Lincoln Educational Services Reports 28.8% Revenue Growth and Significant Operating and Net Income Improvement for the Second Quarter
Previously Provided Guidance for Revenue, Adjusted EBITDA and Income Before Taxes are Refined Due to Better-than-Expected First Half Results
Conference call today at 10 a.m. ET
Second Quarter 2021 vs Second Quarter 2020 Operating and Financial Highlights
- Revenue increased 28.8% to
$80.5 million . - Student starts increased 8.0% including approximately 300 students impacted by COVID-19 with delayed start dates from Q1 to Q2 2020. After adjustment for these students, student starts increased 19.1%. Year-to-date student starts up, 18.0%.
- Operating income of
$3.5 million versus$1.2 million . - Net income of
$2.4 million versus$0.8 million ; EPS per diluted share of$0.06 versus$0.02 . - Adjusted EBITDA* of
$6.1 million versus$3.4 million . - Cash provided by operations of
$9.4 million . - Ending student population up 11.0% to 12,860.
*See Use of “Non-GAAP Financial Information” below.
“Our second quarter generated solid financial performance across each of our campuses as we continue to adjust our operations in light of fluid local and regional pandemic regulations to meet the training and educational needs of our students, protect our staff, and help our corporate partners close their skills gap,” commented
2021 SECOND QUARTER FINANCIAL RESULTS
(Quarter ended
- Revenue increased
$18.0 million , or 28.8% to$80.5 million from$62.5 million in the prior year comparable quarter. The increase in revenue was driven by several factors including a 16.3% increase in average student population, driven by a higher beginning student population and continued student start growth in addition to the normalization of our revenue stream driven by the return to in-person instruction at all of our campuses in the current year - Student starts increased 19.1% when adjusting for approximately 300 student starts initially scheduled for last year’s first quarter that were delayed to the 2020 second quarter due to the onset of the pandemic. When including these students in last year’s second quarter, student start growth increased 8.0% over prior year.
- Educational services and facilities expense increased
$7.5 million , or 28.4% to$33.7 million from$26.2 million in the prior year. Instructional expense and books and tools expense increased as a result of a growing student population in addition to operating with a hybrid remote and in-person instruction in the current year compared to remote learning in the prior year. Similarly, facilities expense increased compared to 2020 due to one-time rent reductions coupled with overall facilities savings during campus closures as a result of COVID-19. - Selling, general and administrative expense increased
$8.1 million , or 23.2% to$43.3 million from$35.2 million in the prior year comparable period. The additional expenses were driven by several factors including an increased student population; the normalization of operating expenses in the current year as students returned to in-person instruction; an improved business climate as the country begins to reopen and a$1.5 million increase in incentive compensation tied directly to improved financial performance. - Operating income increased to
$3.5 million from$1.2 million in the prior year. - Pre-tax income increased to
$3.2 million , from$0.8 million in the prior year. - Net income improved to
$2.4 million , or$0.06 per diluted share, compared to$0.8 million , or$0.02 per diluted share.
SECOND QUARTER SEGMENT RESULTS
Transportation and Skilled Trades Segment
Revenue increased
Operating income improved to
Healthcare and Other Professions Segment
Revenue increased
While operating income increased to
Corporate and Other
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were
SIX MONTHS FINANCIAL RESULTS
(Period ended
- Total revenue increased by $26.0 million, or 19.6%, to $158.5 million, as compared to $132.5 million in the prior year comparable period.
- Transportation and Skilled Trades segment revenue increased to $112.6 million a $20.6 million increase compared to $92.0 million in 2020.
- The Healthcare and Other Professions segment revenue increased to $45.8 million a $5.3 million increase compared to $40.5 million in 2020.
- Operating income increased to $9.5 million as compared to an operating loss of $0.2 million in the prior year comparable period.
FULL YEAR 2021 OUTLOOK
As a result of the company’s performance in the first half and management’s outlook for the remainder of the year, Lincoln is refining its 2021 full year guidance.
- Annual revenue growth of 9% to 12% over 2020, compared to the previous guidance of 7% to 12%.
- Full year student starts growth of 5% to 10% over 2020, the same as previously communicated.
