Lincoln Educational Services Reports Solid Third Quarter Results
Third Quarter 2021 Financial Highlights and Recent Operating Developments
- Revenue of
$89.1 million , a 13.0% increase compared to prior year quarter - Operating income of
$5.7 million , up 49.6% compared to prior year quarter - Adjusted EBITDA* of
$8.4 million compared to$6.3 million for the prior year quarter - Student starts of 5,430 compared to 5,510 for the prior year quarter despite limited access to high schools over the past 18 months due to COVID restrictions
- Ending student population of 14,000, up 6.4% compared to prior year quarter
- Net cash of
$31.3 million at quarter end, compared net debt of$1.5 million last year - Recently announced fourth quarter closing of the
$46.5 million sale-leaseback transaction involvingDenver, CO andGrand Prairie, TX properties further strengthens balance sheet
*See Use of “Non-GAAP Financial Information” below.
“Our team performed well during the third quarter as we generated better than expected high school starts, driving revenue growth into the fourth quarter,” said
“The real estate transactions announced in September have been moving forward and we recently closed on the first of these, the sale-leaseback of our
2021 THIRD QUARTER FINANCIAL RESULTS
(Quarter ended
- Revenue increased
$10.3 million , or 13.0% to$89.1 million from$78.8 million . The increase in revenue results from an 8.3% higher average student population, driven by the 8.8% increase in student starts for the nine months, and a 4.3% increase in average revenue per student in the current quarter. - Educational services and facilities expense increased
$3.9 million , or 11.3%, to$38.1 million from$34.2 million in the prior year comparable period. Additional costs were concentrated in instruction expense, books and tools expense and facilities expense. Instructional increases were driven in part by inflationary pressures on instructor salaries due to widespread instructor shortages and higher student population, which also drove additional books and tools expense. Facilities expense increased from the normalization of housing expenses for students during the quarter. - Selling, general and administrative expense increased
$4.5 million , or 11.1% to$45.2 million driven primarily by increases in incentive and stock-based compensation due to our improved financial performance in addition to increased marketing investments - Operating income increased to
$5.7 million from$3.8 million - Pre-tax income increased to
$5.5 million from$3.6 million - Net income improved to
$3.8 million , or$0.11 per diluted share, compared to$3.5 million , or$0.08 per diluted share
THIRD QUARTER SEGMENT RESULTS
Transportation and Skilled Trades Segment
Revenue increased
Operating income improved to
Healthcare and Other Professions Segment
Revenue increased
Operating income increased to
Corporate and Other
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were
NINE MONTHS FINANCIAL RESULTS
(Period ended
- Total revenue increased by $36.2 million, or 17.1%, to $247.5 million, compared to $211.3 million
- Student starts grew by 1,026, or 8.8%, to 12,681 compared to 11,655
- Transportation and Skilled Trades segment revenue increased by
$28.8 million , or 19.3%, to $177.6 million, compared to $148.8 million - The Healthcare and Other Professions segment revenue increased by
$7.4 million , or 11.9%, to $69.9 million, compared to $62.5 million - Operating income increased to $15.2 million as compared to
$3.7 million
FULL YEAR 2021 OUTLOOK
As a result of the Company's performance through the first nine months of 2021 and management's outlook for the remainder of the year, Lincoln is now refining its 2021 full year guidance as follows:
- Revenue growth in the range of 12% to 14%
- Student start growth in the range of 7% to 8%
- Adjusted EBITDA* in the range of
$35.0 million to$37.0 million - Pre-tax Income in the range of
$25.0 million to$27.0 million - Capital expenditures of approximately
$7.5 million
The above full year guidance excludes the gain related to the sale-leaseback transaction and the associated expenses in the fourth quarter.
*See Use of “Non-GAAP Financial Information” below.
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 4862849.
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 4862849.
