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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lincoln Educational Services Corp | NASDAQ:LINC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.14 | -1.25% | 11.09 | 10.20 | 11.75 | 11.55 | 10.90 | 11.40 | 113,293 | 21:25:01 |
☒
|
ANNUAL 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.)
|
Title of each class
|
Name of exchange on which registered
|
|
Common Stock, no par value per share
|
The NASDAQ Stock Market LLC
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company
☒
|
PART I.
|
1
|
||
ITEM 1.
|
1
|
||
ITEM 1A.
|
18
|
||
ITEM 1B.
|
24
|
||
ITEM 2.
|
25
|
||
ITEM 3.
|
26
|
||
ITEM 4.
|
26
|
||
PART II.
|
27
|
||
ITEM 5.
|
27
|
||
ITEM 6.
|
30
|
||
ITEM 7.
|
32
|
||
ITEM 7A.
|
49
|
||
ITEM 8
|
49
|
||
ITEM 9.
|
49
|
||
ITEM 9A.
|
49
|
||
ITEM 9B.
|
50
|
||
PART III.
|
50
|
||
ITEM 10.
|
50
|
||
ITEM 11.
|
50
|
||
ITEM 12.
|
50
|
||
ITEM 13.
|
50
|
||
ITEM 14.
|
50
|
||
PART IV.
|
51
|
||
ITEM 15.
|
51
|
· |
our failure to comply with the extensive existing regulatory framework applicable to our industry or our failure to obtain timely regulatory approvals in connection with a change of control of our company or acquisitions;
|
· |
the promulgation of new regulations in our industry as to which we may find compliance challenging;
|
· |
our success in updating and expanding the content of existing programs and developing new programs in a cost-effective manner or on a timely basis;
|
· |
our ability to implement our strategic plan;
|
· |
risks associated with changes in applicable federal laws and regulations including pending rulemaking by the U.S. Department of Education;
|
· |
uncertainties regarding our ability to comply with federal laws and regulations regarding the 90/10 rule and cohort default rates;
|
· |
risks associated with opening new campuses and closing existing campuses;
|
· |
risks associated with integration of acquired schools;
|
· |
industry competition;
|
· |
conditions and trends in our industry;
|
· |
general economic conditions; and
|
· |
other factors discussed under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
|
|
|
Segment
|
|
Status
|
|
||||
School
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
Allentown, PA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Edison, NJ
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Moorestown, NJ
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Paramus, NJ
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Lincoln, RI
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Brockton, MA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Somerville, MA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Lowell, MA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
New Britain, CT
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Shelton, CT
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Las Vegas (Summerlin), NV
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Southington, CT
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Marietta, GA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Hartford, CT
|
|
Transitional (Continuing Operations)
|
|
HOPS (Discontinued Operations)
|
|
Teach-out
|
|
Closed
|
2
|
Henderson (Green Valley), NV
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Closed
|
3
|
Center City Philadelphia, PA
|
|
HOPS (Discontinued Operations)
|
|
Transitional (Continuing Operations)
|
|
Held for sale
|
|
Teach-out
|
4
|
Northeast Philadelphia, PA
|
|
HOPS (Discontinued Operations)
|
|
Transitional (Continuing Operations)
|
|
Held for sale
|
|
Teach-out
|
4
|
West Palm Beach, FL
|
|
HOPS (Discontinued Operations)
|
|
Transitional (Continuing Operations)
|
|
Held for sale
|
|
Teach-out
|
5
|
Fern Park, FL
|
|
Transitional (Continuing Operations)
|
|
Transitional (Continuing Operations)
|
|
Teach-out
|
|
Closed
|
6
|
1 |
In November 2015, the Board of Directors approved a plan to divest these schools and thus they are included in discontinued operations as of December 31, 2016 and 2015.
|
2 |
In November 2015, the Board of Directors approved a plan to divest this school. In December 2015, the Board of Directors approved a plan to cease operations at this school. The school was included in the Transitional Segment and included in continuing operations until it closed in the fourth quarter of 2016; it is included in discontinued operations as of December 31, 2016.
|
3 |
In November 2015, the Board of Directors approved a plan to divest this school. In the fourth quarter of 2016, the Board of Directors approved a plan to cease operations at this school, which closed in the fourth quarter of 2016 and is included in discontinued operations as of December 31, 2016.
|
4 |
In November 2015, the Board of Directors approved a plan to divest these schools. In the fourth quarter of 2016, the Board of Directors approved a plan to cease operations at these schools which are being taught-out and expected to be closed in 2017. These schools are included in the Transitional segment and continuing operations as of December 31, 2016.
|
5 |
In November 2015, the Board of Directors approved a plan to divest this school. In the third quarter of 2016, the Board of Directors approved a plan to teach–out certain programs at this school. Then, in the fourth quarter of 2016, the Board of Directors approved a plan to teach-out the remainder of the programs at this school. The school is expected to be closed in 2017. This school’s operations are included in the Transitional segment and continuing operations as of December 31, 2016. However, as part of this plan, the Board of Directors approved the divestiture of the properties for this school and therefore the properties are included in held for sale as of December 31, 2016.
|
6 |
On February 27, 2015, our Board of Directors approved a plan to cease operations at this school, which was fully taught out and officially closed as of March 31, 2016 and is included in the Transitional segment and continuing operations as of December 31, 2016.
The plan to teach out this school was approved prior to the plan to exit the HOPS segment and as such does not meet the discontinued operations criteria.
|
Current Programs Offered
|
||||||
Area of Study
|
Bachelor's
Degree
|
Associate's Degree
|
Diploma and Certificate
|
|||
Automotive
|
Automotive Service Management, Automotive Technology, Collision Repair & Refinishing Service Management, Diesel & Truck Service Management
|
Automotive Mechanics, Automotive Technology, Automotive Technology with BMW FastTrack, Automotive Technology with Mopar X-Press, Automotive Technology with High Performance, Collision Repair and Refinishing Technology, Diesel & Truck Mechanics, Diesel & Truck Technology, Diesel & Truck Technology with Transport Refrigeration, Diesel & Truck with Automotive Technology, Heavy Equipment Maintenance Technology, Heavy Equipment and Truck Technology
|
||||
Health Sciences
|
Health Information Administration, RN to BSN
|
Medical Assisting Technology, Dental Office Management, Health Information Technology, Medical Office Management, Mortuary Science, Occupational Therapy Assistant, Dental Hygiene, Dental Administrative Assistant, Advanced Medical Coding & Billing
|
Medical Office Assistant, Medical Assistant, Patient Care Technician, Pharmacy Technician, Medical Coding & Billing, Dental Assistant, Licensed Practical Nursing
|
|||
Skilled Trades
|
Electronic Engineering Technology, HVAC, Electronics Systems Service Management
|
Electrical Technology & Electronic Systems Technology, Electrical Technology, Electronics Systems Technician, HVAC, Welding Technology, CNC
|
||||
Hospitality Services
|
Culinary Arts, Cosmetology, Aesthetics, International Baking and Pastry, Nail Technolgy, Therapeutic Massage & Bodywork Technician
|
|||||
Business and Information Technology
|
Business Management,
Criminal Justice, Funeral
Service Management
|
Criminal Justice, Business Management, Broadcasting and Communications, Paralegal, Computer Networking and Support, Human Services
|
Criminal Justice, Computer & Network Support Technician
|
School
|
Last Accreditation Letter
|
Next Accreditation
|
Type of Accreditation
|
|||
Philadelphia, PA
2
|
September 30, 2013
|
May 1, 2018
|
National
|
|||
Union, NJ
1
|
May 29, 2014
|
February 1, 2019
|
National
|
|||
Mahwah, NJ
1
|
March 11, 2015
|
August 1, 2019
|
National
|
|||
Melrose Park, IL
2
|
March 13, 2015
|
November 1, 2019
|
National
|
|||
Denver, CO
1
|
June 14, 2016
|
February 1, 2021
|
National
|
|||
Columbia, MD
|
March 8, 2017
|
February 1, 2022
|
National
|
|||
Grand Prairie, TX
1
|
December 7, 2011
|
August 1, 2016
3
|
National
|
|||
Allentown, PA
2
|
March 8, 2017
|
February 1, 2022
|
National
|
|||
Nashville, TN
1
|
November 30, 2012
|
May 1, 2017
|
National
|
|||
Indianapolis, IN
|
November 30, 2012
|
November 1, 2017
3
|
National
|
|||
New Britain, CT
|
June 5, 2014
|
January 1, 2018
|
National
|
|||
Shelton, CT
2
|
March 5, 2014
|
September 1, 2018
|
National
|
|||
Queens, NY
1
|
June 4, 2013
|
June 1, 2018
|
National
|
|||
East Windsor, CT
2
|
December 4, 2013
|
February 1, 2018
3
|
National
|
|||
South Plainfield, NJ
1
|
September 2, 2014
|
August 1, 2019
|
National
|
1 |
Branch campus of main campus in Indianapolis, IN
|
2 |
Branch campus of main campus in New Britain, CT
|
3 |
Campus undergoing re-accreditation. Campus has received written confirmation that it remains accredited pending consideration of its application for reaccreditation.
|
School
|
Last Accreditation Letter
|
Next Accreditation
|
Type of Accreditation
|
|||
Brockton, MA
1
|
August 28, 2014
|
December 31, 2020
|
National
|
|||
Lincoln, RI
1
|
August 28, 2014
|
December 31, 2019
|
National
|
|||
Lowell, MA
1
|
January 5, 2015
|
December 31, 2019
|
National
|
|||
Somerville, MA
1
|
August 28, 2014
|
December 31, 2019
|
National
|
|||
Philadelphia (Center City), PA
1
|
Sepember 14, 2016
|
August 31, 2017
|
National
|
|||
Iselin, NJ
|
December 20, 2016
|
December 31, 2022
|
National
|
|||
Marietta, GA
1
|
August 28, 2014
|
December 31, 2019
|
National
|
|||
Moorestown, NJ
1
|
December 20, 2016
|
December 31, 2022
|
National
|
|||
Paramus, NJ
1
|
December 20, 2016
|
December 31, 2022
|
National
|
|||
Philadelphia (Northeast), PA
1
|
December 20, 2016
|
December 31, 2022
|
National
|
|||
West Palm Beach, FL
1
|
August 28, 2014
|
December 31, 2019
|
National
|
|||
Las Vegas (Summerlin), NV
1
|
August 29, 2014
|
December 31, 2019
|
National
|
1 |
Branch campus of main campus in Iselin, NJ
|
2 |
Campus undergoing re-accreditation.
|
School
|
Last Accreditation Letter
|
Comprehensive Evaluation
|
Type of Accreditation
|
|||
Southington, CT
|
June 29, 2012
|
Fall 2017
|
Regional
|
Institution
|
Expiration Date of Current
Program Participation
Agreement
|
|
Columbia, MD
|
September 30, 2017
|
|
Iselin, NJ
|
June 12, 2018
1
|
|
Indianapolis, IN
|
September 30, 2016
1 2
|
|
New Britain, CT
|
March 31, 2020
|
|
Southington, CT
|
June 30, 2017
|
1 |
Provisionally certified.
|
2 |
Month-to-month certification during review process.
|
· |
establishing new processes, and updating existing processes, for enabling borrowers to obtain from the DOE a discharge of some or all of their federal student loans based on circumstances such as certain acts or omissions of the institution and for the DOE to impose and collect liabilities against the institution following the loan discharges;
|
· |
establishing expanded standards of financial responsibility (see “Regulatory Environment – Financial Responsibility Standards”);
|
· |
requiring institutions to make disclosures to current and prospective students regarding the existence of certain of the circumstances identified in the expanded standards of financial responsibility;
|
· |
calculating a loan repayment rate for each proprietary institution under standards established by the regulations and requiring institutions to provide warnings to current and prospective students if the institution has a loan repayment rate below specified thresholds;
|
· |
prohibiting certain contractual provisions imposed by or on behalf of schools on students regarding arbitration, dispute resolution, and participation in class actions; and
|
· |
expanding the existing definition of misrepresentations that could result in grounds for discharge of student loans and in liabilities and sanctions against the institution, including, without limitation, potential loss of Title IV eligibility.
