Lincoln Reports Double Digit Increases in New Student Starts, Revenue and Operating Income in Fourth Quarter with Net Income of $46.0 million after Release of Tax Valuation Allowance
Key Fourth Quarter 2020 vs Fourth Quarter 2019 Operating and Financial Achievements
- New student starts rose 15.0%
- Average student population up 9.4%
- Ending student population increased 8.3%
- Revenue growth of 10.7%
- EBITDA* of
$13.0 million , up 6.4% - Net income of
$46.0 million which includes$35.9 million release of tax valuation allowance - EPS of
$1.44 ; Adjusted EPS* of$0.31 which excludes release of tax valuation allowance - Cash provided by operations
$13.3 million , more than double prior year $59.0 million of available liquidity as ofDecember 31, 2020
*See Use of Non-GAAP Financial Information below.
“Lincoln had an exceptionally robust finish to 2020 as our 15.0% student start growth and 10.7% revenue growth resulted in strong operating leverage and increased profitability. Despite the impact on our operations from the COVID-19 pandemic, we continuously provided training in essential careers to our student body and finished 2020 with double digit annual growth in student starts for the first time since 2009,” said
“We achieved our strong financial performance through exceptional operating flexibility and execution. As a result of our team’s efforts and dedication, we rapidly implemented several programs, projects and activities to keep our students, faculty, administration and management as safe as possible while providing training for essential careers that remain in high demand. As a result of our actions, Lincoln has continued to increase the number of students pursuing these careers since the onset of the pandemic at the end of the first quarter, in contrast to the declining student populations experienced by many in our field. Our continued progress in the first quarter of 2021 allows us to be optimistic about the year ahead. We continue to apply many of the lessons learned during the implementation of distance learning to further enhance the student and faculty experience, while bringing additional operating efficiencies to the Company. I believe we are well positioned to continue our growth in 2021 as we add new programs to our core operations and continue to provide tangible contributions to our corporate partners and students.”
2020 FOURTH QUARTER FINANCIAL RESULTS
(Quarter ended
- Revenue increased
$7.9 million , or 10.7% to$81.8 million from$73.9 million . The increase was due to a 9.4% increase in average student population, driven by a 15.0% increase in student starts. - Student start growth of 15.0% benefitted from ongoing investments in marketing as well as continuous evaluation and improvement of the admissions process. Increased efficiency is evidenced by a decline in the overall cost to obtain student starts while continuing growth. Lincoln has now experienced three years of consistent growth in student starts.
- Educational services and facilities expense increased
$0.9 million , or 3.0% to$31.5 million from$30.6 million in the prior year. The increase was due to additional instructional expense and books and tools expense resulting from an increased student population but grew at a rate less than our student population. - Selling general and administrative expense increased
$5.5 million , or 16.4% to$39.2 million from$33.7 million in the prior year. The increase in expense was driven by actions taken in response to the impact of COVID-19 on our employees and students and an increase in incentive compensation accruals driven by improved financial performance. - Operating income increased
$1.0 million , or 10.7% to$11.1 million from$10.1 million in the prior year. - Income tax benefit of
$35.2 million after release of tax valuation allowance of$35.9 million . - Net income increased to
$46.0 million , or$1.44 per diluted share. Adjusted EPS prior to release of the tax valuation allowance was$0.31 . This is compared to$9.2 million , or$0.33 per diluted share, in the prior year. - As of
December 31, 2020 , total debt outstanding under the Company’s credit facility was$17.8 million , down$17.0 million from$34.8 million in the prior year comparable quarter.
FOURTH QUARTER SEGMENT RESULTS
Transportation and Skilled Trades Segment
Revenue increased
Operating income increased 42.9%, to
Healthcare and Other Professions Segment
Revenue increased
Operating income increased 38.7%, to
Corporate and Other
This category includes unallocated expenses incurred on behalf of the entire Company.
Corporate and other expenses were
FULL YEAR 2020 FINANCIAL RESULTS
Total revenue increased by
2021 OUTLOOK
The Company is providing the following outlook for the year 2021:
- Annual revenue growth of 7% to 12% over 2020.
