ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____to_____
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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Title of each class
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Trading Symbol (s)
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Name of exchange on which registered
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Large accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company
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||||||
Emerging growth company
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1
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ITEM 1.
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1
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ITEM 1A.
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23
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ITEM 1B.
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35
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ITEM 1C.
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35
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ITEM 2.
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37
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ITEM 3.
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38
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ITEM 4.
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39
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39
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ITEM 5.
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39
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ITEM 6.
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40
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ITEM 7.
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41
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ITEM 7A.
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52
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ITEM 8
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52
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ITEM 9.
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52
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ITEM 9A.
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53
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ITEM 9B.
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53
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ITEM 9C.
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53
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53
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ITEM 10.
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54
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ITEM 11.
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54
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ITEM 12.
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54
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ITEM 13.
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54
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ITEM 14.
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54
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54
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ITEM 15.
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54
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ITEM 16.
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56
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• |
compliance with the extensive existing regulatory framework applicable to our industry or our failure to timely obtain and maintain regulatory approvals and accreditation;
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• |
compliance with continuous changes in applicable federal laws and regulations including pending rulemaking by the U.S. Department of Education;
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• |
the effect of current and future Title IV Program regulations arising out of negotiated rulemakings, including any potential reductions in funding or restrictions on the use of funds received through Title IV
Programs;
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• |
successful updating and expansion of the content of existing programs and developing new programs in a cost-effective manner or on a timely basis;
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• |
uncertainties regarding our ability to comply with federal laws and regulations regarding the 90/10 Rule and cohort default rates;
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• |
successful implementation of our strategic plan;
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• |
our inability to maintain eligibility for or to process federal student financial assistance;
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• |
regulatory investigations of, or actions commenced against, us or other companies in our industry;
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• |
changes in the state regulatory environment or budgetary constraints;
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• |
enrollment declines or challenges in our students’ ability to find employment as a result of economic conditions;
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• |
maintenance and expansion of existing industry relationships and develop new industry relationships;
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• |
a loss of members of our senior management or other key employees;
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• |
uncertainties associated with opening of new campuses and closing existing campuses;
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• |
uncertainties associated with integration of acquired schools;
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• |
industry competition;
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• |
the effect of any cybersecurity incident;
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• |
the effect of public health outbreaks, epidemics and pandemics including, without limitation, COVID-19
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conditions and trends in our industry;
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• |
general economic conditions; and
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• |
other factors discussed under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
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ITEM 1. |
BUSINESS
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• |
Increase Operating Efficiency. Our existing schools are a result of strategic acquisitions and expansion, and, while the programs may be very similar across the campuses, each
campus operates on its own calendar. As we move most of our curriculum to a hybrid teaching model of virtual and traditional classroom-based in-person training, we are taking this opportunity to also standardize the programs and course
calendars so that new students will begin on the same day across all campuses. In addition, we are removing certain functions from the campuses and centralizing them to remove distractions from the campuses while creating more efficient
and effective services for our students. By simplifying, centralizing and standardizing our operations, we believe we will improve our margins and be more scalable. We are more than 50% through the transformation and expect to see
improving margins by the second half of 2024.
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• |
Replicate Programs and Expand Existing Areas of Study. Whenever possible, we seek to replicate programs across our campuses. Adding proven in-demand programs to an existing
campus enables that campus to further serve that market while increasing the operating efficiency at that campus. In addition, we believe we can leverage our operations to expand our program offerings in existing areas of study.
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• |
Maximize Utilization of Existing Facilities. We are focused on improving capacity utilization of existing facilities through increased enrollments, the introduction of new
programs and partnerships with industry. In addition, we see opportunities to adjust our real estate needs with the advancement of our hybrid teaching model that we will continue to roll out over the next two years.
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• |
Expand Geographically. We plan to deploy our resources to strengthen our brand, invest in new programs and seek opportunities to expand our footprint into new markets. We have
a solid portfolio of corporate and industry partners requesting that we explore new geographies to serve them better. Regardless of whether we expand our current campuses to take advantage of the operating leverage or establish new
campuses, our goal is to remain competitive and prudently deploy our resources. Our expansion plans may be achieved organically through the opening of new campuses with existing resources or through acquisitions. We will be opening our
first new campus in over a decade in the Atlanta market in the first half of 2024 and we have signed a lease for a second new campus in Houston that we expect to open by the first quarter of 2026.
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• |
Expand Teaching Platform. Using the lessons learned from the COVID-19 pandemic, we expect to continue to transform our in-person education model to a hybrid teaching model,
which we call Lincoln 10.0. The Lincoln 10.0 model provides students with greater flexibility and convenience, which should help us attract more students. Moreover, we believe blended learning will create operating efficiencies that will
enable us to contain tuition increases over the coming years and thus provide our students with a higher return on investment in their education in addition to the increased flexibility and convenience. We are more than 50% through the
transformation and expect to be complete with this process by the end of 2024.
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Current Programs Offered
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Area of Study
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Associate's Degree
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Diploma and Certificate
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Skilled Trades
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Electrical and Electronic Systems Technology Service Management, HVAC
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Electrical & Electronics Systems Technology, Electrician Training, HVAC, Welding Technology, Welding Fabrication Technology, Welding and Metal Fabrication Technology, Welding with Introduction to Pipefitting, CNC Machining and
Manufacturing, Advanced Manufacturing with Robotics
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Automotive
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Automotive Service Management, Collision Repair & Refinishing Service Management, Diesel & Truck Service Management, Heavy Equipment Maintenance Service Management
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Automotive Technology, Automotive Technology with BMW, Automotive Technology with Mopar X-Press, Automotive Technology with Volkswagen, Collision Repair and Refinishing Technology, Diesel & Truck Technology, Diesel & Truck
Technology with Alternate Fuel Technology, Diesel & Truck Technology with Transport Refrigeration, Heavy Equipment Service Technology
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Health Sciences
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Medical Assisting Technology
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Medical Assistant, Patient Care Technician, Dental Assistant, Licensed Practical Nursing
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Hospitality Services and Information Technology
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Culinary Arts & Food Services, Cosmetology, Aesthetics, International Baking and Pastry, Nail Technology, Therapeutic Massage & Bodywork Technician. Computer Systems Support Technician.
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School
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Last Accreditation Letter
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Next Accreditation
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Philadelphia, PA2
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September 1, 2023
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May 1, 2028
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Union, NJ1
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May 24, 2019
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February 1,20244
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Mahwah, NJ1
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October 15, 2020
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August 1, 20244
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Melrose Park, IL2
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December 2, 2019
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November 1, 20244
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Denver, CO1
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September 6, 2022
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February 1, 2026
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Columbia, MD2
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September 1, 2023
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February 1, 2027
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Grand Prairie, TX1
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May 26, 2022
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August 1, 2026
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Allentown, PA2
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May 23, 2023
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January 1, 2027
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Nashville, TN1
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March 8, 2023
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May 1, 2027
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Indianapolis, IN
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May 23, 2023
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November 1, 2026
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New Britain, CT
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December 1, 2023
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January 1, 2028
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Shelton, CT2
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May 23, 2023
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January 1, 2028
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Queens, NY1
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September 4, 2018
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June 1, 20234
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East Windsor, CT2
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October 17, 2017
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February 1, 20234
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South Plainfield, NJ1
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December 2, 2019
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August 1, 20244
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Iselin, NJ
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May 15, 2018
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May 15, 20234
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Moorestown, NJ3
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May 15, 2018
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May 15, 20234
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Paramus, NJ3
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May 15, 2018
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May 15, 20234
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Lincoln, RI3
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May 15, 2018
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May 15, 20234
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Summerlin, NV3
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May 15, 2018
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May 15, 20234
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Marietta, GA3
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May 1, 2022
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May 1, 2027
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East Point, GA2
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December 20, 2023
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December 20, 2025
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1 |
Branch campus of main campus in Indianapolis, IN
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2 |
Branch campus of main campus in New Britain, CT
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3 |
Branch campus of main campus in Iselin, NJ
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4 |
Campus going through reaccreditation
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Main Institution/Campus(es)
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Additional Location(s)
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Iselin, NJ
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Moorestown, NJ
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Paramus, NJ
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Lincoln, RI
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Marietta, GA
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Las Vegas, NV (Summerlin)
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New Britain, CT
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Shelton, CT
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Philadelphia, PA
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East Windsor, CT
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Melrose Park, IL
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Allentown, PA
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Columbia, MD
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East Point, GA1
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Indianapolis, IN
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Grand Prairie, TX
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Nashville, TN
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Denver, CO
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Union, NJ
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Mahwah, NJ
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Queens, NY
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South Plainfield, NJ
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1 |
Applied to participate in Title IV programs.
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Institution
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Expiration Date of Current
Program Participation
Agreement
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Iselin, NJ
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December 31, 20242
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Indianapolis, IN
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December 31, 20242
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New Britain, CT
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December 31, 20242
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2 |
Provisionally certified.
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• |
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
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• |
the net income ratio, which measures the institution's ability to operate at a profit.
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• |
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; or
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• |
posting a letter of credit in an amount equal to at least 10% of the Title IV Program funds received by the institution during its most recently completed fiscal year 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.
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• |
comply with all applicable federal student financial aid requirements;
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• |
have capable and sufficient personnel to administer the federal student Title IV Programs;
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• |
administer Title IV Programs with adequate checks and balances in its system of internal controls over financial reporting;
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• |
divide the function of authorizing and disbursing or delivering Title IV Program funds so that no office has the responsibility for both functions;
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• |
establish and maintain records required under the Title IV Program regulations;
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• |
develop and apply an adequate system to identify and resolve discrepancies in information from sources regarding a student’s application for financial aid under the Title IV Program;
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• |
have acceptable methods of defining and measuring the satisfactory academic progress of its students;
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• |
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;
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• |
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;
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• |
provide adequate financial aid counseling to its students;
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• |
submit in a timely manner all reports and financial statements required by the Title IV Program regulations; and
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• |
not otherwise appear to lack administrative capability.
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Item 1A. |
RISK FACTORS
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• |
student dissatisfaction with our programs and services;
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• |
diminished access to high school student populations;
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• |
our failure to maintain or expand our brand or other factors related to our marketing or advertising practices; and
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• |
our inability to maintain relationships with employers in the automotive, diesel, skilled trades and IT services industries.
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• |
authorize the issuance of blank check Preferred Stock that could be issued by our Board of Directors to thwart a takeover attempt;
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• |
prohibit cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors;
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• |
require super-majority voting to effect amendments to certain provisions of our Amended and Restated Certificate of Incorporation;
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• |
limit who may call special meetings of both the Board of Directors and shareholders;
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• |
prohibit shareholder action by non-unanimous written consent and otherwise require all shareholder actions to be taken at a meeting of the shareholders;
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• |
establish advance notice requirements for nominating candidates for election to the Board of Directors or for proposing matters that can be acted upon by shareholders at shareholders’ meetings; and
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• |
require that vacancies on the Board of Directors, including newly created directorships, be filled only by a majority vote of directors then in office.
|
• |
general economic conditions;
|
• |
general conditions in the for-profit, post-secondary education industry;
|
• |
negative media coverage of the for-profit, post-secondary education industry;
|
• |
failure of certain of our schools or programs to maintain compliance under the gainful employment regulation, 90/10 Rule or with financial responsibility standards;
|
• |
the impact of DOE rulemaking and other changes in the highly regulated environment in which we operate;
|
• |
the initiation, pendency or outcome of litigation, accreditation reviews and regulatory reviews, inquiries and investigations;
|
• |
loss of key personnel;
|
• |
quarterly variations in our operating results;
|
• |
our ability to meet or exceed, or changes in, expectations of investors and analysts, or the extent of analyst coverage of us; and decisions by any significant investors to reduce their investment in our Common Stock.
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ITEM 1B. |
UNRESOLVED STAFF COMMENTS
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ITEM 1C. |
CYBERSECURITY
|
Current Locations
|
Brand
|
Approximate Square Footage
|
||
Las Vegas, Nevada
|
Euphoria Institute
|
23,000
|
||
Columbia, Maryland
|
Lincoln College of Technology
|
111,000
|
||
Denver, Colorado
|
Lincoln College of Technology
|
213,000
|
||
Grand Prairie, Texas
|
Lincoln College of Technology
|
157,000
|
||
Indianapolis, Indiana
|
Lincoln College of Technology
|
126,000
|
||
Marietta, Georgia
|
Lincoln College of Technology
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30,000
|
||
Melrose Park, Illinois
|
Lincoln College of Technology
|
88,000
|
||
Allentown, Pennsylvania
|
Lincoln Technical Institute
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25,000
|
||
East Windsor, Connecticut
|
Lincoln Technical Institute
|
289,000
|
||
Iselin, New Jersey
|
Lincoln Technical Institute
|
32,000
|
||
Lincoln, Rhode Island
|
Lincoln Technical Institute
|
66,000
|
||
Mahwah, New Jersey
|
Lincoln Technical Institute
|
79,000
|
||
Moorestown, New Jersey
|
Lincoln Technical Institute
|
48,000
|
||
New Britain, Connecticut
|
Lincoln Technical Institute
|
36,000
|
||
Paramus, New Jersey
|
Lincoln Technical Institute
|
30,000
|
||
Philadelphia, Pennsylvania
|
Lincoln Technical Institute
|
30,000
|
||
Queens, New York
|
Lincoln Technical Institute
|
48,000
|
||
Shelton, Connecticut
|
Lincoln Technical Institute and Lincoln Culinary Institute
|
57,000
|
||
South Plainfield, New Jersey
|
Lincoln Technical Institute
|
60,000
|
||
Union, New Jersey
|
Lincoln Technical Institute
|
56,000
|
||
Nashville, Tennessee
|
Lincoln College of Technology
|
292,000
|
||
Parsippany, New Jersey
|
Corporate Office
|
17,000
|
Future Locations
|
Brand
|
Approximate Square Footage
|
||
Houston, Texas1
|
Lincoln College of Technology
|
100,000
|
||
Levittown, Pennsylania3
|
Lincoln Technical Institute
|
90,000
|
||
East Point, Georgia4
|
Lincoln Technical Institute
|
55,000
|
||
Nashville, Tennessee2
|
Lincoln College of Technology
|
120,000
|
1 |
On October 31, 2023, the Company entered into a lease for approximately 100,000 square feet of space to serve as the Company’s new campus in Houston, Texas. The lease term commenced on January 2, 2024, with an initial lease term of
21-years and 6 months with three five-year renewal options.
|
2 |
On October 18, 2023, the Company entered into a lease for approximately 120,000 square feet of space. to serve as the Company’s new Nashville, Tennessee campus. The lease term commenced on November 1, 2023, with an initial lease term of
15-years with two five-year renewal options.
|
3 |
On September 28, 2023, the Company purchased a 90,000 square foot property located at 311 Veterans Highway, Levittown, Pennsylvania for approximately $10.2 million and, subsequently on January 30, 2024, entered into a sale-leaseback
transaction for this property. As of December 31, 2023, this property was classified as held-for-sale on the Consolidated Balance Sheets.
|
4 |
On June 30, 2022, the Company executed a lease for approximately 55,000 square feet of space to serve as the Company’s new campus, in East Point, Georgia. The lease term commenced in August 2022 with an initial lease term of 12 years
term with two five-year renewal options. The Company had no involvement in the construction or design of the facilities on the property and was not deemed to be in control of the asset prior to the lease commencement date. For the year
ended December 31, 2023, the Company incurred approximately $0.8 million in rent expenses.
|
ITEM 3. |
LEGAL PROCEEDINGS
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of
Shares Purchased
as Part of Publically
Announced Plan
|
Maximum Dollar
Value of Shares
Remaining to be
Purchased Under
the Plan
|
||||||||||||
October 1, 2023 to October 31, 2023
|
-
|
$
|
-
|
-
|
$
|
29,663,667
|
||||||||||
November 1, 2023 to November 30, 2023
|
-
|
-
|
-
|
-
|
||||||||||||
December 1, 2023 to December 31, 2023
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
-
|
-
|
-
|
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
|
-
|
$
|
-
|
127,507
|
||||||||
Equity compensation plans not approved by security holders
|
-
|
-
|
-
|
|||||||||
Total
|
-
|
$
|
-
|
127,507
|
ITEM 6. |
[RESERVED]
|
ITEM 7. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
• |
our internal extension of credit 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 and, as a consequence, more likely to pay outstanding tuition amounts;
|
• |
funding for students who interrupt their education is typically covered by Title IV Program funds as long as they have been properly packaged for financial aid.
|
• |
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 Dec 31,
|
||||||||
2023
|
2022
|
|||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
||||
Costs and expenses:
|
||||||||
Educational services and facilities
|
42.9
|
%
|
42.7
|
%
|
||||
Selling, general and administrative
|
55.3
|
%
|
52.4
|
%
|
||||
Gain on sale of assets
|
-8.2
|
%
|
-0.1
|
%
|
||||
Impairment of goodwill and long-lived assets
|
1.1
|
%
|
0.3
|
%
|
||||
Total costs and expenses
|
91.2
|
%
|
95.3
|
%
|
||||
Operating income
|
8.8
|
%
|
4.7
|
%
|
||||
Interest expense, net
|
0.6
|
%
|
0.0
|
%
|
||||
Income from operations before income taxes
|
9.4
|
%
|
4.7
|
%
|
||||
Provision for income taxes
|
2.6
|
%
|
1.1
|
%
|
||||
Net income
|
6.8
|
%
|
3.6
|
%
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Campus Operations
|
$
|
376,602
|
$
|
341,440
|
10.3
|
%
|
||||||
Transitional
|
1,468
|
6,847
|
-78.6
|
%
|
||||||||
Total
|
$
|
378,070
|
$
|
348,287
|
8.6
|
%
|
||||||
Operating Income (Loss):
|
||||||||||||
Campus Operations
|
$
|
47,579
|
$
|
49,524
|
-3.9
|
%
|
||||||
Transitional
|
(1,914
|
)
|
(430
|
)
|
-345.1
|
%
|
||||||
Corporate
|
(12,307
|
)
|
(32,816
|
)
|
62.5
|
%
|
||||||
Total
|
$
|
33,358
|
$
|
16,278
|
104.9
|
%
|
||||||
Starts:
|
||||||||||||
Campus Operations
|
16,199
|
14,541
|
11.4
|
%
|
||||||||
Transitional
|
-
|
379
|
-100.0
|
%
|
||||||||
Total
|
16,199
|
14,920
|
8.6
|
%
|
||||||||
Average Population:
|
||||||||||||
Campus Operations
|
12,875
|
12,602
|
2.2
|
%
|
||||||||
Transitional
|
66
|
292
|
-77.4
|
%
|
||||||||
Total
|
12,941
|
12,894
|
0.4
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Campus Operations
|
13,270
|
12,196
|
8.8
|
%
|
||||||||
Transitional
|
-
|
192
|
-100.0
|
%
|
||||||||
Total
|
13,270
|
12,388
|
7.1
|
%
|
• |
Revenue increased $35.2 million, or 10.3% to $376.6 million for the fiscal year ended December 31, 2023 from $341.4 million in the prior year comparable period. The increase in revenue was driven by several
factors including student start growth of 11.4% and an increase in average revenue per student of 8.0%, driven in part by the continuing rollout of the Company’s hybrid teaching model in combination with tuition increases. The Company’s
hybrid teaching model increases program efficiency and delivers accelerated revenue recognition in certain evening programs.
|
• |
Educational services and facilities expense increased $14.8 million, or 10.2% to $160.4 million for the fiscal year ended December 31, 2023 from $145.6 million in the prior year comparable period. Increased
costs were primarily concentrated in instructional, facilities expense, and books and tools expense.
|
o |
Instructional expenses increased $7.0 million, driven primarily by higher instructional salaries resulting from higher staffing levels due to increases in our student population and merit salary increases.
