UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 8, 2024
(Exact Name of Registrant as Specified in Charter)
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (973 )
736-9340
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which
registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. |
Results of Operations and Financial Condition.
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On August 8, 2024, Lincoln Educational Services Corporation. (the “Company”) issued a press release announcing financial results for the second
quarter. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated in this Item 2.02 by reference.
The information contained under this Item 2.02 in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be
deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Furthermore, the information contained under this Item 2.02 in this Current Report on
Form 8-K, including Exhibit 99.1, shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, unless specifically identified therein as being
incorporated therein by reference. The furnishing of the information under this Item 2.02 in this Current Report is not intended to, and does not, constitute a determination or admission by the Company that the information contained under this
Item 2.02 in this Current Report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.
| Item 9.01 |
Financial Statements and Exhibits.
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(d) Exhibits
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Press release of Lincoln Educational Services Corporation dated August 8, 2024
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104
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Cover Page Interactive Data File (embedded within the inline XBRL document).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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LINCOLN EDUCATIONAL SERVICES CORPORATION
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Date: August 8, 2024
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By:
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/s/ Brian K. Meyers
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Name:
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Brian K. Meyers | |
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Title:
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Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit 99.1
Lincoln Educational Services Reports Double Digit Growth in Revenue and Student Starts During
Second Quarter 2024
Conference Call Today at 10 a.m. ET
PARSIPPANY, N.J., August 8, 2024 – Lincoln
Educational Services Corporation (Nasdaq: LINC) today announced financial and operating results for the second quarter ended June 30, 2024, as well as recent business developments.
Second Quarter 2024 Financial Highlights*
| • |
Revenue grew 16.1% to $102.9 million
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| • |
Student starts increased 12.3%; 11.4% increase in quarter-end student population
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| • |
Net loss of $700,000 and Adjusted EBITDA of $6.2 million
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| • |
Total liquidity of more than $100 million; no debt outstanding
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| • |
New East Point, Georgia Campus student starts to date exceeds full year plan
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| • |
Raised outlook for full year Revenue; raised lower end of adjusted EBITDA, adjusted net income and student starts; reduced 2024 capital expenditures due to timing
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*Note: The highlighted financial results exclude the Transitional segment results of the prior year. A reconciliation of GAAP / non-GAAP measures is included in this
release.
“We continued our strong performance during the second quarter with revenue growing 16.1%, student starts increasing 12.3% and adjusted EBITDA more than doubling
compared to last year," commented Scott Shaw, President & CEO. “The transformational growth strategies we have set in place are enabling Lincoln to capitalize on the American public’s increased interest in educational alternatives to a
traditional four-year college degree while employers continue to face a workforce skills gap, which is driving demand for our graduates.”
“We remain focused on improving our efficiency as we grow, while always striving to improve our student experience and outcomes. The rollout of our hybrid teaching
platform, Lincoln 10.0, which is nearing completion, supports these objectives and plays a critical role in the key components of our growth strategy, new campus development and program replication at existing campuses. The first new campus in East
Point, Georgia opened in March is off to an exceptionally strong start with student starts during its first four months exceeding our original forecast for the full year.”
“During the second quarter, we continued the buildouts of our campus relocations in Nashville, Tennessee and Levittown, Pennsylvania, which are both expected to open in
the first half of 2025. We are also continuing work on our new campus in Houston, Texas which is now anticipated to welcome students by the end of 2025. We anticipate announcing another new campus in the upcoming months as we continue to expand our
footprint.”
1
“We continued to develop our existing corporate partnerships and are in various stages of negotiations with new partners. The workforce development partnership with
Container Maintenance Corporation (CMC) began operations in June at CMC’s Charleston, South Carolina facility. We believe our company has unique capabilities to expand workforce development programs to capitalize on this significant opportunity and
are executing plans to realize this potential.”
