Education Management removes itself from Nasdaq listing
Education Management Corp. is going private as the financially struggling operator of for-profit colleges undergoes an enormous restructuring and hands control to its creditors.
Downtown-based EDMC said Thursday that it plans to remove itself as a listed company on the Nasdaq stock exchange and will stop reporting to regulators.
The cost of compliance — the demands on its management's time and resources needed to comply with Securities and Exchange Commission reporting rules — outweighs the benefits of keeping its shares listed, the company said.
EDMC has fewer than 300 stockholders of record for each class of stock, making it eligible to stop reporting to the SEC. Its common stock will be traded over the counter on “Pink Sheets,” which do not have the same reporting requirements.
A company spokesman declined to comment.
The value of EDMC's stock has plummeted to $1.15 per share from $16.94 a share in the past year amid its struggles.
Last week, EDMC reported a $644 million loss in fiscal year 2014, its third consecutive annual loss, as enrollment declined 7.3 percent.
EDMC has 125,560 students on campuses in 32 states and Canada, and employs 20,800 people, including 2,000 in Pittsburgh. Its schools include The Art Institutes, Argosy University and Brown Mackie College.
EDMC made the announcement as the company prepares to hand majority control to its creditors under a debt-restructuring deal that will convert $1.1 billion in debt into an equity stake.
Nasdaq threatened this month to delist the company's stock because it had missed a deadline to file its annual comprehensive financial statement. At the time, EDMC said it was considering a voluntary delisting.
The year was a difficult one marked by ongoing lawsuits over its recruiting practices and pressure from lenders. It is facing a potential class-action lawsuit from investors seeking to recoup losses since the Justice Department began investigating the company several years ago.
The lawsuits could bring large financial penalties at a time when the company is slashing costs and restructuring its debt. EDMC has cut more than 600 workers nationwide, nearly half of them in Pittsburgh.
Chris Fleisher is a staff writer for Trib Total Media.