Fornits
Treatment Abuse, Behavior Modification, Thought Reform => Aspen Education Group => Topic started by: Pile of Dead Kids on August 10, 2010, 04:58:22 PM
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http://www.faqs.org/sec-filings/100514/ ... #tx13761_2 (http://www.faqs.org/sec-filings/100514/CRC-Health-CORP_10-Q/#tx13761_2)
First things first: This 10Q is *unaudited*. Are the numbers accurate? There's no way of knowing. That's what unaudited means. They seem to be mostly accurate, save for some wild overvaluings.
For those of you worried that CRC's staying afloat because it managed to make a tiny profit this quarter: Relax. Its total loss was $135M in March 2009, and its total loss in December 2009 was $161M. This means that it managed to piss 26 million dollars away in those 9 months. Also, its "Recovery" division was the cause for most of the gain for 1Q 2010 ($25M); the "Healthy living" division (where the "therapeutic boarding schools" are) lost 4 million dollars this quarter, while its corporate headquarters pissed away $8M. And the remaining $13M was mostly raped by the crushing debt- nearly 11 million dollars of interest for the quarter.
How much crushing debt? Oh, only 650 million dollars of it. And $116 million in deferred income taxes. I'm not even going to pretend to know how they can pull THAT one off.
CRC values its "referral network" at nearly $30M, depreciating over 20 years. I can't figure out why they value it this way or why it depreciates. It's not that kind of asset. Its curriculum and accreditations are valued the same way. This makes strikingly little sense. Its trademarks/trade names it values at $172 million (I wouldn't pay two dollars for them :rofl:) and it values its Certificates of Need and regulatory licenses at $44.6M and $37.5M, respectively. They might be necessary for the company to operate, but what the fuck gives them a book value of 80 million bucks? It's not like CRC paid $80 million to get them!
On the other hand, its contracts, assuming that refers to actual signed contracts with a guarantee of future business, are a real asset- but those total to only $33.5M.
Goodwill isn't really an asset. A thorough discussion of the subject can be found here (http://http://www.marketoracle.co.uk/Article8982.html). Aspen took a $170M goodwill hit on its "Healthy Living" (residential treatment) from an original $240M on goodwill. This means that even the management agrees that the division is fucked. But either way, it only applies if someone else buys the company, and only if they choose to take it at face value; not likely. Goodwill isn't money and can't be converted to money.
In other words, the bulk of CRC's assets are intangibles and nonexistents; it has maybe $250-300 million in something that could be qualified as a real asset, depending on how much shit you want to believe. On the hand, its liabilities, all $813 million of them, are very, very real.
What Bain Capital is doing can be best described as corporate necromancy; CRC's total loss so far (again, this is money it's actually paid out, not money it owes) is $160 million, and Bain's paid in $456M. The only reason Bain would want to pour money down this rathole is to maintain stockholder equity, funneling money from Bain's corporate coffers into the pockets of CRC's stockholders, whoever they are. If Bain was actually serious about keeping CRC alive for the long term, they'd do something to pay down the crushing debt; Bain isn't about to spend $650M on this turkey in one shot. Way too much risk.
From an assets/debt perspective, the solution is simple. Sell off the money-bleeding "Healthy Living" division in its entirety, using the proceeds to pay down the debt, and start austerity at corporate headquarters to staunch the bleeding there. Make money from the profitable "Recovery" division and, again, pay down the debt with it. Then maybe Bain can step in, finish off the debt, and turn CRC into an actual investment instead of a money pit.
Why don't they do this? Again, stockholder equity. Because selling off all the "Healthy Living" crap would mean that quite a few of those intangibles/nonexistents would disappear, resulting in a loss of book assets. If Bain had to step in to cover the difference, Bain wouldn't be happy. If the stockholders found themselves holding assets with considerably less book value, they wouldn't be happy and they aren't about to wait for the company to actually be profitable. So the company is fundamentally at odds with itself; it can't do what it needs to do to survive for the long term. Its current solution seems to be to s-l-o-w-l-y sell off the "Healthy Living" piecemeal, letting Bain's steady influx of cash make up the difference, but every quarter it does this, it pays more and more interest.
