For the three months ended December 31,
2017:
Lincoln Educational Services Corporation (Nasdaq:LINC) today
reported financial results for the fourth quarter and full year
ended December 31, 2017.
FOURTH QUARTER FINANCIAL RESULTS
HIGHLIGHTS:
- Student starts for the quarter, including the Transitional
segment, remained essentially flat at approximately 1,900 students
for the three months ended December 31, 2017. Excluding the
Transitional segment for the quarter student starts rose 11.2%, as
compared to student starts in the fourth quarter of 2016.
Healthcare and Other Professions (“HOP”) student starts increased
16.1% while Transportation and Skilled Trades (“TST”) student
starts rose 7.2%.
- Total revenue for the fourth quarter was $67.4 million, a 7.1%
decrease from the fourth quarter of 2016, primarily due to reduced
revenue from campuses in the Transitional segment. Excluding
the Transitional segment revenues for the quarter, increased by
$0.3 million when compared to the prior year comparable
quarter. The two campuses in the Transitional segment
were closed by fiscal year end.
- Educational services and facilities expense decreased by $4.0
million, or 11.6%, to $30.2 million for the three months ended
December 31, 2017 from $34.2 in the prior year comparable
quarter. This decrease is primarily due to the Transitional
segment, which accounted for approximately $3.5 million, or 87.7%
of the total decrease.
- Selling general and administrative expenses decreased by $5.7
million, or 16.3%, to $29.4 million for the three months ended
December 31, 2017 from $35.1 million in the prior year comparable
quarter. This decrease was also primarily due to cost
reductions in the Transitional segment, which accounted for
approximately $4.1 million of the decrease for the period.
Additional cost savings of $2.1 million were realized in
administrative expenses resulting from reduced salaries and
benefits expense, partially offset by a $0.4 million increase in
marketing investments. Management believes that this
increased investment was a major factor behind the increase in
student starts in the fourth quarter.
- Net interest expense for the quarter decreased by $1.0 million,
or 67.0% to $0.5 million from $1.5 million in the prior year
comparable period. The reduction is a result of lower debt
outstanding in combination with more favorable terms under the
Company’s credit facility that became effective on March 31, 2017
when compared to the terms of the previous term loan.
- Net income for the quarter was $7.7 million, or $0.32 earnings
per share, compared to a net loss of $18.6 million, or $0.79 loss
per share, in the prior year comparable quarter. The prior
year loss was primarily attributed to a non-cash impairment charge
of $17.5 million and a $8.1 million net loss in the Transitional
segment during the prior comparable period.
“Our solid increase in student starts in the fourth quarter is a
primarily due to our increased investment in several marketing
initiatives during the second half of the year and demonstrates
interest in new and expanded programs offered by Lincoln during
2017,” said Scott Shaw, President and CEO. “In addition to
the encouraging student start results, we improved our operating
performance during the fourth quarter and excluding the
Transitional segment, generated more than $9 million in net
income.”
“We are entering 2018 with cautious optimism,” added Mr.
Shaw. “The student start trends of the fourth quarter have
continued into the first two months of 2018 and our program
diversification is playing a key role. In addition, we are
executing prudent program expansion as the year progresses and we
are continuing to enter into new partnerships, as well as expand
existing partnerships, with corporations who are turning to Lincoln
to fill a critical need to find trained employees. For
instance, in late January, we announced a partnership with
commercial refrigerator innovator, Hussmann, and during the fourth
quarter, we expanded our Computer Numerical Control partnership
with Haas to our Indianapolis campus. At the same time, our
financial performance for 2018 should improve over last year as we
benefit from lower projected interest expense as a result of the
credit facility entered into early in 2017, as well as cost
reductions resulting from the closure of all campuses in our
Transitional segment.”
FOURTH QUARTER SEGMENT FINANCIAL
PERFORMANCE
Transportation and Skilled Trades
TST segment revenue decreased 1.5% to $45.9 million for the
three months ended December 31, 2017 from $46.6 million in the
prior year comparable period. The decrease in revenue was
driven by a 4.3% decline in average student population partially
offset by a 2.8% increase in average revenue per student compared
to the prior year comparable period.
