☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
New Jersey
|
57-1150621
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
200 Executive Drive, Suite 340
|
07052
|
|
West Orange, NJ
|
(Zip Code)
|
|
(Address of principal executive offices)
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Non-accelerated filer ☐ (Do not check if a smaller reporting company)
|
Smaller reporting company ☒
|
|
Emerging growth company ☐
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, no par value per share
|
LINC
|
The NASDAQ Stock Market LLC
|
PART I.
|
FINANCIAL INFORMATION
|
|
Item 1.
|
1
|
|
1
|
||
3
|
||
4
|
||
5
|
||
6
|
||
8
|
||
Item 2.
|
25
|
|
Item 4.
|
40 | |
PART II.
|
40
|
|
Item 1.
|
40
|
|
Item 1A.
|
40 | |
Item 6.
|
41 | |
42 |
Item 1. |
June 30,
2020
|
December 31,
2019
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
23,342
|
$
|
23,644
|
||||
Restricted cash
|
2,626
|
-
|
||||||
Accounts receivable, less allowance of $20,661 and $18,107 at June 30, 2020 and December 31, 2019, respectively
|
27,906
|
20,652
|
||||||
Inventories
|
3,107
|
1,608
|
||||||
Prepaid income taxes and income taxes receivable
|
277
|
383
|
||||||
Prepaid expenses and other current assets
|
3,748
|
4,190
|
||||||
Total current assets
|
61,006
|
50,477
|
||||||
PROPERTY, EQUIPMENT AND FACILITIES - At cost, net of accumulated depreciation and amortization of $175,183 and $172,408 at June 30, 2020 and December 31, 2019, respectively
|
49,172
|
49,345
|
||||||
OTHER ASSETS:
|
||||||||
Noncurrent restricted cash
|
-
|
15,000
|
||||||
Noncurrent receivables, less allowance of $2,932 and $2,260 at June 30, 2020 and December 31, 2019, respectively
|
15,787
|
15,337
|
||||||
Operating lease right-of-use assets
|
53,397
|
49,065
|
||||||
Goodwill
|
14,536
|
14,536
|
||||||
Other assets, net
|
1,003
|
1,003
|
||||||
Total other assets
|
84,723
|
94,941
|
||||||
TOTAL ASSETS
|
$
|
194,901
|
$
|
194,763
|
June 30,
2020
|
December 31,
2019
|
|||||||
LIABILITIES, SERIES A CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Current portion of credit agreement
|
$
|
2,000
|
$
|
2,000
|
||||
Unearned tuition
|
17,573
|
23,411
|
||||||
Accounts payable
|
14,058
|
14,584
|
||||||
Accrued expenses
|
12,162
|
7,869
|
||||||
CARES Act student funds liability
|
2,626
|
-
|
||||||
CARES Act institutional funds liability
|
11,837
|
-
|
||||||
Current portion of operating lease liabilities
|
8,222
|
9,142
|
||||||
Other short-term liabilities
|
93
|
199
|
||||||
Total current liabilities
|
68,571
|
57,205
|
||||||
NONCURRENT LIABILITIES:
|
||||||||
Long-term credit agreement and term loan
|
16,121
|
32,028
|
||||||
Pension plan liabilities
|
3,850
|
4,015
|
||||||
Deferred income taxes, net
|
153
|
153
|
||||||
Long-term portion of operating lease liabilities
|
51,148
|
46,018
|
||||||
Other long-term liabilities
|
1,014
|
214
|
||||||
Total liabilities
|
140,857
|
139,633
|
||||||
|
||||||||
COMMITMENTS AND CONTINGENCIES
|
||||||||
SERIES A CONVERTIBLE PREFERRED STOCK
|
||||||||
Preferred stock, no par value - 10,000,000 shares authorized, Series A convertible preferred shares, 12,700 shares issued and outstanding at June 30, 2020 and December 31, 2019
|
11,982
|
11,982
|
||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Common stock, no par value - authorized: 100,000,000 shares at June 30, 2020 and December 31, 2019; issued and outstanding: 32,386,438 shares at June 30, 2020 and 31,142,251 shares at
December 31, 2019
|
141,377
|
141,377
|
||||||
Additional paid-in capital
|
30,589
|
30,145
|
||||||
Treasury stock at cost - 5,910,541 shares at June 30, 2020 and December 31, 2019
|
(82,860
|
)
|
(82,860
|
)
|
||||
Accumulated deficit
|
(43,025
|
)
|
(42,058
|
)
|
||||
Accumulated other comprehensive loss
|
(4,019
|
)
|
(3,456
|
)
|
||||
Total stockholders’ equity
|
42,062
|
43,148
|
||||||
TOTAL LIABILITIES, SERIES A CONVERTIBLE PREFERRED STOCK AND EQUITY
|
$
|
194,901
|
$
|
194,763
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
REVENUE
|
$
|
62,470
|
$
|
63,569
|
$
|
132,511
|
$
|
126,833
|
||||||||
COSTS AND EXPENSES:
|
||||||||||||||||
Educational services and facilities
|
26,245
|
29,749
|
56,482
|
59,728
|
||||||||||||
Selling, general and administrative
|
35,162
|
35,913
|
76,310
|
74,062
|
||||||||||||
(Gain) loss on disposition of assets
|
(97
|
)
|
-
|
(96
|
)
|
1
|
||||||||||
Total costs & expenses
|
61,310
|
65,662
|
132,696
|
133,791
|
||||||||||||
OPERATING INCOME (LOSS)
|
1,160
|
(2,093
|
)
|
(185
|
)
|
(6,958
|
)
|
|||||||||
OTHER:
|
||||||||||||||||
Interest income
|
-
|
2
|
-
|
7
|
||||||||||||
