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): February 25, 2010
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
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
|
Item
2.02
|
Results of Operations
and Financial Condition
|
On March
3, 2010, Lincoln Educational Services Corporation (the “Company”) issued a press
release announcing, among other things, its results of operations for the fourth
quarter and year ended December 31, 2009. A copy of the press release
is furnished herewith as Exhibit 99.1 and attached hereto. The
information contained under this Item 2.02 in this Current Report on Form 8-K,
including Exhibit 99.1 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 in
this Current Report on Form 8-K 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.
|
Item
5.02.
|
Departure of Directors
or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain
Officers
|
On
February 25, 2010, Jerry G. Rubenstein, a member of the Board of Directors (the
“Board”) of the Company, provided notice to the Executive Chairman of the Board
that he will not stand for re-election to the Board at the Company’s next Annual
Meeting of Shareholders, scheduled for April 30, 2010.
On March
2, 2010, the Company announced that on February 25, 2010, Alvin O. Austin was
appointed to its Board, effective immediately. Mr. Austin will serve
on the Company’s Audit Committee. No arrangement or understanding
exists between Mr. Austin and any other person pursuant to which he was
appointed as a director. There are no transactions with respect to
Mr. Austin that would be required to be reported under Item 404(a) of Regulation
S-K. Mr. Austin will participate in the Company’s 2005
Non-Employee Directors Restricted Stock Plan, which is filed as Exhibit 10.11 to
the Company’s Registration Statement on Form S-1 (Registration No.
333-123664). A copy of the press release announcing Mr. Austin’s
appointment is attached to this report as Exhibit 99.2 and is incorporated
herein by reference.
|
Item
9.01
|
Financial Statements
and Exhibits
|
|
(d)
|
Exhibits
|
|
99.1
|
Press
release of Lincoln Educational Services Corporation dated March 3,
2010.
|
|
99.2
|
Press
release of Lincoln Educational Services Corporation dated March 2,
2010.
|
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: March 3, 2010 | By: | /s/ Cesar Ribeiro | ||
| Name: | Cesar Ribeiro | |||
| Title: | Senior Vice President, Chief Financial Officer and Treasurer | |||
Exhibit
99.1
Lincoln
Educational Services Corporation Reports
Record
Fourth Quarter and 2009 Year End Results
West Orange, New Jersey, March
3, 2010 – Lincoln Educational Services Corporation (Nasdaq: LINC) (“Lincoln”)
today reported record fourth quarter and 2009 year end results.
Highlights:
Quarterly
- -
|
·
|
Record
revenue of $157.5 million for the fourth quarter of 2009, representing an
increase of 46.7% from $107.3 million for the fourth quarter of
2008.
|
|
·
|
Record
diluted EPS from continuing operations of $0.82 for the fourth quarter of
2009, representing an increase of 65.2% from $0.49 for the fourth quarter
of 2008.
|
|
·
|
Student
starts increased by 31.8% as compared to the fourth quarter of
2008. On a same school basis, student starts
increased 25.0% as compared to the fourth quarter of
2008.
|
|
·
|
Average
student population increased by 40.1% as compared to the fourth quarter of
2009. On a same school basis, average student population
increased 26.5% as compared to the fourth quarter of
2008.
|
Yearly -
|
·
|
Record
revenue of $552.5 million for the year ended December 31, 2009,
representing an increase of 46.6% from $376.9 million for the year ended
December 31, 2008.
|
|
·
|
Record
diluted EPS of $1.82 for the year ended December 31, 2009, representing an
increase of 133.8% from $0.78 for the year ended December 31,
2008.
|
|
·
|
Student
starts increased by 37.2% as compared to the year ended December 31,
2008. On a same school basis, student starts increased 26.7% as
compared to the year ended December 31,
2008.
|
|
·
|
Student
population at December 31, 2009 increased 35.4% to 29,340 from 21,667 at
December 31, 2008. Student population, on a same school basis
increased 25.0% to 26,399 at December 31, 2009 from 21,116 at December 31,
2008.
|
Continued
.. . .