“Our performance over the first six months of 2024, combined with our outlook into the second half of the year, leads us to raise our outlook for our full year revenue and
increase the low end of the range of our adjusted EBITDA, adjusted net income and student start metrics. We are focused on realizing our full potential for our students, instructors, partners and shareholders and the first six months of 2024
position Lincoln to achieve our growth objectives for 2024 and beyond.”
2024 SECOND QUARTER FINANCIAL RESULTS
(Quarter ended June 30, 2024, compared to June 30, 2023)
| • |
Revenue grew by $14.3 million, or 16.1% to
$102.9 million. The increase was primarily due to an 11.7% increase in average student population resulting from entering this quarter with 11.2% more students combined with new student start growth of 12.3%. Revenue per student also
helped drive overall growth in revenue.
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| • |
Benefit for income taxes was $0.5 million resulting from a pre-tax loss and a discrete item, compared to a tax provision
of $6.8 million in the prior year mainly driven by a $30.9 million gain recognized on the sale of the Nashville, Tennessee property.
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2
SECOND QUARTER SEGMENT RESULTS
Campus Operations Segment
Revenue increased $14.7 million, or 16.7% to $102.9 million. Adjusted EBITDA increased $5.4 million or 52.9% to $15.8 million, from $10.3 million in the prior year.
Transitional Segment
The Somerville, Massachusetts campus teach-out was completed in the fourth quarter of 2023. In the prior year comparable period, the Somerville campus
had revenue of $0.4 million and operating expenses of $0.9 million.
Corporate and Other
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expense were $10.7 million and $11.1 million
for the three months ended June 30, 2024, and 2023, respectively, after excluding a $30.9 million gain in the prior year resulting from the sale of the Nashville, Tennessee property. The decrease in expense from the prior year was primarily driven
by a reduction in stock-based compensation expense resulting from last year’s cumulative catch-up of expense due to meeting financial performance targets, partially offset by additional salaries and benefits expense resulting in part from student
population growth.
SIX MONTHS FINANCIAL RESULTS
(Quarter ended June 30, 2024, compared to June 30, 2023)
| • |
Total revenue increased $30.4 million, or 17.3%, to $206.3 million, compared to $175.9 million.
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| • |
Campus Operations Segment revenue increased $31.7 million, or 18.2% to $206.2 million, compared to $174.5 million.
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| • |
Transitional Segment revenue decreased $1.4 million, or 100% to zero, compared to $1.4 million.
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3
FULL YEAR 2024 OUTLOOK
Based on second quarter operating and financial results, as well as the outlook for the
remainder of the year, the Company is raising the financial guidance for revenue and raising the lower end range for adjusted EBITDA, adjusted net income and student starts. Additionally, the Company is reducing the capital expenditures guidance
due to timing of capital spend from 2024 to 2025 primarily related to the Company’s new Houston, Texas campus. Also, the campus relocations in Nashville, Tennessee and Levittown, Pennsylvania buildouts are slightly ahead of schedule and are
expected to open in the first half of 2025. Updated, guidance for the full year 2024 is outlined below:
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2024 Guidance
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(Amounts in millions except for student starts)
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Low
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High
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|||||||||||
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Revenue
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$
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423
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-
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$
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430
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Adjusted EBITDA
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$
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39
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-
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$
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42
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1 |
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Adjusted net income
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$
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14
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-
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$
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17
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1 |
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Capital expenditures
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$
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45
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-
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$
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55
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Starts
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9
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%
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-
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12
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%
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1
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The guidance in this release includes references to non-GAAP operating measures. A reconciliation to the midpoint of our guidance can be reviewed below in
the non-GAAP operating measures at the end of this release.
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CONFERENCE CALL INFO
Lincoln will host a conference call today at 10:00 a.m. Eastern Standard Time to discuss results.
To access the live webcast of the conference call, please go to the Investor Overview section of Lincoln’s website at http://www.lincolntech.edu. Participants may also register via
teleconference at: Q2 2024 Lincoln Educational Services Earnings Conference Call. Once registration is completed, participants will be provided with a dial-in number containing a
personalized PIN to access the call. Participants are requested to register at least 15 minutes prior to the start of the call.