|
·
|
The equity ratio, which measures the institution's capital resources, ability to borrow and financial viability;
|
· |
The primary reserve ratio, which measures the institution's ability to support current operations from expendable resources; and
|
· |
The net income ratio, which measures the institution's ability to operate at a profit.
|
· |
Posting a letter of credit in an amount equal to at least 50% of the total Title IV Program funds received by the institution during the institution's most recently completed fiscal year;
|
· |
Posting a letter of credit in an amount equal to at least 10% of such prior year's Title IV Program funds, accepting provisional certification, complying with additional DOE monitoring requirements and agreeing to receive Title IV Program funds under an arrangement other than the DOE's standard advance funding arrangement
|
· |
Comply with all applicable federal student financial aid requirements;
|
· |
Have capable and sufficient personnel to administer the federal student Title IV Programs;
|
· |
Administer Title IV Programs with adequate checks and balances in its system of internal controls over financial reporting;
|
· |
Divide the function of authorizing and disbursing or delivering Title IV Program funds so that no office has the responsibility for both functions;
|
· |
Establish and maintain records required under the Title IV regulations;
|
· |
Develop and apply an adequate system to identify and resolve discrepancies in information from sources regarding a student’s application for financial aid under Title IV;
|
· |
Have acceptable methods of defining and measuring the satisfactory academic progress of its students;
|
· |
Refer to the Office of the Inspector General any credible information indicating that any applicant, student, employee, third party servicer or other agent of the school has been engaged in any fraud or other illegal conduct involving Title IV Programs;
|
· |
Not be, and not have any principal or affiliate who is, debarred or suspended from federal contracting or engaging in activity that is cause for debarment or suspension;
|
· |
Provide adequate financial aid counseling to its students;
|
· |
Submit in a timely manner all reports and financial statements required by the regulations; and
|
· |
Not otherwise appear to lack administrative capability.
|
· |
establishing new processes, and updating existing processes, for enabling borrowers to obtain from the DOE a discharge of some or all of their federal student loans based on circumstances such as certain acts or omissions of the institution and for the DOE to impose and collect liabilities against the institution following the loan discharges;
|
· |
establishing expanded standards of financial responsibility (see “Financial Responsibility Standards”);
|
· |
requiring institutions to make disclosures to current and prospective students regarding the existence of certain of the circumstances identified in the expanded standards of financial responsibility;
|
· |
calculating a loan repayment rate for each proprietary institution under standards established by the regulations and requiring institutions to provide warnings to current and prospective students if the institution has a loan repayment rate below specified thresholds;
|
· |
prohibiting certain contractual provisions imposed by or on behalf of schools on students regarding arbitration, dispute resolution, and participation in class actions; and
|
· |
expanding the existing definition of misrepresentations that could result in grounds for discharge of student loans and in liabilities and sanctions against the institution, including, without limitation, potential loss of Title IV eligibility.
|
· |
Student dissatisfaction with our programs and services;
|
· |
Diminished access to high school student populations;
|
· |
Our failure to maintain or expand our brand or other factors related to our marketing or advertising practices; and
|
· |
Our inability to maintain relationships with employers in the automotive, diesel, skilled trades and IT services industries.
|
· |
authorize the issuance of blank check preferred stock that could be issued by our board of directors to thwart a takeover attempt;
|
· |
prohibit cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors;
|
· |
require super-majority voting to effect amendments to certain provisions of our amended and restated certificate of incorporation;
|
· |
limit who may call special meetings of both the board of directors and stockholders;
|
· |
prohibit stockholder action by non-unanimous written consent and otherwise require all stockholder actions to be taken at a meeting of the stockholders;
|
· |
establish advance notice requirements for nominating candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholders' meetings; and
|
· |
require that vacancies on the board of directors, including newly created directorships, be filled only by a majority vote of directors then in office.
|
Location
|
Brand
|
Approximate Square Footage
|
||
Henderson, Nevada
|
Euphoria Institute
|
18,000
|
||
Las Vegas, Nevada
|
Euphoria Institute
|
19,000
|
||
Southington, Connecticut
|
Lincoln College of New England
|
113,000
|
||
Columbia, Maryland
|
Lincoln College of Technology
|
110,000
|
||
Denver, Colorado
|
Lincoln College of Technology
|
212,000
|
||
Grand Prairie, Texas
|
Lincoln College of Technology
|
146,000
|
||
Indianapolis, Indiana
|
Lincoln College of Technology
|
189,000
|
||
Marietta, Georgia
|
Lincoln College of Technology
|
30,000
|
||
Melrose Park, Illinois
|
Lincoln College of Technology
|
88,000
|
||
West Palm Beach, Florida
|
Lincoln College of Technology
|
117,000
|
||
Allentown, Pennsylvania
|
Lincoln Technical Institute
|
26,000
|
||
Brockton, Massachusetts
|
Lincoln Technical Institute
|
22,000
|
||
East Windsor, Connecticut
|
Lincoln Technical Institute
|
289,000
|
||
Iselin, New Jersey
|
Lincoln Technical Institute
|
32,000
|
||
Lincoln, Rhode Island
|
Lincoln Technical Institute
|
39,000
|
||
Lowell, Massachusetts
|
Lincoln Technical Institute
|
21,000
|
||
Mahwah, New Jersey
|
Lincoln Technical Institute
|
79,000
|
||
Moorestown, New Jersey
|
Lincoln Technical Institute
|
35,000
|
||
New Britain, Connecticut
|
Lincoln Technical Institute
|
35,000
|
||
Northeast Philadelphia, Pennsylvania
|
Lincoln Technical Institute
|
25,000
|
||
Paramus, New Jersey
|
Lincoln Technical Institute
|
30,000
|
||
Philadelphia, Pennsylvania
|
Lincoln Technical Institute
|
36,000
|
||
Philadelphia, Pennsylvania
|
Lincoln Technical Institute
|
29,000
|
||
Queens, New York
|
Lincoln Technical Institute
|
48,000
|
||
Shelton, Connecticut
|
Lincoln Technical Institute
|
47,000
|
||
Somerville, Massachusetts
|
Lincoln Technical Institute
|
33,000
|
||
South Plainfield, New Jersey
|
Lincoln Technical Institute
|
60,000
|
||
Union, New Jersey
|
Lincoln Technical Institute
|
56,000
|
||
Nashville, Tennessee
|
Lincoln College of Technology
|
281,000
|
||
West Orange, New Jersey
|
Corporate Office
|
52,000
|
||
Plymouth Meeting, Pennsylvania
|
Corporate Office
|
6,000
|
||
Suffield, Connecticut
|
132,000
|
ITEM 5. |
Price Range of Common Stock
|
||||||||||||
High
|
Low
|
Dividend
|
||||||||||
Fiscal Year Ended December 31, 2016
|
||||||||||||
First Quarter
|
$
|
3.05
|
$
|
1.92
|
$
|
-
|
||||||
Second Quarter
|
$
|
2.49
|
$
|
1.37
|
$
|
-
|
||||||
Third Quarter
|
$
|
2.58
|
$
|
1.37
|
$
|
-
|
||||||
Fourth Quarter
|
$
|
2.20
|
$
|
1.58
|
$
|
-
|
Price Range of Common Stock
|
||||||||||||
High
|
Low
|
Dividend
|
||||||||||
Fiscal Year Ended December 31, 2015
|
||||||||||||
First Quarter
|
$
|
3.10
|
$
|
2.08
|
$
|
-
|
||||||
Second Quarter
|
$
|
2.71
|
$
|
1.93
|
$
|
-
|
||||||
Third Quarter
|
$
|
1.93
|
$
|
0.20
|
$
|
-
|
||||||
Fourth Quarter
|
$
|
2.40
|
$
|
0.53
|
$
|
-
|
Plan Category
|
Number of
Securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights
|
Weighted-
average
exercise
price of
outstanding
options,
warrants and
rights
|
Number of
securities
remaining
available for
future issuance
under equity
compensation
plans (excluding
securities
reflected in
column (a))
|
|||||||||
(a)
|
||||||||||||
Equity compensation plans approved by security holders
|
218,167
|
$
|
12.11
|
2,315,016
|
||||||||
Equity compensation plans not approved by security holders
|
-
|
-
|
-
|
|||||||||
Total
|
218,167
|
$
|
12.11
|
2,315,016
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
(In thousands, except per share amounts)
|
||||||||||||||||||||
Statement of Operations Data, Year Ended December 31:
|
||||||||||||||||||||
Revenue
|
$
|
196,910
|
$
|
208,256
|
$
|
218,040
|
$
|
225,742
|
$
|
248,724
|
||||||||||
Cost and expenses:
|
||||||||||||||||||||
Educational services and facilities
|
94,922
|
94,970
|
103,299
|
104,330
|
111,008
|
|||||||||||||||
Selling, general and administrative
|
103,129
|
105,380
|
116,573
|
122,253
|
133,158
|
|||||||||||||||
Loss (gain) on sale of assets
|
120
|
1,741
|
(58
|
)
|
(279
|
)
|
(70
|
)
|
||||||||||||
Impairment of goodwill and long-lived assets
|
3,902
|
216
|
21,885
|
1,701
|
10,739
|
|||||||||||||||
Total costs and expenses
|
202,073
|
202,307
|
241,699
|
228,005
|
254,835
|
|||||||||||||||
Operating (loss) income
|
(5,163
|
)
|
5,949
|
(23,659
|
)
|
(2,263
|
)
|
(6,111
|
)
|
|||||||||||
Other:
|
||||||||||||||||||||
Interest income
|
155
|
52
|
62
|
37
|
2
|
|||||||||||||||
Interest expense
|
(6,001
|
)
|
(5,727
|
)
|
(3,431
|
)
|
(2,507
|
)
|
(2,293
|
)
|
||||||||||
Other income
|
6,711
|
109
|
-
|
18
|
14
|
|||||||||||||||
(Loss) income from continuing operations before income taxes
|
(4,298
|
)
|
383
|
(27,028
|
)
|
(4,715
|
)
|
(8,388
|
)
|
|||||||||||
Provision (benefit) for income taxes (1)
|
200
|
242
|
(1,479
|
)
|
19,830
|
(1,333
|
)
|
|||||||||||||
(Loss) income from continuing operations
|
(4,498
|
)
|
141
|
(25,549
|
)
|
(24,545
|
)
|
(7,055
|
)
|
|||||||||||
Loss from discontinued operations, net of income taxes
|
(23,806
|
)
|
(3,491
|
)
|
(30,584
|
)
|
(26,741
|
)
|
(30,131
|
)
|
||||||||||
Net loss
|
$
|
(28,304
|
)
|
$
|
(3,350
|
)
|
$
|
(56,133
|
)
|
$
|
(51,286
|
)
|
$
|
(37,186
|
)
|
|||||
Basic
|
||||||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.19
|
)
|
$
|
0.01
|
$
|
(1.12
|
)
|
$
|
(1.09
|
)
|
$
|
(0.32
|
)
|
||||||
Loss per share from discontinued operations
|
(1.02
|
)
|
(0.15
|
)
|
(1.34
|
)
|
(1.19
|
)
|
(1.36
|
)
|
||||||||||
Net loss per share
|
$
|
(1.21
|
)
|
$
|
(0.14
|
)
|
$
|
(2.46
|
)
|
$
|
(2.28
|
)
|
$
|
(1.68
|
)
|
|||||
Diluted
|
||||||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.19
|
)
|
$
|
0.01
|
$
|
(1.12
|
)
|
$
|
(1.09
|
)
|
$
|
(0.32
|
)
|
||||||
Loss per share from discontinued operations
|
(1.02
|
)
|
(0.15
|
)
|
(1.34
|
)
|
(1.19
|
)
|
(1.36
|
)
|
||||||||||
Net loss per share
|
$
|
(1.21
|
)
|
$
|
(0.14
|
)
|
$
|
(2.46
|
)
|
$
|
(2.28
|
)
|
$
|
(1.68
|
)
|
|||||
Weighted average number of common shares outstanding:
|
||||||||||||||||||||
Basic
|
23,453
|
23,167
|
22,814
|
22,513
|
22,195
|
|||||||||||||||
Diluted
|
23,453
|
23,227
|
22,814
|
22,513
|
22,195
|
|||||||||||||||
Other Data:
|
||||||||||||||||||||
Capital expenditures
|
$
|
3,596
|
$
|
2,218
|
$
|
7,472
|
$
|
6,538
|
$
|
8,839
|
||||||||||
Depreciation and amortization from continuing operations
|
10,975
|
10,346
|
14,589
|
14,590
|
15,787
|
|||||||||||||||
Number of campuses
|
28
|
31
|
31
|
33
|
33
|
|||||||||||||||
Average student population from continuing operations (2)
|
7,725
|
8,395
|
9,037
|
9,178
|
10,083
|
|||||||||||||||
Cash dividend declared per common share
|
$
|
-
|
$
|
-
|
$
|
0.18
|
$
|
0.28
|
$
|
0.28
|
||||||||||
