Lincoln Educational Services Corporation (Nasdaq: LINC) today
announced financial and operating results for the third quarter as
well as recent business developments.
Third Quarter 2023 Financial Highlights and
Recent Operating Developments*
- Revenue grew 10.5% to $99.5
million
- New student starts increased
7.1%
- Adjusted EBITDA of $6.1
million
- Earnings per share of $0.07
- Total liquidity of $70.3 million;
no debt outstanding
- Recently announced strategic growth
plans include new Houston campus and relocation and expansion of
Nashville and Philadelphia campuses
- Raised outlook for full year
revenue, student starts and adjusted net income; raised lower end
of adjusted EBITDA range; reduced 2023 capital expenditures due to
timing
*Note: The highlighted financial results exclude
the Transitional segment. A reconciliation of GAAP / non-GAAP
measures is included in this release.
“Lincoln continued to generate strong results
during the third quarter as we achieved 10.5% revenue growth and
7.1% student start growth,” said Scott Shaw, President & CEO.
“The continued roll out of our hybrid instructional platform, which
we call Lincoln 10.0, is providing a better experience for our
students as evidenced by higher student retention. We remain on
track to complete the transition to Lincoln 10.0 by the end of
2025. This highly scalable platform creates capacity for additional
program replications at our campuses providing instructional and
campus operation efficiencies. We also have continued
to transition our financial aid process. Both initiatives have
resulted in incremental expenses this year, but we anticipate will
provide future savings once they are fully implemented.”
“Program replication and new campus development
both play major roles in our growth strategy. Two recently
completed transactions allow us to relocate and expand two of our
existing campuses. We have leased a new facility in the Nashville
market, following the sale of our legacy campus in the second
quarter. We have also purchased a property in Levittown,
Pennsylvania, where we will relocate our Philadelphia campus. These
new facilities and the efficiencies of 10.0 will allow us to expand
adding HVAC and electrical programs in Nashville and HVAC,
electrical and welding programs in Philadelphia when these campuses
open in 2025.”
“Our new campus in Atlanta is on track to open
during the first quarter of 2024 and we have announced the location
of plans for a second new campus in Houston. Both of these new
locations will take full advantage of our Lincoln 10.0 learning
platform and offer multiple programs. We continue to execute on our
growth plan to open new campuses and expand our most successful
programs. Our strong balance sheet and cash flow from operations
has enabled Lincoln to make these investments in our growth while
we remain debt free.”
“Our performance for the first nine months of
2023, and our outlook for the fourth quarter, leads us to raise our
outlook for the full year. The strong growth in student starts
fuels our long-term optimism for Lincoln to prepare increasing
numbers of students for good paying, rewarding and essential
careers while helping American corporations close their skills
gap.”
2023 THIRD QUARTER FINANCIAL
RESULTS
(Quarter ended September 30, 2023
compared to September 30, 2022)
- Revenue increased
$9.4 million, or 10.5% to $99.5 million from $90.1 million in the
prior year comparable period excluding the Transitional segment.
Revenue benefited from student start growth of 7.1%, which drove a
3.0% increase in average student population as well as an increase
in average revenue per student of 7.3%, driven in part by the
continuing roll-out of Lincoln 10.0 in combination with tuition
increases. Lincoln 10.0’s hybrid teaching model increases program
efficiency and delivers accelerated revenue recognition in certain
evening programs.
- Educational services and
facilities expense increased $3.2
million, or 8% to $43.1 million from $39.9 million in the prior
year comparable period. Increased costs were primarily
concentrated in instructional expense, facilities expense, and
books and tools expense. Instructional expenses rose due to
increased salaries with higher staffing levels driven by increases
in student population, merit salary increases, and operating
parallel programs as we transition to the Lincoln 10.0 model.
Facilities expenses grew over the prior year comparable period
mainly due to non-cash rent expense at both the new Atlanta campus
and the sale leaseback of the existing Nashville property. Also
contributing to the increase was higher utility expenses resulting
from inflation and a higher student population, in addition to
routine maintenance at several campuses. Books and
tools expense was driven by the increase in student starts.
Partially offsetting the additional costs was a decrease in
expenses within the Transitional segment.
- Selling, general and
administrative expense increased $7.5 million, or 16% to
$54.5 million from $47 million in the prior year comparable period.
Increased costs were driven by higher bad debt expense,
performance-based incentives, and additional marketing
investments. Partially offsetting the additional costs
was a decrease in expenses within the Transitional segment.
