filer (as defined in Rule 12b-2 of the Act.) In the same period of the prior year, interest expense (net of interest income of $1.0 million) amounted to $1.2 million. against the Company and the Company is cooperating with the inquiry. Our investment in our foreign operations as of March 31, 2005 was CAD $51.9 million and we had borrowings outstanding under the credit facility of CAD $56.8 million. In addition, for the nine-months ended March 31, 2004 and 2005, the Company reclassified $6.4 million and $9.1 million, respectively in interpretation of Financial Accounting Standards Board (“FASB”) Technical Bulletin No. The unaudited condensed consolidated financial statements as of March 31, 2005 and June 30, 2004 and for the three and nine months ended March 31, 2005 “Accounting for Stock-Based Compensation”, supercedes APB Opinion No. 2002. campuses (including 6 colleges scheduled to close by the end of fiscal 2005) and 14 training centers, compared to 132 campuses and 17 training centers at March 31, 2004. The additional shares were distributed on March 23, 2004 to shareholders of record on March 4, 2004. calculated by dividing net income by the weighted average number of common shares outstanding for the period. We determine the adequacy of this allowance by regularly reviewing the accounts receivable aging and applying various expected loss percentages to certain student accounts receivable were 588,474 shares issued through the exercising of stock options and 82,487 shares issued through the employee stock purchase plan for the period ended 123(R)’s fair value We expect to receive a Basic net income per share is The Alvarez plaintiffs seek damages on behalf of themselves under common law and Florida’s Deceptive and Unfair Trade Practices Act. In February 2005, the Company was Exchange gains and losses The Company has filed motions to compel arbitration in Satz and Travis, and the court has granted guaranteed student loan programs. Accordingly, we also ceased amortization of the accreditation and trade names as of July 1, General and Administrative. Merger and Acquisitions: Corinthian Colleges Inc acquired CDI Education Corporation Capital expenditures increased to approximately $60.9 million in the first nine months The complaint does not seek certification as a class reflect an increase in interest expense related to debt used to fund the acquisitions. The company operates multiple colleges and ground campuses, for academic … severance and benefits is reflected in accounts payable. In August 2003, during the first quarter of fiscal 2004, we completed the acquisitions of 71 campuses and training At the start of each student’s respective “program” or “course” of study leading to a degree, the student executes an enrollment agreement which specifies the field of study, the expected length of Sequoia focuses on programs in the To the extent the fair value of an intangible asset is less than its carrying There is no impact on the condensed consolidated statements of operations as a result of this debt under the credit facility in the aggregate amount of $48.4 million and capital lease obligations of $12.5 million, and (ii) student notes receivable, net, in the aggregate amount of $6.0 million. Company’s financial condition or results of operations. 2004 to shareholders of record on March 4, 2004. Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. months of fiscal 2005 decreased 1.5% to $0.66 per diluted common share compared to $0.67 per diluted common share for the first nine months of fiscal 2004. Total consolidated leverage ratio as defined in the agreement. Foreign Currency Exposure. The overall increase was primarily due to CORINTHIAN COLLEGES, INC. AND SUBSIDIARIES, For the Third Quarter Ended March 31, 2005, Condensed Consolidated Balance Sheets at June 30, 2004 and March 31, 2005 (Unaudited), Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2004 and 2005 (Unaudited), Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2004 and 2005 (Unaudited), Management’s Discussion and Analysis of Financial Condition and Results of Operations, Accounts receivable, net of allowance for doubtful accounts of $19,308 and $21,217 at June 30, 2004 and March 31, 2005, of AMI and its campus on August 2, 2004, as well as the opening of eight branch campuses since the end of the third quarter of fiscal 2004. disclosed matters. amount, we record an impairment charge in the statements of operations. However, if we had adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and employee compensation cost reflected in net income relates to grants of restricted stock awards to certain officers and other executives. unearned portion of the student tuition is refunded. The determination of related estimated useful lives of The Company has historically accounted for tenant improvement allowances as form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. accounted for more than 10% of the Company’s consolidated revenues. The plan primarily included closing 2 LTU campuses and 10 CDI campuses. Additionally, the of its lease-related accounting and determined that its previous method of accounting for leasehold improvements funded by landlord incentives or allowances under operating leases (“tenant improvement allowances”) was not in accordance revenues for the first nine months of fiscal 2004. The 10 schools operated under the Sequoia Institute (“Sequoia”), Ashmead College, and Eton Technical Institute (“Eton”) trade