Interest expense
|
(327
|
)
|
(829
|
)
|
(682
|
)
|
(1,386
|
)
|
||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
833
|
(2,920
|
)
|
(867
|
)
|
(8,337
|
)
|
|||||||||
PROVISION FOR INCOME TAXES
|
50
|
144
|
100
|
194
|
||||||||||||
NET INCOME (LOSS)
|
$
|
783
|
$
|
(3,064
|
)
|
$
|
(967
|
)
|
$
|
(8,531
|
)
|
|||||
Basic
|
||||||||||||||||
Net income (loss) per common share
|
$
|
0.02
|
$
|
(0.12
|
)
|
$
|
(0.06
|
)
|
$
|
(0.35
|
)
|
|||||
Diluted
|
||||||||||||||||
Net income (loss) per common share
|
$
|
0.02
|
$
|
(0.12
|
)
|
$
|
(0.06
|
)
|
$
|
(0.35
|
)
|
|||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
24,741
|
24,555
|
24,670
|
24,545
|
||||||||||||
Diluted
|
24,741
|
24,555
|
24,670
|
24,545
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Net income (loss)
|
$
|
783
|
$
|
(3,064
|
)
|
$
|
(967
|
)
|
$
|
(8,531
|
)
|
|||||
Other comprehensive income
|
||||||||||||||||
Derivative qualifying as a cash flow hedge, net of taxes (nil)
|
(95
|
)
|
-
|
(843
|
)
|
-
|
||||||||||
Employee pension plan adjustments, net of taxes (nil)
|
140
|
154
|
280
|
308
|
||||||||||||
Comprehensive income (loss)
|
$
|
828
|
$
|
(2,910
|
)
|
$
|
(1,530
|
)
|
$
|
(8,223
|
)
|
Stockholders’ Equity
|
||||||||||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-in
|
Treasury
|
Accumulated
|
Accumulated
Other
Comprehensive
|
Series A
Convertible
Preferred Stock
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stock
|
Deficit
|
Loss
|
Total
|
Shares
|
Amount
|
||||||||||||||||||||||||||||
BALANCE - January 1, 2020
|
31,142,251
|
$
|
141,377
|
$
|
30,145
|
$
|
(82,860
|
)
|
$
|
(42,058
|
)
|
$
|
(3,456
|
)
|
$
|
43,148
|
12,700
|
$
|
11,982
|
|||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(1,750
|
)
|
-
|
(1,750
|
)
|
-
|
-
|
|||||||||||||||||||||||||
Employee pension plan adjustments
|
-
|
-
|
-
|
-
|
-
|
140
|
140
|
-
|
-
|
|||||||||||||||||||||||||||
Derivative qualifying as cash flow hedge
|
-
|
-
|
-
|
-
|
-
|
(748
|
)
|
(748
|
)
|
-
|
-
|
|||||||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||||||||||
Restricted stock
|
1,191,262
|
-
|
291
|
-
|
-
|
-
|
291
|
-
|
-
|
|||||||||||||||||||||||||||
Net share settlement for equity-based compensation
|
(58,451
|
)
|
-
|
(172
|
)
|
-
|
-
|
-
|
(172
|
)
|
-
|
-
|
||||||||||||||||||||||||
BALANCE - March 31, 2020
|
32,275,062
|
141,377
|
30,264
|
(82,860
|
)
|
(43,808
|
)
|
(4,064
|
)
|
40,909
|
12,700
|
11,982
|
||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
783
|
-
|
783
|
-
|
-
|
|||||||||||||||||||||||||||
Employee pension plan adjustments
|
-
|
-
|
-
|
-
|
-
|
140
|
140
|
-
|
-
|
|||||||||||||||||||||||||||
Derivative qualifying as cash flow hedge
|
-
|
-
|
-
|
-
|
-
|
(95
|
)
|
(95
|
)
|
-
|
-
|
|||||||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||||||||||
Restricted stock
|
111,376
|
-
|
325
|
-
|
-
|
-
|
325
|
-
|
-
|
|||||||||||||||||||||||||||
Net share settlement for equity-based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
BALANCE - June 30, 2020
|
32,386,438
|
$
|
141,377
|
$
|
30,589
|
$
|
(82,860
|
)
|
$
|
(43,025
|
)
|
$
|
(4,019
|
)
|
$
|
42,062
|
12,700
|
$
|
11,982
|
Stockholders’ Equity
|
||||||||||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-in
|
Treasury
|
Accumulated
|
Accumulated
Other
Comprehensive
|
Series A
Convertible
Preferred Stock
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stock
|
Deficit
|
Loss
|
Total
|
Shares
|
Amount
|
||||||||||||||||||||||||||||
BALANCE - January 1, 2019
|
30,552,333
|
$
|
141,377
|
$
|
29,484
|
$
|
(82,860
|
)
|
$
|
(44,073
|
)
|
$
|
(4,062
|
)
|
$
|
39,866
|
-
|
$
|
-
|
|||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(5,467
|
)
|
-
|
(5,467
|
)
|
-
|
-
|
|||||||||||||||||||||||||
Employee pension plan adjustments
|
-
|
-
|
-
|
-
|
-
|
154
|
154
|
-
|
-
|
|||||||||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||||||||||
Restricted stock
|
478,853
|
-
|
52
|
-
|
-
|
-
|
52
|
-
|
-
|
|||||||||||||||||||||||||||
Net share settlement for equity-based compensation
|
(5,518
|
)
|
-
|
(18
|
)
|
-
|
-
|
-
|
(18
|
)
|
-
|
-
|
||||||||||||||||||||||||
BALANCE - March 31, 2019
|
31,025,668
|
141,377
|
29,518
|
(82,860
|
)
|
(49,540
|
)
|
(3,908
|
)
|
34,587
|
-
|
-
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(3,064
|
)
|
-
|
(3,064
|
)
|
-
|
-
|
|||||||||||||||||||||||||
Employee pension plan adjustments
|
-
|
-
|
-
|
-
|
-
|
154
|
154
|
-
|
-
|
|||||||||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||||||||||
Restricted stock
|
116,583
|
-
|
191
|
-
|
-
|
-
|
191
|
-
|
-
|
|||||||||||||||||||||||||||
