Lincoln Educational Services Corporation (Nasdaq: LINC) today
announced financial and operating results for the second quarter as
well as recent business developments.
Second Quarter 2023 Financial Highlights and Recent Operating
Developments*
- Revenue grew 9.8% to $88.2 million
- New student starts increased 17.9%
- Adjusted EBITDA of $2.4 million
- Total liquidity of $95 million; No debt outstanding
- Raising outlook for revenues and earnings for the full year and
refining outlook for start growth to the upper end of previous
range
*Note: The highlighted financial results exclude the
Transitional segment. A reconciliation of GAAP / non-GAAP measures
is included in this release.
“Our strong second quarter results reflect
significant progress in Lincoln’s transformative strategy,” said
Scott Shaw, President & CEO. “We believe our new hybrid
instructional platform provides a superior model for our students
and more efficient operations at our campuses. The roll out has
contributed to growing student leads, improved student outcomes,
and more efficient program delivery, aiding the quarter’s 8.6%
increase in revenue per student. Once the transition to the hybrid
model has been finalized, which is currently on track to be
completed by the end of 2025, we will have a highly scalable
platform providing additional capacity at our campuses and
instructional expense efficiencies going forward.
Additionally, along with other initiatives geared towards
population growth, we believe the centralization of our financial
aid process helped contribute to the second quarter’s robust 17.9%
increase in student starts by improving our conversion rate of
enrollments to starts.
During the second quarter we completed the
previously announced sale of our Nashville, Tennessee property. The
net proceeds from this transaction combined with cash flow from
operations enabled Lincoln to finish the quarter with $95 million
in cash and short-term investments, while we remained debt-free.
Our strong balance sheet and financial performance provides
significant resources for Lincoln to expand our campus footprint
and educational offerings, supporting sustained growth for many
years to come.
Our first half performance and the successful
execution of our initiatives has increased our level of confidence
and prompts us to raise our outlook for the full year. Furthermore,
we continue to make progress on the opening of our new Atlanta,
Georgia campus and the relocation of our Nashville, Tennessee
campus, which combined with other growth initiatives currently
underway has raised our long-term optimism. These along with our
efforts to build a more efficient and scalable platform are
delivering results, allowing us to prepare increasing numbers of
students for productive, good-paying, rewarding and essential
careers while helping American corporations close their skills
gap.”
2023 SECOND QUARTER FINANCIAL RESULTS
(Quarter ended June 30, 2023 compared to June 30,
2022)
- Revenue increased $7.9 million, or 9.8% to
$88.2 million from $80.3 million in the prior year comparable
period excluding the Transitional segment. Average revenue per
student was 8.6% higher with the continuing roll-out of Lincoln’s
hybrid teaching model along with tuition increases. Lincoln’s
hybrid model increases program efficiency and delivers accelerated
revenue recognition in certain evening programs. Revenue also
benefitted from student population increasing as a result of 17.9%
growth in student starts, resulting from increased investments in
marketing, additional admissions initiatives, and improved
enrollment to start rates.
- Educational services and facilities
expense increased $3.9 million, or 10.9% to $40.0
million from $36.1 million in the prior year. Instructional
expense, facilities expense and books and tools expense were all
higher. Instructional expense rose with higher staffing levels and
salary increases, as well as additional costs as the Company
transitions to its hybrid teaching model. Facilities
expenses included higher utility expense from higher usage and
inflation in addition to an increase in real estate taxes. Books
and tools expense were driven by the 17.9% increase in student
starts. Partially offsetting the additional costs was a decrease in
expenses within the Transitional segment.
- Selling, general and administrative expense
increased $6.0 million, or 13.0% to $51.8 million from $45.8
million in the prior year. Compensation costs including salaries,
stock-based compensation, and performance-based incentives
resulting from improved financial performance, were higher. There
were also costs associated with our growth in student starts.
Partially offsetting the additional costs was a decrease in
expenses within the Transitional segment.
- Gain on sale of assets was $30.9 million,
resulting from the sale of the Company’s Nashville, Tennessee
property. Net proceeds from the sale were approximately $33.3
million.
- Impairment of goodwill and long-lived assets
was a $4.2 million non-cash charge relating to our Nashville,
Tennessee property.
- Net interest income was $0.5 million compared
to minimal interest expense in the prior year as a result of our
treasury management and higher interest rates.
