Lincoln Educational Services Corporation Reports First Quarter 2016 Financial Results
- First Quarter Total Revenue of
$70.6 million - First Quarter Revenue from Continuing Operations of
$43.4 million - First Quarter Net Loss of
$6.1 million , or$0.26 per share - Cash, Cash Equivalents and Restricted Cash of
$47.8 million - Conference Call Today at
10 a.m. ET
“We began 2016 by executing on the initiatives we have put into place over the last 18 months in our efforts to position Lincoln for a transitional year as we work towards achieving sustainable profitability and improved student outcomes,” commented
We continue to build corporate partnerships with employers seeking to tap into our rich pool of talented graduates. We also announced a new agreement with
“The operational efficiencies we put into place, including a streamlined internal infrastructure and a reorganized sales leadership, have helped to control costs as we transition to a leaner, more nimble organization focused on providing a value added experience for students. As Lincoln celebrates its 70th anniversary of preparing students with hands on vocational training, we remain focused on our long-term strategy to increase starts and grow revenue while trending towards profitability and enhanced shareholder value.”
FIRST QUARTER RESULTS (CONTINUING OPERATIONS):
In
The Company’s educational services and facilities expenses from continuing operations increased by
Selling, general and administrative expenses for continuing operations decreased by
The first quarter’s net loss from continuing operations was
FIRST QUARTER SEGMENT FINANCIAL PERFORMANCE
Transportation and Skilled Trades segment revenue was
The Transitional segment revenue was
Corporate expense decreased by
DISCONTINUED OPERATIONS
Operating income for Healthcare and Other Professions increased by
2016 OUTLOOK
The Company reaffirms the guidance provided on
- As of
March 31, 2016 , the Company officially closed itsFern Park, Florida facility and continues to reaffirm prior year guidance to fully exit the Transitional segment and to reduce losses incurred by continuing to take measures to ensure the timely closure of theHartford, Connecticut campus by the end of the year. - The Company expects revenue from the Transportation and Skilled Trades segment to decline by low to mid-single digits compared to 2015’s revenue from this segment. Lincoln anticipates ending 2016 with the same overall student population level as existed at the beginning of the year, approximately 6,600 students from the Transportation and Skilled Trades segment.
- In addition, the Company continues to anticipate generating slightly positive net income for the year from continuing operations excluding the Transitional segment. The profitability outlook includes a non-cash gain in 2016 of approximately
$6.6 million relating to a lease amendment.
CONFERENCE CALL INFO
Lincoln will host a conference call today at
An archived version of the webcast will be accessible for 90 days at http://www.lincolnedu.com. 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 92609210.
ABOUT
SAFE HARBOR
Statements in this press release regarding Lincoln’s business that are not historical facts may be “forward-looking statements” that involve risks and uncertainties. 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. 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 in a cost-effective manner or on a timely basis; risks associated with changes in applicable federal laws and regulations, including final rules that took effect during 2011 and other pending rulemaking by the
(Tables to Follow)
Three Months Ended | ||||||||
March 31, | ||||||||
(Unaudited) | ||||||||
2016 | 2015 | |||||||
REVENUE | $ | 43,443 | $ | 47,674 | ||||
COSTS AND EXPENSES: | ||||||||
Educational services and facilities | 23,144 | 22,914 | ||||||
Selling, general and administrative | 27,012 | 29,639 | ||||||
Gain on sale of assets | (389 | ) | (43 | ) | ||||
Total costs & expenses | 49,767 | 52,510 | ||||||
OPERATING LOSS | (6,324 | ) | (4,836 | ) | ||||
OTHER: | ||||||||
Interest income | 64 | 9 | ||||||
Interest expense | (1,572 | ) | (1,488 | ) | ||||
Other income | 1,753 | 223 | ||||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (6,079 | ) | (6,092 | ) | ||||
PROVISION FOR INCOME TAXES | 50 | 50 | ||||||
LOSS FROM CONTINUING OPERATIONS | (6,129 | ) | (6,142 | ) | ||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES | 61 | (741 | ) | |||||
NET LOSS | $ | (6,068 | ) | $ | (6,883 | ) | ||
Basic | ||||||||