Net share settlement for equity-based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||
BALANCE - June 30, 2019
|
31,142,251
|
$
|
141,377
|
$
|
29,709
|
$
|
(82,860
|
)
|
$
|
(52,604
|
)
|
$
|
(3,754
|
)
|
$
|
31,868
|
-
|
$
|
-
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(967
|
)
|
$
|
(8,531
|
)
|
||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Depreciation and amortization
|
3,763
|
3,989
|
||||||
Amortization of deferred finance charges
|
90
|
194
|
||||||
Deferred income taxes
|
-
|
424
|
||||||
(Gain) loss on disposition of assets
|
(96
|
)
|
1
|
|||||
Fixed asset donations
|
(334
|
)
|
(893
|
)
|
||||
Provision for doubtful accounts
|
12,618
|
8,923
|
||||||
Stock-based compensation expense
|
616
|
242
|
||||||
(Increase) decrease in assets:
|
||||||||
Accounts receivable
|
(20,322
|
)
|
(13,818
|
)
|
||||
Inventories
|
(1,499
|
)
|
(635
|
)
|
||||
Prepaid income taxes and income taxes receivable
|
106
|
(211
|
)
|
|||||
Prepaid expenses and current assets
|
346
|
177
|
||||||
Other assets, net
|
(122
|
)
|
(649
|
)
|
||||
Increase (decrease) in liabilities:
|
||||||||
Accounts payable
|
(615
|
)
|
4,271
|
|||||
Accrued expenses
|
4,293
|
(470
|
)
|
|||||
CARES Act student funds liability
|
2,626
|
-
|
||||||
CARES Act institutional funds liability
|
11,837
|
-
|
||||||
Unearned tuition
|
(5,838
|
)
|
(2,829
|
)
|
||||
Deferred income taxes
|
-
|
93
|
||||||
Other liabilities
|
(34
|
)
|
(1,060
|
)
|
||||
Total adjustments
|
7,435
|
(2,251
|
)
|
|||||
Net cash provided by (used in) operating activities
|
6,468
|
(10,782
|
)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Capital expenditures
|
(3,072
|
)
|
(1,212
|
)
|
||||
Proceeds from insurance
|
97
|
-
|
||||||
Net cash used in investing activities
|
(2,975
|
)
|
(1,212
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments on borrowings
|
(27,000
|
)
|
(26,600
|
)
|
||||
Proceeds from borrowings
|
11,000
|
3,750
|
||||||
Credit (payment) of deferred finance fees
|
3
|
(98
|
)
|
|||||
Net share settlement for equity-based compensation
|
(172
|
)
|
(18
|
)
|
||||
Net cash used in financing activities
|
(16,169
|
)
|
(22,966
|
)
|
||||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(12,676
|
)
|
(34,960
|
)
|
||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period
|
38,644
|
45,946
|
||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period
|
$
|
25,968
|
$
|
10,986
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
589
|
$
|
1,073
|
||||
Income taxes
|
$
|
14
|
$
|
99
|
||||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Liabilities accrued for or noncash purchases of fixed assets
|
$
|
614
|
$
|
1,030
|
1.
|
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
|
2.
|
EARNINGS PER SHARE
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
(in thousands, except share data)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Numerator:
|
||||||||||||||||
Net income (loss)
|
$
|
783
|
$
|
(3,064
|
)
|
$
|
(967
|
)
|
$
|
(8,531
|
)
|
|||||
Less: preferred stock dividend
|
(305
|
)
|
-
|
(610
|
)
|
-
|
||||||||||
Less: allocation to preferred stockholders
|
(83
|
)
|
-
|
-
|
-
|
|||||||||||
Less: allocation to restricted stockholders
|
(23
|
)
|
-
|
-
|
-
|
|||||||||||
Net income (loss) allocated to common stockholders
|
$
|
372
|
$
|
(3,064
|
)
|
$
|
(1,577
|
)
|
$
|
(8,531
|
)
|
|||||
Basic loss per share:
|
||||||||||||||||
Denominator:
|
||||||||||||||||
Weighted average common shares outstanding
|
24,741,331
|
24,555,435
|
24,669,838
|
24,544,879
|
||||||||||||
Basic income (loss) per share
|
$
|
0.02
|
$
|
(0.12
|
)
|
$
|
(0.06
|
)
|
$
|
(0.35
|
)
|
|||||
Diluted loss per share:
|
||||||||||||||||
Denominator:
|
||||||||||||||||
Weighted average number of:
|
||||||||||||||||
Common shares outstanding
|
24,741,331
|
24,555,435
|
24,669,838
|
24,544,879
|
||||||||||||
Dilutive potential common shares outstanding:
|
||||||||||||||||
Series A Preferred Stock
|
-
|
-
|
-
|
-
|
||||||||||||
Unvested restricted stock
|
-
|
-
|
-
|
-
|
||||||||||||
Stock options
|
-
|
-
|
-
|
-
|
||||||||||||
Dilutive shares outstanding
|
24,741,331
|
24,555,435
|
24,669,838
|
24,544,879
|
||||||||||||
Diluted income (loss) per share
|
$
|
0.02
|
$
|
(0.12
|
)
|
$
|
(0.06
|
)
|
$
|
(0.35
|
)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
(in thousands, except share data)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Series A Preferred Stock
|
5,577,955
|
-
|
5,513,379
|
-
|
||||||||||||
Unvested restricted stock
|
319,461
|
61,138
|
466,581
|
118,348
|
||||||||||||
5,897,416
|
61,138
|
5,979,960
|
118,348
|
3.