Page 2 of 10
|
·
|
2010
Guidance –
|
|
Ø
|
Revenue
of $645 million to $655 million, up 17% to 19% over
2009.
|
|
Ø
|
Diluted
EPS of $2.40 to $2.50, representing growth of 32% to 37% over
2009.
|
|
Ø
|
Increase
in expected student starts of 13% to 15% over
2009.
|
|
Ø
|
For
the first quarter of 2010, we expect revenues of $145.0 million to $147.0
million, representing an increase of approximately 23% over the first
quarter of 2009, and diluted EPS of $0.38 to $0.41, representing an
increase of approximately 80% over the first quarter of
2009. Guidance for the first quarter of 2010 is based on an
expected increase in student starts of 18% to 20% over the same period in
2009.
|
Comment
and Outlook
“Our
fourth quarter marked the culmination of an outstanding year for
Lincoln. For the fourth quarter and the year we achieved record
revenue, operating income, net income, and enrollment growth. We
finished the year with 29,340 students or approximately 7,650 students ahead of
the prior year. Strong start growth during the year resulted in
increased capacity utilization which produced meaningful margin
expansion. For 2009, our operating margin increased to 16.0% up 655
basis points from an operating margin of 9.4% for the year ended December 31,
2008. With respect to 2010, we expect that we will continue to
see leverage in our business model, as we benefit from the approximately 7,650
additional students coupled with some moderation in our expectation of student
start growth,” said David Carney, Lincoln’s Executive Chairman. “The
strategic investments we have made in our business over the last several years
produced meaningful results in 2009. Those investments, combined with the recent
formation of the Lincoln Collegiate Group, will enable us to deliver online
regionally accredited bachelor’s degrees, and deliver continued growth for 2010
and beyond.”
Mr.
Carney added, “As most of you are probably aware, the current negotiated
rulemaking process under the Higher Education Act has produced consensus on 9 of
the 14 issues being deliberated. One of the remaining actively
contested open issues centers on the definition of ‘gainful employment’ and the
Department of Higher Education’s (“DOE”) proposed language, which ties the
definition of gainful employment to a debt to income ratio based on starting
salaries. We believe the DOE’s focus on quality speaks to our core
strengths and is consistent with our stated mission, which is centered on
providing our students a high return on their educational
investment. However, we believe the definition of gainful employment
as proposed by the DOE is problematic in its current draft form. We
believe the regulation as currently proposed would lead to unintended
consequences, and would ultimately hurt the students that need the education the
most. Moreover, the draft regulation focuses only on
starting salaries and doesn’t address the benefits and earnings potential of a
student over his career.”
Mr.
Carney concluded, “However, even in the unfortunate event that the proposed
regulation is not altered or amended, as we expect it will be, we anticipate
that this regulation would be manageable for Lincoln. Based on our
current enrollment and program mix, we estimate that, before we make any
modifications to our programs, the regulation as proposed, would have impacted
less than 5% of our revenues in 2009. “
Page 3 of 10
Fiscal
2009 Operating Performance
Revenues
increased by $175.6 million, or 46.6%, to $552.5 million for 2009 from
$376.9 million for 2008. Approximately $57.0 million of this
increase was a result of our acquisitions of Briarwood College on December 1,
2008, six of the seven schools comprising Baran Institute of Technology (“BAR”)
on January 20, 2009 and Clemens College (“Clemens”) on April 20, 2009
(collectively, the “Acquisitions”). The remainder of the increase in
revenues was primarily attributable to a 26.5% increase in average student
population, which increased to 25,277 for the year ended December 31, 2009, from
19,983 for the year ended December 31, 2008. Average revenue per student on a
same school basis increased 4.0% for the year ended December 31, 2009, from the
year ended December 31, 2008, primarily from tuition increases which ranged from
3% to 5% annually and from a shift from lower to higher tuition
programs.
Operating
income margin for the year ended December 31, 2009 increased to 16.0% from 9.4%
for the year ended December 31, 2008. The improvement in operating
income was related to the increase in our average student population which
resulted in capacity utilization of 70% for 2009 versus 56% for
2008. This increase in capacity utilization enabled us to leverage
both our educational services and facilities expenses and selling and general
expenses during the year. Accordingly, the additional revenues from
increased student population contributed to the increase in operating income
margin.
Our
educational services and facilities expenses increased by $57.8 million, or
37.6%, to $211.3 million for the year ended December 31, 2009 from
$153.5 million for the year ended December 31, 2008. The Acquisitions
accounted for $32.0 million of this increase. The remainder of the increase in
educational services and facilities expenses was primarily due to instructional
expenses which increased by $15.3 million, or 19.2%, and books and tools
expenses, which increased by $7.2 million, or 34.2%, respectively, over 2008.