- Net interest
income was $0.9 million compared to minimal interest
expense in the prior year comparable period as a result of treasury
management and higher interest rates.
RECENT BUSINESS
DEVELOPMENTS
Relocation of Philadelphia, Pennsylvania
Area Campus. On September 28, 2023, the Company purchased
a 90,000 square foot property in Levittown, Pennsylvania for
approximately $10.2 million. The Company expects to invest
approximately $17 million in the buildout of new
classrooms and training areas to ensure a best-in-class campus that
provides a positive experience for students, faculty, and industry
partners. The Company plans to enter into a sale leaseback
transaction to recover the purchase price in the coming months.
This property is currently classified as held-for-sale on the
condensed consolidated balance sheet. The new Levittown campus
is expected to open in the first quarter of 2025 and is not
expected to impact the student experience at the existing
Philadelphia campus which today serves about 250 Automotive
Technology students. The existing campus will continue to operate
until the buildout of the new campus is fully complete in order to
ensure a seamless transition. The addition of HVAC,
electrical and welding programs at this larger campus is projected
to increase the average population to approximately 600 students,
providing educational opportunities for students
from Philadelphia, points north in Pennsylvania, as well
as Trenton and Camden, New Jersey.
Relocation of Nashville, Tennessee Area
Campus. On November 3, 2023, the Company announced the
completion of a lease agreement for the relocation of the
Nashville, TN campus. The new Nashville campus has over
120,000 square feet which enables us to expand our skilled trades
offering with the addition of our electrical and HVAC programs
while keeping automotive, diesel, heavy equipment, collision repair
and welding. The sale of the existing Nashville,
Tennessee property that closed in the second quarter included
a lease agreement allowing Lincoln to continue to occupy the
existing campus for up to eighteen months while we transition to
the new facility.
New Houston, Texas Campus. On
November 3, 2023, the Company also announced an expansion into a
new market with the leasing of a facility in Houston, TX, the
country’s fourth largest employment market. The Houston
campus will be the second campus in Texas with the campus in Grand
Prairie that Lincoln has operated since 1966. The new campus will
feature an approximately 100,000 square foot training center,
offering career opportunities in auto, diesel, welding, HVAC and
electrical and electronic fields.
THIRD QUARTER SEGMENT
RESULTS
Campus Operations
SegmentRevenue increased $9.4 million, or 10.5% to $99.5
million. Adjusted EBITDA remained essentially flat at $14.4 million
for both the current and prior year period.
Transitional
Segment Revenue decreased $1.6 million, or 95% to
$0.1 million compared to $1.7 million in the prior year comparable
period. Total operating expenses decreased $1 million,
or 54% to $0.8 million from $1.8 million in the prior year
comparable period. The Somerville, Massachusetts campus teach-out
is now complete.
Corporate and OtherCorporate
and other expenses increased $1 million to $9.1 million from $8.1
million in the prior year comparable period, which was driven by
performance-based incentives.
NINE MONTHS FINANCIAL
RESULTS(Period ended September 30, 2023 compared
to September 30, 2022)
- Total revenue increased $19 million, or 7.4% to $275.5 million,
compared to $256.5 million.
- Campus Operations segment revenue increased $22.9 million, or
9.1% to $274.1 million, compared to $251.2 million.
- Transitional segment revenue decreased $3.8 million, or 72.5%
to $1.5 million, compared to $5.3 million.
FULL YEAR 2023 OUTLOOKBased on
the financial results achieved during the first nine months of the
year and the current outlook for the remainder of the year, the
Company is increasing financial guidance for revenue, student
starts and adjusted net income. In addition, the lower-end of the
range for Adjusted EBITDA has increased, and expected investments
in Capital Expenditures have been lowered. The revised guidance is
as follows:
- Revenue in the range of $370 million to $375 million
- Adjusted EBITDA* in the range of $24 million to $26
million
- Adjusted net income* in the range of $12 million to $14
million
- Student start growth in the range of 8% to 11%
- Capital expenditures in the range of $30 million to $33
million
*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.
This guidance excludes the impact of the new
Atlanta, Georgia campus, apart from capital expenditures. Capital
expenditure guidance excludes the $10.2 million acquisition of the
Levittown, Pennsylvania property for which we are pursuing a
sale-leaseback. In addition, this 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.
