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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-0.22 | -1.98% | 10.87 | 10.20 | 12.80 | 841 | 13:48:44 |
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
New Jersey
|
57-1150621
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
14 Sylvan Way, Suite A
|
07054
|
|
Parsippany, NJ
|
(Zip Code)
|
|
(Address of principal executive offices)
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, no par value per share
|
LINC
|
The NASDAQ Stock Market LLC
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
|
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
|
Emerging growth company ☐
|
PART I.
|
FINANCIAL INFORMATION
|
|
Item 1.
|
1
|
|
1
|
||
3
|
||
4
|
||
5
|
||
6
|
||
8
|
||
Item 2.
|
25
|
|
Item 4.
|
34
|
|
PART II.
|
35
|
|
Item 1.
|
35
|
|
Item 6.
|
35
|
|
37
|
Item 1.
|
Financial Statements
|
|
March 31,
2021
|
December 31,
2020
|
||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
26,742
|
$
|
38,026
|
||||
Accounts receivable, less allowance of $22,539 and $25,174 at March 31, 2021 and December 31, 2020, respectively
|
30,604
|
30,021
|
||||||
Inventories
|
2,666
|
2,394
|
||||||
Prepaid expenses and other current assets
|
10,770
|
3,723
|
||||||
Total current assets
|
70,782
|
74,164
|
||||||
PROPERTY, EQUIPMENT AND FACILITIES - At cost, net of accumulated depreciation and amortization of $176,757 and $176,300 at March 31, 2021 and December 31, 2020, respectively
|
49,035
|
48,388
|
||||||
OTHER ASSETS:
|
||||||||
Noncurrent receivables, less allowance of $3,701 and $3,465 at March 31, 2021 and December 31, 2020, respectively
|
17,070
|
16,463
|
||||||
Deferred income taxes, net
|
34,473
|
35,718
|
||||||
Operating lease right-of-use assets
|
53,155
|
55,187
|
||||||
Goodwill
|
14,536
|
14,536
|
||||||
Other assets, net
|
802
|
734
|
||||||
Total other assets
|
120,036
|
122,638
|
||||||
TOTAL ASSETS
|
$
|
239,853
|
$
|
245,190
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
REVENUE
|
$
|
77,996
|
$
|
70,041
|
||||
COSTS AND EXPENSES:
|
||||||||
Educational services and facilities
|
32,344
|
30,238
|
||||||
Selling, general and administrative
|
39,633
|
41,149
|
||||||
Total costs & expenses
|
71,977
|
71,387
|
||||||
OPERATING INCOME (LOSS)
|
6,019
|
(1,346
|
)
|
|||||
OTHER:
|
||||||||
Interest expense
|
(285
|
)
|
(354
|
)
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
5,734
|
(1,700
|
)
|
|||||
PROVISION FOR INCOME TAXES
|
1,245
|
50
|
||||||
NET INCOME (LOSS)
|
$
|
4,489
|
$
|
(1,750
|
)
|
|||
PREFERRED STOCK DIVIDENDS
|
304
|
-
|
||||||
INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
4,185
|
$
|
(1,750
|
)
|
|||
Basic
|
||||||||
Net income (loss) per common share
|
$
|
0.13
|
$
|
(0.08
|
)
|
|||
Diluted
|
||||||||
Net income (loss) per common share
|
$
|
0.13
|
$
|
(0.08
|
)
|
|||
Weighted average number of common shares outstanding:
|
||||||||
Basic
|
24,889
|
24,598
|
||||||
Diluted
|
24,889
|
24,598
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
Net income (loss)
|
$
|
4,489
|
$
|
(1,750
|
)
|
|||
Other comprehensive income (loss)
|
||||||||
Derivative qualifying as a cash flow hedge, net of taxes (nil)
|
211
|
(748
|
