Lincoln Educational Services Corporation (Nasdaq: LINC) today
announced financial and operating results for the fourth quarter
and full year ended December 31, 2023, as well as recent business
developments.
Fourth Quarter 2023 Financial Highlights*
- Revenue grew 13.6% to $102.5 million
- New student starts increased 16.0%
- Adjusted EBITDA of $15.7 million
- Adjusted net income of $10.0 million
- Earnings per share of $0.23
- Cashflow from operations of $21.9 million
Full Year 2023 Financial and Operational Highlights*
- Revenue grew 10.3% to $376.6 million
- New student starts increased 11.4%
- Adjusted EBITDA of $26.5 million
- Adjusted net income of $14.8 million
- Earnings per share of $0.86
- Total liquidity of $80.3 million; no debt outstanding
- Ended year with student population of 13,270, 8.8% higher than
2022
- Exceeded all guidance metrics for 2023
Recent Developments
- Entered into new credit facility with Fifth Third Bank
- Added Hyundai Genesis to our list of OEM partners
- Completed sale of recently acquired Levittown, Pennsylvania
campus for $11.0 million, simultaneously entering into sale
lease-back agreement for 20 year-term
- First classes have enrolled at new East Point, Georgia campus
with classes expected to commence in March 2024
*Note: The highlighted financial results exclude the
Transitional segment. A reconciliation of GAAP / non-GAAP measures
is included in this release.
“Our team is successfully executing our
transformative growth strategies, which has led to increased
student starts, retention, graduation and placement rates, and
allowed us to exceed all of our 2023 guidance metrics,” said Scott
Shaw, President & CEO. “During the fourth quarter, we achieved
a 16% increase in student starts, all from existing campus
operations, and grew revenue to more than $100 million. Our solid
student start growth enabled us to begin 2024 with a thousand more
students than the start of last year.”
“We have completed the build-out of our new East
Point campus in Georgia, which is planning to have its first
enrolled class in March. Additionally, plans for the opening of our
Houston campus are moving forward as well as the campus relocation
efforts in Nashville and Philadelphia. Program expansions across
our existing campuses remain in progress and are expected to be
operational in the second half of this year. We also remain on
track to complete the transition to our highly scalable hybrid
instructional platform, which we call Lincoln 10.0, by the end of
2024, which we anticipate will begin to deliver lower instructional
costs as a percentage of revenue in 2025.”
“With $80 million in cash and no debt at year
end, Lincoln’s strong financial position allows us to make
significant investments to expand our business and create long
lasting benefits to our students, graduates, instructors, and
corporate partners, while increasing returns to our shareholders.
We hope that analysts and investors will be able to join us either
in person at our new East Point campus or virtually on Tuesday
March 19, 2024 as we host our first Investor Day where we will
provide an overview of our growth strategy.”
2023 FOURTH QUARTER FINANCIAL RESULTS
(Quarter ended December 31, 2023 compared to December
31, 2022)
- Revenue increased $12.3 million, or 13.6% to
$102.5 million from $90.2 million in the prior year comparable
period excluding the Transitional segment. Revenue benefited from
student start growth of 16.0%, which drove a 7.8% increase in
average student population as well as an increase in average
revenue per student of 5.4%, driven in part by the continuing
roll-out of the Lincoln 10.0 platform in combination with tuition
increases. The Lincoln 10.0 platform’s hybrid teaching model
increases program efficiency and delivers accelerated revenue
recognition in certain evening programs.
- Educational services and facilities increased
$4.5 million, or 12.4% to $41.0 million from $36.5 million in the
prior year comparable period. Instructional expense grew with
higher staffing levels in addition to merit increases. Staffing
levels were higher due to the increase in students and increased
staffing at campuses that are providing instruction through both
Lincoln 10.0’s hybrid teaching model and traditional learning
models while we continue to transition to 10.0. Facilities expense
rose mainly due to non-cash rent expense driven by the sale
leaseback of the Nashville, Tennessee property and two months of
non-cash rent at the East Point, Georgia campus. Rent payments for
the East Point, Georgia campus began in December of 2023. Partially
offsetting these additional costs was a decrease in expense
resulting in the Transitional segment.