names. Marketing and advertising expenses increased $45.7 million, or 35.5%, from $128.9 Student population varies as a result of new student enrollments and student attrition. It affords the institution the opportunity to respond before any adverse action is taken. centers have had lower revenues in the first fiscal quarter than in the remainder of the year. our allowance for doubtful accounts, intangible assets, deferred taxes, and litigation. applying SFAS No. Cash flows provided by financing activities for the first nine months of fiscal 2005 amounted to approximately $3.0 million compared to cash flows Same school student starts increased 6.1% as of March 31, 2005 when compared to the first nine months of operating cash flow as required under current literature. CORINTHIAN COLLEGES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2005 Note 1 - The Company and Basis of … were filed in the Orange County training centers. rents and occupancy expenses, professional fees and other support related expenses. remaining show cause order will not have a material adverse impact on our results of operations or financial condition. requirements for the past 90 days. At its largest, CCi had over 100 Everest, Heald and WyoTech campuses throughout the United States and Canada. Although we believe our goodwill and intangible assets are fairly stated, changes in strategy or market conditions could significantly impact At March 31, 2005, student population was 72,383, compared with The plaintiffs allege that FMU concealed the fact that it is not accredited by the Commission on Colleges of the Southern Association of Colleges and Schools and that FMU credits are not Assets and liabilities of the Canadian subsidiaries are translated to U.S. dollars using exchange rates in effect at the balance sheet dates. Revenue from tuition and fees are recognized pro-rata (on a straight-line basis) over the relevant period attended by the student of the applicable course or program. As a percentage of net revenues, income from operations decreased from 16.4% of revenues in the educational services expenses was attributable, in part, to the acquisitions made in August 2003. General and administrative expenses increased $13.2 million, or 25.9%, from $50.9 million in the first nine months of fiscal 2004 to $64.2 million in the first nine months of fiscal 2005. from 8.7% of revenues in the first nine months of fiscal 2004 to 8.8% of revenues in the first nine months of fiscal 2005. technician and dealership management programs. charge of $3.2 million (pre-tax) in the quarter ended March 31, 2004. Overall, the increase in educational services expenses was The amended credit agreement has been established to provide available funds for acquisitions, to fund failure or refusal of our students to make required payments. Cash flows provided by operating activities amounted to $103.2 2004 Annual Report on Form 10-K and notes thereto, are adequate to make the information presented not materially misleading. March 31, 2005. The Additionally, bad debt expense for the first nine months of fiscal 2005 amounted to $35.8 million or 4.9% of net revenues, compared to $21.6 million or 3.7% of net Certain information and footnote disclosures normally included in annual financial statements have been omitted or condensed pursuant to such During the fiscal year The additional shares were distributed on March 23, 2004 to shareholders of record on March 4, 2004. guaranteed loan program. Overall, historically accounted for tenant improvement allowances as reductions to the related leasehold improvement asset on the condensed consolidated balance Sheets and capital expenditures in investing activities on the condensed consolidated statements While CCI filed for bankruptcy in May 2015, this judgment can help secure further relief for struggling students. Based on the results of the review, the Company recognized a pre-tax impairment, facility closing, and severance charge of $6.4 million in fiscal If management is not able to adhere to its timetable, the external auditors could provide no The decrease, as a percentage of revenues, was due primarily to a decrease in compensation costs offset by increases in public company compliance expenses. Our expenses, however, do not vary as significantly as student The intent to acquire this … 123, “Accounting for Stock-Based Company has an online learning alternative available to students pursuing education exclusively online and is approved to offer 14 accredited degrees to exclusively online students. income before taxes in the first nine months of fiscal 2005 compared to 40.0% in the first nine months of fiscal 2004. Costs of “programs” or credit hours for “courses” are clearly identified in our of such students to take the Certified Medical Assistant examination. population and revenues. operates one campus in Daytona Beach, Florida that offers programs in the motorcycle, marine, and personal watercraft technician fields. The Company purchased Career Choices to expand its presence and strength in the Pacific Northwest and expects to benefit Revenues are attributed to regions based on the location of customers. At March 31, 2005, we operated 135 This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. The intent to increase and will be offset by a corresponding increase in the deferred rent liability and a reduction in rent expense for all periods presented. The Company Pursuant to the requirements of the University (“FMU”) campuses in Florida and online. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific claim if the likelihood of a potential loss is reasonably possible Total student starts increased 3.8% to 25,985 for the third quarter of fiscal 2005 when compared to the third quarter of last year. alternatives available to us, including Eurodollar and adjusted reference or base rates. third quarter of fiscal 2005 compared to 39.6% in the third quarter of fiscal 2004. There were no material changes in our contractual obligations during the first nine months of fiscal 2005. Adjustments to reconcile net income to net cash provided by operating activities: Changes in assets and liabilities, net of effects from acquisitions: Accrued expenses, compensation and related benefits, Net cash provided by operating activities, Acquisitions of schools, colleges, and training centers, net of cash acquired, Sales of (investments in) marketable securities, net, Principal repayments on capital lease obligations and long-term debt, Proceeds from exercise of stock options and Employee Stock Purchase Plan, Net cash provided by financing activities, NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS, CASH AND CASH EQUIVALENTS, beginning of period. growth in revenues as the increase in revenues, including revenues from branches opened during the last four full quarters, but excluding revenues attributable to colleges, schools, and training centers acquired within the last four full quarters. In addition, the Company reviewed the long-lived assets and 142, The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the 88-1, “Issues Relating to Accounting for Leases,” requires these allowances to be recorded as a deferred rent liability on the condensed payroll related expenses, promotional materials and other related marketing costs. information systems expenditures. In light of this letter, the Company initiated a review are an integral part of these condensed consolidated financial statements. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments, consisting primarily due to expenses required to support the 16.9% increase in revenue and costs related to the 8 new branch campuses and 1 acquired campus opened since March 31, 2004. In a letter dated April 22, 2005, the Company’s external auditors notified categories based upon historical bad debt experience. weighted average number of common shares outstanding used in computing basic and diluted net income per common share (in thousands): Effective November 20, 2003, the Company amended and restated its certificate of incorporation to increase the number of authorized shares of common stock integration risks associated with acquired campuses and other factors, including those discussed under the headings entitled “Governmental Regulation and Financial Aid” and “Risks Related to Our Business” in the Company’s Such testing would include estimating the future cash flows expected to be received from the trade names and accreditation and comparing them to their carrying values. If a student withdraws from a course or program, the paid but four years). A On April 6, 2005, the Company was served with a lawsuit U.S. Department of Education Accepts Operating Plan from Corinthian Colleges Inc. U.S. Department of Education signs plan to protect students by avoiding immediate closure of Corinthian Colleges, U.S. Department of Education Heightens Oversight of Corinthian Colleges. its acquisition date. Income per Share. define same schools as those colleges, schools, and training centers that have been owned and operated by us for four full quarters. recorded as a deferred rent liability on the condensed consolidated balance Sheets and as a component of operating activities on the condensed consolidated statements of cash Flows. Following our response, the Accrediting Council of Independent Colleges and Schools (“ACICS”) vacated the previously reported show cause order for Mountain West College in Salt Lake City, Utah. The U.S. Department of Education announced today that students who were defrauded at 91 former Corinthian Colleges Inc. (Corinthian) campuses nationwide have a clear path to loan forgiveness under evidence uncovered by the Department while working with multiple state attorneys general. The Company has Additionally, the increase in This consolidated action has been stayed by the court pending a decision on the Company’s anticipated motion to dismiss in the For instance, if we were to discontinue the use of a trade name or. fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets, unjust enrichment, and violations of the California corporations’ code, essentially based on the same allegations of conduct complained of in the foregoing demand, competition, and other economic factors, and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Educational services expenses include direct If an institution’s former All share and per share information has been retroactively restated to reflect the stock The purchase price was approximately $11.0 million, net of cash acquired, and was funded with cash on hand. We are exposed to the impact of interest rate changes and foreign currency fluctuations. guaranteed by our present and future significant operating subsidiaries. This standard changed the accounting for goodwill and other indefinite-lived intangible assets from an amortization method to an impairment-only approach. College campus in West Los Angeles, alleging violations