)
|
|||||
Employee pension plan adjustments, net of taxes (nil)
|
(134
|
)
|
140
|
|||||
Comprehensive income (loss)
|
$
|
4,566
|
$
|
(2,358
|
)
|
|
Stockholders’ Equity
|
|||||||||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-in
|
Treasury
|
Retained
|
Accumulated
Other
Comprehensive
|
Series A
Convertible
Preferred Stock
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stock
|
Earnings
|
Loss
|
Total
|
Shares
|
Amount
|
||||||||||||||||||||||||||||
BALANCE - January 1, 2021
|
26,476,329
|
$
|
141,377
|
$
|
30,512
|
$
|
(82,860
|
)
|
$
|
6,203
|
$
|
(4,165
|
)
|
$
|
91,067
|
12,700
|
$
|
11,982
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
4,489
|
-
|
4,489
|
-
|
-
|
|||||||||||||||||||||||||||
Preferred stock dividend
|
-
|
-
|
-
|
-
|
(304
|
)
|
-
|
(304
|
)
|
-
|
-
|
|||||||||||||||||||||||||
Employee pension plan adjustments
|
-
|
-
|
-
|
-
|
-
|
(134
|
)
|
(134
|
)
|
-
|
-
|
|||||||||||||||||||||||||
Derivative qualifying as cash flow hedge
|
-
|
-
|
-
|
-
|
-
|
211
|
211
|
-
|
-
|
|||||||||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||||||||||
Restricted stock
|
574,614
|
-
|
493
|
-
|
-
|
-
|
493
|
-
|
-
|
|||||||||||||||||||||||||||
Net share settlement for equity-based compensation
|
(154,973
|
)
|
-
|
(962
|
)
|
-
|
-
|
-
|
(962
|
)
|
-
|
-
|
||||||||||||||||||||||||
BALANCE -March 31, 2021
|
26,895,970
|
$
|
141,377
|
$
|
30,043
|
$
|
(82,860
|
)
|
$
|
10,388
|
$
|
(4,088
|
)
|
$
|
94,860
|
12,700
|
$
|
11,982
|
|
Stockholders’ Equity
|
|||||||||||||||||||||||||||||||||||
|
Common Stock
|
Additional
Paid-in
|
Treasury
|
Accumulated
|
Accumulated
Other
Comprehensive
|
Series A
Convertible
Preferred Stock
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stock
|
Deficit
|
Loss
|
Total
|
Shares
|
Amount
|
||||||||||||||||||||||||||||
BALANCE - January 1, 2020
|
25,231,710
|
$
|
141,377
|
$
|
30,145
|
$
|
(82,860
|
)
|
$
|
(42,058
|
)
|
$
|
(3,456
|
)
|
$
|
43,148
|
12,700
|
$
|
11,982
|
|||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(1,750
|
)
|
-
|
(1,750
|
)
|
-
|
-
|
|||||||||||||||||||||||||
Employee pension plan adjustments
|
-
|
-
|
-
|
-
|
-
|
140
|
140
|
-
|
-
|
|||||||||||||||||||||||||||
Derivative qualifying as cash flow hedge
|
-
|
-
|
-
|
-
|
-
|
(748
|
)
|
(748
|
)
|
-
|
-
|
|||||||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||||||||||
Restricted stock
|
1,191,262
|
-
|
291
|
-
|
-
|
-
|
291
|
-
|
-
|
|||||||||||||||||||||||||||
Net share settlement for equity-based compensation
|
(58,451
|
)
|
-
|
(172
|
)
|
-
|
-
|
-
|
(172
|
)
|
-
|
-
|
||||||||||||||||||||||||
BALANCE - March 31, 2020
|
26,364,521
|
$
|
141,377
|
$
|
30,264
|
$
|
(82,860
|
)
|
$
|
(43,808
|
)
|
$
|
(4,064
|
)
|
$
|
40,909
|
12,700
|
$
|
11,982
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
4,489
|
$
|
(1,750
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
1,901
|
1,890
|
||||||
Amortization of deferred finance charges
|
45
|
45
|
||||||
Deferred income taxes
|
1,245
|
-
|
||||||
Fixed asset donations
|
(29
|
)
|
(220
|
)
|
||||
Provision for doubtful accounts
|
4,181
|
6,551
|
||||||
Stock-based compensation expense
|
493
|
291
|
||||||
(Increase) decrease in assets:
|
||||||||