- Selling, general and administrative expense
increased $9.6 million, or 22.5% to $52.5 million from $42.9
million in the prior year comparable period. Increased costs were
driven by higher performance-based incentive compensation expenses,
additional marketing investments, and credits received from a
vendor in the prior year. Partially offsetting the additional costs
was a decrease in expenses within the Transitional segment.
- Net interest income increased $0.2 million to
$0.5 million from $0.3 million in the prior year comparable period.
The increase was the result of a full quarter of investments
yielding a higher rate of return in the current year.
FOURTH QUARTER SEGMENT RESULTS
Campus Operations SegmentRevenue increased
$12.3 million, or 13.6% to $102.5 million. Adjusted EBITDA
increased $3.5 million or 15.8% to $25.7 million, from $22.2
million in the prior year.
Transitional Segment
The Somerville, Massachusetts campus teach-out was completed in
the fourth quarter. Revenue decreased $1.5 million to less than $20
thousand compared to $1.6 million in the prior year comparable
period. Total operating expenses decreased $1.3 million
to $0.5 million from $1.8 million in the prior year comparable
period.
Corporate and OtherCorporate and other expenses
increased $4.4 million to $12.0 million from $7.6 million in the
prior year comparable period, driven by higher performance-based
compensation expense.
YEAR END FINANCIAL RESULTS(Period ended
December 31, 2023 compared to December 31, 2022)
- Total revenue increased $29.8 million, or 8.6% to $378.1
million, compared to $348.3 million.
- Campus Operations segment revenue increased $35.2 million, or
10.3% to $376.6 million, compared to $341.4 million.
- Transitional segment revenue decreased $5.3 million, or 78.6%
to $1.5 million, compared to $6.8 million.
RECENT BUSINESS DEVELOPMENTS
Relocation of Philadelphia, Pennsylvania Area
Campus. In September, 2023, the Company purchased a 90,000
square foot property in Levittown, Pennsylvania for
approximately $10.2 million and, subsequently, entered into a
sale leaseback transaction in January, 2024 for a sale price
of approximately $11.0 million. Simultaneously with the
closing of the sale, the Company and the purchaser have entered
into a triple-net lease agreement pursuant to which the property is
being leased back to Lincoln for a twenty-year term. The
lease agreement includes a $2.5 million tenant improvement
allowance.
The Company expects to invest approximately $15.0 million,
net of the tenant allowance, 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.
Students training at the new campus will go on to launch new
careers in the Automotive, Welding, HVAC, and Electrical industries
throughout the greater Philadelphia, Pennsylvania area.
The new Levittown campus is expected to open in the second
half of 2025 and is not expected to impact the student experience
at the existing Philadelphia campus, which today serves
approximately 230 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.
As of December 31, 2023, the Levittown, Pennsylvania campus was
classified as held-for-sale on the consolidated balance sheet.
Relocation of Nashville, Tennessee Area Campus.
On November 3, 2023, the Company announced that it had entered into
a new lease agreement for the relocation of its Nashville,
Tennessee campus. The new Nashville campus has over 120,000 square
feet which enables Lincoln to expand its skilled trades offerings
with the addition of 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 operations are transitioned 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, Texas, the country’s fourth
largest employment market. The Houston campus will be the Company’s
second campus in Texas. Lincoln has operated a campus in Grand
Prairie since 1966. The new campus will feature an approximately
100,000 square foot training center, offering career opportunities
in automotive, diesel, welding, HVAC and electrical and electronic
fields. This campus is expected to open in the first quarter of
2026.
New Credit Facility. In mid-February, we
entered into a new credit facility with Fifth Third
Bank. The facility includes a $40.0 million revolving
line of credit, in addition to a $20.0 million accordion feature
providing additional financial flexibility to support strategic
growth initiatives.
FULL YEAR 2024 OUTLOOKThe Company ended the
year with $80.3 million in cash and cash equivalents and restricted
cash, and no debt. With an ending student population up over 1,000
students compared to the prior year comparable period, and momentum
carrying through into the first quarter, the Company is
anticipating continued growth in 2024.