In addition, the Company is experiencing higher staffing levels at several campuses that have launched the hybrid teaching model as the Company is providing instruction through both the new and traditional learning models for an interim
period of time. Further increases resulted from student testing, primarily relating to our nursing program and increased consumables costs driven by a higher student population and inflation.
|
o |
Facilities expense increased by approximately $4.5 million, driven primarily by a $2.4 million increase in rent expense relating to lease extensions at several campuses, additional space taken at one of our
campuses, and non-cash rent expense relating to the new East Point, Georgia campus and the sale-leaseback of our existing Nashville, Tennessee property. In connection with the sale of the Nashville, Tennessee property, the Company entered
into a lease agreement allowing the Company to continue to occupy the campus and operate it on a rent-free basis for a period of 15 months. At the consummation of the sale, the Company took the fair value of the 15-month rent free period,
valued at $2.3 million, and included the balance in prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets. During the 15-month rent-free period, the Company will straight-line the expense until the
rent-free period has expired. Also contributing to the increased costs were higher utility expense driven by inflation and an increase in repairs and maintenance at several campuses.
|
o |
Books and tools expense increased $3.0 million, driven by a 11.4% increase in student starts year-over-year.
|
• |
Selling, general and administrative expense increased $19.1 million, or 13.1% to $164.4 million for the fiscal year ended December 31, 2023, from $145.3 million in the prior year comparable period. The
increase was primarily driven by an increase in administrative costs, marketing investments and student services, all of which are discussed above in the Consolidated Results of Operations.
|
• |
Impairment of goodwill and long-lived assets was $4.2 million and $1.0 million for the fiscal years ended December 31, 2023 and 2022, respectively, as discussed above in the Consolidated Results of
Operations.
|
• |
Revenue decreased $5.3 million, or 78.6% to $1.5 million for the fiscal year ended December 31, 2023, from $6.8 million in the prior year comparable period.
|
• |
Total operating expenses decreased $3.9 million, or 53.6% to $3.4 million for the fiscal year ended December 31, 2023, from $7.3 million in the prior year comparable period.
|
Cash Flow Summary
|
||||||||
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
(In thousands)
|
||||||||
Net cash provided by operating activities
|
$
|
25,558
|
$
|
882
|
||||
Net cash provided by (used in) investing activities
|
$
|
7,369
|
$
|
(21,354
|
)
|
|||
Net cash used in financing activities
|
$
|
(2,945
|
)
|
$
|
(12,548
|
)
|
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A. |
CONTROLS AND PROCEDURES
|
ITEM 9B. |
OTHER INFORMATION
|
ITEM 9C. |
DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11. |
EXECUTIVE COMPENSATION
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
1. |
Financial Statements
|
2. |
Financial Statement Schedules
|
3. |
Exhibits Required by Securities and Exchange Commission Regulation S-K
|
Exhibit
Number
|
Description
|
|
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 Exhibit 3.1 of the Company’s Form 8-K filed April 30, 2020).
|
||
Specimen Stock Certificate evidencing shares of Common Stock (incorporated by reference to the Company’s Registration Statement on Form S-1/A (Registration No. 333-123644) filed June 21, 2005).
|
||
Registration Rights Agreement, dated as of November 14, 2019, between the Company and the investors parties thereto (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q
filed November 14, 2019).
|
||
Description of Securities of the Company (incorporated by reference to Exhibit 4.3 of the Company’s Annual Report on Form 10-K filed March 9, 2021).
|
||
Employment Agreement, dated as of December 13, 2022, between the Company and Scott M. Shaw
(incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 16, 2022).
|
||
Employment Agreement, dated as of December 13, 2022, between the Company and Brian K. Meyers
(incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed December 16, 2022).
|
||
Employment Agreement dated as of December 13, 2022 between the Company and Chad D Nyce
(incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed December 16, 2022).
|
||
Lincoln Educational Services Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.16 of the Company’s Current Report on Form 8-K filed June 5, 2020).
|
||
Lincoln Educational Services Corporation Severance and Retention Policy (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed November 7, 2022).
|
||
Securities Purchase Agreement, dated as of November 14, 2019, between the Company and the investor parties thereto (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed
November 14, 2019).
|
||
Credit Agreement, dated as of November 14, 2019, among the Company, Lincoln Technical Institute, Inc. and its subsidiaries, and Sterling National Bank (incorporated by reference to Exhibit 10.3 of the Company’s
Quarterly Report on Form 10-Q filed November 14, 2019).
|
||
First Amendment to Credit Agreement, dated as of November 10, 2020, among the Company, Lincoln Technical Institute, Inc. and its subsidiaries, and Sterling National Bank (incorporated by reference to Exhibit 10.1 of
the Company’s Quarterly Report on Form 10-Q filed November 12, 2020).
|
||
Second Amendment to Credit Agreement, dated as of May 23, 2022, among the Company, Lincoln Technical Institute, Inc. and its subsidiaries, and Webster Bank, National Bank (incorporated by reference to Exhibit 10.1
of the Company’s Current Report on Form 8-K filed May 24, 2022).
|
||
Third Amendment to the Credit Agreement, dated as of August 5, 2022, among the Company, Lincoln Technical Institute, Inc. and its subsidiaries, and Webster Bank, National Bank (incorporated by reference to Exhibit
10.2 of the Company’s Quarterly Report on Form 10-Q filed August 8, 2022).
|
||
Consent and Waiver Letter Agreement, dated as of September 23, 2021, by and among the Company and certain of its subsidiaries and Sterling National Bank (incorporated by reference to Exhibit 10.3 of the Company’s
Current Report on Form 8-K filed September 28, 2021).
|
||
Form of Indemnification Agreement between the Company and each director of the Company (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed November 14, 2019).
|
Indemnification Agreement between the Company and John A. Bartholdson (incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q filed November 14, 2019).
|
||
Credit Agreement, dated as of February 16, 2024, among the Company and its subsidiaries and Fifth Third Bank, National Association (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form
8-K filed February 23,2024).
|
||
Subsidiaries of the Company.
|
||
Consent of Independent Registered Public Accounting Firm.
|
||
Power of Attorney (included on the Signature page of this Annual Report on Form 10-K).
|
||
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.
|
||
Compensation Recovery Policy
|
||
101*
|
The following financial statements from Lincoln Educational Services Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in iXBRL: (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.
|
|
104
|
Cover Page Interactive Data File (formatted as Inline iXBRL and contained in Exhibit 101*.
|
* |
Filed herewith.
|
+ |
Indicates management contract or compensatory plan or arrangement required to be filed or incorporated by reference as an exhibit to this Form 10-K pursuant to Item 15(b) of Form 10-K.
|
ITEM 16. |
FORM 10-K SUMMARY
|
LINCOLN EDUCATIONAL SERVICES CORPORATION
|
||
By:
|
/s/ Brian Meyers
|
|
Brian Meyers
|
||
Executive Vice President, Chief Financial Officer and Treasurer
|
||
(Principal Accounting and Financial Officer)
|
||
Date:
|
March 4, 2024
|
Signature
|
Title
|
Date
|
||
/s/ Scott M. Shaw
|
Chief Executive Officer and Director
|
March 4, 2024
|
||
Scott M. Shaw
|
||||
/s/ Brian K. Meyers
|
Executive Vice President, Chief Financial Officer and Treasurer (Principal Accounting and Financial Officer)
|
March 4, 2024
|
||
Brian K. Meyers
|
||||
/s/ John A. Bartholdson
|
Director
|
March 4, 2024
|
||
John A. Bartholdson
|
||||
/s/ James J. Burke, Jr.
|
Director
|
March 4, 2024
|
||
James J. Burke, Jr.
|
||||
/s/ Kevin M. Carney
|
Director
|
March 4, 2024
|
||
Kevin M. Carney
|
||||
/s/ J. Barry Morrow
|
Director
|
March 4, 2024
|
||
J. Barry Morrow
|
||||
/s/ Michael A. Plater
|
Director
|
March 4, 2024
|
||
Michael A. Plater
|
||||
/s/ Felecia J. Pryor
|
Director
|
March 4, 2024
|
||
Felecia J. Pryor
|
||||
/s/ Carlton Rose
|
Director
|
March 4, 2024
|
||
Carlton Rose
|
||||
/s/ Sylvia Jean Young
|
Director
|
March 4, 2024
|
||
Sylvia Jean Young
|
Page Number
|
||||
Reports of Independent Registered Public Accounting Firm - Report of Independent Registered Public Accounting Firm (PCAOB ID No. )
|
F-2 | |||
F-6
|
||||
F-8
|
||||
F-9 | ||||
F-10 |
||||
F-11
|
||||
F-13
|
||||
F-37
|
•
|
Tested the design and operating effectiveness of controls relating to establishing the allowance for credit losses.
|
•
|
Assessed the appropriateness of management’s adoption calculation and significant assumptions made for reasonableness, which included discussions with
professionals in our firm with expertise in Topic 326.
|
•
|
Recalculated the estimated allowance rates applied to the respective accounts receivable allowance categories determined according to funding sources and
other criteria.
|
•
|
Tested the completeness and accuracy of data underlying management’s assertions and calculations by selecting and reperforming the calculations for a
selection of students, and compared our recalculations to management’s analysis to determine whether management’s conclusions were reasonable.
|
•
|
Tested on a sample basis the write-offs, the rates of reserve percentages, and subsequent cash collections on a student account through our evaluation of a
selection of students.
|
•
|
Evaluated Topic 326 related financial statement disclosures.
|
•
|
Tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the reporting units within the Campus Operations Segment such as controls related to
management’s selection of the long-term growth rate, discount rate, EBITDA multiples and control premiums, as well as forecasts of future revenue, student start growth and EBITDA margins and the determination of the fair value of
certain assets.
|
•
|
Evaluated the reasonableness of the determination of the fair value of certain assets by management.
|
•
|
Evaluated management’s ability to accurately forecast future revenues and EBITDA margins by comparing actual results to management’s historical forecasts.
|
• |
Evaluated the reasonableness of management’s revenue and EBITDA margin forecasts by comparing the forecasts to:
|
o
|
Historical revenues and EBITDA margins.
|
o
|
Internal communications to management and the Board of Directors.
|
o
|
Forecasted
information included in Company press releases, as well as in analyst and industry reports for the Company and certain peer companies.
|
• |
With
the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodologies (2) EBITDA multiples (3) control premiums (4) long-term growth rate and (5) the discount rate by:
|
o
|
Testing
the source information underlying the determination of the discount rate, the selection of the EBITDA multiples, control premiums, long-term growth rates and the discount rate and the mathematical accuracy of the calculations.
|
o
|
Developing
a range of independent estimates and comparing those to the EBITDA multiples, control premiums, long-term growth rates and the discount rate selected by management.
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Restricted cash
|
||||||||
Short-term investments
|
||||||||
Accounts receivable, less allowance of $
|
|
|
||||||
Inventories
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Asset held for sale
|
||||||||
Total current assets
|
|
|
||||||
PROPERTY, EQUIPMENT AND FACILITIES - At cost, net of accumulated depreciation and amortization of $
|
|
|
||||||
OTHER ASSETS:
|
||||||||
Noncurrent receivables, less allowance of $
|
|
|
||||||
Deferred income taxes, net
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Finance lease right-of-use
assets
|
||||||||
Goodwill
|
|
|
||||||
Other assets, net
|
|
|
||||||
Pension plan assets, net
|
||||||||
Total other assets
|
|
|
||||||
TOTAL ASSETS
|
$
|
|
$
|
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
LIABILITIES, SERIES A CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Unearned tuition
|
$
|
|
$
|
|
||||
Accounts payable
|
|
|
||||||
Accrued expenses
|
|
|
||||||
Income taxes payable
|
|
|
||||||
Current portion of operating lease liabilities
|
|
|
||||||
Current portion of finance lease liabilities
|
||||||||
Other short-term liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
NONCURRENT LIABILITIES:
|
||||||||
Pension plan liabilities
|
|
|
||||||
Long-term portion of operating lease liabilities
|
|
|
||||||
Long-term portion of finance lease liabilities
|
||||||||
Other long-term liabilities
|
||||||||
Total liabilities
|
|
|
||||||
COMMITMENTS AND CONTINGENCIES
|
|
|||||||
SERIES A CONVERTIBLE PREFERRED STOCK
|
||||||||
Preferred stock,
|
|
|
||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Common stock,
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
TOTAL LIABILITIES, SERIES A CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
REVENUE
|
$
|
|
$
|
|
||||
COSTS AND EXPENSES:
|
||||||||
Educational services and facilities
|
|
|
||||||
Selling, general and administrative
|
|
|
||||||
Gain on sale of assets
|
(
|
)
|
(
|
)
|
||||
Impairment of goodwill and long-lived assets
|
||||||||
Total costs and expenses
|
|
|
||||||
OPERATING INCOME
|
|
|
||||||
OTHER:
|
||||||||
Interest income
|
||||||||
Interest expense
|
(
|
)
|
(
|
)
|
||||
INCOME BEFORE INCOME TAXES
|
|
|
||||||
PROVISION FOR INCOME TAXES
|
|
|
||||||
NET INCOME
|
|
|
||||||
PREFERRED STOCK DIVIDENDS
|
|
|
||||||
INCOME AVAILABLE TO COMMON STOCKHOLDERS
|
$
|
|
$
|
|
||||
Basic
|
||||||||
Net income per common share
|
$
|
|
$
|
|
||||
Diluted |
||||||||
Net income per common share
|
$ |
$ |
||||||
Weighted average number of common shares outstanding:
|
||||||||
Basic
|
|
|
||||||
Diluted
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Net income
|
$
|
|
$
|
|
||||
Other comprehensive income
|
||||||||
Employee pension plan adjustments, net of taxes (a)
|
|
|
||||||
Comprehensive income
|
$
|
|
$
|
|
(a)
|
|
Stockholders’ Equity
|
||||||||||||||||||||||||||||||||||||
Accumulated | Series A | |||||||||||||||||||||||||||||||||||
Additional | Other | Convertible | ||||||||||||||||||||||||||||||||||
Common Stock | Paid-in | Treasury | Retained | Comprehensive | Preferred Stock | |||||||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stock
|
Earnings
|
Loss
|
Total
|
Shares
|
Amount
|
||||||||||||||||||||||||||||
BALANCE - January 1, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
||||||||||||||||||
Net income
|
-
|
|
|
|
|
|
|
-
|
|
|||||||||||||||||||||||||||
Preferred stock dividend |
- | ( |
) | ( |
) | - | ||||||||||||||||||||||||||||||
Preferred Stock Conversion |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Employee pension plan adjustments
|
-
|
|
|
|
|
|
|
-
|
|
|||||||||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||||||||||
Restricted stock
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Treasury stock cancellation
|
- | ( |
) | - | ||||||||||||||||||||||||||||||||
Share repurchase
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Net share settlement for
equity-based compensation
|
(
|
)
|
|
(
|
)
|
|
|
|
(
|
)
|
|
|
||||||||||||||||||||||||
BALANCE - December 31, 2022
|
|
|
|
|
|
(
|
)
|
|
|
|
||||||||||||||||||||||||||
Net cumulative effect from adoption of |
(a) ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Net income
|
-
|
|
|
|
|
|
|
-
|
|
|||||||||||||||||||||||||||
Employee pension plan adjustments
|
-
|
|
|
|
|
|
|
-
|
|
|||||||||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||||||||||
Restricted stock
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Share repurchase
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Net share settlement for
equity-based compensation
|
(
|
)
|
|
(
|
)
|
|
|
|
(
|
)
|
|
|
||||||||||||||||||||||||
BALANCE - December 31, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Finance lease amortization
|
||||||||
Deferred income taxes
|
|
|
||||||
Gain on sale of assets
|
(
|
)
|
(
|
)
|
||||
Impairment of goodwill and long-lived assets
|
||||||||
Fixed asset donation
|
(
|
)
|
(
|
)
|
||||
Provision for credit losses
|
|
|
||||||
Stock-based compensation expense
|
|
|
||||||
(Increase) decrease in assets:
|
||||||||
Accounts receivable
|
(
|
)
|
(
|
)
|
||||
Inventories
|
(
|
)
|
|
|||||
Prepaid expenses and current assets
|
|
(
|
)
|
|||||
Other assets
|
|
|
||||||
Increase (decrease) in liabilities:
|
||||||||
Accounts payable
|
|
(
|
)
|
|||||
Accrued expenses
|
|
(
|
)
|
|||||
Unearned tuition
|
|
(
|
)
|
|||||
Income taxes payable
|
|
|
||||||
Other liabilities
|
|
(
|
)
|
|||||
Total adjustments
|
(
|
)
|
(
|
)
|
||||
Net cash provided by operating activities
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Capital expenditures
|
(
|
)
|
(
|
)
|
||||
Proceeds from sale of property and equipment
|
|
|
||||||
Proceeds from sale of short-term investments
|
||||||||
Purchase of short-term investments
|
( |
) | ( |
) | ||||
Net cash provided by (used in) investing activities
|
|
(
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net share settlement for equity-based compensation
|
(
|
)
|
(
|
)
|
||||
Dividend payment for preferred stock
|
|
(
|
)
|
|||||
Finance lease principal
|
||||||||
Share repurchase
|
( |
) | ( |
) | ||||
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
|
(
|
)
|
|||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of year
|
|
|
||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of year
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Cash paid during the year for:
|
||||||||
Interest
|
$
|
|
$
|
|
||||
Income taxes
|
$
|
|
$
|
|
||||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Liabilities accrued for or noncash purchases of property and equipment
|
$
|
|
$
|
|
1. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2. |
FINANCIAL AID AND REGULATORY COMPLIANCE
|
•
|
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
|
• |
posting a letter of credit in an amount equal to at least
|
3. |
NET INCOME PER COMMON SHARE
|
Year Ended December 31,
|
||||||||
(in thousands, except share data)
|
2023
|
2022
|
||||||
Numerator:
|
||||||||
Net income
|
$ |
$
|
|
|||||
Less: preferred stock dividend
|
|
(
|
)
|
|||||
Less: allocation to preferred stockholders
|
|
(
|
)
|
|||||
Less: allocation to restricted stockholders
|
|
(
|
)
|
|||||
Net income allocated to common stockholders
|
$
|
|
$
|
|
||||
Basic net income per share:
|
||||||||
Denominator:
|
||||||||
Weighted average common shares outstanding
|
|
|
||||||
Basic net income per share
|
$
|
|
$
|
|
||||
Diluted net income per share:
|
||||||||
Denominator:
|
||||||||
Weighted average number of:
|
||||||||
Common shares outstanding
|
|
|
||||||
Dilutive shares outstanding
|
|
|
||||||
Diluted net income per share
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Unvested restricted stock
|
|
|
||||||
|
|
4. |
REVENUE RECOGNITION
|
Year ended December 31, 2023 | ||||||||||||
Campus
Operations
|
Transitional
|
Consolidated
|
||||||||||
Timing of Revenue Recognition
|
||||||||||||
Services transferred at a point in time
|
$
|
|
$ |
$
|
|
|||||||
Services transferred over time
|
|
|
||||||||||
Total revenues
|
$
|
|
$ |
$
|
|
Year ended December 31, 2022 | ||||||||||||
Campus
Operations
|
Transitional
|
Consolidated
|
||||||||||
Timing of Revenue Recognition
|
||||||||||||
Services transferred at a point in time
|
$
|
|
$ |
$
|
|
|||||||
Services transferred over time
|
|
|
||||||||||
Total revenues
|
$
|
|
$ |
$
|
|
5. |
STUDENT RECEIVABLES
|
Year Ended
|
||||||||
December 31, 2023
|
||||||||
Student
|
||||||||
Year
|
Receivables (1)
|
Write-Off’s (2)
|
||||||
2023
|
$
|
|
$
|
|
||||
2022
|
|
|
||||||
2021
|
|
|
||||||
2020
|
|
|
||||||
2019
|
|
|
||||||
Thereafter
|
|
|
||||||
Total
|
$
|
|
$
|
|
(1)
|
|
(2)
|
|
Year Ended
|
||||
December 31, 2023
|
||||
Balance, beginning of period
|
$
|
|
||
Cumulative effect of ASC Topic 326
|
|
|||
Adjusted beginning of period balance
|
|
|||
Provision for credit losses
|
|
|||
Write-off’s
|
(
|
)
|
||
Balance, at end of period
|
$
|
|
6. |
LEASES
|
|
|
Year Ended December 31,
|
||||||||
in thousands
|
Consolidated Statement of Operations Classification
|
2023
|
2022
|
|||||||
Operating Lease Cost
|
Selling, general and administrative
|
$
|
|
$
|
|
|||||
Finance lease cost
|
|
|||||||||
Amortization of leased assets
|
Depreciation and amortization
|
|
|
|||||||
Interest on lease Liabilities
|
Interest expense
|
|
|
|||||||
Variable lease cost
|
Selling, general and administrative
|
|
|
|||||||
|
|
$
|
|
$
|
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Cash flow information:
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
||||||||
Operating Cash Flows - operating leases
|
$ | $ | ||||||
Financing Cash Flows - finance leases
|
$ | $ | ||||||
Non-cash activity:
|
||||||||
Lease liabilities arising from obtaining right-of-use assets
|
||||||||
Operating leases
|
$ | $ | ||||||
Finance leases
|
$ | $ |
Year Ended
December 31,
|
||||||||
2023
|
2022
|
|||||||
Weighted-average remaining lease term |
||||||||
Operating leases
|
|
|
||||||
Finance leases |
- | |||||||
Weighted-average discount rate
|
|
|||||||
Operating leases |
% | % | ||||||
Finance leases |
% |
As of December 31, 2023 | ||||||||
Operating Leases |
Finance Leases |
|||||||
Year ending December 31,
|
||||||||
2024
|
$
|
|
$ | |||||
2025
|
|
|||||||
2026
|
|
|||||||
2027
|
|
|||||||
2028
|
|
|||||||
Thereafter
|
|
|||||||
Total lease payments
|
|
|||||||
Less: imputed interest
|
(
|
)
|
( |
) | ||||
Present value of lease liabilities
|
$
|
|
$ |
7. |
GOODWILL
|
Gross
Goodwill
Balance
|
Accumulated
Impairment
Losses
|
Net
Goodwill
Balance
|
||||||||||
Balance as of January 1, 2022
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Adjustments
|
-
|
|
|
|||||||||
Balance as of December 31, 2022
|
|
(
|
)
|
|
||||||||
Adjustments
|
-
|
(
|
)
|
(
|
)
|
|||||||
Balance as of December 31, 2023
|
$
|
|
$
|
(
|
)
|
$
|
|
8.
