New Jersey
|
000-51371
|
57-1150621
|
||
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which
registered
|
Common Stock No Par Value
|
LINC
|
NASDAQ
|
Item 2.02. |
Results of Operations and Financial Condition.
|
Item 9.01 |
Financial Statements and Exhibits.
|
|
Press release of Lincoln Educational Services Corporation dated August 8, 2024
|
||
|
|||
104
|
|
Cover Page Interactive Data File (embedded within the inline XBRL document).
|
|
LINCOLN EDUCATIONAL SERVICES CORPORATION
|
||
Date: August 8, 2024
|
|||
By:
|
/s/ Brian K. Meyers
|
Name:
|
Brian K. Meyers | |
Title:
|
Executive Vice President, Chief Financial Officer and Treasurer |
|
• |
Revenue grew 16.1% to $102.9 million
|
|
• |
Student starts increased 12.3%; 11.4% increase in quarter-end student population
|
|
• |
Net loss of $700,000 and Adjusted EBITDA of $6.2 million
|
|
• |
Total liquidity of more than $100 million; no debt outstanding
|
|
• |
New East Point, Georgia Campus student starts to date exceeds full year plan
|
|
• |
Raised outlook for full year Revenue; raised lower end of adjusted EBITDA, adjusted net income and student starts; reduced 2024 capital expenditures due to timing
|
|
• |
Revenue grew by $14.3 million, or 16.1% to
$102.9 million. The increase was primarily due to an 11.7% increase in average student population resulting from entering this quarter with 11.2% more students combined with new student start growth of 12.3%. Revenue per student also
helped drive overall growth in revenue.
|
|
• |
Educational services and facilities expense increased $5.5 million, or 13.8% to $45.5 million. The expense increase includes approximately $2.6 million of new campus and relocation costs related to the recently opened
East Point, Georgia campus, relocation costs associated with the Nashville, Tennessee and the Levittown, Pennsylvania campuses and costs associated with the new Houston, Texas campus. Additional expense increases were due mostly to the
higher student population. As a percentage of revenue, educational services and facilities expense declined to 44.3% from 45.2%.
|
|
• |
Selling, general and administrative expense increased $6.1 million, or 11.7% to $57.9 million. Included in the increase over the prior year are approximately $1.2 million of expenses relating to the recently opened East Point, Georgia campus. The
remaining increase was driven by several factors including higher salary expense due to merit increases and new hires, in addition to $2.0 million of marketing investments and sales expense, which helped drive the 12.3% increase in student
starts. As a percentage of revenue, selling, general and administrative expense declined to 56.2% from 58.5%.
|
|
• |
Net interest expense was less than $0.1 million, compared to net interest income of $0.5 million in the prior year comparable period. Interest income in the current year and prior year remained
essentially flat, with an increase in interest expense in the current year resulting from the addition of two new finance leases.
|
|
• |
Benefit for income taxes was $0.5 million resulting from a pre-tax loss and a discrete item, compared to a tax provision
of $6.8 million in the prior year mainly driven by a $30.9 million gain recognized on the sale of the Nashville, Tennessee property.
|
|
• |
Total revenue increased $30.4 million, or 17.3%, to $206.3 million, compared to $175.9 million.
|
|
• |
Campus Operations Segment revenue increased $31.7 million, or 18.2% to $206.2 million, compared to $174.5 million.
|
|
• |
Transitional Segment revenue decreased $1.4 million, or 100% to zero, compared to $1.4 million.
|
|
2024 Guidance
|
||||||||||||
(Amounts in millions except for student starts)
|
Low
|
High
|
|||||||||||
Revenue
|
$
|
423
|
-
|
$
|
430
|
||||||||
Adjusted EBITDA
|
$
|
39
|
-
|
$
|
42
|
1 |
|||||||
Adjusted net income
|
$
|
14
|
-
|
$
|
17
|
1 |
|||||||
Capital expenditures
|
$
|
45
|
-
|
$
|
55
|
||||||||
Starts
|
9
|
%
|
-
|
12
|
%
|
1
|
The guidance in this release includes references to non-GAAP operating measures. A reconciliation to the midpoint of our guidance can be reviewed below in
the non-GAAP operating measures at the end of this release.