Operating and financial guidance for the coming year are
outlined below:
|
|
|
|
|
|
|
|
2024
Guidance |
|
|
|
Low |
|
High |
|
Revenue |
$ |
410 |
|
- |
$ |
420 |
|
1 |
Adjusted EBITDA |
$ |
35 |
|
- |
$ |
40 |
|
1,2 |
Adjusted net income |
$ |
10 |
|
- |
$ |
15 |
|
1,2 |
Starts |
|
7 |
% |
- |
|
12 |
% |
|
Capital expenditures |
$ |
65 |
|
- |
$ |
70 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
1 $ amounts in millions |
|
|
|
|
|
|
|
|
|
|
2 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. |
|
|
|
|
|
|
CONFERENCE CALL INFOLincoln 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: Q4 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.
MARCH 19, 2024 INVESTOR DAY
The Company announced that it will hold an Investor Day for
analysts and institutional investors on Tuesday, March 19, 2024, to
preview its new, state-of-the-art East Point, Georgia campus, learn
corporate partner and student perspectives, and attend senior
management presentations about the Company’s growth initiatives and
2024 plan. To receive an invitation and more information, please
contact mpolyviou@evcgroup.com.
A live webcast of the event and presentation materials will be
available on the investor relations section of the Company’s
website. A replay of the webcast will also be made available
shortly after the event.
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 21 campuses in 13 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 cybersecurity; 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 |
|
Year-Ended |
|
December
31, |
|
December
31, |
|
(Unaudited) |
|
(Unaudited) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
REVENUE |
$ |
102,522 |
|
|
$ |
91,778 |
|
|
$ |
378,070 |
|
|
$ |
348,287 |
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
Educational services and facilities |
|
41,024 |
|
|
|
36,513 |
|
|
|
162,275 |
|
|
|
148,746 |
|
Selling, general and administrative |
|
52,530 |
|
|
|
42,888 |
|
|
|
209,135 |
|
|
|
182,391 |
|
Loss (gain) on sale of assets |
|
6 |
|
|
|
- |
|
|
|
(30,918 |
) |
|
|
(177 |
) |
Impairment of goodwill and long-lived assets |
|
- |
|
|
|
1,049 |
|
|
|
4,220 |
|
|
|
1,049 |
|
Total costs & expenses |
|
93,560 |
|
|
|
80,450 |
|
|
|
344,712 |
|
|
|
332,009 |
|
OPERATING
INCOME |
|
8,962 |
|
|
|
11,328 |
|
|
|
33,358 |
|
|
|
16,278 |
|
OTHER: |
|
|
|
|
|
|
|
Interest income |
|
736 |
|
|
|
318 |
|
|
|
2,628 |
|
|
|
318 |
|
Interest expense |
|
(273 |
) |
|
|
(47 |
) |
|
|
(347 |
) |
|
|
(160 |
) |
INCOME BEFORE INCOME TAXES |
|
9,425 |
|
|
|
11,599 |
|
|
|
35,639 |
|
|
|
16,436 |
|
PROVISION
FOR INCOME TAXES |
|
2,633 |
|
|
|
3,041 |
|
|
|
9,642 |
|
|
|
3,802 |
|
NET
INCOME |
$ |
6,792 |
|
|
$ |
8,558 |
|
|
$ |
25,997 |
|
|
$ |
12,634 |
|
PREFERRED
STOCK DIVIDENDS |
|
- |
|
|
|
196 |
|
|
|
- |
|
|
|
1,111 |
|
INCOME
AVAILABLE TO COMMON STOCKHOLDERS |
$ |
6,792 |
|
|
$ |
8,362 |
|
|
$ |
25,997 |
|
|
$ |
11,523 |
|
Basic |
|
|
|
|
|
|
|
Net income per share |
$ |
0.23 |
|
|
$ |
0.27 |
|
|
$ |
0.86 |
|
|
$ |
0.36 |
|
Diluted |
|
|
|
|
|
|
|
Net income per share |
$ |
0.22 |
|
|
$ |
0.27 |
|
|
$ |
0.85 |
|
|