|
REVENUE RECOGNITION
|
Three months ended June 30, 2020
|
Six months ended June 30, 2020
|
|||||||||||||||||||||||
Transportation
and Skilled
Trades
Segment
|
Healthcare
and Other
Professions
Segment
|
Consolidated
|
Transportation
and Skilled
Trades
Segment
|
Healthcare
and Other
Professions
Segment
|
Consolidated
|
|||||||||||||||||||
Timing of Revenue Recognition
|
||||||||||||||||||||||||
Services transferred at a point in time
|
$
|
2,038
|
$
|
939
|
$
|
2,977
|
$
|
4,536
|
$
|
2,013
|
$
|
6,549
|
||||||||||||
Services transferred over time
|
40,877
|
18,616
|
59,493
|
87,435
|
38,527
|
125,962
|
||||||||||||||||||
Total revenues
|
$
|
42,915
|
$
|
19,555
|
$
|
62,470
|
$
|
91,971
|
$
|
40,540
|
$
|
132,511
|
Three months ended June 30, 2019
|
Six months ended June 30, 2019
|
|||||||||||||||||||||||
Transportation
and Skilled
Trades
Segment
|
Healthcare
and Other
Professions
Segment
|
Consolidated
|
Transportation
and Skilled
Trades
Segment
|
Healthcare
and Other
Professions
Segment
|
Consolidated
|
|||||||||||||||||||
Timing of Revenue Recognition
|
||||||||||||||||||||||||
Services transferred at a point in time
|
$
|
2,487
|
$
|
1,159
|
$
|
3,646
|
$
|
4,568
|
$
|
2,233
|
$
|
6,801
|
||||||||||||
Services transferred over time
|
41,541
|
18,382
|
59,923
|
83,786
|
36,246
|
120,032
|
||||||||||||||||||
Total revenues
|
$
|
44,028
|
$
|
19,541
|
$
|
63,569
|
$
|
88,354
|
$
|
38,479
|
$
|
126,833
|
4.
|
LEASES
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Operating cash flow information:
|
||||||||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
3,802
|
$
|
3,821
|
$
|
7,643
|
$
|
7,603
|
||||||||
Non-cash activity:
|
||||||||||||||||
Lease liabilities arising from obtaining right-of-use assets
|
$
|
8,731
|
$
|
657
|
$
|
8,781
|
$
|
48,634
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Weighted-average remaining lease term
|
6.39 years
|
5.63 years
|
6.39 years
|
5.63 years
|
||||||||||||
Weighted-average discount rate
|
11.94
|
%
|
14.43
|
%
|
11.94
|
%
|
14.43
|
%
|
Year ending December 31,
|
||||
2020 (excluding the six months ended June 30, 2020)
|
$
|
7,691
|
||
2021
|
14,045
|
|||
2022
|
13,553
|
|||
2023
|
11,926
|
|||
2024
|
10,689
|
|||
2025
|
9,116
|
|||
Thereafter
|
17,196
|
|||
Total lease payments
|
84,216
|
|||
Less: imputed interest
|
(24,846
|
)
|
||
Present value of lease liabilities
|
$
|
59,370
|
5.
|
GOODWILL AND LONG-LIVED ASSETS
|
Gross
Goodwill
Balance |
Accumulated
Impairment
Losses
|
Net
Goodwill
Balance
|
||||||||||
Balance as of January 1, 2020
|
$
|
117,176
|
$
|
(102,640
|
)
|
$
|
14,536
|
|||||
Adjustments
|
-
|
-
|
-
|
|||||||||
Balance as of June 30, 2020
|
$
|
117,176
|
$
|
(102,640
|
)
|
$
|
14,536
|
Gross
Goodwill
Balance |
Accumulated
Impairment Losses
|
Net
Goodwill
Balance
|
||||||||||
Balance as of January 1, 2019
|
$
|
117,176
|
$
|
(102,640
|
)
|
$
|
14,536
|
|||||
Adjustments
|
-
|
-
|
-
|
|||||||||
Balance as of June 30, 2019
|
$
|
117,176
|
$
|
(102,640
|
)
|
$
|
14,536
|
6.
|
LONG-TERM DEBT
|
June 30,
2020
|
December 31,
2019
|
|||||||
Credit agreement
|
$
|
18,833
|
$
|
34,833
|
||||
Deferred Financing Fees
|
(712
|
)
|
(805
|
)
|
||||
18,121
|
34,028
|
|||||||
Less current maturities
|
(2,000
|
)
|
(2,000
|
)
|
||||
$
|
16,121
|
$
|
32,028
|
Year ending December 31,
|
||||
2020
|
$
|
1,000
|
||
2021
|
2,000
|
|||
2022
|
2,000
|
|||
2023
|
2,000
|
|||
2024
|
11,833
|
|||
$
|
18,833
|
7.
|
STOCKHOLDERS’ EQUITY
|
Shares
|
Weighted
Average Grant
Date Fair Value
Per Share
|
|||||||
Nonvested restricted stock outstanding at December 31, 2019
|
595,436
|
$
|
3.15
|
|||||
Granted
|
1,302,638
|
2.65
|
||||||
Canceled
|
-
|
-
|
||||||
Vested
|
(278,987
|
)
|
3.13
|
|||||
Nonvested restricted stock outstanding at June 30, 2020
|
1,619,087
|
2.75
|
Shares
|
Weighted
Average
Exercise Price
Per Share
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value (in
thousands)
|
||||||||||
Outstanding at December 31, 2019
|
116,000
|
$
|
10.56
|
1.83 years
|
$
|
-
|
|||||||
Granted/Canceled/Vested
|
-
|
-
|
-
|
||||||||||
Outstanding at June 30, 2020
|
116,000
|
10.56
|
1.33 years
|
-
|
|||||||||
Vested as of June 30, 2020
|
116,000
|
10.56
|
1.33 years
|
-
|
|||||||||
Exercisable as of June 30, 2020
|
116,000
|
10.56
|
1.33 years
|
-
|
At June 30, 2020
|
||||||||||||||||||||||
Stock Options Outstanding
|
Stock Options Exercisable
|
|||||||||||||||||||||
Exercise Prices
|
Shares
|
Contractual
Weighted
Average Life
(years)
|
Weighted
Average Price
|
Shares
|
Weighted
Average
Exercise Price
|
|||||||||||||||||
$
|
7.79
|
91,000
|
1.67
|
$
|
7.79
|
91,000
|
$
|
7.79
|
||||||||||||||
$
|
20.62
|
25,000
|
0.10
|
20.62
|
25,999
|
20.62
|
||||||||||||||||
116,000
|
1.33
|
10.56
|
116,999
|
10.56
|
8.