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 | Nine Months Ended | ||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
REVENUE | $ | 89,059 | $ | 78,792 | $ | 247,520 | $ | 211,303 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Educational services and facilities | 38,105 | 34,251 | 104,143 | 90,733 | |||||||||||
Selling, general and administrative | 45,209 | 40,700 | 128,159 | 117,011 | |||||||||||
Loss (gain) on disposition of assets | - | 1 | 1 | (96 | ) | ||||||||||
Total costs & expenses | 83,314 | 74,952 | 232,303 | 207,648 | |||||||||||
OPERATING INCOME | 5,745 | 3,840 | 15,217 | 3,655 | |||||||||||
OTHER: | |||||||||||||||
Interest expense | (292 | ) | (278 | ) | (874 | ) | (960 | ) | |||||||
INCOME BEFORE INCOME TAXES | 5,453 | 3,562 | 14,343 | 2,695 | |||||||||||
PROVISION FOR INCOME TAXES | 1,614 | 50 | 3,589 | 150 | |||||||||||
NET INCOME | $ | 3,839 | $ | 3,512 | $ | 10,754 | $ | 2,545 | |||||||
PREFERRED STOCK DIVIDENDS | 304 | 1,074 | 912 | 1,074 | |||||||||||
INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | 3,535 | $ | 2,438 | $ | 9,842 | $ | 1,471 | |||||||
Basic | |||||||||||||||
Net income per common share | $ | 0.11 | $ | 0.08 | $ | 0.30 | $ | 0.05 | |||||||
Diluted | |||||||||||||||
Net income per common share | $ | 0.11 | $ | 0.08 | $ | 0.30 | $ | 0.05 | |||||||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic | 25,135 | 24,822 | 25,043 | 24,721 | |||||||||||
Diluted | 25,135 | 24,822 | 25,043 | 24,721 | |||||||||||
Other data: | |||||||||||||||
Adjusted EBITDA (1) | $ | 8,430 | $ | 6,292 | $ | 22,930 | $ | 10,488 | |||||||
Depreciation and amortization | $ | 1,928 | $ | 1,782 | $ | 5,620 | $ | 5,546 | |||||||
Number of campuses | 22 | 22 | 22 | 22 | |||||||||||
Average enrollment | 13,178 | 12,165 | 12,666 | 11,379 | |||||||||||
Stock-based compensation | $ | 757 | $ | 670 | $ | 2,093 | $ | 1,287 | |||||||
Net cash provided by operating activities | $ | 16,683 | $ | 3,754 | $ | 17,750 | $ | 10,222 | |||||||
Net cash used in investing activities | $ | (1,736 | ) | $ | (482 | ) | $ | (5,252 | ) | $ | (3,457 | ) | |||
Net cash used in financing activities | $ | (804 | ) | $ | (1,647 | ) | $ | (3,374 | ) | $ | (17,816 | ) | |||
Selected Consolidated Balance Sheet Data: | |||
(Unaudited) | |||
Cash and cash equivalents | $ | 47,150 | |
Current assets | 110,953 | ||
Working capital | 42,078 | ||
Total assets | 253,456 | ||
Current liabilities | 68,875 | ||
Long-term debt obligations, including current portion, net of deferred financing fees | 15,848 | ||
Series A convertible preferred stock | 11,982 | ||
Total stockholders' equity | 101,963 | ||
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.
- We define reconciled net cash (debt) as our cash and cash equivalents and restricted cash less both the short and long-term portion under the Company’s credit agreement, deferred financing fees, and amounts received under the CARES Act.
EBITDA, Adjusted EBITDA and reconciled net cash (debt) 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, Adjusted EBITDA and reconciled net cash (debt) are not necessarily comparable to similarly titled measures used by other companies.