$ |
0.36 |
|
Weighted
average number of common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
30,126 |
|
|
|
26,436 |
|
|
|
30,105 |
|
|
|
25,879 |
|
Diluted |
|
30,847 |
|
|
|
26,436 |
|
|
|
30,541 |
|
|
|
25,879 |
|
|
|
|
|
|
|
|
|
Other data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA (1) |
$ |
15,730 |
|
|
$ |
15,659 |
|
|
$ |
26,500 |
|
|
$ |
28,344 |
|
Depreciation
and amortization |
$ |
2,114 |
|
|
$ |
1,745 |
|
|
$ |
6,770 |
|
|
$ |
6,364 |
|
Number of
campuses |
|
21 |
|
|
|
22 |
|
|
|
21 |
|
|
|
22 |
|
Average
enrollment |
|
13,983 |
|
|
|
13,230 |
|
|
|
12,941 |
|
|
|
12,894 |
|
Stock-based
compensation |
$ |
1,845 |
|
|
$ |
745 |
|
|
$ |
5,894 |
|
|
$ |
3,111 |
|
Net cash
provided by operating activities |
$ |
21,946 |
|
|
$ |
270 |
|
|
$ |
25,558 |
|
|
$ |
882 |
|
Net cash
provided by (used in) investing activities |
$ |
12,330 |
|
|
$ |
(16,691 |
) |
|
$ |
7,369 |
|
|
$ |
(21,354 |
) |
Net cash
used in financing activities |
$ |
- |
|
|
$ |
(2,911 |
) |
|
$ |
(2,945 |
) |
|
$ |
(12,548 |
) |
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Data: |
December
31, |
|
|
(Unaudited) |
|
|
|
|
Cash and cash equivalents |
$ |
75,992 |
|
Restricted
cash |
|
4,277 |
|
Current
assets |
|
134,663 |
|
Working
capital |
|
61,253 |
|
Total
assets |
|
345,249 |
|
Current
liabilities |
|
73,410 |
|
Total
stockholders' equity |
|
166,804 |
|
|
|
|
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 December 31, |
|
Year Ended
Ended December 31, |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Consolidated Operations |
|
Consolidated Operations |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
6,792 |
|
|
$ |
8,558 |
|
|
$ |
25,997 |
|
|
$ |
12,634 |
|
|
Interest income, net |
|
(463 |
) |
|
|
(271 |
) |
|
|
(2,281 |
) |
|
|
(158 |
) |
|
Provision for income taxes |
|
2,633 |
|
|
|
3,041 |
|
|
|
9,642 |
|
|
|
3,802 |
|
|
Depreciation and amortization |
|
2,114 |
|
|
|
1,745 |
|
|
|
6,770 |
|
|
|
6,364 |
|
|
EBITDA |
|
11,076 |
|
|
|
13,073 |
|
|
|
40,128 |
|
|
|
22,642 |
|
|
Stock compensation expense |
|
1,845 |
|
|
|
745 |
|
|
|
5,894 |
|
|
|
3,111 |
|
|
Impairment of goodwill and long-lived assets |
|
- |
|
|
|
1,049 |
|
|
|
4,220 |
|
|
|
1,049 |
|
|
Severance and other one-time costs |
|
437 |
|
|
|
364 |
|
|
|
1,831 |
|
|
|
765 |
|
|
Transitional segment |
|
487 |
|
|
|
198 |
|
|
|
1,900 |
|
|
|
408 |
|
|
New campus start-up costs |
|
1,435 |
|
|
|
230 |
|
|
|
2,451 |
|
|
|
369 |
|
|
Gain on sale of Nashville, Tennessee 1 |
|
- |
|
|
|
- |
|
|
|
(30,939 |
) |
|
|
- |
|
|
FMV of Nashville, Tennessee rent2 |
|
450 |
|
|
|
- |
|
|
|
1,015 |
|
|
|
- |
|
|
Adjusted
EBITDA |
$ |
15,730 |
|
|
$ |
15,659 |
|
|
$ |
26,500 |
|
|
$ |
28,344 |
|
|
|
|
|
|
|
|
|
|
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 December 31, |
|
(Unaudited) |
|
Campus Operations |
|
Transitional |
|
Corporate |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
21,179 |
|
$ |
19,092 |
|
$ |
(490 |
) |
|
$ |
(202 |
) |
|
$ |
(13,897 |
) |
$ |
(10,332 |
) |
Interest expense (income), net |
|
233 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(696 |
