Press Release

SANTA ANA, Calif., Jan. 29 /PRNewswire-FirstCall/ -- Corinthian Colleges, Inc. (Nasdaq: COCO) reported financial results today for the second quarter ended December 31, 2007. The results exceeded our guidance for starts and revenue and were at the high end of guidance for earnings per share.

"In the second quarter we continued our positive growth trend, posting a 10% increase in new student starts," said Jack D. Massimino, Corinthian's chief executive officer. "More effective marketing, coupled with higher employee retention and continued improvement in other key business processes, has helped generate enrollment growth over the past three quarters. We expect that growth to continue in the second half of the fiscal year."

"We recently reported that Sallie Mae and two other lenders will no longer make private loans available to our students who are subprime borrowers," Massimino continued. "In the face of this change in lender policy, our top priority is to ensure continued access to education for our students. Our current students will continue to receive previously-approved financing through existing arrangements, and we are confident that we can arrange financing for the vast majority of incoming students through Title IV, our internal lending program, and other resources. In addition, we are exploring several alternatives that will allow us to reduce our reliance on third party lenders. Given our growth and operational momentum, we believe we are in a good position to navigate the transition from current lending sources to other alternatives."

Comparing the second quarter of fiscal 2008 with the same quarter of the prior year (Data is for continuing operations only, unless otherwise noted. More detail is provided in the "Discontinued operations" section below and in the table which accompanies this release.):

    --  Net revenue was $272.6 million versus $235.1 million, up 15.9%.

    --  Total student population at December 31, 2007 was 67,744 versus 61,800
        at December 31, 2006, an increase of 9.6%.

    --  Total student starts were 22,698 versus 20,630, an increase of 10.0%.
        Including discontinued operations, starts increased 8.4%.

    --  Operating income was $14.7 million, compared with $4.5 million. Q2 07
        included $2.4 million in expenses related to the impairment, facility
        closing and severance.

    --  Income from continuing operations was $9.1 million, compared with net
        income of $3.3 million. Net loss from discontinued operations was $1.0
        million.

    --  Diluted earnings per share from continuing operations were $0.11
        versus $0.04.  The diluted loss per share from discontinued operations
        was $0.01.


    Q2 08 Financial Review

Discontinued operations -- As previously reported, during fiscal 2008 we expect to divest the CDI campuses outside of the Ontario, Canada province, as well as the WyoTech Boston campus. Until the divestitures are complete, these campuses will be accounted for as discontinued operations. In Q2 08, discontinued operations lost $1.0 million.

In December 2007, we entered into an asset purchase agreement to sell our CDI schools outside of Ontario. These schools are being sold to a wholly-owned subsidiary of the Eminata Group, in a cash transaction valued at CAD $7.4 million. We expect the transaction to close in Q3 08.

Educational services expenses were 57.3% of revenue in Q2 08 versus 57.0% in Q2 07. Bad debt expense was 6.0% of revenue in Q2 08 versus 6.3% in Q2 07. The decrease in bad debt expense is partially the result of hiring more financial aid processors and reducing the backlog of student loans to be processed.

Marketing and admissions expenses were 26.8% of revenue in Q2 08 versus 27.2% in Q2 07. Advertising costs declined as a percent of revenue, offset by increased admissions representative staffing.

General and administrative expenses were 10.6% of revenue in Q2 08 versus 12.9% in Q2 07. Expenses in Q2 07 were higher than usual, as they included professional fees related to the review of historic stock option grants and an increase in litigation reserves.

Operating margin -- As a result of the factors outlined above, our operating margin from continuing operations was 5.4% in Q2 08 versus 1.9% in Q2 07.

Cash, restricted cash and marketable securities totaled $72.3 million at December 31, 2007, compared with $114.8 million at June 30, 2007. The higher cash balance at June 30, 2007 included approximately $80.0 million in temporary borrowing.

Cash flow from operations, including discontinued operations, was $59.3 million in the first half of fiscal 2008, versus $30.3 million in the first half of fiscal 2007.