Can somebody with some econ experience help me figure out *exactly* what the hell's going on, and how it can defer 116 million bucks in income taxes? (No, not the one we know has a financial interest in CRC/Aspen, thanks)
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Pile, the deferred income tax is an easy one (the rest of their valuation is not). This deferrment simply means that CRC has realized an income that is expected to be taxed at the standard corporate rate which is generally assumed to be 35% (for projection purposes). So, that deferred amount is what they estimate they will have to pay, but this is calculated before their actual taxable income is determined. Once the accounting process is complete, they may pay that amount, more or less, depending on how the numbers shake out. Right now it's simply an estimated liability on their books.
Now, the rest of their value statement is not so straightforward. Typically a company like CRC will be valued based on its book-to-market ratio; that is, what it's worth on CRC's books versus how the market values the company. An accurate valuation would be 1:1 for a company like CRC. If they were heavy on "intellectual capital" like Oracle or Microsoft the book value would be below the market value because of "intangible assets." CRC doesn't really have any intellectual capital. It's a service business. It's worth what it's services bring in plus the value of its plant. It looks like they're making a big value statement based on branding, which you rightly stated is currently in the toilet. To me, it looks awfully inflated.
However...this type of value self-statement (with no audit, of course) is typical for companies looking to sell. Right now they are shopping CRC Youth Care which is taking an absolute pounding in value. To me, this just looks like confirmation of what I have already heard rumblings about - CRC Youth is dead in the water. CRC Youth is Aspen Education.
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Pile, the deferred income tax is an easy one (the rest of their valuation is not). This deferrment simply means that CRC has realized an income that is expected to be taxed at the standard corporate rate which is generally assumed to be 35% (for projection purposes). So, that deferred amount is what they estimate they will have to pay, but this is calculated before their actual taxable income is determined.
Now I'm even more confused. In what universe has CRC realized $330 million dollars in income not yet taxed? Over what time period? With what revenue?!
However...this type of value self-statement (with no audit, of course) is typical for companies looking to sell. Right now they are shopping CRC Youth Care which is taking an absolute pounding in value. To me, this just looks like confirmation of what I have already heard rumblings about - CRC Youth is dead in the water. CRC Youth is Aspen Education.
This doesn't surprise me in the slightest, but I'm just curious who'd be dumb enough to buy it. A blatantly overvalued money-losing enterprise, sold at considerably more than its tangible assets and which cost the last buyer (Bain Capital) a considerable chunk of change? Oh boy! Sure, I'll open my checkbook for that one! Where do I sign?
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Also I should clarify what I meant by sell in its entirety. Unless CRC finds some real dumbshits with a couple hundred million to waste, they're not going to sell its "Healthy Living" division/CRC Youth as itself. The fastest way to recoup anything would be to sell the tangibles: the land with buildings on it, to be repurposed or scrapped as the buyer wishes. Which is what they've been doing, but again, piecemeal.
What, guys? Do you think the Child Abuse Fairy is going to descend from Heaven and suddenly make CRC Youth profitable long enough for you to sell it? Every day you keep it open is another day you risk another closure, another dead kid, another lawsuit. It's a loss. Take it as what it is, eat the pain, and be done with it instead of slowly bleeding your cash and risking major corporate damage.
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Both the co-founder of the company, Dr. Barry Karlin (http://http://ir.10kwizard.com/filing.php?ipage=7087769&rid=23&attach=ON&doc=1&source=1321), and a Board of Directors member, Elliot Sainer (http://http://ir.10kwizard.com/filing.php?ipage=7095715&rid=23&attach=ON&doc=1&source=1321) (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.
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CRC may be considering selling off the Aspen Programs (although I haven't read this) to try to get a better "foot hold" in the weight management division and shift some of their assets there.
Some quick and dirty numbers: Link (http://http://www.faqs.org/sec-filings/100324/CRC-Health-CORP_10-K/#ixzz0wFSEfUGV)
If you look at the net revenue per bed per day, Aspen Education was pulling in $288 per kid every day (Net revenue). (which is down from $304 per day last year). While their Weight Management Division was pulling in $297 per kid per day (Net revenue).