|
INCOME TAXES
|
9.
|
COMMITMENTS AND CONTINGENCIES
|
10.
|
SEGMENTS
|
For the Three Months Ended June 30,
|
||||||||||||||||||||||||
Revenue
|
Operating Income (Loss)
|
|||||||||||||||||||||||
2020
|
% of
Total
|
2019
|
% of
Total
|
2020
|
2019
|
|||||||||||||||||||
Transportation and Skilled Trades
|
$
|
42,915
|
68.7
|
%
|
$
|
44,028
|
69.3
|
%
|
$
|
4,870
|
$
|
2,484
|
||||||||||||
Healthcare and Other Professions
|
19,555
|
31.3
|
%
|
19,541
|
30.7
|
%
|
2,731
|
1,839
|
||||||||||||||||
Corporate
|
-
|
-
|
(6,441
|
)
|
(6,416
|
)
|
||||||||||||||||||
Total
|
$
|
62,470
|
100.0
|
%
|
$
|
63,569
|
100.0
|
%
|
$
|
1,160
|
$
|
(2,093
|
)
|
For the Six Months Ended June 30,
|
||||||||||||||||||||||||
Revenue
|
Operating Income (Loss)
|
|||||||||||||||||||||||
2020
|
% of
Total
|
2019
|
% of
Total
|
2020
|
2019
|
|||||||||||||||||||
Transportation and Skilled Trades
|
$
|
91,971
|
69.4
|
%
|
$
|
88,354
|
69.7
|
%
|
$
|
9,708
|
$
|
4,300
|
||||||||||||
Healthcare and Other Professions
|
40,540
|
30.6
|
%
|
38,479
|
30.3
|
%
|
4,733
|
2,811
|
||||||||||||||||
Corporate
|
-
|
-
|
(14,626
|
)
|
(14,069
|
)
|
||||||||||||||||||
Total
|
$
|
132,511
|
100.0
|
%
|
$
|
126,833
|
100.0
|
%
|
$
|
(185
|
)
|
$
|
(6,958
|
)
|
Total Assets
|
||||||||
June 30, 2020
|
December 31, 2019
|
|||||||
Transportation and Skilled Trades
|
$
|
135,140
|
$
|
121,611
|
||||
Healthcare and Other Professions
|
29,184
|
27,945
|
||||||
Corporate
|
30,577
|
45,207
|
||||||
Total
|
$
|
194,901
|
$
|
194,763
|
11.
|
FAIR VALUE
|
June 30, 2020 | ||||||||||||||||||||
Carrying |
Quoted Prices in
Active Markets
for Identical
Assets
|
Significant Other
Observable Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||||||
Amount
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
23,342
|
$
|
23,342
|
$
|
-
|
$
|
-
|
$
|
23,342
|
||||||||||
Restricted cash
|
2,626
|
2,626
|
-
|
-
|
2,626
|
|||||||||||||||
Prepaid expenses and other current assets
|
3,748
|
-
|
3,748
|
-
|
3,748
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Accrued expenses
|
$
|
12,163
|
$
|
-
|
$
|
12,163
|
$
|
-
|
$
|
12,163
|
||||||||||
Other short term liabilities
|
93
|
-
|
93
|
-
|
93
|
|||||||||||||||
Derivative qualifying cash flow hedge
|
1,017
|
-
|
1,017
|
-
|
1,017
|
|||||||||||||||
Credit facility
|
18,121
|
-
|
14,943
|
-
|
14,943
|
December 31, 2019
|
||||||||||||||||||||
Carrying
|
Quoted Prices in
Active Markets
for Identical
Assets
|
Significant Other
Observable Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||||||
Amount
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
23,644
|
$
|
23,644
|
$
|
-
|
$
|
-
|
$
|
23,644
|
||||||||||
Restricted cash
|
15,000
|
15,000
|
-
|
-
|
15,000
|
|||||||||||||||
Prepaid expenses and other current assets
|
4,190
|
-
|
4,190
|
-
|
4,190
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Accrued expenses
|
$
|
7,869
|
$
|
-
|
$
|
7,869
|
$
|
-
|
$
|
7,869
|
||||||||||
Other short term liabilities
|
199
|
-
|
199
|
-
|
199
|
|||||||||||||||
Derivative qualifying cash flow hedge
|
174
|
-
|
174
|
-
|
174
|
|||||||||||||||
Credit facility
|
34,028
|
-
|
34,028
|
-
|
34,028
|
June 30, 2020
|
December 31, 2019
|
|||||||||||||||
Liability(1)
|
Liability(1)
|
|||||||||||||||
Notional
|
Fair Value
|
Notional
|
Fair Value
|
|||||||||||||
Derivative derived as a heding instrument:
|
||||||||||||||||
Interest Rate Swap
|
$
|
18.8
|
$
|
1.0
|
$
|
19.8
|
$
|
0.1
|
(1) |
The Company’s derivative liability is measured at fair value using observable market inputs such as interest rates and our own credit risk as well as an evaluation of our counterparty’s credit risk. Based on
these inputs the derivative liability is classified within Level 2 of the valuation hierarchy. The liability is included in other long-term liabilities in the condensed consolidated balance sheets.
|
Three Months Ended
|
Six Months Ended
|
|||||||
June 30, 2020
|
||||||||
Interest expense
|
||||||||
Interest Rate Swap
|
$
|
0.1
|
$
|
0.1
|
June 30, 2020
|
||||||||
Three Months Ended
|
Six Months Ended
|
|||||||
Derivative qualifying as cash flow hedge
|
||||||||
Interest rate swap loss
|
$
|
0.1
|
$
|
0.8
|
12.