) |
|
|
(271 |
) |
Provision for income taxes |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
2,633 |
|
|
|
3,041 |
|
Depreciation and amortization |
|
1,962 |
|
|
1,579 |
|
|
3 |
|
|
|
4 |
|
|
|
149 |
|
|
|
162 |
|
EBITDA |
|
23,374 |
|
|
20,671 |
|
|
(487 |
) |
|
|
(198 |
) |
|
|
(11,811 |
) |
|
|
(7,400 |
) |
Stock compensation expense |
|
- |
|
|
108 |
|
|
- |
|
|
|
- |
|
|
|
1,845 |
|
|
|
637 |
|
Impairment of goodwill and long-lived assets |
|
- |
|
|
1,049 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Severance and other one-time costs |
|
437 |
|
|
364 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Transitional segment |
|
- |
|
|
- |
|
|
487 |
|
|
|
198 |
|
|
|
- |
|
|
|
- |
|
New campus start-up costs |
|
1,435 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
230 |
|
FMV of Nashville, Tennessee rent2 |
|
450 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted
EBITDA |
$ |
25,696 |
|
$ |
22,192 |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(9,966 |
) |
|
$ |
(6,533 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-Ended
December 31, |
|
(Unaudited) |
|
Campus Operations |
|
Transitional |
|
Corporate |
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
47,346 |
|
|
$ |
49,524 |
|
$ |
(1,913 |
) |
|
$ |
(430 |
) |
|
$ |
(19,436 |
) |
$ |
(36,460 |
) |
Interest expense (income), net |
|
233 |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(2,514 |
) |
|
|
(158 |
) |
Provision for income taxes |
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
9,642 |
|
|
|
3,802 |
|
Depreciation and amortization |
|
6,127 |
|
|
|
5,754 |
|
|
13 |
|
|
|
22 |
|
|
|
630 |
|
|
|
588 |
|
EBITDA |
|
53,706 |
|
|
|
55,278 |
|
|
(1,900 |
) |
|
|
(408 |
) |
|
|
(11,678 |
) |
|
|
(32,228 |
) |
Stock compensation expense |
|
- |
|
|
|
116 |
|
|
- |
|
|
|
- |
|
|
|
5,894 |
|
|
|
2,995 |
|
Impairment of goodwill and long-lived assets |
|
4,220 |
|
|
|
1,049 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Severance and other one-time costs |
|
- |
|
|
|
364 |
|
|
- |
|
|
|
- |
|
|
|
1,831 |
|
|
|
401 |
|
Transitional segment |
|
- |
|
|
|
- |
|
|
1,900 |
|
|
|
408 |
|
|
|
- |
|
|
|
- |
|
New campus start-up costs |
|
2,451 |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
369 |
|
Gain on sale of Nashville, Tennessee 1 |
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(30,939 |
) |
|
|
- |
|
FMV of Nashville, Tennessee rent2 |
|
1,015 |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted
EBITDA |
$ |
61,392 |
|
|
$ |
56,807 |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(34,892 |
) |
|
$ |
(28,463 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year
Ended |
|
December, |
|
December, |
|
(Unaudited) |
|
(Unaudited) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net
income |
$ |
6,792 |
|
|
$ |
8,558 |
|
|
$ |
25,997 |
|
|
$ |
12,634 |
|
|
|
|
|
|
|
|
|
Non-recurring adjustments: |
|
|
|
|
|
|
|
Impairment
of goodwill and long-lived assets |
|
- |
|
|
|
1,049 |
|
|
|
4,220 |
|
|
|
1,049 |
|
Severance
and other one time costs |
|
437 |
|
|
|
472 |
|
|
|
2,608 |
|
|
|
1,263 |
|
