8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 24, 2006

Career Education Corporation

(Exact name of registrant as specified in its charter)

Delaware	0-23245	36-3932190
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2895 Greenspoint Parkway, Suite 600, Hoffman Estates, Illinois 60169

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:  (847) 781-3600

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1—Registrant’s Business and Operations

Item 1.01.  Entry into a Material Definitive Agreement.

On September 25, 2006, Career Education Corporation (the “Company”) announced that John M. Larson had stepped down as the Company’s President and Chief Executive Officer. Mr. Larson will remain an employee of the Company and Chairman of the Board of Directors of the Company.

In light of Mr. Larson’s new role, the Company and Mr. Larson entered into that certain First Amendment to the Employment Agreement by and among John M. Larson, Career Education Corporation and CEC Employee Group, LLC (the “Agreement”), dated as of September 24, 2006, by and among John M. Larson, the Company and CEC Employee Group, LLC (the “Amendment”). The Amendment provides that Mr. Larson is to receive a reduced Base Salary of $500,000 per annum. The parties also acknowledge that Mr. Larson’s removal from the offices of President and Chief Executive Officer and the reduction in his Base Salary each constitute Good Reason for termination by Mr. Larson under the terms of the Agreement. The Amendment further provides that upon any termination of Mr. Larson’s employment, the severance payments due to him shall be measured as of September 24, 2006 or as of the date of his termination, whichever measurement date results in the greater severance payment. Except as provided by the Amendment, the Agreement remains in full force and effect.

The description of the terms of the Amendment contained herein does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein. A copy of the Agreement has been filed as Exhibit 10.11 to the Quarterly Report on Form 10-Q for the Quarterly Period ended September 30, 2000 and is incorporated by reference herein.

Section 5—Corporate Governance and Management

Item 5.02.  Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.

On September 24, 2006, John M. Larson stepped down as the Company’s President and Chief Executive Officer.

On September 24, 2006, the Board of Directors of the Company appointed Robert E. Dowdell, a director of the Company since its inception in January 1994 and Lead Director since July 2004, to the office of interim Chief Executive Officer. Mr. Dowdell has not entered into an employment agreement with the Company and will serve as an at-will employee of the Company. During his service as interim Chief Executive Officer, Mr. Dowdell will receive a base salary of $86,250.00 per month. Mr. Dowdell, age 61, served as Chief Executive Officer and as a director of Marshall & Swift, L.P., a web-hosted software application company, from 1989 until his retirement in January 2006. From 1984 to 1988, Mr. Dowdell served as President of National Education Centers, Inc., a subsidiary of National Education Corporation, Inc. Mr. Dowdell is also the General Partner of RGD Partners, L.P., an investment business, and Chairman of Roof Express, L.P., a software business. Mr. Dowdell received a Bachelor’s of Business Administration in Accounting and a Master’s of Business Administration from the University of Notre Dame. Mr. Dowdell received certification as a public accountant in 1974.

In connection with his appointment to the office of interim Chief Executive Officer, Mr. Dowdell resigned his position as Lead Director. The Board of Directors of the Company has appointed Dennis H. Chookaszian, a Director of the Company since October 2002, as Lead Director.

Section 7—Regulation FD

Item 7.01.  Regulation FD Disclosure.

On September 25, 2006, the Company issued a press release announcing that Mr. Larson had stepped down as President and Chief Executive Officer and that the Board of Directors of the Company had appointed Mr. Dowdell to the office of interim Chief Executive Officer. A copy of the Company’s press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein. In addition, the Company held a conference call on September 25, 2006 to discuss the announcement. A transcript of this conference call is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.

Section 9—Financial Statements and Exhibits

Item 9.01.  Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit Number	Description
10.1	First Amendment to the Employment Agreement by and among John M. Larson, Career Education Corporation and CEC Employee Group, LLC, dated as of September 24, 2006, by and among John M. Larson, Career Education Corporation and CEC Employee Group, LLC.
99.1	Press Release issued by Career Education Corporation, dated September 25, 2006.
99.2	Transcript of Conference Call of Career Education Corporation held on September 25, 2006.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CAREER EDUCATION CORPORATION
By:	/s/ Patrick K. Pesch
	Patrick K. Pesch
	Executive Vice President, Chief Financial Officer
	and Assistant Secretary

Dated:  September 27, 2006

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EXHIBIT INDEX

Exhibit Number	Description
10.1	First Amendment to the Employment Agreement by and among John M. Larson, Career Education Corporation and CEC Employee Group, LLC, dated as of September 24, 2006, by and among John M. Larson, Career Education Corporation and CEC Employee Group, LLC.
99.1	Press Release issued by Career Education Corporation, dated September 25, 2006.
99.2	Transcript of Conference Call of Career Education Corporation held on September 25, 2006.