Accounts receivable
|
(5,371
|
)
|
(11,835
|
)
|
||||
Inventories
|
(272
|
)
|
(227
|
)
|
||||
Prepaid income taxes and income taxes receivable
|
-
|
71
|
||||||
Prepaid expenses and current assets
|
(7,059
|
)
|
(6
|
)
|
||||
Other assets, net
|
429
|
(127
|
)
|
|||||
Increase (decrease) in liabilities:
|
||||||||
Accounts payable
|
782
|
(2,195
|
)
|
|||||
Accrued expenses
|
(5,979
|
)
|
723
|
|||||
Unearned tuition
|
(3,213
|
)
|
(5,127
|
)
|
||||
Income taxes payable
|
(55
|
)
|
-
|
|||||
Other liabilities
|
114
|
(31
|
)
|
|||||
Total adjustments
|
(12,788
|
)
|
(10,197
|
)
|
||||
Net cash used in operating activities
|
(8,299
|
)
|
(11,947
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Capital expenditures
|
(1,219
|
)
|
(1,287
|
)
|
||||
Net cash used in investing activities
|
(1,219
|
)
|
(1,287
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments on borrowings
|
(500
|
)
|
(26,500
|
)
|
||||
Proceeds from borrowings
|
-
|
11,000
|
||||||
Dividend payment for preferred stock
|
(304
|
)
|
-
|
|||||
Credit of deferred finance fees
|
-
|
3
|
||||||
Net share settlement for equity-based compensation
|
(962
|
)
|
(172
|
)
|
||||
Net cash used in financing activities
|
(1,766
|
)
|
(15,669
|
)
|
||||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(11,284
|
)
|
(28,903
|
)
|
||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period
|
38,026
|
38,644
|
||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period
|
$
|
26,742
|
$
|
9,741
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
331
|
$
|
327
|
||||
Income taxes
|
$
|
-
|
$
|
1
|
||||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Liabilities accrued for or noncash purchases of fixed assets
|
$
|
1,329
|
$
|
721
|
1. |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
|
2. |
NET INCOME (LOSS) PER COMMON SHARE
|
|
Three Months Ended
March 31,
|
|||||||
(in thousands, except share data)
|
2021
|
2020
|
||||||
Numerator:
|
||||||||
Net income (loss)
|
$
|
4,489
|
$
|
(1,750
|
)
|
|||
Less: preferred stock dividend
|
(304
|
)
|
(308
|
)
|
||||
Less: allocation to preferred stockholders
|
(699
|
)
|
-
|
|||||
Less: allocation to restricted stockholders
|
(252
|
)
|
-
|
|||||
Net income (loss) allocated to common stockholders
|
$
|
3,234
|
$
|
(2,058
|
)
|
|||
Basic income (loss) per share:
|
||||||||
Denominator:
|
||||||||
Weighted average common shares outstanding
|
24,888,615
|
24,598,346
|
||||||
Basic income (loss) per share
|
$
|
0.13
|
$
|
(0.08
|
)
|
|||
Diluted income (loss) per share:
|
||||||||
Denominator:
|
||||||||
Weighted average number of:
|
||||||||
Common shares outstanding
|
24,888,615
|
24,598,346
|
||||||
Dilutive potential common shares outstanding:
|
||||||||
Series A Preferred Stock
|
-
|
-
|
||||||
Unvested restricted stock
|
-
|
-
|
||||||
Stock options
|
-
|
-
|
||||||
Dilutive shares outstanding
|
24,888,615
|
24,598,346
|
||||||
Diluted income (loss) per share
|
$
|
0.13
|
$
|
(0.08
|
)
|
|
Three Months Ended
March 31,
|
|||||||
(in thousands, except share data)
|
2021
|
2020
|
||||||
Series A Preferred Stock
|
-
|
5,448,802
|
||||||
Unvested restricted stock
|
697,458
|
613,701
|
||||||
697,458
|
6,062,503
|
3. |