Student starts for the quarter increased 7.2% compared to the
prior year comparable period. Increases in student starts can
be attributed to increased marketing investments as well as new or
expanded programs initiated during 2017.
Operating income was $8.9 million, a decrease of 4.9% from $9.4
million for the three months ended December 31, 2016.
Educational services and facilities expense decreased by $0.7
million, or 3.6% to $19.5 million for the three months ended
December 31, 2017 from $20.2 million in the prior year comparable
period. This decrease was primarily due to reductions in
facilities expense resulting from fully depreciated assets and more
favorable lease terms at one campus.
Selling, general and administrative expense increased by $0.5
million, or 2.9%, to $17.6 million for the three months ended
December 31, 2017 from $17.1 million in the prior year comparable
period. The increase was attributable to several factors
including increased administrative costs resulting from slightly
higher bad debt expense as well as increased marketing investment
that management believes is directly attributed to the increase in
start growth quarter over quarter.
Healthcare and Other Professions
HOP segment revenue increased by $1.0 million to $21.1 million
for the three months ended December 31, 2017 from $20.1 million in
the prior year comparable period. The increase in revenue is
mainly due to a 3.4% increase in average student population, in
combination with a 1.4% increase in average revenue per
student.
Student starts for the quarter increased 16.1% compared to the
prior year comparable period, which we attribute to the increased
marketing spend.
Operating income for the three months ended December 31, 2017
increased by $16.9 million to $3.4 million, compared to an
operating loss of $13.5 million in the prior year comparable
period. Included in the prior year operating loss of $13.5
million are non-cash impairment charges of $16.1 million.
Educational services and facilities expense increased by $0.2
million, or 2.5%, to $9.9 million for the three months ended
December 31, 2017 from $9.7 million in the prior year comparable
period. The majority of the increase was due to increased
instructional expenses and books and tools expenses.
Selling general and administrative expenses remained essentially
flat at $7.8 million for the three months ended December 31, 2017
and 2016.
Impairment of goodwill and long-lived assets decreased by $16.1
million due to the absence of impairment charges for the three
months ended December 31, 2017 as compared to non-cash impairment
charges of $16.1 million in the prior year comparable period.
Transitional
Transitional segment revenue was $0.4 million for the three
months ended December 31, 2017 as compared to $5.8 million in the
prior year comparable period due to the campus
closures.
Operating loss decreased by $6.6 million to $1.5 million for the
three months ended December 31, 2017 from $8.0 million in the prior
year comparable period. The reduction in net loss was a
result of closing schools in this segment. As of December 31,
2017, all operations in the Transitional segment were closed.
Corporate and Other
This category includes unallocated expenses incurred on behalf
of the company as a whole. Corporate and Other expenses
decreased by $3.5 million, or 53.9%, to $3.0 million from $6.5
million, for the prior year comparable period. The decrease
was primarily driven by a $2.6 million reduction in salaries and
benefits expense quarter over quarter in addition to a $1.4 million
impairment charge booked in 2016 for one of our corporate owned
properties. Partially offsetting these reductions were $0.4
million in increased closed school costs. The additional
closed school costs related to the closure of the Hartford,
Connecticut campus on December 31, 2016. The additional
expenses relating to the Hartford Connecticut campus will terminate
with the apartment lease previously used for student housing, which
will expire in September 2019.
2017 FULL YEAR FINANCIAL RESULTS
Revenue was $261.9 million for the year ended December 31, 2017
as compared to $285.6 million in the prior year.
Operating loss for the year ended December 31, 2017 decreased by
$24.2 million when compared to the prior year. Included in
the operating loss for the year ended December 31, 2017 is a $1.5
million gain on sale of assets relating to the sale of two of the
Company’s three properties located in Palm Beach County,
Florida. Included in the prior year’s net loss is a non-cash
impairment charge of $21.4 million and an operating loss of $15.2
million relating to the Transitional segment.
Educational services and facilities expense decreased by $15.0
million, or 10.4%, to $129.4 million for the year ended December
31, 2017 from $144.4 million in the prior year.