|
COVID-19 PANDEMIC AND CARES ACT
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Costs and expenses:
|
||||||||||||||||
Educational services and facilities
|
42.0
|
%
|
46.8
|
%
|
42.6
|
%
|
47.1
|
%
|
||||||||
Selling, general and administrative
|
56.3
|
%
|
56.5
|
%
|
57.6
|
%
|
58.4
|
%
|
||||||||
(Gain) loss on sale of assets
|
-0.2
|
%
|
0.0
|
%
|
-0.1
|
%
|
0.0
|
%
|
||||||||
Total costs and expenses
|
98.1
|
%
|
103.3
|
%
|
100.1
|
%
|
105.5
|
%
|
||||||||
Operating income (loss)
|
1.9
|
%
|
-3.3
|
%
|
-0.1
|
%
|
-5.5
|
%
|
||||||||
Interest expense, net
|
-0.5
|
%
|
-1.3
|
%
|
-0.5
|
%
|
-1.1
|
%
|
||||||||
Income (loss) from operations before income taxes
|
1.4
|
%
|
-4.6
|
%
|
-0.6
|
%
|
-6.6
|
%
|
||||||||
Provision for income taxes
|
0.1
|
%
|
0.2
|
%
|
0.1
|
%
|
0.2
|
%
|
||||||||
Net income (loss)
|
1.3
|
%
|
-4.8
|
%
|
-0.7
|
%
|
-6.8
|
%
|
Three Months Ended June 30,
|
||||||||||||
2020
|
2019
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Transportation and Skilled Trades
|
$
|
42,915
|
$
|
44,028
|
-2.5
|
%
|
||||||
HOPS
|
19,555
|
19,541
|
0.1
|
%
|
||||||||
Total
|
$
|
62,470
|
$
|
63,569
|
-1.7
|
%
|
||||||
Operating Income (Loss):
|
||||||||||||
Transportation and Skilled Trades
|
$
|
4,870
|
$
|
2,484
|
96.1
|
%
|
||||||
Healthcare and Other Professions
|
2,731
|
1,839
|
48.5
|
%
|
||||||||
Corporate
|
(6,441
|
)
|
(6,416
|
)
|
-0.4
|
%
|
||||||
Total
|
$
|
1,160
|
$
|
(2,093
|
)
|
155.4
|
%
|
|||||
Starts:
|
||||||||||||
Transportation and Skilled Trades
|
2,302
|
2,028
|
13.5
|
%
|
||||||||
Healthcare and Other Professions
|
1,127
|
949
|
18.8
|
%
|
||||||||
Total
|
3,429
|
2,977
|
15.2
|
%
|
||||||||
Average Population:
|
||||||||||||
Transportation and Skilled Trades
|
7,298
|
6,827
|
6.9
|
%
|
||||||||
Leave of Absense - COVID-19
|
(424
|
)
|
-
|
100.0
|
%
|
|||||||
Transportation and Skilled Trades Excluding Leave of Absense - COVID-19
|
6,874
|
6,827
|
0.7
|
%
|
||||||||
Healthcare and Other Professions
|
4,254
|
3,578
|
18.9
|
%
|
||||||||
Leave of Absense - COVID-19
|
(393
|
)
|
-
|
100.0
|
%
|
|||||||
Healthcare and Other Professions Excluding Leave of Absense - COVID-19
|
3,861
|
3,578
|
7.9
|
%
|
||||||||
Total
|
11,552
|
10,405
|
11.0
|
%
|
||||||||
Total Excluding Leave of Absense - COVID-19
|
10,735
|
10,405
|
3.2
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Transportation and Skilled Trades
|
7,826
|
7,195
|
8.8
|
%
|
||||||||
Leave of Absense - COVID-19
|
(463
|
)
|
-
|
100.0
|
%
|
|||||||
Transportation and Skilled Trades Excluding Leave of Absense - COVID-19
|
7,363
|
7,195
|
2.3
|
%
|
||||||||
Healthcare and Other Professions
|
4,456
|
3,582
|
24.4
|
%
|
||||||||
Leave of Absense - COVID-19
|
(233
|
)
|
-
|
100.0
|
%
|
|||||||
Healthcare and Other Professions Excluding Leave of Absense - COVID-19
|
4,223
|
3,582
|
17.9
|
%
|
||||||||
Total
|
12,282
|
10,777
|
14.0
|
%
|
||||||||
Total Excluding Leave of Absense - COVID-19
|
11,586
|
10,777
|
7.5
|
%
|
• |
Revenue was $42.9 million for the three months ended June 30, 2020, down 2.5% from $44.0 in the prior year comparable period million despite the 6.9% increase in average student population. Student start growth
increased 13.5% for the three months ended June 30, 2020 as compared to the prior year comparable period. As a result, the Company’s ending population as of June 30, 2020 grew 8.8% compared to prior year. After excluding students who are
on leave of absence as a result of the impact of COVID-19, the ending population grew 2.3% or approximately 170 students. Non-tuition revenue was reduced $0.8 million due to credits issued to students for Company owned dorms and meal fees
resulting from campus closures caused by COVID-19. In addition, as a result of the impact of COVID-19, graduation dates for certain programs have been extended due to restricted access to externships sites and classroom labs which resulted
in $0.1 million in revenue being deferred to the second half of the year.
|
• |
Educational services and facilities expense decreased $2.8 million, or 14.0% to $17.6 million for the three months ended June 30, 2020 from $20.4 million in the prior year comparable period. Reduced costs were a
result of several factors including facilities cost savings due to facility closure during the quarter as a result of actions taken to control transmission of COVID-19; renegotiation of lease terms at certain campuses reducing rent expense;
and the reduction in instructional and books and tools expenses as a result of students completing their course remotely.
|
• |
Selling, general and administrative expense decreased $0.5 million, or 2.5% to $20.6 million for the three months ended June 30, 2020 from $21.1 million in the prior year comparable period. The cost savings were
primarily attributed to reductions in sales expense, student services and marketing expense partially offset by an increase in bad debt expense, which are all discussed above in the consolidated results from operations.
