CECO CECO Environmental Corporation

Career Education Corporation (NASDAQ: CECO) today reported total revenue of $437.4 million and net income of $23.3 million, or $0.26 per diluted share, for the first quarter of 2009 compared to total revenue of $451.9 and net income of $16.4 million, or $0.18 per diluted share, for the first quarter of 2008. Excluding significant items as detailed below in this press release, net income per diluted share was $0.32 for the first quarter of 2009, compared to $0.25 for the first quarter of 2008.

�I am encouraged by our overall performance in the first quarter,� said Gary E. McCullough, president and chief executive officer. �Our Health Education schools delivered another record quarter with a 24% increase in student population. Our Culinary schools posted a 13% increase in student starts, thanks to our efforts in 2008 to evolve the business to meet the changing needs of our students. However, in our University institutions, while we generated strong improvements in operating income and margins, I am not satisfied with the level of our student starts. We will continue to improve in this important area as we move toward our goal of meaningful and consistent revenue growth across the organization.�

Three Months Ended March 31, 2009

• Total revenue from continuing operations was $437.4 million during the first quarter of 2009, a 3.2 percent decrease from $451.9 million during the first quarter of 2008.
• Revenue for the Transitional Schools was $6.7 million in the first quarter of 2009, as compared to $24.4 million for the first quarter of 2008 reflecting the reduction in student population associated with the teach-out of these operations.
• Excluding the Transitional Schools, revenue was $430.7 million in the first quarter, a 0.7 percent increase from $427.5 million in the first quarter of 2008.
• Operating income was $35.4 million during the first quarter of 2009, a 46 percent increase from $24.2 million of operating income during the first quarter of 2008. Operating margin percentage was 8.1 percent during the first quarter of 2009, a 2.7 percentage point increase relative to an operating profit margin percentage of 5.4 percent during the first quarter of 2008.
• Included in pretax income for the three months ended March 31, 2009 and the three months ended March 31, 2008 are the following significant items:

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Pretax Expense/ (Income)

(In Millions)

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Diluted Earnings per Share Impact

Income Gain/ (Loss)

Three Months Ended March 31, 2009

Lease Exit Charges $7.8 ($0.06 ) �

Three Months Ended March 31, 2008

Severance and Stay Bonuses $10.5 ($0.08 )

Impairment Charges

$2.2

($0.02

)

Gain from Termination of Affiliate Relationship (1)

($4.7

)

$0.03

� TOTAL $8.0 � ($0.07 )

(1) (Reported within other income)

• Transitional Schools reported a loss of $17.2 million in the first quarter of 2009, as compared to a loss of $15.6 million for the first quarter of 2008. Included in the operating loss in the first quarter of 2009 were charges associated with vacated real estate of $7.8 million. Included in the operating loss in the first quarter of 2008 was $7.2 million of charges related to severance and stay bonuses and a $2.2 million charge related to the impairment of long-lived assets.
• Excluding the Transitional Schools, operating income was $52.6 million in the first quarter of 2009, up 32 percent from $39.8 million in the first quarter of 2008. Included in operating income in the first quarter of 2008 was $3.3 million of severance expenses. Operating margin excluding the Transitional Schools was 12.2 percent during the first quarter of 2009, a 2.9 percentage point increase relative to an operating profit margin percentage of 9.3 percent during the first quarter of 2008.

CONSOLIDATED CASH FLOWS AND FINANCIAL POSITION

Cash Flows

• Cash provided by operating activities was $48.7 million during the first quarter of 2009, compared to cash provided by operating activities of $35.5 million during the first quarter of 2008.
• Capital expenditures decreased to $14.9 million during the first quarter of 2009, from $18.8 million during the first quarter of 2008. Capital expenditures represented 3.4 percent of total revenue during the first quarter of 2009.

Financial Position

• As of March 31, 2009 and December 31, 2008, cash and cash equivalents and investments totaled $499.7 million and $508.7 million, respectively.
• Days sales outstanding (DSO) were 13 days as of March 31, 2009, compared to 14 days as of March 31, 2008.

Stock Repurchase Program

Our Board of Directors has authorized the use of a total of $800.2�million to repurchase outstanding shares of our common stock. Stock repurchases under this program may be made on the open market or in privately negotiated transactions from time to time, depending on various factors, including market conditions and corporate and regulatory requirements. The stock repurchase program does not have an expiration date and may be suspended or discontinued at any time.

During the three months ended March 31, 2009, the company repurchased 1.7 million shares of our common stock for approximately $40.0 million at an average price of $22.83 per share. Since the inception of the program, the company has repurchased 20.9 million shares of our common stock for approximately $644.7 million at an average price of $30.80 per share.

As of March 31, 2009, approximately $155.5 million is available under the program to repurchase outstanding shares of our common stock.