Balance Sheet Data, At December 31:
|
||||||||||||||||||||
Cash, cash equivalents and restricted cash
|
$
|
47,715
|
$
|
61,041
|
$
|
42,299
|
$
|
67,386
|
$
|
61,708
|
||||||||||
Working (deficit) capital (3)
|
(1,733
|
)
|
33,818
|
29,585
|
47,041
|
40,939
|
||||||||||||||
Total assets
|
163,207
|
210,279
|
213,707
|
305,949
|
346,774
|
|||||||||||||||
Total debt (4)
|
41,957
|
58,224
|
65,181
|
90,116
|
73,527
|
|||||||||||||||
Total stockholders' equity
|
54,926
|
80,997
|
83,010
|
145,196
|
198,477
|
|
|
Segment
|
|
Status
|
|
||||
School
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
Allentown, PA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Edison, NJ
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Moorestown, NJ
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Paramus, NJ
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Lincoln, RI
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Brockton, MA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Somerville, MA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Lowell, MA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
New Britain, CT
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Shelton, CT
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Las Vegas (Summerlin), NV
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Southington, CT
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Marietta, GA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Hartford, CT
|
|
Transitional (Continuing Operations)
|
|
HOPS (Discontinued Operations)
|
|
Teach-out
|
|
Closed
|
2
|
Henderson (Green Valley), NV
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Closed
|
3
|
Center City Philadelphia, PA
|
|
HOPS (Discontinued Operations)
|
|
Transitional (Continuing Operations)
|
|
Held for sale
|
|
Teach-out
|
4
|
Northeast Philadelphia, PA
|
|
HOPS (Discontinued Operations)
|
|
Transitional (Continuing Operations)
|
|
Held for sale
|
|
Teach-out
|
4
|
West Palm Beach, FL
|
|
HOPS (Discontinued Operations)
|
|
Transitional (Continuing Operations)
|
|
Held for sale
|
|
Teach-out
|
5
|
Fern Park, FL
|
|
Transitional (Continuing Operations)
|
|
Transitional (Continuing Operations)
|
|
Teach-out
|
|
Closed
|
6
|
1 |
In November 2015, the Board of Directors approved a plan to divest these schools and thus they are included in discontinued operations as of December 31, 2016 and 2015.
|
2 |
In November 2015, the Board of Directors approved a plan to divest this school. In December 2015, the Board of Directors approved a plan to cease operations at this school. The school was included in the Transitional Segment and included in continuing operations until it closed in the fourth quarter of 2016; it is included in discontinued operations as of December 31, 2016.
|
3 |
In November 2015, the Board of Directors approved a plan to divest this school. In the fourth quarter of 2016, the Board of Directors approved a plan to cease operations at this school, which closed in the fourth quarter of 2016 and is included in discontinued operations as of December 31, 2016.
|
4 |
In November 2015, the Board of Directors approved a plan to divest these schools. In the fourth quarter of 2016, the Board of Directors approved a plan to cease operations at these schools which are being taught-out and expected to be closed in 2017. These schools are included in the Transitional segment and continuing operations as of December 31, 2016.
|
5 |
In November 2015, the Board of Directors approved a plan to divest this school. In the third quarter of 2016, the Board of Directors approved a plan to teach–out certain programs at this school. Then, in the fourth quarter of 2016, the Board of Directors approved a plan to teach-out the remainder of the programs at this school. The school is expected to be closed in 2017. This school’s operations are included in the Transitional segment and continuing operations as of December 31, 2016. However, as part of this plan, the Board of Directors approved the divestiture of the properties for this school and therefore the properties are included in held for sale as of December 31, 2016.
|
6 |
On February 27, 2015, our Board of Directors approved a plan to cease operations at this school, which was fully taught out and officially closed as of March 31, 2016 and is included in the Transitional segment and continuing operations as of December 31, 2016.
The plan to teach out this school was approved prior to the plan to exit the HOPS segment and as such does not meet the discontinued operations criteria.
|
· |
Our internal financing is provided to students only after all other funding resources have been exhausted; thus, by the time this funding is available, students have completed approximately two-thirds of their curriculum and are more likely to graduate;
|
· |
Funding for students who interrupt their education is typically covered by Title IV funds as long as they have been properly packaged for financial aid; and
|
· |
Creditworthy criteria to demonstrate a student’s ability to pay.
|
· |
Educational services and facilities.
Major components of educational services and facilities expenses include faculty compensation and benefits, expenses of books and tools, facility rent, maintenance, utilities, depreciation and amortization of property and equipment used in the provision of education services and other costs directly associated with teaching our programs excluding student services which is included in selling, general and administrative expenses.
|
· |
Selling, general and administrative.
Selling, general and administrative expenses include compensation and benefits of employees who are not directly associated with the provision of educational services (such as executive management and school management, finance and central accounting, legal, human resources and business development), marketing and student enrollment expenses (including compensation and benefits of personnel employed in sales and marketing and student admissions), costs to develop curriculum, costs of professional services, bad debt expense, rent for our corporate headquarters, depreciation and amortization of property and equipment that is not used in the provision of educational services and other costs that are incidental to our operations. Selling, general and administrative expenses also includes the cost of all student services including financial aid and career services. All marketing and student enrollment expenses are recognized in the period incurred.
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Revenue
|
$
|
88,649
|
$
|
97,846
|
$
|
106,982
|
||||||
Loss before income tax
|
(6,341
|
)
|
(3,491
|
)
|
(26,684
|
)
|
||||||
Income tax benefit
|
-
|
-
|
(2,746
|
)
|
||||||||
Net loss from discontinued operations
|
$
|
(6,341
|
)
|
$
|
(3,491
|
)
|
$
|
(23,938
|
)
|
Year Ended December 31,
|
||||
2014
|
||||
Revenue
|
$
|
2,140
|
||
Loss before income tax
|
(6,731
|
)
|
||
Income tax benefit
|
(85
|
)
|
||
Net loss from discontinued operations
|
$
|
(6,646
|
)
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||
Costs and expenses:
|
||||||||||||
Educational services and facilities
|
48.2
|
%
|
45.6
|
%
|
47.4
|
%
|
||||||
Selling, general and administrative
|
52.4
|
%
|
50.6
|
%
|
53.5
|
%
|
||||||
Gain on sale of assets
|
0.1
|
%
|
0.8
|
%
|
0.0
|
%
|
||||||
Impairment of goodwill and long-lived assets
|
1.9
|
%
|
0.1
|
%
|
10.0
|
%
|
||||||
Total costs and expenses
|
102.6
|
%
|
97.1
|
%
|
110.9
|
%
|
||||||
Operating (loss) income
|
-2.6
|
%
|
2.9
|
%
|
-10.9
|
%
|
||||||
Interest expense, net
|
-3.0
|
%
|
-2.7
|
%
|
-1.5
|
%
|
||||||
Other income (loss)
|
3.4
|
%
|
0.0
|
%
|
0.0
|
%
|
||||||
(Loss) income from continuing opeartions before income taxes
|
-2.2
|
%
|
0.2
|
%
|
-12.4
|
%
|
||||||
Provision (benefit) for income taxes
|
0.1
|
%
|
0.1
|
%
|
-1.9
|
%
|
||||||
(Loss) income from continuing operations
|
-2.3
|
%
|
0.1
|
%
|
-10.5
|
%
|
Twelve Months Ended December 31,
|
||||||||||||
2016
|
2015
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Transportation and Skilled Trades
|
$
|
177,882
|
$
|
183,821
|
-3.2
|
%
|
||||||
Transitional
|
19,028
|
24,435
|
-22.1
|
%
|
||||||||
Total
|
$
|
196,910
|
$
|
208,256
|
-5.4
|
%
|
||||||
Operating Income (Loss):
|
||||||||||||
Transportation and Skilled Trades
|
$
|
21,278
|
$
|
26,778
|
-20.5
|
%
|
||||||
Transitional
|
(6,334
|
)
|
(1,689
|
)
|
-275.0
|
%
|
||||||
Corporate
|
(20,107
|
)
|
(19,140
|
)
|
-5.1
|
%
|
||||||
Total
|
$
|
(5,163
|
)
|
$
|
5,949
|
186.8
|
%
|
|||||
Starts:
|
||||||||||||
Transportation and Skilled Trades
|
7,626
|
7,794
|
-2.2
|
%
|
||||||||
Transitional
|
838
|
1,227
|
-31.7
|
%
|
||||||||
Total
|
8,464
|
9,021
|
-6.2
|
%
|
||||||||
Average Population:
|
||||||||||||
Transportation and Skilled Trades
|
6,852
|
7,238
|
-5.3
|
%
|
||||||||
Transitional
|
873
|
1,157
|
-24.5
|
%
|
||||||||
Total
|
7,725
|
8,395
|
-8.0
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Transportation and Skilled Trades
|
6,700
|
6,617
|
1.3
|
%
|
||||||||
Transitional
|
595
|
928
|
-35.9
|
%
|
||||||||
Total
|
7,295
|
7,545
|
-3.3
|
%
|
· |
Revenue decreased to $177.9 million for the year ended December 31, 2016, as compared to $183.8 million in the comparable period, primarily driven by a 5.3% decrease in average student population, which decreased to approximately 6,900 from 7,200 in the prior comparable year. The decrease in average population was a result of starting 2016 with approximately 600 fewer students than we had on January 1, 2015. The revenue decline from a lower population was slightly offset by a 2.2% increase in average revenue per student due to a shift in program mix.
|
· |
Educational services and facilities expense increased by $1.9 million mainly due to a $2.0 million, or 5.9%, increase in facilities expense primarily due to (a) increased rent expense of $1.3 million which was the result of a modification of a lease at three of our campuses which were previously accounted for as finance obligations under which rent payments were previously included in interest expense; (b) $0.6 million in additional depreciation expense resulting from the
reclassification of one of our facilities out of held for sale as of December 31, 2015
; and (c) a $1.5 million, or 17.4% increase in books and tools expenses resulting from the purchase of laptops provided to newly enrolled students in certain programs to enhance and expand their overall learning experience. Partially offsetting the above increases was a $1.6 million, or 4.1%, decrease in instructional expense as a result of realigning our cost structure to meet our population
.
|
· |
Selling, general and administrative expenses decreased by $0.5 million primarily as a result of a
$1.6 million decrease in administrative and student services expense due to reduced salary and benefits. Partially offsetting the decrease was a $1.1 million increase in marketing expense which was largely the result of additional spending in a strategic effort to reach more potential students, expand brand awareness and increase enrollments.
|
· |
Loss on sale of asset decreased by $1.6 million as a result of a one-time charge in relation to one of our campuses that previously classified as held for sale. During 2015 the company had reclassified this campus out of held for sale and recorded catch-up depreciation in the amount of $1.6 million.
|
· |
Impairment of goodwill and long lived asset decreased by $0.2 million as a result of one-time charges in relation to one of our campuses during the year ended December 31, 2015.