|
REAL ESTATE TRANSACTIONS
|
9. |
PROPERTY, EQUIPMENT AND FACILITIES
|
|
At December 31,
|
|||||||||||
Useful life
(years)
|
2023
|
2022
|
||||||||||
Land
|
-
|
$
|
|
$
|
|
|||||||
Buildings and improvements (a)
|
|
|
|
|||||||||
Equipment, furniture and fixtures
|
|
|
|
|||||||||
Vehicles
|
|
|
|
|||||||||
Construction in progress (a)
|
-
|
|
|
|||||||||
|
|
|||||||||||
Less accumulated depreciation and amortization (a)
|
(
|
)
|
(
|
)
|
||||||||
$
|
|
$
|
|
(a)
|
|
10. |
ACCRUED EXPENSES
|
At December 31,
|
||||||||
2023
|
2022
|
|||||||
Accrued compensation and benefits
|
$
|
|
$
|
|
||||
Accrued real estate taxes
|
|
|
||||||
Other accrued expenses
|
|
|
||||||
$
|
|
$
|
|
11. |
LONG-TERM DEBT
|
12. |
STOCKHOLDERS’ EQUITY
|
Shares
|
Weighted
Average Grant
Date Fair Value
Per Share
|
|||||||
Nonvested restricted stock outstanding at December 31, 2021
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Cancelled
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Nonvested restricted stock outstanding at December 31, 2022
|
|
|
||||||
Granted
|
|
|
||||||
Cancelled
|
(
|
)
|
|
|||||
Vested
|
(
|
)
|
|
|||||
Nonvested restricted stock outstanding at December 31, 2023
|
|
|
Year Ended
|
||||||||
December 31,
|
||||||||
(in thousands, except share
data)
|
2023
|
2022
|
||||||
Total number of shares
repurchased1
|
|
|
||||||
Total cost of shares
repurchased
|
$
|
|
$
|
|
13. |
PENSION PLAN
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
CHANGES IN BENEFIT OBLIGATIONS:
|
||||||||
Benefit obligation-beginning of year
|
$
|
|
$
|
|
||||
Service cost
|
|
|
||||||
Interest cost
|
|
|
||||||
Actuarial loss (gain)
|
|
(
|
)
|
|||||
Benefits paid
|
(
|
)
|
(
|
)
|
||||
Benefit obligation at end of year
|
|
|
||||||
CHANGE IN PLAN ASSETS:
|
||||||||
Fair value of plan assets-beginning of year
|
|
|
||||||
Actual return on plan assets
|
|
(
|
)
|
|||||
Benefits paid
|
(
|
)
|
(
|
)
|
||||
Fair value of plan assets-end of year
|
|
|
||||||
FAIR VALUE IN EXCESS (DEFICIT) OF BENEFIT OBLIGATION FUNDED STATUS:
|
$
|
|
$
|
(
|
)
|
At December 31,
|
||||||||
2023
|
2022
|
|||||||
Noncurrent assets |
$ |
$ |
||||||
Noncurrent liabilities
|
$
|
|
$
|
(
|
)
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Accumulated loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Deferred income taxes
|
|
|
||||||
Accumulated other comprehensive loss
|
$
|
(
|
)
|
$
|
(
|
)
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
COMPONENTS OF NET PERIODIC BENEFIT COST
|
||||||||
Service cost
|
$
|
|
$
|
|
||||
Interest cost
|
|
|
||||||
Expected return on plan assets
|
(
|
)
|
(
|
)
|
||||
Recognized net actuarial loss
|
|
|
||||||
|
$
|
(
|
)
|
$
|
(
|
)
|
Quoted Prices in
Active Markets
for Identical
Assets
|
Significant Other
Observable Inputs
|
Significant
Unobservable
Inputs
|
||||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
|||||||||||||
Equity securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Fixed income
|
|
|
|
|
||||||||||||
International equities
|
|
|
|
|
||||||||||||
Real estate
|
|
|
|
|
||||||||||||
Cash and equivalents
|
|
|
|
|
||||||||||||
Balance at December 31, 2023
|
$
|
|
$
|
|
$
|
|
$
|
|
Quoted Prices in
Active Markets
for Identical
Assets
|
Significant Other
Observable Inputs
|
Significant
Unobservable
Inputs
|
||||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
|||||||||||||
Equity securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Fixed income
|
|
|
|
|
||||||||||||
International equities
|
|
|
|
|
||||||||||||
Real estate
|
|
|
|
|
||||||||||||
Cash and equivalents
|
|
|
|
|
||||||||||||
Balance at December 31, 2022
|
$
|
|
$
|
|
$
|
|
$
|
|
2023
|
2022
|
|||||||
Equity securities
|
|
%
|
|
%
|
||||
Fixed income
|
|
%
|
|
%
|
||||
International equities
|
|
%
|
|
%
|
||||
Real estate
|
|
%
|
|
%
|
||||
Cash and equivalents
|
|
%
|
|
%
|
||||
Total
|
|
%
|
|
%
|
2023
|
2022
|
|||||||
Discount rate
|
|
%
|
|
%
|
||||
Rate of compensation increase
|
|
%
|
|
%
|
2023
|
2022
|
|||||||
Discount rate
|
|
%
|
|
%
|
||||
Rate of compensation increase
|
|
%
|
|
%
|
||||
Long-term rate of return
|
|
%
|
|
%
|
Year Ending December 31,
|
||||
2024
|
$
|
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028
|
|
|||
Years 2029-2033
|
|
14. |
INCOME TAXES
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Current:
|
||||||||
Federal
|
$
|
|
$
|
|
||||
State
|
|
|
||||||
Total
|
|
|
||||||
Deferred:
|
||||||||
Federal
|
|
|
||||||
State
|
|
|
||||||
Total
|
|
|
||||||
Total provision
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
Income before taxes
|
$
|
|
$
|
|
||||||||||||
Expected tax
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
State tax (net of federal benefit)
|
|
|
%
|
|
|
%
|
||||||||||
Other
|
(
|
)
|
-
|
%
|
(
|
)
|
-
|
%
|
||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
At December 31,
|
||||||||
2023
|
2022
|
|||||||
Gross noncurrent deferred tax assets (liabilities)
|
||||||||
Operating lease liability
|
$
|
|
$
|
|
||||
Provision for credit losses
|
|
|
||||||
Finance lease liability
|
||||||||
Depreciation
|
||||||||
Stock-based compensation
|
|
|
||||||
Net operating loss carryforwards
|
||||||||
Accrued expenses
|
|
|
||||||
Other intangibles
|
|
|
||||||
Pension plan liabilities
|
(
|
)
|
|
|||||
Goodwill
|
( |
) | ( |
) | ||||
Finance lease right of use assets
|
(
|
)
|
|
|||||
Operating lease right-of-use assets
|
(
|
)
|
(
|
)
|
||||
Noncurrent deferred tax assets, net
|
$
|
|
$
|
|
15. |
FAIR VALUE
|
December 31, 2023
|
||||||||||||||||||||
Carrying
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
Significant
Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
|||||||||||||||||
Amount
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
||||||||||||||||
Cash equivalents:
|
||||||||||||||||||||
Money market fund
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Treasury bill
|
|
|
|
|
|
|||||||||||||||
Total cash equivalents and short-term investments
|
$ | $ | $ | $ | $ |
December 31, 2022
|
||||||||||||||||||||
Carrying
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
Significant
Other
Observable
Inputs |
Significant
Unobservable
Inputs
|
|||||||||||||||||
Amount
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
||||||||||||||||
Cash equivalents:
|
||||||||||||||||||||
Money market fund
|
$
|
$ | $ | $ | $ | |||||||||||||||
Treasury bill
|
||||||||||||||||||||
Short-term investments:
|
||||||||||||||||||||
Treasury bill
|
|
|||||||||||||||||||
Total cash equivalents and short-term investments
|
$ | $ | $ | $ | $ |
16. |
SEGMENT REPORTING
|
For the Year Ended December 31,
|
||||||||||||||||||||||||
Revenue
|
Operating Income (Loss)
|
|||||||||||||||||||||||
2023
|
% of
Total
|
2022
|
% of
Total
|
2023
|
2022
|
|||||||||||||||||||
Campus Operations |
$ |
% | $ |
% | $ |
$ |
||||||||||||||||||
Transitional | % | % | ( |
) | ( |
) | ||||||||||||||||||
Corporate
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
$
|
|
Total Assets
|
||||||||
December 31, 2023
|
December 31, 2022
|
|||||||
Campus Operations |
$ |
$ |
||||||
Transitional | ||||||||
Corporate
|
|
|
||||||
Total
|
$
|
|
$
|
|
17. |
COMMITMENTS AND CONTINGENCIES
|
18. |
COVID-19 PANDEMIC AND CARES ACT
|
19.
|
SUBSEQUENT EVENTS
|
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, 2023
|
||||||||||||||||
Student receivable allowance
|
$
|
|
$
|
|
$
|
(
|
)1
|
$
|
|
|||||||
December 31, 2022
|
||||||||||||||||
Student receivable allowance
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
1 |
|
Name
|
Jurisdiction
|
Lincoln Technical Institute, Inc. (wholly-owned)
|
New Jersey
|
New England Acquisition LLC (wholly-owned through Lincoln Technical Institute, Inc.)
|
Delaware
|
Nashville Acquisition, LLC (wholly-owned through Lincoln Technical Institute, Inc.)
|
Delaware
|
Euphoria Acquisition, LLC (wholly-owned through Lincoln Technical Institute, Inc.)
|
Delaware
|
LTI Holdings, LLC (wholly-owned through Lincoln Technical Institute, Inc.)
|
Colorado
|
NN Acquisition, LLC (wholly-owned through Lincoln Technical Institute, Inc.)
|
Delaware
|
1. |
I have reviewed this Annual Report on Form 10-K of Lincoln Educational Services Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and
the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
Date: March 4, 2024
|
|
/s/ Scott Shaw
|
|
Scott Shaw
|
|
Chief Executive Officer
|
1. |
I have reviewed this Annual Report on Form 10-K of Lincoln Educational Services Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and
the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
|
Date: March 4, 2024
|
|
Brian Meyers | |
/s/ Brian Meyers
|
|
Chief Financial Officer
|
Date: March 4, 2024
|
|
/s/ Scott Shaw
|
|
Scott Shaw | |
Chief Executive Officer
|
|
/s/ Brian Meyers
|
|
Brian Meyers | |
Chief Financial Officer
|
I. |
Recovery of Erroneously Awarded Compensation
|
II. |
Certain Defined Terms
|
III. |
Executive Officers
|
IV. |
Administration
|
V. |
Prohibition Against Indemnification
|
VI. |
Disclosure Requirements
|
VII. |
Other Repayment Requirements
|
VIII. |
Other Actions by Company
|
IX. |
Effective Date
|
X. |
Amendment; Termination
|
XI. |
Acknowledgement of Executive Officers
|
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
||
---|---|---|---|---|
CURRENT ASSETS: | ||||
Accounts receivable, allowance for credit losses | $ 34,441 | $ 28,560 | ||
PROPERTY, EQUIPMENT AND FACILITIES - accumulated depreciation and amortization | [1] | 140,161 | 146,367 | |
OTHER ASSETS: | ||||
Noncurrent receivables, allowance for credit losses | $ 19,370 | $ 6,810 | ||
STOCKHOLDERS' EQUITY: | ||||
Common stock, par value (in dollars per share) | $ 0 | $ 0 | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||
Common stock, shares issued (in shares) | 31,359,110 | 31,147,925 | ||
Common stock, shares outstanding (in shares) | 31,359,110 | 31,147,925 | ||
Series A Convertible Preferred Stock [Member] | ||||
SERIES A CONVERTIBLE PREFERRED STOCK | ||||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||
|
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||||
Net income | $ 25,997 | $ 12,634 | ||
Other comprehensive income | ||||
Employee pension plan adjustments, net of taxes | [1] | 924 | 280 | |
Comprehensive income | $ 26,921 | $ 12,914 | ||
|
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Other comprehensive income | ||
Employee pension plan adjustments, taxes | $ 0.3 | $ 0.1 |
CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands |
Common Stock [Member] |
Common Stock [Member]
Net Cumulative Effect from Adoption [Member]
|
[1] | Additional Paid-in Capital [Member] |
Additional Paid-in Capital [Member]
Net Cumulative Effect from Adoption [Member]
|
[1] | Treasury Stock [Member] |
Treasury Stock [Member]
Net Cumulative Effect from Adoption [Member]
|
[1] | Retained Earnings [Member] |
Retained Earnings [Member]
Net Cumulative Effect from Adoption [Member]
|
[1] | Accumulated Other Comprehensive Loss [Member] |
Accumulated Other Comprehensive Loss [Member]
Net Cumulative Effect from Adoption [Member]
|
[1] | Total |
Net Cumulative Effect from Adoption [Member] |
[1] |
Preferred Stock [Member]
Series A Convertible Preferred Stock [Member]
|
Preferred Stock [Member]
Series A Convertible Preferred Stock [Member]
Net Cumulative Effect from Adoption [Member]
|
[1] | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
BALANCE at Dec. 31, 2021 | $ 141,377 | $ 32,439 | $ (82,860) | $ 39,702 | $ (1,240) | $ 129,418 | $ 11,982 | ||||||||||||||||
BALANCE (in shares) at Dec. 31, 2021 | 27,000,687 | 12,700 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Net income | $ 0 | 0 | 0 | 12,634 | 0 | 12,634 | $ 0 | ||||||||||||||||
Preferred stock dividend | 0 | 0 | 0 | (1,111) | 0 | (1,111) | 0 | ||||||||||||||||
Preferred Stock Conversion | $ 0 | 11,982 | 0 | 0 | 0 | 11,982 | $ (11,982) | ||||||||||||||||
Preferred Stock Conversion (in shares) | 5,381,356 | (12,700) | |||||||||||||||||||||
Employee pension plan adjustments | $ 0 | 0 | 0 | 0 | 280 | 280 | $ 0 | ||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||
Restricted stock | $ 0 | 3,111 | 0 | 0 | 0 | 3,111 | $ 0 | ||||||||||||||||
Restricted stock (in shares) | 606,950 | 0 | |||||||||||||||||||||
Treasury stock cancellation | $ (82,860) | 0 | 82,860 | 0 | 0 | 0 | $ 0 | ||||||||||||||||
Share repurchase | $ (9,445) | 0 | 0 | 0 | 0 | (9,445) | $ 0 | ||||||||||||||||
Share repurchase (in shares) | (1,572,414) | 0 | |||||||||||||||||||||
Net share settlement for equity-based compensation | $ 0 | (1,992) | 0 | 0 | 0 | (1,992) | $ 0 | ||||||||||||||||
Net share settlement for equity-based compensation (in shares) | (268,654) | 0 | |||||||||||||||||||||
BALANCE at Dec. 31, 2022 | $ 49,072 | 45,540 | 0 | 51,225 | (960) | $ 144,877 | $ 0 | ||||||||||||||||
BALANCE (in shares) at Dec. 31, 2022 | 31,147,925 | 0 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 [Member] | ||||||||||||||||||||||
Net income | $ 0 | 0 | 0 | 25,997 | 0 | $ 25,997 | $ 0 | ||||||||||||||||
Employee pension plan adjustments | 0 | 0 | 0 | 0 | 924 | 924 | 0 | ||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||
Restricted stock | $ 0 | 5,894 | 0 | 0 | 0 | 5,894 | $ 0 | ||||||||||||||||
Restricted stock (in shares) | 713,299 | 0 | |||||||||||||||||||||
Share repurchase | $ (891) | 0 | 0 | 0 | 0 | (891) | $ 0 | ||||||||||||||||
Share repurchase (in shares) | (165,064) | 0 | |||||||||||||||||||||
Net share settlement for equity-based compensation | $ 0 | (2,054) | 0 | 0 | 0 | (2,054) | $ 0 | ||||||||||||||||
Net share settlement for equity-based compensation (in shares) | (337,050) | 0 | |||||||||||||||||||||
BALANCE at Dec. 31, 2023 | $ 48,181 | $ 0 | $ 49,380 | $ 0 | $ 0 | $ 0 | $ 69,279 | $ (7,943) | $ (36) | $ 0 | $ 166,804 | $ (7,943) | $ 0 | $ 0 | |||||||||
BALANCE (in shares) at Dec. 31, 2023 | 31,359,110 | 0 | 0 | 0 | |||||||||||||||||||
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Business Activities— Lincoln Educational Services Corporation and its
subsidiaries (collectively, the “Company”, “we”, “our” and “us”, as applicable) provide diversified career-oriented post-secondary education to recent high school graduates and working adults. The Company, which currently operates 21 campuses, in 13 states has
added two additional campuses, one located in East Point, Georgia and the other in Houston, Texas. As of December 31, 2023, these
campuses were not operational however, the East Point, Georgia campus is expected to hold its first class in March of 2024 and the Houston, Texas campus is expected to become operational in the first quarter of 2026. Lincoln Educational
Services Corporation offers programs in skilled trades (which include HVAC, welding and computerized
numerical control and electrical and electronic systems technology, among other programs), automotive technology, healthcare services (which include nursing, dental assistant and medical administrative assistant, among other programs) and
hospitality services and information technology (which include culinary, therapeutic massage, cosmetology and aesthetics and information technology programs). The schools operate under Lincoln Technical Institute, Lincoln College of
Technology, Lincoln Culinary Institute, and Euphoria Institute of Beauty Arts and Sciences and associated brand names. Most of the campuses serve major metropolitan markets and each typically offers courses in multiple areas of study. Five of the campuses are destination schools, which attract students from across the United States and, in some cases, from abroad. The Company’s
other campuses primarily attract students from their local communities and surrounding areas. All of the campuses are nationally accredited and are eligible to participate in federal financial aid programs administered by the U.S. Department
of Education (the “DOE”) and applicable state education agencies and accrediting commissions which allow students to apply for and access federal student loans as well as other forms of financial aid. The Company was incorporated in New Jersey
in 2003 as the successor-in-interest to various acquired schools including Lincoln Technical Institute, Inc. which opened its first campus in Newark, New Jersey in 1946.
As of January 1, 2023, the Company’s business is now organized into two reportable business segments: (a) Campus Operations, and (b) Transitional. Based on trends in student demand and program expansion, there have been more cross-offerings of programs among the various
campuses. Given this change, the Company has revised the way it manages the business, evaluates performance, and allocates resources, resulting in an updated segment structure. The Campus Operations segment includes campuses that are continuing
in operation and contribute to the Company’s core operations and performance. The Transitional segment refers to campuses that are marked for closure and are currently being taught-out. As of December 31, 2023, the only campus classified in the
Transitional segment is the Somerville, Massachusetts campus, which has been fully taught-out as of year-end.
Liquidity—As of December 31, 2023, the Company had $80.3 million in cash and cash equivalents and restricted cash, compared to $50.3 million in cash and cash equivalents and restricted cash, in addition to $14.8 million in short-term investments in the prior year. The Company believes
that its likely sources of cash should be sufficient to fund operations for the next 12 months and thereafter for the foreseeable future.
Principles of Consolidation—The accompanying Consolidated Financial Statements include the accounts of Lincoln Educational Services Corporation and its wholly-owned subsidiaries. All intercompany accounts and transactions have been
eliminated.
Cash and Cash Equivalents—Cash and cash equivalents include all cash balances and highly-liquid short-term investments, which contain original maturities within three months of purchase. Pursuant to the DOE’s cash management requirements, the Company retains funds from financial aid programs under Title IV of the Higher Education Act of 1965 in segregated cash
management accounts. The segregated accounts do not require a restriction on use of the cash and, as such, these amounts are classified as cash and cash equivalents on the consolidated balance sheets.
Restricted Cash – Restricted cash consists of cash currently utilized as collateral for the Company’s letters of credit.
Short-term Investments – Short-term investments not considered cash and cash equivalents are investments with maturity dates of three months to 12 months from the date of purchase.
Accounts Receivable—The Company reports accounts receivable at net realizable value, which is equal to the gross receivable less an estimated allowance for uncollectible accounts. Noncurrent accounts receivable represents amounts due from
graduates in excess of 12 months from the balance sheet date.
Allowance for Credit Losses—On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”)
2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. As a result of the adoption, the Company has revised the way in which it calculates reserves on outstanding student accounts
receivable balances. Details considered by management in the estimate include the following:
We extend credit to a portion of the students who are enrolled at our academic institutions for tuition and certain other educational costs. Based upon past
experience and judgment, we establish an allowance for credit losses with respect to student receivables which we estimate will ultimately not be collectible. Our standard student receivable allowance is based on an estimate of lifetime
expected credit losses for student receivables that considers vintages of receivables to determine a loss rate. Our estimation methodology considers a number of quantitative and qualitative factors that, based on our collection experience, we
believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors include, but are not limited to:
internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored
and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trending analysis and comparing estimated and actual performance.
Management makes a series of assumptions to determine what is believed to be the appropriate level of allowance for credit losses. Management determines a
reasonable and supportable forecast based on the expectation of future conditions over a supportable forecast period as described above, as well as qualitative adjustments based on current and future conditions that may not be fully captured in
the historical modeling factors described above. All of these estimates are susceptible to significant change.
We monitor our collections and write-off experience to assess whether or not adjustments to our allowance percentage estimates are necessary. Changes in trends in
any of the factors that we believe impact the collection of our student receivables, as noted above, or modifications to our collection practices, and other related policies may impact our estimate of our allowance for credit losses and our
results from operations.
Because a substantial portion of our revenue is derived from Title IV Programs, any legislative or regulatory action that significantly reduces the funding
available under Title IV Programs, or the ability of our students or institutions to participate in Title IV Programs, would likely have a material impact on the realizability of our receivables.
Inventories—Inventories consist mainly of textbooks, computers, tools and supplies. Inventories are valued at the lower of cost or market on a first-in, first-out basis.
