UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
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): January 20, 2009
___________________
Lincoln Educational Services
Corporation
(Exact
Name of Registrant as Specified in Charter)
___________________
|
New
Jersey
(State
or other jurisdiction
of incorporation) |
000-51371
(Commission
File Number)
|
57-1150621
(I.R.S.
Employer
Identification No.) |
|
200
Executive Drive, Suite 340
West
Orange, New Jersey 07052
(Address
of principal executive offices)
|
07052
(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:
|
o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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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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Item
1.01
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Entry into a Material
Definitive Agreement
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On January 20, 2009, Lincoln
Educational Services Corporation (the “Company”), through its wholly owned
subsidiary Lincoln Technical Institute, Inc. (“LTI”) and LTI’s wholly owned
subsidiary NN Acquisition LLC (“NN
Acquisition”), entered into a
stock purchase agreement (the “BIT Purchase Agreement”) with Brad Baran, Barbara
Baran, UGP Education Partners, LLC, UGPE Partners, Inc. and Merion Investment
Partners, L.P to purchase all of the outstanding shares of Baran Institute of
Technology, Inc., as well as certain assets of Hartford Urban Ventures, LLC and
Educational Properties, LLC, for $28 million in cash, subject to certain
adjustments on and after the date of the agreement. Baran Institute
of Technology, Inc. and its subsidiaries own and operate four of the five
distinct schools of Baran Institute of Technology (“Baran”) – Baran Institute of
Technology (“BIT”), Connecticut Culinary Institute (“CCI”), Americare School of
Nursing (“Americare”) and Engine City Technical Institute (“Engine
City”).
On January 20, 2009, the Company,
through LTI and NN Acquisition, also entered into a stock purchase agreement
(the “Clemens Purchase Agreement”) with Brad Baran, UGP Education Partners, LLC,
Merion Investment Partners, L.P (collectively, the “Clemens Sellers”) and, for
certain limited purposes only, UGPE Partners Inc., to purchase all of the
outstanding shares of Hospitality Acquisition Corporation (dba Clemens College)
for $3 million in cash, subject to certain adjustments on and after the date of
the agreement.
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Item
2.01
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Completion of
Acquisition or Disposition of
Assets
|
Pursuant to the BIT Purchase Agreement,
on January 20, 2009, the Company completed the acquisition of Baran Institute of
Technology, Inc. and the related schools named in Item 1.01 of this Current
Report on Form 8-K, for an adjusted purchase price of approximately $25.3
million in cash, subject to further customary post closing
adjustments. In the same acquisition, Lincoln also acquired certain
assets of Hartford Urban Ventures, LLC and Educational Properties, LLC, which
provide support services to Baran.
The Company expects to complete the
acquisition of the fifth school, Clemens College (“Clemens”), from the Clemens
Sellers pursuant to the Clemens Purchase Agreement, subject to receiving
approval from the New England Association of Schools and Colleges at their March
meeting.
Baran comprises the five distinct
schools of BIT, CCI, Americare, Engine City and Clemens, which together serve
approximately 1,900 students and offer associate and diploma programs in the
fields of automotive, skilled trades, health sciences and culinary
arts.
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Item
2.02
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Results of Operations
and Financial Condition
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On January 21, 2009, the Company issued
a press release announcing the acquisitions described above and the accounting
for such acquisitions in accordance with Statement of Financial Accounting
Standards Statement No. 141(R), Business Combinations. The Company
announced that, in connection with these acquisitions, it will be taking a
charge of approximately $0.02 per share in the fourth quarter of 2008 and for
the year ended December 31, 2008 and $0.01 per share in the first quarter of
2009 to account for the expenses related to the acquisitions. The
Company also stated that, in spite of the $0.02 per share charge in the fourth
quarter of 2008, it expects that its earnings per share for 2008 will meet or
exceed its previously issued guidance of $0.69 to $0.71. A copy of
the press release is furnished herewith as Exhibit 99.1 and attached
hereto.
The information contained under this
Item 2.02 of this Current Report on Form 8-K, including the exhibit attached
hereto, 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 of this Current Report on Form
8-K, including the exhibit attached hereto, 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.
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Item
9.01
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Financial Statements
and Exhibits
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(c)
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Exhibits
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99.1 Press
release of Lincoln Educational Services Corporation dated January 21, 2009
(furnished under Item 2.02 of this Current Report on Form
8-K).
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.
| LINCOLN EDUCATIONAL SERVICES CORPORATION | ||||
|
Date:
January 26, 2009
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||||
| By: | /s/ Cesar Ribeiro | |||
| Name: | Cesar Ribeiro | |||
| Title: |
Senior
Vice President, Chief Financial
Officer
and Treasurer
|
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EXHIBIT
INDEX
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Exhibit
No.
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Description
of Document
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|
99.1
|
Press
release of Lincoln Educational Services Corporation dated January 21,
2009
(furnished
under Item 2.02 of this Current Report on Form
8-K).
|
Lincoln
Educational Services Corporation
Announces
the Acquisition of Baran Institute of Technology
and
Reports Record Year End Enrollment
West
Orange, N.J., January 21, 2009 – Lincoln Educational Services Corporation
(Nasdaq: LINC; “Lincoln”) announced today that it has completed the acquisition
of Baran Institute of Technology (“Baran”) for approximately $25.3
million in cash, subject to customary post closing adjustments.
Baran
Institute of Technology comprises five distinct schools serving approximately
1,900 students and offers associate and diploma programs in the fields of
automotive, skilled trades, health sciences and culinary arts. Lincoln has
closed the acquisition of four of the schools – Baran Institute of Technology,
Connecticut Culinary Institute, Americare School of Nursing and Engine City
Technical Institute, and expects to acquire the fifth school, Clemens College,
for an additional $3 million subject to receiving approval from the New England
Association of Schools and Colleges (NEASC) at their March
meeting. In addition, Lincoln is also acquiring certain assets of
Hartford Urban Ventures, LLC and Education Properties, LLC, which provide
support services to Baran.