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Transportation and Skilled Trades
|
$
|
183,821
|
$
|
188,669
|
-2.6
|
%
|
||||||
Transitional
|
24,435
|
29,371
|
-16.8
|
%
|
||||||||
Total
|
$
|
208,256
|
$
|
218,040
|
-4.5
|
%
|
||||||
Operating Income (Loss):
|
||||||||||||
Transportation and Skilled Trades
|
$
|
26,778
|
$
|
19,519
|
37.2
|
%
|
||||||
Transitional
|
(1,689
|
)
|
(19,814
|
)
|
91.5
|
%
|
||||||
Corporate
|
(19,140
|
)
|
(23,364
|
)
|
18.1
|
%
|
||||||
Total
|
$
|
5,949
|
$
|
(23,659
|
)
|
125.1
|
%
|
|||||
Starts:
|
||||||||||||
Transportation and Skilled Trades
|
7,794
|
8,289
|
-6.0
|
%
|
||||||||
Transitional
|
1,227
|
1,661
|
-26.1
|
%
|
||||||||
Total
|
9,021
|
9,950
|
-9.3
|
%
|
||||||||
Average Population:
|
||||||||||||
Transportation and Skilled Trades
|
7,238
|
7,603
|
-4.8
|
%
|
||||||||
Transitional
|
1,157
|
1,434
|
-19.3
|
%
|
||||||||
Total
|
8,395
|
9,037
|
-7.1
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Transportation and Skilled Trades
|
6,617
|
7,210
|
-8.2
|
%
|
||||||||
Transitional
|
928
|
1,270
|
-26.9
|
%
|
||||||||
Total
|
7,545
|
8,480
|
-11.0
|
%
|
· |
Revenue decreased to $183.8 million for the year ended December 31, 2015, as compared to $188.7 million in the comparable period, primarily driven by a 4.8% decline in average student population, which decreased to approximately 7,200 from 7,600 in the prior comparable year. In addition, we had fewer new starts of 495 which decreased our new student population to 7,794 for the year ended December 31, 2015 from 8,289 for the year ended December 31, 2014. The revenue decline from lower population was slightly offset by a 2.3% increase in average revenue per student due to improved student retention and a shift in program mix. In addition, revenue was lower in 2015 due to higher scholarship recognition in comparison to 2014. Scholarships are recognized ratably over the term of the student’s program. Scholarship discounts increased by $0.7 million for the year ended December 31, 2015 as compared to the prior year. While scholarships have negatively impacted revenue, we believe we provide more students with the opportunity to pursue their educational goals by assisting in their affordability challenge
|
· |
Educational services and facilities expense reduced by $6.5 million comprised of: (a) $3.7 million, or 9.8%, reduction in facilities expense, primarily due to lower depreciation expense as a result of discontinued depreciation for one campus included in assets held for sale and lower asset base due to prior long-lived asset impairments; and (b) lower instructional expenses of $2.4 million, or 5.8%, and books and tools expense of $0.4 million, or 4.7% as a result of lower student population.
|
· |
Selling, general and administrative expenses reduced by $5.7 million comprised of: (a) $2.6 million, or 11.8%, reduction in sales expenses offset by a $0.8 million, or 5.9%, increase in marketing. The decrease in sales expense was attributable to a reduction in the number of admissions representatives dedicated to the destination schools replaced with a centralized call center thus reducing travel costs and salary expense, while the marketing increase was a result of increased spending on production costs associated with our new marketing campaign as “Lincoln Tech, America’s Technical Institute”; (b) $1.1 million reduction in student services driven by lower student population; and (c) $2.8 million, or 8.2%, reduction in administrative expenses primarily as a result of a reduction in bad debt expense. The improvement in bad debt expense was mainly the result of improvement in current collections and collections history.
|
· |
Gain on sale of assets increased by $1.6 million as a result of a non-cash charge in relation to one of our campuses that was previously classified as held for sale in 2014. During 2015 the Company had re-classified this campus out of held for sale and recorded catch-up depreciation in the amount of $1.6 million.
|
· |
Impairment of goodwill and long-lived assets of $0.2 million compared to $1.7 million for the years ended December 31, 2015 and 2014, respectively.
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
(In thousands)
|
||||||||||||
Net cash (used in)provided by operating activities
|
$
|
(6,107
|
)
|
$
|
14,337
|
$
|
12,022
|
|||||
Net cash used in investing activities
|
$
|
(2,182
|
)
|
$
|
(1,767
|
)
|
$
|
(7,405
|
)
|
|||
Net cash (used in) provided by financing activities
|
$
|
(9,067
|
)
|
$
|
13,551
|
$
|
(5,204
|
)
|
As of December 31,
|
||||||||
2016
|
2015
|
|||||||
Term loan
|
$
|
44,267
|
$
|
44,653
|
||||
Finance obligation
|
-
|
9,672
|
||||||
Capital lease-property (with a rate of 8.0%)
|
-
|
3,899
|
||||||
Subtotal
|
44,267
|
58,224
|
||||||
Less current maturities
|
(11,713
|
)
|
(10,114
|
)
|
||||
Total long-term debt
|
$
|
32,554
|
$
|
48,110
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 year
|
1-3 years
|
3-5 years
|
More than
5 years
|
||||||||||||||||
Credit agreement (including interest)
|
$
|
53,887
|
$
|
16,048
|
$
|
37,839
|
$
|
-
|
$
|
-
|
||||||||||
Operating leases
|
97,206
|
21,428
|
35,653
|
19,641
|
20,484
|
|||||||||||||||
Total contractual cash obligations
|
$
|
151,093
|
$
|
37,476
|
$
|
73,492
|
$
|
19,641
|
$
|
20,484
|
ITEM 12. |
1. |
Financial Statements
|
2. |
Financial Statement Schedule
|
3. |
Exhibits Required by Securities and Exchange Commission Regulation S-K
|
Exhibit
Number
|
Description
|
3.1
|
Amended and Restated Certificate of Incorporation of the Company (1).
|
3.2
|
By-laws of the Company (2).
|
4.1
|
Management Stockholders Agreement, dated as of January 1, 2002, by and among Lincoln Technical Institute, Inc., Back to School Acquisition, L.L.C. and the Stockholders and other holders of options under the Management Stock Option Plan listed therein (3).
|
4.2
|
Assumption Agreement and First Amendment to Management Stockholders Agreement, dated as of December 20, 2007, by and among Lincoln Educational Services Corporation, Lincoln Technical Institute, Inc., Back to School Acquisition, L.L.C. and the Management Investors parties therein (4).
|
4.3
|
Registration Rights Agreement, dated as of June 27, 2005, between the Company and Back to School Acquisition, L.L.C. (2).
|
4.4
|
Specimen Stock Certificate evidencing shares of common stock (5).
|
10.1
|
Credit Agreement, dated as of July 31, 2015, among Lincoln Educational Services Corporation and its wholly-owned subsidiaries, the Lenders and Collateral Agents party thereto, and HPF Service, LLC, as Administrative Agent (6).
|
10.2
|
First Amendment to Credit Agreement, dated as of December 31, 2015, among Lincoln Educational Services Corporation and its wholly-owned subsidiaries, the Lenders and Collateral Agents party thereto, and HPF Service, LLC, as Administrative Agent (7).
|
10.3
|
Second Amendment to Credit Agreement, dated as of February 29, 2016, among Lincoln Educational Services Corporation and its wholly-owned subsidiaries, the Lenders party thereto, and HPF Service, LLC, as Administrative Agent and Tranche A Collateral Agent (8).
|
10.4
|
Credit Agreement, dated as of April 12, 2016, among the Company, Lincoln Technical Institute, Inc. and its subsidiaries, and Sterling National Bank (9).
|
10.5
|
Purchase and Sale Agreement, dated as of July 1, 2016, between New England Institute of Technology at Palm Beach, Inc. and School Property Development Metrocentre, LLC (10).
|
10.6
|
Separation and Release Agreement, dated as of May 5, 2015, between the Company and Shaun E. McAlmont (11).
|
10.7
|
Employment Agreement, dated as of January 30, 2015, between the Company and Scott M. Shaw (12).
|
10.8
|
Employment Agreement, dated as of August 31, 2015, between the Company and Scott M. Shaw (13).
|
10.9
|
Employment Agreement, dated as of August 23, 2016, between the Company and Scott M. Shaw (14)
|
10.10
|
Employment Agreement, dated as of June 2, 2014, between the Company and Kenneth M. Swisstack (15).
|
|
10.11
|
Amendment to Employment Agreement, dated as of March 12, 2015, between the Company and Kenneth M. Swisstack. (16)
|
|
10.12
|
Separation and Release Agreement, dated as of January 15, 2016, between the Company and Kenneth M. Swisstack (17).
|
|
10.13
|
Employment Agreement, dated as of March 12, 2015, between the Company and Brian K. Meyers (16).
|
|
10.14
|
Employment Agreement, dated as of August 23, 2016, between the Company and Brian K. Meyers (14).
|
|
10.15*
|
Change in Control Agreement, dated August 31, 2016, between the Company and Deborah Ramentol.
|
|
10.16
|
Lincoln Educational Services Corporation Amended and Restated 2005 Long-Term Incentive Plan (18).
|
|
10.17
|
Lincoln Educational Services Corporation Amended and Restated 2005 Non-Employee Directors Restricted Stock Plan (19).
|
|
10.18
|
Lincoln Educational Services Corporation 2005 Deferred Compensation Plan (3).
|
|
10.19
|
Lincoln Technical Institute Management Stock Option Plan, effective January 1, 2002 (3).
|
|
10.20
|
Form of Stock Option Agreement, dated January 1, 2002, between Lincoln Technical Institute, Inc. and certain participants (3).
|
|
10.21
|
Form of Stock Option Agreement under our 2005 Long-Term Incentive Plan (20).
|
|
10.22
|
Form of Restricted Stock Agreement under our 2005 Long-Term Incentive Plan (21).
|
|
10.23
|
Form of Performance-Based Restricted Stock Award Agreement under our Amended & Restated 2005 Long-Term Incentive Plan (16).
|
|
10.24
|
Management Stock Subscription Agreement, dated January 1, 2002, among Lincoln Technical Institute, Inc. and certain management investors (3).
|
|
21.1*
|
Subsidiaries of the Company.
|
|
23*
|
Consent of Independent Registered Public Accounting Firm.
|
|
24*
|
Power of Attorney (included on the Signatures page of this Form 10-K).
|
|
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 Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Comprehensive (Loss) Income, (v) Consolidated Statement of Changes in Stockholders’ Equity and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.
|
(1) |
Incorporated by reference to the Company’s Registration Statement on Form S-1/A (Registration No. 333-123644) filed June 7, 2005.
|
(2) |
Incorporated by reference to the Company’s Form 8-K filed June 28, 2005.
|
(3) |
Incorporated by reference to the Company’s Registration Statement on Form S-1 (Registration No. 333-123644) filed March 29, 2005.
|
(4) |
Incorporated by reference to the Company’s Registration Statement on Form S-3 (Registration No. 333-148406) filed December 28, 2007.
|
(5) |
Incorporated by reference to the Company’s Registration Statement on Form S-1/A (Registration No. 333-123644) filed June 21, 2005.
|
(6) |
Incorporated by reference to the Company’s Form 8-K filed August 5, 2015.