Property,
Equipment and Facilities—Depreciation and Amortization—Property,
equipment and facilities are stated at cost. Major renewals and improvements are capitalized, while repairs and maintenance are expensed when incurred. Upon the retirement, sale or other disposition of assets, costs and related accumulated
depreciation are eliminated from the accounts and any gain or loss is reflected in operating income. For financial statement purposes, depreciation of property and equipment is computed using the straight-line method over the estimated useful
lives of the assets, and amortization of leasehold improvements is computed over the lesser of the term of the lease or its estimated useful life.
Asset Retirement Obligation—Lincoln recognizes and records an Asset Retirement Obligation (“ARO”) if there is a clear obligation at the termination of a lease, and the potential obligation is measurable in both
potential cost and time. If both conditions are met Lincoln will record the ARO at the Present Value (“PV”) of the future obligation and incur accretion expense over the course of the term, using the lease end date as the termination date.
Should the components or assumptions used to assess the ARO materially change, the ARO is re-measured, and adjustments recorded.
Advertising Costs—Costs related to advertising are expensed as incurred and are approximately $38.2 million and $35.0 million for the years ended December 31, 2023 and 2022, respectively. These amounts are included in selling, general and administrative expenses
in the Consolidated Statements of Operations.
Goodwill—Goodwill represents the excess of purchase price over the fair value of tangible net assets and identifiable intangible assets of
the businesses acquired. Lincoln tests goodwill for impairment annually, in the fourth quarter of each year, unless there are events or changes in circumstances that indicate an impairment may have occurred. Impairment may result from
deterioration in performance, adverse market conditions, adverse changes in laws or regulations, the restriction of activities associated with the acquired business, and/or a variety of other circumstances. If we determine that impairment has
occurred, we record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made.
Impairment of Long-Lived Assets—The Company reviews the carrying
value of its long-lived assets and identifiable intangibles for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. For other long-lived assets, including right-of-use (“ROU”)
lease assets, the Company evaluates assets for recoverability when there is an indication of potential impairment. Factors the Company considers important, which could trigger an impairment review, include significant changes in the manner of the
use of the asset, significant changes in historical trends in operating performance, significant changes in projected operating performance, and significant negative economic trends. If the undiscounted cash flows from a group of assets being
evaluated is less than the carrying value of that group of assets, the fair value of the asset group is determined and the carrying value of the asset group is written down to fair value.
When we perform the quantitative impairment test for long-lived assets, we examine estimated future cash flows using Level 3 inputs. These cash flows are evaluated by using weighted probability techniques as well as
comparisons of past performance against projections. Assets may also be evaluated by identifying independent market values. If the Company determines that an asset’s carrying value is impaired, it will record a write-down of the carrying value of the asset and charge the impairment as an operating expense in the
period in which the determination is made.
On June 8, 2023, the Company consummated the sale of its Nashville, Tennessee property. See “Note 8, Real Estate Transactions.” The result of the sale created
a change in the trajectory of the fair value of the Nashville, Tennessee operations and as such, the Company recorded a pre-tax non-cash impairment charge of $0.4 million relating to long-lived assets.
On December 31, 2022, as a result of impairment testing it was determined that there was a long-lived asset impairment of $1.0 million. The impairment was the result of an assessment of the current market value, as compared to the carrying value of the assets.
Concentration of Credit Risk—Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments. The Company places its cash and cash equivalents with high
credit quality financial institutions. The Company’s cash balances with financial institutions typically exceed the Federal Deposit Insurance Corporation (“FDIC”) limit of $0.25 million. The Company’s cash balances on deposit as of December 31, 2023, exceeded the balance insured by the FDIC by approximately $34.3 million. The Company has not experienced any losses to date on its invested cash.
The Company extends credit for tuition and fees to many of its students. The credit
risk with respect to these accounts receivable is mitigated by the students’ participation in federally funded financial aid programs unless students withdraw prior to the receipt of federal funds for those students. In addition, the remaining
tuition receivables are primarily comprised of smaller individual amounts due from students. With respect to student receivables, the Company had no significant concentrations of credit risk as of each of December 31, 2023 and 2022, respectively.
Use of Estimates in the Preparation of Financial Statements—The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the period. On an ongoing
basis, the Company evaluates the estimates and assumptions, including those used to determine the incremental borrowing rate to calculate lease liabilities and ROU assets, lease term to calculate lease cost, revenue recognition, bad debts,
impairments, fixed assets, income taxes, benefit plans and certain accruals. Actual results could differ from those estimates.
Income Taxes—The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”). This statement requires an asset and a liability approach for measuring deferred taxes based on temporary differences between
the financial statement and tax bases of assets and liabilities existing at each balance sheet date using enacted tax rates for years in which taxes are expected to be paid or recovered.
In accordance with ASC 740, the Company assesses our deferred tax asset to determine whether all or any portion of the asset
is more likely than not unrealizable. A valuation allowance is required to be established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be
realized. In accordance with ASC 740, our assessment considers whether there has been sufficient income in recent years and whether sufficient income is expected in future
years in order to utilize the deferred tax asset. In evaluating the realizability of deferred income tax assets, the Company considers, among other things, historical levels of income, expected future income, the expected timing of the reversals
of existing temporary reporting differences, and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Significant judgment is required in determining the future tax
consequences of events that have been recognized in our Consolidated Financial Statements and/or tax returns. Differences between anticipated and actual outcomes of these future tax consequences could have a material impact on the Company’s
consolidated financial position or results of operations. Changes in, among other things, income tax legislation, statutory income tax rates or future income levels could materially impact the Company’s valuation of income tax assets and
liabilities and could cause our income tax provision to vary significantly among financial reporting periods.
On August 16, 2022, the Inflation Reduction Act was enacted and signed into law. The Inflation Reduction Act is a budget reconciliation package that includes significant changes relating to tax, climate change,
energy and health care. The income tax provision of the act includes, among other items, a corporate alternative minimum tax of 15.0%, an excise tax of 1.0% on corporate stock buybacks, energy-related tax credits and additional IRS funding. The
tax provisions of the Inflation Reduction Act have not had a material impact on the Company’s Consolidated Financial Statements.
We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. During the fiscal years ended December 31, 2023 and 2022, we did not record any interest and penalties expense associated with uncertain tax positions, as we do not have any uncertain tax positions.
Start-up Costs—Costs related to the start of new campuses are expensed as incurred.
New Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board
(“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this ASU require that public business entities on an
annual basis 1) disclose specific categories in the rate reconciliation, and 2) provide additional information for reconciling items that meet a quantitative threshold. The amendments require disclosure about income taxes paid by federal, state
and foreign taxes, and by individual jurisdictions in which income taxes paid is equal or greater than 5 percent of total income taxes paid. The amendment also requires entities to disclose income or loss from continuing operations before income
tax expense disaggregated between domestic and foreign and income tax expense or benefit from continuing operations disaggregated by federal, state and foreign. For all public business entities, ASU 2023-09 is effective for annual periods
beginning after December 15, 2024; early adoption is permitted. We do not expect this ASU will have a material impact to the Consolidated Financial Statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic
326): Measurement of Credit Losses on Financial Instruments and subsequently issued additional guidance that modified ASU 2016-13. The ASU and the subsequent modifications were identified as Accounting Standard Codification (“ASC”) Topic
326. The standard requires an entity to change its accounting approach in determining impairment of certain financial instruments, including trade receivables, from an “incurred loss” methodology to a “current expected credit loss” methodology (the
“CECL methodology”). The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses on financial assets measured at amortized cost at the time the financial asset is originated or
acquired. The allowance is adjusted each period for changes in expected lifetime credit losses. The CECL methodology represents a significant change from prior U.S. GAAP, which generally required that a loss be incurred before it was recognized.
Further, the FASB issued ASU No. 2019-04, ASU No. 2019-05, ASU No. 2019-11 and ASU No. 2022-02 to provide additional guidance on the credit losses standard. In November 2019, FASB issued ASU No. 2019-10, Financial
Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). This ASU deferred the effective date of ASU 2016-13 for public companies that are considered smaller reporting companies as defined by
the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Additionally, in February and March 2020, the FASB issued ASU 2020-02, Financial Instruments—Credit
Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842).
ASU 2020-02 added an SEC paragraph pursuant to the issuance of SEC Staff Accounting Bulletin No. 119 on loan losses to FASB Codification Topic 326 and also updated the SEC section of the codification for the change in the effective date of Topic
842. As of the January 1, 2023 date of adoption, based on forecasts of macroeconomic conditions and exposures at that time, the aggregate impact to the Company resulted in an opening balance sheet adjustment increasing the allowance for credit
losses related to the Company’s accounts receivables of approximately $10.8 million, a decrease in retained earnings of $7.9 million, after-tax and a deferred tax asset increase of $2.9 million.
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FINANCIAL AID AND REGULATORY COMPLIANCE |
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FINANCIAL AID AND REGULATORY COMPLIANCE [Abstract] | |||||||||||||||
FINANCIAL AID AND REGULATORY COMPLIANCE |
Financial Aid
The Company’s schools and students participate in a variety of government-sponsored financial aid programs that assist students in paying for the cost of their
education. The largest source of such support is the federal programs of student financial assistance under Title IV of the Higher Education Act of 1965, as amended, commonly referred to as the Title IV Programs, which are administered by the DOE.
During the fiscal years ended December 31, 2023 and 2022, approximately 81% and 74%, respectively, of net revenues on a cash basis were indirectly derived from funds distributed under Title IV Programs.
For the fiscal years ended December 31, 2023 and 2022, the Company calculated that no individual DOE reporting entity received more than 90% of its revenue, determined on a cash basis pursuant to DOE regulations, from the Title IV Program funds. The Company’s calculations may be
subject to review by the DOE. Under DOE regulations, a proprietary institution that derives more than 90% of its total revenue from the Title IV Programs for
consecutive fiscal years becomes immediately ineligible to participate in the Title IV Programs and may not reapply for eligibility until the end of fiscal years. An institution with revenues exceeding 90% of its total revenue for a single fiscal year, will be placed on provisional certification and may be subject to
other enforcement measures. If one of the Company’s institutions violated the 90/10 Rule and became ineligible to participate in Title IV Programs but continued to disburse Title IV Program funds, the DOE would require the institution to repay all
Title IV Program funds received by the institution after the effective date of the loss of eligibility.Regulatory Compliance
All institutions participating in Title
IV Programs must satisfy specific standards of financial responsibility. The DOE evaluates institutions for compliance with these standards each year, based on the institution’s annual audited financial statements, as well as following a change in
ownership resulting in a change of control of the institution.
The
most significant financial responsibility measurement is the institution’s composite score, which is calculated by the DOE based on three ratios:
The DOE assigns a
strength factor to the results of each of these ratios on a scale from negative 1.0 to positive 3.0, with negative 1.0 reflecting
financial weakness and positive 3.0 reflecting financial strength. The DOE then assigns a weighting percentage to each ratio and adds
the weighted scores for the three ratios together to produce a composite score for the institution. The composite score must be at least 1.5
for the institution to be deemed financially responsible without the need for further oversight.
If an institution’s composite score is below 1.5, but is at least 1.0, it is in a category denominated by the DOE as “the zone.” Under the DOE regulations, institutions that are in the zone typically may be permitted by the DOE to continue
to participate in the Title IV Programs by choosing one of two alternatives: 1) the “Zone Alternative” under which an institution is required to make disbursements to students under the Heightened Cash Monitoring 1 (“HCM1”) payment method, or a
different payment method other than the advance payment method, and to notify the DOE within 10 days after the occurrence of certain
oversight and financial events or 2) submit a letter of credit to the DOE equal to 50 percent of the Title IV Program funds received
by the institution during its most recent fiscal year. The DOE permits an institution to participate under the “Zone Alternative” for a period of up to
consecutive fiscal years. Under the HCM1 payment method, the institution is required to make Title IV Program disbursements to eligible students and parents before it requests or receives funds for the amount of those disbursements from the
DOE. As long as the student accounts are credited before the funding requests are initiated, an institution is permitted to draw down funds through the DOE’s electronic system for grants management and payments for the amount of disbursements
made to eligible students. Unlike the Heightened Cash Monitoring 2 (“HCM2”) and thereimbursement payment methods, the HCM1 payment method typically does not require schools to submit documentation to the DOE and wait for DOE approval before drawing down Title IV Program
funds. Effective July 1, 2016, a school under HCM1, HCM2 or reimbursement payment methods must also pay any credit balances due to a student before drawing down funds for the amount of those disbursements from the DOE, even if the student or
parent provides written authorization for the school to hold the credit balance.
If an institution’s composite score is below 1.0, the
institution is considered by the DOE to lack financial responsibility. If the DOE determines that an institution does not satisfy the DOE’s financial responsibility standards, depending on its composite score and other factors, that institution may
establish its eligibility to participate in the Title IV Programs on an alternative basis by, among other things:
For the 2023 and 2022 fiscal years, we calculated our composite score to be 3.0
and 2.9, respectively. These scores are subject to determination by the DOE based on its review of our consolidated audited financial
statements for the 2023 and 2022 fiscal years, but we believe it is likely that the DOE will determine that our institutions comply with the composite score requirement.
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NET INCOME PER COMMON SHARE |
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NET INCOME PER COMMON SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER COMMON SHARE |
Basic and diluted earnings per share (“EPS”) are determined in accordance with ASC Topic 260, “Earnings per Share”, which specifies the computation, presentation and disclosure
requirements for EPS. Basic EPS excludes all dilutive Common Stock equivalents. It is based upon the weighted average number of common shares outstanding during the period. Diluted EPS, as calculated using the treasury stock method, reflects the
potential dilution that would occur if our dilutive outstanding stock options and stock awards were issued.
During the year ended December 31, 2022, the Company presented its basic and diluted
income per common share using the two-class method, which requires all outstanding Series A Preferred Stock (“Series A Preferred Stock”) and unvested shares of Restricted Stock that contain rights to non-forfeitable dividends and therefore
participate in undistributed income with common shareholders to be included in computing income per common share. Under the two-class method, net income is reduced by the amount of dividends declared in the period for each class of Common Stock
and participating security. The remaining undistributed income is then allocated to Common Stock and participating securities based on their respective rights to receive dividends. Series A Preferred Stock and shares of unvested Restricted
Stock contain non-forfeitable rights to dividends on an if-converted basis and on the same basis as shares of the Company’s Common Stock, respectively, and are considered participating securities. The Series A Preferred Stock and unvested
Restricted Stock are not included in the computation of basic income per common share in periods in which we have a net loss, as the Series A Preferred Stock and unvested Restricted Stock are not contractually obligated to share in our net
losses. However, the cumulative dividends on Series A Preferred Stock for the period decreases the income or increases the net loss allocated to common shareholders unless the dividend is paid in the period. Basic income per common share has
been computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding.
On November 30, 2022, the Company exercised in full its right of mandatory conversion of the Company’s Series A Preferred Stock. In connection with the conversion, each
share of Series A Preferred Stock was cancelled and converted into 423.729 shares of the Company’s Common Stock, no par value per share (the “Common Stock”). No
shares of Series A Preferred Stock remain outstanding and all rights of the holders to receive future dividends have been terminated. As a result of the conversion, the aggregate 12,700 shares of Series A Preferred Stock outstanding were converted into 5,381,356
shares of Common Stock. As of December 31, 2023, the Company still maintains Restricted Stock, but these shares do not participate in the disbursement of dividends.
The following is a reconciliation of the numerator and denominator of the net income per share computations for the years ended December 31, 2023 and 2022:
The following table summarizes the potential weighted average shares of Common Stock that were excluded from the determination of our diluted shares outstanding as
they were anti-dilutive:
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REVENUE RECOGNITION |
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REVENUE RECOGNITION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION |
Substantially all of our revenues are considered to be revenues from contracts with students. We determine standalone selling price based on the price at which the distinct services or goods are sold
separately. The related accounts receivable balances are recorded in our balance sheets as student accounts receivable. We do not have significant revenue recognized from performance obligations that were satisfied in prior periods, and we do not
have any transaction price allocated to unsatisfied performance obligations other than in our unearned tuition. We record revenue for students who withdraw from our schools only to the extent that it is probable that a significant reversal in the
amount of cumulative revenue recognized will not occur. Unearned tuition represents contract liabilities primarily related to our tuition revenue. We have assessed the costs incurred to obtain a contract with a student and determined them to be
immaterial.
Unearned tuition in the amount of $26.9 million and $24.2 million is recorded in the current liabilities section of the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022,
respectively. The change in this contract liability balance during the fiscal year ended December 31, 2023 is the result of payments received in advance of satisfying performance obligations, offset by revenue recognized during that period. Revenue
recognized for the fiscal year ended December 31, 2023 that was included in the contract liability balance at the beginning of the year was $23.3
million.
The following table depicts the timing of revenue recognition by segment:
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STUDENT RECEIVABLES |
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STUDENT RECEIVABLES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STUDENT RECEIVABLES |
Student receivables represent funds owed to us in exchange for the educational
services provided to a student. Student receivables are reflected net of an allowance for credit losses at the end of the reporting period. Student receivables, net, are reflected on our Consolidated Balance Sheets as components of both current and
non-current assets.
Our students pay for their costs through a variety of funding sources, including
federal loan and grant programs, institutional payment plans, Veterans Administration and other military funding and grants, private and institutional scholarships and cash payments. Cash receipts from government-related sources are typically
received during the current academic term. Students who have not applied for any type of financial aid generally set up a payment plan with the institution and make payments on a monthly basis as per the terms of the payment plan. A student
receivable balance is written off when deemed uncollectable, which is typically once a student is out of school and there has been no payment activity on the account for 150 days. If, however, the student does remit a payment during this time period, the 150-day
policy for write-off starts again until the students either (1) continues making payments or (2) the student does not make any additional payments and is then subsequently written off after 150 days.
Students enrolled in the Company’s programs are provided with a variety of funding
resources, including financial aid, grants, scholarships and private loans. After exhausting all fund options, if the student is still in need of additional financing, the Company may offer an institutional loan as a lender of last resort.
Institutional loan terms are pre-determined at enrollment and are not typically restructured.
Our standard student receivable allowance is based on an estimate of lifetime
expected credit losses on student receivables that considers vintages of receivables to determine a loss rate. In considering lifetime credit losses, if the expected life goes beyond the Company’s reasonable ability to forecast, the Company then
reverts back to historical loss experience as an indicator of collections. In determining the expected credit losses for the period, student receivables were disaggregated and pooled into two different categories to refine the calculation. Other
information considered included external factors outside the Company’s control, which included, but was not limited to, the effects of COVID-19. Given that collection history during the pandemic was not considered to be a reliable indicator of a
student’s repayment history, the Company adjusted the historical loss calculation by normalizing the financial data relating to that time period. Our estimation methodology further considered a number of quantitative and qualitative factors that,
based on our collection experience, we believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors
include, but are not limited to: internal repayment history, student status, changes in the current economic condition, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid
process with the student. These factors are monitored and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trending analysis and comparing estimated and actual performance.
Student Receivables
The Company has student receivables that are due greater than 12 months from the
date of our Consolidated Balance Sheets. As of December 31, 2023, and December 31, 2022, the amount of non-current student receivables under payment plans that is longer than 12 months in duration, net of allowance for credit losses, was $17.5 million and $22.7 million,
respectively. The following table
presents the amortized cost basis of student receivables as of December 31, 2023 by year of origination.
*As the Company did not adopt ASC Topic 326
until January 1, 2023, no comparative information from the prior year is available.
The Company does not utilize or maintain data pertaining to student credit
information.
Allowance for Credit Losses
We define student receivables as a portfolio segment under ASC Topic 326. Changes
in our current and non-current allowance for credit losses related to our student receivable portfolio are calculated in accordance with the guidance effective January 1, 2023 under CECL for the year ended December 31, 2023.
Fair Value Measurements
The carrying amount reported in our Consolidated Balance Sheets for the current
portion of student receivables approximates fair value because of the nature of these financial instruments as they generally have short maturity periods. It is not practicable to estimate the fair value of the non-current portion of student
receivables, since observable market data is not readily available, and no reasonable estimation methodology exists.
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LEASES |
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LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES |
The Company determines if an arrangement is a lease at inception. The Company considers any contract where there is an identified asset as to which the Company has the
right to control its use in determining whether the contract contains a lease. An operating lease ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease
payments arising from the lease. Operating lease ROU assets and liabilities are to be recognized at the commencement date based on the present value of lease payments over the lease term. As all of the Company’s operating leases do not provide an
implicit rate, the Company uses an incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. We estimate the incremental borrowing rate based on a yield curve
analysis, utilizing the interest rate derived from the fair value analysis of our credit facility and adjusting it for factors that appropriately reflect the profile of secured borrowing over the expected term of the lease. The operating lease ROU
assets include any lease payments made prior to the rent commencement date and exclude lease incentives. Our leases have remaining lease terms of one year
to 22 years. Lease terms may include options to extend the lease term used in determining the lease obligation when it is reasonably
certain that the Company will exercise that option. Lease expense for lease payments are recognized on a straight-line basis over the lease term for operating leases.
On October 31, 2023, the Company entered into a lease for approximately 100,000 square feet of space to serve as the Company’s new campus in Houston, Texas. The lease term commenced on January 2, 2024, with an initial lease term of
. The lease contains three
five-year renewal options. On October 18, 2023,
the Company entered into a lease for approximately 120,000 square feet of space to serve as the Company’s new Nashville, Tennessee
campus. The lease term commenced on November 1, 2023, with an initial lease term of 15 years. The lease contains two five-year renewal options. See
Note 8, “Real Estate Transactions”.