|
|
Three Months Ended
June 30,
(Unaudited)
|
Six Months Ended
June 30,
(Unaudited)
|
||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
REVENUE
|
$
|
102,914
|
$
|
88,646
|
$
|
206,281
|
$
|
175,929
|
||||||||
COSTS AND EXPENSES:
|
||||||||||||||||
Educational services and facilities
|
45,561
|
40,030
|
88,584
|
78,123
|
||||||||||||
Selling, general and administrative
|
57,865
|
51,814
|
118,359
|
102,119
|
||||||||||||
Loss (gain) on sale of assets
|
604
|
(30,933
|
)
|
913
|
(30,933
|
)
|
||||||||||
Impairment of goodwill and long-lived assets
|
-
|
4,220
|
-
|
4,220
|
||||||||||||
Total costs & expenses
|
104,030
|
65,131
|
207,856
|
153,529
|
||||||||||||
OPERATING ( LOSS) INCOME
|
(1,116
|
)
|
23,515
|
(1,575
|
)
|
22,400
|
||||||||||
OTHER:
|
||||||||||||||||
Interest income
|
638
|
547
|
1,336
|
1,013
|
||||||||||||
Interest expense
|
(667
|
)
|
(28
|
)
|
(1,234
|
)
|
(53
|
)
|
||||||||
(LOSS) INCOME BEFORE INCOME TAXES
|
(1,145
|
)
|
24,034
|
(1,473
|
)
|
23,360
|
||||||||||
(BENEFIT) PROVISION FOR INCOME TAXES
|
(463
|
)
|
6,784
|
(577
|
)
|
6,219
|
||||||||||
NET (LOSS) INCOME
|
$
|
(682
|
)
|
$
|
17,250
|
$
|
(896
|
)
|
$
|
17,141
|
||||||
Basic
|
||||||||||||||||
Net (loss) income per common share
|
$
|
(0.02
|
)
|
$
|
0.57
|
$
|
(0.03
|
)
|
$
|
0.57
|
||||||
Diluted
|
||||||||||||||||
Net (loss) income per common share
|
$
|
(0.02
|
)
|
$
|
0.57
|
$
|
(0.03
|
)
|
$
|
0.57
|
||||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
30,660
|
30,140
|
30,481
|
30,090
|
||||||||||||
Diluted
|
30,660
|
30,397
|
30,481
|
30,333
|
||||||||||||
Other data:
|
||||||||||||||||
Adjusted EBITDA (1)
|
$
|
6,240
|
$
|
2,444
|
$
|
12,784
|
$
|
4,641
|
||||||||
Depreciation and amortization
|
$
|
3,323
|
$
|
1,679
|
$
|
6,288
|
$
|
2,933
|
||||||||
Number of campuses
|
22
|
22
|
22
|
22
|
||||||||||||
Average enrollment
|
13,811
|
12,453
|
13,745
|
12,420
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
8,335
|
$
|
10,617
|
$
|
(6,599
|
)
|
$
|
10,403
|
|||||||
Net cash (used in) provided by investing activities
|
$
|
(11,041
|
)
|
$
|
16,072
|
$
|
(3,007
|
)
|
$
|
12,823
|
||||||
Net cash used in financing activities
|
$
|
(82
|
)
|
$
|
(610
|
)
|
$
|
(3,676
|
)
|
$
|
(2,945
|
)
|
Selected Consolidated Balance Sheet Data:
|
June 30, 2024
(Unaudited)
|
|||
Cash and cash equivalents
|
$
|
66,987
|
||
Current assets
|
119,391
|
|||
Working capital
|
52,499
|
|||
Total assets
|
366,379
|
|||
Current liabilities
|
66,892
|
|||
Total stockholders' equity
|
164,856
|
|
• |
We define EBITDA as income (loss) before interest expense (net of interest income), provision (benefit) for income taxes, depreciation and amortization.
|
|
• |
We define adjusted EBITDA as EBITDA plus stock compensation expense and adjustments for items not considered part of the Company’s normal recurring operations.
|
|
• |
We define adjusted net income as net income plus adjustments for items not considered part of the Company’s normal recurring operations.
|
|
• |
We define total liquidity as the Company’s cash and cash equivalents, short-term investments and restricted cash.
