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Corinthian Colleges Says It Breached Bank-Debt Covenants


The Chronicle of Higher Education. May 6, 2014.

The for-profit-college company said in a corporate filing on Tuesday that it was out of compliance with the terms of some bank-debt covenants and was expecting to receive a waiver from its lenders. Corinthian said third-quarter results were below its own expectations for revenue, new-student enrollment, and earnings per share.

Jack Massimino, Corinthian’s chief executive officer, said in a written statement that “in light of current market and regulatory conditions,” its board had hired an investment bank “to help the company explore strategic alternatives and enhance shareholder value.”

“The company continues to face a number of challenges which have combined to decrease new student enrollments, reduce revenue and pressure margins significantly,” Chief Executive Officer Jack Massimino said today in a statement.

Corinthian fell 4.2 percent to $1.14 at 9:45 a.m. in New York, and dropped as much as 10 percent, the most in 11 months. The shares had declined 33 percent this year before today.