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EX-10.1

EXHIBIT 10.1

FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT
BY AND AMONG
JOHN M. LARSON, CAREER EDUCATION CORPORATION
AND
CEC EMPLOYEE GROUP, LLC

WHEREAS, JOHN M. LARSON (the “Executive”), CAREER EDUCATION CORPORATION, a Delaware corporation (the “Company”) and CEC EMPLOYEE GROUP, LLC (“Employee Group”) entered into that certain Employment Agreement as of the 1st day of August, 2000 (the “Agreement”); and

WHEREAS, the Company intends to remove Executive from the offices of President and Chief Executive Officer of the Company and to reduce the amount of compensation paid to Executive effective as of Transition Date as defined in this amendment to the Agreement; and

WHEREAS, the Company otherwise desires to continue to employ Executive as the Chairman of the Board, the Board desires that Executive continue to serve as a member of the Board and as the Chairman of the Board notwithstanding such changed employment and does not desire Executive tender his resignation from the Board or from his position as Chairman of the Board, and except as specifically modified herein, the Board and Company desire that the Agreement remain in full force and effect;

NOW, THEREFORE, in consideration of the mutual undertakings of the parties, the parties agree:

I.

Section 2 of the Agreement is amended by adding a new sentence to the end of Section 2.1 to read as follows:

Notwithstanding any prior increase in Base Salary, effective during the term of the Agreement after September 24, 2006 (the “Transition Date”), the Company agrees to pay Larson a reduced Base Salary at the rate of $500,000 per annum.  Such reduced Base Salary shall be subject to annual review by the Board and may be increased by the Board in its sole and absolute discretion but may not be decreased, and shall otherwise be payable as set forth in this Section 2.1.

II.

Section 2.4(d)(i)(A)(2) of the Agreement is amended to read as follows:

(2)           a cash amount equal to twenty-four (24) times the sum of:

(i)            one-twelfth (1/12) of Larson’s Base Salary at the greater of:

(x) the highest rate in effect at any time during the twelve (12)-month period prior to the Date of Termination, or

(y) the highest rate in effect at any time during the twelve (12)-month period prior to the Transition Date,

(ii)           one-twelfth (1/12) of the greater of:

(x) Larson’s Average Bonus, or

(y) Larson’s Average Bonus calculated as if the Transition Date were the Date of Termination, and

(iii) one twelfth (1/12) of an amount equal to the greater of:

(x) the amount the Company contributed on Larson’s behalf for the prior fiscal year ending before the Date of Termination under any qualified or unqualified (under Section 401(a) of the Internal Revenue Code of 1986, as amended) defined contribution plans (“DC Plans”) maintained by the Company as of the Date of Termination, or

(y) the amount the Company contributed on Larson’s behalf for the 2005 fiscal year under any DC Plans maintained by the Company as of the Transition Date,

that total amount being payable in equal monthly installments during each of the twenty-four (24) months following the month in which the Date of Termination occurs; and

III.

Section 2.4(d)(ii)(A)(2) of the Agreement is amended to read as follows:

(2)           a cash amount equal to thirty-six (36) times the sum of:

(i)            one-twelfth (1/12) of Larson’s Base Salary at the greater of:

(x) the highest rate in effect at any time during the twelve (12)-month period prior to the Date of Termination, or

(y) the highest rate in effect at any time during the twelve (12)-month period prior to the Transition Date,

(ii)           one-twelfth (1/12) of the greater of:

(x) Larson’s Average Bonus, or

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(y) Larson’s Average Bonus calculated as if the Transition Date were the Date of Termination, and

(iii) one twelfth (1/12) of an amount equal to the greater of:

(x) the amount the Company contributed on Larson’s behalf for the prior fiscal year ending before the Date of Termination under any DC Plans maintained by the Company as of the Date of Termination, or

(y) the amount the Company contributed on Larson’s behalf for the 2005 fiscal year under any DC Plans maintained by the Company as of the Transition Date,

that total amount being payable in equal monthly installments during each of the thirty-six (36) months following the month in which the Date of Termination occurs; and

IV.