- Annual student start growth of 5% to 10% over 2020.
- Adjusted EBITDA of between
$29.0 million and$34.0 million , which would represent a 22.0% to 43.0% growth over 2020 Adjusted EBITDA* - Income before taxes of between
$19.0 million and$24.0 million , which would represent a 41.0% to 78.0% increase over 2020 income before taxes. - Capital expenditures are projected to be approximately
$7.5 million .
*Adjusted EBITDA is defined as EBITDA plus stock compensation expense.
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.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 9886717.
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 | Year Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
REVENUE | $ | 81,792 | $ | 73,915 | $ | 293,095 | $ | 273,342 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Educational services and facilities | 31,463 | 30,555 | 122,196 | 123,495 | |||||||||||
Selling, general and administrative | 39,188 | 33,664 | 156,199 | 145,176 | |||||||||||
Loss (gain) on disposition of assets | 15 | (356 | ) | (81 | ) | (567 | ) | ||||||||
Total costs & expenses | 70,666 | 63,863 | 278,314 | 268,104 | |||||||||||
OPERATING INCOME | 11,126 | 10,052 | 14,781 | 5,238 | |||||||||||
OTHER: | |||||||||||||||
Interest income | - | 1 | - | 8 | |||||||||||
Interest expense | (315 | ) | (823 | ) | (1,275 | ) | (2,963 | ) | |||||||
INCOME BEFORE INCOME TAXES | 10,811 | 9,230 | 13,506 | 2,283 | |||||||||||
(BENEFIT) PROVISION FOR INCOME TAXES | (35,209 | ) | 24 | (35,059 | ) | 268 | |||||||||
NET INCOME | $ | 46,020 | $ | 9,206 | $ | 48,565 | $ | 2,015 | |||||||
PREFERRED STOCK DIVIDENDS | 304 | - | 1,378 | - | |||||||||||
INCOME AVAILABLE FOR DISTRIBUTION | $ | 45,716 | $ | 9,206 | $ | 47,187 | $ | 2,015 | |||||||
Basic | |||||||||||||||
Net income per common share | $ | 1.44 | $ | 0.33 | $ | 1.49 | $ | 0.08 | |||||||
Diluted | |||||||||||||||
Net income per common share | $ | 1.44 | $ | 0.33 | $ | 1.49 | $ | 0.08 | |||||||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic | 24,831 | 24,563 | 24,748 | 24,554 | |||||||||||
Diluted | 24,831 | 24,563 | 24,748 | 24,554 | |||||||||||
Other Data: | |||||||||||||||
EBITDA (1) | $ | 12,980 | $ | 12,196 | $ | 22,181 | $ | 13,353 | |||||||
Depreciation and amortization | $ | 1,854 | $ | 2,144 | $ | 7,400 | $ | 8,115 | |||||||
Number of campuses | 22 | 22 | 22 | 22 | |||||||||||
Average enrollment | 12,796 | 11,692 | 11,729 | 10,985 | |||||||||||
Stock-based compensation | $ | 400 | $ | 218 | $ | 1,686 | $ | 679 | |||||||
Net cash provided by operating activities | $ | 13,263 | $ | 5,881 | $ | 23,485 | $ | 988 | |||||||
Net cash used in investing activities | $ | (2,026 | ) | $ | (1,749 | ) | $ | (5,483 | ) | $ | (4,810 | ) | |||
Net cash (used in) provided by financing activities | $ | (804 | ) | $ | 18,758 | $ | (18,620 | ) | $ | (3,480 | ) | ||||
Selected Consolidated Balance Sheet Data: | |||
(Unaudited) | |||
Cash and cash equivalents | $ | 38,026 | |
Current assets | 74,164 | ||
Working capital | 7,322 | ||
Total assets | 245,190 | ||
Current liabilities | 66,842 | ||
Long-term debt obligations, including current portion, net of deferred financing fees | 17,212 | ||
Series A convertible preferred stock | 11,982 | ||
Total stockholders' equity | 91,067 | ||
As of
During 2020, the Company paid two dividends totaling