CONFERENCE CALL INFO Lincoln
will host a conference call today at 10:00 a.m. Eastern
Standard 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: Q3 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 career-oriented programs to recent high school
graduates and working adults 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 |
|
Nine Months
Ended |
|
|
September
30, |
|
September
30, |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
$ |
99,618 |
|
|
$ |
91,813 |
|
|
$ |
275,548 |
|
|
$ |
256,510 |
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
Educational services and facilities |
|
43,129 |
|
|
|
39,933 |
|
|
|
121,251 |
|
|
|
112,234 |
|
|
Selling, general and administrative |
|
54,485 |
|
|
|
46,984 |
|
|
|
156,603 |
|
|
|
139,503 |
|
|
(Loss) gain on sale of assets |
|
8 |
|
|
|
16 |
|
|
|
(30,923 |
) |
|
|
(178 |
) |
|
Impairment of goodwill and long-lived assets |
|
- |
|
|
|
- |
|
|
|
4,220 |
|
|
|
- |
|
|
Total costs & expenses |
|
97,622 |
|
|
|
86,933 |
|
|
|
251,151 |
|
|
|
251,559 |
|
|
OPERATING
INCOME |
|
1,996 |
|
|
|
4,880 |
|
|
|
24,397 |
|
|
|
4,951 |
|
|
OTHER: |
|
|
|
|
|
|
|
|
Interest income |
|
878 |
|
|
|
- |
|
|
|
1,891 |
|
|
|
- |
|
|
Interest expense |
|
(21 |
) |
|
|
(36 |
) |
|
|
(74 |
) |
|
|
(114 |
) |
|
INCOME BEFORE INCOME TAXES |
|
2,853 |
|
|
|
4,844 |
|
|
|
26,214 |
|
|
|
4,837 |
|
|
PROVISION
FOR INCOME TAXES |
|
789 |
|
|
|
1,300 |
|
|
|
7,009 |
|
|
|
761 |
|
|
NET
INCOME |
$ |
2,064 |
|
|
$ |
3,544 |
|
|
$ |
19,205 |
|
|
$ |
4,076 |
|
|
PREFERRED
STOCK DIVIDENDS |
|
- |
|
|
|
304 |
|
|
|
- |
|
|
|
912 |
|
|
INCOME
AVAILABLE TO COMMON STOCKHOLDERS |
$ |
2,064 |
|
|
$ |
3,240 |
|
|
$ |
19,205 |
|
|
$ |
3,164 |
|
|
Basic |
|
|
|
|
|
|
|
|
Net income per share |
$ |
0.07 |
|
|
$ |
0.10 |
|
|
$ |
0.64 |
|
|
$ |
0.10 |
|
|
Diluted |
|
|
|
|
|
|
|
|
Net income per share |
$ |
0.07 |
|
|
$ |
0.10 |
|
|
$ |
0.63 |
|
|
$ |
0.10 |
|
|
Weighted
average number of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
30,164 |
|
|
|
25,381 |
|
|
|
30,115 |
|
|
|
25,692 |
|
|
Diluted |
|
30,698 |
|
|
|
25,381 |
|
|
|
30,455 |
|
|
|
25,692 |
|
|
|
|
|
|
|
|
|
|
|
Other data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA (1) |
$ |
6,140 |
|
|
$ |
7,429 |
|
|
$ |
10,775 |
|
|
$ |
12,685 |
|
|
Depreciation
and amortization |
$ |
1,723 |
|
|
$ |
1,561 |
|
|
$ |
4,656 |
|
|
$ |
4,617 |
|
|
Number of
campuses |
|
22 |
|
|
|
22 |
|
|
|
22 |
|
|
|
22 |
|
|
Average
enrollment |
|
12,942 |
|
|
|
12,824 |
|
|
|
12,594 |
|
|
|
12,781 |
|
|
Stock-based
compensation |
$ |
662 |
|
|
$ |
637 |
|
|
$ |
4,050 |
|
|
$ |
2,367 |
|
|
Net cash
(used in) provided by operating activities |
$ |
(6,791 |
) |
|
$ |
10,604 |
|
|
$ |
3,612 |
|
|
$ |
612 |
|
|
Net cash
used in investing activities |
$ |
(17,784 |
) |
|
$ |
(3,471 |
) |
|
$ |
(4,961 |
) |
|
$ |
(4,663 |
) |
|
Net cash
used in financing activities |
$ |
- |
|
|
$ |
(4,499 |
) |
|
$ |
(2,945 |
) |
|
$ |
(9,637 |
) |
|
|
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Data: |
September
30, |
|
|
(Unaudited) |
|
|
|
|
Cash and cash equivalents |
$ |
41,717 |
|
Restricted
cash |
|
4,276 |
|
Short-term
investments |
|
24,344 |
|
Current
assets |
|
130,676 |
|
Working
capital |
|
64,576 |
|
Total
assets |
|
315,778 |
|
Current
liabilities |
|
66,100 |
|
Total
stockholders' equity |
|
157,165 |
|
|
|
|
LIQUIDITYThe Company ended the
quarter with approximately $70.3 million in cash and cash
equivalents, restricted cash, and short-term
investments. The cash position decreased from the prior
year quarter primarily due to investments in capital expenditures
of $17.8 million, which included the purchase of the new Levittown,
Pennsylvania property for $10.2 million and build-out costs for the
new Atlanta, Georgia campus of $2.2 million, which mostly related
to architecture fees and construction.