An archived version of the webcast will be accessible for 90 days at http://www.lincolntech.edu.
ABOUT LINCOLN EDUCATIONAL SERVICES CORPORATION
Lincoln Educational Services Corporation is a leading provider of diversified career-oriented post-secondary education helping to provide solutions
to America’s skills gap. Lincoln offers career-oriented programs to recent high school graduates and working adults in five principal areas of study: automotive technology, health sciences, skilled trades, business and information technology, and
hospitality services. Lincoln has provided the workforce with skilled technicians since its inception in 1946 and currently operates 22 campuses in 13 states under Lincoln College of Technology, Lincoln Technical Institute, Lincoln Culinary
Institute, Euphoria Institute of Beauty Arts and Sciences and associated brand names. For more information, please go to www.lincolntech.edu.
4
FORWARD-LOOKING STATEMENTS
Statements in this press release and in oral statements made from time to time by representatives of Lincoln Educational Services Corporation
regarding Lincoln’s business that are not historical facts, including those made in a conference call, may be “forward-looking statements” as that term is defined in the federal securities law. The words “may,” “will,” “expect,” “believe,”
“anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on information available at the time those
statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or
suggested by the forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will
be achieved, if at all. Generally, these statements relate to business plans or strategies and projections involving anticipated revenues, earnings, or other aspects of the Company’s operating results. Such forward-looking statements include the
Company’s current belief that it is taking appropriate steps regarding the pandemic and that student growth will continue. The Company cautions you that these statements concern current expectations about the Company’s future performance or events
and are subject to a number of uncertainties, risks, and other influences, many of which are beyond the Company’s control, that may influence the accuracy of the statements and the projects upon which the statements are based including, without
limitation, impacts related to the COVID-19 pandemic or other epidemics or pandemics; our failure to comply with the extensive regulatory framework applicable to our industry or our failure to obtain timely regulatory approvals in connection with
acquisitions or a change of control of our Company; our success in updating and expanding the content of existing programs and developing new programs for our students in a cost-effective manner or on a timely basis; risks associated with
cybersecurity; risks associated with changes in applicable federal laws and regulations; uncertainties regarding our ability to comply with federal laws and regulations, such as the 90/10 rule and prescribed cohort default rates; risks associated
with the opening of new campuses; risks associated with integration of acquired schools; industry competition; our ability to execute our growth strategies; conditions and trends in our industry; general economic conditions; and other factors
discussed in the “Risk Factors” section of our Annual Reports and Quarterly Reports filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and Lincoln
undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise after the date hereof.
5
(Tables to Follow)
(In Thousands)
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Three Months Ended
June 30,
(Unaudited)
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Six Months Ended
June 30,
(Unaudited)
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|||||||||||||||
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2024
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2023
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2024
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2023
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|||||||||||||
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REVENUE
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$
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102,914
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$
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88,646
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$
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206,281
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$
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175,929
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||||||||
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COSTS AND EXPENSES:
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||||||||||||||||
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Educational services and facilities
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45,561
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40,030
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88,584
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78,123
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||||||||||||
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Selling, general and administrative
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57,865
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51,814
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118,359
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102,119
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||||||||||||
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Loss (gain) on sale of assets
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604
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(30,933
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)
|
913
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(30,933
|
)
|
||||||||||
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Impairment of goodwill and long-lived assets
|
-
|
4,220