During 2009 they were able to treat 4,500 students. If you look at the number of RTCs(7) and TBS’s (8), Special Learning (2) Outdoor Programs (7)compared to their weight loss Division (13).
So it would make good business sense to shift over to the weight management which is apparently what the customers demand is going and shed off some of their RTCs and TBS’s. I think this is "where the real money is" lol (sorry inside joke)
Residential Treatment Centers
Aspen Institute for Behavioral Assessment
Aspen Ranch
Island View
Pine Ridge Academy
SunHawk Adolescent Recovery Center
Turn-About Ranch
Youth Care
Therapeutic Boarding Schools
Academy at Swift River
Bromley Brook School
Copper Canyon Academy
New Leaf Academy of Oregon
New Leaf Academy of North Carolina
NorthStar Center
Oakley School
Stone Mountain School
Special Learning Needs
Camp Huntington
Talisman Summer Camps
Outdoor Programs
Adirondack Leadership Expeditions
Aspen Achievement Academy
Four Circles Recovery Center
Outback Therapeutic Expeditions
Passages to Recovery Loa UT Leased
SUWS of the Carolinas / Phoenix Outdoor
SUWS of Idaho
Weight Management Schools and Camps
Wellspring Academy of the Carolinas
Wellspring Academy of California
Wellspring Adventure Camp NC
Wellspring Family Camp
Wellspring California
Wellspring Florida
Wellspring Hawaii
Wellspring New York
Wellspring Pennsylvania
Wellspring Texas
Wellspring Wisconsin
Wellspring UK
Wellspring Vancouver
...
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If you look at the net revenue per bed per day, Aspen Education was pulling in $288 per kid every day (net after expenses). (which is down from $304 per day last year). While their Weight Management Division was pulling in $297 per kid per day (Net after expenses).
Absolute bullshit. That's not net after expenses. That might be revenue before expenses.. wait, it's not that either. Let's have some real numbers instead.
During 2009, CRC's "Healthy Living" division had a revenue of $117,515,000. During that same time period, they had operating expenses at the "Healthy Living" division of $153,098,000. This comes to a loss of $35,383,000. Assuming we take your bullshit number of 4500 "clients" and divide that by 365 for a per-day figure, it comes to a loss of 21 dollars per kid per day.
It's right there on page 36, Whooter. Don't pretend.
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When looking at the 4,500 kids that they treated last year.... some may have stayed a week and others may have stayed the full year. We cannot assume they all stayed the entire year.
The Industry has taken a down turn mostly as a result of the economy which has also hampered parents from accessing funds in the form of loans and equity in their homes to help pay for treatment. So demand still remains high but fewer households can afford the treatment out of pocket. The total number of facilities decreased from 29 down to 24 for Aspen Programs (in 2009) whereas the weight management division increased their facility count from 17 to 18 over the same period. If you look at this coupled with the increased per bed per day net revenue (in the weight management division) we can see why they may be thinking of selling off the Aspen division.
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So if the total is 4500 kids no matter how long they stayed then the per-kid per-day loss is even bigger.
Tell us how your per-bed per-day number is anything other than complete bullshit, Whooter. Cite a page number.
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Also, don't try to blame the economy. CRC claims it's the economy because they can't afford to let the truth slip out: that residential treatment is a dying business even when other parts of its business are making money.
Recovery division revenue growth is primarily attributable to increases of $6.9 million and $0.2 million in comprehensive treatment centers (“CTCs”) and outpatient facilities, respectively offset by revenue decreases in residential treatment centers of $4.6 million. Of the $27.0 million decrease in healthy living division revenue, $14.8 million is primarily attributable to residential schools, $10.1 million in outdoor programs, and $1.9 million in weight management.
Large CTC growth mixed with massive RTC loss (both adult and teenager) doesn't match up with it being the economy.