|
(7) |
Incorporated by reference to the Company’s Form 8-K filed January 7, 2016.
|
(8) |
Incorporated by reference to the Company’s Form 8-K filed March 4, 2016.
|
(9) |
Incorporated by reference to the Company’s Form 8-K filed April 18, 2016.
|
(10) |
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 9, 2016.
|
(11) |
Incorporated by reference to the Company’s Form 8-K filed May 6, 2015.
|
(12) |
Incorporated by reference to the Company’s Form 8-K filed February 5, 2015.
|
(13) |
Incorporated by reference to the Company’s Form 8-K filed September 3, 2015.
|
(14) |
Incorporated by reference to the Company’s Form 8-K filed August 25, 2016.
|
(15) |
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 8, 2014.
|
(16) |
Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2014.
|
(17) |
Incorporated by reference to the Company’s Form 8-K filed January 22, 2016.
|
(18) |
Incorporated by reference to the Company’s Form 8-K filed May 6, 2013.
|
(19) |
Incorporated by reference to the Company’s Registration Statement on Form S-8 (Registration No. 333-211213) filed May 6, 2016.
|
(20) |
Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.
|
(21) |
Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
|
(22) |
Incorporated by reference to the Company’s Form 8-K filed May 5, 2011.
|
* |
Filed herewith.
|
** |
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
|
|||
By:
|
/s/ Brian Meyers
|
||
Brian Meyers
|
|||
Executive Vice President, Chief Financial Officer and Treasurer
|
|||
(Principal Accounting and Financial Officer)
|
Signature
|
Title
|
Date
|
||
/s/ Scott M. Shaw
|
Chief Executive Officer and Director
|
March 10, 2017
|
||
Scott M. Shaw
|
||||
/s/ Brian K. Meyers
|
Executive Vice President, Chief Financial Officer and Treasurer
|
March 10, 2017
|
||
Brian K. Meyers
|
(Principal Accounting and Financial Officer) | |||
/s/ Alvin O. Austin
|
Director
|
March 10, 2017
|
||
Alvin O. Austin
|
||||
/s/ Peter S. Burgess
|
Director
|
March 10, 2017
|
||
Peter S. Burgess
|
||||
/s/ James J. Burke, Jr.
|
Director
|
March 10, 2017
|
||
James J. Burke, Jr.
|
||||
/s/ Celia H. Currin
|
Director
|
March 10, 2017
|
||
Celia H. Currin
|
||||
/s/ Ronald E. Harbour
|
Director
|
March 10, 2017
|
||
Ronald E. Harbour
|
||||
/s/ J. Barry Morrow
|
Director
|
March 10, 2017
|
||
J. Barry Morrow
|
Page Number
|
|
Reports of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
F-4
|
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014
|
F-6
|
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2016, 2015 and 2014
|
F-7
|
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2016, 2015 and 2014
|
F-8
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
F-9
|
Notes to Consolidated Financial Statements
|
F-11
|
Schedule II-Valuation and Qualifying Accounts
|
F-34
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
21,064
|
$
|
38,420
|
||||
Restricted cash
|
6,399
|
7,362
|
||||||
Accounts receivable, less allowance of $9,887 and $9,787 at December 31, 2016 and 2015, respectively
|
10,294
|
10,410
|
||||||
Inventories
|
1,058
|
1,242
|
||||||
Prepaid income taxes and income taxes receivable
|
262
|
349
|
||||||
Assets held for sale
|
24,786
|
44,369
|
||||||
Prepaid expenses and other current assets
|
2,434
|
2,710
|
||||||
Total current assets
|
66,297
|
104,862
|
||||||
PROPERTY, EQUIPMENT AND FACILITIES - At cost, net of accumulated depreciation and amortization of $124,192 and $123,324 at December 31, 2016 and 2015, respectively
|
55,445
|
66,625
|
||||||
OTHER ASSETS:
|
||||||||
Noncurrent restricted cash
|
20,252
|
15,259
|
||||||
Noncurrent receivables, less allowance of $765 and $837 at December 31, 2016 and 2015, respectively
|
5,633
|
5,278
|
||||||
Goodwill
|
14,536
|
14,536
|
||||||
Other assets, net
|
1,044
|
1,190
|
||||||
Total other assets
|
41,465
|
36,263
|
||||||
TOTAL
|
$
|
163,207
|
$
|
207,750
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
REVENUE
|
$
|
196,910
|
$
|
208,256
|
$
|
218,040
|
||||||
COSTS AND EXPENSES:
|
||||||||||||
Educational services and facilities
|
94,922
|
94,970
|
103,299
|
|||||||||
Selling, general and administrative
|
103,129
|
105,380
|
116,573
|
|||||||||
Loss (gain) on sale of assets
|
120
|
1,741
|
(58
|
)
|
||||||||
Impairment of goodwill and long-lived assets
|
3,902
|
216
|
21,885
|
|||||||||
Total costs and expenses
|
202,073
|
202,307
|
241,699
|
|||||||||
OPERATING (LOSS) INCOME
|
(5,163
|
)
|
5,949
|
(23,659
|
)
|
|||||||
OTHER:
|
||||||||||||
Interest income
|
155
|
52
|
62
|
|||||||||
Interest expense
|
(6,001
|
)
|
(5,727
|
)
|
(3,431
|
)
|
||||||
Other income
|
6,711
|
109
|
-
|
|||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(4,298
|
)
|
383
|
(27,028
|
)
|
|||||||
PROVISION (BENEFIT) FOR INCOME TAXES
|
200
|
242
|
(1,479
|
)
|
||||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS
|
(4,498
|
)
|
141
|
(25,549
|
)
|
|||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES
|
(23,806
|
)
|
(3,491
|
)
|
(30,584
|
)
|
||||||
NET LOSS
|
$
|
(28,304
|
)
|
$
|
(3,350
|
)
|
$
|
(56,133
|
)
|
|||
Basic
|
||||||||||||
(Loss) income per share from continuing operations
|
$
|
(0.19
|
)
|
$
|
0.01
|
$
|
(1.12
|
)
|
||||
Loss per share from discontinued operations
|
(1.02
|
)
|
(0.15
|
)
|
(1.34
|
)
|
||||||
Net loss per share
|
$
|
(1.21
|
)
|
$
|
(0.14
|
)
|
$
|
(2.46
|
)
|
|||
Diluted
|
||||||||||||
(Loss) income per share from continuing operations
|
$
|
(0.19
|
)
|
$
|
0.01
|
$
|
(1.12
|
)
|
||||
Loss per share from discontinued operations
|
(1.02
|
)
|
(0.15
|
)
|
(1.34
|
)
|
||||||
Net loss per share
|
$
|
(1.21
|
)
|
$
|
(0.14
|
)
|
$
|
(2.46
|
)
|
|||
Weighted average number of common shares outstanding:
|
||||||||||||
Basic
|
23,453
|
23,167
|
22,814
|
|||||||||
Diluted
|
23,453
|
23,227
|
22,814
|
December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Net loss
|
$
|
(28,304
|
)
|
$
|
(3,350
|
)
|
$
|
(56,133
|
)
|
|||
Other comprehensive income (loss)
|
||||||||||||
Employee pension plan adjustments
|
971
|
395
|
(3,905
|
)
|
||||||||
Comprehensive loss
|
$
|
(27,333
|
)
|
$
|
(2,955
|
)
|
$
|
(60,038
|
)
|
Retained
|
Accumulated
|
|||||||||||||||||||||||||||
Additional
|
Earnings
|
Other
|
||||||||||||||||||||||||||
Common Stock
|
Paid-in
|
Treasury
|
(Accumulated
|
Comprehensive
|
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stock
|
Deficit)
|
Loss
|
Total
|
||||||||||||||||||||||
BALANCE - January 1, 2014
|
29,919,761
|
$
|
141,377
|
$
|
24,177
|
$
|
(82,860
|
)
|
$
|
66,064
|
$
|
(3,562
|
)
|
$
|
145,196
|
|||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(56,133
|
)
|
-
|
(56,133
|
)
|
|||||||||||||||||||
Employee pension plan adjustments
|
-
|
-
|
-
|
-
|
-
|
(3,905
|
)
|
(3,905
|
)
|
|||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||
Restricted stock
|
158,308
|
-
|
2,517
|
-
|
-
|
-
|
2,517
|
|||||||||||||||||||||
Stock options
|
-
|
-
|
104
|
-
|
-
|
-
|
104
|
|||||||||||||||||||||
Net share settlement for equity-based compensation
|
(144,983
|
)
|
-
|
(448
|
)
|
-
|
-
|
-
|
(448
|
)
|
||||||||||||||||||
Cash dividend of $0.18 per common share
|
-
|
-
|
-
|
-
|
(4,321
|
)
|
-
|
(4,321
|
)
|
|||||||||||||||||||
BALANCE - December 31, 2014
|
29,933,086
|
141,377
|
26,350
|
(82,860
|
)
|
5,610
|
(7,467
|
)
|
83,010
|
|||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(3,350
|
)
|
-
|
(3,350
|
)
|
|||||||||||||||||||
Employee pension plan adjustments
|
-
|
-
|
-
|
-
|
-
|
395
|
395
|
|||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||
Restricted stock
|
(119,791
|
)
|
-
|
1,095
|
-
|
-
|
-
|
1,095
|
||||||||||||||||||||
Stock options
|
-
|
-
|
33
|
-
|
-
|
-
|
33
|
|||||||||||||||||||||
Net share settlement for equity-based compensation
|
(85,740
|
)
|
-
|
(186
|
)
|
-
|
-
|
-
|
(186
|
)
|
||||||||||||||||||
BALANCE - December 31, 2015
|
29,727,555
|
141,377
|
27,292
|
(82,860
|
)
|
2,260
|
(7,072
|
)
|
80,997
|
|||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(28,304
|
)
|
-
|
(28,304
|
)
|
|||||||||||||||||||
Employee pension plan adjustments
|
-
|
-
|
-
|
-
|
-
|
971
|
971
|
|||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||
Restricted stock
|
1,029,267
|
-
|
1,440
|
-
|
-
|
-
|
1,440
|
|||||||||||||||||||||
Net share settlement for equity-based compensation
|
(71,805
|
)
|
-
|
(178
|
)
|
-
|
-
|
-
|
(178
|
)
|
||||||||||||||||||
BALANCE - December 31, 2016
|
30,685,017
|
$
|
141,377
|
$
|
28,554
|
$
|
(82,860
|
)
|
$
|
(26,044
|
)
|
$
|
(6,101
|
)
|
$
|
54,926
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
$
|
(28,304
|
)
|
$
|
(3,350
|
)
|
$
|
(56,133
|
)
|
|||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
11,066
|
14,506
|
19,338
|
|||||||||
Amortization of deferred finance costs
|
949
|
554
|
818
|
|||||||||
Deferred income taxes
|
-
|
-
|
(4,528
|
)
|
||||||||
Loss on disposition of assets
|
223
|
1,738
|
41
|
|||||||||
Gain on capital lease termination, net
|
(6,710
|
)
|
(3,062
|
)
|
-
|
|||||||
Impairment of goodwill and long-lived assets
|
21,367
|
216
|
42,958
|
|||||||||
Fixed asset donation
|
(123
|
)
|
(20
|
)
|
(92
|
)
|
||||||
Provision for doubtful accounts
|
14,592
|
13,583
|
15,500
|
|||||||||
Stock-based compensation expense
|
1,440
|
1,128
|
2,621
|
|||||||||
Deferred rent
|
(489
|
)
|
(638
|
)
|
(740
|
)
|
||||||
(Increase) decrease in assets:
|
||||||||||||
Accounts receivable
|
(15,700
|
)
|
(13,216
|
)
|
(14,470
|
)
|
||||||
Inventories
|
201
|
9
|
372
|
|||||||||
Prepaid income taxes and income taxes receivable
|
87
|
530
|
7,638
|
|||||||||
Prepaid expenses and current assets
|
412
|
444
|
(986
|
)
|
||||||||
Other assets
|
(1,701
|
)
|
(1,460
|
)
|
231
|
|||||||
Increase (decrease) in liabilities:
|
||||||||||||
Accounts payable
|
742
|
1,004
|
(2,732
|
)
|
||||||||
Accrued expenses
|
1,195
|
(450
|
)
|
3,806
|
||||||||
