After looking at his company's earnings last quarter, Blair Sheppard was able to deliver the University a nice holiday present - a $1 million check from Duke Corporate Education.
Sheppard, CEO of Duke CE, the customized executive education venture and spin-off from the Fuqua School of Business, said the corporation made enough money in the last two quarters of 2002 to pay Duke $1 million of the $5 million it owes the University for its royalty obligations and other start-up costs.
"It's the first time we've given money back to the University," Sheppard said. "We have enough cash flow that we probably could have done a little better than that."
Executive Vice President Tallman Trask said the money will go to the business school as operating revenue.
The company, competing in a tight economy in which relatively few people are seeking executive education, has seen three quarters of consecutive growth and earnings - before interest, taxes, depreciation, amortization and Duke royalty - of $1.526 million, including a $469,000 profit in the last quarter of 2002. By contrast, the company lost money in every quarter of 2001 and in the first quarter of 2002.
"We're growing, but we're not out of the woods yet," said Trask, who has the final authority over Duke CE.
Sheppard said he hoped to give the University another $3 million by the middle of the year.
"My expectation for the subsequent year is to meet our entire obligation, and we make money on top of that," he said. "It's been a hell of a year. Everybody else is shrinking and we're growing."
Last month, Fuqua officials announced a wide-ranging partnership with Seoul National University, part of which will be Duke CE's involvement in widening its client base in Asia and setting up a similar custom-made education firm for Seoul National's business school.
Indeed, Sheppard said that Duke CE would have several upcoming announcements this spring designed to provide the company an even firmer financial base, but he would not provide any details about what that next step will be.
"[Our goal is to] become the preeminent player in the marketplace. We're working on that one. We're positioned for that one in a very interesting way," he said. "We're going to create something you're going to be incredibly proud of being associated with the University."
Sheppard said that Duke CE is doing so well because it designs for each client a program tailored to its problems and that it has a large resource pool of faculty members and other experts.
"We have a faculty list of 1,500 people we use on a global basis," he said. "We have the ability to orchestrate a large-scale activity that virtually no one else can do."
Last May, Duke CE was ranked third in the world among customized education programs for executives by The Financial Times, after Columbia Business School and IMD in Switzerland.
Its website lists several big-name recent and current clients, including Bank of America, Deutsche Bank, Ford Motor Company, GlaxoSmithKline, IBM, Nestle and Siemens.
Get The Chronicle straight to your inbox
Signup for our weekly newsletter. Cancel at any time.