The American Education Corporation may have initially rooted in Palo Alto, Calif., but today it’s an Oklahoma company. And CEO Jeff Butler knows that the educational software giant will need to reach coast to coast to survive in today’s shrinking school-funding environment.
The company recently announced first quarter gains in revenue of 2 percent, even during a traditionally slow quarter.
It was the eighth consecutive quarter that the 69-employee company posted a gain, and Butler says the company is thriving even when school districts nationwide are cutting back.
“There’s a clear tightening trend and that’s manifested by delays and deferrals of orders, but we really haven’t lost any business or momentum yet,” Butler said. “What you have here is an abnormally long sales cycle for this type of product.”
American Education Corp. is a leading provider of integrated online instructional courseware, computerized assessment testing and educational management systems aimed primarily toward the K-12 U.S. market.
Butler said when school districts purchase the company’s learning systems it’s typically a $30,000 investment per building. With declining state revenues nationwide, some districts are rethinking how they retool each year.
“A year ago they may have spent district money in advance of securing a grant knowing they would get their grant approvals,” Butler said. “Schools are far more risk-adverse in terms of commitment of funds.”
Butler said his company has a strong market for districts offering alternative schooling, which is mandated by federal education law. Core-specific software allows districts to more easily offer both remedial and grade-level offerings to students both onsite and through Internet portals or wireless area networks.
American Education Software is in 350 schools across Oklahoma but that’s only a fraction of the company’s 7,000 major installations.
“It’s a balancing act, quite frankly,” Butler said of growing his company in today’s funding environment. “We’ve grown about 14 percent from last year, it is a very profitable business and we ended up at about $12 million in total revenues last year.”
The company just finished its largest online order in its history: a five-year commitment from the State of Ohio Department of Justice for its juvenile justice system statewide.
At the center of the company’s portfolio is the highly respected A+nyWhere Learning System, which is a comprehensive software product that covers most required primary, middle and secondary core subject areas, as well as popular high school electives. The software basically helps districts boost math and reading scores, key measuring components for the No Child Left Behind Act.
With nearly a quarter century in the health care industry, Butler and investors were able to purchase the publicly held corporation in 1991. In 2006, the company was privatized by management and core shareholders.