REVENUE RECOGNITION
|
|
Three months ended March 31, 2021
|
|||||||||||||
a
|
Transportation
and Skilled
Trades Segment
|
Healthcare
and Other
Professions
Segment
|
Consolidated
|
|||||||||||
Timing of Revenue Recognition
|
||||||||||||||
Services transferred at a point in time
|
$
|
3,520
|
$
|
1,333
|
$
|
4,853
|
||||||||
Services transferred over time
|
52,150
|
20,993
|
73,143
|
|||||||||||
Total revenues
|
$
|
55,670
|
$
|
22,326
|
$
|
77,996
|
|
Three months ended March 31, 2020
|
|||||||||||||
a
|
Transportation
and Skilled
Trades Segment
|
Healthcare
and Other
Professions
Segment
|
Consolidated
|
|||||||||||
Timing of Revenue Recognition
|
||||||||||||||
Services transferred at a point in time
|
$
|
2,498
|
$
|
1,073
|
$
|
3,571
|
||||||||
Services transferred over time
|
46,558
|
19,912
|
66,470
|
|||||||||||
Total revenues
|
$
|
49,056
|
$
|
20,985
|
$
|
70,041
|
4. |
LEASES
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
Operating cash flow information:
|
||||||||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
3,208
|
$
|
3,840
|
||||
Non-cash activity:
|
||||||||
Lease liabilities arising from obtaining right-of-use assets
|
$
|
50
|
$
|
50
|
|
March 31,
|
|||||||
2021
|
2020
|
|||||||
Weighted-average remaining lease term
|
5.96 years
|
6.06 years
|
||||||
Weighted-average discount rate
|
11.27
|
%
|
12.82
|
%
|
Year ending December 31,
|
||||
2021 (excluding the three months ended March 31, 2021)
|
$
|
11,507
|
||
2022
|
14,761
|
|||
2023
|
13,463
|
|||
2024
|
12,318
|
|||
2025
|
10,761
|
|||
2026
|
7,821
|
|||
Thereafter
|
10,561
|
|||
Total lease payments
|
81,192
|
|||
Less: imputed interest
|
(21,493
|
)
|
||
Present value of lease liabilities
|
$
|
59,699
|
5. |
GOODWILL AND LONG-LIVED ASSETS
|
|
Gross
Goodwill
Balance
|
Accumulated
Impairment
Losses
|
Net
Goodwill
Balance
|
|||||||||
Balance as of January 1, 2021
|
$
|
117,176
|
$
|
(102,640
|
)
|
$
|
14,536
|
|||||
Adjustments
|
-
|
-
|
-
|
|||||||||
Balance as of March 31, 2021
|
$
|
117,176
|
$
|
(102,640
|
)
|
$
|
14,536
|
|
Gross
Goodwill
Balance
|
Accumulated
Impairment
Losses
|
Net
Goodwill
Balance
|
|||||||||
Balance as of January 1, 2020
|
$
|
117,176
|
$
|
(102,640
|
)
|
$
|
14,536
|
|||||
Adjustments
|
-
|
-
|
-
|
|||||||||
Balance as of March 31, 2020
|
$
|
117,176
|
$
|
(102,640
|
)
|
$
|
14,536
|
6. |
LONG-TERM DEBT
|
|
March 31,
2021
|
December 31,
2020
|
||||||
Credit agreement
|
$
|
17,333
|
$
|
17,833
|
||||
Deferred Financing Fees
|
(576
|
)
|
(621
|
)
|
||||
16,757
|
17,212
|
|||||||
Less current maturities
|
(2,000
|
)
|
(2,000
|
)
|
||||
$
|
14,757
|
$
|
15,212
|
Year ending December 31,
|
||||
2021
|
$
|
1,500
|
||
2022
|
2,000
|
|||
2023
|
2,000
|
|||
2024
|
11,833
|
|||
$
|
17,333
|
7. |
STOCKHOLDERS’ EQUITY
|
|
Shares
|
Weighted
Average Grant
Date Fair Value
Per Share
|
||||||
Nonvested restricted stock outstanding at December 31, 2020
|
1,572,159
|
$
|
2.77
|
|||||
Granted
|
574,614
|
5.83
|
||||||
Canceled
|
-
|
-
|
||||||
Vested
|
(383,226
|
)
|
2.76
|
|||||
Nonvested restricted stock outstanding at March 31, 2021
|
1,763,547
|
3.77
|
|
Shares
|
Weighted
Average
Exercise Price
Per Share
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||||