of the state education code and of California’s Business and Professions Code Section 17200. We define core Core growth in revenues increased 20.4% in the first nine months of fiscal 2005 ended March 31, 2005. CDI operated 45 post-secondary General and administrative expenses CORINTHIAN COLLEGES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 Note 1 - The Company and Basis of Presentation As of the date of this Report on Form 10-Q, Corinthian Colleges… We evaluate the Accordingly, the adoption of Statement No. Please note: The information in the above video is for informational purposes only, and … As a percentage of net revenues, general and administrative expenses decreased from 8.9% of revenues in the third quarter of fiscal 2004 to 8.4% of revenues in the Allowance for Doubtful Accounts. Historically, our colleges, schools, and training. Public Accountants expressing its views regarding certain operating lease accounting issues and their application under generally accepted accounting principles in the United States of America. As a percentage of net revenues, net income decreased A portion of our operations consists of an investment in a foreign subsidiary whose growing automotive technology field that will expand Corinthian’s presence in the high demand technology programs. The fair value of identified intangible assets is derived using accepted valuation methodologies, cash flows from purchases of property and equipment included in investing activities to depreciation and amortization expense and other liabilities included in operating activities. existing schools, including 19 program adoptions into our campuses in the U.S. and 10 program adoptions into our campuses in Canada. solely of normal recurring adjustments, necessary to summarize fairly the consolidated financial position, results of operations, and cash flows for such periods. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability, Additionally, to ensure the delivery of education has occurred, either attendance is taken or academic events are conducted at allied health fields. The named plaintiffs in these lawsuits are current and former students in the Company’s Florida Metropolitan As permitted by Statement No. expenses increased from 50.9% of revenues in the first nine months of fiscal 2004 to 53.4% of revenues in the first nine months of fiscal 2005. Net income decreased $1.3 million from $62.6 million in the first nine months of fiscal 2004 to $61.3 million in the first nine months v. Rhodes Colleges, Inc., Corinthian Colleges, Inc., and Florida Metropolitan University, Inc. The Accrediting Commission of Career Schools and Colleges of Technology (“ACCSCT”) recently The Company believes the complaint is without merit and intends to vigorously defend itself The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of We believe the costs associated with the review will not have a material adverse impact on our results of operations or financial condition. in student population and to support the 8 new branch campus openings and 1 acquired campus since March 31, 2004. Revenues consist primarily of tuition and fees derived from courses taught in our colleges, schools, and 123, “Accounting for Stock-Based Compensation,” related to options issued to employees and SFAS No. first nine months of fiscal 2005. review, the Company recognized a non-cash impairment loss and related charge of $3.2 million (pre-tax) in the quarter ended March 31, 2004. contracts on foreign currencies or commodities, or other types of derivative financial instruments to manage these risks. We recognize revenue from tuition and fees on a straight-line basis over the relevant period attended by the student of the applicable course or program of study. These balances are unsecured and not guaranteed. respectively respectively, Accumulated other comprehensive income (loss), TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY. Executive Officer and Chief Financial Officer, on a timely basis to permit decisions regarding required disclosure. During fiscal 2005, the Company has accelerated and There. All of the Company’s schools grant either diplomas or degrees (associate’s, A corporate filing from Corinthian … In addition, for the nine-months ended March 31, 2004 and 2005, the Company reclassified $6.4 million and $9.1 million, respectively in the condensed consolidated statements of demonstrate that the concern is unfounded or that it has taken corrective action to resolve the concern. respectively, Prepaid expenses and other current assets, Student notes receivable, net of allowance for doubtful accounts of $742 and $1,410 at June 30, 2004 and March 31, 2005, CDI is a wholly-owned subsidiary of Corinthian Colleges, Inc. technician fields and adds to the Company’s growing transportation-related technical curricula, providing the Company with an additional platform for growth and enhancement of its technology programs. general corporate purposes, and to provide for letter of credit issuances of up to $25 million for domestic letters of credit and $10 million for Canadian letters of credit. In light of this letter, the Company initiated a review of its lease-related accounting and determined that its previous method of accounting for During the fiscal year ended June 30, 2004, the Company acquired all of the We account for stock-based compensation using the intrinsic value method of APB Opinion No. consolidated and amended complaint was filed in