Following is a reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and reconciled net cash (debt):
Three Months Ended |
Nine Months Ended |
||||||||||
(Unaudited) | (Unaudited) | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
Net income | $ | 3,839 | $ | 3,512 | $ | 10,754 | $ | 2,545 | |||
Interest expense, net | 292 | 278 | 874 | 960 | |||||||
Provision for income taxes | 1,614 | 50 | 3,589 | 150 | |||||||
Depreciation and amortization | 1,928 | 1,782 | 5,620 | 5,546 | |||||||
EBITDA | 7,673 | 5,622 | 20,837 | 9,201 | |||||||
Stock compensation expense | 757 | 670 | 2,093 | 1,287 | |||||||
Adjusted EBITDA | $ | 8,430 | $ | 6,292 | $ | 22,930 | $ | 10,488 | |||
Three Months Ended |
|||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Transportation and Skilled Trades | Healthcare and Other Professions | Corporate | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
Net income (loss) | $ | 11,842 | $ | 9,138 | $ | 1,833 | $ | 1,655 | $ | (9,836 | ) | $ | (7,281 | ) | |||||
Interest expense, net | - | - | - | - | 292 | 278 | |||||||||||||
Provision for income taxes | - | - | - | - | 1,614 | 50 | |||||||||||||
Depreciation and amortization | 1,658 | 1,561 | 140 | 106 | 130 | 115 | |||||||||||||
EBITDA | 13,500 | 10,699 | 1,973 | 1,761 | (7,800 | ) | (6,838 | ) | |||||||||||
Stock Compensation Expense | - | - | - | - | 757 | 670 | |||||||||||||
Adjusted EBITDA | $ | 13,500 | $ | 10,699 | $ | 1,973 | $ | 1,761 | $ | (7,043 | ) | $ | (6,168 | ) | |||||
Nine Months Ended |
|||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Transportation and Skilled Trades | Healthcare and Other Professions | Corporate | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
Net income (loss) | $ | 35,423 | $ | 18,848 | $ | 7,743 | $ | 6,387 | $ | (32,412 | ) | $ | (22,690 | ) | |||||
Interest expense, net | - | - | - | - | 874 | 960 | |||||||||||||
Provision for income taxes | - | - | - | - | 3,589 | 150 | |||||||||||||
Depreciation and amortization | 4,917 | 4,862 | 357 | 343 | 346 | 341 | |||||||||||||
EBITDA | 40,340 | 23,710 | 8,100 | 6,730 | (27,603 | ) | (21,239 | ) | |||||||||||
Stock Compensation Expense | - | - | - | - | 2,093 | 1,287 | |||||||||||||
Adjusted EBITDA | $ | 40,340 | $ | 23,710 | $ | 8,100 | $ | 6,730 | $ | (25,510 | ) | $ | (19,952 | ) | |||||
(Unaudited) | |||||||
2021 | 2020 | ||||||
Current portion of credit agreement and term loan | $ | (2,000 | ) | $ | (2,000 | ) | |
Long-term credit agreement and term loan | (13,848 | ) | (15,667 | ) | |||
Cash and cash equivalents | 47,150 | 26,520 | |||||
Restricted Cash | - | 1,073 | |||||
CARES Act impact | - | (11,460 | ) | ||||
Reconcilled net cash (debt) | $ | 31,302 | $ | (1,534 | ) | ||
Three Months Ended |
||||||||||
2021 | 2020 | % Change | ||||||||
Revenue: | ||||||||||
Transportation and Skilled Trades | $ | 64,950 | $ | 56,828 | 14.3 | % | ||||
HOPS | 24,109 | 21,964 | 9.8 | % | ||||||
Total | $ | 89,059 | $ | 78,792 | 13.0 | % | ||||
Operating Income (Loss): | ||||||||||
Transportation and Skilled Trades | $ | 11,842 | $ | 9,138 | 29.6 | % | ||||
Healthcare and Other Professions | 1,833 | 1,654 | 10.8 | % | ||||||
Corporate | (7,930 | ) | (6,952 | ) | -14.1 | % | ||||
Total | $ | 5,745 | $ | 3,840 | 49.6 | % | ||||