These increases were attributable to a 26.7% increase in student starts for the
year ended December 31, 2009 as compared to the same period in 2008 coupled with
a 26.5% increase in average student population and higher tool sales during the
year ended December 31, 2009 compared to 2008. On a same school
basis, we began 2009 with approximately 3,000 more students than we had on
January 1, 2008, and as of December 31, 2009, our population on a same school
basis was approximately 5,300 higher than as of December 31,
2008. Also contributing to the increase in educational services and
facilities expenses were higher facilities expenses, which increased by
approximately $3.2 million over 2008. Educational services and
facilities expenses as a percentage of revenues decreased to 38.3% from 40.7%
for the year ended December 31, 2009 compared to 2008.
Our selling, general and administrative expenses for the year ended December 31, 2009 were $252.7 million, an increase of $65.0 million, or 34.6%, from $187.7 million for the year ended December 31, 2008. Approximately $29.9 million of this increase was attributable to the Acquisitions. The remainder of the increase in our selling, general and administrative expenses for the year ended December 31, 2009 was primarily due to: (a) a $2.9 million, or 17.9%, increase in student services; (b) a $7.5 million, or 10.7%, increase in sales and marketing; and (c) a $24.6 million, or 24.2%, increase in administrative expenses as compared to 2008.
The
increase in student services during the year ended December 31, 2009 as compared
to 2008 was primarily due to annual increases in compensation and benefit
expenses to our financial aid and career services
personnel. Additionally, during 2009, we slightly increased the
number of financial aid personnel as a result of a larger student population
during the year ended December 31, 2009 as compared to 2008. We also
increased by 31.2% the number of career service personnel during 2009 to further
aid our students in obtaining job placement during these difficult economic
times.
Page 4 of 10
The
increase in administrative expenses during the year ended December 31, 2009 as
compared to 2008 was due to: (a) a $9.0 million increase in personnel costs
relating to (i) annual compensation increases and an increase in the number of
personnel needed to serve the needs of a higher student population during the
year ended December 31, 2009 as compared to 2008, (ii) an increase in
accruals for incentive compensation and increased cost of benefits provided to
employees; (b) a $11.3 million increase in bad debt expense; (c) $0.5 million
increase in stationary and supplies due to our re-branding; (d) $0.3 million
incurred due to the re-branding of our Florida Culinary Institute in West Palm
Beach, Florida; (e) $0.4 million in connection with our acquisition of BAR on
January 20, 2009; and (f) a $1.0 million increase in our net periodic benefit
cost of our defined benefit pension plan.
For the year ended December 31, 2009, including the Acquisitions, our bad debt expense as a percentage of revenue was 6.7% as compared to 5.7% for 2008. This increase was primarily attributable to a slight deterioration in the performance of our portfolio, due to the current economic environment. During 2009, we considered the current economic environment which has produced high unemployment rates and concluded to increase our reserve on graduate receivables to 17% from 10% in 2008. Our number of days sales outstanding for the fourth quarter of 2009 were 25.0 days, compared to 22.4 days for the fourth quarter of 2008. As of December 31, 2009, we had outstanding loan commitments to our students of $28.9 million as compared to $24.0 million at December 31, 2008. Loan commitments, net of interest that would be due on the loans through maturity, were $20.5 million at December 31, 2009 as compared to $16.5 million at December 31, 2008.
As a
percentage of revenues, selling, general and administrative expenses decreased
to 45.7% of revenues for 2009 from 49.9% for 2008.
Net
income for the year ended December 31, 2009 was $49.2 million, or $1.82 per
diluted share, as compared to $20.2 million or $0.78 per diluted share for
2008.
Page 5 of 10
Three
Months Ended December 31, 2009 Compared to Three Months Ended December 31,
2008
Revenues
increased by $50.1 million, or 46.7%, to $157.5 million for the
quarter ended December 31, 2009 from $107.3 million for the quarter ended
December 31, 2008. Approximately $17.5 million of this increase was a
result of our acquisitions of Briarwood College on December 1, 2008, six of the
seven schools comprising BAR on January 20, 2009 and Clemens on April 20,
2009. The remainder of the increase in revenues was primarily
attributable to a 26.5% increase in average student population, which increased
to 28,173 for the quarter ended December 31, 2009 from 22,269 for the quarter
ended December 31, 2008. Average revenue per student on a same school
basis increased 3.3% for the quarter ended December 31, 2009 from the quarter
ended December 31, 2008, primarily from tuition increases which ranged from 3%
to 5% annually and from a shift from lower to higher tuition
programs.