- Provision for income taxes increased to $6.8
million from $0.1 million in the prior year. The gain on the sale
of the Nashville, Tennessee property drove an increase in the
Company’s pre-tax income. The effective tax rate for both periods
remained essentially flat at 28.2%.
RECENT BUSINESS DEVELOPMENTS
Sale of the Nashville, Tennessee
property. On June 8, 2023, the Company
closed the sale of its Nashville, Tennessee property to
East Nashville Owner, LLC, an affiliate of SLC Development,
LLC, a subsidiary of Southern Land Company, for $33.8
million. In connection with the sale, the parties
entered into a lease agreement allowing Lincoln to continue to
occupy the campus on a rent-free basis for a period of 15 months
while the Company seeks to relocate to a more efficient facility
within the Nashville, Tennessee market. In addition to
the initial 15-month rent-free period, Lincoln has options to
extend the lease for up to three consecutive 30-day terms
at $150,000 per extension term. While the new
campus location has not yet been finalized, the Company intends to
invest between $15 million to $20 million for the
buildout of the new campus with the addition of HVAC and
Electrical, two new programs not currently offered at the
Nashville, Tennessee campus. The proceeds from the sale of
the Nashville, Tennessee property are approximately $33.3
million, net of closing costs.
Share Repurchase Program. During the second
quarter, the Company repurchased approximately 61,000 shares of its
Common Stock for approximately $0.3 million. Since the adoption of
the share repurchase program in May 2022, the Company has
repurchased a total of 1.7 million shares of its Common Stock for a
total investment of $10.3 million.
SECOND QUARTER SEGMENT RESULTS
Campus Operations SegmentAs detailed above,
revenue increased $7.9 million, or 9.8% to $88.2 million. Adjusted
EBITDA was $10.3 million compared to $10.2 million in the prior
year. The current quarter includes approximately $0.4
million in start-up costs relating to the Atlanta, Georgia campus
and costs associated with the relocation of the Nashville,
Tennessee property.
Transitional SegmentRevenue decreased $1.4
million, or 75.9% to $0.4 million compared to $1.8 million in the
prior year. Total operating expenses decreased $1.0
million, or 51.4% to $0.9 million from $1.9 million in the prior
year. The Somerville, Massachusetts campus is no longer enrolling
new students, had 45 remaining students at the end of the second
quarter and will be fully taught-out and closed by the end of the
year.
Corporate and OtherCorporate and other expenses
increased $2.6 million to $11.1 million from $8.5 million in the
prior year after excluding extraordinary gains in both the current
and prior year.
SIX MONTHS FINANCIAL RESULTS(Period
ended June 30, 2023 compared to June 30, 2022)
- Total revenue increased $11.2 million, or 6.8% to $175.9
million, compared to $164.7 million.
- Campus Operations segment revenue increased $13.4 million, or
8.3% to $174.5 million, compared to $161.1 million.
- Transitional segment revenue decreased $2.2 million, or 61.7%
to $1.4 million, compared to $3.6 million.
FULL YEAR 2023 OUTLOOKBased on the financial
results achieved in the first half and the current outlook for the
remainder of the year, the Company is increasing its financial
guidance for Revenue, Adjusted EBITDA and Adjusted Net Income. In
addition, we have refined our expectation on Student Start growth
to the higher end of the previous range, despite the shift of
approximately 150 second-half student starts into 2024 as a result
of delays in certain new program roll-outs. The revised guidance is
as follows:
- Revenue in the range of $360 million to $370 million
- Adjusted EBITDA* in the range of $22 million to $26
million
- Adjusted Net income* in the range of $10 million to $13
million
- Student start growth in the range of 6% to 10%
The outlook for capital expenditures in the range of $35 million
to $40 million remains unchanged.
*The guidance in this release includes references to non-GAAP
operating measures. A reconciliation of GAAP / non-GAAP measures
can be found at the end of this release.
The 2023 guidance excludes the impact of the new Atlanta,
Georgia campus, apart from capital expenditures. In addition,
guidance further excludes costs associated with the Company’s
Transitional segment, one-time expenses not considered part of the
Company’s normal business operations, and the gain realized from
the sale of the Nashville, Tennessee property. This
guidance may be revised as the year progresses due to changes in
student demand and other factors.
