Lincoln Educational Services Reports 30.6% Student Start Growth, Double Digit Revenue Growth, Significant Operating and Net Income Improvement During Q1; Raises 2021 Guidance
First Quarter 2021 vs First Quarter 2020 Operating and Financial Highlights
- New student starts rose 30.6%, or by approximately 800 students.
- Ending student population increased 15.5% to 12,646.
- Revenue increased 11.4% to
$78.0 million . - Operating income of
$6.0 million versus operating loss of$1.3 million . - Net income of
$4.5 million versus net loss of$1.8 million . - Adjusted EBITDA* of
$8.4 million versus$0.8 million .
*See Use of “Non-GAAP Financial Information” below.
“Lincoln is off to a strong start in 2021 and the first quarter put us ahead of our plan for the full year. As a result of our performance, and the trends we are experiencing and expect for the remainder of the year, we have been able to increase some of our annual guidance metrics,” commented
“Student start growth continued to accelerate during the quarter, reflecting the continued effectiveness of our marketing initiatives. During the second quarter, we plan to launch a new Medical Assistant program, and a Welding program, at two of our existing campuses. With the increased attention in
2021 FIRST QUARTER FINANCIAL RESULTS
(Quarter ended
- Revenue increased
$8.0 million , or 11.4% to$78.0 million from$70.0 million . The increase was largely due to the 9.8% increase in average student population compared to the prior year. The primary revenue drivers were beginning the year with approximately 1,000 more students than at the beginning of 2020, coupled with the quarters increase in new student starts. - Student starts increased 30.6% or by approximately 800 students over the prior year comparable period. Contributing to the favorable comparison approximately 300 student starts scheduled for last year’s first quarter were delayed to the second quarter due to the onset of the pandemic. Student starts have consistently grown over the last three years.
- Educational services and facilities expense increased
$2.1 million , or 7.0% to$32.3 million from$30.2 million in the prior year comparable quarter. The increase was due mainly to a higher student population. - Selling, general and administrative expense decreased
$1.5 million , or 3.7% to$39.6 million from$41.1 million in the prior year comparable quarter. The decrease was partially due to a$2.4 million reduction in bad debt expense resulting from the new government guidance on the uses of institutional CARES Act funds. - Operating income increased to
$6.0 million from an operating loss of$1.3 million in the prior year comparable quarter. - Pre-tax income increased to
$5.7 million , from a pre-tax loss of$1.7 million in the prior year comparable quarter. - Provision for income taxes increased to
$1.2 million , from less than$0.1 million in the prior year comparable quarter. The increase quarter over quarter was due to the reversal of a full valuation allowance atDecember 31, 2020 , resulting in an effective tax rate of 21.7% in the current quarter. - Net income improved to
$4.5 million , or$0.13 per diluted share, compared to a net loss of$1.8 million , or$0.08 per diluted share.
FIRST QUARTER SEGMENT RESULTS
Transportation and Skilled Trades Segment
Revenue increased
Operating income improved to
Healthcare and Other Professions Segment
Revenue increased
Operating income increased 47.5%, to
Corporate and Other
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were
2021 OUTLOOK
The Company is updating its outlook for 2021 as follows:
- Reaffirming annual revenue growth of 7% to 12% over 2020.
- Reaffirming full year student starts growth of 5% to 10% over 2020.
- Raising adjusted EBITDA by
$3.0 million to between$32.0 million and$37.0 million as compared to$23.9 million in 2020. - Raising pre-tax Income by
$3.0 million to between$22.0 million and$27.0 million as compared to$13.5 million in 2020. - Reaffirming capital expenditures of approximate
$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 1368208.
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 1368208.
