New Jersey
|
000-51371
|
57-1150621
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
200 Executive Drive, Suite 340
West Orange, New Jersey 07052
(Address of principal executive offices)
|
07052
(Zip Code)
|
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | 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
|
Press release of Lincoln Educational Services Corporation dated March 10, 2015.
|
LINCOLN EDUCATIONAL SERVICES CORPORATION
|
|||
Date: March 10, 2015
|
|||
By:
|
/s/ Kenneth M. Swisstack
|
||
Name:
|
Kenneth M. Swisstack
|
||
Title:
|
General Counsel
|
· | Improvement in Full Year Student Starts and Adjusted EPS, in Line with Previously Issued Guidance. |
· | Revenue from continuing operations of $325.0 million for the year ended December 31, 2014, representing a decrease of 4.8% from $341.5 million for 2013. |
· | Net Loss of $2.17 per share from continuing operations for the year ended December 31, 2014 as compared to a net loss of $1.38 per share for 2013. Net Loss per share of $2.17 includes $1.70 in non-recurring charges. Excluding these charges, net loss per share was $0.47. Please see below for “Reconciliation of Non-GAAP Financial Measures”. |
· | Graduate Placement Rate Improves to 77.5%. |
· | Draft 2012 Three-Year Cohort Default Rate Improves to 16.8%. |
· | 2014 Cash Flow from Operations of $12.0 Million and Free Cash Flow of $4.6 Million |
· | Preliminary 2015 Guidance Provided. |
· | The Company had a placement rate of 77.5% in 2014 compared to 75.4% in 2013, marking the fourth consecutive year of improvement, indicating the Company's success in training its students. |
· | Recently released data from the US Department of Education covering the draft 2012 three-year cohort default rate reported that Lincoln has shown significant improvement to 16.8%. |
· | The Company has continued to rationalize operations by closing underperforming campuses. |
· | On March 4, 2015, the Company entered into an agreement with Bank of America to extend its existing credit facility for one year to April 2016. |
Three Months Ended
|
Year Ended
|
|||||||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||||||
2014
|
2013
|
Change
|
2014
|
2013
|
Change
|
|||||||||||||||||||
Average population
|
14,361
|
14,807
|
-3.0
|
%
|
14,010
|
14,804
|
-5.4
|
%
|
||||||||||||||||
End of period population
|
13,278
|
13,561
|
-2.1
|
%
|
13,278
|
13,561
|
-2.1
|
%
|
||||||||||||||||
Student starts
|
2,095
|
2,356
|
-11.1
|
%
|
15,581
|
16,057
|
-3.0
|
%
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Automotive
|
41.9
|
%
|
42.5
|
%
|
||||
Health sciences
|
29.7
|
%
|
29.5
|
%
|
||||
Skilled trades
|
15.1
|
%
|
13.6
|
%
|
||||
Hospitality services
|
8.4
|
%
|
8.9
|
%
|
||||
Business & IT
|
4.9
|
%
|
5.5
|
%
|
||||
100.0
|
%
|
100.0
|
%
|
Three Months Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
REVENUE
|
$
|
85,449
|
$
|
87,441
|
$
|
325,022
|
$
|
341,512
|
||||||||
COSTS AND EXPENSES:
|
||||||||||||||||
Educational services and facilities
|
39,472
|
41,447
|
164,352
|
169,049
|
||||||||||||
Selling, general and administrative
|
35,541
|
38,976
|
168,441
|
175,978
|
||||||||||||
Loss (Gain) on sale of assets
|
3
|
2
|
(58
|
)
|
(501
|
)
|
||||||||||
Impairment of goodwill and long-lived assets
|
1,521
|
-
|
40,836
|
3,908
|
||||||||||||
Total costs & expenses
|
76,537
|
80,425
|
373,571
|
348,434
|
||||||||||||
OPERATING INCOME (LOSS)
|
8,912
|
7,016
|
(48,549
|
)
|
(6,922
|
)
|
||||||||||
OTHER:
|
||||||||||||||||
Interest income
|
28
|
-
|
153
|
37
|
||||||||||||
Interest expense
|
(1,482
|
)
|
(1,284
|
)
|
(5,613
|
)
|
(4,667
|
)
|
||||||||
Other income
|
148
|
-
|
297
|
18
|
||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
7,606
|
5,732
|
(53,712
|
)
|
(11,534
|
)
|
||||||||||