|
|
Three Months Ended June 30,
(Unaudited)
Consolidated Operations
|
Six Months Ended June 30,
(Unaudited)
Consolidated Operations
|
||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Net (loss) income
|
$
|
(682
|
)
|
$
|
17,250
|
$
|
(896
|
)
|
$
|
17,141
|
||||||
Interest expense (income), net
|
29
|
(519
|
)
|
(102
|
)
|
(960
|
)
|
|||||||||
(Benefit) provision for income taxes
|
(463
|
)
|
6,784
|
(577
|
)
|
6,219
|
||||||||||
Depreciation and amortization
|
3,323
|
1,679
|
6,288
|
2,933
|
||||||||||||
EBITDA
|
2,207
|
25,194
|
4,713
|
25,333
|
||||||||||||
Stock compensation expense
|
1,045
|
2,576
|
2,103
|
3,388
|
||||||||||||
New campus and campus relocation costs
|
2,623
|
410
|
5,425
|
670
|
||||||||||||
Program expansions
|
365
|
-
|
454
|
-
|
||||||||||||
Gain on sale of Nashville, Tennessee
|
-
|
(30,939
|
)
|
-
|
(30,939
|
)
|
||||||||||
Impairment of goodwill and long-lived assets
|
-
|
4,220
|
-
|
4,220
|
||||||||||||
Severance and other one-time costs
|
-
|
505
|
89
|
1,299
|
||||||||||||
Transitional segment
|
-
|
478
|
-
|
670
|
||||||||||||
Adjusted EBITDA
|
$
|
6,240
|
$
|
2,444
|
$
|
12,784
|
$
|
4,641
|
|
Three Months Ended June 30,
(Unaudited)
|
|||||||||||||||||||||||
Campus Operations
|
Transitional
|
Corporate
|
||||||||||||||||||||||
2024
|
2023
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||||||||
Net income (loss)
|
$
|
9,065
|
$
|
4,169
|
$
|
-
|
$
|
(482
|
)
|
$
|
(9,747
|
)
|
$
|
13,563
|
||||||||||
Interest expense (income), net
|
565
|
-
|
-
|
-
|
(536
|
)
|
(519
|
)
|
||||||||||||||||
(Benefit) provision for income taxes
|
-
|
-
|
-
|
-
|
(463
|
)
|
6,784
|
|||||||||||||||||
Depreciation and amortization
|
3,148
|
1,514
|
-
|
4
|
175
|
161
|
||||||||||||||||||
EBITDA
|
12,778
|
5,683
|
-
|
(478
|
)
|
(10,571
|
)
|
19,989
|
||||||||||||||||
Stock compensation expense
|
-
|
-
|
-
|
-
|
1,045
|
2,576
|
||||||||||||||||||
New campus and campus relocation costs
|
2,623
|
410
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Program expansions
|
365
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Gain on sale of Nashville, Tennessee
|
-
|
-
|
-
|
-
|
-
|
(30,939
|
)
|
|||||||||||||||||
Impairment of goodwill and long-lived assets
|
-
|
4,220
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Severance and other one-time costs
|
-
|
-
|
-
|
-
|
-
|
505
|
||||||||||||||||||
Transitional segment
|
-
|
-
|
-
|
478
|
-
|
-
|
||||||||||||||||||
Adjusted EBITDA
|
$
|
15,766
|
$
|
10,313
|
$
|
-
|
$
|
-
|
$
|
(9,526
|
)
|
$
|
(7,869
|
)
|
|
Six Months Ended June 30,
(Unaudited)
|
|||||||||||||||||||||||
Campus Operations
|
Transitional
|
Corporate
|
||||||||||||||||||||||
2024
|
2023
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||||||||
Net income (loss)
|
$
|
20,888
|
$
|
14,278
|
$
|
-
|
$
|
(678
|
)
|
$
|
(21,784
|
)
|
$
|
3,541
|
||||||||||
Interest expense (income), net
|
1,066
|
-
|
-
|
-
|
(1,168
|
)
|
(960
|
)
|
||||||||||||||||
(Benefit) provision for income taxes
|
-
|
-
|
-
|
-
|
(577
|
)
|
6,219
|
|||||||||||||||||
Depreciation and amortization
|
5,922
|
2,612
|
-
|
8
|
366
|
313
|
||||||||||||||||||
EBITDA
|
27,876
|