Selling, general and administrative expense decreased by $9.7
million, or 6.5%, to $138.8 million for the year ended December 31,
2017 from $148.4 million in the prior year. Transportation
and Skilled Trades segment revenue was $177.1 million for the year
ended December 31, 2017, as compared to $177.9 million in the prior
year.
Healthcare and Other Professions segment revenue was $76.3
million for the year ended December 31, 2017, as compared to $77.2
million in the prior year.
BALANCE SHEET INFORMATION
As of December 31, 2017, the Company had a net cash balance of
$1.2 million compared to a net cash balance of $3.4 million as of
December 31, 2016. The decrease in cash position can be
attributed to several factors including (i) $2.8 million in fees
paid for the early termination of the prior term loan as well as
fees incurred for the implementation of the new credit facility,
(ii) a $1.5 million lease termination fee paid in relation to the
Center City Philadelphia, Pennsylvania campus, and (iii) $5.4
million in closing costs associated with the Transitional
segment. Management believes that the Company has adequate
resources in place to execute its 2018 operating plan. .
Further, with the implementation of the new credit facility in the
first quarter of 2017, management believes that the Company has
adequate resources in place to execute its 2018 operating
plan. In addition, the Company anticipates a savings of $3
million annually in reduced interest expense.
2018 GUIDANCE
Management is providing the following guidance
for 2018:
- Revenue is expected to increase by low single digits, excluding
the 2017 Transitional segment, compared to the prior
year.
- Operating Income for 2018 is expected to be in the range of
breakeven and a loss of $3 million.
- Student starts are expected to increase by low single digits,
excluding the 2017 Transitional segment, compared to prior
year.
- Year-end population is expected to be greater than that of the
prior year.
CONFERENCE CALL INFO
Lincoln will host a conference call today at 10:00 a.m. Eastern
Daylight Time. The conference call can be accessed by going
to the IR portion of our website at www.lincolntech.edu. 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 can also listen to
the conference call by dialing 844-413-0946 (domestic) or
216-562-0456 (international) and providing access code 6886509.
Please log in or dial into the call at least 10 minutes prior to
the start time.
An archived version of the webcast will be accessible for 90
days at http://www.lincolntech.edu. A replay of the call will
also be available for seven days by calling 855-859-2056 (domestic)
or 404-537-3406 (international) and providing access code
6886509.
ABOUT LINCOLN EDUCATIONAL SERVICES
CORPORATION
Lincoln Educational Services Corporation is a provider of
diversified career-oriented post-secondary education and helping to
provide solutions to America’s skills gap. Lincoln offers recent
high school graduates and working adults degree and diploma
programs. The Company operates under three reportable
segments: Transportation and Skilled Trades, Healthcare and Other
Professions and Transitional. Lincoln has provided the nation’s
workforce with skilled technicians since its inception in 1946. For
more information, go to www.lincolntech.edu.
SAFE HARBOR
Statements in this press release and in oral
statements made from time to time by representatives of Lincoln
Educational Services Corporation regarding Lincoln’s business that
are not historical facts may be “forward-looking statements” as
that term is defined in the federal securities law. The words
“may,” “will,” “expect,” “believe,” “anticipate,” “project,”
“plan,” “intend,” “estimate,” and “continue,” and their opposites
and similar expressions are intended to identify forward-looking
statements. Forward-looking statements should not be read as a
guarantee of future performance or results, and will not
necessarily be accurate indications of the times at, or by, which
such performance or results will be achieved, if at all.
Generally, these statements relate to business plans or strategies,
projected or anticipated benefits from acquisitions or dispositions
to be made by the Company or projections involving anticipated
revenues, earnings or other aspects of the Company’s operating
results. The Company cautions you that these statements
concern current expectations about the Company’s future performance
or events and are subject to a number of uncertainties, risks and
other influences many of which are beyond the Company’s control,
that may influence the accuracy of the statements and the projects
upon which the statements are based. The events described in
forward-looking statements may not occur at all. Factors which may
affect the Company’s results include, but are not limited to, the
risks and uncertainties discussed in the Company’s Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K filed with the Securities and Exchange commission.