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Also, don't try to blame the economy. CRC claims it's the economy because they can't afford to let the truth slip out: that residential treatment is a dying business even when other parts of its business are making money.
Recovery division revenue growth is primarily attributable to increases of $6.9 million and $0.2 million in comprehensive treatment centers (“CTCs”) and outpatient facilities, respectively offset by revenue decreases in residential treatment centers of $4.6 million. Of the $27.0 million decrease in healthy living division revenue, $14.8 million is primarily attributable to residential schools, $10.1 million in outdoor programs, and $1.9 million in weight management.
Large CTC growth mixed with massive RTC loss (both adult and teenager) doesn't match up with it being the economy.
None of us can ignore the economy. I cant see how more parents can afford to send their kids to residential treatment when many of them depend on the equity in their homes and personal loans to help supplement the out of pocket expenses. As the economy improves there will be more assets available for the families to tap into.
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. The industry cannot dictate the number of kids who will need their treatment.
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So if the total is 4500 kids no matter how long they stayed then the per-kid per-day loss is even bigger.
Tell us how your per-bed per-day number is anything other than complete bullshit, Whooter. Cite a page number.
Ya know I was going to jump in on this but it looks like Whooter is doing a fine job again. Pile you are over your head and plagiarizing numbers from a professional assisting you.Stop acting like you know what your really talking about.
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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.
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Danny, you can't read a high school textbook, let alone a corporate balance sheet.
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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.
When the economy takes a down turn it doesn't mean that people don't want a part of it. It means that people cannot afford it. The economy downturn is about financial loss not loss of interest or a loss of need. People put off dental visits for their children also, but it doesnt mean they have less cavities or have a reduced need for dentists.
I just went along with the argument based on the original assumption that CRC is looking to sell off Aspen. Where does it say this? Does anyone have a link? With the economy at a potential turning point it may be a good time to buy.... buy low sell high!!
Do you have a link to this article PODKs? I am curious if they are selling the whole division or just the Weight management portion, Aspen portion or both.
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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.
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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.
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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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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.
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"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.
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"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.
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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.
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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.
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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.
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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.
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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.
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the most important thing is to provide care...not make money.
CRC's "Healthy Living" division apparently can't do either. :roflmao:
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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.
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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.
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Both the co-founder of the company, Dr. Barry Karlin (http://http://ir.10kwizard.com/filing.php?ipage=7087769&rid=23&attach=ON&doc=1&source=1321), and a Board of Directors member, Elliot Sainer (http://http://ir.10kwizard.com/filing.php?ipage=7095715&rid=23&attach=ON&doc=1&source=1321) (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:
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Breaking News
Posted: Jun 28, 2010 22:56
CRC Health Group
Cupertino, CA
CRC Health Group CEO To Step Down (http://http://www.strugglingteens.com/artman/publish/CRCHealthGroupBN_100628.shtml)
Contact:
Kristen Hayes
Communications Director
949-589-1765
http://www.crchealth.com (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 (http://www.crchealth.com) or call 877-637-6237.
Copyright ©2010, Woodbury Reports, Inc.
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Some loquacious spin from Phil Herschman...
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Breaking News
Jul 12, 2010, 09:04
Aspen Education Group
Cerritos, CA
Aspen Assures Continuity Despite CRC Changes (http://http://www.strugglingteens.com/artman/publish/printer_AspenEducationGroupBN_100712.shtml)
Kristen Hayes
Communications Director
949-589-1765
http://www.crchealth.com (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.
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Argh, Dam, I just hope they know what they are doing with these Aspie kids. I know first hand that kids with Aspergers have a great deal of anxiety and difficulty being integrated into the average public school system. But placing an Aspie in a regular program like ASR Aspen Ranch, MBA etc. would be a disaster and they would be eaten alive and I dont support that. Placing Aspies together is a good idea I think, especially if they are not functioning well at home, becoming at risk and/or not responding to local services.
The people who will be working with these children need specialized training to understand their anxieties and what makes them tick before they could ever have a chance at helping them. I would really like to see the model they developed to help these kids. Aspergers is not curable but may be treatable if they have the right support, environment and people around them. Most of these kids are desperately trying to fit in socially but just don't know how and they fret about it 24/7.