Section 3.3 of the Agreement is amended by adding a new sentence to the end thereof to read as follows:

The parties hereto acknowledge and agree that the change in Larson’s duties and responsibilities by the Company as of the Transition Date by removing Larson from the offices of President and Chief Executive Officer and the reduction of Larson’s compensation each separately constitute Good Reason as such term is defined in this Section 3.3.  The Company and Board acknowledge and agree that Larson’s agreement to continue employment with the Company after the Transition Date under the Agreement as modified by the first amendment to the Agreement shall not in any way be deemed to constitute (i) consent of Larson to such change, removal or reduction or (ii) a waiver of Larson’s right to subsequently terminate his employment with the Company for Good Reason at any time after the Transition Date based on such change, removal or reduction, or based on any other facts and circumstances that may occur or have occurred.

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V.

Except as provided herein, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment on and effective as of September 24, 2006.

CAREER EDUCATION CORPORATION
By:	/s/ Robert E. Dowdell
Its:	Lead Director
CEC EMPLOYEE GROUP, LLC
By:	/s/ Robert E. Dowdell
Its:	Authorized Signatory
EXECUTIVE
By:	/s/ John M. Larson
	John M. Larson

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EX-99.1

EXHIBIT 99.1

Contact:

Media:	Investor Relations:
Pattie Overstreet-Miller	Karen King
847/851-7351	847/585-3899
www.careered.com	www.careered.com

Lynne Baker
847/851-7006
www.careered.com

CAREER EDUCATION CORPORATION ANNOUNCES THAT FOUNDER JACK
LARSON WILL BE STEPPING DOWN AS PRESIDENT AND CEO WHILE
RETAINING THE POST OF CHAIRMAN OF THE BOARD

Lead Director Robert E. Dowdell Is Named Interim CEO

Board Initiates Active Search for a Permanent CEO

HOFFMAN ESTATES, IL, September 25, 2006 — Career Education Corporation (NASDAQ: CECO) today announced that John M. Larson has stepped down as the company’s president and chief executive officer while continuing to serve as chairman of the board.  Larson will focus on guiding and supporting the development of new initiatives for the corporation, but will no longer be responsible for the day-to-day operations of the company.

Robert E. Dowdell, Career Education’s lead director, has been named interim CEO and will have responsibility and authority for day-to-day operations with a full-time presence at the company’s corporate headquarters.  The board of directors is in the final stages of engaging a nationally recognized executive search firm to lead the search for a permanent CEO.  “Jack Larson’s talent, passion, commitment, and leadership have brought this company to the forefront of for-profit post-secondary education,” said Dowdell.  “The board and Jack have determined that the decision to split the position of chairman and CEO is the best one for the company.  This will enable Jack, as Career Education’s founder, to focus on the company’s global strategy, its various growth initiatives, and to further define a viable and compelling vision for the company

in the evolving world of education.  I have agreed to serve as interim CEO during the period it takes for the board to complete its search for a permanent CEO.  The fundamentals of the business remain solid.  We are confident that a strengthened, broader executive leadership team will successfully move the company forward in addressing opportunities and challenges, and in pursuing strategies to deliver high quality education and value for all our stakeholders.”

“I am proud of what Career Education Corporation and its employees and educators have accomplished over the past 12 years,” said Larson.  “We are moving now into a new and even more positive stage for our company, and I look forward to working closely with Bob and his permanent successor to continue leading the company forward.  I remain extremely optimistic about growth prospects for the global for-profit postsecondary education sector, and believe Career Education will continue to be a market leader in providing high quality education programs to students.”

In 1994, Larson founded Career Education Corporation, currently the second largest for-profit education company in the United States.  He has served as chairman since January 2000 and as president and CEO and a member of the board of directors since 1994.  Under his leadership, the company’s annual revenues surpassed $2 billion in less than 12 years, and achieved a compound annual growth rate of 44 percent in the last five years.  Career Education Corporation was ranked fourth on FORTUNE magazine’s 2003 list of the 100 Fastest-Growing Companies, and first in the for-profit sector. CEC also ranked in the Top 20 of the 2003 “Hot Growth Companies” as measured by BusinessWeek magazine.  Larson’s guidance drove the acquisition of gold standard brands such as Brooks Institute of Photography and Le Cordon Bleu Schools North America and the expansion of on-site and online educational offerings throughout the U.S., France, the United Kingdom, Dubai and Canada.  In 2000, Larson was named Ernst & Young’s “Entrepreneur of the Year” for the Illinois and northwestern Indiana region in the service category.  Larson has recently been named as one of the first inductees to the Hall of Fame at the Haas School of Business at the University of California, Berkeley.