Pension plan liabilities
|
-
|
-
|
(271
|
)
|
||||||||
Unearned tuition
|
(6,854
|
)
|
2,627
|
(1,190
|
)
|
|||||||
Other liabilities
|
1,500
|
194
|
(159
|
)
|
||||||||
Total adjustments
|
22,197
|
17,687
|
68,155
|
|||||||||
Net cash (used in) provided by operating activities
|
(6,107
|
)
|
14,337
|
12,022
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Capital expenditures
|
(3,596
|
)
|
(2,218
|
)
|
(7,472
|
)
|
||||||
Restricted cash
|
963
|
-
|
-
|
|||||||||
Proceeds from sale of property and equipment
|
451
|
451
|
67
|
|||||||||
Net cash used in investing activities
|
(2,182
|
)
|
(1,767
|
)
|
(7,405
|
)
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds from borrowings
|
-
|
53,500
|
47,500
|
|||||||||
Payments on borrowings
|
(387
|
)
|
(38,847
|
)
|
(72,000
|
)
|
||||||
Reclassifications of payments from borrowings to restricted cash
|
-
|
30,000
|
24,500
|
|||||||||
Reclassifications of proceeds from borrowings to restricted cash
|
(4,993
|
)
|
(22,621
|
)
|
-
|
|||||||
Payment of deferred finance fees
|
(645
|
)
|
(2,823
|
)
|
-
|
|||||||
Net share settlement for equity-based compensation
|
(178
|
)
|
(186
|
)
|
(448
|
)
|
||||||
Dividends paid
|
-
|
-
|
(4,321
|
)
|
||||||||
Payments under capital lease obligations
|
(2,864
|
)
|
(5,472
|
)
|
(435
|
)
|
||||||
Net cash (used in) provided by financing activities
|
(9,067
|
)
|
13,551
|
(5,204
|
)
|
|||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(17,356
|
)
|
26,121
|
(587
|
)
|
|||||||
CASH AND CASH EQUIVALENTS—Beginning of year
|
38,420
|
12,299
|
12,886
|
|||||||||
CASH AND CASH EQUIVALENTS—End of year
|
$
|
21,064
|
$
|
38,420
|
$
|
12,299
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$
|
5,265
|
$
|
7,159
|
$
|
4,597
|
||||||
Income taxes
|
$
|
150
|
$
|
89
|
$
|
145
|
||||||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||||||
Liabilities accrued for or noncash purchases of fixed assets
|
$
|
2,048
|
$
|
979
|
$
|
1,613
|
1. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
Segment
|
|
Status
|
|
||||
School
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
Allentown, PA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Edison, NJ
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Moorestown, NJ
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Paramus, NJ
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Lincoln, RI
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Brockton, MA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Somerville, MA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Lowell, MA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
New Britain, CT
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Shelton, CT
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Las Vegas (Summerlin), NV
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Southington, CT
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Marietta, GA
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Held for sale
|
1
|
Hartford, CT
|
|
Transitional (Continuing Operations)
|
|
HOPS (Discontinued Operations)
|
|
Teach-out
|
|
Closed
|
2
|
Henderson (Green Valley), NV
|
|
HOPS (Discontinued Operations)
|
|
HOPS (Discontinued Operations)
|
|
Held for sale
|
|
Closed
|
3
|
Center City Philadelphia, PA
|
|
HOPS (Discontinued Operations)
|
|
Transitional (Continuing Operations)
|
|
Held for sale
|
|
Teach-out
|
4
|
Northeast Philadelphia, PA
|
|
HOPS (Discontinued Operations)
|
|
Transitional (Continuing Operations)
|
|
Held for sale
|
|
Teach-out
|
4
|
West Palm Beach, FL
|
|
HOPS (Discontinued Operations)
|
|
Transitional (Continuing Operations)
|
|
Held for sale
|
|
Teach-out
|
5
|
Fern Park, FL
|
|
Transitional (Continuing Operations)
|
|
Transitional (Continuing Operations)
|
|
Teach-out
|
|
Closed
|
6
|
1 |
In November 2015, the Board of Directors approved a plan to divest these schools and thus they are included in discontinued operations as of December 31, 2016 and 2015.
|
2 |
In November 2015, the Board of Directors approved a plan to divest this school. In December 2015, the Board of Directors approved a plan to cease operations at this school. The school was included in the Transitional Segment and included in continuing operations until it closed in the fourth quarter of 2016; it is included in discontinued operations as of December 31, 2016.
|
3 |
In November 2015, the Board of Directors approved a plan to divest this school. In the fourth quarter of 2016, the Board of Directors approved a plan to cease operations at this school, which closed in the fourth quarter of 2016 and is included in discontinued operations as of December 31, 2016.
|
4 |
In November 2015, the Board of Directors approved a plan to divest these schools. In the fourth quarter of 2016, the Board of Directors approved a plan to cease operations at these schools which are being taught-out and expected to be closed in 2017. These schools are included in the Transitional segment and continuing operations as of December 31, 2016.
|
5 |
In November 2015, the Board of Directors approved a plan to divest this school. In the third quarter of 2016, the Board of Directors approved a plan to teach–out certain programs at this school. Then, in the fourth quarter of 2016, the Board of Directors approved a plan to teach-out the remainder of the programs at this school. The school is expected to be closed in 2017. This school’s operations are included in the Transitional segment and continuing operations as of December 31, 2016. However, as part of this plan, the Board of Directors approved the divestiture of the properties for this school and therefore the properties are included in held for sale as of December 31, 2016.
|
6 |
On February 27, 2015, our Board of Directors approved a plan to cease operations at this school, which was fully taught out and officially closed as of March 31, 2016 and is included in the Transitional segment and continuing operations as of December 31, 2016.
The plan to teach out this school was approved prior to the plan to exit the HOPS segment and as such does not meet the discontinued operations criteria.
|
2. |
FINANCIAL AID AND REGULATORY COMPLIANCE
|
· |
Posting a letter of credit in an amount determined by the DOE equal to at least 50% of the total Title IV Program funds received by the institution during the institution's most recently completed fiscal year;
|
· |
Posting a letter of credit in an amount determined by the DOE equal to at least 10% of such prior year's Title IV Program funds, accepting provisional certification, complying with additional DOE monitoring requirements and agreeing to receive Title IV Program funds under an arrangement other than the DOE's standard advance funding arrangement.
|
3. |
WEIGHTED AVERAGE COMMON SHARES
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Basic shares outstanding
|
23,453,427
|
23,166,977
|
22,814,105
|
|||||||||
Dilutive effect of stock options
|
-
|
60,161
|
-
|
|||||||||
Diluted shares outstanding
|
23,453,427
|
23,227,138
|
22,814,105
|
4. |
DISCONTINUED OPERATIONS
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Revenue
|
$
|
88,649
|
$
|
97,846
|
$
|
106,982
|
||||||
Loss before income tax
|
(6,341
|
)
|
(3,491
|
)
|
(26,684
|
)
|
||||||
Income tax benefit
|
-
|
-
|
(2,746
|
)
|
||||||||
Net loss from discontinued operations
|
$
|
(6,341
|
)
|
$
|
(3,491
|
)
|
$
|
(23,938
|
)
|
Year Ended December 31,
|
||||
2014
|
||||
Revenue
|
$
|
2,140
|
||
Loss before income tax
|
(6,731
|
)
|
||
Income tax benefit
|
(85
|
)
|
||
Net loss from discontinued operations
|
$
|
(6,646
|
)
|
5. |
GOODWILL AND OTHER INTANGIBLES
|
Gross
Goodwill
Balance
|
Accumulated
Impairment
Losses
|
Net
Goodwill
Balance
|
||||||||||
Balance as of January 1, 2015
|
$
|
115,872
|
$
|
(93,665
|
)
|
$
|
22,207
|
|||||
Asset held for sale (1)
|
(7,455
|
)
|
-
|
(7,455
|
)
|
|||||||
Goodwill impairment
|
-
|
(216
|
)
|
(216
|
)
|
|||||||
Balance as of December 31, 2015
|
108,417
|
(93,881
|
)
|
14,536
|
||||||||
Adjustment
|
-
|
-
|
-
|
|||||||||
Balance as of December 31, 2016
|
$
|
108,417
|
$
|
(93,881
|
)
|
$
|
14,536
|
(1) |
Amount consists of $1.3 million of goodwill held for sale as of December 31, 2014 offset by $8.8 million of goodwill as of December 31, 2015. Refer to Note 6 for more information on assets held for sale.
|
Trade
Name
|
Accreditation
|
Curriculum
|
Total
|
|||||||||||||
Gross carrying amount at December 31, 2015
|
$
|
310
|
$
|
-
|
$
|
160
|
$
|
470
|
||||||||
Additions
|
-
|
-
|
-
|
-
|
||||||||||||
Gross carrying amount at December 31, 2016
|
310
|
-
|
160
|
470
|
||||||||||||
Accumulated amortization at December 31, 2015
|
308
|
-
|
112
|
420
|
||||||||||||
Amortization
|
2
|
-
|
16
|
18
|
||||||||||||
Accumulated amortization at December 31, 2016
|
310
|
-
|
128
|
438
|
||||||||||||
Net carrying amount at December 31, 2016
|
$
|
-
|
$
|
-
|
$
|
32
|
$
|
32
|
||||||||
Weighted average amortization period (years)
|
7
|
Indefinite
|
10
|
Trade
Name
|
Accreditation
|
Curriculum
|
Total
|
|||||||||||||
Gross carrying amount at December 31, 2014
|
$
|
310
|
$
|
1,064
|
$
|
550
|
$
|
1,924
|
||||||||
Asset held for sale (1)
|
-
|
(1,064
|
)
|
(390
|
)
|
(1,454
|
)
|
|||||||||
Gross carrying amount at December 31, 2015
|
310
|
-
|
160
|
470
|
||||||||||||
Accumulated amortization at December 31, 2014
|
264
|
-
|
469
|
733
|
||||||||||||
Amortization
|
44
|
-
|
21
|
65
|
||||||||||||
Asset held for sale (1)
|
-
|
-
|
(378
|
)
|
(378
|
)
|
||||||||||
Accumulated amortization at December 31, 2015
|
308
|
-
|
112
|
420
|
||||||||||||
Net carrying amount at December 31, 2015
|
$
|
2
|
$
|
-
|
$
|
48
|
$
|
50
|
||||||||
Weighted average amortization period (years)
|
7
|
Indefinite
|
10
|
(1) |
Refer to Note 6 for more information on assets held for sale.