Our
operating income for the fourth quarter of 2009 was $40.0 million, which
represented an 88.5% increase from operating income of $21.2 million for the
fourth quarter of 2008. The improvement in operating income was
related to the increase in our average student population which resulted in
capacity utilization of 77% for the fourth quarter of 2009 versus 62% for the
fourth quarter of 2008. This increase in capacity utilization enabled
us to leverage both our educational services and facilities expenses and selling
and general expenses during the quarter. Accordingly, the additional
revenues from increased student population contributed to the increase in
operating income.
Our
educational services and facilities expenses increased by $14.8 million, or
37.6%, to $54.2 million for the quarter ended December 31, 2009 from
$39.4 million for the quarter ended December 31, 2008. The Acquisitions
accounted for $8.6 million of this increase. The remainder of the increase in
educational services and facilities expenses was primarily due to instructional
expenses which increased by $3.6 million, or 17.4%, and books and tools
expenses, which increased by $1.3 million, or 24.5%, respectively, over the same
quarter in 2008. These increases were attributable to a 25.0% increase in
student starts for the fourth quarter of 2009 as compared to the fourth quarter
of 2008 coupled with a 26.5% increase in average student population and higher
tool sales during the fourth quarter of 2009 compared to the fourth quarter of
2008. On a same school basis, we began the fourth of 2009 with
approximately 5,700 more students than we had on October 1, 2008, and as of
December 31, 2009 our student population on a same school basis was
approximately 5,300 higher than as of December 31, 2008. Also contributing to
the increase in educational services and facilities expenses were higher
facilities expenses, which increased by approximately $1.3 million over the same
quarter in 2008. Educational services and facilities expenses as a
percentage of revenues decreased to 34.4% for the fourth quarter of 2009 from
36.7% for the fourth quarter of 2008.
Our
selling, general and administrative expenses for the quarter ended December 31,
2009 were $62.9 million, an increase of $16.3 million, or 34.8%, from $46.7
million for the quarter ended December 31, 2008. Approximately $7.9 million of
this increase was attributable to the Acquisitions. The remainder of the
increase in our selling, general and administrative expenses for the quarter
ended December 31, 2009 was primarily due to: (a) a $0.9 million, or 21.8%,
increase in student services; (b) a $2.9 million, or 17.6%, increase in sales
and marketing; and (c) a $4.6 million, or 17.5%, increase in administrative
expenses as compared to the quarter ended December 31, 2008.
The
increase in student services during the fourth quarter of 2009 as compared to
the fourth quarter of 2008 was primarily due to annual increases in compensation
and benefit expenses to our financial aid and career services
personnel. Additionally, during 2009, we increased the number of
financial aid and career services personnel as a result of a larger student
population during the fourth quarter of 2009 as compared to the fourth quarter
of 2008 and to further assist our students in obtaining job placement during
these difficult economic times.
Page 6 of 10
The
increase in sales and marketing expense during the fourth quarter of 2009 as
compared to the fourth quarter of 2008 was primarily due to: (a) annual
compensation increases to sales representatives; (b) additional sales
representatives to facilitate our recent and anticipated growth; and (c)
increased call center personnel as compared to the fourth quarter of
2008. In addition, we continued to invest in marketing initiatives in
an effort to continue to grow our student population.
The
increase in administrative expenses during the fourth quarter of 2009 as
compared to the fourth quarter of 2008 was primarily due to: (a) a $0.7 million
increase in personnel costs relating to (i) annual compensation increases and an
increase in the number of personnel needed to serve the needs of a higher
student population during the quarter ended December 31, 2009 as compared to the
fourth quarter of 2008, (ii) an increase in accruals for incentive compensation
and cost of benefits provided to employees; (b) a $3.9 million increase in bad
debt expense; (c) a $0.2 million increase in our net periodic benefit cost of
our defined benefit pension plan; (d) $0.2 million increase in stationary and
supplies due to our re-branding; (e) a $0.2 million increase in software
maintenance expenses resulting from increased software licenses for our student
management system; and (f) offset by a decrease of $1.0 million in connection
with our acquisitions.