Robert E. Dowdell has been a director of Career Education since its inception in January 1994. From 1984 to 1988, Dowdell served as president of National Education Centers, Inc., a subsidiary of NEC. From 1989 to early 2006, Dowdell served as chief executive officer and as a

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director of Marshall & Swift, L.P.  Dowdell is also the general partner of RGD Partners, L.P., an investment business.

Conference Call Information

Career Education Corporation will host a 15-minute conference call today, September 25, 2006 at 5:00 PM (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 617-614-2704 (international) or 866-800-8651 (domestic) and citing code 58463833.  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 seven days at www.careered.com.  A replay of the call will also be available for seven days by calling 617-801-6888 (international) or 888-286-8010 (domestic) and citing code 92076332.

About Career Education Corporation

The colleges, schools and universities that are part of the Career Education Corporation (CEC) family offer high quality education to more than 85,000 students across the world in a variety of career-oriented disciplines.  The 80-plus campuses that serve these students are located throughout the U. S., Canada, France, the United Kingdom, and the United Arab Emirates and offer doctoral, master’s, bachelor’s, and associate degrees and diploma and certificate programs. Approximately one third of students attend the web-based virtual campuses of American InterContinental University Online and Colorado Technical University Online.

Career Education is an industry leader whose gold-standard brands are recognized globally.  Those brands include, among others, the Le Cordon Bleu Schools North America; the Harrington College of Design; the Brooks Institute of Photography; the Katharine Gibbs Schools; American InterContinental University; Colorado Technical University and Sanford-Brown Institutes and Colleges.  The mission of CEC, through its schools, its educators, and its employees is education—their primary goal, to enable students to graduate successfully and pursue rewarding careers.

For more information, see www.careered.com.   The company’s website also has a detailed listing of individual campus locations and web links for its 80-plus colleges, schools and universities.

Except for the historical and present factual information contained herein, the matters set forth in this release 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,

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 performance and business prospects, and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by 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: future financial and operational results, including the impact of impairment of goodwill and other intangible assets; risks related to our ability to comply with accrediting agency requirements or obtain accrediting agency approvals, including the adverse impact of negative publicity concerning the continued probation status of American InterContinental University and ongoing review by its accrediting body; risks related to our ability to comply with, and the impact of changes in, legislation and regulations that affect our ability to participate in student financial aid programs; costs, risks and effects of legal and administrative proceedings and investigations and governmental regulations, including the pending Securities and Exchange Commission and Justice Department investigations and, class action, derivative,  and other lawsuits; costs and difficulties related to the integration of acquired businesses; risks related to our ability to manage and continue growth; risks related to competition, general economic conditions, and other risk factors relating to our industry and business, and the factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2005, and from time to time in our other reports filed with the Securities and Exchange Commission.

# # #

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EX-99.2

Exhibit 99.2

FINAL TRANSCRIPT

      

Conference Call Transcript

CECO - Career Education Conference Call

Event Date/Time: Sep. 25. 2006 / 5:00PM ET

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FINAL TRANSCRIPT

Sep. 25. 2006 / 5:00PM ET, CECO - Career Education Conference Call

CORPORATE PARTICIPANTS

 Jack Larson

 Career Education Corporation - Chairman, President, CEO

 Bob Dowdell

 Career Education Corporation - Director

CONFERENCE CALL PARTICIPANTS

 Greg Cappelli

 Credit Suisse - Analyst

 Sarah Gubins

 Merrill Lynch - Analyst

 PRESENTATION

Operator

 Good day, ladies and gentlemen, and welcome to the Career Education Corporation conference call. At this time, all participants are in listen-only mode. Today’s presentation will be approximately 15 minutes in duration. If time permits, we will be taking questions. (OPERATOR INSTRUCTIONS). As a reminder, this conference is being recorded for replay purposes.