Loss per share from continuing operations | $ | (0.26 | ) | $ | (0.27 | ) | ||
Income (loss) per share from discontinued operations | 0.00 | (0.03 | ) | |||||
Net loss per share | $ | (0.26 | ) | $ | (0.30 | ) | ||
Diluted | ||||||||
Loss per share from continuing operations | $ | (0.26 | ) | $ | (0.27 | ) | ||
Income (loss) per share from discontinued operations | 0.00 | (0.03 | ) | |||||
Net loss per share | $ | (0.26 | ) | $ | (0.30 | ) | ||
Weighted average number of common shares outstanding: | ||||||||
Basic | 23,351 | 23,056 | ||||||
Diluted | 23,351 | 23,056 | ||||||
Other data: | ||||||||
EBITDA (1) | $ | (4,162 | ) | $ | (4,569 | ) | ||
Depreciation and amortization from continuing operations | $ | 3,418 | $ | 3,002 | ||||
Number of campuses/training sites from continuing operations | 13 | 14 | ||||||
Average enrollment from continuing operations | 6,715 | 7,629 | ||||||
Stock-based compensation | $ | 373 | $ | 332 | ||||
Net cash used in operating activities | $ | (9,169 | ) | $ | (6,305 | ) | ||
Net cash used in investing activities | $ | (73 | ) | $ | (679 | ) | ||
Net cash used in financing activities | $ | (9,012 | ) | $ | (135 | ) | ||
Selected Consolidated Balance Sheet Data: | March 31, 2016 | |||
(In thousands) | ||||
Cash and cash equivalents | $ | 20,166 | ||
Restricted cash | 27,637 | |||
Current assets | 89,181 | |||
Working capital | 14,958 | |||
Total assets | 190,300 | |||
Current liabilities | 74,223 | |||
Long-term debt and finance | ||||
obligations, including current portion | 46,320 | |||
Total stockholders' equity | 75,423 | |||
(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 and Total Revenue are measurements not recognized in financial statements presented in accordance with accounting principles generally accepted in
Following is a reconciliation of net loss from continuing operations to EBITDA and Total Revenue:
Three Months Ended March 31, | |||||||
(Unaudited) | |||||||
2016 | 2015 | ||||||
Net loss from continuing operations | $ | (6,129 | ) | $ | (6,142 | ) | |
Interest expense, net | (1,508 | ) | (1,479 | ) | |||
Provision for income taxes | 50 | 50 | |||||
Depreciation and amortization | 3,425 | 3,002 | |||||
EBITDA | (4,162 | ) | (4,569 | ) | |||
Three Months Ended March 31, | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Transportation and Skilled Trades | Transitional | Corporate | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Net income (loss) from continuing operations | $ | 3,369 | $ | 4,592 | $ | (2,968 | ) | $ | (2,130 | ) | $ | (6,530 | ) | $ | (8,604 | ) | ||||||||
Interest income (expense), net | 4 | (382 | ) | (77 | ) | (531 | ) | (1,435 | ) | (566 | ) | |||||||||||||
Provision for income taxes | - | - | - | - | 50 | 50 | ||||||||||||||||||
Depreciation and amortization | 2,534 | 2,298 | 704 | 494 | 186 | 210 | ||||||||||||||||||
EBITDA | 5,907 | 6,508 | (2,341 | ) | (2,167 | ) | (7,729 | ) | (8,910 | ) | ||||||||||||||
Three Months Ended March 31, | |||||||
(Unaudited) | |||||||
2016 | 2015 | ||||||
Revenue from continuing operations | $ | 43,443 | $ | 47,674 | |||
Revenue from discontinued operation | 27,201 | 29,046 | |||||
Total revenue | $ | 70,644 | $ | 76,720 | |||
Three Months Ended March 31, | ||||||||||||
(Unaudited) | ||||||||||||
2016 | 2015 | % Change | ||||||||||
Revenue: | ||||||||||||
Transportation and Skilled Trades | $ | 42,271 | $ | 44,844 | -5.7 | % | ||||||
Transitional | 1,172 | 2,830 | -58.6 | % | ||||||||
Total | $ | 43,443 | $ | 47,674 | -8.9 | % | ||||||
Operating Income (Loss): | ||||||||||||
Transportation and Skilled Trades | $ | 3,365 | $ | 4,976 | -32.4 | % | ||||||
Transitional | (2,966 | ) | (1,823 | ) | -62.7 | % | ||||||
Corporate | (6,723 | ) | (7,989 | ) | 15.8 | % | ||||||
Total | $ | (6,324 | ) | $ | (4,836 | ) | -30.8 | % | ||||
Starts: | ||||||||||||
Transportation and Skilled Trades | 1,660 | 1,787 | -7.1 | % | ||||||||
Transitional | - | 82 | -100.0 | % | ||||||||
Total | 1,660 | 1,869 | -11.2 | % | ||||||||
Average Population: | ||||||||||||
Transportation and Skilled Trades | 6,553 | 7,223 | -9.3 | % | ||||||||
Transitional | 162 | 406 | -60.1 | % | ||||||||
Total | 6,715 | 7,629 | -12.0 | % | ||||||||
End of Period Population: | ||||||||||||
Transportation and Skilled Trades | 6,684 | 7,215 | -7.4 | % | ||||||||
Transitional | 122 | 375 | -67.5 | % | ||||||||
Total | 6,806 | 7,590 | -10.3 | % | ||||||||
LINCOLN EDUCATIONAL SERVICES CORPORATION Brian Meyers , CFO 973-736-9340 EVC GROUP, INVESTOR RELATIONS:Doug Sherk , dsherk@evcgroup.com; 415-652-9100Chris Dailey , cdailey@evcgroup.com; 646-445-4801