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National Education Posts $1.32 Million Loss

TIMES STAFF WRITER

National Education Corp., citing the seasonality of sales of vocational programs and training services, announced Monday a second-quarter loss of $1.32 million, or 4 cents per share.

The Irvine-based company reported that revenues increased 4.8% to $92.4 million for the quarter ending June 30, compared to $88 million in the same quarter last year.

NEC’s last profitable quarter ended Dec. 31, when it earned $1.2 million. Annual company revenues have declined over the past two years.

But analysts said Monday that they were confident that the company’s financial fortunes were on the upturn.

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“We looked for a loss this quarter,” said Jeffrey Kilpatrick, president of Newport Securities Corp. of Costa Mesa, which prepared an analysis in May on the company for its clients.

The report said NEC is still feeling some effects of accounting problems with Applied Learning, a subsidiary that provides interactive video instruction and computer-based training.

The report said Applied Learning representatives had spent money based on anticipated sales increases that never materialized, leading to “increasing revenue figures, although the division was actually operating with negative cash flow.”

President and Chief Executive Officer Jerome Cwiertnia said the seasonality of the company’s sales was the major reason for the income losses. He said NEC traditionally sells more during the last half of the year.

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Another analyst predicted that the second half of the year would be stronger for the company. Bert Boksen, with Raymond James & Associates in St. Petersburg, Fla., said: “They’ll probably return to profitability at the end of the year.”

The company president declined to speculate on NEC’s financial performance through the end of the year, except to say he was confident the earnings would improve.

Wall Street seemed to expect the news and reacted favorably to the company’s earnings. NEC stock on the New York Stock Exchange closed up 38 cents to $8, near its 52-week high of $8.25.

National Education’s Performance

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National Education Corp., based in Irvine, on Monday reported a $1.32-million second-quarter loss on net revenue of $92.4 million. But some analysts said the company posted better numbers than expected, and they predict a better second half of 1991.

Figures are in thousands, except per-share data.

2nd Qtr 2nd Qtr 6 Months 6 Months 1991 1990 1991 1989 Revenue $92,357 $88,048 $177,106 $173,441 Net income (loss) (1,323) (6,380) (6,927) (14,811) Per share (loss) ($0.04) ($0.22) ($0.23) ($0.50)

Source: National Education Corp.

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