CONFERENCE CALL INFOLincoln will host a
conference call today at 10:00 a.m. Eastern Time to
discuss results. To access the live webcast of the conference call,
please go to the investor relations section of Lincoln’s website at
http://www.lincolntech.edu. Participants may also register via
teleconference at: Q2 2023 Lincoln Educational Services Earnings
Conference Call. Once registration is completed,
participants will be provided with a dial-in number containing a
personalized PIN to access the call. Participants are requested to
register at a minimum 15 minutes before the start of the call.
An archived version of the webcast will be
accessible for 90 days at http://www.lincolntech.edu.
ABOUT LINCOLN EDUCATIONAL SERVICES
CORPORATION
Lincoln Educational Services Corporation is a
leading provider of diversified career-oriented post-secondary
education helping to provide solutions to America’s skills gap.
Lincoln offers recent high school graduates and working adult’s
career-oriented programs in five principal areas of study:
automotive technology, health sciences, skilled trades, business
and information technology and hospitality services. Lincoln has
provided the workforce with skilled technicians since its inception
in 1946 and currently operates 22 campuses in 14 states under 4
brands: Lincoln College of Technology, Lincoln Technical Institute,
Lincoln Culinary Institute and Euphoria Institute of Beauty Arts
and Sciences. For more information, please go to
www.lincolntech.edu.
FORWARD-LOOKING
STATEMENTSStatements 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, including those made in a conference
call, 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 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. 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
and projections involving anticipated revenues, earnings or other
aspects of the Company’s operating results. Such forward-looking
statements include the Company’s current belief that it is taking
appropriate steps regarding the pandemic and that student growth
will continue. 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 including, without limitation,
impacts related to the COVID-19 pandemic or other epidemics or
pandemics, our failure to comply with the extensive regulatory
framework applicable to our industry or our failure to obtain
timely regulatory approvals in connection with acquisitions or a
change of control of our Company; 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, such as the 90/10 rule and prescribed
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 Reports and Quarterly Reports filed with the Securities and
Exchange Commission. 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.
(Tables to Follow)(In Thousands)
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
(Unaudited) |
|
(Unaudited) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
REVENUE |
$ |
88,646 |
|
|
$ |
82,142 |
|
|
$ |
175,929 |
|
|
$ |
164,697 |
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
Educational services and facilities |
|
40,030 |
|
|
|
36,106 |
|
|
|
78,123 |
|
|
|
72,302 |
|
Selling, general and administrative |
|
51,814 |
|
|
|
45,835 |
|
|
|
102,119 |
|
|
|
92,520 |
|
Gain on sale of assets |
|
(30,933 |
) |
|
|
(195 |
) |
|
|
(30,933 |
) |
|
|
(195 |
) |
Impairment of goodwill and long-lived assets |
|
4,220 |
|
|
|
- |
|
|
|
4,220 |
|
|
|
- |
|
Total costs & expenses |
|
65,131 |
|
|
|
81,746 |
|
|
|
153,529 |
|
|
|
164,627 |
|
OPERATING
INCOME |
|
23,515 |
|
|
|
396 |
|
|
|
22,400 |
|
|
|
70 |
|
OTHER: |
|
|
|
|
|
|
|
Interest income |
|
547 |
|
|
|
- |
|
|
|
1,013 |
|
|
|
- |
|
Interest expense |
|
(28 |
) |
|
|
(35 |
) |
|
|
(53 |