Revenue

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For the three months ended March 31,

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% Change

2009 � 2008 2009 vs. 2008 Revenue (in millions) University $189.8 $177.1 7% Culinary Arts 75.3 87.2 (14%) Health Education 67.4 57.8 17% Art & Design 63.8 70.9 (10%) International 34.5 34.5 - Corporate (0.1 ) - N/M Subtotal $430.7 $427.5 1% Transitional Schools 6.7 � 24.4 N/M Total Revenue $437.4 � $451.9 (3%) �

Operating Income

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For the three months ended March 31,

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% Change

2009 � 2008 2009 vs. 2008 Operating Income (in millions) University $38.1 $25.0 52% Culinary Arts (0.6 ) 5.4 (111%) Health Education 13.5 4.4 207% Art & Design 7.4 10.7 (31%) International 11.4 12.8 (11%) Corporate (17.2 ) (18.5 ) N/M Subtotal $52.6 $39.8 32% Transitional Schools (17.2 ) (15.6 ) N/M Total Operating Income $35.4 � $24.2 � 46% �

Operating Margin

�

For the three months ended March 31,

2009 � 2008 Operating Margin University 20.1% 14.1% Culinary Arts -0.8% 6.2% Health Education 20.0% 7.7% Art & Design 11.5% 15.1% International 33.0% 37.1% Corporate N/M N/M Subtotal 12.2% 9.3% Transitional Schools N/M -63.9% Total 8.1% 5.4% �

STUDENT POPULATION AND NEW STUDENT START DATA

Student Population

Total student population by reportable segment as of April 30, 2009 and 2008, were as follows:

� As of April 30, � % Change 2009 � 2008 2009 vs. 2008 STUDENT POPULATION University 48,600 43,500 12% Culinary Arts 9,800 10,200 (4%) Health Education 19,300 15,600 24% Art & Design 12,500 12,800 (2%) International 8,300 7,000 19% Subtotal 98,500 89,100 11%

Transitional Schools

1,300 4,700 (72%) Total Student Population 99,800 93,800 6% �

ONLINE STUDENT POPULATION

Art & Design 1,100 500 120% University 38,400 33,900 13% Total Online Student Population 39,500 34,400 15% �

New Student Starts

New student starts by reportable segment during the first quarter of 2009 and 2008, were as follows:

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For the three months ended March 31,

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% Change

2009 � 2008 2009 vs. 2008 NEW STUDENT STARTS University 16,120 15,830 2% Culinary Arts 2,840 2,520 13% Health Education 6,380 5,110 25% Art & Design 1,950 2,070 (6%) International 710 560 27% Subtotal 28,000 26,090 7% Transitional Schools 10 1,300 N/M Total New Student Starts 28,010 27,390 2% �

ONLINE STUDENT STARTS

Art & Design 330 300 10% University 13,640 � 13,460 1% Total Online Student Starts 13,970 � 13,760 2%

CONFERENCE CALL INFORMATION

Career Education Corporation will host a conference call on May 7, 2009 at 10:00 AM (Eastern Time). Interested parties can access the live webcast of the conference call at www.careered.com. Participants can also listen to the conference call by dialing 800-573-4842 (domestic) or 617-224-4327 (international) and citing code 27904153. Please log-in or dial-in at least 10 minutes prior to the start time to ensure a connection. An archived version of the webcast will be accessible for 90 days at www.careered.com. A replay of the call will also be available for seven days by calling 888-286-8010 (domestic) or 617-801-6888 (international) and citing code 52594782.

About Career Education Corporation

The colleges, schools, and universities that are part of the Career Education Corporation (CEC) family offer high quality education to a diverse population of approximately 99,000 students across the world in a variety of career-oriented disciplines. The more than 75 campuses that serve these students are located throughout the U.S. and in France, Italy, and the United Kingdom, and offer doctoral, master's, bachelor's, and associate degrees and diploma and certificate programs. Approximately one-third of its students attend the web-based virtual campuses of American InterContinental University Online and Colorado Technical University Online.

CEC is an industry leader whose gold-standard brands are recognized globally. Those brands include, among others, the Le Cordon Bleu Schools North America; Harrington College of Design; Brooks Institute; International Academy of Design & Technology; American InterContinental University; Colorado Technical University and Sanford-Brown Institutes and Colleges. Through its schools, CEC is committed to providing quality education, enabling students to graduate and pursue rewarding careers.

For more information, see the company�s website at www.careered.com. The company's website includes a detailed listing of individual campus locations and web links to its more than 75 colleges, schools, and universities.

Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as "anticipate," "believe," "plan," "expect," "intend," "project," "will," and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, performance and business prospects, and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. These risks and uncertainties, the outcome of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: the adverse impact and potential impacts on the availability of Title IV and private student loans for our students of (1) the willingness or ability of private lenders to make private student loans in the current U.S. credit markets, (2) new student lending related reporting and disclosure obligations on institutions that participate in Title IV federal student financial aid programs under The Higher Education Opportunity Act (�HEOA�), signed into law on August 14, 2008, in the first full reauthorization of the Higher Education Act of 1965, as amended, and (3) pending regulations under HEOA and Congress� willingness or ability to maintain or increase funding for Title IV programs; potential higher bad debt expense or reduced revenue associated with requiring students to pay more of their educational expenses while in school or with directly making student loans to our students; increased competition; the effectiveness of our regulatory compliance efforts; impairment of goodwill and other intangible assets as we continue to redefine the company and manage our brands and marketing to improve effectiveness and reduce costs; charges and expenses associated with exiting excess facility space, centralizing various functional areas, such as human resources and financial aid, and continuing to align the SBUs and corporate staff to remove layers, overlaps and redundancies; the impact on our revenues and profitability of our transitional segment; our ability to comply with accrediting agency requirements or obtain accrediting agency approvals; our dependence on information technology system; our ownership or use of intellectual property ; costs and impacts of legal and administrative proceedings and investigations, governmental regulations, and class action and other lawsuits; costs and difficulties related to the integration of acquired businesses; our ability to manage and continue growth; and other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2008, our Quarterly Report on Form 10-Q for the most recent fiscal quarter, and from time to time in our current reports filed with the Securities and Exchange Commission.

CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands) � � March 31, December 31, 2009

2008(1)

� ASSETS CURRENT ASSETS: Cash and cash equivalents $ 159,121 $ 244,743 Investments 340,566 � 263,953 � Total cash and cash equivalents and investments 499,687 508,696 Receivables: Students, net of allowance for doubtful accounts of $35,738 and $35,226 as of March 31, 2009 and December 31, 2008, respectively 57,134 59,119 Other, net 6,844 9,191 Prepaid expenses 47,473 46,416 Inventories 12,362 12,352 Deferred income tax assets 17,472 17,472 Other current assets 9,601 9,223 Assets of discontinued operations 4,848 � 5,003 � Total current assets 655,421 � 667,472 � NON-CURRENT ASSETS: Property and equipment, net 298,044 304,970 Goodwill 374,048 376,072 Intangible assets, net 39,245 39,904 Deferred income tax assets 11,566 11,440 Other assets, net 18,879 � 17,465 � TOTAL ASSETS $ 1,397,203 � $ 1,417,323 � � LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt and capital lease obligations $ 337 $ 354 Accounts payable 42,862 28,450 Accrued expenses: Payroll and related benefits 48,729 63,757 Advertising and production costs 19,729 21,504 Income taxes 34,216 29,224 Other 50,107 49,526 Deferred tuition revenue 142,524 153,727 Liabilities of discontinued operations 7,294 � 8,753 � Total current liabilities 345,798 � 355,295 � � NON-CURRENT LIABILITIES: Long-term debt and capital lease obligations, net of current maturities 1,658 1,889 Deferred rent obligations 99,299 97,644 Other liabilities, net 20,368 � 13,983 � Total non-current liabilities 121,325 � 113,516 � � SHARE-BASED AWARDS SUBJECT TO REDEMPTION 1,693 860 � STOCKHOLDERS' EQUITY: Preferred stock - - Common stock 954 933 Additional paid-in capital 226,200 222,523 Accumulated other comprehensive income 571 5,774 Retained earnings 829,924 807,500 Cost of shares in treasury (129,262 ) (89,078 ) Total stockholders' equity 928,387 � 947,652 � TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,397,203 � $ 1,417,323 � � � � � � �

(1)

�

Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as transitional, the change in our reportable business segments during the first quarter of 2008 and to present Brooks College - Sunnyvale and Long Beach, CA, IADT - Pittsburgh, PA, IADT - Toronto, Canada and Katharine Gibbs School and Gibbs College - Piscataway, NJ as discontinued operations. CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts and percentages) � � � � � � For the Three Months Ended March 31, % of % of 2009 Revenue

2008(1)