I am not a supporter of putting Aspies in programs, but am open to understanding their Talisman program.
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This is the sme spin they used before: "continuity of care" just before they shut down two programs and literally put the kids out into the streets with no transfer, referral or warning. To me it's confirmation they are going down, not refutation.
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This is the sme spin they used before: "continuity of care" just before they shut down two programs and literally put the kids out into the streets with no transfer, referral or warning. To me it's confirmation they are going down, not refutation.
See also:
- Recent Aspen cutback and re-structure
viewtopic.php?f=48&t=30538 (http://www.fornits.com/phpbb/viewtopic.php?f=48&t=30538)
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Argh, Dam, I just hope they know what they are doing with these Aspie kids. I know first hand that kids with Aspergers have a great deal of anxiety and difficulty being integrated into the average public school system. But placing an Aspie in a regular program like ASR Aspen Ranch, MBA etc. would be a disaster and they would be eaten alive and I dont support that. Placing Aspies together is a good idea I think, especially if they are not functioning well at home, becoming at risk and/or not responding to local services.
Hey, I agree wholeheartedly with your assessment of the psychological fate of Aspies in a so-called standard program utilizing a "positive peer culture" environment, Whooter. Yet I also, personally, do think it's unwise forcing Aspies together into any kind of program 24/7.
Imo, these kids would benefit most from a social support network and social skills training in addition to their usual routine, thereby enabling them to integrate said knowledge into their lives in a realistic fashion, in situ so to speak.
Perhaps "progress" or "improved behavior" might come about at a slower pace than some might wish for. However, I tend to believe it will be healthier and more robust in the long run. Not to mention potentially leading to a far greater enhancement of self understanding than one could ever possibly acquire via the artificial constraints of an imposed therapeutic milieu. As well as avoiding the potential for abuse in program that, regrettably, seems to occur more often than is acknowledged.
The people who will be working with these children need specialized training to understand their anxieties and what makes them tick before they could ever have a chance at helping them. I would really like to see the model they developed to help these kids. Aspergers is not curable but may be treatable if they have the right support, environment and people around them. Most of these kids are desperately trying to fit in socially but just don't know how and they fret about it 24/7.
Incidentally, fwiw and fyi, most Aspies these days really don't think that they need to be "cured" of anything. In some circles, it's considered to be simply a different way of thinking. It's negotiation with the rest of the world, namely, those who don't think like they do, that is a problem. Learning about how one thinks, as well as how others generally think, along with requisite adjustments in one's style of communication and/or behavior in order to reduce misunderstanding and miscommunication can be very valuable things to learn! Not sure that that necessitates popping them into a program, however...
I am not a supporter of putting Aspies in programs, but am open to understanding their Talisman program.
See also:
- Cedars Academy closes
viewtopic.php?f=48&t=28485 (http://www.fornits.com/phpbb/viewtopic.php?f=48&t=28485) - TALISMAN ACADEMY
viewtopic.php?f=48&t=33591 (http://www.fornits.com/phpbb/viewtopic.php?f=48&t=33591)
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the issues most people have with spectrum disorders are to do with not understanding the social conventions that the rest of us live by. I agree with Ursus that it can be about appreciating that there are benefits to the aspie/autistic lens of the world. One mother once told me that her autistic son was the only of her children that never would lie to her and that was never sarcastic as a teenager. He just did not know how to be.
Surely if we want aspies to learn to navigate the world an institution with just aspies actually prevents this. It also deprives other children of the company of a group of people not like them. All programs seem to talk about the idea that the kids they work with are more obsessed with being "cool" than being "genuine" and suggest that popular culture somehow makes them more shallow that adults. this is the excuse for taking away all personal effects. But Aspies are a group usually supremely unconcerned with what popular culture says is fashionable. They truly are just willing to be their own people. So surely teaching all the "normal" kids to interact in a genuine and compassionate manner is vital. Not locking them away like freaks and trying to force them to comprehend a world that they are not capable of.