On September 28, 2023,
the Company purchased a 90,000 square foot property located at 311 Veterans Highway, Levittown, Pennsylvania for approximately $10.2 million and has subsequently on January 30, 2024 entered into a sale-leaseback transaction for this property. See Note 8, “Real Estate
Transactions”. As of December 31, 2023, this property is classified as held-for-sale on the Consolidated Balance Sheets.
On November 3, 2022,
the Board of Directors approved a plan to close the Somerville, Massachusetts campus, which as of December 31, 2023, has been fully taught-out
On June 30, 2022, the Company executed a lease for approximately 55,000 square feet of space to serve as the Company’s new campus in East Point, Georgia. The lease term commenced in August 2022, with total payments due on an undiscounted basis of $12.2 million over the 12-year initial
term. The lease contains two five-year
renewal options that may be exercised by the Company at the end of the initial lease term. The Company had no involvement in the construction or design of the facilities on the property and was not deemed to be in control of the asset prior to
the lease commencement date. For the year ended December 31, 2023, the Company incurred approximately $0.8 million in rent expenses.
The following table presents
components of lease cost and classification on the Consolidated Statement of Operations:
The net change in ROU asset and operating lease liability is included in the net change in other assets in the Consolidated Statements of Cash Flows for the fiscal years ended
December 31, 2023 and 2022.
The net change in ROU asset and finance lease liability is split between principal payments, interest expense and amortization expense. Principal payments are classified in the
financing section, interest expense is included in net income and amortization expense is broken out separately in the operating section of the Consolidated Statements of Cash Flows.
Supplemental cash flow information and non-cash activity related to our leases are as follows:
During the year ended December 31, 2023, the Company entered into three new leases and five lease modifications that resulted in noncash re-measurement of the related
ROU asset and operating lease liability of $10.5 million. In addition, during the fourth quarter of 2023, the Company entered into a
finance lease and recorded a $16.0 million ROU asset and liability.
Weighted-average remaining lease term and discount rate for our leases are as follows:
Maturities of lease liabilities by fiscal year for our leases as of December 31, 2023 are as follows:
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GOODWILL |
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GOODWILL [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL |
Changes in the carrying amount of goodwill during the fiscal years ended December 31, 2023 and 2022 are as follows:
When we perform our annual goodwill impairment assessment we have the option to perform a qualitative
assessment based on a number of factors impacting our reporting units (step 0). When a qualitative assessment is performed, a number of factors are evaluated to determine whether it is more likely than not that the fair value of a reporting unit
is less than its carrying value. Our qualitative assessment is subjective. It includes a review of macroeconomic and industry factors, review of financial and non-financial performance measures, including projected student starts and assessment of
adverse events that may negatively impact a reporting unit’s carrying value. Adverse events would include, but are not limited to, difficulty in accessing capital, a greater competitive environment, decline in market-dependent multiples or metrics,
regulatory or political developments, change in key personnel, strategy, or customers, or litigation. If we conclude based on our qualitative review that it is more likely than not that the fair value of the reporting unit is less than the carrying
value, we proceed with a quantitative impairment test.
When we perform our quantitative impairment test we believe the most critical assumptions and estimates
in determining the estimated fair value of our reporting units include, but are not limited to, future tuition revenues, operating costs, working capital changes, capital expenditures and a discount rate. The assumptions used in determining our
expected future cash flows consider various factors such as historical operating trends particularly in student enrollment and pricing and long-term operating strategies and initiatives.
If we determine that quantitative tests are necessary, we determine the fair value of each reporting
unit using an equal weighting of the discounted cash flow model and the market approach, or if required, we will evaluate other asset value-based approaches. Our judgment is necessary in forecasting future cash flows and operating results,
critical assumptions include growth rates, changes in operating costs, capital expenditures, changes in weighted average costs of capital, and the fair value of an asset based on the price that would be received in a current transaction to sell the
asset. Additionally, we obtain independent market metrics for the industry and our peers to assist in the development of these key assumptions. This process is consistent with our internal forecasts and operating plans.
On June 8, 2023, the Company consummated the sale of its Nashville, Tennessee property. See Note 8,
“Real Estate Transactions.” The result of the sale created a change in the trajectory of the fair value of the Nashville, Tennessee operations and as such, the Company recorded a pre-tax non-cash impairment charge of $3.8 million relating to goodwill. No
further impairments to goodwill were deemed necessary as of December 31, 2023. For the year ended December 31, 2022, there were no
impairments related to goodwill.
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REAL ESTATE TRANSACTIONS |
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Dec. 31, 2023 | |||
REAL ESTATE TRANSACTIONS [Abstract] | |||
REAL ESTATE TRANSACTIONS |
Purchase and Sale-leaseback
Transaction – Philadelphia, Pennsylvania Area Campus
On September 28, 2023, the
Company purchased a 90,000 square foot property located at 311 Veterans Highway, Levittown, Pennsylvania for approximately $10.2 million and on January 30, 2024, the Company has subsequently entered into a sale-leaseback transaction for this property. The Company plans to
invest approximately $15.0 million, net of the tenant improvement allowance, in the buildout of new classrooms and training areas. As of
December 31, 2023, the new campus is classified as held-for-sale on the Consolidated Balance Sheets. See Note 19, “Subsequent Events.”
Property Sale Agreement -
Nashville, Tennessee Campus
On September 24, 2021, Nashville Acquisition, L.L.C., a subsidiary of the Company, entered into a Contract for the Purchase of Real Estate (the “Nashville Contract”) to sell the
nearly 16-acre property located at 524 Gallatin Avenue, Nashville, Tennessee 37206, at which the Company operates its Nashville
campus, to SLC Development, LLC, a subsidiary of Southern Land Company (“SLC”).
On June 8, 2023, the Company closed on the sale of its Nashville, Tennessee property to East Nashville Owner, LLC, an affiliate of SLC, for approximately $33.8 million pursuant to the Nashville Contract. The net proceeds from the Nashville sale, net of closing costs, are available for working capital,
acquisitions, other strategic initiatives, and general corporate purposes. In connection with the sale, the parties entered into a lease agreement allowing Lincoln to continue to occupy the campus and operate it on a rent-free basis for a period
of 15 months plus options to extend the lease for up to three consecutive 30-day terms at $150,000 per extension term. The carrying value of the campus is approximately $4.5
million and the estimated fair value of the rent for the 15-month rent-free period was approximately $2.3 million at the consummation of the lease. As of December 31, 2023, approximately $1.3 million remains and is included in prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets.
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PROPERTY, EQUIPMENT AND FACILITIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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PROPERTY, EQUIPMENT AND FACILITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, EQUIPMENT AND FACILITIES |
Property, equipment and facilities consist of the following:
On December 31, 2022, as a result of impairment testing it was determined that there was a long-lived asset impairment of $1.0 million. The impairment was the result of an assessment of the current market value, as compared to the current carrying value of the assets. In addition to the $0.4 million impairment charge noted above, the additional $0.6
million impairment charge was related to the Company’s ROU asset.
The increase in property, equipment and facilities was driven by several factors, including a $13.0 million investment relating to the build-out of the new East Point, Georgia campus, $9.0 million in new and expanded programs at various campuses, expansions and additional programs focused on Welding, EEST, HVAC, Auto and MA, $1.0 million for the build-out related to our Tesla Partnership, $7.0
million of facilities upgrades, including security and branding, with the remainder focusing on training materials and equipment. Gross property, equipment and facilities and accumulated depreciation and amortization are down as a result of the
sale of our Suffield, Connecticut property during the second quarter of 2022. Depreciation and amortization expense of property, equipment and facilities was $6.8 million and $6.4 million for the years ended December 31, 2023 and 2022,
respectively.
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ACCRUED EXPENSES |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES |
Accrued expenses consist of the following:
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LONG-TERM DEBT |
12 Months Ended | ||
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Dec. 31, 2023 | |||
LONG-TERM DEBT [Abstract] | |||
LONG-TERM DEBT |
Credit Facility
On November 14, 2019, the Company entered into a senior secured credit agreement (the “Sterling Credit Agreement”) with its lender, Sterling National Bank (the “Lender”), providing for borrowing in the
aggregate principal amount of up to $60.0 million (the “Credit Facility”). Initially, the Credit Facility was comprised of four facilities: (1) a $20.0 million
senior secured term loan maturing on December 1, 2024 (the “Term Loan”), with monthly interest and principal payments based on a 120-month amortization, with the outstanding balance due on the maturity date; (2) a $10.0 million senior secured delayed draw term loan maturing on December 1, 2024
(the “Delayed Draw Term Loan”), with monthly interest payments for the first 18 months and thereafter monthly payments of interest and
principal based on a 120-month amortization and all balances due on the maturity date; (3) a $15.0 million senior secured committed revolving line of credit providing a sublimit of up to $10.0
million for standby letters of credit maturing on November 13, 2022 (the “Revolving Loan”), with monthly payments of interest only;
and (4) a $15.0 million senior secured non-restoring line of credit maturing on January 31, 2021 (the “Line of Credit Loan”). The Credit Facility was secured by a first priority lien in favor of the Lender on substantially all of the personal property owned by the
Company as well as a pledge of the stock and other rights in the Company’s subsidiaries and mortgages on parcels of real property owned by the Company. The Sterling Credit Agreement was amended on various occasions.
On November 4, 2022, the Company agreed
with its Lender to terminate the Sterling Credit Agreement and the remaining Revolving Loan. The Lender agreed to allow the Company’s existing letters of credit to remain outstanding, provided that they are cash collateralized. As of December 31,
2023, the letters of credit, in the aggregate outstanding principal amount of $4.1 million, remained outstanding, were cash
collateralized, and were classified as restricted cash on the Consolidated Balance Sheets. As of December 31, 2023, the Company did not
have a credit facility and did not have any debt outstanding.
On February 16, 2024, the Company
entered into a secured credit agreement (the “Fifth Third Credit Agreement”) with Fifth Third Bank, National Association (the “Bank”), pursuant to which the Company, as borrower, has obtained a revolving credit facility in the aggregate principal
amount of $40.0 million including a $10.0
million letter of credit sublimit and a $20.0 million accordion feature (the “Facility”), the proceeds of which are to be used for
working capital, general corporate and certain other permitted purposes. See Note 19, “Subsequent Events.”
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STOCKHOLDERS' EQUITY |
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STOCKHOLDERS' EQUITY [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY |
Common Stock
Holders of our Common Stock are entitled to receive dividends when and as declared by our Board of Directors and have the right to one vote per share on all matters requiring shareholder approval. The Company has not
declared or paid any cash dividends on our Common Stock since the Company’s Board of Directors discontinued our quarterly cash dividend program in February 2015. The Company has no current intentions to resume the payment of cash dividends in the
foreseeable future.
Preferred Stock
On November 30, 2022, the Company exercised in full its right of mandatory conversion of the Company’s Series A Preferred Stock. In connection with the conversion, each
share of Series A Preferred Stock has been cancelled and converted into the right to receive 423.729 shares of the Company’s Common
Stock, no par value per share. Shares of the Series A Preferred Stock are no longer outstanding and all rights of the holders to
receive future dividends have terminated. As a result of the conversion, the aggregate 12,700 shares of Series A Preferred Stock
outstanding were converted into 5,381,356 shares of Common Stock.
Dividends
Dividends on the Series A Preferred Stock (“Series A Dividends”), at the initial annual rate of 9.6% is to be paid, in arrears, from the date of issuance quarterly on each December 31, March 31, June 30 and September 30 with September 30, 2020 being the first dividend payment date. As of December 31, 2022, we have paid $1.1 million in cash dividends on the outstanding shares of Series A Preferred Stock. With the exercise of the mandatory conversion of the Company’s Series A Preferred Stock
there will not be any additional dividend payment related to the Series A Preferred Stock going forward. Dividends are included in the Consolidated Balance Sheets within additional paid-in-capital when the Company maintains an accumulated deficit.
Treasury Stock
On May 24, 2022, the Board of Directors authorized the cancellation of 5,910,541 shares of Treasury Stock, which reduced Treasury Stock and Common Stock by $82.9 million.
Restricted Stock
The Company currently has two stock incentive plans:
the Lincoln Educational Services Corporation 2020 Long-Term Incentive Compensation Plan (the “LTIP”) and the 2005 Long Term Incentive Plan (the “Prior Plan”).
LTIP
On March 26, 2020, the Board of Directors adopted the LTIP to provide an incentive to certain directors, officers, employees and consultants of the
Company to align their interests in the Company’s success with those of its shareholders through the grant of equity-based awards. On June 16, 2020, the shareholders of the Company approved the LTIP. The LTIP is administered by the Compensation
Committee of the Board of Directors, or such other qualified committee appointed by the Board of Directors, which will, among other duties, have the full power and authority to take all actions and make all determinations required or provided for
under the LTIP. Pursuant to the LTIP, the Company may grant options, share appreciation rights, restricted shares, restricted share units, incentive stock options and nonqualified stock options. Under the LTIP, employees may surrender shares as
payment of applicable income tax withholding on the vested Restricted Stock. The LTIP has a duration of 10 years. On February 23,
2023, the Board of Directors approved, subject to shareholder approval, the amendment of the LTIP to increase the aggregate number of shares available under the LTIP from 2,000,000 shares to 4,000,000 shares. The amendment was
approved and adopted by the shareholders at the Annual Meeting of Shareholders held on May 5, 2023.
Prior Plan
Under the Prior Plan, certain employees have received awards of restricted shares of Common Stock based on service and performance. The number of shares granted to
each employee is based on the amount of the award and the fair market value of a share of Common Stock on the date of the grant. The LTIP makes it clear that there will be no new grants under the Prior Plan as of June 16, 2020, the date of
shareholder approval of the LTIP. As no shares remain available under the Prior Plan, there can be no additional grants under the Prior Plan. Grants under the Prior Plan remain in effect according to their terms. Therefore, those grants remaining
in effect under the Prior Plan are subject to the particular award agreement relating thereto and to the Prior Plan to the extent that the Prior Plan provides rules relating to those grants. The Prior Plan remains in effect only to that extent.
For the years ended December 31, 2023 and 2022, respectively, the Company completed a net share
settlement for 337,050 and 268,654
restricted shares on behalf of certain employees that participate in the LTIP and the Prior Plan upon the vesting of the restricted shares pursuant to the terms of the LTIP and the Prior Plan. The net share settlement was in connection with
income taxes incurred on restricted shares that vested and were transferred to the employees during 2023 and/or 2022, creating taxable income for the employees. At the employees’ request, the Company has paid these taxes on behalf of the
employees in exchange for the employees returning an equivalent value of restricted shares to the Company. These transactions resulted in a decrease of $2.0
million and $2.0 million for each of the years ended December 31, 2023 and 2022, respectively, to equity on the Consolidated Balance
Sheets as the cash payment of the taxes effectively was a repurchase of the restricted shares granted in previous years.
The following is a summary of transactions pertaining to Restricted Stock:
The Restricted Stock expense for the fiscal years ended December 31, 2023 and 2022 was $5.9 million and $3.1 million, respectively. The unrecognized Restricted Stock
expense as of December 31, 2023 and 2022 was $4.3 million and $7.9 million, respectively. As of December 31, 2023, outstanding Restricted Shares under the LTIP had aggregate intrinsic value of $14.0 million.
Share Repurchase Program
On May 24, 2022, the Company announced that its Board of Directors had authorized a share repurchase program of up to $30.0 million of the Company’s outstanding Common Stock. The repurchase program was authorized for 12 months. Pursuant to the program, purchases may be made, from time to time, in open-market transactions at prevailing market prices, in privately negotiated transactions or by other
means as determined by the Company’s management and in accordance with applicable federal securities laws. The timing of purchases and the number of shares repurchased under the program will depend on a variety of factors including price,
trading volume, corporate and regulatory requirements and market conditions. The Company retains the right to limit, terminate or extend the share repurchase program at any time without prior notice.
On February 27, 2023, the Board of Director extended the share repurchase program for an additional 12 months and
authorized the repurchase of an additional $10.0 million of the Company’s Common Stock, for an aggregate of up to $30.6 million in additional repurchases.
The following table presents information about our repurchases of Common
Stock, all of which were completed through open market purchases:
1 These shares were subsequently canceled and recorded as a reduction of Common Stock.
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PENSION PLAN |
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PENSION PLAN [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION PLAN |
The Company sponsors a noncontributory defined benefit pension plan covering substantially all of the Company’s union employees. Benefits are provided based on
employees’ years of service and earnings. This plan was frozen on December 31, 1994 for non-union employees.
The following table sets forth the plan’s funded status and amounts recognized in the Consolidated Financial Statements:
For the fiscal year ended December 31, 2023, the actuarial loss of less than $0.1 million was due to the decrease in the discount rate from 4.90% to 4.71%.
Amounts recognized in the Consolidated Balance Sheets consist of:
Amounts recognized in accumulated other comprehensive loss consist of:
The accumulated benefit obligation was $16.6 million and
$17.1 million at December 31, 2023 and 2022, respectively.
The following table provides the components of net periodic cost for the plan:
The estimated net income and prior service cost for the plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the
next year is zero.
The following tables present plan assets using the fair value hierarchy as of December 31, 2023 and 2022, respectively. The fair value hierarchy has three levels
based on the reliability of inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using observable prices that are
based on inputs not quoted in active markets but observable by market data, while Level 3 includes the fair values estimated using significant non-observable inputs. The level in the fair value hierarchy within which the fair value measurement falls is determined
based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair value of total plan assets by major asset category as of December 31:
Weighted-average assumptions used to determine benefit obligations as of December 31:
Weighted-average assumptions used to determine net periodic pension cost for years ended December 31:
As this plan was frozen to non-union employees on December 31, 1994, the difference between the projected benefit obligation and accumulated benefit obligation is not
significant in any year.
The Company invests plan assets based on a total return on investment approach, pursuant to which the plan assets include a diversified blend of equity and fixed
income investments toward a goal of maximizing the long-term rate of return without assuming an unreasonable level of investment risk. The Company determines the level of risk based on an analysis of plan liabilities, the extent to which the value
of the plan assets satisfies the plan liabilities and the plan’s financial condition. The investment policy includes target allocations ranging from 30%
to 70% for equity investments, 20%
to 60% for fixed income investments and 0%
to 10% for cash equivalents. The equity portion of the plan assets represents growth and value stocks of small, medium and large
companies. The Company measures and monitors the investment risk of the plan assets both on a quarterly basis and annually when the Company assesses plan liabilities.
The Company uses a building block approach to estimate the long-term rate of return on plan assets. This approach is based on the capital markets assumption that the
greater the volatility, the greater the return over the long term. An analysis of the historical performance of equity and fixed income investments, together with current market factors such as the inflation and interest rates, are used to help
make the assumptions necessary to estimate a long-term rate of return on plan assets. Once this estimate is made, the Company reviews the portfolio of plan assets and makes adjustments thereto that the Company believes are necessary to reflect a
diversified blend of equity and fixed income investments that is capable of achieving the estimated long-term rate of return without assuming an unreasonable level of investment risk. The Company also compares the portfolio of plan assets to those
of other pension plans to help assess the suitability and appropriateness of the plan’s investments.
The Company does not expect to make contributions to the plan in 2024. However, after considering the funded status of the plan, movements in the discount rate,
investment performance and related tax consequences, the Company may choose to make additional contributions to the plan in any given year.
The total amount of the Company’s contributions paid under its pension plan was zero for each of the fiscal years ended December 31, 2023 and 2022, respectively.
Information about the expected benefit payments for the plan is as follows:
The Company has a 401(k) defined contribution plan for all eligible employees. Employees may contribute up to 75% of their compensation into the plan. The Company may contribute up to an additional 15% of the employee’s contributed amount up to 6% of compensation. For each of the fiscal years ended
December 31, 2023 and 2022, the Company’s expense for the 401(k) plan amounted to $0.8 million and $0.7 million, respectively.
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INCOME TAXES |
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INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
Components of the provision for income taxes were as follows:
Effective Tax rate
The reconciliation of the effective tax rate to the U.S. Statutory Federal Income tax rate was:
Deferred Taxes
The components of the non-current deferred tax assets (liabilities) were as follows:
As of December 31, 2023, and 2022, the Company had gross
net operating losses (“NOL”) of $18.1 million and $34.2 million, respectively for state tax purposes and none for federal. While some states NOL can be carried forward indefinitely, the majority of state NOLs expire in 2033 and end in 2037
if not utilized.
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FAIR VALUE |
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FAIR VALUE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE |
The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value,
which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers:
Level 1: Defined as quoted market prices in active markets for identical assets or liabilities.
Level 2: Defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities,
quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or other inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities.
Level 3: Defined as unobservable inputs that are not corroborated by market data.
The Company measures the fair value of money market funds using Level 1 inputs. As of December 31, 2023, the Company had three treasury bills, with maturity date of three months or less, classified as cash equivalents. As of December 31, 2022, the Company had two treasury bills, one with a
maturity date of three months or less, classified as cash equivalents. The treasury bill had a maturity date greater than three
months but less than a year and as a result is classified as a short-term investment. The treasury bills are valued using Level 1 inputs. Pricing sources may include industry standard data providers, security master files from large financial
institutions and other third-party sources used to determine a daily market value.