16,890
|
-
|
(670
|
)
|
(23,163
|
)
|
9,113
|
||||||||||||||||
Stock compensation expense
|
-
|
-
|
-
|
-
|
2,103
|
3,388
|
||||||||||||||||||
New campus and campus relocation costs
|
5,425
|
670
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Program expansions
|
454
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Severance and other one-time costs
|
89
|
-
|
-
|
-
|
-
|
1,299
|
||||||||||||||||||
Gain on sale of Nashville, Tennessee
|
-
|
-
|
-
|
-
|
-
|
(30,939
|
)
|
|||||||||||||||||
Impairment of goodwill and long-lived assets
|
-
|
4,220
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Transitional segment
|
-
|
-
|
-
|
670
|
-
|
-
|
||||||||||||||||||
Adjusted EBITDA
|
$
|
33,844
|
$
|
21,780
|
$
|
-
|
$
|
-
|
$
|
(21,060
|
)
|
$
|
(17,139
|
)
|
|
Three Months Ended
June 30,
(Unaudited)
|
Six Months Ended
June 30,
(Unaudited)
|
||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Net (loss) income
|
$
|
(682
|
)
|
$
|
17,250
|
$
|
(896
|
)
|
$
|
17,141
|
||||||
Adjustments to net (loss) income:
|
||||||||||||||||
New campus and campus relocation costs
|
2,623
|
410
|
5,425
|
670
|
||||||||||||
East Point, Georgia depreciation
|
371
|
-
|
511
|
-
|
||||||||||||
Program expansions
|
365
|
-
|
454
|
-
|
||||||||||||
Gain on sale of Nashville, Tennessee
|
-
|
(30,939
|
)
|
-
|
(30,939
|
)
|
||||||||||
Impairment of goodwill and long-lived assets
|
-
|
4,220
|
-
|
4,220
|
||||||||||||
Severance and other one time costs
|
-
|
1,098
|
89
|
2,071
|
||||||||||||
Performance based catch-up stock compensation
|
-
|
1,400
|
-
|
1,400
|
||||||||||||
Transitional segment
|
-
|
478
|
-
|
670
|
||||||||||||
Total non-recurring adjustments
|
3,359
|
(23,333
|
)
|
6,479
|
(21,908
|
)
|
||||||||||
Income tax effect
|
(1,008
|
)
|
6,533
|
(1,944
|
)
|
6,134
|
||||||||||
Adjusted net income, non-GAAP
|
$
|
1,669
|
$
|
450
|
$
|
3,639
|
$
|
1,367
|
|
As of
June 30, 2024
|
|||
Cash and cash equivalents
|
$
|
66,987
|
||
Credit facility
|
40,000
|
|||
Total Liquidity
|
$
|
106,987
|
Three Months Ended June 30,
|
||||||||||||
2024
|
2023
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Campus Operations
|
$
|
102,914
|
$
|
88,213
|
16.7
|
%
|
||||||
Transitional
|
-
|
433
|
-100.0
|
%
|
||||||||
Total
|
$
|
102,914
|
$
|
88,646
|
16.1
|
%
|
||||||
Operating Income (loss):
|
||||||||||||
Campus Operations
|
$
|
9,630
|
$
|
4,169
|
131.0
|
%
|
||||||
Transitional
|
-
|
(482
|
)
|
-100.0
|
%
|
|||||||
Corporate
|
(10,746
|
)
|
19,828
|
-154.2
|
%
|
|||||||
Total
|
$
|
(1,116
|
)
|
$
|
23,515
|
-104.7
|
%
|
|||||
Starts:
|
||||||||||||
Campus Operations
|
4,953
|
4,411
|
12.3
|
%
|
||||||||
Total
|
4,953
|
4,411
|
12.3
|
%
|
||||||||
Average Population:
|
||||||||||||
Campus Operations
|
13,811
|
12,369
|
11.7
|
%
|
||||||||
Transitional
|
-
|
84
|
-100.0
|
%
|
||||||||
Total
|
13,811
|
12,453
|
10.9
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Campus Operations
|
14,481
|
12,959
|
11.7
|
%
|
||||||||
Transitional
|
-
|
45
|
-100.0
|
%
|
||||||||
Total
|
14,481
|
13,004
|
11.4
|
%
|
Six Months Ended June 30,
|
||||||||||||
2024
|
2023
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Campus Operations
