Boston, MA 05/01/2014 (wallstreetpr) – Education Management Corp (NASDAQ:EDMC)’s shares are down in mid-morning trading session by a high of 26.45% after the company announced a $467.7 million net loss for the first three months of the year. The quarter was also mired by a decline in revenue and student enrollment, as well as an impairment charge totaling $509.2 million. EDMC specializes in a number trades,running schools for artists and chefs. The company employs about 23,000 employees with 2,200 of them in Pittsburg.
Quarterly Loss Nearly Doubles
A netloss of $467.7 million for the quarter was nearly double a net loss of $260.4 million reported for the same period last year. Revenue for the quarter as a result was down by 7% coming in at $595.2 million, down from a high of $638.9 million reported a year ago. The dismal performance for the quarter was as a result of the company deciding to make a good will impairment charge worth $509.2 million. The company also announced it did not need any impairment charges on other divisions.
Education Management Corp (NASDAQ:EDMC)’s net income would have been at an impressive $20.4 million or 16 cents a share had there not been any impairment charges in this case. Student enrollment in all the centers under EDMC umbrella was down by 7% to 119,500. New student enrollment also fell by 10% coming in at 22,140. Similar declines were also experienced in art institute’s Argosy university as well as Brown Mackie Colleges.
EDMC lays off 200 Employees
Dismal performance for the quarter follows the laying off of up to 200 employees nationwide in the company’s operation. The company has also been forced to sell one of its building in Pittsburg seen as a cost cutting measure to generate enough cash flow for other operations in the company.
Education Management Corp (NASDAQ:EDMC) has already sold its art institute of Pittsburg building for just $10 million and plans to lease the available space for the next three years. Chicago developer M&J Wilkow is thought to have bought the building. The school has in the recent past been targeted by Federal regulators and the Securities exchange, who continue to question the schools bad debt expenses.