|
• |
Revenue remained essentially flat at $19.5 million for the three months ended June 30, 2020 and 2019, despite the 18.9% increases in average student population. Student start growth increased 18.8% for the three
months ended June 30, 2020 as compared to the prior year comparable period. As a result, the Company’s ending population as of June 30, 2020 grew 24.4% compared to prior year. After excluding students who are on leave of absence as a
result of the impact of COVID-19, ending population grew 17.9% or approximately 640 students. Partially offsetting student start growth was the extension of graduation dates for certain programs which have been extended due to restricted
access to externships sites and classroom labs due to COVID-19. These restrictions have resulted in $0.8 million in revenue being deferred to the second half of the year.
|
• |
Educational services and facilities expense decreased $0.6 million, or 6.8% to $8.7 million for the three months ended June 30, 2020 from $9.3 million in the prior year comparable period. Reduced costs were a
result of several factors including facilities cost savings due to facility closure during the quarter as a result of actions taken to control transmission of COVID-19; renegotiation of lease terms at certain campuses reducing rent expense;
and the reduction in instructional and books and tools expenses as a result of students completing their course remotely.
|
• |
Selling general and administrative expense decreased $0.3 million, or 2.9% to $8.1 million for the three months ended June 30, 2020 from $8.4 million in the prior year comparable period. The cost savings were
primarily attributed to reductions in sales expense, student services and marketing expense partially offset by an increase in bad debt expense, which are all discussed above in the consolidated results from operations.
|
Six Months Ended June 30,
|
||||||||||||
2020
|
2019
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Transportation and Skilled Trades
|
$
|
91,971
|
$
|
88,354
|
4.1
|
%
|
||||||
HOPS
|
40,540
|
38,479
|
5.4
|
%
|
||||||||
Total
|
$
|
132,511
|
$
|
126,833
|
4.5
|
%
|
||||||
Operating Income (Loss):
|
||||||||||||
Transportation and Skilled Trades
|
$
|
9,708
|
$
|
4,300
|
125.8
|
%
|
||||||
Healthcare and Other Professions
|
4,733
|
2,811
|
68.4
|
%
|
||||||||
Corporate
|
(14,626
|
)
|
(14,069
|
)
|
-4.0
|
%
|
||||||
Total
|
$
|
(185
|
)
|
$
|
(6,958
|
)
|
97.3
|
%
|
||||
Starts:
|
||||||||||||
Transportation and Skilled Trades
|
4,022
|
3,849
|
4.5
|
%
|
||||||||
Healthcare and Other Professions
|
2,123
|
1,987
|
6.8
|
%
|
||||||||
Total
|
6,145
|
5,836
|
5.3
|
%
|
||||||||
Average Population:
|
||||||||||||
Transportation and Skilled Trades
|
7,302
|
6,935
|
5.3
|
%
|
||||||||
Leave of Absense - COVID-19
|
(223
|
)
|
-
|
100.0
|
%
|
|||||||
Transportation and Skilled Trades Excluding Leave of Absense - COVID-19
|
7,079
|
6,935
|
2.1
|
%
|
||||||||
Healthcare and Other Professions
|
4,120
|
3,561
|
15.7
|
%
|
||||||||
Leave of Absense - COVID-19
|
(213
|
)
|
-
|
100.0
|
%
|
|||||||
Healthcare and Other Professions Excluding Leave of Absense - COVID-19
|
3,907
|
3,561
|
9.7
|
%
|
||||||||
Total
|
11,422
|
10,496
|
8.8
|
%
|
||||||||
Total Excluding Leave of Absense - COVID-19
|
10,986
|
10,496
|
4.7
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Transportation and Skilled Trades
|
7,826
|
7,195
|
8.8
|
%
|
||||||||
Leave of Absense - COVID-19
|
(463
|
)
|
-
|
100.0
|
%
|
|||||||
Transportation and Skilled Trades Excluding Leave of Absense - COVID-19
|
7,363
|
7,195
|
2.3
|
%
|
||||||||
Healthcare and Other Professions
|
4,456
|
3,582
|
24.4
|
%
|
||||||||
Leave of Absense - COVID-19
|
(233
|
)
|
-
|
100.0
|
%
|
|||||||
Healthcare and Other Professions Excluding Leave of Absense - COVID-19
|
4,223
|
3,582
|
17.9
|
%
|
||||||||
Total
|
12,282
|
10,777
|
14.0
|
%
|
||||||||
Total Excluding Leave of Absense - COVID-19
|
11,586
|
10,777
|
7.5
|
%
|
• |
Revenue increased $3.6 million, or 4.1% to $92.0 million for the six months ended June 30, 2020 from $88.4 million in the prior year comparable period. The increase was the result of a 2.1% increase in
average population excluding the students on leave of absence due to COVID-19 driven by starting the year with approximately 360 more students than in the prior year comparable period. As a result, our ending population grew 8.8%
compared to prior year. Excluding students on leave of absence as a result of COVID-19, ending population grew 2.3% or approximately 170 students. The majority of these students were near the end of their programs and are
expected to resume their program during the third quarter as all of our schools are now open and more externship sites reopen. We do not recognize revenue during a students’ leave of absence period, therefore, we anticipate earning revenue
starting in the third quarter upon the students’ return. Partially offsetting the increase in revenue was the impact of COVID-19, which has extended graduation dates for certain programs due to restricted
access to externship sites and classroom labs. These restrictions have deferred $0.1 million in revenue to the second half of the year. In addition, non-tuition revenue was reduced $0.8 million due to credits issues to students for dorm
and meal fees resulting from campus closures caused by COVID-19. The dorms are owned and operated by the Company. We received funds under the Cares Act which may be used to reimburse the Company for the student credits issued,
but at this time we are awaiting further guidance from the DOE on the appropriate application of such funds.
|
• |
Educational services and facilities expense decreased $2.9 million, or 7.1% to $38.1 million for the six months ended June 30, 2020 from $41.0 million in the prior year comparable period. Reduced costs were a
result of several factors including facilities cost savings due to facility closures during the first and second quarter as a result of actions taken to control transmission of COVID-19; renegotiation of lease terms at certain campuses
reducing rent expense; and the reduction in instructional and books and tools expenses as a result of students completing their course remotely.
