Irvine’s NEC Reports $8.4-Million Net Loss : Finances: The firm blames the costs of reorganizing its Applied Learning International subsidiary for the dip.

IRVINE — National Educational Corp. on Friday reported a net loss of $8.4 million because of costs related to the continuing reorganization of its troubled Applied Learning International subsidiary.

The loss on revenue of $85.4 million for the three months ended March 31 compares with net earnings of $7 million on revenue of $99.5 million in 1989.

The company, which provides vocational education and training services, also announced that J.W. Cwiertnia, president and chief operating officer, has been named chief executive officer. That post had been temporarily held by chairman David C. Jones, a retired Air Force general and former chairman of the Joint Chiefs of Staff. Jones will remain as NEC’s chairman.

Jones took over the CEO post last year from H. David Bright, who was forced out of the company last year in the face of growing losses. NEC lost $29.3 million on revenue of $400.8 million.

The company said the first-quarter report does not reflect a reserve for payment to Bright, who recently won an arbitration decision that his five-year employment contract was terminated without just cause.

“The company does not believe the amount (to Bright) is susceptible to reasonable estimation at the present time, although the amount could be material,” said a statement from the firm.

The amount payable to Bright, who earned nearly $1.5 million in 1988, will be determined at an arbitration hearing in May.

In the lastest quarter, all NEC subsidiaries were profitable except Applied Learning in Napierville, Ill. But, NEC’s statement said, “first-quarter results were in line with management’s expectations, as its Applied Learning subsidiary continues to solve its operational problems.”

Jeff Brill, NEC’s vice president and general counsel, said Applied Learning’s losses resulted largely from changes in terms and conditions with customers. Previously, a single period might reflect payments from different periods, but under the change, only the income received from the current period is reflected, he said.