Treatment Abuse, Behavior Modification, Thought Reform > Aspen Education Group
CRC's 10Q, March 2010 (They're FUCKED!)
DannyB II:
--- Quote from: "Pile of Dead Kids" ---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"?
--- Quote from: "Whooter" ---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.
--- End quote ---
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.
--- End quote ---
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:
--- Quote from: "Pile of Dead Kids" ---This comes to a loss of $35,383,000.
--- End quote ---
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.
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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:
--- Quote from: "Dysfunction Junction" --- "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.'"
--- End quote ---
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.
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