PROVISION (BENEFIT) FOR INCOME TAXES
|
494
|
26,257
|
(4,225
|
)
|
19,591
|
|||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
7,112
|
(20,525
|
)
|
(49,487
|
)
|
(31,125
|
)
|
|||||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES
|
(2,474
|
)
|
(11,620
|
)
|
(6,646
|
)
|
(20,161
|
)
|
||||||||
NET INCOME (LOSS)
|
$
|
4,638
|
$
|
(32,145
|
)
|
$
|
(56,133
|
)
|
$
|
(51,286
|
)
|
|||||
Basic
|
||||||||||||||||
Earnings (loss) per share from continuing operations
|
$
|
0.31
|
$
|
(0.91
|
)
|
$
|
(2.17
|
)
|
$
|
(1.38
|
)
|
|||||
Loss per share from discontinued operations
|
(0.11
|
)
|
(0.51
|
)
|
(0.29
|
)
|
(0.90
|
)
|
||||||||
Net Earnings (loss) per share
|
$
|
0.20
|
$
|
(1.42
|
)
|
$
|
(2.46
|
)
|
$
|
(2.28
|
)
|
|||||
Diluted
|
||||||||||||||||
Earnings (loss) per share from continuing operations
|
$
|
0.31
|
$
|
(0.91
|
)
|
$
|
(2.17
|
)
|
$
|
(1.38
|
)
|
|||||
Loss per share from discontinued operations
|
(0.11
|
)
|
(0.51
|
)
|
(0.29
|
)
|
(0.90
|
)
|
||||||||
Net Earnings (loss) per share
|
$
|
0.20
|
$
|
(1.42
|
)
|
$
|
(2.46
|
)
|
$
|
(2.28
|
)
|
|||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
22,888
|
22,618
|
22,814
|
22,513
|
||||||||||||
Diluted
|
23,004
|
22,618
|
22,814
|
22,513
|
||||||||||||
Other data:
|
||||||||||||||||
Adjusted EBITDA (1)
|
$
|
17,221
|
$
|
12,496
|
$
|
14,371
|
$
|
18,812
|
||||||||
Depreciation and amortization from continuing operations
|
$
|
4,567
|
$
|
5,480
|
$
|
19,201
|
$
|
21,808
|
||||||||
Number of campuses from continuing operations
|
31
|
33
|
31
|
33
|
||||||||||||
Average enrollment from continuing operations
|
14,361
|
14,807
|
14,010
|
14,804
|
||||||||||||
Stock-based compensation
|
$
|
135
|
$
|
540
|
$
|
2,621
|
$
|
2,995
|
||||||||
Net cash provided by operating activities
|
$
|
10,701
|
$
|
12,583
|
$
|
12,022
|
$
|
3,246
|
||||||||
Net cash used in investing activities
|
$
|
(2,676
|
)
|
$
|
(3,004
|
)
|
$
|
(7,405
|
)
|
$
|
(5,788
|
)
|
||||
Net cash used in financing activities
|
$
|
(8,428
|
)
|
$
|
(2,943
|
)
|
$
|
(5,204
|
)
|
$
|
(46,280
|
)
|
Selected Consolidated Balance Sheet Data:
|
December 31, 2014
|
|||
(In thousands)
|
||||
Cash, cash equivalents and restricted cash
|
$
|
42,299
|
||
Current assets
|
113,064
|
|||
Working capital
|
29,585
|
|||
Total assets
|
213,707
|
|||
Current liabilities
|
83,479
|
|||
Long-term debt and capital lease obligations, including current portion
|
65,181 | |||
Total stockholders' equity
|
83,010
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Net income (loss) from continuing operations
|
$
|
7,112
|
$
|
(20,525
|
)
|
$
|
(49,487
|
)
|
$
|
(31,125
|
)
|
|||||
Interest expense, net
|
1,454
|
1,284
|
5,460
|
4,630
|
||||||||||||
Provision (Benefit) for income taxes
|
494
|
26,257
|
(4,225
|
)
|
19,591
|
|||||||||||
Depreciation and amortization
|
4,567
|
5,480
|
19,201
|
21,808
|
||||||||||||
EBITDA
|
13,627
|
12,496
|
(29,051
|
)
|
14,904
|
|||||||||||
Impairment of goodwill and long-lived assets
|
1,521
|
-
|
40,836
|
3,908
|
||||||||||||
Loss Contingency
|
1,000
|
- |
1,000
|
- | ||||||||||||
Executive Severance
|
1,073
|
- |
1,586
|
- | ||||||||||||
Adjusted EBITDA
|
$
|
17,221
|
$
|
12,496
|
$
|
14,371
|
$
|
18,812
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
GAAP Net Earnings (Loss) Per Share
|
$
|
0.31
|
$
|
(0.91
|
)
|
$
|
(2.17
|
)
|
$
|
(1.38
|
)
|
|||||
Impact of Impairment
|
|
0.07
|
|
1.79
|
|
0.17
|
||||||||||
Loss Contingency
|
|
0.04
|
|
-
|
|
0.04
|
|
-
|
||||||||
Executive Severance
|
|
0.05
|
|
-
|
|
0.07
|
|
-
|
||||||||
Impact of Valuation Allowance
|
|
-
|
|
1.11
|
|
(0.20
|
)
|
|
1.05
|
|||||||
Non-GAAP Net Earnings (Loss) Per Share
|
$
|
0.47
|
$
|
0.20
|
$
|
(0.47
|
)
|
$
|
(0.16
|
)
|
CONTACT:
|
Lincoln Educational Services Corporation
Brian Meyers, CFO
973-736-9340
|