Any one or more of these uncertainties, risks and other influences
could materially affect the Company’s results of operations and
financial condition and whether forward-looking statements made by
the Company ultimately prove to be accurate and, as such, the
Company’s actual results, performance and achievements could
materially differ from those expressed or implied in these
forward-looking statements. Forward-looking statements are based on
information available at the time those statements are made and/or
management’s good faith belief as of that time with respect to
future events, and are subject to risks and uncertainties that
could cause actual performance or results to differ materially from
those expressed in or suggested by the forward-looking statements.
Important factors that could cause such differences include, but
are not limited to, our failure to comply with the extensive
regulatory framework applicable to our industry or our failure to
obtain timely regulatory approvals in connection with a change of
control of our Company or acquisitions; our success in updating and
expanding the content of existing programs and developing new
programs for our students in a cost-effective manner or on a timely
basis; risks associated with changes in applicable federal laws and
regulations; uncertainties regarding our ability to comply with
federal laws and regulations regarding the 90/10 rule and cohort
default rates; risks associated with the opening of new campuses;
risks associated with integration of acquired schools; industry
competition; our ability to execute our growth strategies;
conditions and trends in our industry; general economic conditions;
and other factors discussed in the “Risk Factors” section of our
annual and quarterly reports. All forward-looking statements are
qualified in their entirety by this cautionary statement, and
Lincoln undertakes no obligation to publicly revise or update any
forward-looking statements, whether as a result of new information,
future events or otherwise after the date hereof.
(Tables to Follow)(In Thousands)
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Year
Ended |
|
December
31, |
|
December
31, |
|
(Unaudited) |
|
(Unaudited) |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
REVENUE |
$ |
67,401 |
|
|
$ |
72,568 |
|
|
$ |
261,853 |
|
|
$ |
285,559 |
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
Educational services and facilities |
|
30,229 |
|
|
|
34,191 |
|
|
|
129,413 |
|
|
|
144,426 |
|
Selling,
general and administrative |
|
29,401 |
|
|
|
35,141 |
|
|
|
138,779 |
|
|
|
148,447 |
|
(Gain)
loss on sale of assets |
|
(4 |
) |
|
|
636 |
|
|
|
(1,623 |
) |
|
|
233 |
|
Impairment of goodwill and long-lived assets |
|
- |
|
|
|
21,367 |
|
|
|
- |
|
|
|
21,367 |
|
Total costs & expenses |
|
59,626 |
|
|
|
91,335 |
|
|
|
266,569 |
|
|
|
314,473 |
|
OPERATING INCOME
(LOSS) |
|
7,775 |
|
|
|
(18,767 |
) |
|
|
(4,716 |
) |
|
|
(28,914 |
) |
OTHER: |
|
|
|
|
|
|
|
Interest
income |
|
9 |
|
|
|
14 |
|
|
|
56 |
|
|
|
155 |
|
Interest
expense |
|
(501 |
) |
|
|
(1,503 |
) |
|
|
(7,098 |
) |
|
|
(6,131 |
) |
Other
income |
|
- |
|
|
|
1,678 |
|
|
|
- |
|
|
|
6,786 |
|
INCOME (LOSS) BEFORE INCOME TAXES |
|
7,283 |
|
|
|
(18,578 |
) |
|
|
(11,758 |
) |
|
|
(28,104 |
) |
(BENEFIT) PROVISION FOR
INCOME TAXES |
|
(424 |
) |
|
|
50 |
|
|
|
(274 |
) |
|
|
200 |
|