|
Year Ending December 31,
|
||||
2017
|
$
|
16
|
||
2018
|
16
|
|||
$
|
32
|
6. |
PROPERTY, EQUIPMENT AND FACILITIES
|
Useful life
(years)
|
At December 31,
|
|||||||||||
2016
|
2015
|
|||||||||||
Land (a)
|
-
|
$
|
6,969
|
$
|
10,054
|
|||||||
Buildings and improvements (a)
|
1-25
|
105,433
|
112,281
|
|||||||||
Equipment, furniture and fixtures
|
1-7
|
65,776
|
66,838
|
|||||||||
Vehicles
|
3
|
534
|
617
|
|||||||||
Construction in progress
|
-
|
925
|
159
|
|||||||||
179,637
|
189,949
|
|||||||||||
Less accumulated depreciation and amortization
|
(124,192
|
)
|
(123,324
|
)
|
||||||||
$
|
55,445
|
$
|
66,625
|
At December 31,
2016
|
At December 31,
2015
|
|||||||
Assets held for sale
|
||||||||
Inventories
|
$
|
629
|
$
|
646
|
||||
Accounts receivable, less allowance of $3,930 and $3,261 at December 31, 2016 and 2015, respectively
|
5,089
|
4,526
|
||||||
Prepaid expense and other current assets
|
460
|
724
|
||||||
Noncurrent receivables, less allowance of $212 and $189 at December 31, 2016 and 2015, respectively
|
1,690
|
1,384
|
||||||
Property, equipment and facilities - at cost, net of accumluated depreciation and amortization of $41,703 and $34,751 at December 31, 2016 and 2015, respectively (b) (c)
|
16,847
|
27,133
|
||||||
Goodwill (d)
|
-
|
8,759
|
||||||
Other assets, net (e)
|
71
|
1,197
|
||||||
Assets held for sale
|
24,786
|
44,369
|
||||||
Liabilities held for sale
|
||||||||
Unearned tuition
|
(7,255
|
)
|
(7,929
|
)
|
||||
Accrued expenses
|
(2,553
|
)
|
(2,668
|
)
|
||||
Accrued rent
|
(1,770
|
)
|
(1,735
|
)
|
||||
Liabilities held for sale
|
(11,578
|
)
|
(12,332
|
)
|
||||
Assets held for sale, net
|
$
|
13,208
|
$
|
32,037
|
7. |
ACCRUED EXPENSES
|
At December 31,
|
||||||||
2016
|
2015
|
|||||||
Accrued compensation and benefits
|
$
|
6,664
|
$
|
6,151
|
||||
Accrued rent and real estate taxes
|
$
|
2,917
|
$
|
2,012
|
||||
Other accrued expenses
|
3,234
|
3,046
|
||||||
$
|
12,815
|
$
|
11,209
|
8. |
LONG-TERM DEBT AND LEASE OBLIGATIONS
|
At December 31,
|
||||||||
2016
|
2015
|
|||||||
Term loan (a)
|
$
|
44,267
|
$
|
44,653
|
||||
Finance obligation (b)
|
-
|
9,672
|
||||||
Capital lease-property (with a rate of 8.0%) (c)
|
-
|
3,899
|
||||||
44,267
|
58,224
|
|||||||
Less current maturities
|
(11,713
|
)
|
(10,114
|
)
|
||||
$
|
32,554
|
$
|
48,110
|
Year ending December 31,
|
||||
2017
|
$
|
11,713
|
||
2018
|
3,427
|
|||
2019
|
29,127
|
|||
2020
|
-
|
|||
2021
|
-
|
|||
Thereafter
|
-
|
|||
$
|
44,267
|
9. |
STOCKHOLDERS' EQUITY
|
Shares
|
Weighted
Average Grant
Date Fair Value
Per Share
|
|||||||
Nonvested restricted stock outstanding at December 31, 2014
|
925,819
|
$
|
5.04
|
|||||
Granted
|
234,651
|
2.28
|
||||||
Cancelled
|
(354,462
|
)
|
4.97
|
|||||
Vested
|
(355,514
|
)
|
5.00
|
|||||
Nonvested restricted stock outstanding at December 31, 2015
|
450,494
|
3.69
|
||||||
Granted
|
1,105,487
|
1.67
|
||||||
Cancelled
|
(76,200
|
)
|
2.98
|
|||||
Vested
|
(336,182
|
)
|
3.33
|
|||||
Nonvested restricted stock outstanding at December 31, 2016
|
1,143,599
|
1.89
|
Shares
|
Weighted
Average
Exercise Price
Per Share
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic Value
|
||||||||||
Outstanding December 31, 2013
|
547,125
|
$
|
14.73
|
4.56 years
|
$
|
-
|
|||||||
Cancelled
|
(122,958
|
)
|
18.49
|
-
|
|||||||||
Outstanding December 31, 2014
|
424,167
|
13.65
|
4.18 years
|
-
|
|||||||||
Cancelled
|
(178,000
|
)
|
15.20
|
-
|
|||||||||
Outstanding December 31, 2015
|
246,167
|
12.52
|
3.98 years
|
-
|
|||||||||
Cancelled
|
(28,000
|
)
|
15.76
|
||||||||||
Outstanding December 31, 2016
|
218,167
|
12.11
|
3.33 years
|
-
|
|||||||||
Vested or expected to vest as of December 31, 2016
|
218,167
|
12.11
|
3.33 years
|
-
|
|||||||||
Exercisable as of December 31, 2016
|
218,167
|
12.11
|
3.33 years
|
-
|
At December 31, 2016
|
||||||||||||||||||||||
Stock Options Outstanding
|
Stock Options Exercisable
|
|||||||||||||||||||||
Range of Exercise Prices
|
Shares
|
Contractual
Weighted
Average life
(years)
|
Weighted
Average Exercise
Price
|
Shares
|
Weighted
Average Exercise
Price
|
|||||||||||||||||
$
|
4.00-$13.99
|
165,167
|
3.35
|
$
|
9.46
|
165,167
|
$
|
9.46
|
||||||||||||||
$
|
14.00-$19.99
|
22,000
|
2.84
|
19.98
|
22,000
|
19.98
|
||||||||||||||||
$
|
20.00-$25.00
|
31,000
|
3.59
|
20.62
|
31,000
|
20.62
|
||||||||||||||||
218,167
|
3.33
|
12.11
|
218,167
|
12.11
|
10. |
PENSION PLAN
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
CHANGES IN BENEFIT OBLIGATIONS:
|
||||||||||||
Benefit obligation-beginning of year
|
$
|
23,341
|
$
|
24,299
|
$
|
20,314
|
||||||
Service cost
|
28
|
28
|
23
|
|||||||||
Interest cost
|
888
|
884
|
892
|
|||||||||
Actuarial (gain) loss
|
(255
|
)
|
(782
|
)
|
4,149
|
|||||||
Benefits paid
|
(1,086
|
)
|
(1,088
|
)
|
(1,079
|
)
|
||||||
Benefit obligation at end of year
|
22,916
|
23,341
|
24,299
|
|||||||||
CHANGE IN PLAN ASSETS:
|
||||||||||||
Fair value of plan assets-beginning of year
|
17,792
|
19,000
|
18,792
|
|||||||||
Actual return on plan assets
|
842
|
(120
|
)
|
1,017
|
||||||||
Employer contributions
|
-
|
-
|
270
|
|||||||||
Benefits paid
|
(1,086
|
)
|
(1,088
|
)
|
(1,079
|
)
|
||||||
Fair value of plan assets-end of year
|
17,548
|
17,792
|
19,000
|
|||||||||
BENEFIT OBLIGATION IN EXCESS OF FAIR VALUE FUNDED STATUS:
|
$
|
(5,368
|
)
|
$
|
(5,549
|
)
|
$
|
(5,299
|
)
|
At December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Noncurrent liabilities
|
$
|
(5,368
|
)
|
$
|
(5,549
|
)
|
$
|
(5,299
|
)
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Accumulated loss
|
$
|
(8,467
|
)
|
$
|
(9,438
|
)
|
$
|
(9,833
|
)
|
|||
Deferred income taxes
|
2,366
|
2,366
|
2,366
|
|||||||||
Accumulated other comprehensive loss
|
$
|
(6,101
|
)
|
$
|
(7,072
|
)
|
$
|
(7,467
|
)
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
COMPONENTS OF NET PERIODIC BENEFIT COST
|
||||||||||||
Service cost
|
$
|
28
|
$
|
28
|
$
|
23
|
||||||
Interest cost
|
888
|
884
|
892
|
|||||||||
Expected return on plan assets
|
(1,118
|
)
|
(1,243
|
)
|
(1,287
|
)
|
||||||
Recognized net actuarial loss
|
991
|
976
|
513
|
|||||||||
Net periodic benefit cost
|
$
|
789
|
$
|
645
|
$
|
141
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
|||||||||||||
Equity securities
|
$
|
8,509
|
$
|
-
|
$
|
-
|
$
|
8,509
|
||||||||
Fixed income
|
6,548
|
-
|
-
|
6,548
|
||||||||||||
International equities
|
2,484
|
-
|
-
|
2,484
|
||||||||||||
Cash and equivalents
|
7
|
-
|
-
|
7
|
||||||||||||
Balance at December 31, 2016
|
$
|
17,548
|
$
|
-
|
$
|
-
|
$
|
17,548
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
|||||||||||||
Equity securities
|
$
|
8,473
|
$
|
-
|
$
|
-
|
$
|
8,473
|
||||||||
Fixed income
|
5,943
|
-
|
-
|
5,943
|
||||||||||||
International equities
|
3,288
|
-
|
-
|
3,288
|
||||||||||||
Cash and equivalents
|
88
|
-
|
-
|
88
|
||||||||||||
Balance at December 31, 2015
|
$
|
17,792
|
$
|
-
|
$
|
-
|
$
|
17,792
|
2016
|
2015
|
2014
|
||||||||||
Equity securities
|
49
|
%
|
48
|
%
|
50
|
%
|
||||||
Fixed income
|
37
|
%
|
33
|
%
|
32
|
%
|
||||||
International equities
|
14
|
%
|
19
|
%
|
18
|
%
|
||||||
Cash and equivalents
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
2016
|
2015
|
2014
|
||||||||||
Discount rate
|
3.81
|
%
|
3.94
|
%
|
3.66
|
%
|
||||||
Rate of compensation increase
|
2.50
|
%
|
2.50
|
%
|
1.13
|
%
|
2016
|
2015
|
2014
|
||||||||||
Discount rate
|
3.81
|
%
|
3.94
|
%
|
4.46
|
%
|
||||||
Rate of compensation increase
|
2.50
|
%
|
2.50
|
%
|
1.13
|
%
|
||||||
Long-term rate of return
|
6.25
|
%
|
6.50
|
%
|
7.00
|
%
|
Year Ending December 31,
|
||||
2017
|
$
|
1,257
|
||
2018
|
1,323
|
|||
2019
|
1,357
|
|||
2020
|
1,369
|
|||
2021
|
1,376
|
|||
Years 2022-2026
|
7,039
|
11. |
INCOME TAXES
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
State
|
200
|
242
|
200
|
|||||||||
Total
|
200
|
242
|
200
|
|||||||||
Deferred:
|
||||||||||||
Federal
|
-
|
-
|
(1,420
|
)
|
||||||||
State
|
-
|
-
|
(259
|
)
|
||||||||
Total
|
-
|
-
|
(1,679
|
)
|
||||||||
Total provision (benefit)
|
$
|
200
|
$
|
242
|
$
|
(1,479
|
)
|
At December 31,
|
||||||||
2016
|
2015
|
|||||||
Noncurrent deferred tax assets (liabilities)
|
||||||||
Allowance for bad debts
|
$
|
5,904
|
$
|
5,617
|
||||
Accrued rent
|
3,191
|
2,952
|
||||||
Accrued bonus
|
1,429
|
-
|
||||||
Accrued benefits
|
198
|
-
|
||||||
Stock-based compensation
|
557
|
498
|
||||||
Depreciation
|
20,372
|
14,941
|
||||||
Goodwill
|
1,959
|
(380
|
)
|
|||||
Other intangibles
|
562
|
274
|
||||||
Pension plan liabilities
|
2,142
|
2,215
|
||||||
Net operating loss carryforwards
|
17,846
|
14,765
|
||||||
Sale leaseback-deferred gain
|
-
|
2,629
|
||||||
AMT credit
|
424
|
424
|
||||||
Total noncurrent deferred tax assets
|
54,584
|
43,935
|
||||||
Less valuation allowance
|
(54,584
|
)
|
(43,935
|
)
|
||||
Noncurrent deferred tax assets, net of valuation allowance
|
$
|
-
|
$
|
-
|
Year Ended December 31,
|
||||||||||||||||||||||||
2016
|
2015
|
2014
|
||||||||||||||||||||||