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-
|
4,220
|
||||||||||||
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Total costs & expenses
|
104,030
|
65,131
|
207,856
|
153,529
|
||||||||||||
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OPERATING ( LOSS) INCOME
|
(1,116
|
)
|
23,515
|
(1,575
|
)
|
22,400
|
||||||||||
|
OTHER:
|
||||||||||||||||
|
Interest income
|
638
|
547
|
1,336
|
1,013
|
||||||||||||
|
Interest expense
|
(667
|
)
|
(28
|
)
|
(1,234
|
)
|
(53
|
)
|
||||||||
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(LOSS) INCOME BEFORE INCOME TAXES
|
(1,145
|
)
|
24,034
|
(1,473
|
)
|
23,360
|
||||||||||
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(BENEFIT) PROVISION FOR INCOME TAXES
|
(463
|
)
|
6,784
|
(577
|
)
|
6,219
|
||||||||||
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NET (LOSS) INCOME
|
$
|
(682
|
)
|
$
|
17,250
|
$
|
(896
|
)
|
$
|
17,141
|
||||||
|
Basic
|
||||||||||||||||
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Net (loss) income per common share
|
$
|
(0.02
|
)
|
$
|
0.57
|
$
|
(0.03
|
)
|
$
|
0.57
|
||||||
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Diluted
|
||||||||||||||||
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Net (loss) income per common share
|
$
|
(0.02
|
)
|
$
|
0.57
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$
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(0.03
|
)
|
$
|
0.57
|
||||||
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Weighted average number of common shares outstanding:
|
||||||||||||||||
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Basic
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30,660
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30,140
|
30,481
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30,090
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||||||||||||
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Diluted
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30,660
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30,397
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30,481
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30,333
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||||||||||||
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Other data:
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||||||||||||||||
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Adjusted EBITDA (1)
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$
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6,240
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$
|
2,444
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$
|
12,784
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$
|
4,641
|
||||||||
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Depreciation and amortization
|
$
|
3,323
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$
|
1,679
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$
|
6,288
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$
|
2,933
|
||||||||
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Number of campuses
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22
|
22
|
22
|
22
|
||||||||||||
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Average enrollment
|
13,811
|
12,453
|
13,745
|
12,420
|
||||||||||||
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Net cash provided by (used in) operating activities
|
$
|
8,335
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$
|
10,617
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$
|
(6,599
|
)
|
$
|
10,403
|
|||||||
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Net cash (used in) provided by investing activities
|
$
|
(11,041
|
)
|
$
|
16,072
|
$
|
(3,007
|
)
|
$
|
12,823
|
||||||
|
Net cash used in financing activities
|
$
|
(82
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)
|
$
|
(610
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)
|
$
|
(3,676
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)
|
$
|
(2,945
|
)
|
||||
|
Selected Consolidated Balance Sheet Data:
|
June 30, 2024
(Unaudited)
|
|||
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Cash and cash equivalents
|
$
|
66,987
|
||
|
Current assets
|
119,391
|
|||
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Working capital
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52,499
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|||
|
Total assets
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366,379
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|||
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Current liabilities
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66,892
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|||
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Total stockholders' equity
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164,856
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|||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), 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, adjusted EBITDA, adjusted net income and total liquidity are measures not recognized in financial statements
presented in accordance with GAAP.
6
| • |
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 and adjustments for items not considered part of the Company’s normal recurring operations.
|
| • |
We define adjusted net income as net income plus adjustments for items not considered part of the Company’s normal recurring operations.
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| • |
We define total liquidity as the Company’s cash and cash equivalents, short-term investments and restricted cash.
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EBITDA, adjusted EBITDA, adjusted net income, and total liquidity are presented because we believe they are useful indicators of the Company’s performance and ability to make strategic
investments 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, adjusted net income and total liquidity are not necessarily comparable to similarly titled measures used by other companies.
