Corinthian Colleges CEO Waller Resigns; Massimino Retakes Helm
November 30 2010 - 05:27PM
Dow Jones News
Corinthian Colleges Inc. (COCO) said Tuesday that Chief
Executive Peter Waller resigned after less than two years as leader
of the for-profit college operator.
Chairman Jack Massimino, who served as chief executive from
November 2004 until July 2009, will take over from Waller, the
company said.
Waller's resignation is the second high-level departure for the
troubled college operator in as many months. Like other for-profit
colleges, Corinthian faces slowing growth amid new scrutiny and
increased regulations.
Last month, Matt Ouimet, then Corinthian's president and chief
operating officer, left the company. Corinthian, whose school
brands include Everest, Heald and WyoTech, said it has no immediate
plans to fill the president and operating chief positions.
In after-hours trading, shares of Corinthian were off 4.6% to
$3.95. The company's stock has been pummeled this year, losing
nearly 70%, as investors fear it will need to overhaul its
operations in order to comply with new rules regarding programs
that graduate students with high debt loads.
Corinthian offers entry-level associate and certificate
programs, and its students often have high debt levels. The company
has warned it could run afoul of rules that cap how much revenue it
derives from federal aid sources if it doesn't raise tuition. That
would require students to find private funding. However, if it does
increase tuition, students will have even higher debt loads and
potentially default at higher levels.
"Our executive team is working diligently to improve the value
we bring to students, strengthen operations and reduce regulatory
risk," Massimino said in a statement. "Further, we have the balance
sheet and liquidity needed to adapt to a changing regulatory
environment."
The company reported cash and cash equivalents of $38.1 million
at Sept. 30, down from $209.2 million just three months earlier.
Operating cash flow was $4.5 million in the fiscal first quarter,
compared with $80.7 million in the prior year. Corinthian announced
earlier this month that it has suspended its stock-repurchase
program.
-By Melissa Korn, Dow Jones Newswires; 212-416-2271;
melissa.korn@dowjones.com
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