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 | ||||||||
(Unaudited) | ||||||||
2021 | 2020 | |||||||
REVENUE | $ | 77,996 | $ | 70,041 | ||||
COSTS AND EXPENSES: | ||||||||
Educational services and facilities | 32,344 | 30,238 | ||||||
Selling, general and administrative | 39,633 | 41,149 | ||||||
Total costs & expenses | 71,977 | 71,387 | ||||||
OPERATING INCOME (LOSS) | 6,019 | (1,346 | ) | |||||
OTHER: | ||||||||
Interest expense | (285 | ) | (354 | ) | ||||
INCOME (LOSS) BEFORE INCOME TAXES | 5,734 | (1,700 | ) | |||||
PROVISION FOR INCOME TAXES | 1,245 | 50 | ||||||
NET INCOME (LOSS) | $ | 4,489 | $ | (1,750 | ) | |||
PREFERRED STOCK DIVIDENDS | 304 | - | ||||||
INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | 4,185 | $ | (1,750 | ) | |||
Basic | ||||||||
Net income (loss) per common share | $ | 0.13 | $ | (0.08 | ) | |||
Diluted | ||||||||
Net income (loss) per common share | $ | 0.13 | $ | (0.08 | ) | |||
Weighted average number of common shares outstanding: | ||||||||
Basic | 24,889 | 24,598 | ||||||
Diluted | 24,889 | 24,598 | ||||||
Other data: | ||||||||
Adjusted EBITDA (1) | $ | 8,413 | $ | 836 | ||||
Depreciation and amortization | $ | 1,901 | $ | 1,890 | ||||
Number of campuses | 22 | 22 | ||||||
Average enrollment | 12,336 | 11,237 | ||||||
Stock-based compensation | $ | 493 | $ | 292 | ||||
Net cash used in operating activities | $ | (8,299 | ) | $ | (11,947 | ) | ||
Net cash used in investing activities | $ | (1,219 | ) | $ | (1,287 | ) | ||
Net cash used in financing activities | $ | (1,766 | ) | $ | (15,669 | ) | ||
Selected Consolidated Balance Sheet Data: | |||
(Unaudited) | |||
Cash and cash equivalents | $ | 26,742 | |
Current assets | 70,782 | ||
Working capital | 10,232 | ||
Total assets | 239,853 | ||
Current liabilities | 60,550 | ||
Long-term debt obligations, including current portion, net of deferred financing fees | 16,757 | ||
Series A convertible preferred stock | 11,982 | ||
Total stockholders' equity | 94,860 | ||
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 |
|||||||
(Unaudited) | |||||||
2021 | 2020 | ||||||
Net income (loss) | $ | 4,489 | $ | (1,750 | ) | ||
Interest expense, net | 285 | 354 | |||||
Provision for income taxes | 1,245 | 50 | |||||
Depreciation and amortization | 1,901 | 1,890 | |||||
EBITDA | 7,920 | 544 | |||||
Stock compensation expense | 493 | 292 | |||||
Adjusted EBITDA | $ | 8,413 | $ | 836 | |||
Three Months Ended |
||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Transportation and Skilled Trades | Healthcare and Other Professions | Corporate | ||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||
Net income (loss) | $ | 12,324 | $ | 4,840 | $ | 2,949 | $ | 2,001 | $ | (10,784 | ) | $ | (8,591 | ) | ||||||
Interest expense, net | - | - | - | - | 285 | 354 | ||||||||||||||
Provision for income taxes | - | - | - | - | 1,245 | 50 | ||||||||||||||
Depreciation and amortization | 1,672 | 1,659 | 116 | 120 | 113 | 111 | ||||||||||||||
EBITDA | 13,996 | 6,499 | 3,065 | 2,121 | (9,141 | ) | (8,076 | ) | ||||||||||||
Stock compensation expense | - | - | - | - | 493 | 292 | ||||||||||||||
Adjusted EBITDA | $ | 13,996 | $ | 6,499 | $ | 3,065 | $ | 2,121 | $ | (8,648 | ) | $ | (7,784 | ) | ||||||
Three Months Ended |
|||||||||||
2021 | 2020 | % Change | |||||||||
Revenue: | |||||||||||
Transportation and Skilled Trades | $ | 55,670 | $ | 49,056 | 13.5 | % | |||||
Healthcare and Other Professions | 22,326 | 20,985 | 6.4 | % | |||||||
Total | $ | 77,996 | $ | 70,041 | 11.4 | % | |||||
Operating Income (Loss): | |||||||||||
Transportation and Skilled Trades | $ | 12,324 | $ | 4,840 | 154.6 | % | |||||
Healthcare and Other Professions | 2,949 | 2,000 | 47.5 | % | |||||||
Corporate | (9,254 | ) | (8,186 | ) | -13.0 | % | |||||
Total | $ | 6,019 | $ | (1,346 | ) | 547.2 | % | ||||
Starts: | |||||||||||
Transportation and Skilled Trades | 2,339 | 1,720 | 36.0 | % | |||||||
Healthcare and Other Professions | 1,209 | 996 | 21.4 | % | |||||||
Total | 3,548 | 2,716 | 30.6 | % | |||||||
Average Population: | |||||||||||
Transportation and Skilled Trades | 8,032 | 7,305 | 10.0 | % | |||||||
Leave of Absence - COVID-19 | (15 | ) | (33 | ) | 54.5 | % | |||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 8,017 | 7,272 | 10.2 | % | |||||||
Healthcare and Other Professions | 4,409 | 3,987 | 10.6 | % | |||||||
Leave of Absence - COVID-19 | (90 | ) | (22 | ) | -309.1 | % | |||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,319 | 3,965 | 8.9 | % | |||||||
Total | 12,441 | 11,292 | 10.2 | % | |||||||
Total Excluding Leave of Absence - COVID-19 | 12,336 | 11,237 | 9.8 | % | |||||||
End of Period Population: | |||||||||||
Transportation and Skilled Trades | 8,212 | 7,250 | 13.3 | % | |||||||
Leave of Absence - COVID-19 | (19 | ) | (131 | ) | 85.5 | % | |||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 8,193 | 7,119 | 15.1 | % | |||||||
Healthcare and Other Professions | 4,532 | 4,021 | 12.7 | % | |||||||
Leave of Absence - COVID-19 | (79 | ) | (193 | ) | 59.1 | % | |||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,453 | 3,828 | 16.3 | % | |||||||
Total | 12,744 | 11,271 | 13.1 | % | |||||||
Total Excluding Leave of Absence - COVID-19 | 12,646 | 10,947 | 15.5 | % | |||||||
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