NET INCOME (LOSS) |
$ |
7,707 |
|
|
$ |
(18,628 |
) |
|
$ |
(11,484 |
) |
|
$ |
(28,304 |
) |
Basic |
|
|
|
|
|
|
|
Net income
(loss) per share |
$ |
0.32 |
|
|
$ |
(0.79 |
) |
|
$ |
(0.48 |
) |
|
$ |
(1.21 |
) |
Diluted |
|
|
|
|
|
|
|
Net income
(loss) per share |
$ |
0.31 |
|
|
$ |
(0.79 |
) |
|
$ |
(0.48 |
) |
|
$ |
(1.21 |
) |
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
24,025 |
|
|
|
23,514 |
|
|
|
23,906 |
|
|
|
23,453 |
|
Diluted |
|
24,590 |
|
|
|
23,514 |
|
|
|
23,906 |
|
|
|
23,453 |
|
|
|
|
|
|
|
|
|
Other
data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1) |
$ |
10,039 |
|
|
$ |
6,749 |
|
|
$ |
3,986 |
|
|
$ |
10,300 |
|
Depreciation and
amortization |
$ |
2,264 |
|
|
$ |
2,471 |
|
|
$ |
8,702 |
|
|
$ |
11,061 |
|
Number of campuses |
|
23 |
|
|
|
28 |
|
|
|
23 |
|
|
|
28 |
|
Average enrollment |
|
10,854 |
|
|
|
12,204 |
|
|
|
10,772 |
|
|
|
11,864 |
|
Stock-based
compensation |
$ |
272 |
|
|
$ |
354 |
|
|
$ |
1,220 |
|
|
$ |
1,442 |
|
Net cash provided by
(used in) operating activities |
$ |
5,286 |
|
|
$ |
3,406 |
|
|
$ |
(11,321 |
) |
|
$ |
(6,107 |
) |
Net cash used in
investing activities |
$ |
(33,782 |
) |
|
$ |
(1,539 |
) |
|
$ |
(22,885 |
) |
|
$ |
(2,182 |
) |
Net cash provided by
(used in) financing activities |
$ |
35,782 |
|
|
$ |
(43 |
) |
|
$ |
27,705 |
|
|
$ |
(9,067 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Consolidated Balance Sheet Data: |
December 31, 2017 |
(In thousands) |
(Unaudited) |
|
|
Cash and
cash equivalents |
$ |
14,563 |
Current
assets |
|
44,718 |
Working deficit |
|
(2,766) |
Total
assets |
|
155,213 |
Current
liabilities |
|
47,484 |
Long-term debt obligations, including current portion
|
|
52,593 |
Total
stockholders' equity |
|
45,813 |
|
|
|
|
(1) Reconciliation of Non-GAAP
Financial Measures
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 EDBITDA, Net cash, Net Income on a same school basis, and
EBITDA on a same school basis are measurements not recognized in
financial statements presented in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”). We define EBITDA as income (loss) before interest expense
(net of interest income), provision for income taxes, depreciation,
and amortization. Adjusted EBITDA includes non-cash charges related
to impairment of goodwill and long-lived assets. We define net cash
as cash, cash equivalents and restricted cash less long-term debt
including current portion. . We define Net Income on a same school
basis as net income for the entire company excluding the
Transitional segment. We define EBITDA on a same school basis as
income (loss) before interest expense (net of interest income),
provision for income taxes, depreciation and amortization for all
operating segments except the Transitional segment. EBITDA,
Adjusted EBITDA, Net cash, Net Income on a same school basis, and
EBITDA on a same school basis are presented because we believe they
are a useful indicator of our performance and our ability to make
strategic acquisitions and meet capital expenditure and debt
service requirements. However, it is 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 an indicator of operating
performance or to cash flow as a measure of liquidity. EBITDA,
Adjusted EBITDA, Net cash, Net Income on a same school basis, and
EBITDA on a same school basis are not necessarily comparable to
similarly titled measures used by other companies.