For the quarter ended December 31, 2009, including the Acquisitions, our bad debt expense as a percentage of revenue was 7.0% as compared to 5.4% for the same quarter in 2008. This increase was primarily attributable to a slight deterioration in the performance of our portfolio, due to the current economic environment. During 2009 we considered the current economic environment which has produced high unemployment rates and concluded to increase our reserve on graduate receivables to 17% from 10% in 2008. Our number of days sales outstanding as of December 31, 2009 were 25.0 days, compared to 22.4 days as of December 31, 2008, primarily due to the timing of the collection of federal funds. As of December 31, 2009, we had outstanding loan commitments to our students of $28.9 million as compared to $25.3 million at September 30, 2009. Loan commitments, net of interest that would be due on the loans through maturity, were $20.5 million at December 31, 2009 as compared to $17.6 million at September 30, 2009.
As a
percentage of revenues, selling, general and administrative expenses for the
fourth quarter of 2009 decreased to 40.0% from 43.5% for the fourth quarter of
2008.
Net
income for the fourth quarter of 2009 was $22.3 million, or $0.82 per diluted
share, as compared to $12.8 million, or $0.49 per diluted share, for the
comparable period in 2008.
Balance
Sheet
At
December 31, 2009, we had $46.1 million in cash and cash equivalents, compared
to $15.2 million at December 31, 2008.
During
the fourth quarter of 2009, we repurchased 1,250,000 shares from our principal
shareholder for $26.2 million. The purchase was concurrent with a
block sale to the public by our principal shareholder for an additional 750,000
shares.
At
December 31, 2009, our stockholders’ equity was $218.6 million, compared to
$174.9 million at December 31, 2008, with the increase resulting from net income
for the period, sale of common stock and stock-based compensation expense
partially offset by a repurchase of common stock.
Page 7 of 10
Student
Metrics
|
Total
Company
Year
Ended
December 31,
|
Same
Schools
Year
Ended
December
31,
|
||||||||||||||||||||||||
|
2008
|
2009
|
Growth
|
2008
|
2009
|
Growth
|
||||||||||||||||||||
|
Student
Starts
|
27,175 | 37,281 | 37.2% | 27,175 | 34,427 | 26.7 | % | ||||||||||||||||||
|
Average
population
|
20,006 | 27,808 | 39.0% | 19,983 | 25,277 | 26.5 | % | ||||||||||||||||||
|
End
of period population
|
21,667 | 29,340 | 35.4% | 21,116 | 26,399 | 25.0 | % | ||||||||||||||||||
|
Total
Company
Three
Months Ended
December 31,
|
Same
Schools
Three
Months Ended
December
31,
|
||||||||||||||||||||||||
|
2008
|
2009
|
Growth
|
2008
|
2009
|
Growth
|
||||||||||||||||||||
|
Student
Starts
|
5,200 | 6,856 | 31.8% | 5,200 | 6,501 | 25.0 | % | ||||||||||||||||||
|
Average
population
|
22,361 | 31,321 | 40.1% | 22,269 | 28,173 | 26.5 | % | ||||||||||||||||||
|
End
of period population
|
21,667 | 29,340 | 35.4% | 21,116 | 26,399 | 25.0 | % | ||||||||||||||||||
Conference
Call Today
Lincoln
will host a conference call today at 10:00 a.m. Eastern Standard
Time. The conference call can be accessed by going to the IR portion
of our website at www.lincolneducationalservices.com. Participants
can also listen to the conference call by dialing 800-510-0178 (domestic) or
617-614-3450 (international) and citing code 19504029. Please log-in or dial-in
at least 10 minutes prior to the start time to ensure a connection. An archived
version of the webcast will be accessible for 90 days at http://www.lincolneducationalservices.com. A replay of
the call will also be available for seven days by calling 888-286-8010
(domestic) or 617-801-6888 (international) and citing code
51573193.