Outstanding at December 31, 2020
|
81,000
|
$
|
7.79
|
1.17 years
|
$
|
-
|
|||||
Granted/Vested
|
-
|
-
|
-
|
||||||||
Canceled
|
-
|
-
|
-
|
||||||||
Outstanding at March 31, 2021
|
81,000
|
7.79
|
0.92 years
|
-
|
|||||||
Vested as of March 31, 2021
|
81,000
|
7.79
|
0.92 years
|
-
|
|||||||
Exercisable as of March 31, 2021
|
81,000
|
7.79
|
0.92 years
|
-
|
8. |
INCOME TAXES
|
9. |
COMMITMENTS AND CONTINGENCIES
|
10. |
SEGMENTS
|
|
For the Three Months Ended March 31,
|
|||||||||||||||||||||||
Revenue
|
Operating Income (Loss)
|
|||||||||||||||||||||||
2021
|
% of
Total
|
2020
|
% of
Total
|
2021
|
2020
|
|||||||||||||||||||
Transportation and Skilled Trades
|
$
|
55,670
|
71.4
|
%
|
$
|
49,056
|
70.0
|
%
|
$
|
12,324
|
$
|
4,840
|
||||||||||||
Healthcare and Other Professions
|
22,326
|
28.6
|
%
|
20,985
|
30.0
|
%
|
2,949
|
2,000
|
||||||||||||||||
Corporate
|
-
|
-
|
(9,254
|
)
|
(8,186
|
)
|
||||||||||||||||||
Total
|
$
|
77,996
|
100.0
|
%
|
$
|
70,041
|
100.0
|
%
|
$
|
6,019
|
$
|
(1,346
|
)
|
|
Total Assets
|
|||||||
March 31, 2021
|
December 31, 2020
|
|||||||
Transportation and Skilled Trades
|
$
|
134,111
|
$
|
133,078
|
||||
Healthcare and Other Professions
|
32,453
|
32,753
|
||||||
Corporate
|
73,289
|
79,359
|
||||||
Total
|
$
|
239,853
|
$
|
245,190
|
11. |
FAIR VALUE
|
|
March 31, 2021
|
|||||||||||||||||||
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
|
$
|
26,742
|
$
|
26,742
|
$
|
-
|
$
|
-
|
$
|
26,742
|
||||||||||
Prepaid expenses and other current assets
|
10,770
|
-
|
10,770
|
-
|
10,770
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Accrued expenses
|
$
|
10,713
|
$
|
-
|
$
|
10,713
|
$
|
-
|
$
|
10,713
|
||||||||||
Other short term liabilities
|
73
|
-
|
73
|
-
|
73
|
|||||||||||||||
Derivative qualifying cash flow hedge
|
666
|
-
|
666
|
-
|
666
|
|||||||||||||||
Credit facility
|
16,757
|
-
|
15,222
|
-
|
15,222
|
|
December 31, 2020
|
|||||||||||||||||||
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
|
$
|
38,026
|
$
|
38,026
|
$
|
-
|
$
|
-
|
$
|
38,026
|
||||||||||
Prepaid expenses and other current assets
|
3,723
|
-
|
3,723
|
-
|
3,723
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Accrued expenses
|
$
|
16,692
|
$
|
-
|
$
|
16,692
|
$
|
-
|
$
|
16,692
|
||||||||||
Other short term liabilities
|
26
|
-
|
26
|
-
|
26
|
|||||||||||||||
Derivative qualifying cash flow hedge
|
877
|
-
|
877
|
-
|
877
|
|||||||||||||||
Credit facility
|
17,212
|
-
|
15,487
|
-
|
15,487
|
|
March 31, 2021
|
December 31, 2020
|
||||||||||||||
Liability(1)
|
Liability(1)
|
|||||||||||||||
Notional
|
Fair Value
|
Notional
|
Fair Value
|
|||||||||||||
Derivative derived as a hedging instrument:
|
||||||||||||||||
Interest Rate Swap
|
$
|
17,333
|
$
|
666
|
$
|
17,833
|
$
|
877
|
(1) |
The Company’s derivative liability is measured at fair value using observable market inputs such as interest rates and our own credit risk as well as an evaluation of our counterparty’s credit risk. Based on these inputs the derivative liability is classified within Level 2 of the valuation hierarchy. The liability is included in other long-term liabilities in the condensed consolidated balance sheets.