Revenue � REVENUE: Tuition and registration fees $ 420,197 96.1 % $ 432,051 95.6 % Other 17,250 � 3.9 % 19,833 � 4.4 % Total revenue 437,447 � 451,884 � � OPERATING EXPENSES: Educational services and facilities 163,074 37.3 % 166,649 36.9 % General and administrative 222,141 50.8 % 238,626 52.8 % Depreciation and amortization 16,802 3.8 % 20,215 4.5 % Goodwill and asset impairment - � 0.0 % 2,169 � 0.5 % Total operating expenses 402,017 � 91.9 % 427,659 � 94.6 % Operating income 35,430 � 8.1 % 24,225 � 5.4 % � OTHER INCOME (EXPENSE): Interest income 1,158 0.3 % 3,433 0.8 % Interest expense (10 ) 0.0 % (227 ) -0.1 % Share of affiliate earnings - 0.0 % 4,665 1.0 % Miscellaneous expense (243 ) -0.1 % (191 ) 0.0 % Total other income 905 � 0.2 % 7,680 � 1.7 % � Pretax income 36,335 8.3 % 31,905 7.1 % � Provision for income taxes 13,008 � 3.0 % 10,535 � 2.3 % � Income from continuing operations 23,327 5.3 % 21,370 4.7 % � Loss from discontinued operations, net of tax (70 ) $ (4,986 ) � NET INCOME $ 23,257 � $ 16,384 � � NET INCOME (LOSS) PER SHARE - DILUTED Income from continuing operations $ 0.26 $ 0.24 Loss from discontinued operations (0.00 ) (0.06 ) Net income $ 0.26 � $ 0.18 � � DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 90,162 � 90,289 � � �

(1)

�

Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as transitional, the change in our reportable business segments during the first quarter of 2008 and to present Brooks College - Sunnyvale and Long Beach, CA, IADT - Pittsburgh, PA, IADT - Toronto, Canada and Katharine Gibbs School and Gibbs College - Piscataway, NJ as discontinued operations. CAREER EDUCATION CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) � � � � � � For the Three Months Ended March 31, 2009 2008 � CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 23,257 $ 16,384 Adjustments to reconcile net income to net cash provided by operating activities: Goodwill and asset impairment - 6,613 Depreciation and amortization expense 16,802 21,403 Bad debt expense 9,943 11,765 Compensation expense related to share-based awards 3,157 3,029 Loss (gain) on disposition of property and equipment 295 (134 ) Share of affiliate earnings, net of cash received - 939 Deferred income taxes - 533 Changes in operating assets and liabilities (4,755 ) (25,017 ) Net cash provided by operating activities 48,699 � 35,515 � � CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale investments (225,622 ) (213,501 ) Sales of available-for-sale investments 149,009 177,569 Purchases of property and equipment (14,898 ) (18,814 ) Other (266 ) 433 � Net cash used in investing activities (91,777 ) (54,313 ) � CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (40,184 ) (13,990 ) Issuance of common stock 520 793 Tax benefit associated with stock option exercises 21 26 Borrowings on revolving loans - 999 Payments of capital lease obligations and other long-term debt (141 ) (118 ) Net cash used in financing activities (39,784 ) (12,290 ) � � EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS: (2,875 ) 8,292 � �

NET DECREASE IN CASH AND CASH EQUIVALENTS

(85,737 ) (22,796 ) Add: Cash balance of discontinued operations, beginning of the year 115 15,735 Less: Cash balance of discontinued operations, end of the year - 2,855 CASH AND CASH EQUIVALENTS, beginning of the year 244,743 � 221,970 � CASH AND CASH EQUIVALENTS, end of the year $ 159,121 � $ 212,054 � CAREER EDUCATION CORPORATION SELECTED UNIVERSITY SEGMENT INFORMATION (Dollars in thousands) � � � � � For the Three Months Ended March 31, 2009

2008 (1)

� UNIVERSITY REVENUE: AIU Online $ 77,762 $ 71,972 On-ground 20,131 22,982 CTU Online 68,083 59,198 On-ground 15,048 13,538 Briarcliffe 8,750 � 9,461 � University

$ 189,774

�

$ 177,151

� � UNIVERSITY SEGMENT OPERATING INCOME (LOSS): AIU Online $ 21,086 $ 8,531 On-ground (588 ) (1,535 ) CTU Online 18,491 16,165 On-ground (666 ) 828 Briarcliffe (215 ) 1,002 � University

$ 38,108

�

$ 24,991

� � UNIVERSITY SEGMENT OPERATING INCOME (LOSS) PERCENTAGE: AIU Online 27.1 % 11.9 % On-ground -2.9 % -6.7 % CTU Online 27.2 % 27.3 % On-ground -4.4 % 6.1 % Briarcliffe -2.5 % 10.6 % University 20.1 % 14.1 % � � Student Population as of April 30, 2009 2008 AIU Online 18,300 16,900 On-ground 3,600 3,500 CTU Online 20,100 17,000 On-ground 5,000 4,300 Briarcliffe 1,600 � 1,800 � University

48,600

�

43,500

� � � Student Starts for the year ended March 31, 2009 2008 AIU Online 8,040 8,160 On-ground 1,240 1,140 CTU Online 5,600 5,300 On-ground 920 860 Briarcliffe 320 � 370 � University

16,120

�

15,830

� � � � � � � � �

(1)

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Prior period financial results have been reclassified to account for the teach-out of our schools previously reported as held for sale and the change in our reportable business segments during the first quarter of 2008.