At this time, I would like to read the Safe Harbor statement. Statements made by CEC or its representatives on this call that are not historical facts are forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on information currently available to us, and involve risks and uncertainties that could cause our actual growth, results, performance and business prospects and opportunities to differ materially from those expressed in or implied by these statements. These risks and uncertainties, the outcome of which could materially and adversely affect our financial condition and operations, include but are not limited to future financial and operational results, including the impact of impairment of goodwill and other intangible assets; risks related to our ability to comply with the crediting agency requirements or obtain a credit agency approvals, including the adverse impact of negative publicity and negative press coverage concerning the continued probation status of American InterContinental University and ongoing review by its accrediting body; risks related to our ability to comply with and the impact of changes in legislation and regulation that affect our ability to participate in student financial aid programs; costs, risks and effects of legal and administrative proceedings and investigations and governmental regulations, including the pending Securities and Exchange Commission and Justice Department investigations and class-action derivative and other lawsuits; costs and difficulties related to the integration of acquired businesses; risks related to our ability to manage and continue growth; risks related to competition; general economic conditions; and other risk factors relating to our industry and business, as described in our annual report on Form 10-K for the year ended December 31, 2005, and from time to time in our other reports filed with the SEC. Except as expressly required by federal securities laws, we undertake no obligation to update such factors, or to publicly announce the results of any of these forward-looking statements to reflect future events, developments or changed circumstances or for any other reason.

I would now like to turn the presentation over to Jack Larson, Chairman, President and Chief Executive Officer. Please proceed, sir.

 Jack Larson - Career Education Corporation - Chairman, President, CEO

 Very good. Thank you for joining us today on such short notice. With me today is Bob Dowdell. So anyway, I wish you all good afternoon. But thanks for taking the time to be on the call today. You have now likely seen the press release which, of course, speaks for itself. This is going to be a brief call, but there are three points that we would like to reaffirm for you here today.

First, we want to let you know that we feel strongly that this is the right decision at the right time. This decision was made between me and the Board, as a result of significant discussion. We believe that as the Company matures and transitions into its business model, this is an appropriate time for me to step into a different role and focus more closely on the Company’s global strategies and growth initiatives. The decision to split the

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role of CEO and Chairman will allow me to play a more strategic role, while enabling the Company to broaden its leadership team by adding a strong executive experienced in day-to-day operations.

Second, I want to assure you that we continue to be optimistic about the long-term fundamentals of the for-profit post-secondary sector and the role this Company will continue to play as a market leader. As the release indicates, the fundamentals of our business remain solid.

I also want to emphasize the outstanding credentials that Bob Dowdell, our Lead Director, brings to the role of Interim CEO. Bob has spent much of his career in this sector. He not only understands the industry, but he understands the Company exceptionally well. He has almost two decades of experience as a CEO, leading both strategic initiatives and running day-to-day operations. We are fortunate that Bob has agreed to make the commitment to be a full-time CEO onsite during this transition.

Before I turn this call over to Bob, I want to thank you for your continued interest in this Company, and again want to reiterate my commitment to the vision, to our extraordinary staff and faculty across the globe, and of course, to our students. I remain enthusiastic about our excellent long-term prospects as an industry leader that creates value for its stakeholders.

Just a few other comments that I would like to make. I certainly want to assure you that I am very excited about where I am going to be spending my time, focused on the global strategies that are available to our Company. There’s many very unique growth projects that I will be involved in, and of course, the many opportunities in the evolving world of education, whether they be onsite or online, a hybrid, or other types of initiatives, such as chefs.com or Blish.

Keep in mind, we didn’t get to be the size that we are standing still. I want to assure you again that things are under control here at the Company, and are underway in our many colleges, and that we have started many really great initiatives that I think will pay a very nice future dividend.

I have been in this industry now for over 30 years, and I will continue to guide and share my ideas and vision with the people in our Company. I know the industry well. I am very proud of our employees. I am very proud of our students. I am exceptionally proud of the services that we provide each and every day, in each one of our institutions, whether we provide those services onsite or online. I am also, as you heard, very optimistic about the future, and I think that we have made tremendous progress in many areas of our Company.

What I would like to do at this time is to turn it over to Bob Dowdell, and Bob wants to share a few words with you also.

 Bob Dowdell - Career Education Corporation - Director

 Hi. I’m Bob Dowdell. I’m the now Interim CEO of Career Education. Before I start, I really just want to thank and applaud Jack for what he has accomplished. You know, sometimes we lose perspective, but in 12 years, Career Education is the second-largest Company in its industry. It is just a marvel that one could accomplish that. He has provided a lot of benefit for many stakeholders, including investors, but certainly students and employees. I just want to both commend him for that, thank him for it and applaud him for it.

As we announced in the release today, we are in the final stages of engaging an outside executive search firm to lead the search for a permanent CEO. We hope to have a permanent CEO — we will be exploring candidates to get to that point within six months or less — and I can tell you we will be looking for an executive with a strong operating background, a proven track record in leading large and complex public companies in the service sector. That is the target. Finding the right person for this role is clearly one of the dominant things that is the responsibility of the CEC Board.