) |
|
|
(77 |
) |
INCOME (LOSS) BEFORE INCOME TAXES |
|
24,034 |
|
|
|
361 |
|
|
|
23,360 |
|
|
|
(7 |
) |
PROVISION
(BENEFIT) FOR INCOME TAXES |
|
6,784 |
|
|
|
102 |
|
|
|
6,219 |
|
|
|
(539 |
) |
NET
INCOME |
$ |
17,250 |
|
|
$ |
259 |
|
|
$ |
17,141 |
|
|
$ |
532 |
|
PREFERRED
STOCK DIVIDENDS |
|
- |
|
|
|
304 |
|
|
|
- |
|
|
|
608 |
|
INCOME
(LOSS) AVAILABLE TO COMMON STOCKHOLDERS |
$ |
17,250 |
|
|
$ |
(45 |
) |
|
$ |
17,141 |
|
|
$ |
(76 |
) |
Basic |
|
|
|
|
|
|
|
Net income (loss) per share |
$ |
0.57 |
|
|
$ |
(0.00 |
) |
|
$ |
0.57 |
|
|
$ |
(0.00 |
) |
Diluted |
|
|
|
|
|
|
|
Net income (loss) per share |
$ |
0.57 |
|
|
$ |
(0.00 |
) |
|
$ |
0.57 |
|
|
$ |
(0.00 |
) |
Weighted
average number of common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
30,140 |
|
|
|
25,963 |
|
|
|
30,090 |
|
|
|
25,842 |
|
Diluted |
|
30,397 |
|
|
|
25,963 |
|
|
|
30,333 |
|
|
|
25,842 |
|
|
|
|
|
|
|
|
|
Other data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA (1) |
$ |
2,444 |
|
|
$ |
2,302 |
|
|
$ |
4,641 |
|
|
$ |
5,061 |
|
Depreciation
and amortization |
$ |
1,679 |
|
|
$ |
1,529 |
|
|
$ |
2,933 |
|
|
$ |
3,057 |
|
Number of
campuses |
|
22 |
|
|
|
22 |
|
|
|
22 |
|
|
|
22 |
|
Average
enrollment |
|
12,453 |
|
|
|
12,637 |
|
|
|
12,420 |
|
|
|
12,761 |
|
Stock-based
compensation |
$ |
2,576 |
|
|
$ |
491 |
|
|
$ |
3,388 |
|
|
$ |
1,730 |
|
Net cash
provided by (used in) operating activities |
$ |
10,617 |
|
|
$ |
4,375 |
|
|
$ |
10,403 |
|
|
$ |
(9,992 |
) |
Net cash
provided by (used in) investing activities |
$ |
16,072 |
|
|
$ |
(147 |
) |
|
$ |
12,823 |
|
|
$ |
(1,192 |
) |
Net cash
used in financing activities |
$ |
(610 |
) |
|
$ |
(2,842 |
) |
|
$ |
(2,945 |
) |
|
$ |
(5,138 |
) |
|
|
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Data: |
June 30, 2023 |
|
(Unaudited) |
|
|
Cash and cash equivalents |
$ |
66,356 |
|
Restricted
cash |
|
4,212 |
|
Short-term
investments |
|
24,344 |
|
Current
assets |
|
137,490 |
|
Working
capital |
|
68,828 |
|
Total
assets |
|
311,418 |
|
Current
liabilities |
|
68,662 |
|
Total
stockholders' equity |
|
154,465 |
|
|
|
LIQUIDITYThe Company ended the quarter with
approximately $95 million in cash and cash equivalents, restricted
cash and short-term investments. The increase in liquidity was
primarily driven by the sale of the Company’s Nashville, Tennessee
property for $33.8 million, yielding $33.3 million in net proceeds
after closing costs and generating a gain of approximately $30.9
million.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURESIn
addition to disclosing financial results that are determined in
accordance with U.S. generally accepted accounting principles
(“GAAP”), the Company believes it is useful to present non-GAAP
financial measures that exclude certain significant items as a
means to understand the performance of its business. EBITDA,
Adjusted EBITDA, Adjusted net income and total liquidity are
measures not recognized in financial statements presented in
accordance with GAAP.
- 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.
EBITDA, Adjusted EBITDA, Adjusted net income and total liquidity
are presented because we believe they are useful indicators of the
Company’s performance and ability to make strategic investments and
meet capital expenditures and debt service requirements. However,
they are not intended to represent cash flows from operations as
defined by GAAP and should not be used as an alternative to net
income (loss) as indicators of operating performance or cash flow
as a measure of liquidity. EBITDA, Adjusted EBITDA, Adjusted net
income and total liquidity are not necessarily comparable to
similarly titled measures used by other companies.