- Adjusted EBITDA of between
$34.0 million and$37.0 million , compared to the previous guidance of$32.0 million to$37.0 million and$23.9 million in 2020. - Pre-tax Income of between
$24.0 million and$27.0 million , compared to the previous guidance of$22.0 million to$27.0 million and$13.5 million in 2020. - Capital expenditures of approximately
$7.5 million .
*Adjusted EBITDA is defined as EBITDA plus non-cash stock compensation expense.
CONFERENCE CALL INFO
Lincoln will host a conference call today at
Participants can also listen to the conference call by dialing 844-413-0946 (domestic) or 216-562-0456 (international) and providing access code 6859917.
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 6859917.
ABOUT
SAFE HARBOR
Statements in this press release and in oral statements made from time to time by representatives of
(Tables to Follow)
(In Thousands)
Three Months Ended | Six Months Ended | ||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
REVENUE | $ | 80,464 | $ | 62,470 | $ | 158,461 | $ | 132,511 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Educational services and facilities | 33,694 | 26,245 | 66,037 | 56,482 | |||||||||||
Selling, general and administrative | 43,318 | 35,162 | 82,951 | 76,310 | |||||||||||
(Gain) loss on disposition of assets | - | (97 | ) | 1 | (96 | ) | |||||||||
Total costs & expenses | 77,012 | 61,310 | 148,989 | 132,696 | |||||||||||
OPERATING INCOME (LOSS) | 3,452 | 1,160 | 9,472 | (185 | ) | ||||||||||
OTHER: | |||||||||||||||
Interest expense | (297 | ) | (327 | ) | (582 | ) | (682 | ) | |||||||
INCOME (LOSS) BEFORE INCOME TAXES | 3,155 | 833 | 8,890 | (867 | ) | ||||||||||
PROVISION FOR INCOME TAXES | 729 | 50 | 1,975 | 100 | |||||||||||
NET INCOME (LOSS) | $ | 2,426 | $ | 783 | $ | 6,915 | $ | (967 | ) | ||||||
PREFERRED STOCK DIVIDENDS | 304 | - | 608 | - | |||||||||||
INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | 2,122 | $ | 783 | $ | 6,307 | $ | (967 | ) | ||||||
Basic | |||||||||||||||
Net income (loss) per common share | $ | 0.06 | $ | 0.02 | $ | 0.19 | $ | (0.06 | ) | ||||||
Diluted | |||||||||||||||
Net income (loss) per common share | $ | 0.06 | $ | 0.02 | $ | 0.19 | $ | (0.06 | ) | ||||||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic | 25,105 | 24,741 | 24,997 | 24,670 | |||||||||||
Diluted | 25,105 | 24,741 | 24,997 | 24,670 | |||||||||||
Other data: | |||||||||||||||
Adjusted EBITDA (1) | $ | 6,089 | $ | 3,359 | $ | 14,501 | $ | 4,195 | |||||||
Depreciation and amortization | $ | 1,793 | $ | 1,874 | $ | 3,693 | $ | 3,763 | |||||||
Number of campuses | 22 | 22 | 22 | 22 | |||||||||||
Average enrollment | 12,482 | 10,735 | 12,410 | 10,986 | |||||||||||
Stock-based compensation | $ | 844 | $ | 325 | $ | 1,336 | $ | 617 | |||||||
Net cash provided by operating activities | $ | 9,366 | $ | 18,415 | $ | 1,067 | $ | 6,468 | |||||||
Net cash used in investing activities | $ | (2,297 | ) | $ | (1,688 | ) | $ | (3,516 | ) | $ | (2,975 | ) | |||
Net cash used in financing activities | $ | (804 | ) | $ | (500 | ) | $ | (2,570 | ) | $ | (16,169 | ) | |||
Selected Consolidated Balance Sheet Data: | |||
(Unaudited) |
|||
Cash and cash equivalents | $ | 33,007 | |
Current assets | 72,500 | ||
Working capital | 10,026 | ||
Total assets | 244,646 | ||
Current liabilities | 62,474 | ||
Long-term debt obligations, including current portion, net of deferred financing fees | 16,303 | ||
Series A convertible preferred stock | 11,982 | ||
Total stockholders’ equity | 97,741 | ||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
In addition to disclosing financial results that are determined in accordance with
- 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.
