Boston, MA 04/02/2014 (wallstreetpr) – Private education provider,Apollo Education Group Inc. (NASDAQ:APOL), saw its net income for the second quarter grow despite registering fewer than expected enrollment for the period. The company’s results for the period were mostly weighed down by restructuring charges that amounted to $44 million.
Net income for the period was up by 8% coming in at $14.6 million despite the company registering a drop of enrollments of 16.5% to 32,500 students and down by 17% on a year over year basis to 250,300.
Declining student demand
Apollo Education Group Inc. (NASDAQ:APOL) has also announced that Tim Slottow will take up his seat as the new president of the University of Phoenix, replacing the retiring Bill Pepicello who has been at the helm for 7 years. Slottow who is currently the Chief Financial Officer at University of Michigan is expected to ascend to the helm on June 20 this year.
The profit making education institution experienced a big boom during the financial crisis that affected many schoolsbut is now struggling amidst a drop in student demand as well as increased criticism of the schools. New federal regulations and the struggling economy have been cited as other possible reasons behind the company’sdismal performance in the markets.
Apollo Cost Reduction Measures
Apollo Education Group Inc. (NASDAQ:APOL) was forced to close more than 100 smaller schools in 2012 as a result of a drop in demand and is now planning to slash down up to 500 jobs as a way of reducing its costs of operation. The company’s woos can also be seen in its dwindling cashbalance that has dropped from highs of $1.5 billion as of August 31, 2013 to lows of $0.8 billion as of February 28, 2014.
The drop in the company’s cash balance was mainly as a result payments made on borrowings amounting to $619.3 million, made to acquire new colleges. Apollo Education Group Inc. (NASDAQ:APOL) also incurred a total of $72.2 million for stock repurchases as well as a net investment of $67.8 million. Under its buyback program, Apollo Education repurchased a total of 1.7 million shares of its common stock at an average price of $31.93.