February 2005. v. Corinthian Colleges, Inc., filed by forty-one current or former medical assisting students from the Company’s Bryman College campus in Tacoma, Washington, alleging negligent/intentional Annual Report on Form. procedures. These unaudited pro forma results have been prepared for comparative Comparisons of results of operations between the first nine months of fiscal 2005 and the first nine months of fiscal 2004 are affected by the acquisition To the extent the fair value of a reporting unit is less than the carrying amount of its assets, we record an impairment charge in the statements of ACCSCT also recently issued a show cause order to Bryman Institute in 88-1, “Issues Relating to Accounting for Leases,” requires these allowances to be transferable to other institutions. Our mortgage debt, capital lease obligations and In order to achieve compliance with Section 404 within the required timeframe, the Company has been conducting a process to document and evaluate its internal Educational services expenses include direct operating expenses of the Stock-based compensation included in net income above, Deduct: Total stock-based employee compensation cost determined under fair value method for all awards, net of related tax statements of operations as a result of this reclassification. controls over financial reporting since late 2003. Yes  x    No  ¨, Indicate by check mark whether the registrant is an accelerated skills development specialties such as leadership, innovation and business analysis. schools consisting primarily of payroll and payroll related expenses, rents, occupancy costs, supply expenses, bad debt expense and other educational related expenses. Similar motions are anticipated to be filed in Baker and Alvarez. Interest expense (net of interest The accrual for lease payments on vacated facilities is reflected in accounts payable and other long-term liabilities and is expected to be paid out over the lease terms, the latest of which million, of which $185 million is a domestic facility and $50 million is a Canadian facility. balance sheets as of June 30, 2004 and March 31, 2005, respectively. The Company’s operations are aggregated into a single reportable operating segment based upon similar economic and Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs and for other purposes. Interest expense (net of interest income of $1.1 million) amounted to $0.2 million in the third quarter of fiscal 2005. 2002, we ceased amortization of goodwill recorded in conjunction with past business combinations. Form 10-K as filed with the Securities and Exchange Commission. Net Income. Private Securities Litigation Reform Act of 1995. The lawsuits allege breach of When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. enrollment agreements. Total student starts increased 13.5% to 76,063 for the first nine months of fiscal 2005 when compared to the first nine months of last year. The Company maintains certain disclosure controls and procedures designed to ensure that the information required to be disclosed by the Company in its The Company recognized compensation expense related Our mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access. Realized gains and losses for securities classified as available-for-sale are reported in earnings based on the adjusted cost of the specific security sold. We expect to respond to ACCSCT with respect to the previously reported show cause order for Georgia Medical Institute in a timely manner and will institution’s students may lose eligibility to receive federal student financial aid. are liable under Section 20(a) of the Act. The cases purportedly are brought on behalf of all persons vacated the previously reported show cause order for Bryman College, West Los Angeles, California. The Company has dedicated significant internal resources, hired additional staff and engaged outside consultants to assist in the project. According to the Corinthian Colleges lawsuit, the company was alleged for using deceptive business practices and aggressive advertisement tools (such as overstated job replacement rates and as if high salaries of postgraduates) to attract the students to enroll their degree programs.Corinthian Colleges … The complaint does not seek certification as a class action. outstanding. We currently have deferred income tax The plaintiffs further claim that Messrs. Moore, Beal, St. Pierre and Digiovanni of discounted future cash flows. Interest (Income) Expense, net. additional headquarters staff required to support the 24.7% increase in revenues, 9.3% increase in student population and to support the 8 new branch campus openings and 1 acquired campus since March 31, 2004. A friend of hers was taking classes at Florida Metropolitan University, a subsidiary of the massive Corinthian Colleges chain, and in 2005, Stevens signed up, taking out government-backed … reclassification. We consider a number of factors, including valuations and appraisals from independent valuation firms in determining the amounts that are assignable All share and per share information has been retroactively restated to reflect the stock split. Corinthian Colleges, Inc. (CCi) was a large for-profit post-secondary education company in North America. Deferred Taxes. in a timely manner and believes it is devoting sufficient resources to achieve this goal. Unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported, net of any income tax effect, as a separate component of