The following is a reconciliation of net income (loss) to
EBITDA, Adjusted EBITDA, Adjusted net income and total
liquidity:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
Consolidated Operations |
|
Consolidated Operations |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
17,250 |
|
|
$ |
259 |
|
|
$ |
17,141 |
|
|
$ |
532 |
|
|
|
Interest (income) expense, net |
|
(519 |
) |
|
|
35 |
|
|
|
(960 |
) |
|
|
77 |
|
|
|
Provision (benefit) for income taxes |
|
6,784 |
|
|
|
102 |
|
|
|
6,219 |
|
|
|
(539 |
) |
|
|
Depreciation and amortization |
|
1,679 |
|
|
|
1,529 |
|
|
|
2,933 |
|
|
|
3,057 |
|
|
|
EBITDA |
|
25,194 |
|
|
|
1,925 |
|
|
|
25,333 |
|
|
|
3,127 |
|
|
|
Stock compensation expense |
|
2,576 |
|
|
|
491 |
|
|
|
3,388 |
|
|
|
1,730 |
|
|
|
Gain on sale of assets |
|
(30,933 |
) |
|
|
(195 |
) |
|
|
(30,933 |
) |
|
|
(195 |
) |
|
|
Impairment of goodwill and long-lived assets |
|
4,220 |
|
|
|
- |
|
|
|
4,220 |
|
|
|
- |
|
|
|
Severance and other one-time costs |
|
505 |
|
|
|
- |
|
|
|
1,299 |
|
|
|
260 |
|
|
|
Transitional segment |
|
478 |
|
|
|
81 |
|
|
|
670 |
|
|
|
139 |
|
|
|
New campus start-up costs |
|
289 |
|
|
|
- |
|
|
|
549 |
|
|
|
- |
|
|
|
FMV of Nashville, Tennessee rent1 |
|
115 |
|
|
|
- |
|
|
|
115 |
|
|
|
- |
|
|
|
Adjusted EBITDA |
$ |
2,444 |
|
|
$ |
2,302 |
|
|
$ |
4,641 |
|
|
$ |
5,061 |
|
|
|
|
|
|
|
|
|
|
|
|
1 |
The fair market value ("FMV") of Nashville, Tennessee rent relates
to non-cash rent expense recognized resulting from the sale of the
Nashville, Tennessee property. A prepaid asset was recognized upon
the sale of approximately $2.3 million representing the FMV of rent
expense that would have been paid during the 15-month "free-rent"
period where the Company will occupy this property. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
(Unaudited) |
|
Campus Operations |
|
Transitional |
|
Corporate |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
4,169 |
|
|
$ |
8,792 |
|
|
$ |
(482 |
) |
|
$ |
(88 |
) |
|
$ |
13,563 |
|
|
$ |
(8,445 |
) |
Interest (income) expense, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(519 |
) |
|
|
35 |
|
Provision for income taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,784 |
|
|
|
102 |
|
Depreciation and amortization |
|
1,514 |
|
|
|
1,380 |
|
|
|
4 |
|
|
|
7 |
|
|
|
161 |
|
|
|
142 |
|
EBITDA |
|
5,683 |
|
|
|
10,172 |
|
|
|
(478 |
) |
|
|
(81 |
) |
|
|
19,989 |
|
|
|
(8,166 |
) |
Stock compensation expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,576 |
|
|
|
491 |
|
Impairment of goodwill and long-lived assets |
|
4,220 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
New campus start-up costs |
|
289 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
FMV of Nashville, Tennessee rent1 |
|
115 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Loss (gain) on sale of assets |
|
6 |
|
|
|
4 |
|
|
|
- |
|
|
|
- |
|
|
|
(30,939 |
) |
|
|
(199 |
) |
Transitional segment |
|
- |
|
|
|
- |
|
|
|
478 |
|
|
|
81 |
|
|
|
- |
|
|
|
- |
|
Severance and other one-time costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
505 |
|
|
|
- |
|
Adjusted
EBITDA |
$ |
10,313 |
|
|
$ |
10,176 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(7,869 |
) |
|
$ |
(7,874 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
(Unaudited) |
|
Campus Operations |
|
Transitional |
|
Corporate |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
14,278 |
|
|
$ |
17,406 |
|
|
$ |
(678 |
) |
|
$ |
(151 |
) |
|
$ |
3,541 |
|
|
$ |
(16,723 |
) |
Interest (income) expense, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(960 |