Capital expenditures were $24.6 million in the first half of fiscal 2008 compared with $34.1 million in the first half of fiscal 2007.

Changes in Third-Party Student Lending

In a Form 8-K issued on January 22, 2008, we reported that Sallie Mae and two other lenders will no longer make private (non-Title IV) loans available for students who are subprime borrowers. Sallie Mae's change in policy applies to subprime borrowers at any post-secondary institution.

Sallie Mae provided 90% of private loans for Corinthian's students in the United States. Private loans constituted approximately 13% of our U.S. revenue (on a cash basis) in fiscal 2007. On January 18, 2008, we received a letter from Sallie Mae indicating that effective March 1, 2008, it would no longer provide private loans for Corinthian students in the subprime credit category. In fiscal 2007, approximately 75% of the portfolio of private loans to students were subprime. We understand that Sallie Mae plans to honor its loan obligations to current students through the duration of their programs; continue providing private loans to students with prime credit scores; and continue providing federal Title IV loans.

The company is considering several alternatives for replacing the student financing formerly provided by Sallie Mae and other lenders. These include: changing the mix of funding sources to reduce reliance on third-party loans (by, among other things, requiring additional cash payments from students while they attend school); expanding our own lending program; using third party lenders to issue the loans, which Corinthian would guarantee against default; seeking new lenders who will make private loans available to our students in both the prime and subprime credit categories.

For more detail on this matter, see the Form 8-K.

Guidance

We are currently analyzing the financial impact of the policy changes by third-party lenders, as well as the alternatives described above. Our preliminary analysis indicates that in the second half of fiscal 2008 these lending changes will reduce earnings by approximately $0.03 - $0.04 per diluted share. Our previous fiscal year 2008 guidance was $0.40 - $0.45 per diluted share, with the previously-announced expectation that we would be at the high end of the range. We now expect to be at the low end of the same range.

We anticipate that it will take several more months to quantify the impact of the lending changes on fiscal 2009 and beyond. We plan to provide fiscal 2009 guidance during our regularly scheduled fourth quarter and fiscal year-end conference call in late August 2008.

Conference Call Today

We will host a conference call today at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time), for the purpose of discussing second quarter results. The call will be open to all interested investors through a live audio web cast at http://www.cci.edu (Investor Relations/Webcasts & Presentations) and http://www.earnings.com. The call will be archived on http://www.cci.edu after the call. A telephonic playback of the conference call will also be available through 5:00 p.m. EST, Tuesday, February 5, 2008. To hear the replay, dial (888) 286-8010 (domestic) or (617) 801-6888 (international) and enter passcode 51626958.

About Corinthian Colleges, Inc.

Corinthian Colleges, Inc. is one of the largest post-secondary education companies in North America. The Company's mission is to prepare students for careers in demand or for advancement in their chosen field. Corinthian offers diploma programs and associate's, bachelor's, and master's degrees in a variety of high-demand occupational areas, including healthcare, business, criminal justice, transportation technology and maintenance, construction trades and information technology. More information can be found on Corinthian's website at http://www.cci.edu.