Following is a reconciliation of net loss to
EBITDA, Adjusted EBITDA, Net cash, and Net Income on a same school
basis, and EBITDA on a same school basis:
|
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended December
31, |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
7,707 |
|
|
$ |
(18,628 |
) |
|
$ |
(11,484 |
) |
|
$ |
(28,304 |
) |
Interest
expense, net |
|
492 |
|
|
|
1,489 |
|
|
|
7,042 |
|
|
|
5,976 |
|
(Benefit)
Provision for income taxes |
|
(424 |
) |
|
|
50 |
|
|
|
(274 |
) |
|
|
200 |
|
Depreciation and amortization |
|
2,264 |
|
|
|
2,471 |
|
|
|
8,702 |
|
|
|
11,061 |
|
EBITDA |
|
10,039 |
|
|
|
(14,618 |
) |
|
|
3,986 |
|
|
|
(11,067 |
) |
Impairment of goodwill and long-lived assets |
|
- |
|
|
|
21,367 |
|
|
|
- |
|
|
|
21,367 |
|
Adjusted EBITDA |
$ |
10,039 |
|
|
$ |
6,749 |
|
|
$ |
3,986 |
|
|
$ |
10,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
(Unaudited) |
|
Transportation and Skilled Trades |
|
Healthcare and Other Professions |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
8,899 |
|
|
$ |
9,303 |
|
|
$ |
3,364 |
|
|
$ |
(13,573 |
) |
Interest
expense, net |
|
2 |
|
|
|
58 |
|
|
|
3 |
|
|
|
24 |
|
(Benefit)
Provision for income taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Depreciation and amortization |
|
2,023 |
|
|
|
2,259 |
|
|
|
42 |
|
|
|
5 |
|
EBITDA |
|
10,924 |
|
|
|
11,620 |
|
|
|
3,409 |
|
|
|
(13,544 |
) |
Impairment of goodwill
and long-lived assets |
- |
|
|
- |
|
|
|
- |
|
|
|
16,132 |
|
Adjusted EBITDA |
$ |
10,924 |
|
|
$ |
11,620 |
|
|
$ |
3,409 |
|
|
$ |
2,588 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
(Unaudited) |
|
Transitional |
|
Corporate |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(1,479 |
) |
|
$ |
(8,052 |
) |
|
$ |
(3,077 |
) |
|
$ |
(6,306 |
) |
Interest
expense, net |
|
- |
|
|
|
12 |
|
|
|
487 |
|
|
|
1,395 |
|
(Benefit) Provision for income taxes |
|
- |
|
|
|
- |
|
|
|
(424 |
) |
|
|
50 |
|
Depreciation and amortization |
|
63 |
|
|
|
28 |
|
|
|
136 |
|
|
|
179 |
|
EBITDA |
|
(1,416 |
) |
|
|
(8,012 |
) |
|
|
(2,878 |
) |
|
|
(4,682 |
) |
Impairment of goodwill
and long-lived assets |
|
- |
|
|
|
3,848 |
|
|
|
- |
|
|
|
1,387 |
|
Adjusted EBITDA |
$ |
(1,416 |
) |
|
$ |
(4,164 |
) |
|
$ |
(2,878 |
) |
|
$ |
(3,295 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December
31, |
|
(Unaudited) |
|
Transportation and Skilled Trades |
|
Healthcare and Other Professions |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
17,877 |
|
|
$ |
21,182 |
|
|
$ |
2,317 |
|
|
$ |
(10,999 |
) |
Interest
expense, net |
|
(16 |
) |
|
|
96 |
|
|
|
3 |
|
|
|
83 |
|
Provision
for income taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Depreciation and amortization |
|
7,962 |
|
|
|
9,601 |
|
|
|
90 |
|
|
|
11 |
|
EBITDA |
|
25,823 |
|
|
|
30,879 |
|
|
|
2,410 |
|
|
|
(10,905 |
) |
Impairment of goodwill
and long-lived assets |
|
|
|
|
|
|
|
16,132 |
|
Adjusted EBITDA |
$ |
25,823 |
|
|
$ |
30,879 |
|
|
$ |
2,410 |
|
|
$ |
5,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December
31, |
|
(Unaudited) |
|
Transitional |
|
Corporate |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(5,376 |
) |
|
$ |
(15,206 |
) |
|
$ |
(26,302 |
) |
|
$ |
(23,281 |
) |
Interest
expense, net |
|
- |
|
|
|
113 |
|
|
|
7,055 |
|
|
|
5,684 |
|
(Benefit) Provision for income taxes |
|
- |
|
|
|
- |
|
|
|
(274 |
) |
|
|
200 |
|
Depreciation and amortization |
|
93 |
|
|
|
769 |
|
|
|
557 |
|
|
|
680 |
|
EBITDA |
|
(5,283 |
) |
|
|
(14,324 |
) |
|
|
(18,964 |
) |
|
|
