CRC's 10Q, March 2010 (They're FUCKED!)

[DannyB II]

Sorry, Whooter, but no. You can't explain the CTC growth with the economy. Is it bad or is it good? CTCs aren't cheap either. Would you like to explain how all of those people suddenly came up with $7 million in extra money during a time where the economy was bad enough to force such massive losses in RTCs and other adolescent "treatment"?

If there is less demand for residential treatment and Therapeutic Boarding Schools then the number of them will naturally decrease. But this is driven by the families themselves not the industry.

Exactly. And more and more families are deciding that they want no part of this. Which is why CRC's so desperate to sell, and nobody's willing to buy.

Well for someone who owns a midsize-business my friend and has experienced bottom line issues within the last 3 years, I can surely understand that parents are having a difficult time authorizing money for treatment right now when, one- the equity in there homes has vanished or decreased considerably, two- there jobs are probably unstable and three- their portfolios are just starting to show improvement from the drastic downturn of the last 3 years.
So Mr. Hotshot, "I want to impress everyone with what I've been reading and studying for the last week", please do explain more why, Bain Cap. is showing loses. I can tell you one thing it is not because parents have suddenly realized T/C's are abusive places. It is probably more to do with the past and current economic times.
Though I do wish that parents would take a more active roll in investigating T/C's, to make sure they are not sending their son or daughter to a place that will only do harm.

[Troll Control]

This comes to a loss of $35,383,000.

That's right, Pile.  A loss, not a "net gain per day."  A loss.  CRC Youth is losing and losing badly, mostly behind their "programs for troubled teens."  Lawsuits, a bad economy and total mismanagement are driving it into the ground.

I'm not sure Whooter actually knows how supply and demand work either.  If "demand remains high" then so does price and there is a scarcity.  Clearly not the case here.  There's no scarcity at all.  There's surplus.  Surplus means "low demand at the offered price."

The fact is that demand is at an all time low, so Aspen has two choices: restrict supply to match flagging demand or drop the price.  They have chosen so far to layoff a lot of their workforce and withhold supply hoping to keep the market equilibrium price high along with their margins.  Soon they will abandon this strategy because to follow this long-term means erosion of year over year net income in perpetuity for as long as the economy is bad, which looks to be at least five more years.  

In this economy even dropping the price won't fill beds because consumer discretionary spending is at a standstill (save for technology for some crazy reason) and is forecast to remain so for at least another couple of years.  Let's face it, with interest rates at or near zero banks have plenty to loan at the lowest rates in modern American history and people still aren't borrowing.  Instead the savings rate is up from a negative to over 6% now.

So what is CRC Youth's best option?  Sell that albatross Aspen Education Group.  And that's what is going to happen or it will simply go under.  I doubt Bain will settle for a total loss, so look for liquidation of real property or a low-ball sale...and soon.

[Whooter]

Most businesses have little choice but to ride out the storm until the economy gets better.   There are several strategies for getting through it and the key is to know what your customer will best respond to i.e lower price, better service etc.

Many of the programs have opted to not apply a cost of living increase (to their rates) over the past couple of years to try to keep more beds filled.  If this isn’t successful then they implement other cost saving measures and hobble along until the economy turns around.

If someone offers the right price then CRC would surely sell, anyone would.  But it is difficult to find a buyer during hard times and when people don’t have the funds to purchase your product.  If they are looking to sell I believe they will hold onto their Weight Management division.



...

[Troll Control]

Just another way of saying "I have no idea how supply and demand works.  I think 'demand' is a synonym for 'what people would like to do if they had money.'"

It's really simple.  The demand is vanishing.  For whatever reason, people aren't buying Aspen Education services.  Demand goes down and sellers have two choices: drop the price until demand comes up or die a slow death.  Looks like Aspen is choosing the latter.  They're going to be gone airly soon, as I have been saying.  Bad press, lawsuits, the sullied-beyond-recovery brand name "Aspen" all add up to inability to make money.

While they're drying up I continue to send research reports about their marketing practices, false advertising, shutdowns for abuse, and the avoidable deaths of children in their care, etc to over 100 Ed Cons on my email list as well as journals, newspapers, prospective buyers, regulators and critics with visible platforms.  It's only a matter of time now.  Even Sainer bailed out.

[Whooter]

"I have no idea how supply and demand works.  I think 'demand' is a synonym for 'what people would like to do if they had money.'"

