SEGMENTS

The for-profit education industry has been impacted by numerous regulatory changes, the changing economy and an onslaught of negative media attention. 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 ten locations and exited its online business. In 2016, the Company ceased operations in Hartford, Connecticut; Fern Park, Florida; and Henderson (Green Valley), Nevada. In the fourth quarter of 2016, the Board of Directors approved plans to cease operations at our schools in Center City Philadelphia, Pennsylvania; Northeast Philadelphia, Pennsylvania; and West Palm Beach, Florida. Each of these schools is expected to close in 2017. In addition, in March 2017, the Board of Directors approved plans to cease operations at our schools in Brockton, Massachusetts and Lowell, Massachusetts which are expected to close in the fourth quarter of 2017. These schools, which were previously included in the Healthcare and Other Professions segment, are now included in the Transitional segment.

In the past, we offered any combination of programs at any campus. We have shifted our focus to program offerings that create greater differentiation among campuses and attain excellence to attract more students and gain market share. Also, strategically, we began offering continuing education training to select employers who hire our students and this is best achieved at campuses focused on their profession.

We currently operate in three reportable segments: a) Transportation and Skilled Trades b) Healthcare and Other Professions and c) Transitional. Our reportable segments represent a group of post-secondary 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 which have been determined based on a method by which we evaluate performance and allocate resources. Our operating segments have been aggregated into three reportable segments because, in our judgment, the operating segments have similar services, types of customers, regulatory environment and economic characteristics. Our reportable 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 or closed and our campuses that are currently being taught out. These schools are employing a gradual teach-out process that enables the schools to continue to operate while current students complete their course of study. These schools are no longer enrolling new students. During the year ended December 31, 2016, the Company announced the closings of our Northeast Philadelphia, Pennsylvania; Center City Philadelphia, Pennsylvania; and West Palm Beach, Florida facilities. These schools are expected to be fully taught out on August 31, 2017, August 31, 2017 and September 30, 2017, respectively. In the first quarter of 2016 we completed the teach-out of our Fern Park, Florida campus. Also, in the fourth quarter of 2016, we completed the teach-out of our Hartford, Connecticut and Henderson (Green Valley), Nevada campuses. In addition, in March 2017, the Board of Directors approved a plan to cease operations at our schools in Brockton, Massachusetts and Lowell, Massachusetts. These schools are being taught out and expected to be closed in December 2017.

The Company continually evaluates all campuses for profitability, earning potential, and customer satisfaction. This evaluation takes several factors into consideration, including the campus’s geographic location, the programs offered at the campus, as well as skillsets required of our students by their potential employers. The purpose of this evaluation is to ensure that our programs provide our students with the best possible opportunity to succeed in the marketplace with the goals of attracting more students to our programs and, ultimately, to provide the shareholders with the maximum return on their investment. Campuses in the Transitional segment have been subject to this process and have been strategically identified for closure.

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 June 30,
	Revenue										Operating Income (Loss)
	2017		% of Total			2016		% of Total			2017			2016
Transportation and Skilled Trades	$	41,310		66.8	%	$	41,032		60.3	%	$	850		$	2,430
Healthcare and Other Professions		17,932		29.0	%		18,661		27.4	%		(634	)		918
Transitional		2,623		4.2	%		8,387		12.3	%		(833	)		(1,458	)
Corporate		-		0.0	%		-		0.0	%		(5,414	)		(5,123	)
Total	$	61,865		100.0	%	$	68,080		100.0	%	$	(6,031	)	$	(3,233	)

	For the Six Months Ended June 30,
	Revenue										Operating Income (Loss)
	2017		% of Total			2016		% of Total			2017			2016
Transportation and Skilled Trades	$	83,477		65.7	%	$	83,304		60.1	%	$	2,898		$	5,796
Healthcare and Other Professions		36,769		28.9	%		38,470		27.7	%		(474	)		2,673
Transitional		6,898		5.4	%		16,950		12.2	%		(1,401	)		(5,101	)
Corporate		-		0.0	%		-		0.0	%		(12,782	)		(12,845	)
Total	$	127,144		100.0	%	$	138,724		100.0	%	$	(11,759	)	$	(9,477	)

	Total Assets
	June 30, 2017		December 31, 2016
Transportation and Skilled Trades	$	84,578	$	83,320
Healthcare and Other Professions		7,622		7,506
Transitional		18,377		18,874
Corporate		19,654		53,507
Total	$	130,231	$	163,207