NEC Reports First Yearly Profits Since 1988 : Earnings: The job-training company has benefited from cost-cutting, restructuring and increased demand for its services during the recession.

National Education Corp., boosted by cost-cutting and restructuring programs, Monday reported its first yearly profit since 1988, earning $5.4 million, or 18 cents per share.

The Irvine-based company, which provides vocational programs and training services, posted a loss of $15 million, equal to 50 cents per share, in 1990. The company’s most recent yearly profit was $46.1 million.

Company revenues rose 3.7% to $385 million in 1991 compared to $371 million the year before. It also was the first time since 1988 that yearly revenues have increased.

The company reported net income of $9 million, or 30 cents per share, for the fourth quarter of 1991, compared to $1.2 million, or 4 cents per share, in the same period a year earlier. Quarterly revenues were $111 million, compared to $102.1 million in the final quarter of 1990.

Jeffrey L. Kilpatrick, president of Newport Securities in Costa Mesa, said NEC’s improvement to 30 cents a share in the fourth quarter was “probably better than we expected.”

“It’s very encouraging,” he said. “It shows that the management team has done a good restructuring. . . . They’re trying to rebuild their credibility and integrity with the financial community by being really consistent.”

In the two previous years, the company lost a total of $44.2 million because of $62 million in outstanding bank debt and overly optimistic projections of sales growth in a corporate training division.

By the end of 1991, the management team, led by President and Chief Executive Officer Jerome W. Cwiertnia, has reassigned lines of credit, reduced borrowing, cut $50 million in operating expenses and repaid the last $35 million of its bank debt.

“We feel we’re back on track,” said Cwiertnia, who was promoted from chief operating officer to his current post in 1990. “But we’ve still got a ways to go before we’re back to our performance of several years ago.”

NEC also has benefited slightly from increased enrollment in its career-training and educational advancement programs. With unemployment growing nationwide, many displaced workers enroll in vocational programs to learn new skills. In addition, workers seeking to preserve their positions take courses for job security.

“We’ve generally been counter-cyclical,” Cwiertnia said. “We’re seeing a slight increase from the recession.”

The company’s Applied Learning division--a major target of the company restructuring--has suffered a bit in the poor economy, although it posted a slight profit in 1991, Cwiertnia said.

According to analysts, Applied Learning representatives sold multiyear library leasing agreements, then counted revenues for the entire contract period when only a fraction was paid in advance. Although the accounting method was within generally accepted principles, increased revenues were being counted while the division actually lost money.

The division, which provides interactive video instruction and computer-based training for corporations, stands to gain once the economy turns around because smaller competitors have been unable to weather the recession, analysts say.

“We have very little competition,” Cwiertnia said. “ . . . We stand in a much more positive environment.”

Shares of NEC, which trade on the New York Stock Exchange, closed unchanged Monday at $9.75.