(Loss) gain from continuing operations before taxes
|
$
|
(4,298
|
)
|
$
|
383
|
$
|
(27,028
|
)
|
||||||||||||||||
Expected tax benefit
|
$
|
(1,504
|
)
|
35.0
|
%
|
$
|
134
|
35.0
|
%
|
$
|
(9,460
|
)
|
35.0
|
%
|
||||||||||
State tax benefit (net of federal)
|
200
|
(4.7
|
)
|
242
|
63.2
|
(43
|
)
|
0.2
|
||||||||||||||||
Valuation allowance
|
1,394
|
(32.4
|
)
|
(274
|
)
|
(71.5
|
)
|
7,876
|
(29.1
|
)
|
||||||||||||||
Other
|
110
|
(2.6
|
)
|
140
|
36.5
|
148
|
(0.6
|
)
|
||||||||||||||||
Total
|
$
|
200
|
-4.7
|
%
|
$
|
242
|
63.2
|
%
|
$
|
(1,479
|
)
|
5.5
|
%
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Balance at January 1,
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Decrease for tax positions of prior years
|
-
|
-
|
-
|
|||||||||
Increase for tax positions of current year
|
-
|
-
|
-
|
|||||||||
Balance at December 31,
|
$
|
-
|
$
|
-
|
$
|
-
|
12. |
FAIR VALUE
|
December 31, 2016
|
||||||||||||||||||||
Carrying
Amount
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
21,064
|
$
|
21,064
|
$
|
-
|
$
|
-
|
$
|
21,064
|
||||||||||
Restricted cash
|
6,399
|
6,399
|
-
|
-
|
6,399
|
|||||||||||||||
Prepaid expenses and other current assets
|
2,434
|
-
|
2,434
|
-
|
2,434
|
|||||||||||||||
Noncurrent restricted cash
|
20,252
|
20,252
|
-
|
-
|
20,252
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Accrued expenses
|
$
|
12,815
|
$
|
-
|
$
|
12,815
|
$
|
-
|
$
|
12,815
|
||||||||||
Other short term liabilities
|
653
|
-
|
653
|
-
|
653
|
|||||||||||||||
Term loan
|
44,267
|
-
|
40,687
|
-
|
40,687
|
December 31, 2015
|
||||||||||||||||||||
Carrying
Amount
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Total
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
38,420
|
$
|
38,420
|
$
|
-
|
$
|
-
|
$
|
38,420
|
||||||||||
Restricted cash
|
7,362
|
7,362
|
-
|
-
|
7,362
|
|||||||||||||||
Prepaid expenses and other current assets
|
2,710
|
-
|
2,710
|
-
|
2,710
|
|||||||||||||||
Noncurrent restricted cash
|
15,259
|
15,259
|
-
|
-
|
15,259
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Accrued expenses
|
$
|
11,209
|
$
|
-
|
$
|
11,209
|
$
|
-
|
$
|
11,209
|
||||||||||
Other short term liabilities
|
686
|
-
|
686
|
-
|
686
|
|||||||||||||||
Term loan
|
44,653
|
-
|
36,795
|
-
|
36,795
|
13. |
SEGMENT REPORTING
|
For the Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||
Revenue
|
Operating (Loss) Income
|
|||||||||||||||||||||||||||||||||||
2016
|
% of
Total
|
2015
|
% of
Total
|
2014
|
% of
Total
|
2016
|
2015
|
2014
|
||||||||||||||||||||||||||||
Transportation and Skilled Trades
|
$
|
177,882
|
90.3
|
%
|
$
|
183,821
|
88.3
|
%
|
$
|
188,669
|
86.5
|
%
|
$
|
21,278
|
$
|
26,778
|
$
|
19,519
|
||||||||||||||||||
Transitional
|
19,028
|
9.7
|
%
|
24,435
|
11.7
|
%
|
29,371
|
13.5
|
%
|
(6,334
|
)
|
(1,689
|
)
|
(19,814
|
)
|
|||||||||||||||||||||
Corporate
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
(20,107
|
)
|
(19,140
|
)
|
(23,364
|
)
|
|||||||||||||||||||||
Total
|
$
|
196,910
|
100
|
%
|
$
|
208,256
|
100
|
%
|
$
|
218,040
|
100
|
%
|
$
|
(5,163
|
)
|
$
|
5,949
|
$
|
(23,659
|
)
|
Total Assets
|
||||||||
December 31, 2016
|
December 31, 2015
|
|||||||
Transportation and Skilled Trades
|
$
|
83,320
|
$
|
90,045
|
||||
Transitional
|
1,594
|
4,492
|
||||||
Corporate
|
53,507
|
68,844
|
||||||
Discontinued Operations
|
24,786
|
44,369
|
||||||
Total
|
$
|
163,207
|
$
|
207,750
|
14. |
COMMITMENTS AND CONTINGENCIES
|
Year Ending December 31,
|
Credit
Agreement
|
Operating
Leases
|
||||||
2017
|
$
|
16,048
|
$
|
21,428
|
||||
2018
|
6,881
|
19,132
|
||||||
2019
|
30,958
|
16,521
|
||||||
2020
|
-
|
12,439
|
||||||
2021
|
-
|
7,202
|
||||||
Thereafter
|
-
|
20,484
|
||||||
53,887
|
97,206
|
|||||||
Less amount representing interest
|
(9,620
|
)
|
-
|
|||||
$
|
44,267
|
$
|
97,206
|
15. |
RELATED PARTY
|
16. |
UNAUDITED QUARTERLY FINANCIAL INFORMATION
|
Quarter
|
||||||||||||||||
2016
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
Revenue
|
$
|
47,423
|
$
|
46,263
|
$
|
52,877
|
$
|
50,348
|
||||||||
(Loss) income from continuing operations
|
(4,638
|
)
|
(1,642
|
)
|
1,697
|
84
|
||||||||||
(Loss) income from discontinued operations
|
(1,430
|
)
|
(1,496
|
)
|
(2,168
|
)
|
(18,711
|
)
|
||||||||
Loss income
|
(6,068
|
)
|
(3,138
|
)
|
(471
|
)
|
(18,627
|
)
|
||||||||
Basic
|
||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.20
|
)
|
$
|
(0.07
|
)
|
$
|
0.07
|
$
|
0.00
|
||||||
(Loss) earnings per share from discontinued operations
|
(0.06
|
)
|
(0.06
|
)
|
(0.09
|
)
|
(0.79
|
)
|
||||||||
Net (loss) earnings per share
|
$
|
(0.26
|
)
|
$
|
(0.13
|
)
|
$
|
(0.02
|
)
|
$
|
(0.79
|
)
|
||||
Diluted
|
||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.20
|
)
|
$
|
(0.07
|
)
|
$
|
0.07
|
$
|
0.00
|
||||||
(Loss) earnings per share from discontinued operations
|
(0.06
|
)
|
(0.06
|
)
|
(0.09
|
)
|
(0.76
|
)
|
||||||||
Net (loss) earnings per share
|
$
|
(0.26
|
)
|
$
|
(0.13
|
)
|
$
|
(0.02
|
)
|
$
|
(0.76
|
)
|
||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
23,351
|
23,448
|
23,499
|
23,514
|
||||||||||||
Diluted
|
23,351
|
23,448
|
24,680
|
24,602
|
Quarter
|
||||||||||||||||
2015
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
Revenue
|
$
|
51,345
|
$
|
48,607
|
$
|
55,752
|
$
|
52,552
|
||||||||
(Loss) income from continuing operations
|
(4,786
|
)
|
(4,169
|
)
|
5,217
|
3,878
|
||||||||||
(Loss) income from discontinued operations
|
(2,097
|
)
|
(3,436
|
)
|
(2,636
|
)
|
4,679
|
|||||||||
Net (loss) income
|
(6,883
|
)
|
(7,605
|
)
|
2,581
|
8,557
|
||||||||||
Basic
|
||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.21
|
)
|
$
|
(0.18
|
)
|
$
|
0.22
|
$
|
0.17
|
||||||
(Loss) earnings per share from discontinued operations
|
(0.09
|
)
|
(0.15
|
)
|
(0.11
|
)
|
0.20
|
|||||||||
Net (loss) earnings per share
|
$
|
(0.30
|
)
|
$
|
(0.33
|
)
|
$
|
0.11
|
$
|
0.37
|
||||||
Diluted
|
||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.21
|
)
|
$
|
(0.18
|
)
|
$
|
0.22
|
$
|
0.17
|
||||||
(Loss) earnings per share from discontinued operations
|
(0.09
|
)
|
(0.15
|
)
|
(0.11
|
)
|
0.20
|
|||||||||
Net (loss) earnings per share
|
$
|
(0.30
|
)
|
$
|
(0.33
|
)
|
$
|
0.11
|
$
|
0.37
|
||||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
23,056
|
23,132
|
23,230
|
23,247
|
||||||||||||
Diluted
|
23,056
|
23,132
|
23,270
|
23,347
|
17. |
DIVIDENDS
|
Description
|
Balance at
Beginning
of Period
|
Charged to
Expense
|
Accounts
Written-off
|
Balance at
End of
Period
|
||||||||||||
Allowance accounts for the year ended:
|
||||||||||||||||
December 31, 2016 Student receivable allowance
|
$
|
14,074
|
$
|
14,592
|
$
|
(13,872
|
)
|
$
|
14,794
|
|||||||
December 31, 2015 Student receivable allowance
|
$
|
14,849
|
$
|
13,583
|
$
|
(14,358
|
)
|
$
|
14,074
|
|||||||
December 31, 2014 Student receivable allowance
|
$
|
14,769
|
$
|
15,500
|
$
|
(15,420
|
)
|
$
|
14,849
|
(1) |
Incorporated by reference to the Company’s Registration Statement on Form S-1/A (Registration No. 333-123644) filed June 7, 2005.
|
(2) |
Incorporated by reference to the Company’s Form 8-K filed June 28, 2005.
|
(3)
|
Incorporated by reference to the Company’s Registration Statement on Form S-1 (Registration No. 333-123644) filed March 29, 2005.
|
(4) |
Incorporated by reference to the Company’s Registration Statement on Form S-3 (Registration No. 333-148406) filed December 28, 2007.
|
(5) |
Incorporated by reference to the Company’s Registration Statement on Form S-1/A (Registration No. 333-123644) filed June 21, 2005.
|
(6) |
Incorporated by reference to the Company’s Form 8-K filed August 5, 2015.
|
(7) |
Incorporated by reference to the Company’s Form 8-K filed January 7, 2016.
|
(8) |
Incorporated by reference to the Company’s Form 8-K filed March 4, 2016.
|
(9) |
Incorporated by reference to the Company’s Form 8-K filed April 18, 2016.
|
(10) |
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 9, 2016.
|
(11) |
Incorporated by reference to the Company’s Form 8-K filed May 6, 2015.
|
(12) |
Incorporated by reference to the Company’s Form 8-K filed February 5, 2015.
|
(13) |
Incorporated by reference to the Company’s Form 8-K filed September 3, 2015.
|
(14) |
Incorporated by reference to the Company’s Form 8-K filed August 25, 2016.
|
(15) |
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 8, 2014.
|
(16) |
Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2014.
|
(17) |
Incorporated by reference to the Company’s Form 8-K filed January 22, 2016.
|
(18) |
Incorporated by reference to the Company’s Form 8-K filed May 6, 2013.
|
(19) |
Incorporated by reference to the Company’s Registration Statement on Form S-8 (Registration No. 333-211213) filed May 6, 2016.
|
(20) |
Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.
|
(21) |
Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
|
(22) |
Incorporated by reference to the Company’s Form 8-K filed May 5, 2011.
|
* |
Filed herewith.
|
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