|
• |
Selling general and administrative expenses increased $1.2 million, or 2.8% to $44.2 million for the six months ended June 30, 2020 from $43.0 million in the prior year comparable period. The increase was
primarily the result of an increase in bad debt expense, partially offset by cost savings realized in sales expense and student services expense discussed above in the consolidated results of operations.
|
• |
Revenue increased $2.0 million, or 5.4% to $40.5 million for the six months ended June 30, 2020 from $38.5 million in the prior year comparable period. The increase was the result of a 9.7% increase in
average population excluding the students on leave of absence due to COVID-19 driven by starting the year with approximately 400 more students than in the prior year comparable period. As a result, our ending population as of
June 30, 2020 grew 24.4% compared to prior year. Excluding students on leave of absence as a result of COVID-19, ending population grew 17.9% or approximately 640 students. The majority of these students were near the end of their programs
and are expected to resume their program during the third quarter as all of our schools are now open and more externship sites reopen. We do not recognize revenue during a students’ leave of absence period, therefore, we anticipate earning
revenue starting in the third quarter upon the students’ return. Partially offsetting the increase in revenue was the impact of COVID-19 that resulted in a decrease of $0.8 million of revenue which is being
deferred to the second half of the year. The deferral resulted from certain programs that were extended due to restricted access to externship sites and classroom labs.
|
• |
Educational services and facilities expense decreased $0.3 million, or 1.8% to $18.4 million for the six months ended June 30, 2020 from $18.7 million in the prior year comparable period. Reduced costs were a
result of facilities cost savings due to facility closures during the first and second quarter as a result of actions taken to control transmission of COVID-19 and renegotiation of lease terms at certain campuses reducing rent expense.
Partially offsetting the savings were increases in instructional expense as a result of starting the year with approximately 400 more students than prior year in correlation with an increased average student population that was up 12.5% in
the first quarter of 2020 compared to the prior year comparable period. The additional costs incurred in the first quarter of 2020 were partially offset by savings realized in the second quarter of 2020.
|
• |
Selling, general and administrative expense increased $0.5 million, or 2.8% to $17.5 million for the six months ended June 30, 2020 from $17.0 million in the prior year comparable period. The increase was
primarily the result of an increase in bad debt expense, partially offset by cost savings realized in marketing expense, both of which are discussed above in the consolidated results of operations.
|
Six Months Ended
June 30, |
||||||||
2020
|
2019
|
|||||||
Net cash provided by (used in) operating activities
|
$
|
6,468
|
$
|
(10,782
|
)
|
|||
Net cash used in investing activities
|
(2,975
|
)
|
(1,212
|
)
|
||||
Net cash used in financing activities
|
(16,169
|
)
|
(22,966
|
)
|
June 30,
2020 |
December 31,
2019 |
|||||||
Credit agreement
|
$
|
18,833
|
$
|
34,833
|
||||
Deferred Financing Fees
|
(712
|
)
|
(805
|
)
|
||||
18,121
|
34,028
|
|||||||
Less current maturities
|
(2,000
|
)
|
(2,000
|
)
|
||||
$
|
16,121
|
$
|
32,028
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 year
|
1-3 years
|
3-5 years
|
More than
5 years
|
||||||||||||||||
Credit facility*
|
$
|
18,833
|
$
|
2,000
|
$
|
4,000
|
$
|
12,833
|
$
|
-
|
||||||||||
Operating leases
|
85,965
|
14,978
|
27,277
|
21,599
|
22,111
|
|||||||||||||||
Interest on term loan**
|
3,528
|
974
|
1,621
|
933
|
-
|
|||||||||||||||
Total contractual cash obligations
|
$
|
108,326
|
$
|
17,952
|
$
|
32,898
|
$
|
35,365
|
$
|
22,111
|
Item 4. |
CONTROLS AND PROCEDURES
|
Item 1 A. |
RISK FACTORS
|
Exhibit
Number
|
Description
|
3.1
|
Amended and Restated Bylaws of Lincoln Educational Services Corporation (as amended through April 24, 2020) (incorporated by reference to Exhibit 3.1 to the Company’s
Quarterly Report on Form 10-Q filed with the SEC on May 15, 2020).
|
10.1
|
Lincoln Educational Services Corporation 2020 Long-Term Incentive Plan (as amended) (incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form
8-K filed with the SEC on June 5, 2020).
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101*
|
The following financial statements from Lincoln Educational Services Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed
Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income, (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows
and (vi) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and in detail.
|
* |
As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
|
LINCOLN EDUCATIONAL SERVICES CORPORATION
|
|||
Date: August 13, 2020
|
By:
|
/s/ Brian Meyers
|
|
Brian Meyers
|
|||
Executive Vice President, Chief Financial Officer and Treasurer
|
Amended and Restated Bylaws of Lincoln Educational Services Corporation (as amended through April 24, 2020) (incorporated by reference to Exhibit 3.1 to the Company’s
Quarterly Report on Form 10-Q filed with the SEC on May 15, 2020).
|
|
Lincoln Educational Services Corporation 2020 Long-Term Incentive Plan (as amended) (incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form
8-K filed with the SEC on June 5, 2020).
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101*
|
The following financial statements from Lincoln Educational Services Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed
Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income, (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows
and (vi) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and in detail.
|
* |
As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
|
1. |
I have reviewed this quarterly report on Form 10-Q of Lincoln Educational Services Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
Date: August 13, 2020
|
|
Scott Shaw
|
|
Chief Executive Officer
|
1. |
I have reviewed this quarterly report on Form 10-Q of Lincoln Educational Services Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
Date: August 13, 2020
|
|
/s/ Brian Meyers
|
|
Brian Meyers
|
|
Chief Financial Officer
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 13, 2020
|
/s/ Scott Shaw
|
|
Scott Shaw
|
|
Chief Executive Officer
|
/s/ Brian Meyers
|
|
Brian Meyers
|
|
Chief Financial Officer
|