10.

SEGMENTS

The for-profit education industry has been impacted by numerous regulatory changes, the changing economy and an onslaught of negative articles in the press. As a result of these actions, student populations have declined and operating costs have increased. Over the past few years, the Company has closed over 10 locations and exited its online business. The Company reviewed how it has been structured and decided to change its organization including reorganizing its Group Presidents to oversee each of the reporting segments. By aggregating the remaining 31 operating segments into three reporting segments the Company is better able to allocate financial and human resources to respond to its markets and with the goal of improving its profitability and competitive advantage.

In the past, the Company offered any combination of programs in any market and at any campus. The Company is changing its focus to program offerings that create greater differentiation and attain excellence to attract more students and gain market share. Also strategically, the Company wants to offer continuing education training to employers who hire its students and this is best achieved at campuses focused on their profession.

As a result of these environmental, market forces and strategic decisions, the Company now operates in three reportable segments: a) Transportation and Skilled Trades, b) Healthcare and Other Professions and c) Transitional.

Our reportable segments have been determined based on the method by which our chief operating decision maker now evaluates performance and allocates resources. Each reportable segment represents a group of postsecondary education providers that offer a variety of degree and non-degree academic programs. These segments are organized by key market segments to enhance operational alignment within each segment to more effectively execute our strategic plan. Each of the Company’s schools is a reporting unit and an operating segment. The Company’s operating segments have been aggregated into three reportable segments because, in the Company’s judgment, the reporting units have similar products, production processes, types of customers, methods of distribution, regulatory environment and economic characteristics. Our reporting segments are described below.

Transportation and Skilled Trades – Transportation and Skilled Trades offers academic programs mainly in the career-oriented disciplines of transportation and skilled trades (e.g. automotive, diesel, HVAC, welding and manufacturing).

Healthcare and Other Professions – Healthcare and Other Professions offers academic programs in the career-oriented disciplines of health sciences, hospitality and business and information technology (e.g. dental assistant, medical assistant, practical nursing, culinary arts and cosmetology).

Transitional – Transitional refers to operations that are being phased out and consists of our Fern Park, Florida campus that is currently being taught out. This school is employing a gradual teach-out process that enables the school to continue to operate while current students complete their course of study. The school is no longer enrolling new students. In the fourth quarter of 2014, we announced that we are teaching out our campus in Fern Park, Florida which is expected to be complete by March 2016.

We evaluate segment performance based on operating results. Adjustments to reconcile segment results to consolidated results are included under the caption “Corporate,” which primarily includes unallocated corporate activity.

Summary financial information by reporting segment is as follows:

	For the Three Months Ended March 31,
	Revenue										Operating (Loss) Income
	2015		% of Total			2014		% of Total			2015			2014
Transportation and Skilled Trades	$	44,844		58.5	%	$	44,534		56.2	%	$	4,975		$	2,336
Healthcare and Other Professions		31,289		40.8	%		33,861		42.8	%		(504	)		(679	)
Transitional		587		0.8	%		807		1.0	%		(720	)		(455	)
Corporate		-		0.0	%		-		0.0	%		(9,189	)		(9,814	)
Total	$	76,720		100.0	%	$	79,202		100.0	%	$	(5,438	)	$	(8,612	)

	Total Assets
	March 31, 2015		December 31, 2014
Transporation and Skilled Trades	$	97,695	$	97,650
Healthcare and Other Professions		62,921		62,377
Transitional		2,108		2,184
Corporate		14,172		51,473
Discontinued Operations		-		23
Total	$	176,896	$	213,707