EBITDA and Adjusted EBITDA are presented because we believe they are useful indicators of our performance and our ability to make strategic acquisitions 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 and Adjusted EBITDA are not necessarily comparable to similarly titled measures used by other companies.
Following is a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA:
Three Months Ended |
Six Months Ended |
|||||||||||
(Unaudited) | (Unaudited) | |||||||||||
2021 | 2020 | 2021 | 2020 |
|||||||||
Net income (loss) | $ | 2,426 | $ | 783 | $ | 6,915 | $ | (967 | ) | |||
Interest expense, net | 297 | 327 | 582 | 682 | ||||||||
Provision for income taxes | 729 | 50 | 1,975 | 100 | ||||||||
Depreciation and amortization | 1,793 | 1,874 | 3,693 | 3,763 | ||||||||
EBITDA | 5,245 | 3,034 | 13,165 | 3,578 | ||||||||
Stock compensation expense | 844 | 325 | 1,336 | 617 | ||||||||
Adjusted EBITDA | $ | 6,089 | $ | 3,359 | $ | 14,501 | $ | 4,195 | ||||
Three Months Ended |
|||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Transportation and Skilled Trades | Healthcare and Other Professions | Corporate | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 |
2020 | ||||||||||||||
Net income (loss) | $ | 11,256 | $ | 4,870 | $ | 2,962 | $ | 2,731 | $ | (11,792 | ) | $ | (6,818 | ) | |||||
Interest expense, net | - | - | - | - | 297 | 327 | |||||||||||||
Provision for income taxes | - | - | - | - | 729 | 50 | |||||||||||||
Depreciation and amortization | 1,588 | 1,643 | 102 | 117 | 103 | 114 | |||||||||||||
EBITDA | 12,844 | 6,513 | 3,064 | 2,848 | (10,663 | ) | (6,327 | ) | |||||||||||
Stock compensation expense | - | - | - | - | 844 | 325 | |||||||||||||
Adjusted EBITDA | $ | 12,844 | $ | 6,513 | $ | 3,064 | $ | 2,848 | $ | (9,819 | ) | $ | (6,002 | ) | |||||
Six Months Months Ended |
|||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Transportation and Skilled Trades | Healthcare and Other Professions | Corporate | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
Net income (loss) | $ | 23,581 | $ | 9,710 | $ | 5,910 | $ | 4,732 | $ | (22,576 | ) | $ | (15,409 | ) | |||||
Interest expense, net | - | - | - | - | 582 | 682 | |||||||||||||
Provision for income taxes | - | - | - | - | 1,975 | 100 | |||||||||||||
Depreciation and amortization | 3,260 | 3,301 | 218 | 237 | 215 | 225 | |||||||||||||
EBITDA | 26,841 | 13,011 | 6,128 | 4,969 | (19,804 | ) | (14,402 | ) | |||||||||||
Stock compensation expense | - | - | - | - | 1,336 | 617 | |||||||||||||
Adjusted EBITDA | $ | 26,841 | $ | 13,011 | $ | 6,128 | $ | 4,969 | $ | (18,468 | ) | $ | (13,785 | ) | |||||
Three Months Ended |
||||||||||
2021 | 2020 | % Change | ||||||||
Revenue: | ||||||||||
Transportation and Skilled Trades | $ | 56,965 | $ | 42,915 | 32.7 | % | ||||
Healthcare and Other Professions | 23,499 | 19,555 | 20.2 | % | ||||||
Total | $ | 80,464 | $ | 62,470 | 28.8 | % | ||||
Operating Income: | ||||||||||
Transportation and Skilled Trades | $ | 11,256 | $ | 4,870 | 131.1 | % | ||||
Healthcare and Other Professions | 2,962 | 2,731 | 8.5 | % | ||||||
Corporate | (10,766 | ) | (6,441 | ) | -67.1 | % | ||||
Total | $ | 3,452 | $ | 1,160 | 197.6 | % | ||||
Starts: | ||||||||||
Transportation and Skilled Trades | 2,509 | 2,302 | 9.0 | % | ||||||
Healthcare and Other Professions | 1,194 | 1,127 | 5.9 | % | ||||||