Lets say there are 100 beds in a program and over the past 2 years the beds go from “all full” down to 80 beds full.  That would indicate that demand has dropped.  If they lower their price then the demand may rise and the beds would fill up again.  If they lower their price too much then the demand would outweigh the supply and there would be 120 people wanting to get in, etc.

Presently the economy has been hard on all businesses and they need to do what they can to weather the storm. Lay people off, close schools, lower expectations on profits, help parents get loans etc.

Hope that  helps a little.



...

[Troll Control]

"I have no idea how supply and demand works.  I think 'demand' is a synonym for 'what people would like to do if they had money.'"

Lets say there are 100 beds in a program and over the past 2 years the beds go from “all full” down to 80 beds full.  That would indicate that demand has dropped. If they lower their price then the demand may rise and the beds would fill up again.  If they lower their price too much then the demand would outweigh the supply and there would be 120 people wanting to get in, etc.

Presently the economy has been hard on all businesses and they need to do what they can to weather the storm. Lay people off, close schools, lower expectations on profits, help parents get loans etc.

Hope that  helps a little.



...

Thanks, but I don't need any help.  I understand fully how it works.  I just wanted to point out that you don't as based on your earlier comments.

So demand still remains high but fewer households can afford the treatment out of pocket.

You said "demand remains high" while Aspen is closing facilities and getting fewer and fewer enrollees.  This means "demand is low" - the opposite of what you thought before you simply copied my remarks which explain the concept correctly.

You don't know the difference between "what people would want if they could afford it" and "demand."  That's all I was saying.  And it's true.

[Whooter]

While they're drying up I continue to send research reports about their marketing practices, false advertising, shutdowns for abuse, and the avoidable deaths of children in their care, etc to over 100 Ed Cons on my email list as well as journals, newspapers, prospective buyers, regulators and critics with visible platforms.  It's only a matter of time now.  Even Sainer bailed out.

We have this guy in town who had a bad experience with his Honda and they wouldn’t give his money back so, like yourself, he spends hours collecting bad press items from customers and accident reports and sends them out to all the dealerships in the country.  He actually managed to get his picture in the paper.  So if you are diligent then maybe you will get noticed.  Its good to have a hobby or something to motivate you during the day.



...

[Anne Bonney]

While they're drying up I continue to send research reports about their marketing practices, false advertising, shutdowns for abuse, and the avoidable deaths of children in their care, etc to over 100 Ed Cons on my email list as well as journals, newspapers, prospective buyers, regulators and critics with visible platforms.  It's only a matter of time now.  Even Sainer bailed out.

We have this guy in town who had a bad experience with his Honda and they wouldn’t give his money back so, like yourself, he spends hours collecting bad press items from customers and accident reports and sends them out to all the dealerships in the country.  He actually managed to get his picture in the paper.  So if you are diligent then maybe you will get noticed.  Its good to have a hobby or something to motivate you during the day.

I think that's one of the major differences between you and "us".  You look at this as a business.  We look at it as what's best for the kids.  We know what goes on behind closed doors that the parents aren't privvy to and it's not pretty.

[Whooter]

While they're drying up I continue to send research reports about their marketing practices, false advertising, shutdowns for abuse, and the avoidable deaths of children in their care, etc to over 100 Ed Cons on my email list as well as journals, newspapers, prospective buyers, regulators and critics with visible platforms.  It's only a matter of time now.  Even Sainer bailed out.

We have this guy in town who had a bad experience with his Honda and they wouldn’t give his money back so, like yourself, he spends hours collecting bad press items from customers and accident reports and sends them out to all the dealerships in the country.  He actually managed to get his picture in the paper.  So if you are diligent then maybe you will get noticed.  Its good to have a hobby or something to motivate you during the day.

I think that's one of the major differences between you and "us".  You look at this as a business.  We look at it as what's best for the kids.  We know what goes on behind closed doors that the parents aren't privvy to and it's not pretty.

The advantage that I have is I can recognize that programs are a business and they also help people.  Hospitals are privately owned but they provide care. The 2 can work together.



...

[Anne Bonney]

While they're drying up I continue to send research reports about their marketing practices, false advertising, shutdowns for abuse, and the avoidable deaths of children in their care, etc to over 100 Ed Cons on my email list as well as journals, newspapers, prospective buyers, regulators and critics with visible platforms.  It's only a matter of time now.  Even Sainer bailed out.