Let me assure you that I intend to be full-time and quite visible and active in my role during this transition. I don’t want to be a caretaker or anything like that. I expect to have an ongoing dialogue with all stakeholders, including shareholders and owners, but certainly also with the employees, with the students and the management group.

I look forward to working with Jack — I have worked with him in the past, and I think we can generate a very good working relationship during this transition — and the rest of the Board, and then also my permanent successor, when that individual becomes in-place.

We have had the opportunity to meet with senior management and get engaged this morning, and quite frankly, I feel very good about the relationships that are already building and the willingness of the group to stay the path and get things moving. We remain very optimistic about Career Education’s long-term prospects — look forward to updating you and all other constituencies in the next few weeks and months, as we execute on our business plan and further refine our long-term strategies. Me being a long-term Board member, the strategies of the Company and

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the strategies of the Board were very much in sync. So I would expect that those strategies would stay very much in-place. And then of course, the search — the completion of the search for the permanent CEO.

Because this change has just occurred, I have very little to share with you today in terms of updating you on any current status of the business or any detailed questions you might have about our long-term initiatives. But as you might imagine, we have a lot of stuff to do. We have a lot of work to do, and we look forward to getting on with that and relating that back to you.

So with that, I think we could take a few questions. If the operator would want to queue that up, that would be great.

QUESTION AND ANSWER

Operator

 (OPERATOR INSTRUCTIONS). Greg Cappelli, Credit Suisse.

 Greg Cappelli - Credit Suisse - Analyst

 Jack, just first of all to you, I want to wish you the very best in your new role going forward, and thank you for the hard work you have put in over the years running the Company.

 Jack Larson - Career Education Corporation - Chairman, President, CEO

 Thank you.

 Greg Cappelli - Credit Suisse - Analyst

 I guess the question is you and your team laid out a strategy on the conference call last quarter talking about — with respect to potentially divesting certain underperforming schools, you talked about the underperforming schools. And I am wondering if this decision will impact the timing of how you intend to move forward on that front, or with respect to what you intend to do with those underperforming schools as you look at your total portfolio?

My follow-up is just is Pat Pesch still in his current position as CFO?

 Bob Dowdell - Career Education Corporation - Director

 Let me answer both of those. I don’t know specifically the timing that might have been described to you about dealing with those difficult schools. But I do have it on my agenda to deal with those quite quickly — figure out which ones could be saved, which ones might be closed down, which ones might be appropriately sold — and to just deal with that. If we do believe that there are some schools that we have a pretty good chance of either increasing the value of them or rehabilitating them, we will take that on. But if it is not reasonably apparent than that can be done, I think we will deal with them in other ways.

With regard to Pat Pesch, yes, he is certainly aboard. Yes. Does that answer your question?

Operator

 Sarah Gubins, Merrill Lynch.

 Sarah Gubins - Merrill Lynch - Analyst

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 Are you still planning to hire a COO? If so, could you give us any sense of the timing of that search?

 Bob Dowdell - Career Education Corporation - Director

 Actually, this transition came from that effort. We were looking for a COO to do the obvious things you would expect, enhance the operations of the business and so on and so forth. As we further — and this is Jack and the Board — as we further and further looked at what was going on, we came to the conclusion that Jack’s job was too broad and too difficult for one person. So effectively, we moved the search upstairs to the CEO. Since I had time available — I just sold my business and transitioned out of it at the end of last year, and I do have a lot of background in the vocational school business — we thought that the best way to handle this was to have me come in on an interim basis, change the search from a COO to a CEO. Maybe we will go back and get a COO after that, but I think we will first focus on the CEO, and quite frankly, postpone or terminate the search for the COO.

Operator

 Ladies and gentlemen, this concludes our time for question-and-answer. Sir, please proceed to closing remarks.

 Jack Larson - Career Education Corporation - Chairman, President, CEO

 All right. We could take a few more questions. I did not mean to have it end that abruptly. So if there are a few more questions, operator, I would certainly be glad to take those.

Operator

 (OPERATOR INSTRUCTIONS). Sir, there are no more questions at this point.

 Jack Larson - Career Education Corporation - Chairman, President, CEO

 Okay, very good. We appreciate everybody’s time and attention. Thank you for coming onto this call, and we will —

 Bob Dowdell - Career Education Corporation - Director

 We look forward to keeping in touch with you in the future.

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