7
The following is a reconciliation of net income (loss) to EBITDA, adjusted EBITDA, adjusted net income, and total liquidity:
|
Three Months Ended June 30,
(Unaudited)
Consolidated Operations
|
Six Months Ended June 30,
(Unaudited)
Consolidated Operations
|
|||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||
|
Net (loss) income
|
$
|
(682
|
)
|
$
|
17,250
|
$
|
(896
|
)
|
$
|
17,141
|
||||||
|
Interest expense (income), net
|
29
|
(519
|
)
|
(102
|
)
|
(960
|
)
|
|||||||||
|
(Benefit) provision for income taxes
|
(463
|
)
|
6,784
|
(577
|
)
|
6,219
|
||||||||||
|
Depreciation and amortization
|
3,323
|
1,679
|
6,288
|
2,933
|
||||||||||||
|
EBITDA
|
2,207
|
25,194
|
4,713
|
25,333
|
||||||||||||
|
Stock compensation expense
|
1,045
|
2,576
|
2,103
|
3,388
|
||||||||||||
|
New campus and campus relocation costs
|
2,623
|
410
|
5,425
|
670
|
||||||||||||
|
Program expansions
|
365
|
-
|
454
|
-
|
||||||||||||
|
Gain on sale of Nashville, Tennessee
|
-
|
(30,939
|
)
|
-
|
(30,939
|
)
|
||||||||||
|
Impairment of goodwill and long-lived assets
|
-
|
4,220
|
-
|
4,220
|
||||||||||||
|
Severance and other one-time costs
|
-
|
505
|
89
|
1,299
|
||||||||||||
|
Transitional segment
|
-
|
478
|
-
|
670
|
||||||||||||
|
Adjusted EBITDA
|
$
|
6,240
|
$
|
2,444
|
$
|
12,784
|
$
|
4,641
|
||||||||
|
Three Months Ended June 30,
(Unaudited)
|
||||||||||||||||||||||||
|
Campus Operations
|
Transitional
|
Corporate
|
||||||||||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||||||||
|
Net income (loss)
|
$
|
9,065
|
$
|
4,169
|
$
|
-
|
$
|
(482
|
)
|
$
|
(9,747
|
)
|
$
|
13,563
|
||||||||||
|
Interest expense (income), net
|
565
|
-
|
-
|
-
|
(536
|
)
|
(519
|
)
|
||||||||||||||||
|
(Benefit) provision for income taxes
|
-
|
-
|
-
|
-
|
(463
|
)
|
6,784
|
|||||||||||||||||
|
Depreciation and amortization
|
3,148
|
1,514
|
-
|
4
|
175
|
161
|
||||||||||||||||||
|
EBITDA
|
12,778
|
5,683
|
-
|
(478
|
)
|
(10,571
|
)
|
19,989
|
||||||||||||||||
|
Stock compensation expense
|
-
|
-
|
-
|
-
|
1,045
|
2,576
|
||||||||||||||||||
|
New campus and campus relocation costs
|
2,623
|
410
|
-
|
-
|
-
|
-
|
||||||||||||||||||
|
Program expansions
|
365
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
|
Gain on sale of Nashville, Tennessee
|
-
|
-
|
-
|
-
|
-
|
(30,939
|
)
|
|||||||||||||||||
|
Impairment of goodwill and long-lived assets
|
-
|
4,220
|
-
|
-
|
-
|
-
|
||||||||||||||||||
|
Severance and other one-time costs
|
-
|
-
|
-
|
-
|
-
|
505
|
||||||||||||||||||
|
Transitional segment
|
-
|
-
|
-
|
478
|
-
|
-
|
||||||||||||||||||
|
Adjusted EBITDA
|
$
|
15,766
|
$
|
10,313
|
$
|
-
|
$
|
-
|