Page 8 of
10
About
Lincoln Educational Services Corporation
Lincoln
Educational Services Corporation is a leading provider of diversified
career-oriented post-secondary education. Lincoln offers recent high
school graduates and working adults degree and diploma programs in five
principal areas of study: health sciences, automotive technology, skilled
trades, hospitality services and business and information
technology. Lincoln has provided the workforce with skilled
technicians since its inception in 1946. Lincoln currently operates
43 campuses in 17 states under 6 brands: Lincoln College of Technology, Lincoln
Technical Institute, Nashville Auto-Diesel College, Southwestern College,
Euphoria Institute of Beauty Arts and Sciences, and Lincoln College of New
England. Lincoln had an average enrollment of approximately 27,808
students in 2009.
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, 2008 and
Form 10-Q for the quarterly period ended September 30, 2009. 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.
(Please
see financial attachments.)
Contacts:
Chris
Plunkett/Brad Edwards
Brainerd
Communicators, Inc.
212-986-6667
Page 9 of
10
LINCOLN EDUCATIONAL SERVICES
CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(In
thousands, except per share amounts)
|
Three
Months Ended December 31,
(Unaudited)
|
Years
Ended December 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
REVENUES
|
$ | 157,459 | $ | 107,323 | $ | 552,536 | $ | 376,907 | ||||||||
|
COSTS
AND EXPENSES:
|
||||||||||||||||
|
Educational
services and facilities
|
54,226 | 39,421 | 211,295 | 153,530 | ||||||||||||
|
Selling,
general and administrative
|
62,925 | 46,665 | 252,673 | 187,722 | ||||||||||||
|
Loss
(gain) on sale of assets
|
45 | (11 | ) | 35 | 80 | |||||||||||
|
Impairment
of goodwill
|
215 | - | 215 | - | ||||||||||||
|
Total
costs and expenses
|
117,411 | 86,075 | 464,218 | 341,332 | ||||||||||||
|
OPERATING
INCOME
|
40,048 | 21,248 | 88,318 | 35,575 | ||||||||||||
|
OTHER:
|
||||||||||||||||
|
Interest
income
|
4 | 17 | 29 | 113 | ||||||||||||
|
Interest
expense
|
(1,042 | ) | (487 | ) | (4,275 | ) | (2,152 | ) | ||||||||
|
Other
income
|
8 | - | 35 | - | ||||||||||||
|
INCOME
BEFORE INCOME TAXES
|
39,018 | 20,778 | 84,107 | 33,536 | ||||||||||||
|
PROVISION
FOR INCOME TAXES
|
16,684 | 8,015 | 34,868 | 13,341 | ||||||||||||
|
NET
INCOME
|
$ | 22,334 | $ | 12,763 | $ | 49,239 | $ | 20,195 | ||||||||
|
Earnings
per share - Basic -
|
$ | 0.84 | $ | 0.51 | $ | 1.87 | $ | 0.80 | ||||||||
|
Earnings
per share – Diluted -
|
$ | 0.82 | $ | 0.49 | $ | 1.82 | $ | 0.78 | ||||||||
|
Weighted
average number of common shares outstanding:
|
||||||||||||||||
|
Basic
|
26,565 | 25,148 | 26,337 | 25,308 | ||||||||||||
|
Diluted
|
27,341 | 25,818 | 27,095 | 25,984 | ||||||||||||
|
Other
data:
|
||||||||||||||||
|
EBITDA
(1)
|
$ | 46,720 | $ | 25,791 | $ | 112,593 | $ | 53,495 | ||||||||
|
Depreciation
and amortization
|
6,664 | 4,543 | 24,240 | 17,920 | ||||||||||||
|
Number
of campuses
|
43 | 36 | 43 | 36 | ||||||||||||
|
Average
enrollment
|
31,321 | 22,361 | 27,808 | 20,006 | ||||||||||||
|
Stock
based compensation
|
849 | 430 | 2,377 | 2,201 | ||||||||||||
|
Net
cash provided by operating activities
|
30,304 | 24,173 | 73,169 | 54,176 | ||||||||||||
|
Net
cash used in investing activities
|
(15,555 | ) | (15,286 | ) | (51,593 | ) | (31,205 | ) | ||||||||
|
Net
cash (used in) provided by financing activities
|
$ | (6,729 | ) | $ | 202 | $ | 9,266 | $ | (11,239 | ) | ||||||
Page 10 of 10
|
Selected
Consolidated Balance Sheet Data:
|
December
31,
|
||||
|
(In
thousands)
|
2009
|
||||
|
Cash
and cash equivalents
|
$ | 46,076 | |||
|
Current
assets
|
105,961 | ||||
|
Working
capital
|
4,494 | ||||
|
Total
assets
|
388,368 | ||||
|
Current
liabilities
|
101,467 | ||||
|
Long-term
debt and capital lease
|
|||||
|
Obligations,
including current portion
|
57,328 | ||||
|
Total
stockholders’ equity
|
$ | 218,636 | |||
(1)
Reconciliation of Non-GAAP Financial Measures
EBITDA is
a measurement not recognized in financial statements presented in accordance
with accounting principles generally accepted in the United States of America
(“GAAP”). We define EBITDA as income from continuing operations
