New Jersey
(State or other jurisdiction of incorporation)
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000-51371
(Commission File Number)
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57-1150621
(I.R.S. Employer Identification No.)
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200 Executive Drive, Suite 340
West Orange, New Jersey 07052
(Address of principal executive offices)
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07052
(Zip Code)
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o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
(c) | Exhibits |
99.1 | Press release of Lincoln Educational Services Corporation dated August 6, 2014. |
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LINCOLN EDUCATIONAL SERVICES CORPORATION
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Date: August 6, 2014
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By:
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/s/ Cesar Ribeiro
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Name:
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Cesar Ribeiro
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Title:
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Executive Vice President, Chief Financial
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Officer and Treasurer
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● | Revenue of $77.2 million for the three months ended June 30, 2014, representing a decrease of 5.6% from revenue of $81.8 million for the three months ended June 30, 2013. |
● | Net loss per share from continuing operations of $0.51 for the three months ended June 30, 2014 as compared to net loss per share from continuing operations of $0.30 for the three months ended June 30, 2013. Net loss per share of $0.51 for the three months ended June 30, 2014 includes a $0.21 valuation allowance against deferred tax assets. Please see page 7 for “Reconciliation of Non-GAAP Financial Measures.” |
● | Increase in student starts from continuing operations of 0.6% for the three months ended June 30, 2014 compared to the three months ended June 30, 2013. |
● | Revenue of $83.0 million to $85.0 million, a decrease of $4.5 million, or 5%, from the third quarter of 2013. Net loss per share from continuing operations of $0.14 to $0.20 per share as compared to break-even results from continuing operations for the third quarter of 2013. Net loss per share for the third quarter of 2014 excludes any benefit for income taxes. |
● | We anticipate student starts from continuing operations for the third quarter of 2014 to be down 8% to 10% from the third quarter of 2013. |
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We are reaffirming our previously issued 2014 guidance in terms of net loss per share and we continue to expect to be cash flow and free cash flow positive for 2014.
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●
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We are revising our revenue estimates for the year to $330.0 million to $340.0 million and we now expect that student starts will be down 1% to 3% for the year. We expect to offset the shortfall in revenues with expense management in the second half of the year.
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Three Months Ended
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June 30,
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2014
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2013
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Change
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Average population - excluding short programs
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13,803
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14,500
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-4.8
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%
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End of period population - excluding short programs
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13,648
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13,985
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-2.4
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%
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End of period population - short programs
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150
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255
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-41.2
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%
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Student starts - excluding short programs
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3,617
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3,597
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0.6
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%
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Student starts - short programs
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180
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330
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-45.5
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%
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Three Months Ended June 30,
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2014
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2013
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Automotive
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40.5
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%
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41.4
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%
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Health sciences
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31.7
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%
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31.0
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%
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Skilled trades
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14.5
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%
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13.2
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%
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Hospitality services
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8.4
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%
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8.9
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%
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Business & IT
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4.9
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%
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5.5
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%
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100.0
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%
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100.0
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%
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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||||||||||||||
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(Unaudited)
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(Unaudited)
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2014
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2013
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2014
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2013
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REVENUE
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$
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77,152
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$
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81,751
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$
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157,119
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$
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168,021
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COSTS AND EXPENSES:
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Educational services and facilities
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41,544
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42,398
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84,233
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85,971
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Selling, general and administrative
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45,617
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45,640
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92,354
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95,660
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Gain on sale of assets
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(6
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)
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(196
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)
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(61
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)
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(207
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)
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Impairment of goodwill and long-lived assets
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-
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3,815
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-
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3,908
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Total costs & expenses
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87,155
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91,657
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176,526
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185,332
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OPERATING LOSS
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(10,003
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)
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(9,906
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)
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(19,407
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)
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(17,311
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)
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OTHER:
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Interest income
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16
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15
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72
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17
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Interest expense
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(1,178
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)
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(1,202
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(2,494
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)
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(2,294
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)
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Other income
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-
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18
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-
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18
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LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
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(11,165
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(11,075
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(21,829
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)
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(19,570
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)
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PROVISION (BENEFIT) FOR INCOME TAXES
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431
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(4,387
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862
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(7,599
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)
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LOSS FROM CONTINUING OPERATIONS
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(11,596
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)
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(6,688
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)
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(22,691
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)
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(11,971
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)
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LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES
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-
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(2,690
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)
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-
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(4,894
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)
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NET LOSS
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$
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(11,596
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)
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$
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(9,378
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)
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$
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(22,691
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)
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$
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(16,865
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)
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Basic
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||||||||||||||||
Loss per share from continuing operations
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$
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(0.51
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)
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$
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(0.30
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)
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$
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(1.00
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)
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$
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(0.53