$
|
(9,526
|
)
|
$
|
(7,869
|
)
|
||||||||||
8
|
Six Months Ended June 30,
(Unaudited)
|
||||||||||||||||||||||||
|
Campus Operations
|
Transitional
|
Corporate
|
||||||||||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||||||||
|
Net income (loss)
|
$
|
20,888
|
$
|
14,278
|
$
|
-
|
$
|
(678
|
)
|
$
|
(21,784
|
)
|
$
|
3,541
|
||||||||||
|
Interest expense (income), net
|
1,066
|
-
|
-
|
-
|
(1,168
|
)
|
(960
|
)
|
||||||||||||||||
|
(Benefit) provision for income taxes
|
-
|
-
|
-
|
-
|
(577
|
)
|
6,219
|
|||||||||||||||||
|
Depreciation and amortization
|
5,922
|
2,612
|
-
|
8
|
366
|
313
|
||||||||||||||||||
|
EBITDA
|
27,876
|
16,890
|
-
|
(670
|
)
|
(23,163
|
)
|
9,113
|
||||||||||||||||
|
Stock compensation expense
|
-
|
-
|
-
|
-
|
2,103
|
3,388
|
||||||||||||||||||
|
New campus and campus relocation costs
|
5,425
|
670
|
-
|
-
|
-
|
-
|
||||||||||||||||||
|
Program expansions
|
454
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
|
Severance and other one-time costs
|
89
|
-
|
-
|
-
|
-
|
1,299
|
||||||||||||||||||
|
Gain on sale of Nashville, Tennessee
|
-
|
-
|
-
|
-
|
-
|
(30,939
|
)
|
|||||||||||||||||
|
Impairment of goodwill and long-lived assets
|
-
|
4,220
|
-
|
-
|
-
|
-
|
||||||||||||||||||
|
Transitional segment
|
-
|
-
|
-
|
670
|
-
|
-
|
||||||||||||||||||
|
Adjusted EBITDA
|
$
|
33,844
|
$
|
21,780
|
$
|
-
|
$
|
-
|
$
|
(21,060
|
)
|
$
|
(17,139
|
)
|
||||||||||
|
Three Months Ended
June 30,
(Unaudited)
|
Six Months Ended
June 30,
(Unaudited)
|
|||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
|||||||||||||
|
Net (loss) income
|
$
|
(682
|
)
|
$
|
17,250
|
$
|
(896
|
)
|
$
|
17,141
|
||||||
|
Adjustments to net (loss) income:
|
||||||||||||||||
|
New campus and campus relocation costs
|
2,623
|
410
|
5,425
|
670
|
||||||||||||
|
East Point, Georgia depreciation
|
371
|
-
|
511
|
-
|
||||||||||||
|
Program expansions
|
365
|
-
|
454
|
-
|
||||||||||||
|
Gain on sale of Nashville, Tennessee
|
-
|
(30,939
|
)
|
-
|
(30,939
|
)
|
||||||||||
|
Impairment of goodwill and long-lived assets
|
-
|
4,220
|
-
|
4,220
|
||||||||||||
|
Severance and other one time costs
|
-
|
1,098
|
89
|
2,071
|
||||||||||||
|
Performance based catch-up stock compensation
|
-
|
1,400
|
-
|
1,400
|
||||||||||||
|
Transitional segment
|
-
|
478
|
-
|
670
|
||||||||||||
|
Total non-recurring adjustments
|
3,359
|
(23,333
|
)
|
6,479
|
(21,908
|
)
|
||||||||||
|
Income tax effect
|
(1,008
|
)
|
6,533
|
(1,944
|
)
|
6,134
|
||||||||||
|
Adjusted net income, non-GAAP
|
$
|
1,669
|
$
|
450
|
$
|
3,639
|
$
|
1,367
|
||||||||
|
As of
June 30, 2024
|
||||
|
Cash and cash equivalents