Starts: | ||||||||||
Transportation and Skilled Trades | 3,976 | 3,982 | -0.2 | % | ||||||
Healthcare and Other Professions | 1,454 | 1,528 | -4.8 | % | ||||||
Total | 5,430 | 5,510 | -1.5 | % | ||||||
Average Population: | ||||||||||
Transportation and Skilled Trades | 8,863 | 8,349 | 6.2 | % | ||||||
Leave of Absence - COVID-19 | (9 | ) | (333 | ) | 97.3 | % | ||||
Transportation and Skilled Trades 1 | 8,854 | 8,016 | 10.5 | % | ||||||
Healthcare and Other Professions | 4,326 | 4,286 | 0.9 | % | ||||||
Leave of Absence - COVID-19 | (2 | ) | (137 | ) | 98.5 | % | ||||
Healthcare and Other Professions 1 | 4,324 | 4,149 | 4.2 | % | ||||||
Total | 13,189 | 12,635 | 4.4 | % | ||||||
Total 1 | 13,178 | 12,165 | 8.3 | % | ||||||
End of Period Population: | ||||||||||
Transportation and Skilled Trades | 9,473 | 8,811 | 7.5 | % | ||||||
Leave of Absence - COVID-19 | - | (67 | ) | 100.0 | % | |||||
Transportation and Skilled Trades 1 | 9,473 | 8,744 | 8.3 | % | ||||||
Healthcare and Other Professions | 4,533 | 4,462 | 1.6 | % | ||||||
Leave of Absence - COVID-19 | - | (37 | ) | 100.0 | % | |||||
Healthcare and Other Professions 1 | 4,533 | 4,425 | 2.4 | % | ||||||
Total | 14,006 | 13,273 | 5.5 | % | ||||||
Total 1 | 14,006 | 13,169 | 6.4 | % | ||||||
1 Excluding Leave of Absence - COVID-19
Nine Months Ended |
||||||||||
2021 | 2020 | % Change | ||||||||
Revenue: | ||||||||||
Transportation and Skilled Trades | $ | 177,586 | $ | 148,799 | 19.3 | % | ||||
HOPS | 69,934 | 62,504 | 11.9 | % | ||||||
Total | $ | 247,520 | $ | 211,303 | 17.1 | % | ||||
Operating Income (Loss): | ||||||||||
Transportation and Skilled Trades | $ | 35,423 | $ | 18,848 | 87.9 | % | ||||
Healthcare and Other Professions | 7,743 | 6,388 | 21.2 | % | ||||||
Corporate | (27,949 | ) | (21,581 | ) | -29.5 | % | ||||
Total | $ | 15,217 | $ | 3,655 | 316.3 | % | ||||
Starts: | ||||||||||
Transportation and Skilled Trades | 8,824 | 8,004 | 10.2 | % | ||||||
Healthcare and Other Professions | 3,857 | 3,651 | 5.6 | % | ||||||
Total | 12,681 | 11,655 | 8.8 | % | ||||||
Average Population: | ||||||||||
Transportation and Skilled Trades | 8,312 | 7,651 | 8.6 | % | ||||||
Leave of Absence - COVID-19 | (16 | ) | (260 | ) | 93.8 | % | ||||
Transportation and Skilled Trades 1 | 8,296 | 7,391 | 12.2 | % | ||||||
Healthcare and Other Professions | 4,414 | 4,176 | 5.7 | % | ||||||
Leave of Absence - COVID-19 | (44 | ) | (188 | ) | 76.6 | % | ||||
Healthcare and Other Professions 1 | 4,370 | 3,988 | 9.6 | % | ||||||
Total | 12,726 | 11,827 | 7.6 | % | ||||||
Total 1 | 12,666 | 11,379 | 11.3 | % | ||||||
End of Period Population: | ||||||||||
Transportation and Skilled Trades | 9,473 | 8,811 | 7.5 | % | ||||||
Leave of Absence - COVID-19 | - | (67 | ) | 100.0 | % | |||||
Transportation and Skilled Trades 1 | 9,473 | 8,744 | 8.3 | % | ||||||
Healthcare and Other Professions | 4,533 | 4,462 | 1.6 | % | ||||||
Leave of Absence - COVID-19 | - | (37 | ) | 100.0 | % | |||||
Healthcare and Other Professions 1 | 4,533 | 4,425 | 2.4 | % | ||||||
Total | 14,006 | 13,273 | 5.5 | % | ||||||
Total 1 | 14,006 | 13,169 | 6.4 | % | ||||||
1 Excluding Leave of Absence - COVID-19
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