|
|
Three Months Ended
|
|||||||
March 31, 2021
|
March 31, 2020
|
|||||||
Interest expense
|
||||||||
Interest Rate Swap
|
$
|
100
|
$
|
100
|
|
Three Months Ended
|
|||||||
March 31, 2021
|
March 31, 2020
|
|||||||
Interest expense
|
||||||||
Interest Rate Swap
|
$
|
211
|
$
|
(748
|
)
|
12. |
COVID-19 PANDEMIC AND CARES ACT
|
13. |
SUBSEQUENT EVENTS
|
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
||||
Costs and expenses:
|
||||||||
Educational services and facilities
|
41.5
|
%
|
43.2
|
%
|
||||
Selling, general and administrative
|
50.8
|
%
|
58.7
|
%
|
||||
Total costs and expenses
|
92.3
|
%
|
101.9
|
%
|
||||
Operating Income (loss)
|
7.7
|
%
|
-1.9
|
%
|
||||
Interest expense, net
|
-0.3
|
%
|
-0.5
|
%
|
||||
Income (loss) from opeartions before income taxes
|
7.4
|
%
|
-2.4
|
%
|
||||
Provision for income taxes
|
1.6
|
%
|
0.1
|
%
|
||||
Net Income (loss)
|
5.8
|
%
|
-2.5
|
%
|
|
Three Months Ended March 31,
|
|||||||||||
2021
|
2020
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Transportation and Skilled Trades
|
$
|
55,670
|
$
|
49,056
|
13.5
|
%
|
||||||
Healthcare and Other Professions
|
22,326
|
20,985
|
6.4
|
%
|
||||||||
Total
|
$
|
77,996
|
$
|
70,041
|
11.4
|
%
|
||||||
Operating Income (Loss):
|
||||||||||||
Transportation and Skilled Trades
|
$
|
12,324
|
$
|
4,840
|
154.6
|
%
|
||||||
Healthcare and Other Professions
|
2,949
|
2,000
|
47.5
|
%
|
||||||||
Corporate
|
(9,254
|
)
|
(8,186
|
)
|
-13.0
|
%
|
||||||
Total
|
$
|
6,019
|
$
|
(1,346
|
)
|
547.2
|
%
|
|||||
Starts:
|
||||||||||||
Transportation and Skilled Trades
|
2,339
|
1,720
|
36.0
|
%
|
||||||||
Healthcare and Other Professions
|
1,209
|
996
|
21.4
|
%
|
||||||||
Total
|
3,548
|
2,716
|
30.6
|
%
|
||||||||
Average Population:
|
||||||||||||
Transportation and Skilled Trades
|
8,032
|
7,305
|
10.0
|
%
|
||||||||
Leave of Absence - COVID-19
|
(15
|
)
|
(33
|
)
|
54.5
|
%
|
||||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19
|
8,017
|
7,272
|
10.2
|
%
|
||||||||
Healthcare and Other Professions
|
4,409
|
3,987
|
10.6
|
%
|
||||||||
Leave of Absence - COVID-19
|
(90
|
)
|
(22
|
)
|
-309.1
|
%
|
||||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19
|
4,319
|
3,965
|
8.9
|
%
|
||||||||
Total
|
12,441
|
11,292
|
10.2
|
%
|
||||||||
Total Excluding Leave of Absence - COVID-19
|
12,336
|
11,237
|
9.8
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Transportation and Skilled Trades
|
8,212
|
7,250
|
13.3
|
%
|
||||||||
Leave of Absence - COVID-19
|
(19
|
)
|
(131
|
)
|
85.5
|
%
|
||||||
Transportation and Skilled Trades Excluding Leave of Absence - COVID-19
|
8,193
|
7,119
|
15.1
|
%
|
||||||||
Healthcare and Other Professions
|
4,532
|
4,021
|
12.7
|
%
|
||||||||
Leave of Absence - COVID-19
|
(79
|
)
|
(193
|
)
|
59.1
|
%
|
||||||
Healthcare and Other Professions Excluding Leave of Absence - COVID-19
|
4,453
|
3,828
|
16.3
|
%
|
||||||||
Total
|
12,744
|
11,271
|
13.1
|
%
|
||||||||
Total Excluding Leave of Absence - COVID-19
|
12,646
|
10,947
|
15.5
|
%
|
• |
Revenue increased $6.6 million, or 13.5% to $55.7 million for the three months ended March 31, 2021 from $49.1 million in the prior year comparable period. The increase in revenue was primarily due to a 10.2% increase in average student population, driven by starting the year with approximately 570 more students, coupled with a 36.0% increase in student starts quarter over quarter.