|
$
|
66,987
|
||
|
Credit facility
|
40,000
|
|||
|
Total Liquidity
|
$
|
106,987
|
||
9
|
Three Months Ended June 30,
|
||||||||||||
|
2024
|
2023
|
% Change
|
||||||||||
|
Revenue:
|
||||||||||||
|
Campus Operations
|
$
|
102,914
|
$
|
88,213
|
16.7
|
%
|
||||||
|
Transitional
|
-
|
433
|
-100.0
|
%
|
||||||||
|
Total
|
$
|
102,914
|
$
|
88,646
|
16.1
|
%
|
||||||
|
Operating Income (loss):
|
||||||||||||
|
Campus Operations
|
$
|
9,630
|
$
|
4,169
|
131.0
|
%
|
||||||
|
Transitional
|
-
|
(482
|
)
|
-100.0
|
%
|
|||||||
|
Corporate
|
(10,746
|
)
|
19,828
|
-154.2
|
%
|
|||||||
|
Total
|
$
|
(1,116
|
)
|
$
|
23,515
|
-104.7
|
%
|
|||||
|
Starts:
|
||||||||||||
|
Campus Operations
|
4,953
|
4,411
|
12.3
|
%
|
||||||||
|
Total
|
4,953
|
4,411
|
12.3
|
%
|
||||||||
|
Average Population:
|
||||||||||||
|
Campus Operations
|
13,811
|
12,369
|
11.7
|
%
|
||||||||
|
Transitional
|
-
|
84
|
-100.0
|
%
|
||||||||
|
Total
|
13,811
|
12,453
|
10.9
|
%
|
||||||||
|
End of Period Population:
|
||||||||||||
|
Campus Operations
|
14,481
|
12,959
|
11.7
|
%
|
||||||||
|
Transitional
|
-
|
45
|
-100.0
|
%
|
||||||||
|
Total
|
14,481
|
13,004
|
11.4
|
%
|
||||||||
10
|
Six Months Ended June 30,
|
||||||||||||
|
2024
|
2023
|
% Change
|
||||||||||
|
Revenue:
|
||||||||||||
|
Campus Operations
|
$
|
206,281
|
$
|
174,565
|
18.2
|
%
|
||||||
|
Transitional
|
-
|
1,364
|
-100.0
|
%
|
||||||||
|
Total
|
$
|
206,281
|
$
|
175,929
|
17.3
|
%
|
||||||
|
Operating Income (loss):
|
||||||||||||
|
Campus Operations
|
$
|
21,954
|
$
|
14,278
|
53.8
|
%
|
||||||
|
Transitional
|
-
|
(679
|
)
|
-100.0
|
%
|
|||||||
|
Corporate
|
(23,529
|
)
|
8,801
|
-367.3
|
%
|
|||||||
|
Total
|
$
|
(1,575
|
)
|
$
|
22,400
|
-107.0
|
%
|
|||||
|
Starts:
|
||||||||||||
|
Campus Operations
|
8,920
|
7,851
|
13.6
|
%
|
||||||||
|
Total
|
8,920
|
7,851
|
13.6
|
%
|
||||||||
|
Average Population:
|
||||||||||||
|
Campus Operations
|
13,745
|
12,297
|
11.8
|
%
|
||||||||
|
Transitional
|
-
|
123
|
-100.0
|
%
|
||||||||
|
Total
|
13,745
|
12,420
|
10.7
|
%
|
||||||||
|
End of Period Population:
|
||||||||||||
|
Campus Operations
|
14,481
|
12,959
|
11.7
|
%
|
||||||||
|
Transitional
|
-
|
45
|
-100.0
|
%
|
||||||||
|
Total
|
14,481
|
13,004
|
11.4
|
%
|
||||||||
11
Information included in the table below provides student starts and population under the Campus Operations Segment with a breakdown by Transportation and Skilled Trade
programs and Healthcare and Other Professions programs. This information is not comparable to the Company’s prior period segment reporting, which was performed on a campus basis rather than a program basis.