(16,717 |
) |
Impairment of goodwill and long-lived assets |
|
- |
|
|
|
3,848 |
|
|
|
- |
|
|
|
1,387 |
|
Adjusted
EBITDA |
$ |
(5,283 |
) |
|
$ |
(10,476 |
) |
|
$ |
(18,964 |
) |
|
$ |
(15,330 |
) |
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
Current
portion of credit agreement and term loan |
|
$ |
- |
|
|
$ |
(11,713 |
) |
Long-term
credit agreement and term loan |
|
|
(52,593 |
) |
|
|
(30,244 |
) |
Deferred
finance fees |
|
|
(807 |
) |
|
|
(2,310 |
) |
Cash and
cash equivalents |
|
|
14,563 |
|
|
|
21,064 |
|
Restricted cash |
|
|
7,189 |
|
|
|
6,399 |
|
Noncurrent restricted cash |
|
|
32,802 |
|
|
|
20,252 |
|
Net debt (cash) |
|
$ |
1,154 |
|
|
$ |
3,448 |
|
|
|
|
|
Three Months Ended
December 31, |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Total |
|
Transitional |
|
Net
Income |
|
|
Company |
|
Segment |
|
Same School
Basis |
|
|
|
2017 |
|
|
|
2017 |
|
|
|
2017 |
|
Net
Income (loss) |
|
$ |
7,707 |
|
|
$ |
(1,479 |
) |
|
$ |
9,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Total |
|
Transitional |
|
EBITDA |
|
|
Company |
|
Segment |
|
Same School
Basis |
|
|
2017 |
|
2017 |
|
2017 |
|
|
|
|
|
|
Net loss |
|
$ |
7,707 |
|
|
$ |
(1,479 |
) |
|
$ |
9,186 |
|
Interest
expense, net |
|
|
492 |
|
|
|
- |
|
|
|
492 |
|
Benefit
for income taxes |
|
|
(424 |
) |
|
|
- |
|
|
|
(424 |
) |
Depreciation and amortization |
|
|
2,264 |
|
|
|
63 |
|
|
|
2,201 |
|
EBITDA |
|
$ |
10,039 |
|
|
$ |
(1,416 |
) |
|
$ |
11,455 |
|
|
|
|
|
Three Months Ended
December 31, |
|
(Unaudited) |
|
|
|
|
|
|
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Same
School |
|
Total Company |
|
Transitional
Segment |
|
Student StartsSame
School Basis |
|
Basis |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
Student
Starts |
|
1,893 |
|
|
1,900 |
|
|
- |
|
|
198 |
|
|
1,893 |
|
|
1,702 |
|
11.2% |
|
|
|
Three Months Months Ended Dec.
31, |
|
2017 |
|
2016 |
|
% Change |
|
|
|
(Unaudited) |
|
|
Revenue: |
|
|
|
|
|
Transportation and
Skilled Trades |
$ |
45,931 |
|
|
$ |
46,639 |
|
|
-1.5 |
% |
Healthcare and Other
Professions |
|
21,110 |
|
|
|
20,123 |
|
|
4.9 |
% |
Transitional |
|
360 |
|
|
|
5,806 |
|
|
-93.8 |
% |
Total |
$ |
67,401 |
|
|
$ |
72,568 |
|
|
-7.1 |
% |
|
|
|
|
|
|
Operating
Income (Loss): |
|
|
|
|
|
Transportation and
Skilled Trades |
$ |
8,902 |
|
|
$ |
9,360 |
|
|
-4.9 |
% |
Healthcare and Other
Professions |
|
3,366 |
|
|
|
(13,549 |
) |
|
-124.8 |
% |
Transitional |
|
(1,480 |
) |
|
|
(8,039 |
) |
|
81.6 |
% |
Corporate |
|
(3,013 |
) |
|
|
(6,539 |
) |
|
53.9 |
% |
Total |
$ |
7,775 |
|
|
$ |
(18,767 |
) |
|
141.4 |
% |
|
|
|
|
|
|
Starts: |
|
|
|
|
|
Transportation and
Skilled Trades |
|
1,008 |
|
|
|
940 |
|
|
7.2 |
% |
Healthcare and Other
Professions |
|
885 |
|
|
|
762 |
|
|
16.1 |
% |
Transitional |
|
- |
|
|
|
198 |
|
|
-100.0 |
% |
Total |
|
1,893 |
|
|
|
1,900 |
|
|
-0.4 |
% |
|
|
|
|
|
|
Average
Population: |
|
|
|
|
|
Transportation and
Skilled Trades |
|
6,927 |
|
|
|
7,236 |
|
|
-4.3 |
% |
Healthcare and Other
Professions |
|
3,845 |
|
|
|
3,717 |
|
|
3.4 |
% |
Transitional |
|
82 |
|
|
|
1,250 |
|
|
-93.4 |
% |
Total |
|
10,854 |
|
|
|
12,203 |
|
|
-11.1 |
% |
|
|
|
|
|
|
End of Period
Population: |
|
|
|
|
|
Transportation and
Skilled Trades |
|
6,413 |
|
|
|
6,700 |
|
|
-4.3 |
% |
Healthcare and Other
Professions |
|
3,746 |
|
|
|
3,587 |
|
|
4.4 |
% |
Transitional |
|
- |
|
|
|
948 |
|
|
-100.0 |
% |
Total |
|
10,159 |
|
|
|
11,235 |
|
|
-9.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended Dec.