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 September 30, |
|
Nine Months
Ended September 30, |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Consolidated Operations |
|
Consolidated Operations |
|
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
2,064 |
|
|
$ |
3,544 |
|
$ |
19,205 |
|
|
$ |
4,076 |
|
Interest (income) expense, net |
|
(857 |
) |
|
|
36 |
|
|
(1,817 |
) |
|
|
114 |
|
Provision for income taxes |
|
789 |
|
|
|
1,300 |
|
|
7,009 |
|
|
|
761 |
|
Depreciation and amortization |
|
1,723 |
|
|
|
1,561 |
|
|
4,656 |
|
|
|
4,617 |
|
EBITDA |
|
3,719 |
|
|
|
6,441 |
|
|
29,053 |
|
|
|
9,568 |
|
Stock compensation expense |
|
662 |
|
|
|
637 |
|
|
4,050 |
|
|
|
2,367 |
|
Impairment of goodwill and long-lived assets |
|
- |
|
|
|
- |
|
|
4,220 |
|
|
|
- |
|
Severance and other one-time costs |
|
100 |
|
|
|
140 |
|
|
1,399 |
|
|
|
400 |
|
Transitional segment |
|
742 |
|
|
|
71 |
|
|
1,411 |
|
|
|
210 |
|
New campus start-up costs |
|
467 |
|
|
|
140 |
|
|
1,016 |
|
|
|
140 |
|
Gain on sale of Nashville, Tennessee 1 |
|
- |
|
|
|
- |
|
|
(30,939 |
) |
|
|
- |
|
FMV of Nashville, Tennessee rent2 |
|
450 |
|
|
|
- |
|
|
565 |
|
|
|
- |
|
Adjusted
EBITDA |
$ |
6,140 |
|
|
$ |
7,429 |
|
$ |
10,775 |
|
|
$ |
12,685 |
|
|
|
|
|
|
|
|
|
1 |
Gain is related to the
sale of our Nashville, Tennessee property connsumated on June 8,
2023. |
|
|
|
|
|
|
|
|
|
2 |
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 September 30, |
|
(Unaudited) |
|
Campus Operations |
|
Transitional |
|
Corporate |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
11,890 |
|
$ |
13,024 |
|
$ |
(745 |
) |
|
$ |
(76 |
) |
|
$ |
(9,081 |
) |
|
$ |
(9,404 |
) |
Interest (income) expense, net |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(857 |
) |
|
|
36 |
|
Provision for income taxes |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
789 |
|
|
|
1,300 |
|
Depreciation and amortization |
|
1,552 |
|
|
1,403 |
|
|
3 |
|
|
|
5 |
|
|
|
168 |
|
|
|
153 |
|
EBITDA |
|
13,442 |
|
|
14,427 |
|
|
(742 |
) |
|
|
(71 |
) |
|
|
(8,981 |
) |
|
|
(7,915 |
) |
Stock compensation expense |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
662 |
|
|
|
637 |
|
Severance and other one-time costs |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
100 |
|
|
|
140 |
|
Transitional segment |
|
- |
|
|
- |
|
|
742 |
|
|
|
71 |
|
|
|
- |
|
|
|
- |
|
New campus start-up costs |
|
467 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
140 |
|
FMV of Nashville, Tennessee rent2 |
|
450 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted
EBITDA |
$ |
14,359 |
|
$ |
14,427 |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(8,219 |
) |
|
$ |
(6,998 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended September 30, |
|
(Unaudited) |
|
Campus Operations |
|
Transitional |
|
Corporate |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
26,167 |
|
$ |
30,430 |
|
$ |
(1,423 |
) |
|
$ |
(227 |
) |
|
$ |
(5,539 |
) |
|
$ |
(26,127 |
) |
Interest (income) expense, net |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(1,817 |
) |
|
|
114 |
|
