Post by
Gladstone78 on Jun 11, 2015 2:15pm
Write downs of goodwill was primarily responsible for loss
Most of the excessive losses are due to write down of goodwill. The company was on an aggressive acquisition program and looks to have paid premium dollar to acquire some schools that did not perform to expectations, therefor the writedown of goodwill. The bigger question is why did they underperform? The market is reacting to a big loss. The explanation of recognition of unearned tuition is intended to soften the loss a bit, but it can’t mask the possibility that they overpaid for some of the acquisitions. If operations are actually sound and they will recover then this could be a good time to buy. Lots of variables and there have been some debacles in private ESL schools before. Many have shut down for bad management
Comment by
Infirstmoney on Jun 11, 2015 2:21pm
Exactly! If they cut costs and spin-out the housing they will be ok. Agreed though that they have to turn over more management and board first....starting with kicking out RYU!!!