Santa Ana-based Corinthian Colleges Inc.,a star of the recession,is changing up its management.
The vocational schools operator is seeing its top executives change roles amid record growth spurred by laid off workers looking to boost their education levels.
“Everyone thought this was a good time for this transition,” said Jack Massimino, Corinthian’s chief executive who gives up that post in July.
Massimino spent much of the past five years turning around Corinthian, which runs more than 100 schools in the U.S. and Canada that offer degrees and certificates in healthcare, automotive technology, criminal justice, technology and other subjects.
He moved from executive chairman to chief executive in 2004 as the company was dealing with falling enrollment, lower profits and setbacks in a program designed to get more students to its schools.
Being chief executive “was never my chosen profession,” Massimino said.
“I came off the board to help get the company turned around and frankly I thought I wouldn’t be here more than three years,” he said. “We’re approaching five now and I feel it’s time.”
Massimino, who is set to return to the executive chairman’s role, solved many of Corin-thian’s problems before the recession took hold and gave the company a countercyclical boost.
Corinthian reported profits of $25.3 million for the three months through March, up 70% from a year earlier. Revenue came in at $346.4 million, up 24%.
The other executives taking new roles are familiar faces to many in Orange County.
Peter Waller, Corinthian’s current president and chief operating officer, is set to replace Massimino.
Waller is an Australian who headed up Irvine’s Taco Bell Corp., part of Louisville, Ky.-based Yum Brands Inc., in the late 1990s.
He joined Corinthian in 2006 as president and chief operating officer with the understanding he would eventually take the reins once the company turned around.
“I wasn’t in any rush,” Waller said. “We knew it was going to take two or three years to learn the education business and create a contribution around it.”
In between Taco Bell and Corinthian, Waller worked for Newport Beach-based ThreeSixty Sourcing Ltd., which helps consumer product companies and others make their products abroad.
Taking Waller’s position is Matthew Ouimet, who came to Corinthian in December and is best known for heading Walt Disney Co.’s Anaheim operations in the middle of the decade.
Ouimet’s arrival helped spur Corinthian’s succession plans, according to Massimino.
He ran Disney’s two Anaheim theme parks, three hotels and Downtown Disney shopping center from late 2003 to 2006. He’s credited with the boom tied to Disneyland’s 50th anniversary in 2005 that saw a surge in popularity for the parks, hotels and shops.
“Matt’s too modest to say this, but he was instrumental at Disney for giving the park a shot in the arm,” Waller said.
Ouimet left Disney in 2006 to become the president of the hotels group at White Plains, N.Y.-based Starwood Hotels and Resorts Worldwide Inc., where he oversaw global operations for more than 850 hotels.
He commuted to White Plains for the first year while his family continued to live in OC.
After a year, he sold his house and moved his family to the Tri-State Region.
His tenure at Starwood didn’t go end as well as it did at Disney: Ouimet abruptly left last August after disappointing results for the preceding quarters as the hotel industry began to tank.
He since has moved back to OC with his family.
“The good news was I found my newest adventure and passion back here,” Ouimet said.
Ouimet said Corinthian’s work helping people improve their education and the company’s size appealed to him.
“I’ve always been in a people-serving-people business (person),” he said. “I think genetically that’s the way I’m wired.”
Massimino is set to leave day-to-day operations to Waller and Ouimet, who take the reins of a company that is faring better than most.
Corinthian’s stock is up more than 30% in the past year, versus a 35% or so drop for the Standard & Poor’s 500 index. The company had a market value of $1.3 billion last week.
“The weak economy has helped our industry,” Massimino said.
Corinthian’s new student starts,a measure of those who enroll and then show up for class,rose 19% in the three months through March. Starts are expected to grow 6% to 8% during the next several quarters, according to Massimino.
Competitors including Phoenix-based Apollo Group Inc., as well as DeVry Inc. and Career Education Corp., both of Illinois. Corinthian’s rivals also have seen gains.
“Whether it’s us or Apollo or DeVry, tough economic times are going give us a turbo boost, there is no denying that,” Waller said.
Corinthian’s Part
Waller is quick to add that part of Corinthian’s gains has come from its own efforts: “Only about a third of our current growth can be contributed to the economy,” he said.
Massimino called it “preparation meets opportunity.”
Corinthian has spent the past five years working to integrate the many vocational colleges it acquired in late 1990s.
Three years ago, the company had 34 brands of schools across North America, Waller said.
Corinthian now has just two,Everest College and WyoTech.
The company hasn’t opened a school in three and half years but has plans for three to four by early 2010.
Corinthian also is spending $50 million to expand its schools with new programs and better equipment. Additionally, it has started offering student loans after they dried up during the credit crisis that took hold in 2008.
“We believe very strongly that we can continue to grow in good times and bad times,” Massimino said. “Our growth is a function of new program development, investment in our school base and our online business.”
