CFO will be implemented following that appointment.

“Reid has been an important component in the execution of our company’s turnaround strategy and we wish him well in his future endeavors,” said Chairman and Interim CEO Ron McCray. “The work that our financial team has done to improve our organizational cost structure and reduce the impact of the losses within our Transitional Campuses and Discontinued Operations continues to stabilize our financial profile.”

“My decision to join ShopperTrak represents a unique personal opportunity for me and is not a reflection on the strength of my belief in Career Education’s future,” Simpson said. “There is a strong finance team in place at Career Education and I have the utmost confidence in their ability to continue to successfully support the execution of the company’s turnaround strategy. I firmly believe that Career Education is on a positive path forward and will emerge from this transformation as a stronger company. I wish the company the very best going forward.”

McCray concluded, “Career Education has a strong history of success in partnering with AlixPartners as they have been instrumental in helping us identify and execute on our cost control initiatives over the last several years. I welcome Dave to our team and look forward to him and the AlixPartners team continuing to find more ways for us to improve our operating platform. The Board and I remain focused on finding a permanent solution for our CEO position. We have retained an executive search firm and are well into the process of identifying and interviewing internal and external candidates for the role. We are encouraged at the caliber of candidates we have met so far, but will remain patient until we have found the right leader that can finalize our transition and take Career Education to the next level.”

David Rawden Background

Dave Rawden is an experienced financial professional with an extensive background with public companies across a wide variety of industries including manufacturing, transportation, distribution and education. Most recently, he was CFO for a privately held regional specialty trucking company servicing the energy industry. While there, Dave helped the company restructure its debt, designed and implemented accounting and liquidity procedures, all while significantly improving EBITDA. Dave was also Interim CFO for Exopack Holdings SA, a privately held SEC registered $700 million manufacturer of flexible packaging; CFO for X-Rite, Incorporated, a $250 million private/public manufacturer of Electro/Optical color measurement devices; CFO for Allied Holdings, Inc., a $1 billion publicly traded transportation company; and Executive Vice President of Finance for Savannah College of Art and Design, a non-profit private college that also had some for-profit elements to it. Dave earned a Master of Management degree in finance and economics from Northwestern University and a Bachelor of Arts degree in accounting from Michigan State University. He is a Certified Public Accountant in the State of Michigan.


ABOUT CAREER EDUCATION CORPORATION

The colleges, institutions and universities that are part of the Career Education Corporation (“CEC”) family offer high-quality education to a diverse student population in a variety of career-oriented disciplines through online, on-ground and hybrid learning program offerings. In addition to its online offerings, Career Education serves students from campuses throughout the United States offering programs that lead to doctoral, master’s, bachelor’s and associate degrees, as well as to diplomas and certificates.

CEC’s institutions include both universities that provide degree programs through the master or doctoral level and colleges that provide programs through the associate and bachelor level. The University group includes American InterContinental University (“AIU”) and Colorado Technical University (“CTU”) – predominantly serving students online with career-focused degree programs that meet the educational demands of today’s busy adults. The Career Schools group offers career-centered education primarily through ground-based campuses and includes Briarcliffe College, Brooks Institute, Harrington College of Design, Le Cordon Bleu North America (“LCB”), Missouri College and Sanford-Brown Institutes and Colleges (“SBI” and “SBC,” respectively). Through its colleges, institutions and universities, CEC is committed to providing high-quality education, enabling students to graduate and pursue rewarding career opportunities.

A detailed listing of individual campus locations and web links to Career Education’s colleges, institutions and universities can be found at www.careered.com.

Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as “continue to,” “believe,” “will,” “expect” and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: declines in enrollment; rulemaking by the U.S. Department of Education or any state and increased focus by Congress, the President and governmental agencies on for-profit education institutions; our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the gainful employment and financial responsibility standards prescribed by the U.S. Department of Education), as well as national and regional accreditation standards and state regulatory requirements; the impact of management changes; negative trends in the real estate market which could impact the success of our initiatives to reduce our real estate obligations under discontinued operations; our ability to successfully defend litigation and other claims brought against us; and changes in the overall U.S. or global economy. Further information about these and other relevant risks and uncertainties may be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and its subsequent filings with the Securities and Exchange Commission.

CONTACT

 

Investors:

Chris Hodges or Sam Gibbons

Alpha IR Group

(312) 445-2870

CECO@alpha-ir.com

Media:

Mark Spencer

Director, Corporate Communications

(847) 585-3802

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