Education Management lures competitor's ex-CEO
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Downtown-based Education Management announced yesterday that it has named Todd S. Nelson as its new chief executive officer.
Mr. Nelson replaces John R. McKernan Jr., who will become executive chairman and remain chairman of the board at the for-profit education company that owns the Art Institute of Pittsburgh and more than 70 other post-secondary schools.
Mr. Nelson previously served as CEO of the Apollo Group, the largest company in the for-profit education sector. Apollo Group is the parent company of the University of Phoenix, which has more than 250,000 students enrolled, most of them online.
Mr. Nelson's sudden resignation from the Apollo Group last January at age 46 took many analysts and shareholders by surprise. His contract included a provision that he couldn't work for a competing education company for a year after the resignation, said Mr. McKernan, and Education Management had been hoping to woo him once that time period expired.
"Having run a company the size of Apollo Group, his experience will be a tremendous benefit," said Mr. McKernan.
In its second-quarter results also released yesterday, Education Management said revenue grew to $358.8 million, up 14.8 percent from the year-ago period.
But profits dipped to $25.8 million from $47.6 million, a drop-off the company attributed to increased interest payments. Earnings before interest, taxes, depreciation and amortization grew to $107.2 million in the second quarter of 2007, from $94.5 million in 2006.
Since going private in a $3.4 billion acquisition in June, the company has entered a growth phase, increasing spending on marketing and admissions and rolling out new programs and campuses at an increased rate.
Enrollment for the winter quarter increased 13.7 percent over last year, from 71,900 to 81,800 students. Online enrollment doubled over the same time period, from 3,900 to 7,900 students.
In brief comments during the earnings call, Mr. Nelson reflected that spirit of growth, saying he believes Education Management is "in position to become to preeminent global higher education company."
First Published February 9, 2007 12:00 am