) |
|
|
77 |
|
Provision (benefit) for income taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,219 |
|
|
|
(539 |
) |
Depreciation and amortization |
|
2,612 |
|
|
|
2,772 |
|
|
|
8 |
|
|
|
12 |
|
|
|
313 |
|
|
|
273 |
|
EBITDA |
|
16,890 |
|
|
|
20,178 |
|
|
|
(670 |
) |
|
|
(139 |
) |
|
|
9,113 |
|
|
|
(16,912 |
) |
Stock compensation expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,388 |
|
|
|
1,730 |
|
Impairment of goodwill and long-lived assets |
|
4,220 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
New campus start-up costs |
|
549 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
FMV of Nashville, Tennessee rent1 |
|
115 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Loss (gain) on sale of assets |
|
6 |
|
|
|
13 |
|
|
|
- |
|
|
|
- |
|
|
|
(30,939 |
) |
|
|
(208 |
) |
Transitional segment |
|
- |
|
|
|
- |
|
|
|
670 |
|
|
|
139 |
|
|
|
- |
|
|
|
- |
|
Severance and other one-time costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,299 |
|
|
|
260 |
|
Adjusted
EBITDA |
$ |
21,780 |
|
|
$ |
20,191 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(17,139 |
) |
|
$ |
(15,130 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, 2023 |
|
June 30, 2023 |
|
(Unaudited) |
|
(Unaudited) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net income |
$ |
17,250 |
|
|
$ |
259 |
|
|
$ |
17,141 |
|
|
$ |
532 |
|
|
|
|
|
|
|
|
|
Non-recurring adjustments: |
|
|
|
|
|
|
|
Gain on sale
of assets |
|
(30,933 |
) |
|
|
(195 |
) |
|
|
(30,933 |
) |
|
|
(195 |
) |
Impairment
of long-lived assets |
|
4,220 |
|
|
|
- |
|
|
|
4,220 |
|
|
|
- |
|
Performance
based catch-up stock compensation |
|
1,400 |
|
|
|
- |
|
|
|
1,400 |
|
|
|
- |
|
Severance
and other one time costs |
|
1,098 |
|
|
|
- |
|
|
|
2,071 |
|
|
|
260 |
|
Transitional
segment |
|
478 |
|
|
|
81 |
|
|
|
670 |
|
|
|
139 |
|
New campus
start-up costs |
|
289 |
|
|
|
- |
|
|
|
549 |
|
|
|
- |
|
FMV of
Nashville Rent1 |
|
115 |
|
|
|
- |
|
|
|
115 |
|
|
|
- |
|
Total
non-recurring adjustments |
|
(23,333 |
) |
|
|
(114 |
) |
|
|
(21,908 |
) |
|
|
204 |
|
Income tax
effect |
|
6,533 |
|
|
|
32 |
|
|
|
6,134 |
|
|
|
(58 |
) |
Adjusted net
income, non-GAAP |
$ |
450 |
|
|
$ |
177 |
|
|
$ |
1,367 |
|
|
$ |
678 |
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
June 30, 2023 |
Cash and cash equivalents |
$ |
66,356 |
|
Restricted
cash |
|
4,212 |
|
Short-term
investments |
|
24,344 |
|
Total Liquidity |
$ |
94,912 |
|
|
|
|
|
|
Three Months Ended June 30, |
|
2023 |
|
2022 |
|
% Change |
Revenue: |
|
|
|
|
|
Campus Operations |
$ |
88,213 |
|
|
$ |
80,349 |
|
|
9.8 |
% |
Transitional |
|
433 |
|
|
|
1,793 |
|
|
-75.9 |
% |
Total |
$ |
88,646 |
|
|
$ |
82,142 |
|
|
7.9 |
% |
|
|
|
|
|
|
Operating Income (loss): |
|
|
|
|
|
Campus
Operations |
$ |
4,169 |
|
|
$ |
8,791 |
|
|
-52.6 |
% |
Transitional |
|
(482 |
) |
|
|
(88 |
) |
|
-447.7 |
% |
Corporate |
|
19,828 |
|
|
|
(8,307 |
) |
|
338.7 |
% |
Total |
$ |
23,515 |
|
|
$ |
396 |
|
|
5838.1 |
% |
|
|
|
|
|
|
Starts: |
|
|
|
|
|
Campus
Operations |
|
4,411 |
|
|
|
3,742 |
|
|
17.9 |
% |
Transitional |
|
- |
|
|
|
110 |
|
|
-100.0 |
% |
Total |
|
4,411 |
|
|
|
3,852 |
|
|
14.5 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Campus
Operations |
|
12,369 |
|
|
|
12,326 |
|
|
0.3 |
% |
Transitional |
|
84 |
|
|
|
311 |
|
|
-73.0 |
% |
Total |
|
12,453 |
|
|
|
12,637 |
|
|
-1.5 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Campus
Operations |
|
12,959 |
|
|
|
12,704 |
|
|
2.0 |
% |
Transitional |
|
45 |
|
|
|
298 |
|