|
• |
Educational services and facilities expense increased $1.3 million, or 6.5% to $21.9 million for the three months ended March 31, 2021 from $20.6 million in the prior year comparable period. The increase was primarily driven by increases in instructional expense and books and tools expense as a result of a larger student population year over year.
|
• |
Selling general and administrative expense decreased $2.2 million, or 9.3% to $21.4 million for the three months ended March 31, 2021 from $23.6 million in the prior year comparable period. The decrease was primarily due to reductions in bad debt expense and sales expense, which is discussed in detail above in the consolidated results of operations.
|
• |
Revenue increased by $1.3 million, or 6.4% to $22.3 million for the three months ended March 31, 2021 from $21.0 million in the prior year comparable period. The increase in revenue was primarily due to a 8.9% increase in average student population, driven by starting the year with approximately 470 more students coupled with a 21.4% increase in student starts quarter over quarter.
|
• |
Educational services and facilities expense increased $0.7 million, or 8.0% to $10.4 million for the three months ended March 31, 2021 from $9.7 million in the prior year comparable period. The increase was primarily driven by increases in instructional expense and books and tools expense as a result of a larger student population year over year.
|
• |
Selling general and administrative expense decreased $0.4 million, or 4.1% to $8.9 million for the three months ended March 31, 2021 from $9.3 million in the prior year comparable period. The decrease was primarily driven by bad debt expense, which is discussed in detail in the consolidated results of operations.
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
Net cash used in operating activities
|
$
|
(8,299
|
)
|
$
|
(11,947
|
)
|
||
Net cash used in investing activities
|
(1,219
|
)
|
(1,287
|
)
|
||||
Net cash used in financing activities
|
(1,766
|
)
|
(15,669
|
)
|
|
March 31,
|
December 31,
|
||||||
2021
|
2020
|
|||||||
Credit agreement
|
$
|
17,333
|
$
|
17,833
|
||||
Deferred Financing Fees
|
(576
|
)
|
(621
|
)
|
||||
16,757
|
17,212
|
|||||||
Less current maturities
|
(2,000
|
)
|
(2,000
|
)
|
||||
$
|
14,757
|
$
|
15,212
|
Item 4. |
CONTROLS AND PROCEDURES
|
Item 1. |
LEGAL PROCEEDINGS
|
Item 6. |
EXHIBITS
|
Exhibit
Number
|
|
Description
|
3.1
|
Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Registration Statement on Form S-1/A (Registration No. 333-123644) filed June 7, 2005.
|
|
3.2
|
Certificate of Amendment, dated November 14, 2019, to the Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-3 filed October 6, 2020).
|
|
3.3
|
Bylaws of the Company, as amended on March 8, 2019 (incorporated by reference to the Company’s Form 8-K filed June 28 2005).
|
|
31.1*
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32*
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101**
|
The following financial statements from Lincoln Educational Services Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline Extensible Business Reporting Language (“iXBRL”): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income, (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and in detail.
|
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
* |
Filed herewith.
|
** |
Furnished herewith. This exhibit will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
|
|
LINCOLN EDUCATIONAL SERVICES CORPORATION
|
||
Date: May 10, 2021
|
By:
|
/s/ Brian Meyers
|
|
Brian Meyers
|
|||
Executive Vice President, Chief Financial Officer and Treasurer
|
Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Registration Statement on Form S-1/A (Registration No. 333-123644) filed June 7, 2005.
|
||
Certificate of Amendment, dated November 14, 2019, to the Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-3 filed October 6, 2020).
|
||
Bylaws of the Company, as amended on March 8, 2019 (incorporated by reference to the Company’s Form 8-K filed June 28 2005).
|
||
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101**
|
The following financial statements from Lincoln Educational Services Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline Extensible Business Reporting Language (“iXBRL”): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income, (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and in detail.
|
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
* |
Filed herewith.
|
** |
Furnished herewith. This exhibit will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
|
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