Certain statements in this Report on Form 8-K may be deemed to be forward-looking statements under the Private Securities Litigation Reform Act of 1995. The Company intends that all such statements be subject to the "safe-harbor" provisions of that Act. Such statements include, but are not limited to, those pertaining to our expectations regarding (i) continued enrollment growth; (ii) current students continuing to receive previously- approved financing through existing arrangements; (iii) Sallie Mae honoring its loans to current students; (iv) Sallie Mae continuing to provide private loans to students with prime credit scores; (v) Sallie Mae continuing to provide federal Title IV loans; (vi) current students continuing to have the financing they need through existing arrangements; (vii) our ability to arrange financing for incoming students through Title IV, our internal lending program, and other resources; (viii) the ability or willingness of lenders to provide alternative loans to credit worthy students; and (ix) the statements included under the heading "Guidance" above. Many factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements, including risks associated with variability in the expense and effectiveness of the company's advertising and promotional efforts; the uncertain future impact of the new student information system; increased competition; the Company's effectiveness in its regulatory compliance efforts; the outcome of the OIG/DOE investigation; the outcome of pending litigation against the company; the outcome of ongoing reviews and inquiries by accrediting, state and federal agencies risks associated with unfavorable changes in the cost or availability of alternative loans for our students; potential higher bad debt expense or reduced revenue associated with requiring students to pay more of their educational expenses while in school; the potential inability or failure of the Company to develop underwriting guidelines that will limit the risk of higher student loan defaults and higher bad debt expense; increased competition; the Company's effectiveness in its regulatory compliance efforts; general market conditions (including credit and labor market conditions); and other risks and uncertainties described in the Company's filings with the U.S. Securities and Exchange Commission. The historical results achieved by the Company are not necessarily indicative of its future prospects. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

     Contacts:

     Investors:                    Media:
     Anna Marie Dunlap             Robert Jaffe
     SVP Investor Relations        Pondel Wilkinson, Inc.
     Corinthian Colleges, Inc.     310-279-5969
     714-424-2678



                          Corinthian Colleges, Inc.
                    (In thousands, except per share data)

    Consolidated Statements of Operations

                                   For the three months  For the six months
                                     ended December 31,   ended December 31,
                                      2007      2006      2007       2006
                                  (Unaudited)(Unaudited)(Unaudited)(Unaudited)

    Net revenues                    $272,564  $235,119  $520,085    $457,208
    Operating expenses:
        Educational services         156,114   133,905   303,184    $264,121
        General and administrative    28,758    30,371    54,979     $57,848
        Marketing and admissions      72,953    64,038   140,791    $125,365
        Impairment, facility closing,
         and severance charges                   2,351                $2,351
    Total operating expenses         257,825   230,665   498,954     449,685

    Income from operations            14,739     4,454    21,131       7,523

    Interest (income)                 (1,003)   (1,707)   (1,858)    $(3,198)
    Interest expense                     554       829     1,125      $1,587
    Other (income) expense              (343)      192      (989)       $457
    Income (loss) before provision for
     income taxes                     15,531     5,140    22,853       8,677
    Provision (benefit) for income
     taxes                             6,385     1,881     9,527      $3,081
    Income from continuing operations $9,146    $3,259   $13,326      $5,596
    Income (Loss) from discontinued
     operations, net of tax           (1,034)     (676)   (3,261)    $(1,613)
    Net income                         8,112     2,583    10,065       3,983

    Income per share - Basic:
        Income from continuing
         operations                    $0.11     $0.04     $0.16       $0.07
        Income (loss) from
         discontinued operations      $(0.01)   $(0.01)   $(0.04)     $(0.02)
        Net income                     $0.10     $0.03     $0.12       $0.05

    Income per share - Diluted:
        Income from continuing
         operations                    $0.11     $0.04     $0.16       $0.07
        Income (loss) from
         discontinued operations      $(0.01)    $0.01)    $0.04)     $(0.02)
                                       $0.10     $0.03     $0.12       $0.05

    Weighted average number of common
     shares outstanding:
        Basic                         84,898    86,327    84,764      86,326
        Diluted                       86,350    87,474    86,072      87,486



    Selected Consolidated Balance Sheet Data

                                                         December 31, June 30,
                                                             2007      2007
                                                          (Unaudited)

    Cash, restricted cash, and
     marketable securities                                  $72,286  $114,789
    Receivables, net (including long
     term notes receivable)                                 $94,305   $85,214
    Current assets                                         $226,962  $274,879
    Total assets                                           $698,831  $733,935
    Current liabilities                                    $177,376  $151,239
    Long-term debt and capital leases
     (including current portion)                            $46,701  $128,438
    Total liabilities                                      $294,016  $348,513
    Total stockholders' equity                             $404,815  $385,422