The following table presents the fair value of the financial instruments measured on a recurring basis as of December 31, 2023 and
2022.
The carrying amount of the Company’s financial instruments, including cash equivalents, short-term investments, prepaid expenses
and other current assets, accrued expenses and other short-term liabilities approximate fair value due to the short-term nature of these items.
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SEGMENT REPORTING |
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SEGMENT REPORTING [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING |
As of January 1, 2023, the Company’s business is now organized into two reportable business segments:
(a) Campus Operations; and (b) Transitional. Based on trends in student demand and program expansion, there have been more cross-offerings of programs
among the various campuses. Given this change, the Company has revised the way it manages the business, evaluates performance, and allocates resources, resulting in an updated segment structure. As a result, the
Company has shifted its focus to two new segments defined below:
Campus Operations – The Campus Operations segment includes campuses that are continuing in operation and contribute to the Company’s core operations and
performance.
Transitional – The Transitional segment refers to businesses that are marked for closure and are currently being taught-out. As of December 31, 2023,
the only campus classified in the Transitional segment is the Somerville, Massachusetts campus. The campus has been fully taught-out and total costs to close the campus were approximately $2.0 million.
We evaluate performance based on operating results. Adjustments to reconcile segment results to consolidated results are included in the caption “Corporate,” which primarily includes unallocated corporate
activity.
Summary financial information by reporting segment is as follows:
|
COMMITMENTS AND CONTINGENCIES |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||
COMMITMENTS AND CONTINGENCIES |
Litigation and Regulatory Matters— On June 22, 2022, the plaintiff student
loan borrowers in a class action against the DOE in federal court in California (Sweet v.
Cardona, No. 3:19-cv-3674 (N.D. Cal.)) and the DOE announced a
proposed settlement agreement to resolve claims that the DOE has failed to timely decide Borrower Defense to Repayment applications submitted to the DOE. The proposed settlement included three categories of relief for student loan borrowers. First, it set forth a list of approximately 150 institutions, including Lincoln Technical Institute and Lincoln College of Technology, and, under the settlement, the DOE would agree to discharge loans and refund prior loan payments to class members with
loan debt associated with an institution on the list (which includes Lincoln institutions). The class action plaintiffs and the DOE stated that the DOE had determined that attendance at one of the listed institutions justifies presumptive
relief allegedly based on strong indicia regarding substantial misconduct by the institutions, whether credibly alleged or in some instances proven, and the purportedly high rate of class members with applications related to the listed
schools. Second, the proposed settlement included new procedures for DOE to resolve pending borrower defense claims associated with other schools not on the list. Third, for any student loan borrower who submitted a borrower defense
application after June 22, 2022 and before the final approval of the settlement, the proposed settlement would require the DOE to review the applications under the DOE’s 2016 regulatory standards and issue decisions within 36 months, or else the applications would be discharged in full.
At the time the plaintiffs and DOE announced the proposed settlement, Lincoln was not a party to the lawsuit and none of the named plaintiffs had attended a Lincoln institution. In August 2022, Lincoln and
three other schools were granted permission to intervene in the lawsuit to protect their interests in the finalization and
implementation of any settlement agreement the court might approve. In October 2022, the four intervening schools, including
Lincoln, filed objections to the final approval of the settlement, asserting reputational harms from the schools’ inclusion on the settlement’s list of schools and denial of schools’ due process rights under the DOE’s borrower defense
regulations.
On November 16, 2022, the federal district court overruled the four schools’ objections and approved the settlement as proposed. As a result of this final approval, the DOE has estimated that approximately 196,000 student loan borrowers who attended one of the listed schools (including Lincoln institutions) will receive automatic student loan discharges; that another approximately 100,000 student loan borrowers who attended other schools not on the list would receive decisions under new procedures; and that approximately 250,000 student loan borrowers who submitted borrower defense applications between June 22, 2022 and November 16, 2022 would receive decisions under the DOE’s 2016 regulatory standards within 36 months or else receive automatic student loan discharges. On January 13, 2023, Lincoln appealed the settlement’s final approval to the U.S. Court of Appeals for the Ninth Circuit. Two of the three other intervenor schools also appealed on the same date. The three appealing schools also sought to stay the implementation of the settlement while their appeals were being decided, but the requested stay was denied by the district court, the Ninth Circuit, and the U.S. Supreme Court. As a result, the DOE is implementing the settlement relief while the three schools appeal the settlement’s final approval. Lincoln and the two other appealing schools filed their opening appellate brief in the Ninth Circuit on May 3, 2023. The plaintiffs and the DOE filed their opposition appellate briefs on August 2, 2023. Lincoln and the two other appealing schools filed their reply appellate brief on September 22, 2023. The Ninth Circuit heard oral argument on December 5, 2023, and is currently considering the appeal. It is not possible at this time to predict whether the settlement will
be upheld on appeal, what actions the DOE might take if the settlement is upheld on appeal, or whether the DOE or other agencies might take actions against Lincoln institutions before the appeal is decided. Such actions could have a material
adverse effect on our business and results of operations. Even if the Ninth Circuit rules in our favor and if the approval of the settlement is overturned, the DOE already may have discharged by that time the loans associated with some or
all of the pending applications. We have seen evidence that the DOE already may have discharged some of the loans associated with some of the pending applications, but the DOE has not furnished definitive data to us necessary to determine
the extent to which applications have been granted. The DOE may or may not attempt to seek recoupment from applicable schools relating to approval of borrower defense applications. The settlement also requires the DOE to review and decide
borrower defense applications submitted after June 22, 2022 and before November 16, 2022 within 36 months of the final settlement
date. If the DOE grants some or all of these applications, the DOE also could attempt to recoup from us the loan amounts relating to these applications. If the DOE approves borrower defense applications concerning us and attempts to recoup
from us the loan amounts in the approved applications, we would consider our options for challenging the legal and factual bases for such actions.
We cannot predict what other actions the DOE might take if the settlement is fully implemented,
including the amount of borrower defense applications that the DOE might grant or the amount of any recoupment that the DOE might seek from us, if any. We also cannot predict the outcome of any challenges we might make to such actions
.
In addition to the
foregoing, in the ordinary conduct of our business, we are subject to additional periodic lawsuits, investigations, regulatory proceedings and other claims, including, but not limited to, claims involving students or graduates, routine
employment matters and business disputes. We cannot predict the ultimate resolution of these lawsuits, investigations, regulatory proceedings and other claims asserted against us, but we do not believe that any of these matters will have a
material adverse effect on our business, financial condition, results of operations or cash flows.
Student Financing Plans—At December 31, 2023, the Company had outstanding net financing commitments to its students to assist them in financing their education of
approximately $33.6 million, net of interest.
Executive Employment Agreements—The Company entered into employment contracts with key executives that
provide for continued salary payments if the executives are terminated for reasons other than cause, as defined in the agreements. The future employment contract commitments for such employees were approximately $10.6 million at December 31, 2023.
Surety Bonds—Each of the Company’s campuses must be authorized by the applicable state education agency in
which the campus is located to operate and to grant degrees, diplomas or certificates to its students. The campuses are subject to extensive, ongoing regulation by each of these states. In addition, the Company’s campuses are required to be
authorized by the applicable state education agencies of certain other states in which the campuses recruit students. The Company is required to post surety bonds on behalf of its campuses and education representatives with multiple states to
maintain authorization to conduct its business. At December 31, 2023, the Company has posted surety bonds in the total amount of approximately $16.0
million.
|
COVID-19 PANDEMIC AND CARES ACT |
12 Months Ended | ||
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Dec. 31, 2023 | |||
COVID-19 PANDEMIC AND CARES ACT [Abstract] | |||
COVID-19 PANDEMIC AND CARES ACT |
In response
to the COVID-19 pandemic, in 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law, providing a $2.0 trillion federal economic relief package of financial assistance and other relief to individuals
and businesses impacted by the pandemic. Among other things, the CARES Act includes a $14.0 billion Higher Education Emergency Relief Fund (“HEERF”) for the DOE to distribute directly to institutions of higher education. The DOE has allocated funds to each institution of higher education based on a
formula contained in the CARES Act. The formula is heavily weighted toward institutions with large numbers of Pell Grant recipients. The DOE allocated $27.4 million to our schools, distributed in two equal installments, and required them to be
utilized by April 30, 2021 and May 14, 2021, respectively. As of September 30, 2021, the Company had distributed the full $13.7
million of its first installment as emergency grants to students and had utilized the full $13.7 million of its second installment.
Proceeds from the second installment for permitted expenses were primarily utilized to either offset original expenses incurred or to reduce student accounts receivable, driving a decrease in bad debt expense. Both uses resulted in a decrease
in our selling, general, and administrative expenses. Institutions are required to use at least half of the HEERF funds for emergency grants to students for expenses related to disruptions in campus operations (e.g., food, housing, etc.). The
law requires an institution receiving such funds to continue, to the greatest extent practicable, to pay its employees and contractors during the period of any disruptions or closures related to the COVID-19 emergency, which the Company has
done. The Company was also permitted to defer payment of FICA payroll taxes through January 1, 2021 and did so, but pursuant to requirements of the deferment, repaid 50.0% of the deferred payments in January 2022 and, in accordance with the
deferment, repaid the remaining 50.0% in January 2023.
In December 2020, the Consolidated Appropriations Act, 2021 was enacted, which included the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (“CRRSAA”). The
CRRSAA provided an additional $81.9 billion to the Education Stabilization Fund, including $22.7 billion for the HEERF, which was originally created by the CARES Act in March 2020. The higher education provisions of the CRRSAA are intended in
part to provide additional financial assistance benefitting students and their postsecondary institutions in the wake of the spread of COVID-19 across the country and its impact on higher educational institutions. In March 2021, the $1.9
trillion American Rescue Plan Act of 2021 (“ARPA”) was signed into law. Among other things, the ARPA provides $40.0 billion in relief funds that go directly to colleges and universities, with $395.8 million going to for-profit institutions.
The DOE allocated a total of $24.4 million to our schools from the funds made available under CRRSAA and ARPA. As of December 31,
2022, the Company has drawn down and distributed to our students $14.8 million of these allocated funds. The availability of the remainder of the funds has expired as of June 30, 2023 and the Company will no longer have access to such funds. Failure to comply with requirements for the usage and reporting
of these funds could result in requirements to repay some or all of the allocated funds and in other sanctions.
|
SUBSEQUENT EVENTS |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
SUBSEQUENT EVENTS [Abstract] | |||
SUBSEQUENT EVENTS |
Sale-leaseback Transaction – Philadelphia, Pennsylvania Area Campus
On January 30, 2024, the Company
entered into a sale-leaseback transaction for the property located at 311 Veterans Highway, Levittown, Pennsylvania. This property is 90,000
square feet and was previously purchased by the Company on September 28, 2023 for approximately $10.2 million. The sale
transaction is for an aggregate sale price of approximately $11.0 million. Simultaneously with the closing of the sale, the
Company and the purchaser have entered into a triple-net lease agreement pursuant to which the property is being leased back to Lincoln for a twenty-year
term. The lease agreement includes a $2.5 million tenant improvement allowance.
The Company plans to invest
approximately $15.0 million, net of the tenant improvement allowance, in the buildout of new classrooms and training areas to
ensure a best-in-class campus that provides a positive experience for students, faculty, and industry partners. Students training at the new Levittown, Pennsylvania campus will go on to launch new careers in the Automotive, Welding, HVAC
and Electrical industries throughout the greater Philadelphia area. As of December 31, 2023, the new campus is classified as held-for-sale on the Consolidated Balance Sheets.
The Company has served the
Philadelphia, Pennsylvania area at its current campus located at 9191 Torresdale Avenue for more than 60 years. The new
Levittown, Pennsylvania campus is expected to open in the second half of 2025 and is not expected to impact the student experience at the existing campus at 9191 Torresdale Avenue. While the current campus can accommodate 250 students, the new Levittown, Pennsylvania campus will have the capability to handle more than double this capacity. The existing campus will
continue to operate until the buildout at the new location is fully complete to ensure a seamless transition. Additionally, the facility will have the extra capacity to accommodate several potential industry partners and future program
expansions.
New Credit Facility
On February 16, 2024, the Company entered into a secured credit agreement (the “Fifth Third Credit Agreement”) with Fifth Third Bank, National
Association (the “Bank”), pursuant to which the Company, as borrower, has obtained a revolving credit facility in the aggregate principal amount of $40.0
million including a $10.0 million letter of credit sublimit and a $20.0 million accordion feature (the “Facility”), the proceeds of which are to be used for working capital, general corporate and certain other permitted purposes. The Facility is
guaranteed by the Company’s wholly-owned subsidiaries and is secured by a first priority lien in favor of the Bank on substantially all of the personal property owned by the Company and its subsidiaries. The term of the Facility is 36 months, maturing on February 16, 2027.
Each advance under the Facility
will bear interest on the outstanding principal amount thereof from the date when made at an interest rate determined at the election of the Company at either the Tranche Rate (which is the forward-looking Secured Overnight Financing Rate
(SOFR) for or three months),
or the Base Rate (which is a variable per annum rate, as of any date of determination, equal to the Bank’s Prime Rate), plus an Applicable Margin. The Applicable Margin is determined pursuant to a Pricing Grid, which for loans subject to
the Tranche Rate varies from 1.75% to 2.50% and for loans subject to the Base Rate varies from 0.75% to 1.50%. The Applicable Margin may change quarterly based on the Total Leverage Ratio at such time. The Total Leverage Ratio is determined with
respect to the Company and its subsidiaries on a consolidated basis for an applicable quarterly period by dividing the aggregate principal amount of various forms of borrowed indebtedness as of the last day of a determination period by
EBITDA (earnings before interest expense, taxes, depreciation and amortization) for such period. Interest is paid in arrears, either quarterly or monthly depending on the Company’s interest rate election, with the principal due at maturity.
Under the terms of the Fifth
Third Credit Agreement, the Company will pay to the Bank an unused facility fee on the average daily unused balance of the Facility at a rate per annum equal to 0.50%, which fee is payable in arrears on dates when interest is due and payable. The Company will also pay to the Bank a letter of credit fee equal to the Applicable Margin for loans subject to the Tranche
Rate multiplied by the maximum amount available to be drawn under such letter of credit.
The Fifth Third Credit Agreement
contains customary representations, warranties and affirmative and negative covenants, as well as events of default customary for facilities of this type. In connection with the Fifth Third Credit Agreement, the Company paid the Bank a
closing fee in the amount of $200,000 and other customary fees and reimbursements.
|
Insider Trading Arrangements |
3 Months Ended |
---|---|
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Schedule II-Valuation and Qualifying Accounts |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II-Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II-Valuation and Qualifying Accounts |
LINCOLN EDUCATIONAL SERVICES CORPORATION
Schedule II—Valuation and Qualifying Accounts
(in thousands)
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Business Activities |
Business Activities— Lincoln Educational Services Corporation and its
subsidiaries (collectively, the “Company”, “we”, “our” and “us”, as applicable) provide diversified career-oriented post-secondary education to recent high school graduates and working adults. The Company, which currently operates 21 campuses, in 13 states has
added two additional campuses, one located in East Point, Georgia and the other in Houston, Texas. As of December 31, 2023, these
campuses were not operational however, the East Point, Georgia campus is expected to hold its first class in March of 2024 and the Houston, Texas campus is expected to become operational in the first quarter of 2026. Lincoln Educational
Services Corporation offers programs in skilled trades (which include HVAC, welding and computerized
numerical control and electrical and electronic systems technology, among other programs), automotive technology, healthcare services (which include nursing, dental assistant and medical administrative assistant, among other programs) and
hospitality services and information technology (which include culinary, therapeutic massage, cosmetology and aesthetics and information technology programs). The schools operate under Lincoln Technical Institute, Lincoln College of
Technology, Lincoln Culinary Institute, and Euphoria Institute of Beauty Arts and Sciences and associated brand names. Most of the campuses serve major metropolitan markets and each typically offers courses in multiple areas of study. Five of the campuses are destination schools, which attract students from across the United States and, in some cases, from abroad. The Company’s
other campuses primarily attract students from their local communities and surrounding areas. All of the campuses are nationally accredited and are eligible to participate in federal financial aid programs administered by the U.S. Department
of Education (the “DOE”) and applicable state education agencies and accrediting commissions which allow students to apply for and access federal student loans as well as other forms of financial aid. The Company was incorporated in New Jersey
in 2003 as the successor-in-interest to various acquired schools including Lincoln Technical Institute, Inc. which opened its first campus in Newark, New Jersey in 1946.
As of January 1, 2023, the Company’s business is now organized into two reportable business segments: (a) Campus Operations, and (b) Transitional. Based on trends in student demand and program expansion, there have been more cross-offerings of programs among the various
campuses. Given this change, the Company has revised the way it manages the business, evaluates performance, and allocates resources, resulting in an updated segment structure. The Campus Operations segment includes campuses that are continuing
in operation and contribute to the Company’s core operations and performance. The Transitional segment refers to campuses that are marked for closure and are currently being taught-out. As of December 31, 2023, the only campus classified in the
Transitional segment is the Somerville, Massachusetts campus, which has been fully taught-out as of year-end.
|
Liquidity |
Liquidity—As of December 31, 2023, the Company had $80.3 million in cash and cash equivalents and restricted cash, compared to $50.3 million in cash and cash equivalents and restricted cash, in addition to $14.8 million in short-term investments in the prior year. The Company believes
that its likely sources of cash should be sufficient to fund operations for the next 12 months and thereafter for the foreseeable future.
|
Principles of Consolidation |
Principles of Consolidation—The accompanying Consolidated Financial Statements include the accounts of Lincoln Educational Services Corporation and its wholly-owned subsidiaries. All intercompany accounts and transactions have been
eliminated.
|
Cash and Cash Equivalents |
Cash and Cash Equivalents—Cash and cash equivalents include all cash balances and highly-liquid short-term investments, which contain original maturities within three months of purchase. Pursuant to the DOE’s cash management requirements, the Company retains funds from financial aid programs under Title IV of the Higher Education Act of 1965 in segregated cash
management accounts. The segregated accounts do not require a restriction on use of the cash and, as such, these amounts are classified as cash and cash equivalents on the consolidated balance sheets.
|
Restricted Cash |
Restricted Cash – Restricted cash consists of cash currently utilized as collateral for the Company’s letters of credit.
|
Short-term Investments |
Short-term Investments – Short-term investments not considered cash and cash equivalents are investments with maturity dates of three months to 12 months from the date of purchase.
|
Accounts Receivable |
Accounts Receivable—The Company reports accounts receivable at net realizable value, which is equal to the gross receivable less an estimated allowance for uncollectible accounts. Noncurrent accounts receivable represents amounts due from
graduates in excess of 12 months from the balance sheet date.
|
Allowance for Credit Losses |
Allowance for Credit Losses—On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”)
2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. As a result of the adoption, the Company has revised the way in which it calculates reserves on outstanding student accounts
receivable balances. Details considered by management in the estimate include the following:
We extend credit to a portion of the students who are enrolled at our academic institutions for tuition and certain other educational costs. Based upon past
experience and judgment, we establish an allowance for credit losses with respect to student receivables which we estimate will ultimately not be collectible. Our standard student receivable allowance is based on an estimate of lifetime
expected credit losses for student receivables that considers vintages of receivables to determine a loss rate. Our estimation methodology considers a number of quantitative and qualitative factors that, based on our collection experience, we
believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors include, but are not limited to:
internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored
and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trending analysis and comparing estimated and actual performance.
Management makes a series of assumptions to determine what is believed to be the appropriate level of allowance for credit losses. Management determines a
reasonable and supportable forecast based on the expectation of future conditions over a supportable forecast period as described above, as well as qualitative adjustments based on current and future conditions that may not be fully captured in
the historical modeling factors described above. All of these estimates are susceptible to significant change.
We monitor our collections and write-off experience to assess whether or not adjustments to our allowance percentage estimates are necessary. Changes in trends in
any of the factors that we believe impact the collection of our student receivables, as noted above, or modifications to our collection practices, and other related policies may impact our estimate of our allowance for credit losses and our
results from operations.
Because a substantial portion of our revenue is derived from Title IV Programs, any legislative or regulatory action that significantly reduces the funding
available under Title IV Programs, or the ability of our students or institutions to participate in Title IV Programs, would likely have a material impact on the realizability of our receivables.
|
Inventories |
Inventories—Inventories consist mainly of textbooks, computers, tools and supplies. Inventories are valued at the lower of cost or market on a first-in, first-out basis.
|
Property, Equipment and Facilities - Depreciation and Amortization |
Property,
Equipment and Facilities—Depreciation and Amortization—Property,
equipment and facilities are stated at cost. Major renewals and improvements are capitalized, while repairs and maintenance are expensed when incurred. Upon the retirement, sale or other disposition of assets, costs and related accumulated
depreciation are eliminated from the accounts and any gain or loss is reflected in operating income. For financial statement purposes, depreciation of property and equipment is computed using the straight-line method over the estimated useful
lives of the assets, and amortization of leasehold improvements is computed over the lesser of the term of the lease or its estimated useful life.
|
Asset Retirement Obligation |
Asset Retirement Obligation—Lincoln recognizes and records an Asset Retirement Obligation (“ARO”) if there is a clear obligation at the termination of a lease, and the potential obligation is measurable in both
potential cost and time. If both conditions are met Lincoln will record the ARO at the Present Value (“PV”) of the future obligation and incur accretion expense over the course of the term, using the lease end date as the termination date.