|
-84.9 |
% |
Total |
|
13,004 |
|
|
|
13,002 |
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
% Change |
Revenue: |
|
|
|
|
|
Campus Operations |
$ |
174,565 |
|
|
$ |
161,130 |
|
|
8.3 |
% |
Transitional |
|
1,364 |
|
|
|
3,567 |
|
|
-61.8 |
% |
Total |
$ |
175,929 |
|
|
$ |
164,697 |
|
|
6.8 |
% |
|
|
|
|
|
|
Operating Income (loss): |
|
|
|
|
|
Campus
Operations |
$ |
14,278 |
|
|
$ |
17,406 |
|
|
-18.0 |
% |
Transitional |
|
(679 |
) |
|
|
(150 |
) |
|
-352.7 |
% |
Corporate |
|
8,801 |
|
|
|
(17,186 |
) |
|
151.2 |
% |
Total |
$ |
22,400 |
|
|
$ |
70 |
|
|
31900.0 |
% |
|
|
|
|
|
|
Starts: |
|
|
|
|
|
Campus
Operations |
|
7,851 |
|
|
|
6,976 |
|
|
12.5 |
% |
Transitional |
|
- |
|
|
|
229 |
|
|
-100.0 |
% |
Total |
|
7,851 |
|
|
|
7,205 |
|
|
9.0 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Campus
Operations |
|
12,297 |
|
|
|
12,444 |
|
|
-1.2 |
% |
Transitional |
|
123 |
|
|
|
317 |
|
|
-61.2 |
% |
Total |
|
12,420 |
|
|
|
12,761 |
|
|
-2.7 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Campus
Operations |
|
12,959 |
|
|
|
12,704 |
|
|
2.0 |
% |
Transitional |
|
45 |
|
|
|
298 |
|
|
-84.9 |
% |
Total |
|
13,004 |
|
|
|
13,002 |
|
|
0.0 |
% |
|
|
|
|
|
|
Information included in the table below provides student starts
and population under the Campus Operations segment with a breakdown
by Transportation and Skilled Trade programs and Healthcare and
Other Professions programs. This information is not comparable to
the Company’s prior period segment reporting, which was performed
on a campus basis rather than a program basis.
|
Population
by Program (Campus Operations Segment): |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
2023 |
|
2022 |
|
% Change |
Starts: |
|
|
|
|
|
|
|
Transportation and Skilled Trades |
3,017 |
|
|
2,543 |
|
|
18.6 |
% |
Healthcare
and Other Professions |
1,394 |
|
|
1,309 |
|
|
6.5 |
% |
Total |
4,411 |
|
|
3,852 |
|
|
14.5 |
% |
|
|
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
|
|
Transportation and Skilled Trades |
8,434 |
|
|
8,346 |
|
|
1.1 |
% |
Healthcare
and Other Professions |
4,019 |
|
|
4,291 |
|
|
-6.3 |
% |
Total |
12,453 |
|
|
12,637 |
|
|
-1.5 |
% |
|
|
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
|
|
Transportation and Skilled Trades |
9,024 |
|
|
8,798 |
|
|
2.6 |
% |
Healthcare
and Other Professions |
3,980 |
|
|
4,204 |
|
|
-5.3 |
% |
Total |
13,004 |
|
|
13,002 |
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
Population
by Program (Campus Operations Segment): |
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
% Change |
Starts: |
|
|
|
|
|
|
|
Transportation and Skilled Trades |
5,280 |
|
|
4,674 |
|
|
13.0 |
% |
Healthcare
and Other Professions |
2,571 |
|
|
2,531 |
|
|
1.6 |
% |
Total |
7,851 |
|
|
7,205 |
|
|
9.0 |
% |
|
|
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
|
|
Transportation and Skilled Trades |
8,357 |
|
|
8,467 |
|
|
-1.3 |
% |
Healthcare
and Other Professions |
4,063 |
|
|
4,294 |
|
|
-5.4 |
% |
Total |
12,420 |
|
|
12,761 |
|
|
-2.7 |
% |
|
|
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
|
|
Transportation and Skilled Trades |
9,024 |
|
|
8,798 |
|
|
2.6 |
% |
Healthcare
and Other Professions |
3,980 |
|
|
4,204 |
|
|
-5.3 |
% |
Total |
13,004 |
|
|
13,002 |
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
LINCOLN EDUCATIONAL SERVICES
CORPORATIONBrian Meyers, CFO973-736-9340
EVC GROUP LLCInvestor Relations: Michael
Polyviou, mpolyviou@evcgroup.com, 732-933-2755Media Relations: Tom
Gibson, 201-476-0322
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