before interest expense (net of interest income), provision for income taxes and
depreciation and amortization. EBITDA is presented because we believe
it is a useful indicator of our performance and our ability to make strategic
acquisitions and meet capital expenditure and debt service
requirements. It is not, however, intended to represent cash flows
from operations as defined by GAAP and should not be used as an alternative to
net income (loss) as an indicator of operating performance or to cash flow as a
measure of liquidity. EBITDA is not necessarily comparable to
similarly titled measures used by other companies. Following is a
reconciliation of income from continuing operations to EBITDA:
|
Three
Months Ended December 31,
(Unaudited)
|
Years
Ended December 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Net
Income
|
$ | 22,334 | $ | 12,763 | $ | 49,239 | $ | 20,195 | ||||||||
|
Interest
expense,
net
|
1,038 | 470 | 4,246 | 2,039 | ||||||||||||
|
Provision
for income
taxes
|
16,684 | 8,015 | 34,868 | 13,341 | ||||||||||||
|
Depreciation
and amortization
|
6,664 | 4,543 | 24,240 | 17,920 | ||||||||||||
|
EBITDA
|
$ | 46,720 | $ | 25,791 | $ | 112,593 | $ | 53,495 | ||||||||
# #
#
Exhibit
99.2
Lincoln
Educational Services Corporation Announces Changes to Board of
Directors
West Orange, N.J.,
March 2, 2010 -- Lincoln Educational Services Corporation (Nasdaq: LINC)
(“Lincoln”) today announced that on February 25, 2010, Alvin O. (Bud) Austin was
appointed to its board of directors. The appointment is effective immediately
and will bring the number of directors on Lincoln’s board to
eleven.
Lincoln also
announced that Jerry Rubenstein has decided not to stand for re-election to the
board of directors at Lincoln’s next annual meeting of stockholders, expected to
be held on April 30, 2010.
“We are
excited to welcome Bud to our board of directors,” said David Carney, Executive
Chairman of Lincoln. “He brings several decades of higher education industry
experience, including a history of facilitating program expansion and valuable
knowledge stemming from his prior roles with several regional accrediting
agencies. We believe Bud will be an important addition to our board and look
forward to his contributions.”
Mr. Carney
continued, “We would like to thank Jerry for his numerous efforts on Lincoln’s
behalf during his eleven year tenure on the board and wish him the very best in
the future. Jerry demonstrated the utmost commitment to Lincoln and his years of
dedicated service are greatly appreciated.”
Mr. Austin has over
40 years of experience in higher education, which includes his tenure as
President and Chancellor of LeTourneau University in Longview, Texas, where the
institution grew its academic programs, funding levels, and campus footprint
under his leadership. Prior to that role, he served as Vice President
at North Park College and Seminary, Chicago, Illinois, and at Seattle Pacific
University. In addition, he was the Dean of Student Programs at
California State University, Northridge, California. He was a member
of the Commission on Colleges of the Southern Association of Colleges and
Schools and a member of the Executive Committee of the Commission. He
is also involved in numerous non-profit and community
organizations. Mr. Austin earned his Ph.D in Higher Education
Administration at the University of Mississippi, Master of Arts in Education at
the California State University, and Master Studies and Secondary Teaching
Credential at the University of California at Santa Barbara.
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
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. Lincoln currently operates 43 campuses
in 17 states under six brands: Lincoln College of Technology, Lincoln Technical
Institute, Nashville Auto-Diesel College, Southwestern College, Euphoria
Institute of Beauty Arts and Sciences, and Lincoln College of New
England. Lincoln had a combined average enrollment of approximately
31,500 students as of September 30, 2009.
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, 2008 and
Form 10-Q for the quarterly period ended September 30, 2009. 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