Provision for income taxes |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
7,009 |
|
|
|
761 |
|
Depreciation and amortization |
|
4,165 |
|
|
4,174 |
|
|
11 |
|
|
|
17 |
|
|
|
480 |
|
|
|
426 |
|
EBITDA |
|
30,332 |
|
|
34,604 |
|
|
(1,412 |
) |
|
|
(210 |
) |
|
|
133 |
|
|
|
(24,826 |
) |
Stock compensation expense |
|
- |
|
|
8 |
|
|
- |
|
|
|
- |
|
|
|
4,050 |
|
|
|
2,359 |
|
Impairment of goodwill and long-lived assets |
|
4,220 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Severance and other one-time costs |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
1,399 |
|
|
|
400 |
|
Transitional segment |
|
- |
|
|
- |
|
|
1,411 |
|
|
|
210 |
|
|
|
- |
|
|
|
- |
|
New campus start-up costs |
|
1,016 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
140 |
|
Gain on sale of Nashville, Tennessee 1 |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(30,939 |
) |
|
|
- |
|
FMV of Nashville, Tennessee rent2 |
|
565 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted
EBITDA |
$ |
36,133 |
|
$ |
34,612 |
|
$ |
(1 |
) |
|
$ |
- |
|
|
$ |
(25,357 |
) |
|
$ |
(21,927 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September
30, 2023 |
|
September
30, 2023 |
|
(Unaudited) |
|
(Unaudited) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net
income |
$ |
2,064 |
|
|
$ |
3,544 |
|
|
$ |
19,205 |
|
|
$ |
4,076 |
|
|
|
|
|
|
|
|
|
Non-recurring adjustments: |
|
|
|
|
|
|
|
Impairment
of goodwill and long-lived assets |
|
- |
|
|
|
- |
|
|
|
4,220 |
|
|
|
- |
|
Severance
and other one time costs |
|
100 |
|
|
|
140 |
|
|
|
2,171 |
|
|
|
400 |
|
Transitional
segment |
|
742 |
|
|
|
71 |
|
|
|
1,411 |
|
|
|
210 |
|
New campus
start-up costs |
|
467 |
|
|
|
140 |
|
|
|
1,016 |
|
|
|
140 |
|
Performance
based catch-up stock compensation |
|
78 |
|
|
|
- |
|
|
|
1,478 |
|
|
|
- |
|
Gain on sale
of Nashville, Tennessee 1 |
|
- |
|
|
|
- |
|
|
|
(30,939 |
) |
|
|
- |
|
FMV of
Nashville Rent2 |
|
450 |
|
|
|
- |
|
|
|
565 |
|
|
|
- |
|
Total
non-recurring adjustments |
|
1,837 |
|
|
|
351 |
|
|
|
(20,078 |
) |
|
|
750 |
|
Income tax
effect |
|
(514 |
) |
|
|
(99 |
) |
|
|
5,622 |
|
|
|
(211 |
) |
Adjusted net
income, non-GAAP |
$ |
3,387 |
|
|
$ |
3,796 |
|
|
$ |
4,749 |
|
|
$ |
4,615 |
|
|
As
of |
|
September 30, 2023 |
Cash and cash equivalents |
$ |
41,717 |
Restricted
cash |
|
4,276 |
Short-term
investments |
|
24,344 |
Total Liquidity |
$ |
70,337 |
|
|
|
Three Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
Revenue: |
|
|
|
|
|
Campus Operations |
$ |
99,527 |
|
|
$ |
90,085 |
|
|
10.5 |
% |
Transitional |
|
91 |
|
|
|
1,728 |
|
|
-94.7 |
% |
Total |
$ |
99,618 |
|
|
$ |
91,813 |
|
|
8.5 |
% |
|
|
|
|
|
|
Operating Income (loss): |
|
|
|
|
|
Campus
Operations |
$ |
11,889 |
|
|
$ |
13,024 |
|
|
-8.7 |
% |
Transitional |
|
(745 |
) |
|
|
(76 |
) |
|
880.3 |
% |
Corporate |
|
(9,148 |
) |
|
|
(8,068 |
) |
|
-13.4 |
% |
Total |
$ |
1,996 |
|
|
$ |
4,880 |
|
|
-59.1 |
% |
|
|
|
|
|
|
Starts: |
|
|
|
|
|
Campus
Operations |
|
5,157 |
|
|
|
4,815 |
|
|
7.1 |
% |
Transitional |
|
- |
|
|
|
114 |
|
|
-100.0 |
% |
Total |
|
5,157 |
|
|
|
4,929 |
|
|
4.6 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Campus