Transitional
segment |
|
487 |
|
|
|
198 |
|
|
|
1,900 |
|
|
|
408 |
|
New campus
start-up costs |
|
1,849 |
|
|
|
230 |
|
|
|
2,875 |
|
|
|
369 |
|
Performance
based catch-up stock compensation |
|
1,264 |
|
|
|
- |
|
|
|
2,742 |
|
|
|
- |
|
Gain on sale
of Nashville, Tennessee 1 |
|
- |
|
|
|
- |
|
|
|
(30,939 |
) |
|
|
- |
|
FMV of
Nashville Rent2 |
|
450 |
|
|
|
- |
|
|
|
1,015 |
|
|
|
- |
|
Total
non-recurring adjustments |
|
4,487 |
|
|
|
1,949 |
|
|
|
(15,579 |
) |
|
|
3,089 |
|
Income tax
effect |
|
(1,256 |
) |
|
|
(561 |
) |
|
|
4,362 |
|
|
|
(890 |
) |
Adjusted net
income, non-GAAP |
$ |
10,023 |
|
|
$ |
9,946 |
|
|
$ |
14,780 |
|
|
$ |
14,833 |
|
|
|
|
|
|
|
|
|
|
As
of |
|
December 31, 2023 |
Cash and cash equivalents |
$ |
75,992 |
Restricted
cash |
|
4,277 |
Total Liquidity |
$ |
80,269 |
|
|
|
Three Months Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
Revenue: |
|
|
|
|
|
Campus Operations |
$ |
102,509 |
|
|
$ |
90,225 |
|
|
13.6 |
% |
Transitional |
|
13 |
|
|
|
1,553 |
|
|
-99.2 |
% |
Total |
$ |
102,522 |
|
|
$ |
91,778 |
|
|
11.7 |
% |
|
|
|
|
|
|
Operating Income (loss): |
|
|
|
|
|
Campus
Operations |
$ |
21,412 |
|
|
$ |
19,092 |
|
|
12.2 |
% |
Transitional |
|
(490 |
) |
|
|
(202 |
) |
|
142.6 |
% |
Corporate |
|
(11,960 |
) |
|
|
(7,562 |
) |
|
-58.2 |
% |
Total |
$ |
8,962 |
|
|
$ |
11,328 |
|
|
-20.9 |
% |
|
|
|
|
|
|
Starts: |
|
|
|
|
|
Campus
Operations |
|
3,191 |
|
|
|
2,750 |
|
|
16.0 |
% |
Transitional |
|
- |
|
|
|
36 |
|
|
-100.0 |
% |
Total |
|
3,191 |
|
|
|
2,786 |
|
|
14.5 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Campus
Operations |
|
13,982 |
|
|
|
12,971 |
|
|
7.8 |
% |
Transitional |
|
1 |
|
|
|
259 |
|
|
-99.6 |
% |
Total |
|
13,983 |
|
|
|
13,230 |
|
|
5.7 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Campus
Operations |
|
13,270 |
|
|
|
12,196 |
|
|
8.8 |
% |
Transitional |
|
- |
|
|
|
192 |
|
|
-100.0 |
% |
Total |
|
13,270 |
|
|
|
12,388 |
|
|
7.1 |
% |
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
Revenue: |
|
|
|
|
|
Campus Operations |
$ |
376,602 |
|
|
$ |
341,440 |
|
|
10.3 |
% |
Transitional |
|
1,468 |
|
|
|
6,847 |
|
|
-78.6 |
% |
Total |
$ |
378,070 |
|
|
$ |
348,287 |
|
|
8.6 |
% |
|
|
|
|
|
|
Operating Income (loss): |
|
|
|
|
|
Campus
Operations |
$ |
47,579 |
|
|
$ |
49,524 |
|
|
-3.9 |
% |
Transitional |
|
(1,914 |
) |
|
|
(430 |
) |
|
-345.1 |
% |
Corporate |
|
(12,307 |
) |
|
|
(32,816 |
) |
|
62.5 |
% |
Total |
$ |
33,358 |
|
|
$ |
16,278 |
|
|
104.9 |
% |
|
|
|
|
|
|
Starts: |
|
|
|
|
|
Campus
Operations |
|
16,199 |
|
|
|
14,541 |
|
|
11.4 |
% |
Transitional |
|
- |
|
|
|
379 |
|
|
-100.0 |
% |
Total |
|
16,199 |
|
|
|
14,920 |
|
|
8.6 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Campus
Operations |
|
12,875 |
|
|
|
12,602 |
|
|
2.2 |
% |
Transitional |
|
66 |
|
|
|
292 |
|
|
-77.4 |
% |
Total |
|
12,941 |
|
|
|
12,894 |
|
|
0.4 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Campus
Operations |
|
13,270 |
|
|
|
12,196 |
|
|
8.8 |
% |
Transitional |
|
- |
|
|
|
192 |
|
|
-100.0 |
% |
Total |
|
13,270 |
|
|
|
12,388 |
|
|
7.1 |
% |
|
|
|
|
|
|