“Baran
uniquely fits our strategy of expanding our geographic presence, strengthening
our core program offerings and adding opportunities for higher degrees,” said
Dave Carney, Chairman and CEO of Lincoln. “The immediate benefits
include a state of the art destination automotive and skilled trades campus with
a strong New England presence; a growing diesel school in New Jersey that will
benefit from our 60 year brand awareness in the New York City metropolitan area;
a leading culinary school with outstanding facilities and a growing high school
sales force; and an expanded presence in Florida with the addition of
Americare’s nursing program. As we implement our marketing and sales
processes and invest more resources for advertising, we expect to achieve
meaningful operating leverage resulting in strong margin expansion. Finally,
assuming that a substantial change application is approved in March by NEASC, we
will acquire Clemens College which will be our second regionally accredited
institution and will provide the platform for higher end hospitality degree
programs.”
These
acquisitions are being accounted for in accordance with Statement of Financial
Accounting Standards Statement No. 141(R), Business Combinations (“SFAS No.
141”), which is effective for calendar year companies on January 1,
2009. Among other things, SFAS No. 141 requires the additional use of
fair value measurements, both as of the acquisition date and in post combination
periods and requires that acquisition costs be expensed as
incurred. In connection with these acquisitions Lincoln will be
taking a charge of approximately $0.02 per share in the fourth quarter of 2008
and for the year ended December 31, 2008 and $0.01 per share in the first
quarter of 2009 to account for the expenses related to the
acquisition.
We expect
these acquisitions, including Clemens, will add approximately $50 million to
revenues in 2009, to be dilutive, but not to have a significant impact on 2009
earnings. We expect these acquisitions to be accretive to
earnings in 2010.
We are
updating our previously issued guidance for the year ended December 31, 2008 to
reflect the impact of this acquisition on our 2008 results. In spite
of the $0.02 per share charge we are taking in the fourth quarter of 2008, we
expect that our earnings per share for the year will meet or exceed our
previously issued guidance of $0.69 to $0.71. The strong results we
experienced in the fourth quarter of 2008 were fueled by a 17.1% increase in
student starts in 2008 over the prior year. Finally, on a same school
basis, we expect that 2008 year-end enrollment will exceed the prior year by
approximately 17% resulting in us beginning 2009 with approximately 3,100 more
students than we had at the beginning of 2008, excluding
acquisitions.
We look
forward to providing further updates on both of our acquisitions, our results
for 2008 and our 2009 guidance in early March of 2009.
About Lincoln Educational
Services Corporation
Lincoln
Educational Services Corporation is a leading and diversified for-profit
provider of career-oriented post-secondary education. Lincoln offers
recent high school graduates and working adults degree and diploma programs in
five 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. Lincoln currently operates 36 campuses in 17 states under six
brands: Lincoln Technical Institute, Lincoln College of Technology, Nashville
Auto-Diesel College, Southwestern College, Euphoria Institute of Beauty Arts and
Sciences and Briarwood College. Lincoln had a combined average
enrollment of approximately 20,665 students for the quarter ended September 30,
2008.
About Baran Institute of
Technology ( Baran)
Baran is
comprised of Baran Institute of Technology (“BIT”), Connecticut Culinary
Institute (“CCI”), Clemens College (“Clemens”), Americare School of Nursing and
Engine City Technical Institute. Baran has a total of 811 dorm beds in two
facilities (Hartford and Suffield, Connecticut), which serve BIT, CCI and
Clemens students.
Baran Institute of
Technology
BIT is in
East Windsor, Connecticut which is 12 miles north of Hartford. BIT
offers diploma programs in automotive, diesel, collision repair, motorcycle,
HVAC, electrical and welding. This campus serves approximately 850
students of which 75% come from New England and the remainder come from over a
dozen other states. BIT is accredited by ACCSCT.
Connecticut Culinary
Institute (CCI)
CCI has
campuses in Hartford and Suffield, Connecticut and offers diploma programs in
culinary arts, baking and pastry and Italian culinary arts. CCI has
approximately 650 students of which
approximately
80% come from New England and the remainder mainly come from six other states.
CCI is accredited by ACCSCT and the American Culinary Federation Foundation,
Inc.
Clemens
College
Clemens
College shares a facility in Suffield with CCI and offers associate degrees in
Hospitality Management to approximately 75 students from across the US and
abroad. Clemens College is regionally accredited by
NEASC.
Americare School of
Nursing
Americare
has two facilities in Florida: Fern Park, which is outside of Orlando, and St.
Petersburg. Americare offers an associate degree in Surgical Technology and
diplomas in dental assisting, medical coding and billing, medical assisting,
practical nursing and patient care technician. Americare serves approximately
250 students and is accredited by ABHES.
Engine City Technical
Institute
Engine
City is located in South Plainfield, New Jersey and has approximately 125
students. Engine City offers a diploma program in diesel engine
repair.
Statements
in this press release regarding Lincoln’s business which are not historical
facts may be “forward-looking statements” that involve risks and uncertainties.
For a discussion of such risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking statements, see
“Risk Factors” in Lincoln’s Form 10-K for the year ended December 31, 2007. All
forward-looking statements are qualified in their entirety by this cautionary
statement, and Lincoln undertakes no obligation to revise or update this news
release to reflect events or circumstances after the date hereof.
Contact:
Brad
Edwards
Brainerd
Communicators
212-986-6667