K12 Earnings Call
This week CAVA’s management company K12 Inc. held its third quarter earnings call with executives, reporting revenue growth of 4 percent “year over year” and operating income (profit) of just about $19 million for the quarter. On the conference call, recently-hired CEO Stuart Udell expressed his delight with being one of the newest members of the K12 executive team as well as his excitement about what he sees as K12’s potential to deliver for students. It’s no surprise that Udell, whose pay and employment depends on improving K12’s stock performance and investor satisfaction, presented an extremely optimistic front as he speculated that K12’s fourth quarter will be even better.
This despite a rough start for the company’s current fiscal year – one that essentially began with a shareholder revolt that resulted in the voting down of K12’s executive compensation proposal, CAVA
teachers delivering a report card of straight F’s to K12’s leadership for its failure to invest in students and teachers, the removal of Nate Davis as the company’s CEO, and sharp criticism of the for-profit company following the release of a series of studies pointing to problems with virtual charter schools due to weak oversight and the industry’s misplaced priorities.
But, if you ask Stuart Udell, at K12 everything is awesome. This is an interesting contrast to the doom and gloom the company sought to broadcast as early as last week in response to the recent articles published by the San Jose Mercury News, which raise very serious questions about how CAVA and K12 are using the public education dollars they receive – millions of dollars intended to provide instruction to our kids but instead funneled out of the state. CAVA and K12 have yet to respond to the actual merits of the news story, instead opting to blame it all away on teachers who have stood up for our students by forming a union. Hmmm.
Oh, and speaking of contradictions, did you know that one of K12’s newest ventures is in partnership with – wait for it – a labor union?! That’s right. Executives on this week’s conference call also touched on their excitement around K12’s Destinations Career Academy – a new technical education online high school in Wisconsin that offers a construction apprenticeship program in partnership with the International Union of Operating Engineers Local 139. Imagine that – K12 seeking to deliver for students in partnership with organized labor.
We sincerely look forward to the day decision-makers at our school embrace a partnership with teachers and our union too – not only for the benefit of shareholders and the bottom line, but for the success of CAVA’s students. Now, talk about awesome.