|
$
|
206,281
|
$
|
174,565
|
18.2
|
%
|
||||||
Transitional
|
-
|
1,364
|
-100.0
|
%
|
||||||||
Total
|
$
|
206,281
|
$
|
175,929
|
17.3
|
%
|
||||||
Operating Income (loss):
|
||||||||||||
Campus Operations
|
$
|
21,954
|
$
|
14,278
|
53.8
|
%
|
||||||
Transitional
|
-
|
(679
|
)
|
-100.0
|
%
|
|||||||
Corporate
|
(23,529
|
)
|
8,801
|
-367.3
|
%
|
|||||||
Total
|
$
|
(1,575
|
)
|
$
|
22,400
|
-107.0
|
%
|
|||||
Starts:
|
||||||||||||
Campus Operations
|
8,920
|
7,851
|
13.6
|
%
|
||||||||
Total
|
8,920
|
7,851
|
13.6
|
%
|
||||||||
Average Population:
|
||||||||||||
Campus Operations
|
13,745
|
12,297
|
11.8
|
%
|
||||||||
Transitional
|
-
|
123
|
-100.0
|
%
|
||||||||
Total
|
13,745
|
12,420
|
10.7
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Campus Operations
|
14,481
|
12,959
|
11.7
|
%
|
||||||||
Transitional
|
-
|
45
|
-100.0
|
%
|
||||||||
Total
|
14,481
|
13,004
|
11.4
|
%
|
|
Three Months Ended June 30,
|
|||||||||||
2024
|
2023
|
% Change
|
||||||||||
Starts:
|
||||||||||||
Transportation and Skilled Trades
|
3,648
|
3,017
|
20.9
|
%
|
||||||||
Healthcare and Other Professions
|
1,305
|
1,394
|
-6.4
|
%
|
||||||||
Total
|
4,953
|
4,411
|
12.3
|
%
|
||||||||
Average Population:
|
||||||||||||
Transportation and Skilled Trades
|
9,741
|
8,434
|
15.5
|
%
|
||||||||
Healthcare and Other Professions
|
4,070
|
4,019
|
1.3
|
%
|
||||||||
Total
|
13,811
|
12,453
|
10.9
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Transportation and Skilled Trades
|
10,482
|
9,024
|
16.2
|
%
|
||||||||
Healthcare and Other Professions
|
3,999
|
3,980
|
0.5
|
%
|
||||||||
Total
|
14,481
|
13,004
|
11.4
|
%
|
Six Months Ended June 30,
|
||||||||||||
2024
|
2023
|
% Change
|
||||||||||
Starts:
|
||||||||||||
Transportation and Skilled Trades
|
6,330
|
5,280
|
19.9
|
%
|
||||||||
Healthcare and Other Professions
|
2,590
|
2,571
|
0.7
|
%
|
||||||||
Total
|
8,920
|
7,851
|
13.6
|
%
|
||||||||
Average Population:
|
||||||||||||
Transportation and Skilled Trades
|
9,642
|
8,357
|
15.4
|
%
|
||||||||
Healthcare and Other Professions
|
4,103
|
4,063
|
1.0
|
%
|
||||||||
Total
|
13,745
|
12,420
|
10.7
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Transportation and Skilled Trades
|
10,482
|
9,024
|
16.2
|
%
|
||||||||
Healthcare and Other Professions
|
3,999
|
3,980
|
0.5
|
%
|
||||||||
Total
|
14,481
|
13,004
|
11.4
|
%
|
Adjusted
|
||||||||
EBITDA
|
Net Income
|
|||||||
Net Income
|
$
|
8,000
|
$
|
8,000
|
||||
Interest expense, net
|
600
|
-
|
||||||
Provision for taxes
|
3,600
|
-
|
||||||
Depreciation and amortization
|
12,500
|
-
|
||||||
Depreciation1
|
1,300
|
1,300
|
||||||
EBITDA
|
26,000
|
-
|
||||||
New campus and campus relocation costs2
|
7,100
|
7,100
|
||||||
Program expansions
|
2,600
|
2,600
|
||||||
Stock compensation expense
|
4,800
|
-
|
||||||
Tax Effect
|
-
|
(3,500
|
)
|
|||||
Total
|
$
|
40,500
|
$
|
15,500
|
||||
|
||||||||
2024 Guidance Range
|
$
|
39,000 - $42,000
|
$
|
14,000 - $17,000
|
1
|
Depreciation expense relates to the new East Point, Georgia campus
|
2
|
New campus and campus relocation costs relate to the following locations:
|