Should the components or assumptions used to assess the ARO materially change, the ARO is re-measured, and adjustments recorded.
|
Advertising Costs |
Advertising Costs—Costs related to advertising are expensed as incurred and are approximately $38.2 million and $35.0 million for the years ended December 31, 2023 and 2022, respectively. These amounts are included in selling, general and administrative expenses
in the Consolidated Statements of Operations.
|
Goodwill |
Goodwill—Goodwill represents the excess of purchase price over the fair value of tangible net assets and identifiable intangible assets of
the businesses acquired. Lincoln tests goodwill for impairment annually, in the fourth quarter of each year, unless there are events or changes in circumstances that indicate an impairment may have occurred. Impairment may result from
deterioration in performance, adverse market conditions, adverse changes in laws or regulations, the restriction of activities associated with the acquired business, and/or a variety of other circumstances. If we determine that impairment has
occurred, we record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made.
|
Impairment of Long-Lived Assets |
Impairment of Long-Lived Assets—The Company reviews the carrying
value of its long-lived assets and identifiable intangibles for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. For other long-lived assets, including right-of-use (“ROU”)
lease assets, the Company evaluates assets for recoverability when there is an indication of potential impairment. Factors the Company considers important, which could trigger an impairment review, include significant changes in the manner of the
use of the asset, significant changes in historical trends in operating performance, significant changes in projected operating performance, and significant negative economic trends. If the undiscounted cash flows from a group of assets being
evaluated is less than the carrying value of that group of assets, the fair value of the asset group is determined and the carrying value of the asset group is written down to fair value.
When we perform the quantitative impairment test for long-lived assets, we examine estimated future cash flows using Level 3 inputs. These cash flows are evaluated by using weighted probability techniques as well as
comparisons of past performance against projections. Assets may also be evaluated by identifying independent market values. If the Company determines that an asset’s carrying value is impaired, it will record a write-down of the carrying value of the asset and charge the impairment as an operating expense in the
period in which the determination is made.
On June 8, 2023, the Company consummated the sale of its Nashville, Tennessee property. See “Note 8, Real Estate Transactions.” The result of the sale created
a change in the trajectory of the fair value of the Nashville, Tennessee operations and as such, the Company recorded a pre-tax non-cash impairment charge of $0.4 million relating to long-lived assets.
On December 31, 2022, as a result of impairment testing it was determined that there was a long-lived asset impairment of $1.0 million. The impairment was the result of an assessment of the current market value, as compared to the carrying value of the assets.
|
Concentration of Credit Risk |
Concentration of Credit Risk—Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments. The Company places its cash and cash equivalents with high
credit quality financial institutions. The Company’s cash balances with financial institutions typically exceed the Federal Deposit Insurance Corporation (“FDIC”) limit of $0.25 million. The Company’s cash balances on deposit as of December 31, 2023, exceeded the balance insured by the FDIC by approximately $34.3 million. The Company has not experienced any losses to date on its invested cash.
The Company extends credit for tuition and fees to many of its students. The credit
risk with respect to these accounts receivable is mitigated by the students’ participation in federally funded financial aid programs unless students withdraw prior to the receipt of federal funds for those students. In addition, the remaining
tuition receivables are primarily comprised of smaller individual amounts due from students. With respect to student receivables, the Company had no significant concentrations of credit risk as of each of December 31, 2023 and 2022, respectively.
|
Use of Estimates in the Preparation of Financial Statements |
Use of Estimates in the Preparation of Financial Statements—The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the period. On an ongoing
basis, the Company evaluates the estimates and assumptions, including those used to determine the incremental borrowing rate to calculate lease liabilities and ROU assets, lease term to calculate lease cost, revenue recognition, bad debts,
impairments, fixed assets, income taxes, benefit plans and certain accruals. Actual results could differ from those estimates.
|
Income Taxes |
Income Taxes—The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”). This statement requires an asset and a liability approach for measuring deferred taxes based on temporary differences between
the financial statement and tax bases of assets and liabilities existing at each balance sheet date using enacted tax rates for years in which taxes are expected to be paid or recovered.
In accordance with ASC 740, the Company assesses our deferred tax asset to determine whether all or any portion of the asset
is more likely than not unrealizable. A valuation allowance is required to be established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be
realized. In accordance with ASC 740, our assessment considers whether there has been sufficient income in recent years and whether sufficient income is expected in future
years in order to utilize the deferred tax asset. In evaluating the realizability of deferred income tax assets, the Company considers, among other things, historical levels of income, expected future income, the expected timing of the reversals
of existing temporary reporting differences, and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Significant judgment is required in determining the future tax
consequences of events that have been recognized in our Consolidated Financial Statements and/or tax returns. Differences between anticipated and actual outcomes of these future tax consequences could have a material impact on the Company’s
consolidated financial position or results of operations. Changes in, among other things, income tax legislation, statutory income tax rates or future income levels could materially impact the Company’s valuation of income tax assets and
liabilities and could cause our income tax provision to vary significantly among financial reporting periods.
On August 16, 2022, the Inflation Reduction Act was enacted and signed into law. The Inflation Reduction Act is a budget reconciliation package that includes significant changes relating to tax, climate change,
energy and health care. The income tax provision of the act includes, among other items, a corporate alternative minimum tax of 15.0%, an excise tax of 1.0% on corporate stock buybacks, energy-related tax credits and additional IRS funding. The
tax provisions of the Inflation Reduction Act have not had a material impact on the Company’s Consolidated Financial Statements.
We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. During the fiscal years ended December 31, 2023 and 2022, we did not record any interest and penalties expense associated with uncertain tax positions, as we do not have any uncertain tax positions.
|
Start-up Costs |
Start-up Costs—Costs related to the start of new campuses are expensed as incurred.
|
New Accounting Pronouncements |
New Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board
(“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this ASU require that public business entities on an
annual basis 1) disclose specific categories in the rate reconciliation, and 2) provide additional information for reconciling items that meet a quantitative threshold. The amendments require disclosure about income taxes paid by federal, state
and foreign taxes, and by individual jurisdictions in which income taxes paid is equal or greater than 5 percent of total income taxes paid. The amendment also requires entities to disclose income or loss from continuing operations before income
tax expense disaggregated between domestic and foreign and income tax expense or benefit from continuing operations disaggregated by federal, state and foreign. For all public business entities, ASU 2023-09 is effective for annual periods
beginning after December 15, 2024; early adoption is permitted. We do not expect this ASU will have a material impact to the Consolidated Financial Statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic
326): Measurement of Credit Losses on Financial Instruments and subsequently issued additional guidance that modified ASU 2016-13. The ASU and the subsequent modifications were identified as Accounting Standard Codification (“ASC”) Topic
326. The standard requires an entity to change its accounting approach in determining impairment of certain financial instruments, including trade receivables, from an “incurred loss” methodology to a “current expected credit loss” methodology (the
“CECL methodology”). The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses on financial assets measured at amortized cost at the time the financial asset is originated or
acquired. The allowance is adjusted each period for changes in expected lifetime credit losses. The CECL methodology represents a significant change from prior U.S. GAAP, which generally required that a loss be incurred before it was recognized.
Further, the FASB issued ASU No. 2019-04, ASU No. 2019-05, ASU No. 2019-11 and ASU No. 2022-02 to provide additional guidance on the credit losses standard. In November 2019, FASB issued ASU No. 2019-10, Financial
Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). This ASU deferred the effective date of ASU 2016-13 for public companies that are considered smaller reporting companies as defined by
the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Additionally, in February and March 2020, the FASB issued ASU 2020-02, Financial Instruments—Credit
Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842).
ASU 2020-02 added an SEC paragraph pursuant to the issuance of SEC Staff Accounting Bulletin No. 119 on loan losses to FASB Codification Topic 326 and also updated the SEC section of the codification for the change in the effective date of Topic
842. As of the January 1, 2023 date of adoption, based on forecasts of macroeconomic conditions and exposures at that time, the aggregate impact to the Company resulted in an opening balance sheet adjustment increasing the allowance for credit
losses related to the Company’s accounts receivables of approximately $10.8 million, a decrease in retained earnings of $7.9 million, after-tax and a deferred tax asset increase of $2.9 million.
|
NET INCOME PER COMMON SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER COMMON SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Numerator and Denominator of Net Income Per Share Computations |
The following is a reconciliation of the numerator and denominator of the net income per share computations for the years ended December 31, 2023 and 2022:
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Antidilutive Securities Excluded from Computation of Earnings Per Share |
The following table summarizes the potential weighted average shares of Common Stock that were excluded from the determination of our diluted shares outstanding as
they were anti-dilutive:
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REVENUE RECOGNITION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depicts Timing of Revenue Recognition by Segment |
The following table depicts the timing of revenue recognition by segment:
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STUDENT RECEIVABLES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STUDENT RECEIVABLES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Student Receivables | The following table
presents the amortized cost basis of student receivables as of December 31, 2023 by year of origination.
*As the Company did not adopt ASC Topic 326
until January 1, 2023, no comparative information from the prior year is available.
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Allowance for Credit Losses |
We define student receivables as a portfolio segment under ASC Topic 326. Changes
in our current and non-current allowance for credit losses related to our student receivable portfolio are calculated in accordance with the guidance effective January 1, 2023 under CECL for the year ended December 31, 2023.
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LEASES (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Cost |
The following table presents
components of lease cost and classification on the Consolidated Statement of Operations:
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Supplemental Cash Flow Information and Non-cash Activity Related to Leases |
Supplemental cash flow information and non-cash activity related to our leases are as follows:
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Weighted Average Remaining Lease Term and Discount Rate |
Weighted-average remaining lease term and discount rate for our leases are as follows:
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Maturities of Lease Liabilities |
Maturities of lease liabilities by fiscal year for our leases as of December 31, 2023 are as follows:
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GOODWILL (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill |
Changes in the carrying amount of goodwill during the fiscal years ended December 31, 2023 and 2022 are as follows:
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PROPERTY, EQUIPMENT AND FACILITIES (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, EQUIPMENT AND FACILITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Equipment and Facilities |
Property, equipment and facilities consist of the following:
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ACCRUED EXPENSES (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses |
Accrued expenses consist of the following:
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STOCKHOLDERS' EQUITY (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transactions Pertaining to Restricted Stock |
The following is a summary of transactions pertaining to Restricted Stock:
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Repurchases of Common Stock |
The following table presents information about our repurchases of Common
Stock, all of which were completed through open market purchases:
1 These shares were subsequently canceled and recorded as a reduction of Common Stock.
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PENSION PLAN (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION PLAN [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Plan's Funded Status |
The following table sets forth the plan’s funded status and amounts recognized in the Consolidated Financial Statements:
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Amounts Recognized in Consolidated Balance Sheets |
Amounts recognized in the Consolidated Balance Sheets consist of:
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Amounts Recognized in Accumulated Other Comprehensive Loss |
Amounts recognized in accumulated other comprehensive loss consist of:
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Components of Net Periodic Cost for Plan |
The following table provides the components of net periodic cost for the plan:
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Plan Assets using Fair Value Hierarchy | The level in the fair value hierarchy within which the fair value measurement falls is determined
based on the lowest level input that is significant to the fair value measurement in its entirety.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Total Plan Assets by Major Asset Category |
Fair value of total plan assets by major asset category as of December 31:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected Benefit Payments for Plan |
Information about the expected benefit payments for the plan is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Obligations [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Assumptions |
Weighted-average assumptions used to determine benefit obligations as of December 31:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Periodic Pension Cost [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Assumptions |
Weighted-average assumptions used to determine net periodic pension cost for years ended December 31:
|
INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of the Provision for Income Taxes |
Components of the provision for income taxes were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Effective Tax Rate to U.S. Statutory Federal Income Tax Rate |
The reconciliation of the effective tax rate to the U.S. Statutory Federal Income tax rate was:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Non-current Deferred Tax Assets (Liabilities) |
The components of the non-current deferred tax assets (liabilities) were as follows:
|
FAIR VALUE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments Measured on Recurring Basis |
The following table presents the fair value of the financial instruments measured on a recurring basis as of December 31, 2023 and
2022.
|
SEGMENT REPORTING (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information by Reporting Segment |
Summary financial information by reporting segment is as follows:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Business Activities (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023
Campus
State
Segment
| |
Business Activities [Abstract] | |
Number of campuses | 21 |
Number of states in which schools operate across the United States | State | 13 |
Number of additional campuses | 2 |
Number of campuses treated as destination schools | 5 |
Number of reportable segments | Segment | 2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Liquidity (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Liquidity [Abstract] | |||
Cash, cash equivalents and restricted cash | $ 80,269 | $ 50,287 | $ 83,307 |
Short-term investments | $ 0 | $ 14,758 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Maximum maturity period for classification of cash equivalents | 3 months |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Short-term Investments (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Minimum [Member] | |
Short-term Investments [Abstract] | |
Maturity period for short-term investments | 3 months |
Maximum [Member] | |
Short-term Investments [Abstract] | |
Maturity period for short-term investments | 12 months |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Advertising Costs (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Advertising Costs [Abstract] | ||
Advertising expense | $ 38.2 | $ 35.0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Impairment of Long-Lived Assets (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Jun. 08, 2023 |
Dec. 31, 2022 |
|
Impairment of Long-Lived Assets [Abstract] | ||
Impairment charges on long lived assets | $ 0.4 | $ 1.0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Concentration of Credit Risk (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Concentration of Credit Risk [Abstract] | |
Federal deposit insurance limit | $ 250 |
Excess cash, FDIC uninsured amount | $ 34,300 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Taxes [Abstract] | ||
Interest and penalties expense | $ 0 | $ 0 |
Uncertain tax positions | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, New Accounting Pronouncements (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
New Accounting Pronouncements [Abstract] | ||
Accounts receivables | $ 17,504 | $ 22,734 |
Retained earnings | 69,279 | 51,225 |
Deferred tax asset | $ 23,217 | 22,312 |
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASC 326 [Member] | ||
New Accounting Pronouncements [Abstract] | ||
Accounts receivables | 10,800 | |
Retained earnings | (7,900) | |
Deferred tax asset | $ 2,900 |
STUDENT RECEIVABLES, Summary (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Student Receivables [Abstract] | |
Write off period for student receivable balance | 150 days |
STUDENT RECEIVABLES, Student Receivables (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|||||
STUDENT RECEIVABLES [Abstract] | ||||||
Accounts receivables | $ 17,504 | $ 22,734 | ||||
Student Receivables [Abstract] | ||||||
2023 | [1] | 77,113 | ||||
2022 | [1] | 12,548 | ||||
2021 | [1] | 6,799 | ||||
2020 | [1] | 3,036 | ||||
2019 | [1] | 2,019 | ||||
Thereafter | [1] | 1,031 | ||||
Total | [1] | 102,546 | ||||
Write-Off's [Abstract] | ||||||
2023 | [2] | 9,540 | ||||
2022 | [2] | 19,731 | ||||
2021 | [2] | 3,194 | ||||
2020 | [2] | 727 | ||||
2019 | [2] | 535 | ||||
Thereafter | [2] | 310 | ||||
Total | [2] | $ 34,037 | ||||
|
STUDENT RECEIVABLES, Allowance for Credit Losses (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|||
Allowance for Credit Losses [Abstract] | ||||
Balance, beginning of period | $ 35,370 | |||
Provision for credit losses | 41,637 | $ 34,915 | ||
Write-off's | [1] | (34,037) | ||
Balance, at end of period | 53,811 | 35,370 | ||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | ||||
Allowance for Credit Losses [Abstract] | ||||
Balance, beginning of period | 10,841 | |||
Balance, at end of period | 10,841 | |||
Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | ||||
Allowance for Credit Losses [Abstract] | ||||
Balance, beginning of period | $ 46,211 | |||
Balance, at end of period | $ 46,211 | |||
|
GOODWILL (Details) - USD ($) $ in Thousands |
7 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jun. 08, 2023 |
Dec. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Changes in Carrying Amount of Goodwill [Abstract] | |||||
Gross goodwill balance | $ 117,176 | $ 117,176 | $ 117,176 | $ 117,176 | |
Accumulated impairment losses | (106,434) | (106,434) | (102,640) | (102,640) | |
Net goodwill balance | 10,742 | 10,742 | 14,536 | $ 14,536 | |
Adjustments | $ (3,794) | 0 | |||
Goodwill impairment loss | $ 3,800 | $ 0 | $ 0 |
REAL ESTATE TRANSACTIONS, Purchase and Sale-leaseback Transaction - Philadelphia, Pennsylvania Area Campus (Details) - Purchase Transaction [Member] $ in Millions |
Sep. 28, 2023
USD ($)
ft²
|
Dec. 31, 2023
USD ($)
|
---|---|---|
Purchase and Sale-leaseback Transaction - Philadelphia, Pennsylvania Area Campus [Abstract] | ||
Area of property purchased | ft² | 90,000 | |
Property purchase price | $ 10.2 | |
Investment in buildout of new classrooms and training areas | $ 15.0 |
REAL ESTATE TRANSACTIONS, Property Sale Agreement - Nashville, Tennessee Campus (Details) |
12 Months Ended | |||
---|---|---|---|---|
Jun. 08, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
Term
|
Dec. 31, 2022
USD ($)
|
Sep. 24, 2021
a
|
|
Property Sale Agreement - Nashville, Tennessee Campus [Abstract] | ||||
Carrying value | $ 50,857,000 | $ 23,940,000 | ||
Prepaid expenses and other current assets | $ 5,556,000 | $ 4,738,000 | ||
Property Sale Agreement [Member] | ||||
Property Sale Agreement - Nashville, Tennessee Campus [Abstract] | ||||
Area of property to sell | a | 16 | |||
Sale price of agreement | $ 33,800,000 | |||
Lease period for rent-free basis | 15 months | |||
Period of additional option to extend lease | 30 days | |||
Rental payment per extension term | $ 150,000 | |||
Carrying value | 4,500,000 | |||
Amount of lease for rent-free period | 2,300,000 | |||
Prepaid expenses and other current assets | $ 1,300,000 | |||
Property Sale Agreement [Member] | Maximum [Member] | ||||
Property Sale Agreement - Nashville, Tennessee Campus [Abstract] | ||||
Number of additional lease terms | Term | 3 |
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
ACCRUED EXPENSES [Abstract] | ||
Accrued compensation and benefits | $ 9,845 | $ 5,451 |
Accrued real estate taxes | 1,733 | 1,812 |
Other accrued expenses | 2,102 | 1,390 |
Accrued expenses | $ 13,680 | $ 8,653 |
LONG-TERM DEBT (Details) - Credit Facility [Member] $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 16, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Nov. 14, 2019
USD ($)