We have this guy in town who had a bad experience with his Honda and they wouldn’t give his money back so, like yourself, he spends hours collecting bad press items from customers and accident reports and sends them out to all the dealerships in the country.  He actually managed to get his picture in the paper.  So if you are diligent then maybe you will get noticed.  Its good to have a hobby or something to motivate you during the day.

I think that's one of the major differences between you and "us".  You look at this as a business.  We look at it as what's best for the kids.  We know what goes on behind closed doors that the parents aren't privvy to and it's not pretty.

The advantage that I have is I can recognize that programs are a business and they also help people.  Hospitals are privately owned but they provide care. The 2 can work together.

Not all hospitals are privately owned and the most important thing is to provide care...not make money.

[Pile of Dead Kids]

the most important thing is to provide care...not make money.

CRC's "Healthy Living" division apparently can't do either. :roflmao:

[Whooter]

While they're drying up I continue to send research reports about their marketing practices, false advertising, shutdowns for abuse, and the avoidable deaths of children in their care, etc to over 100 Ed Cons on my email list as well as journals, newspapers, prospective buyers, regulators and critics with visible platforms.  It's only a matter of time now.  Even Sainer bailed out.

We have this guy in town who had a bad experience with his Honda and they wouldn’t give his money back so, like yourself, he spends hours collecting bad press items from customers and accident reports and sends them out to all the dealerships in the country.  He actually managed to get his picture in the paper.  So if you are diligent then maybe you will get noticed.  Its good to have a hobby or something to motivate you during the day.

I think that's one of the major differences between you and "us".  You look at this as a business.  We look at it as what's best for the kids.  We know what goes on behind closed doors that the parents aren't privvy to and it's not pretty.

The advantage that I have is I can recognize that programs are a business and they also help people.  Hospitals are privately owned but they provide care. The 2 can work together.

Not all hospitals are privately owned and the most important thing is to provide care...not make money.

But some hospitals are privately owned and they need to make money to stay afloat.  Programs need to do the same thing and programs do care about the kids in their care, at least what I have seen.  I cant sit here and tell you that all programs care about kids equally, though.



...

[DannyB II]

This comes to a loss of $35,383,000.

That's right, Pile.  A loss, not a "net gain per day."  A loss.  CRC Youth is losing and losing badly, mostly behind their "programs for troubled teens."  Lawsuits, a bad economy and total mismanagement are driving it into the ground.

I'm not sure Whooter actually knows how supply and demand work either.  If "demand remains high" then so does price and there is a scarcity.  Clearly not the case here.  There's no scarcity at all.  There's surplus.  Surplus means "low demand at the offered price."

The fact is that demand is at an all time low, so Aspen has two choices: restrict supply to match flagging demand or drop the price.  They have chosen so far to layoff a lot of their workforce and withhold supply hoping to keep the market equilibrium price high along with their margins.  Soon they will abandon this strategy because to follow this long-term means erosion of year over year net income in perpetuity for as long as the economy is bad, which looks to be at least five more years.  

In this economy even dropping the price won't fill beds because consumer discretionary spending is at a standstill (save for technology for some crazy reason) and is forecast to remain so for at least another couple of years.  Let's face it, with interest rates at or near zero banks have plenty to loan at the lowest rates in modern American history and people still aren't borrowing.  Instead the savings rate is up from a negative to over 6% now.

So what is CRC Youth's best option?  Sell that albatross Aspen Education Group.  And that's what is going to happen or it will simply go under.  I doubt Bain will settle for a total loss, so look for liquidation of real property or a low-ball sale...and soon.

DJ,
That was well thought out, well written and absolutely right on the money. A bad economy will definitely hurt a business bottom line, throw in any negative publicity and well, that will just about cripple the business.
I threw in the bad publicity example but Aspen doesn't need to be concerned with that because with or without they still probably will not make it.
My business depends upon other businesses borrowing money along with me and nobody is, at this point.

[Ursus]

Both the co-founder of the company, Dr. Barry Karlin, and a Board of Directors member, Elliot Sainer (Wait, isn't that the President of Aspen?), decided to GTFO. They just finished up Barry's contract of termination and Elliot just announced his resignation.

Here's *a* notice re. Barry Karlin stepping down:

-------------- • -------------- • --------------

Breaking News
Posted: Jun 28, 2010 22:56

CRC Health Group
Cupertino, CA

CRC Health Group CEO To Step Down

Contact:
Kristen Hayes
Communications Director
949-589-1765
http://www.crchealth.com

June 28, 2010

CRC Health Group, a leading provider of substance abuse treatment and adolescent youth services, today announced that Barry Karlin has made the personal decision to step down as Chief Executive Officer after 15 years at the helm of the Company he founded. CRC has initiated a search for his successor, and expects to appoint a new CEO by the end of 2010.

