Lincoln Educational Services Completes New $55 Million Secured Revolving Credit Facility Increasing Capital Resource Flexibil...
April 06 2017 - 11:32AM
Lincoln Educational Services Corporation (Nasdaq:LINC), announced
today it has completed a new $55 million secured revolving credit
facility with Sterling National Bank. The new credit facility,
which expires in May 2020, replaces an existing $45 million term
loan that has been repaid in full and terminated concurrently with
the closing of the new credit facility.
"This new credit facility provides us with a number
of advantages over our previous credit facility, chief of which is
an expected reduction in interest expense by $3 million a year
beginning in 2018,” said Scott Shaw, President & CEO of
Lincoln. “In addition, the terms of the new credit agreement afford
increased operating flexibility for our company as well as access
to an additional $5 million dollars in working capital as compared
to our previous credit agreement. The new credit agreement
also permits us to receive the full proceeds netted from the
pending sale of our West Palm Beach, Florida property. Our previous
term loan agreement required us to allocate $10 million of proceeds
from the pending sale to principal pay down. We believe the new
credit facility provides Lincoln with the resources to execute our
operating plan for the next several years.”
The new $55 million credit facility provides
Lincoln with up to $50 million of revolving loans, including a $10
million sublimit for letters of credit, requires that revolving
loans in excess of $25 million be cash collateralized dollar for
dollar, and also provides Lincoln with an additional $5 million
non-revolving loan. The proceeds of the $5 million non-revolving
loan are held in an account at Sterling National Bank and will be
used to reimburse Lincoln for costs incurred for potential
environmental remediation at certain of the mortgaged properties.
When any such environmental remediation is completed or determined
to be unnecessary, the funds remaining in the account will be used
to repay the non-revolving loan and the credit facility will be
permanently reduced to $50 million. Additional information
regarding the terms of the new credit facility are contained in a
Form 8-K that Lincoln will file with the SEC today.
Charles Jones, Managing Director at Sterling
National Bank, commented, "Lincoln offers exceptional educational
opportunities and contributes to the enhancement of the skilled
work force in the markets it serves. The company has made
great progress during the past several years and we look forward to
working with management to provide the financial resources that
enable execution of their operating strategies."
About Lincoln Educational Services
Corporation
Lincoln Educational Services Corporation is a
provider of diversified career-oriented post-secondary education
and helping to provide solutions to America’s skills gap. Lincoln
offers recent high school graduates and working adults degree and
diploma programs. The Company operates under two reportable
segments: Transportation and Skilled Trades and Transitional.
Lincoln has provided the nation’s workforce with skilled
technicians since its inception in 1946. For more information, go
to www.lincolnedu.com.
About Sterling National Bank
Sterling National Bank, the principal subsidiary of
Sterling Bancorp, specializes in the delivery of service and
solutions to business owners, their families, and consumers in
communities within the greater New York City area through teams of
dedicated and experienced relationship managers. Sterling National
Bank offers a complete line of commercial, business, and consumer
banking products and services. For more information, visit
www.snb.com.
SAFE HARBOR
Statements in this press release and in oral
statements made from time to time by representatives of Lincoln
Educational Services Corporation regarding Lincoln’s business that
are not historical facts may be “forward-looking statements” as
that term is defined in the federal securities law. The words
“may,” “will,” “expect,” “believe,” “anticipate,” “project,”
“plan,” “intend,” “estimate,” and “continue,” and their opposites
and similar expressions are intended to identify forward-looking
statements. Forward-looking statements should not be read as a
guarantee of future performance or results, and will not
necessarily be accurate indications of the times at, or by, which
such performance or results will be achieved, if at all.
Generally, these statements relate to business plans or strategies,
projected or anticipated benefits from acquisitions or dispositions
to be made by the Company or projections involving anticipated
revenues, earnings or other aspects of the Company’s operating
results. The Company cautions you that these statements
concern current expectations about the Company’s future performance
or events and are subject to a number of uncertainties, risks and
other influences many of which are beyond the Company’s control,
that may influence the accuracy of the statements and the projects
upon which the statements are based. The events described in
forward-looking statements may not occur at all. Factors which may
affect the Company’s results include, but are not limited to, the
risks and uncertainties discussed in the Company’s Annual Report on
Form 10-K, Quarterly Reports on From 10-Q and Current Reports on
Form 8-K filed with the Securities and Exchange Commission.
Any one or more of these uncertainties, risks and other influences
could materially affect the Company’s results of operations and
financial condition and whether forward-looking statements made by
the Company ultimately prove to be accurate and, as such, the
Company’s actual results, performance and achievements could
materially differ from those expressed or implied in these
forward-looking statements. Forward-looking statements are based on
information available at the time those statements are made and/or
management’s good faith belief as of that time with respect to
future events, and are subject to risks and uncertainties that
could cause actual performance or results to differ materially from
those expressed in or suggested by the forward-looking statements.
Important factors that could cause such differences include, but
are not limited to, our failure to comply with the extensive
regulatory framework applicable to our industry or our failure to
obtain timely regulatory approvals in connection with a change of
control of our Company or acquisitions; our success in updating and
expanding the content of existing programs and developing new
programs for our students in a cost-effective manner or on a timely
basis; risks associated with changes in applicable federal laws and
regulations; uncertainties regarding our ability to comply with
federal laws and regulations regarding the 90/10 rule and cohort
default rates; risks associated with the opening of new campuses;
risks associated with integration of acquired schools; industry
competition; our ability to execute our growth strategies;
conditions and trends in our industry; general economic conditions;
and other factors discussed in the “Risk Factors” section of our
annual and quarterly reports. All forward-looking statements are
qualified in their entirety by this cautionary statement, and
Lincoln undertakes no obligation to publicly revise or update any
forward-looking statements, whether as a result of new information,
future events or otherwise after the date hereof.
CONTACT: Lincoln Educational Services Corporation
Brian Meyers, CFO
973-736-9340
EVC Group, Inc.
Doug Sherk, dsherk@evcgroup.com; 415-652-9100
Media Contact:
EVC Group, Inc.
Tom Gibson
201-476-0322
tom@tomgibsoncommunications.com
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