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, total liquidity, reconciled net cash and adjusted EPS are measures not recognized in financial statements presented in accordance with accounting principles generally accepted in
Following is a reconciliation of net income (loss) to EBITDA, total liquidity, reconciled net cash and adjusted EPS:
Three Months Ended |
Year Ended |
||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
Net income | $ | 46,020 | $ | 9,206 | $ | 48,565 | $ | 2,015 | |||||
Interest expense, net | 315 | 822 | 1,275 | 2,955 | |||||||||
(Benefit) provision for income taxes | (35,209 | ) | 24 | (35,059 | ) | 268 | |||||||
Depreciation and amortization | 1,854 | 2,144 | 7,400 | 8,115 | |||||||||
EBITDA | $ | 12,980 | $ | 12,196 | $ | 22,181 | $ | 13,353 |
Three Months Ended |
|||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Transportation and Skilled Trades | Healthcare and Other Professions | Corporate | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||
Net income (loss) | $ | 15,611 | $ | 10,927 | $ | 4,681 | $ | 3,373 | $ | 25,728 | $ | (5,094 | ) | ||||||
Interest expense, net | - | - | - | - | 315 | 822 | |||||||||||||
(Benefit) provision for income taxes | - | - | - | - | (35,209 | ) | 24 | ||||||||||||
Depreciation and amortization | 1,612 | 1,913 | 117 | 117 | 125 | 114 | |||||||||||||
EBITDA | $ | 17,223 | $ | 12,840 | $ | 4,798 | $ | 3,490 | $ | (9,041 | ) | $ | (4,134 | ) |
Year Ended |
|||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Transportation and Skilled Trades | Healthcare and Other Professions | Corporate | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||
Net income (loss) | $ | 34,458 | $ | 21,979 | $ | 11,068 | $ | 7,588 | $ | 3,039 | $ | (27,552 | ) | ||||||
Interest expense, net | - | - | - | - | 1,275 | 2,955 | |||||||||||||
(Benefit) provision for income taxes | - | - | - | - | (35,059 | ) | 268 | ||||||||||||
Depreciation and amortization | 6,473 | 7,236 | 461 | 408 | 466 | 471 | |||||||||||||
EBITDA | $ | 40,931 | $ | 29,215 | $ | 11,529 | $ | 7,996 | $ | (30,279 | ) | $ | (23,858 | ) |
(Unaudited) | ||
Cash and cash equivalents | $ | 38,026 |
Add: availability under current credit line | 21,000 | |
Total liquidity | $ | 59,026 |
(Unaudited) | |||||||
2020 | 2019 | ||||||
Current portion of credit agreement and term loan | $ | (2,000 | ) | $ | (2,000 | ) | |
Long-term credit agreement and term loan | (15,212 | ) | (32,028 | ) | |||
Cash and cash equivalents | 38,026 | 23,644 | |||||
Noncurrent restricted cash | - | 15,000 | |||||
Reconcilled net cash | $ | 20,814 | $ | 4,616 | |||
(Unaudited) | |||
EPS | $ | 1.44 | |
Less: EPS relating to tax valuation allowance | (1.13 | ) | |
Adjusted EPS | $ | 0.31 | |
Three Months Ended |
||||||||||
2020 | 2019 | % Change | ||||||||
Revenue: | ||||||||||
Transportation and Skilled Trades | $ | 58,636 | $ | 52,716 | 11.2 | % | ||||
Healthcare and Other Professions | 23,156 | 21,199 | 9.2 | % | ||||||
Total | $ | 81,792 | $ | 73,915 | 10.7 | % | ||||
Operating Income (Loss): | ||||||||||
Transportation and Skilled Trades | $ | 15,611 | $ | 10,927 | 42.9 | % | ||||
Healthcare and Other Professions | 4,681 | 3,373 | 38.8 | % | ||||||
Corporate | (9,166 | ) | (4,248 | ) | -115.8 | % | ||||
Total | $ | 11,126 | $ | 10,052 | 10.7 | % | ||||
Starts: | ||||||||||
