NEC’s Attempt to Sell Its 29 Training Centers Fails : Education: The Irvine-based firm says the deal fell through because rules would have made sale of the schools as a unit difficult.


National Education Corp. said Thursday it has ended negotiations to sell its 29 training centers.

Talks broke down between the Irvine-based company and the prospective buyer, said Jerome W. Cwiertnia, NEC’s president and chief executive officer, because of regulations that would have made a sale of all 29 schools together difficult.

Licenses to operate the schools could not have been transferred as part of the sale, Cwiertnia said, so the prospective buyer, which the company would not identify, would have had to solicit a license for each school individually from both state and federal departments of education.


“That increased the risk,” said Cwiertnia, because there was no guarantee that licenses would have been granted for all of the schools.

NEC, based in Irvine, said it will continue to search for buyers for the schools, which offer career training courses to high school graduates. But NEC will now offer them for sale individually or in small groups, the company said, rather than in a block.

Selling the education centers is key in the company’s overall plan to return to profitability. For its latest fiscal year, NEC lost $9.6 million on revenue of $355.9 million.

Cwiertnia placed the blame on the training centers, which are scattered across the United States and offer courses in such areas as medical, electronics and automotive technology.

“They lost money this and last year,” he said. “We would be profitable without the schools operations.”

Two of the company’s other divisions, one of which offers correspondence courses and another that publishes supplemental educational materials, are profitable. A fourth division, which offers computer training for businesses, is still losing money.


NEC has made numerous attempts at restructuring flailing education centers operations, analysts say, but those efforts failed, forcing the company to decide in June to shut down the entire division that runs them.

“The restructuring has been going on for some time,” said Byam Stevens, an analyst with the brokerage H.G. Wellington in New York. “They expanded too fast, made a huge managerial mess, and they are still trying to pull those chestnuts out of the fire.”

NEC’s stock hit a 52-week low in New York Stock Exchange trading Thursday, closing at $3.88 a share, down 25 cents.