Chief Executive Jack Massimino spent the past few years readying Corinthian Colleges Inc. for the down economy.
He’s worked to retain students and stem falling enrollment at the operator of vocational schools.
Now Corinthian is seeing a surge as laid off workers head back to school.
“The weak economy has helped the industry,” Massimino said. “We’re effectively countercyclical.”
For the three months through September, Corinthian had revenue of $289.6 million, up 18% from a year earlier. Operating profit was up 55% to $10.1 million.
The number of students at Corinthian’s schools was up 11% in the quarter to 74,265. The number of students who enrolled and then showed up for class grew 7% to 30,075.
Corinthian’s stock ended 2008 flat with a market value of $1.3 billion, making it one of the better performers amid a 40% drop in the Standard & Poor’s 500 index.
Internal Growth
Massimino’s task has been to expand Corinthian’s internal operations to catch up with the company’s overall growth in recent years.
Corinthian went public in 1999 and grew early in the decade by acquiring other school operators.
Cofounder David Moore led the expansion as chief executive until 2004, when he stepped back in favor of Massimino.
Massimino stripped down the company’s 28 school brands to two.
He upgraded the company’s internal auditing system, hired senior executives and started an effort to study students to better understand them and their needs.
Under his wing, Corinthian created incentive plans for employees to improve worker retention rates.
Massimino also began a marketing strategy and improved customer service to make sure students wouldn’t fall through the cracks.
“Most of the challenges we encountered were a result of rapid growth,” Massimino said. “We didn’t have the basic infrastructure in place to support an organization of our size.”
Corinthian runs more than 100 schools in the U.S. and Canada under the Everest and Wyotech brands.
The schools offer degrees and certificates in healthcare, automotive technology, criminal justice, technology and other areas.
Unlike many other companies, Corinthian expects a strong December quarter.
It projects a profit of $11.9 million to $13.6 million, up about 35% from a year earlier.
Corinthian expects its student population to grow 10% to 12% for the quarter.
The company, which employs some 10,000 full- and part-time employees, could have to hire more workers.
Loan Issues
The tight credit market has been a challenge for vocational schools as students are having trouble getting loans.
Corinthian has started offering loans to students, Massimino said.
“We’re not in the credit business, but the program has been successful in giving students the opportunity to come to school because without it they wouldn’t have that opportunity,” he said.
Corinthian hopes to see more growth as students look to for-profit schools for degrees and certificates amid government budget woes that are squeezing state universities, Massimino said.
The Obama administration’s anticipated public works plan also could help boost the need for workers in trade areas, which could bolster enrollment at vocational schools, he said.
“Our goal is to change students’ lives and we think as an organization we do a heck of a job,” Massimino said.