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 December 31, |
|
2023 |
|
2022 |
|
% Change |
Starts: |
|
|
|
|
|
Transportation and Skilled Trades |
1,810 |
|
1,500 |
|
20.7 |
% |
Healthcare
and Other Professions |
1,381 |
|
1,250 |
|
10.5 |
% |
Total |
3,191 |
|
2,750 |
|
16.0 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Transportation and Skilled Trades |
9,741 |
|
8,904 |
|
9.4 |
% |
Healthcare
and Other Professions |
4,241 |
|
4,067 |
|
4.3 |
% |
Total |
13,982 |
|
12,971 |
|
7.8 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Transportation and Skilled Trades |
9,170 |
|
8,243 |
|
11.2 |
% |
Healthcare
and Other Professions |
4,100 |
|
3,953 |
|
3.7 |
% |
Total |
13,270 |
|
12,196 |
|
8.8 |
% |
|
|
|
|
|
|
Population
by Program (Campus Operations Segment): |
|
|
|
|
|
|
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
% Change |
Starts: |
|
|
|
|
|
Transportation and Skilled Trades |
10,876 |
|
9,693 |
|
12.2 |
% |
Healthcare
and Other Professions |
5,323 |
|
4,848 |
|
9.8 |
% |
Total |
16,199 |
|
14,541 |
|
11.4 |
% |
|
|
|
|
|
|
Average Population: |
|
|
|
|
|
Transportation and Skilled Trades |
8,871 |
|
8,654 |
|
2.5 |
% |
Healthcare
and Other Professions |
4,004 |
|
3,948 |
|
1.4 |
% |
Total |
12,875 |
|
12,602 |
|
2.2 |
% |
|
|
|
|
|
|
End
of Period Population: |
|
|
|
|
|
Transportation and Skilled Trades |
9,170 |
|
8,243 |
|
11.2 |
% |
Healthcare
and Other Professions |
4,100 |
|
3,953 |
|
3.7 |
% |
Total |
13,270 |
|
12,196 |
|
8.8 |
% |
|
|
|
|
|
|
The reconciliations provided below represent
managements best projection for the execution of our 2024 guidance.
These calculations are for illustrative purposes and will be
reviewed throughout 2024 to ensure accuracy and continued
relevance. Any revisions or modifications, if necessary, will be
made transparent and disclosed during the 2024 quarterly reviews.
Adjusted EBITDA and Adjusted Net Income have been reconciled to the
midpoint of our guidance.
|
Reconciliation of Net Income to Adjusted EBITDA and
Adjusted Net Income - 2024 Guidance |
|
(Reconciled
to the Mid-Point of 2024 Guidance) |
|
|
|
|
|
|
|
Adjusted |
|
|
EBITDA |
|
Net Income |
Net Income |
$ |
5,200 |
|
$ |
5,200 |
|
Interest expense, net |
|
700 |
|
|
- |
|
Provision for taxes |
|
2,000 |
|
|
- |
|
Depreciation and amortization |
|
10,700 |
|
|
- |
|
Depreciation1 |
|
2,500 |
|
|
- |
|
EBITDA |
|
21,100 |
|
|
- |
|
New campus and campus relocation costs2 |
|
9,700 |
|
|
9,700 |
|
Program expansions |
|
2,500 |
|
|
2,500 |
|
Stock compensation |
|
4,200 |
|
|
- |
|
Tax Effect |
|
- |
|
|
(4,900 |
) |
Total |
$ |
37,500 |
|
$ |
12,500 |
|
|
|
|
|
|
|
2024
Guidance Range |
$35,000 -
$40,000 |
|
$10,000 -
$15,000 |
|
|
|
|
|
|
1 |
Depreciation expense relates to new campuses and campus
relocations. |
|
|
|
|
|
2 |
New campus and campus relocation costs relate to the following
locations: |
|
East Point,
Georgia |
|
|
|
|
Nashville,
Tennessee |
|
|
|
|
Levittown,
Pennsylvania |
|
|
|
|
Houston,
Texas |
|
|
|
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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