Transportation and Skilled Trades | 1,438 | 1,301 | 10.5 | % | ||||||
Healthcare and Other Professions | 1,228 | 1,018 | 20.6 | % | ||||||
Total | 2,666 | 2,319 | 15.0 | % | ||||||
Average Population: | ||||||||||
Transportation and Skilled Trades | 8,536 | 7,770 | 9.9 | % | ||||||
Leave of Absence - COVID-19 | (82 | ) | - | 100.0 | % | |||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 8,454 | 7,770 | 8.8 | % | ||||||
Healthcare and Other Professions | 4,400 | 3,922 | 12.2 | % | ||||||
Leave of Absence - COVID-19 | (58 | ) | - | 100.0 | % | |||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,342 | 3,922 | 10.7 | % | ||||||
Total | 12,936 | 11,692 | 10.6 | % | ||||||
Total Excluding Leave of Absence - COVID-19 | 12,796 | 11,692 | 9.4 | % | ||||||
End of Period Population: | ||||||||||
Transportation and Skilled Trades | 7,917 | 7,349 | 7.7 | % | ||||||
Leave of Absence - COVID-19 | (22 | ) | - | 100.0 | % | |||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 7,895 | 7,349 | 7.4 | % | ||||||
Healthcare and Other Professions | 4,402 | 3,936 | 11.8 | % | ||||||
Leave of Absence - COVID-19 | (80 | ) | - | 100.0 | % | |||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,322 | 3,936 | 9.8 | % | ||||||
Total | 12,319 | 11,285 | 9.2 | % | ||||||
Total Excluding Leave of Absence - COVID-19 | 12,217 | 11,285 | 8.3 | % | ||||||
Twelve Months Ended |
||||||||||
2020 | 2019 | % Change | ||||||||
Revenue: | ||||||||||
Transportation and Skilled Trades | $ | 207,434 | $ | 193,722 | 7.1 | % | ||||
Healthcare and Other Professions | 85,661 | 79,620 | 7.6 | % | ||||||
Total | $ | 293,095 | $ | 273,342 | 7.2 | % | ||||
Operating Income (Loss): | ||||||||||
Transportation and Skilled Trades | $ | 34,458 | $ | 21,979 | 56.8 | % | ||||
Healthcare and Other Professions | 11,068 | 7,588 | 45.9 | % | ||||||
Corporate | (30,745 | ) | (24,329 | ) | -26.4 | % | ||||
Total | $ | 14,781 | $ | 5,238 | 182.2 | % | ||||
Starts: | ||||||||||
Transportation and Skilled Trades | 9,442 | 8,548 | 10.5 | % | ||||||
Healthcare and Other Professions | 4,879 | 4,386 | 11.2 | % | ||||||
Total | 14,321 | 12,934 | 10.7 | % | ||||||
Average Population: | ||||||||||
Transportation and Skilled Trades | 7,872 | 7,319 | 7.6 | % | ||||||
Leave of Absence - COVID-19 | (219 | ) | - | 100.0 | % | |||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 7,653 | 7,319 | 4.6 | % | ||||||
Healthcare and Other Professions | 4,232 | 3,666 | 15.4 | % | ||||||
Leave of Absence - COVID-19 | (156 | ) | - | 100.0 | % | |||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,076 | 3,666 | 11.2 | % | ||||||
Total | 12,104 | 10,985 | 10.2 | % | ||||||
Total Excluding Leave of Absence - COVID-19 | 11,729 | 10,985 | 6.8 | % | ||||||
End of Period Population: | ||||||||||
Transportation and Skilled Trades | 7,917 | 7,349 | 7.7 | % | ||||||
Leave of Absence - COVID-19 | (22 | ) | - | 100.0 | % | |||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19 | 7,895 | 7,349 | 7.4 | % | ||||||
Healthcare and Other Professions | 4,402 | 3,936 | 11.8 | % | ||||||
Leave of Absence - COVID-19 | (80 | ) | - | 100.0 | % | |||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19 | 4,322 | 3,936 | 9.8 | % | ||||||
Total | 12,319 | 11,285 | 9.2 | % | ||||||
Total Excluding Leave of Absence - COVID-19 | 12,217 | 11,285 | 8.3 | % | ||||||
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