Total | 3,703 | 3,429 | 8.0 | % | ||||||
Average Population: | ||||||||||
Transportation and Skilled Trades | 8,039 | 7,298 | 10.2 | % | ||||||
Leave of Absence - COVID-19 | (25 | ) | (424 | ) | 94.1 | % | ||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 8,014 | 6,874 | 16.6 | % | ||||||
Healthcare and Other Professions | 4,508 | 4,254 | 6.0 | % | ||||||
Leave of Absence - COVID-19 | (40 | ) | (393 | ) | 89.8 | % | ||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,468 | 3,861 | 15.7 | % | ||||||
Total | 12,547 | 11,552 | 8.6 | % | ||||||
Total Excluding Leave of Absence - COVID-19 | 12,482 | 10,735 | 16.3 | % | ||||||
End of Period Population: | ||||||||||
Transportation and Skilled Trades | 8,467 | 7,826 | 8.2 | % | ||||||
Leave of Absence - COVID-19 | (7 | ) | (463 | ) | 98.5 | % | ||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 8,460 | 7,363 | 14.9 | % | ||||||
Healthcare and Other Professions | 4,410 | 4,456 | -1.0 | % | ||||||
Leave of Absence - COVID-19 | (10 | ) | (233 | ) | 95.7 | % | ||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,400 | 4,223 | 4.2 | % | ||||||
Total | 12,877 | 12,282 | 4.8 | % | ||||||
Total Excluding Leave of Absence - COVID-19 | 12,860 | 11,586 | 11.0 | % | ||||||
Six Months Ended |
||||||||||
2021 | 2020 | % Change | ||||||||
Revenue: | ||||||||||
Transportation and Skilled Trades | $ | 112,636 | $ | 91,971 | 22.5 | % | ||||
Healthcare and Other Professions | 45,825 | 40,540 | 13.0 | % | ||||||
Total | $ | 158,461 | $ | 132,511 | 19.6 | % | ||||
Operating Income (Loss): | ||||||||||
Transportation and Skilled Trades | $ | 23,581 | $ | 9,708 | 142.9 | % | ||||
Healthcare and Other Professions | 5,911 | 4,733 | 24.9 | % | ||||||
Corporate | (20,020 | ) | (14,626 | ) | -36.9 | % | ||||
Total | $ | 9,472 | $ | (185 | ) | 5220.0 | % | |||
Starts: | ||||||||||
Transportation and Skilled Trades | 4,848 | 4,022 | 20.5 | % | ||||||
Healthcare and Other Professions | 2,403 | 2,123 | 13.2 | % | ||||||
Total | 7,251 | 6,145 | 18.0 | % | ||||||
Average Population: | ||||||||||
Transportation and Skilled Trades | 8,036 | 7,302 | 10.1 | % | ||||||
Leave of Absence - COVID-19 | (20 | ) | (223 | ) | 91.0 | % | ||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 8,016 | 7,079 | 13.2 | % | ||||||
Healthcare and Other Professions | 4,459 | 4,120 | 8.2 | % | ||||||
Leave of Absence - COVID-19 | (65 | ) | (213 | ) | 69.5 | % | ||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,394 | 3,907 | 12.5 | % | ||||||
Total | 12,495 | 11,422 | 9.4 | % | ||||||
Total Excluding Leave of Absence - COVID-19 | 12,410 | 10,986 | 13.0 | % | ||||||
End of Period Population: | ||||||||||
Transportation and Skilled Trades | 8,467 | 7,826 | 8.2 | % | ||||||
Leave of Absence - COVID-19 | (7 | ) | (463 | ) | 98.5 | % | ||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 8,460 | 7,363 | 14.9 | % | ||||||
Healthcare and Other Professions | 4,410 | 4,456 | -1.0 | % | ||||||
Leave of Absence - COVID-19 | (10 | ) | (233 | ) | 95.7 | % | ||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,400 | 4,223 | 4.2 | % | ||||||
Total | 12,877 | 12,282 | 4.8 | % | ||||||
Total Excluding Leave of Absence - COVID-19 | 12,860 | 11,586 | 11.0 | % | ||||||
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