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)
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Loss per share from discontinued operations
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-
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(0.12
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)
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-
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(0.22
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Net loss per share
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$
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(0.51
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)
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$
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(0.42
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$
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(1.00
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$
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(0.75
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)
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Diluted
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Loss per share from continuing operations
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$
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(0.51
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)
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$
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(0.30
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$
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(1.00
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)
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$
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(0.53
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)
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Loss per share from discontinued operations
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-
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(0.12
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-
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(0.22
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Net loss per share
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$
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(0.51
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$
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(0.42
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$
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(1.00
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$
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(0.75
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)
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Weighted average number of common shares outstanding:
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Basic
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22,800
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22,497
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22,762
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22,456
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Diluted
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22,800
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22,497
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22,762
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22,456
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Other data:
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Adjusted EBITDA (1)
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$
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(5,036
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)
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$
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(612
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$
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(9,376
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)
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$
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(2,234
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)
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Depreciation and amortization from continuing operations
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$
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4,967
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$
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5,461
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$
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10,031
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$
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11,151
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Number of campuses/training sites from continuing operations
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36
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38
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36
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38
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Average enrollment from continuing operations
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13,803
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14,500
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13,984
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15,034
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Stock-based compensation
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$
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707
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$
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1,081
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$
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1,704
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$
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2,361
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Net cash used in operating activities
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$
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(6,519
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)
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$
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(10,053
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)
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$
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(14,899
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)
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$
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(14,272
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)
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Net cash used in investing activities
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$
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(1,968
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)
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$
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(1,046
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)
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$
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(2,544
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)
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$
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(1,620
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)
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Net cash provided by (used in) financing activities
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$
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8,160
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$
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(1,924
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)
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$
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11,316
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$
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(41,550
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)
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Selected Consolidated Balance Sheet Data:
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June 30, 2014
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(In thousands)
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Cash and cash equivalents
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$
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6,759
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Current assets
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45,929
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Working capital
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(23,828
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)
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Total assets
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240,159
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Current liabilities
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69,757
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Long-term debt and capital lease obligations, including current portion
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50,402
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Total stockholders' equity
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120,964
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||||
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(Unaudited)
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(Unaudited)
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||||||||||||||
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||||||||||||||||
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2014
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2013
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2014
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2013
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Net loss from continuing operations
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$
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(11,596
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)
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$
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(6,688
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)
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$
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(22,691
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)
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$
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(11,971
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)
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Interest expense, net
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1,162
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1,187
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2,422
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2,277
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Provision (benefit) for income taxes
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431
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(4,387
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)
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862
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(7,599
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)
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Depreciation and amortization
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4,967
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5,461
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10,031
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11,151
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EBITDA
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(5,036
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)
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(4,427
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)
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(9,376
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)
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(6,142
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)
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Impairment of goodwill and long-lived assets
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-
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3,815
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-
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3,908
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Adjusted EBITDA
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$
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(5,036
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)
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$
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(612
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)
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$
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(9,376
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)
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$
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(2,234
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)
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||
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(Unaudited)
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(Unaudited)
|
||||||
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2014
|
2014
|
||||||
|
||||||||
GAAP Net Loss Per Share
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$
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(0.51
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)
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$
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(1.00
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)
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|
||||||||
Impact of valuation allowance
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$
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0.21
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$
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0.42
|
||||
|
||||||||
Non-GAAP Loss Per Share
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$
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(0.30
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)
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$
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(0.58
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)
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CONTACT: | Lincoln Educational Services Corporation |