"These decisions are always difficult for company founders, but I believe this truly reflects a natural evolution in the needs of CRC as an organization," said Karlin. "After devoting 15 years to building CRC, I feel now is the right time for a new CEO to take the reins and bring our Company to the next level."

Karlin will remain CEO until his replacement is named to ensure a smooth transition. He will continue to serve as Chairman of the Board of CRC.

"I remain deeply committed to CRC, and am incredibly proud of our people, our strong management team, and our many achievements," added Karlin. "My confidence in CRC has never been higher, and I believe the Company is well-positioned to continue to be a leader and innovator in delivering the best quality care to our patients and students for many years to come."

CRC Health Group offers the most comprehensive network of specialized behavioral care services in the nation. As a world-class specialty health organization, CRC has provided healing and hope in the lives of their patients and students. By offering the largest array of personalized treatment services, individuals, families and professionals can choose the most appropriate treatment setting for their behavioral, addiction, and therapeutic education needs. Every day, more than 30,000 people receive treatment from CRC programs making it the most trusted specialized behavioral health organization in the nation. CRC Health Group's motivation for growth stems from a deep commitment to make their services widely and easily available to those in need, while maintaining passion for delivering advanced behavioral, addiction, and therapeutic education services. For over two decades, CRC programs have helped individuals and families reclaim and enrich their lives. For more information, visit http://www.crchealth.com or call 877-637-6237.


Copyright ©2010, Woodbury Reports, Inc.

[Ursus]

Some loquacious spin from Phil Herschman...

-------------- • -------------- • --------------

Breaking News
Jul 12, 2010, 09:04

Aspen Education Group
Cerritos, CA

Aspen Assures Continuity Despite CRC Changes

Kristen Hayes
Communications Director
949-589-1765
http://www.crchealth.com

July 8, 2010

Dear Friends and Colleagues,

Recently, many of you read an announcement from Aspen Education Group's parent company, CRC Health Group, regarding the decision of its Chief Executive Officer, Dr. Barry Karlin, to step down from his position. As a longtime employee of CRC and friend and colleague of Barry's, I was personally saddened to hear this news, but ultimately support Barry's view that this was a natural evolution of the needs of CRC as an organization. Barry has grown CRC into the leading provider of behavioral health services and established a solid network of programs for individuals struggling with addiction, weight management, eating disorders and behavioral issues. His recent decision will allow him more time with his family, and the opportunity to maintain a role within the organization as Chairman of the Board of CRC. I look forward with confident optimism for what is to come in this next chapter of CRC Health Group.

As you can imagine, I have been asked by many people what this change means for Aspen Education Group. In truth, this decision will have no major impact on the day-to-day operations of the outstanding staff and programs within Aspen's continuum of services. Our excellent programs will continue providing families and professionals with the highest level of individualized care they have come to expect from Aspen. Our focus on healing families remains the same; our commitment to helping youth rediscover their potential remains strong. This is what Aspen has come to mean to you, and what we intend to continue doing.

I have had the great pleasure of meeting many of you, our tireless educational consultants and referring professionals, over the past couple years in my position as head of the Healthy Living Division for CRC (and the past year as president of Aspen itself). As some of you have come to learn, I am not a stranger to the healthcare industry, having worked in this field for over 30 years with a Ph.D. in child and adolescent psychology. I believe fully in the positive, life-changing work of this segment of the healthcare industry and plan to continue dedicating resources to outcome studies and research efforts that show the efficacy of what we are doing to help troubled youth. We will continue to incorporate best practices and evidence-based therapies to be as effective as possible with this target population.

Next month, Aspen will open the new Talisman Academy, a school dedicated to youth with Asperger's and other autism spectrum disorders. I am thrilled to be able to offer this type of specialized programming and confident that the school will be successful at addressing the specific needs of this often neglected population of students. I look forward to celebrating this opening with you.

Please feel free to reach out to me or Aspen's Senior Vice President of Business Development, Patty Evans, if ever you have any questions or comments.

We appreciate your continued support and look forward to working with you.

Sincerely,

Phil Herschman, President
Aspen Education Group


© Copyright 2009 by Woodbury Reports, Inc.