Facility
|
|
Long-term debt [Abstract] | |||
Line of credit facility, maximum borrowing capacity | $ 0.0 | $ 60.0 | |
Number of facilities available in 2019 credit agreement | Facility | 4 | ||
Letters of credit outstanding | 4.1 | ||
Credit agreement | $ 0.0 | ||
Subsequent Event [Member] | |||
Long-term debt [Abstract] | |||
Line of credit facility, maximum borrowing capacity | $ 20.0 | ||
Expiration date of credit facility | Feb. 16, 2027 | ||
Letter of Credit [Member] | Subsequent Event [Member] | |||
Long-term debt [Abstract] | |||
Line of credit facility, maximum borrowing capacity | $ 10.0 | ||
Term Loan [Member] | |||
Long-term debt [Abstract] | |||
Line of credit facility, maximum borrowing capacity | $ 20.0 | ||
Expiration date of credit facility | Dec. 01, 2024 | ||
Line of credit facility, amortization schedule based period for interest and principal payments | 120 months | ||
Delayed Draw Term Loan [Member] | |||
Long-term debt [Abstract] | |||
Line of credit facility, maximum borrowing capacity | 10.0 | ||
Expiration date of credit facility | Dec. 01, 2024 | ||
Line of credit facility, amortization schedule based period for interest and principal payments | 120 months | ||
Line of credit facility, monthly interest payment period | 18 months | ||
Credit Agreement [Member] | |||
Long-term debt [Abstract] | |||
Line of credit facility, maximum borrowing capacity | 15.0 | ||
Expiration date of credit facility | Jan. 31, 2021 | ||
Revolving Loan [Member] | |||
Long-term debt [Abstract] | |||
Line of credit facility, maximum borrowing capacity | 15.0 | ||
Expiration date of credit facility | Nov. 13, 2022 | ||
Revolving Loan [Member] | Subsequent Event [Member] | |||
Long-term debt [Abstract] | |||
Line of credit facility, maximum borrowing capacity | $ 40.0 | ||
Revolving Loan [Member] | Letter of Credit [Member] | |||
Long-term debt [Abstract] | |||
Line of credit facility, maximum borrowing capacity | $ 10.0 |
STOCKHOLDERS' EQUITY, Common Stock and Preferred Stock (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Nov. 30, 2022
$ / shares
shares
|
May 24, 2022
USD ($)
shares
|
Nov. 14, 2019 |
Dec. 31, 2023
USD ($)
Vote
$ / shares
|
Dec. 31, 2022
USD ($)
$ / shares
|
|
Dividends [Abstract] | |||||
Dividends paid on shares of Series A preferred stock | $ 0 | $ 1,111 | |||
Treasury Stock [Abstract] | |||||
Cancellation of treasury stock amount | $ 0 | ||||
Common Stock [Member] | |||||
Common Stock [Abstract] | |||||
Common stock voting rights per share | Vote | 1 | ||||
Cash dividends declared or paid | $ 0 | ||||
Preferred Stock [Abstract] | |||||
Number of shares issued upon conversion of preferred stock (in shares) | shares | 423.729 | ||||
Stock conversion (in shares) | shares | 5,381,356 | ||||
Treasury Stock [Abstract] | |||||
Cancellation of treasury stock (in shares) | shares | 5,910,541 | ||||
Cancellation of treasury stock amount | $ 82,900 | ||||
Series A Convertible Preferred Stock [Member] | |||||
Preferred Stock [Abstract] | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0 | $ 0 | $ 0 | ||
Shares converted (in shares) | shares | (12,700) | ||||
Dividends [Abstract] | |||||
Dividend rate | 9.60% | ||||
First dividend payment date | Sep. 30, 2020 | ||||
Dividends paid on shares of Series A preferred stock | $ 1,100 |
STOCKHOLDERS' EQUITY, Restricted Stock and Stock Options (Details) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023
USD ($)
Plan
$ / shares
shares
|
Dec. 31, 2022
USD ($)
$ / shares
shares
|
Feb. 23, 2023
shares
|
|
Stockholders' Equity Note Details [Abstract] | |||
Number of stock incentive plans | Plan | 2 | ||
Restricted Stock [Member] | |||
Shares [Abstract] | |||
Nonvested Restricted Stock outstanding, beginning balance (in shares) | 1,548,266 | 1,743,846 | |
Granted (in shares) | 751,240 | 606,950 | |
Cancelled (in shares) | (37,941) | 0 | |
Vested (in shares) | (862,890) | (802,530) | |
Nonvested Restricted Stock outstanding, ending balance (in shares) | 1,398,675 | 1,548,266 | |
Weighted Average Grant Date Fair Value Per Share [Abstract] | |||
Nonvested Restricted Stock outstanding, beginning balance (in dollars per share) | $ / shares | $ 5.18 | $ 3.89 | |
Granted (in dollars per share) | $ / shares | 6.1 | 7.21 | |
Cancelled (in dollars per share) | $ / shares | 6.15 | 0 | |
Vested (in dollars per share) | $ / shares | 3.76 | 4.18 | |
Nonvested Restricted Stock outstanding, ending balance (in dollars per share) | $ / shares | $ 5.16 | $ 5.18 | |
Recognized restricted stock expense | $ | $ 5.9 | $ 3.1 | |
Unrecognized restricted stock expense | $ | $ 4.3 | $ 7.9 | |
LTIP [Member] | Minimum [Member] | |||
Stockholders' Equity Note Details [Abstract] | |||
Number of shares available for issuance under incentive plan (in shares) | 2,000,000 | ||
LTIP [Member] | Maximum [Member] | |||
Stockholders' Equity Note Details [Abstract] | |||
Number of shares available for issuance under incentive plan (in shares) | 4,000,000 | ||
LTIP [Member] | June 16, 2020 [Member] | |||
Stockholders' Equity Note Details [Abstract] | |||
Stock option award issuance, plan duration | 10 years | ||
LTIP [Member] | Restricted Stock [Member] | |||
Weighted Average Grant Date Fair Value Per Share [Abstract] | |||
Outstanding restricted shares, intrinsic value | $ | $ 14.0 | ||
Non Employee Directors Plan [Member] | |||
Stockholders' Equity Note Details [Abstract] | |||
Net share settlement for restricted stock (in shares) | 337,050 | 268,654 | |
Decrease in equity due to payment of tax for employee | $ | $ 2.0 | $ 2.0 |
STOCKHOLDERS' EQUITY, Share Repurchase Program (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Feb. 27, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
May 24, 2022 |
|||
STOCKHOLDERS' EQUITY [Abstract] | ||||||
Authorized amount of share repurchase program | $ 30,000 | |||||
Period over which common stock can be repurchased | 12 months | |||||
Additional period over which common stock can be repurchased | 12 months | |||||
Additional authorized amount of share repurchase program | $ 10,000 | |||||
Additional amount of shares repurchased | $ 30,600 | |||||
Share Repurchase Program [Abstract] | ||||||
Total number of shares repurchased (in shares) | [1] | 165,064 | 1,572,414 | |||
Amount of shares repurchased | $ 891 | $ 9,445 | ||||
|
PENSION PLAN, Plan's funded status (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
CHANGES IN BENEFIT OBLIGATIONS [Roll Forward] | ||
Benefit obligation-beginning of year | $ 17,113 | $ 22,557 |
Service cost | 0 | 37 |
Interest cost | 792 | 542 |
Actuarial loss (gain) | 4 | (4,661) |
Benefits paid | (1,288) | (1,362) |
Benefit obligation at end of year | 16,621 | 17,113 |
CHANGE IN PLAN ASSETS [Roll Forward] | ||
Fair value of plan assets-beginning of year | 16,445 | 20,950 |
Actual return on plan assets | 2,223 | (3,143) |
Benefits paid | (1,288) | (1,362) |
Fair value of plan assets-end of year | 17,380 | 16,445 |
FAIR VALUE IN EXCESS (DEFICIT) OF BENEFIT OBLIGATION FUNDED STATUS: | $ 759 | $ (668) |
Discount rate | 4.71% | 4.90% |
Maximum [Member] | ||
CHANGE IN PLAN ASSETS [Roll Forward] | ||
Actuarial loss due to change in discount rate | $ 100 |
PENSION PLAN, Summary (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Amounts recognized in the consolidated balance sheets [Abstract] | |||
Noncurrent assets | $ 759 | $ 0 | |
Noncurrent liabilities | 0 | (668) | |
Amounts recognized in accumulated other comprehensive loss [Abstract] | |||
Accumulated loss | (1,219) | (2,480) | |
Deferred income taxes | 1,183 | 1,520 | |
Accumulated other comprehensive loss | (36) | (960) | |
Accumulated benefit obligation | 16,600 | 17,100 | |
COMPONENTS OF NET PERIODIC BENEFIT COST [Abstract] | |||
Service cost | 0 | 37 | |
Interest cost | 792 | 542 | |
Expected return on plan assets | (1,065) | (1,217) | |
Recognized net actuarial loss | 106 | 81 | |
Net periodic benefit income | $ (167) | $ (557) | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, general and administrative | Selling, general and administrative | |
Amortization of estimated net loss, transition obligation and prior service cost from accumulated other comprehensive income into net periodic benefit cost | $ 0 | ||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 17,380 | $ 16,445 | $ 20,950 |
Fair value of total plan assets by major asset category | 100.00% | 100.00% | |
Weighted-average assumptions used to determine benefit obligations [Abstract] | |||
Discount rate | 4.71% | 4.90% | |
Rate of compensation increase | 2.50% | 2.50% | |
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||
Discount rate | 4.71% | 4.90% | |
Pension contributions | $ 0 | $ 0 | |
Expected benefit payments for the plan [Abstract] | |||
Maximum contribution by employee specified as percentage of compensation | 75.00% | ||
Additional contribution by employer | 15.00% | ||
Maximum percentage of compensation contributed by employer as matching contribution | 6.00% | ||
Compensation expense for the 401(k) plan | $ 800 | 700 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 17,380 | 16,445 | |
Significant Other Observable Inputs (Level 2) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Equity Securities [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 4,231 | $ 4,692 | |
Fair value of total plan assets by major asset category | 25.00% | 29.00% | |
Equity Securities [Member] | Minimum [Member] | |||
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||
Target plan asset allocations | 30.00% | ||
Equity Securities [Member] | Maximum [Member] | |||
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||
Target plan asset allocations | 70.00% | ||
Equity Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 4,231 | $ 4,692 | |
Equity Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Equity Securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Fixed Income [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 8,065 | $ 6,130 | |
Fair value of total plan assets by major asset category | 47.00% | 37.00% | |
Fixed Income [Member] | Minimum [Member] | |||
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||
Target plan asset allocations | 20.00% | ||
Fixed Income [Member] | Maximum [Member] | |||
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||
Target plan asset allocations | 60.00% | ||
Fixed Income [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 8,065 | $ 6,130 | |
Fixed Income [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Fixed Income [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
International Equities [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 3,466 | $ 3,650 | |
Fair value of total plan assets by major asset category | 20.00% | 22.00% | |
International Equities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 3,466 | $ 3,650 | |
International Equities [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
International Equities [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Real Estate [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 1,062 | $ 1,301 | |
Fair value of total plan assets by major asset category | 6.00% | 8.00% | |
Real Estate [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 1,062 | $ 1,301 | |
Real Estate [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Real Estate [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Cash and Equivalents [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 556 | $ 672 | |
Fair value of total plan assets by major asset category | 2.00% | 4.00% | |
Cash and Equivalents [Member] | Minimum [Member] | |||
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||
Target plan asset allocations | 0.00% | ||
Cash and Equivalents [Member] | Maximum [Member] | |||
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||
Target plan asset allocations | 10.00% | ||
Cash and Equivalents [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 556 | $ 672 | |
Cash and Equivalents [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | 0 | 0 | |
Cash and Equivalents [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Plan assets using the fair value hierarchy [Abstract] | |||
Fair value of plan assets | $ 0 | $ 0 | |
Pension Plan [Member] | |||
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||
Discount rate | 4.71% | 4.90% | |
Rate of compensation increase | 2.50% | 2.50% | |
Long-term rate of return | 6.75% | 6.75% | |
Expected benefit payments for the plan [Abstract] | |||
2024 | $ 1,356,612 | ||
2025 | 1,338,497 | ||
2026 | 1,339,214 | ||
2027 | 1,325,656 | ||
2028 | 1,311,178 | ||
Years 2029-2033 | $ 6,169,290 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Current [Abstract] | ||
Federal | $ 5,825 | $ 1,864 |
State | 2,185 | 644 |
Total | 8,010 | 2,508 |
Deferred [Abstract] | ||
Federal | 989 | 767 |
State | 643 | 527 |
Total | 1,632 | 1,294 |
Total provision | 9,642 | 3,802 |
Effective income tax rate reconciliation, amount [Abstract] | ||
Income before taxes | 35,639 | 16,436 |
Expected tax | 7,484 | 3,452 |
State tax (net of federal benefit) | 2,234 | 925 |
Other | (76) | (575) |
Total provision | $ 9,642 | $ 3,802 |
Effective income tax rate reconciliation, percent [Abstract] | ||
Expected tax | 21.00% | 21.00% |
State tax (net of federal benefit) | 6.30% | 5.60% |
Other | (0.20%) | (3.50%) |
Total | 27.10% | 23.10% |
Gross noncurrent deferred tax assets (liabilities) [Abstract] | ||
Operating lease liability | $ 26,835 | $ 26,897 |
Provision for credit losses | 14,388 | 9,454 |
Finance lease liability | 4,390 | 0 |
Depreciation | 4,180 | 9,531 |
Stock-based compensation | 1,223 | 541 |
Net operating loss carryforwards | 1,040 | 1,957 |
Accrued expenses | 225 | 67 |
Other intangibles | 24 | 39 |
Pension plan liabilities | (202) | 179 |
Goodwill | (618) | (1,469) |
Finance lease right of use assets | (4,224) | 0 |
Operating lease right-of-use assets | (24,043) | (24,884) |
Noncurrent deferred tax assets, net | 23,218 | 22,312 |
State Tax [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Net operating losses | 18,100 | $ 34,200 |
Federal Tax [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Net operating losses | $ 0 |
FAIR VALUE (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
Investment
|
---|---|---|
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Number of treasury bills | Investment | 2 | |
Number of treasury bills classified as cash and cash equivalent | Investment | 1 | |
Number of treasury bills classified as a short-term investment | Investment | 1 | |
Recurring [Member] | Carrying Amount [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Total cash equivalents and short-term investments | $ 29,380 | $ 43,301 |
Recurring [Member] | Carrying Amount [Member] | Money Market Fund [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | 9,037 | 18,160 |
Recurring [Member] | Carrying Amount [Member] | Treasury Bill [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | 20,343 | 10,383 |
Short-term investments | 14,758 | |
Recurring [Member] | Fair Value [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Total cash equivalents and short-term investments | 29,380 | 43,301 |
Recurring [Member] | Fair Value [Member] | Money Market Fund [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | 9,037 | 18,160 |
Recurring [Member] | Fair Value [Member] | Treasury Bill [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | 20,343 | 10,383 |
Short-term investments | 14,758 | |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Total cash equivalents and short-term investments | 29,380 | 43,301 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value [Member] | Money Market Fund [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | 9,037 | 18,160 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value [Member] | Treasury Bill [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | 20,343 | 10,383 |
Short-term investments | 14,758 | |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Total cash equivalents and short-term investments | 0 | 0 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value [Member] | Money Market Fund [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | 0 | 0 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value [Member] | Treasury Bill [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Total cash equivalents and short-term investments | 0 | 0 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value [Member] | Money Market Fund [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | 0 | 0 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fair Value [Member] | Treasury Bill [Member] | ||
Fair Value of Financial Instruments Measured on Recurring Basis [Abstract] | ||
Cash equivalents | $ 0 | 0 |
Short-term investments | $ 0 |
SEGMENT REPORTING (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023
USD ($)
Segment
|
Dec. 31, 2022
USD ($)
|
|
SEGMENT REPORTING [Abstract] | ||
Number of reportable operating segments | Segment | 2 | |
Estimated costs to close campus | $ 2,000 | |
Summary financial information by reporting segment [Abstract] | ||
Revenue | $ 378,070 | $ 348,287 |
Percentage of Total Revenue | 100.00% | 100.00% |
Operating Income (Loss) | $ 33,358 | $ 16,278 |
Assets | 345,249 | 291,566 |
Campus Operations [Member] | ||
Summary financial information by reporting segment [Abstract] | ||
Revenue | 376,602 | 341,440 |
Reportable Segments [Member] | Campus Operations [Member] | ||
Summary financial information by reporting segment [Abstract] | ||
Revenue | $ 376,602 | $ 341,440 |
Percentage of Total Revenue | 99.60% | 98.00% |
Operating Income (Loss) | $ 47,579 | $ 49,524 |
Assets | 234,940 | 190,473 |
Reportable Segments [Member] | Transitional [Member] | ||
Summary financial information by reporting segment [Abstract] | ||
Revenue | $ 1,468 | $ 6,847 |
Percentage of Total Revenue | 0.40% | 2.00% |
Operating Income (Loss) | $ (1,914) | $ (430) |
Assets | 262 | 1,499 |
Corporate [Member] | ||
Summary financial information by reporting segment [Abstract] | ||
Revenue | 0 | 0 |
Operating Income (Loss) | (12,307) | (32,816) |
Assets | $ 110,047 | $ 99,594 |
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions |
1 Months Ended | 5 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jan. 13, 2023
School
|
Nov. 16, 2022
Student
Decision
|
Jun. 22, 2022
Institution
Category
|
Oct. 31, 2022
School
|
Aug. 31, 2022
School
|
Nov. 16, 2022
Application
|
Dec. 31, 2023
USD ($)
|
|
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||
Number of categories of relief for student loan borrowers | Category | 3 | ||||||
Number of institutes for which DOC agreed to discharge loans and refund prior loan payments | Institution | 150 | ||||||
Period to review borrower defense applications before final settlement date | 36 months | ||||||
Number of schools granted permission to intervene in the lawsuit | School | 3 | ||||||
Number of schools that filed objection against the settlement | School | 4 | ||||||
Estimated number of students to receive automatic loan discharges | Student | 196,000 | ||||||
Estimated number of students to receive decisions under new procedures | Decision | 100,000 | ||||||
Number of new borrowers who submitted borrower defense applications | Application | 250,000 | ||||||
Number of schools that appealed the settlement's final approval | School | 3 | ||||||
Outstanding net loan commitment | $ | $ 33.6 | ||||||
Future employment contract commitments | $ | 10.6 | ||||||
Surety bonds | $ | $ 16.0 |
COVID-19 PANDEMIC AND CARES ACT (Details) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2023
USD ($)
Intallment
|
|
COVID-19 [Abstract] | ||
Total amount expected to be received under CARES Act | $ 27.4 | |
Number of installments used to allocated funds to schools | Intallment | 2 | |
Emergency grants available in first installment under CARES Act | $ 13.7 | |
Utilized amount of permitted expenses | $ 13.7 | |
DOE allocated amount to schools | $ 24.4 | |
Emergency grants distributed to students under CRRSAA and ARPA Act | $ 14.8 |
SUBSEQUENT EVENTS (Details) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 16, 2024
USD ($)
|
Jan. 30, 2024
USD ($)
Student
|
Sep. 28, 2023
USD ($)
ft²
|
Dec. 31, 2023
USD ($)
|
Nov. 14, 2019
USD ($)
|
|
Credit Facility [Member] | |||||
New Credit Facility [Abstract] | |||||
Line of credit facility, maximum borrowing capacity | $ 0 | $ 60,000 | |||
Credit Facility [Member] | Revolving Loan [Member] | |||||
New Credit Facility [Abstract] | |||||
Line of credit facility, maximum borrowing capacity | 15,000 | ||||
Expiration date of credit facility | Nov. 13, 2022 | ||||
Credit Facility [Member] | Letter of Credit [Member] | Revolving Loan [Member] | |||||
New Credit Facility [Abstract] | |||||
Line of credit facility, maximum borrowing capacity | $ 10,000 | ||||
Subsequent Event [Member] | Credit Facility [Member] | |||||
New Credit Facility [Abstract] | |||||
Line of credit facility, maximum borrowing capacity | $ 20,000 | ||||
Term of facility | 36 months | ||||
Expiration date of credit facility | Feb. 16, 2027 | ||||
Line of credit facility, frequency of principal and interest periodic payment | quarterly or monthly | ||||
Payments for closing fee | $ 200,000 | ||||
Subsequent Event [Member] | Credit Facility [Member] | Revolving Loan [Member] | |||||
New Credit Facility [Abstract] | |||||
Line of credit facility, maximum borrowing capacity | 40,000 | ||||
Subsequent Event [Member] | Credit Facility [Member] | Letter of Credit [Member] | |||||
New Credit Facility [Abstract] | |||||
Line of credit facility, maximum borrowing capacity | $ 10,000 | ||||
Percentage of letter of credit fee, annual payment | 0.50% | ||||
Subsequent Event [Member] | Minimum [Member] | Credit Facility [Member] | SOFR [Member] | |||||
New Credit Facility [Abstract] | |||||
Term of variable rate | 1 month | ||||
Subsequent Event [Member] | Minimum [Member] | Credit Facility [Member] | Tranche Rate [Member] | |||||
New Credit Facility [Abstract] | |||||
Interest rate on credit facility | 1.75% | ||||
Subsequent Event [Member] | Minimum [Member] | Credit Facility [Member] | Base Rate [Member] | |||||
New Credit Facility [Abstract] | |||||
Interest rate on credit facility | 0.75% | ||||
Subsequent Event [Member] | Maximum [Member] | Credit Facility [Member] | SOFR [Member] | |||||
New Credit Facility [Abstract] | |||||
Term of variable rate | 3 months | ||||
Subsequent Event [Member] | Maximum [Member] | Credit Facility [Member] | Tranche Rate [Member] | |||||
New Credit Facility [Abstract] | |||||
Interest rate on credit facility | 2.50% | ||||
Subsequent Event [Member] | Maximum [Member] | Credit Facility [Member] | Base Rate [Member] | |||||
New Credit Facility [Abstract] | |||||
Interest rate on credit facility | 1.50% | ||||
Sale-Leaseback Transaction [Member] | |||||
Sale-Leaseback Transaction [Abstract] | |||||
Area of property purchased | ft² | 90,000 | ||||
Property purchase price | $ 10,200 | ||||
Sale-Leaseback Transaction [Member] | Subsequent Event [Member] | |||||
Sale-Leaseback Transaction [Abstract] | |||||
Sale price of agreement | $ 11,000 | ||||
Leaseback agreement term | 20 years | ||||
Tenant improvement allowance | $ 15,000 | ||||
Number of students current campus can accommodate | Student | 250 | ||||
Sale-Leaseback Transaction [Member] | Subsequent Event [Member] | Minimum [Member] | |||||
Sale-Leaseback Transaction [Abstract] | |||||
Property served term | 60 years | ||||
Sale-Leaseback Transaction [Member] | Subsequent Event [Member] | Lease Agreements [Member] | |||||
Sale-Leaseback Transaction [Abstract] | |||||
Tenant improvement allowance | $ 2,500 |
Schedule II-Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
||||
Movement in Valuation Allowances and Reserves [Abstract] | |||||
Balance at beginning of period | $ 35,370 | $ 31,921 | |||
Charged to expense | 41,637 | 34,915 | |||
Accounts written-off | (23,196) | [1] | (31,466) | ||
Balance at end of period | 53,811 | 35,370 | |||
Accounts receivables | 17,504 | 22,734 | |||
Retained earnings | 69,279 | 51,225 | |||
Deferred tax asset | $ 23,217 | 22,312 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASC 326 [Member] | |||||
Movement in Valuation Allowances and Reserves [Abstract] | |||||
Accounts receivables | 10,800 | ||||
Retained earnings | (7,900) | ||||
Deferred tax asset | 2,900 | ||||
Allowance for Credit Loss [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ASC 326 [Member] | |||||
Movement in Valuation Allowances and Reserves [Abstract] | |||||
Accounts receivables | 10,800 | ||||
Retained earnings | (7,900) | ||||
Deferred tax asset | $ 2,900 | ||||
|
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