Population by Program (Campus Operations Segment):
|
Three Months Ended June 30,
|
||||||||||||
|
2024
|
2023
|
% Change
|
||||||||||
|
Starts:
|
||||||||||||
|
Transportation and Skilled Trades
|
3,648
|
3,017
|
20.9
|
%
|
||||||||
|
Healthcare and Other Professions
|
1,305
|
1,394
|
-6.4
|
%
|
||||||||
|
Total
|
4,953
|
4,411
|
12.3
|
%
|
||||||||
|
Average Population:
|
||||||||||||
|
Transportation and Skilled Trades
|
9,741
|
8,434
|
15.5
|
%
|
||||||||
|
Healthcare and Other Professions
|
4,070
|
4,019
|
1.3
|
%
|
||||||||
|
Total
|
13,811
|
12,453
|
10.9
|
%
|
||||||||
|
End of Period Population:
|
||||||||||||
|
Transportation and Skilled Trades
|
10,482
|
9,024
|
16.2
|
%
|
||||||||
|
Healthcare and Other Professions
|
3,999
|
3,980
|
0.5
|
%
|
||||||||
|
Total
|
14,481
|
13,004
|
11.4
|
%
|
||||||||
Population by Program (Campus Operations Segment):
|
Six Months Ended June 30,
|
||||||||||||
|
2024
|
2023
|
% Change
|
||||||||||
|
Starts:
|
||||||||||||
|
Transportation and Skilled Trades
|
6,330
|
5,280
|
19.9
|
%
|
||||||||
|
Healthcare and Other Professions
|
2,590
|
2,571
|
0.7
|
%
|
||||||||
|
Total
|
8,920
|
7,851
|
13.6
|
%
|
||||||||
|
Average Population:
|
||||||||||||
|
Transportation and Skilled Trades
|
9,642
|
8,357
|
15.4
|
%
|
||||||||
|
Healthcare and Other Professions
|
4,103
|
4,063
|
1.0
|
%
|
||||||||
|
Total
|
13,745
|
12,420
|
10.7
|
%
|
||||||||
|
End of Period Population:
|
||||||||||||
|
Transportation and Skilled Trades
|
10,482
|
9,024
|
16.2
|
%
|
||||||||
|
Healthcare and Other Professions
|
3,999
|
3,980
|
0.5
|
%
|
||||||||
|
Total
|
14,481
|
13,004
|
11.4
|
%
|
||||||||
12
The reconciliations provided below represent management’s projections of various components included in our outlook for the full year 2024. These calculations are for
illustrative purposes and will be reviewed as the year progresses to reflect actual results, our outlook and continued relevance of specific items. Any revisions or modifications, if necessary, will be disclosed in future 2024 quarterly results
announcements. Adjusted EBITDA and adjusted net income have been reconciled to the midpoint of our guidance.
Reconciliation of Net Income to Adjusted EBITDA and Adjusted Net Income - 2024 Guidance
(Reconciled to the Mid-Point of 2024 Guidance)
|
Adjusted
|
||||||||
|
EBITDA
|
Net Income
|
|||||||
|
Net Income
|
$
|
8,000
|
$
|
8,000
|
||||
|
Interest expense, net
|
600
|
-
|
||||||
|
Provision for taxes
|
3,600
|
-
|
||||||
|
Depreciation and amortization
|
12,500
|
-
|
||||||
|
Depreciation1
|
1,300
|
1,300
|
||||||
|
EBITDA
|
26,000
|
-
|
||||||
|
New campus and campus relocation costs2
|
7,100
|
7,100
|
||||||
|
Program expansions
|
2,600
|
2,600
|
||||||
|
Stock compensation expense
|
4,800
|
-
|
||||||
|
Tax Effect
|
-
|
(3,500
|
)
|
|||||
|
Total
|
$
|
40,500
|
$
|
15,500
|
||||
|
2024 Guidance Range
|
$
|
39,000 - $42,000
|
$
|
14,000 - $17,000
|
||||
|
1
|
Depreciation expense relates to the new East Point, Georgia campus
|
|
2
|
New campus and campus relocation costs relate to the following locations:
|
East Point, Georgia
Nashville, Tennessee
Levittown, Pennsylvania
Houston, Texas
LINCOLN EDUCATIONAL SERVICES CORPORATION
Brian Meyers, CFO
973-736-9340
EVC GROUP LLC
Investor Relations: Michael Polyviou, mpolyviou@evcgroup.com, 732-933-2755
Media Relations: Tom Gibson, 201-476-0322
13