Operations |
|
12,923 |
|
|
|
12,551 |
|
|
3.0 |
% |
Transitional |
|
19 |
|
|
|
273 |
|
|
-93.0 |
% |
Total |
|
12,942 |
|
|
|
12,824 |
|
|
0.9 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Campus
Operations |
|
14,027 |
|
|
|
13,291 |
|
|
5.5 |
% |
Transitional |
|
4 |
|
|
|
295 |
|
|
-98.6 |
% |
Total |
|
14,031 |
|
|
|
13,586 |
|
|
3.3 |
% |
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
Revenue: |
|
|
|
|
|
Campus Operations |
$ |
274,093 |
|
|
$ |
251,216 |
|
|
9.1 |
% |
Transitional |
|
1,455 |
|
|
|
5,294 |
|
|
-72.5 |
% |
Total |
$ |
275,548 |
|
|
$ |
256,510 |
|
|
7.4 |
% |
|
|
|
|
|
|
Operating Income (loss): |
|
|
|
|
|
Campus
Operations |
$ |
26,167 |
|
|
$ |
30,430 |
|
|
-14.0 |
% |
Transitional |
|
(1,423 |
) |
|
|
(227 |
) |
|
526.9 |
% |
Corporate |
|
(347 |
) |
|
|
(25,252 |
) |
|
98.6 |
% |
Total |
$ |
24,397 |
|
|
$ |
4,951 |
|
|
392.8 |
% |
|
|
|
|
|
|
Starts: |
|
|
|
|
|
Campus
Operations |
|
13,008 |
|
|
|
11,791 |
|
|
10.3 |
% |
Transitional |
|
- |
|
|
|
343 |
|
|
-100.0 |
% |
Total |
|
13,008 |
|
|
|
12,134 |
|
|
7.2 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Campus
Operations |
|
12,506 |
|
|
|
12,479 |
|
|
0.2 |
% |
Transitional |
|
88 |
|
|
|
302 |
|
|
-70.9 |
% |
Total |
|
12,594 |
|
|
|
12,781 |
|
|
-1.5 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Campus
Operations |
|
14,027 |
|
|
|
13,291 |
|
|
5.5 |
% |
Transitional |
|
4 |
|
|
|
295 |
|
|
-98.6 |
% |
Total |
|
14,031 |
|
|
|
13,586 |
|
|
3.3 |
% |
|
|
|
|
|
|
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 September 30, |
|
2023 |
|
2022 |
|
% Change |
Starts: |
|
|
|
|
|
Transportation and Skilled Trades |
3,786 |
|
3,519 |
|
7.6 |
% |
Healthcare
and Other Professions |
1,371 |
|
1,296 |
|
5.8 |
% |
Total |
5,157 |
|
4,815 |
|
7.1 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Transportation and Skilled Trades |
9,029 |
|
8,779 |
|
2.8 |
% |
Healthcare
and Other Professions |
3,894 |
|
3,772 |
|
3.2 |
% |
Total |
12,923 |
|
12,551 |
|
3.0 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Transportation and Skilled Trades |
9,842 |
|
9,266 |
|
6.2 |
% |
Healthcare
and Other Professions |
4,185 |
|
4,025 |
|
4.0 |
% |
Total |
14,027 |
|
13,291 |
|
5.5 |
% |
|
|
|
|
|
|
Population
by Program (Campus Operations Segment): |
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
2023 |
|
2022 |
|
% Change |
Starts: |
|
|
|
|
|
Transportation and Skilled Trades |
9,064 |
|
8,193 |
|
10.6 |
% |
Healthcare
and Other Professions |
3,944 |
|
3,598 |
|
9.6 |
% |
Total |
13,008 |
|
11,791 |
|
10.3 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Transportation and Skilled Trades |
8,581 |
|
8,570 |
|
0.1 |
% |
Healthcare
and Other Professions |
3,925 |
|
3,909 |
|
0.4 |
% |
Total |
12,506 |
|
12,479 |
|
0.2 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Transportation and Skilled Trades |
9,842 |
|
9,266 |
|
6.2 |
% |
Healthcare
and Other Professions |
4,185 |
|
4,025 |
|
4.0 |
% |
Total |
14,027 |
|
13,291 |
|
5.5 |
% |
|
|
|
|
|
|
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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