31, |
|
|
2017 |
|
2016 |
|
% Change |
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
Transportation and
Skilled Trades |
|
$ |
177,099 |
|
|
$ |
177,883 |
|
|
-0.4 |
% |
Healthcare and Other
Professions |
|
|
76,310 |
|
|
|
77,152 |
|
|
-1.1 |
% |
Transitional |
|
|
8,444 |
|
|
|
30,524 |
|
|
-72.3 |
% |
Total |
|
$ |
261,853 |
|
|
$ |
285,559 |
|
|
-8.3 |
% |
|
|
|
|
|
|
|
Operating
Income (Loss): |
|
|
|
|
|
|
Transportation and
Skilled Trades |
|
$ |
17,861 |
|
|
$ |
21,278 |
|
|
-16.1 |
% |
Healthcare and Other
Professions |
|
|
2,318 |
|
|
|
(10,917 |
) |
|
-121.2 |
% |
Transitional |
|
|
(5,379 |
) |
|
|
(15,170 |
) |
|
64.5 |
% |
Corporate |
|
|
(19,516 |
) |
|
|
(24,105 |
) |
|
19.0 |
% |
Total |
|
$ |
(4,716 |
) |
|
$ |
(28,914 |
) |
|
83.7 |
% |
|
|
|
|
|
|
|
Starts: |
|
|
|
|
|
|
Transportation and
Skilled Trades |
|
|
7,510 |
|
|
|
7,626 |
|
|
-1.5 |
% |
Healthcare and Other
Professions |
|
|
4,157 |
|
|
|
4,148 |
|
|
0.2 |
% |
Transitional |
|
|
132 |
|
|
|
1,452 |
|
|
-90.9 |
% |
Total |
|
|
11,799 |
|
|
|
13,226 |
|
|
-10.8 |
% |
|
|
|
|
|
|
|
Average
Population: |
|
|
|
|
|
|
Transportation and
Skilled Trades |
|
|
6,752 |
|
|
|
6,852 |
|
|
-1.5 |
% |
Healthcare and Other
Professions |
|
|
3,569 |
|
|
|
3,560 |
|
|
0.3 |
% |
Transitional |
|
|
451 |
|
|
|
1,452 |
|
|
-68.9 |
% |
Total |
|
|
10,772 |
|
|
|
11,864 |
|
|
-9.2 |
% |
|
|
|
|
|
|
|
End of Period
Population: |
|
|
|
|
|
|
Transportation and
Skilled Trades |
|
|
6,413 |
|
|
|
6,700 |
|
|
-4.3 |
% |
Healthcare and Other
Professions |
|
|
3,746 |
|
|
|
3,587 |
|
|
4.4 |
% |
Transitional |
|
|
- |
|
|
|
948 |
|
|
-100.0 |
% |
Total |
|
|
10,159 |
|
|
|
11,235 |
|
|
-9.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LINCOLN EDUCATIONAL SERVICES CORPORATIONBrian
Meyers, CFO973-736-9340
EVC GROUP, Inc.Investor Relations: Doug Sherk,
dsherk@evcgroup.com; 415-652-9100Media Relations: Tom Gibson,
201-476-0322
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