Duke Corporate Education, the for-profit corporate development wing of the Fuqua School of Business, will not make a profit this year, executives said, but the business will grow by 50 percent and in recent months has established a positive cash flow.
"It depends on how you define profit," said Executive Vice President Tallman Trask. "It looks like they'll come fairly close to breaking even."
CEO Blair Sheppard said the company increased its revenue from $12 million last year to between $18-19 million this year.
In the fall, the company laid off 15 employees--saving around $250,000 per month--after economic apprehension and travel jitters severely affected the business. Sheppard said the company lost about $6.8 million in revenue, however, because of the impact of Sept. 11.
"As the effects of Sept. 11 get further and further away, we look better and better," he said.
Sheppard also said the company has not had to lay off any additional employees, but added it was premature to consider rehiring. The business will remain staffed lightly to handle any possible turns in the economy, Sheppard said, and has the capacity to grow as intended next year.
Duke Corporate Education was founded in June 2000 to provide customized training, via the Internet, to executives from clients such as GlaxoSmithKline, Bank of America Corporation, McKinsey & Company and PricewaterhouseCoopers. Last year, the company added 10 new clients, bringing its total to 29.
Fuqua Dean Doug Breeden said ensuring the long-term success of Duke Corporate Education has been one of his top priorities and that he has devoted a large chunk of time to the business.
"We were expecting more like 100 percent [revenue]," he said. "It's a much smaller loss, but still a significant loss."
Sheppard said the company is outperforming most custom executive training programs, for whom the average this year is a 35 percent loss.
"It's actually really important to understand in a way. Most experiments created by universities have failed--they've closed, shut their doors," he said. "We grew 50 percent in a market where everybody else was shrinking."
Trask said the company makes a payment to Fuqua and that without those payments, the business is making a profit. He added that it may turn an outright profit by June 30.
"They've had net income before," he said. "It was a very aggressive growth plan, which was on schedule until Sept. 11. When the economy tanks, some of these [services] tend to be more discretionary expenses."
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