Lincoln Educational Services Corporation Reports Seventh Consecutive Quarter of Student Start Growth and Improved Operating Performance During Second Quarter; Remains on Target to Achieve Full Year 2019 Profitability

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Conference call today at 10 a.m. ET

WEST ORANGE, N.J., Aug. 14, 2019 (GLOBE NEWSWIRE) -- Lincoln Educational Services Corporation (Nasdaq: LINC) today reported financial results for the second quarter and six months ended June 30, 2019.

“Lincoln has now delivered seven consecutive quarters of student start growth and with the solid momentum of our business we are positioned to extend this trend during the second half of 2019,” commented Scott Shaw, President and Chief Executive Officer.  “We are successfully navigating the tight labor market by working with our corporate partners to enhance the student experience, while our focused marketing initiatives are attracting students seeking training for well-paying careers.  As a result of our achievements to date and expected performance for the second half of the year, we are reiterating our previous guidance for student start growth, net income and EBITDA for the full year.”

Transportation and Skilled Trades segment revenue increased by $1.9 million, or 4.6%, to $44 million for the three months ended June 30, 2019, as compared to $42.1 million in the prior year comparable period.  The increase in revenue is due to continued student start growth which drove a 3.6% increase in average student population quarter over quarter.

Operating income increased $0.7 million, to $2.5 million from $1.7 million in the prior year comparable period.

Educational services and facilities expense increased $0.2 million, or 1% to $20.4 million for the three months ended June 30, 2019, as compared to $20.2 million in the prior year comparable period.

Selling general and administrative expense increased $1 million, or 4.9%, to $21.1 million for the three months ended June 30, 2019, from $20.1 million in the prior year comparable period.  Increased expenses were primarily due to additional investments in marketing during the quarter. 

Healthcare and Other Professions segment revenue increased by $2 million, or 11.3%, to $19.5 million as compared to $17.6 million in the prior year comparable period.  The increase in revenue was mainly due to a 10.3% increase in average student population, which is attributed to consistent start growth over the last 21 months.

Operating income increased by $0.3 million, to $1.8 million from $1.5 million in the prior year comparable period.

Educational services and facilities expense increased $0.6 million, or 6.9%, to $9.3 million for the three months ended June 30, 2019, from $8.7 million in the prior year comparable period.  The increase in expense was primarily driven by increased instructional expense and books and tools expense due to an increased student population quarter over quarter.

Selling general and administrative expense increased by $1.1 million, or 14.8%, to $8.4 million for the three months ended June 30, 2019 from $7.3 million in the prior year comparable period.  Increases in expense were primarily due to additional bad debt expense driven by an increased student population in addition to higher sales and marketing expenses. Investments in marketing expense are expected to yield continued student start growth over the next several quarters.

During the year ended December 31, 2018, one campus, the LCNE campus at Southington, Connecticut was categorized in the Transitional segment.  This campus has been fully taught out as of December 31, 2018 and financial information for this campus has been included in the Transitional segment for the period ending June 30, 2018.  As of June 30, 2019, no campuses have been categorized in the Transitional segment during 2019. There was no revenue for the three months ended June 30, 2019, and $1.5 million for the prior year period resulting in zero operating loss and $0.9 million operating loss for the three months ended June 30, 2019 and 2018 respectively. 

Transportation and Skilled Trades segment revenue increased $3.5 million to $88.4 million for the six months ended June 30, 2019, versus $84.8 million in the comparable six month period of 2018.

Healthcare and Other Professions segment revenue increased $4.2 million to $38.5 million for the six months ended June 30, 2019, versus $34.3 million in the comparable six month period of 2018.

Transitional segment revenue was zero and $3.9 million for the six months ended June 30, 2019 and 2018 respectively.

The Company is reiterating its full year 2019 guidance first provided on March 6, 2019 as follows:

Lincoln will host a conference call today at 10:00 a.m. Eastern Daylight Time.  To access the live webcast of the conference call, please go to the Investor Relations section of Lincoln’s website at . Participants can also listen to the conference call by dialing 844-413-0946 (domestic) or 216-562-0456 (international) and providing access code 2869606. Please log in or dial into the call at least 10 minutes prior to the start time.

An archived version of the webcast will be accessible for 90 days at .  A replay of the call will also be available for seven days by calling 855-859-2056 (domestic) or 404-537-3406 (international) and providing access code 2869606.

Lincoln Educational Services Corporation is a provider of diversified career-oriented post-secondary education and helping to provide solutions to America’s skills gap.  Lincoln offers recent high school graduates and working adults degree and diploma programs.  The Company operates under three reportable segments: Transportation and Skilled Trades, Healthcare and Other Professions and Transitional. Lincoln has provided the nation’s workforce with skilled technicians since its inception in 1946. For more information, go to .

As of June 30, 2019, total debt outstanding was $26.5 million comprised of $22.7 million under Facility 1 and a total year to date advance of $3.8 million under Facility 2 of our outstanding credit facility for working capital purposes.  Further, under the new term loan, principal payments are payable monthly from July through December each year to correspond to the seasonality of our business.  Accordingly, principal payments for 2019 will occur between the months of July through December.  The working capital advance of $3.7 million will be repaid in October of this year. 

The Company believes it is useful to present non-GAAP financial measures that exclude certain significant items as a means to understand the performance of its business. EBITDA and same school basis revenue are measurements not recognized in financial statements presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We define EBITDA as income (loss) before interest expense (net of interest income), provision for income taxes, depreciation, and amortization. We define same school basis revenue as Total Company revenue less the Transitional segment revenue.  EBITDA and same school revenue are presented because we believe they are a useful indicator of our performance and our ability to make strategic acquisitions and meet capital expenditure and debt service requirements. However, it is not intended to represent cash flows from operations as defined by GAAP and should not be used as an alternative to net income (loss) as an indicator of operating performance or to cash flow as a measure of liquidity. EBITDA and same school basis revenue are not necessarily comparable to similarly titled measures used by other companies.

Following is a reconciliation of net loss to EBITDA and same school basis revenue:

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Globe Newswire: 13:00 GMT Wednesday 14th August 2019

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