Lincoln Educational Services Reports 30.6% Student Start Growth, Double Digit Revenue Growth, Significant Operating and Net Income Improvement During Q1; Raises 2021 Guidance
Conference call today at 10 a.m. ET
PARSIPPANY, N.J., May 10, 2021 — Lincoln Educational Services Corporation (Nasdaq: LINC) today, reported operating and financial results for the first quarter as well as recent business developments.
First Quarter 2021 vs First Quarter 2020 Operating and Financial Highlights
- New student starts rose 30.6%, or by approximately 800 students.
- Ending student population increased 15.5% to 12,646.
- Revenue increased 11.4% to $78.0 million.
- Operating income of $6.0 million versus operating loss of $1.3 million.
- Net income of $4.5 million versus net loss of $1.8 million.
- Adjusted EBITDA* of $8.4 million versus $0.8 million.
*See Use of “Non-GAAP Financial Information” below.
“Lincoln is off to a strong start in 2021 and the first quarter put us ahead of our plan for the full year. As a result of our performance, and the trends we are experiencing and expect for the remainder of the year, we have been able to increase some of our annual guidance metrics,” commented Scott Shaw, President & CEO.
“Student start growth continued to accelerate during the quarter, reflecting the continued effectiveness of our marketing initiatives. During the second quarter, we plan to launch a new Medical Assistant program, and a Welding program, at two of our existing campuses. With the increased attention in Washington on programs to address the nation’s ailing infrastructure, we are well positioned with our current curriculums to play a vital role in this effort.”
2021 FIRST QUARTER FINANCIAL RESULTS
(Quarter ended March 31, 2021 compared to quarter ending March 31, 2020)
- Revenue increased $8.0 million, or 11.4% to $78.0 million from $70.0 million. The increase was largely due to the 9.8% increase in average student population compared to the prior year. The primary revenue drivers were beginning the year with approximately 1,000 more students than at the beginning of 2020, coupled with the quarters increase in new student starts.
- Student starts increased 30.6% or by approximately 800 students over the prior year comparable period. Contributing to the favorable comparison approximately 300 student starts scheduled for last year’s first quarter were delayed to the second quarter due to the onset of the pandemic. Student starts have consistently grown over the last three years.
- Educational services and facilities expense increased $2.1 million, or 7.0% to $32.3 million from $30.2 million in the prior year comparable quarter. The increase was due mainly to a higher student population.
- Selling, general and administrative expense decreased $1.5 million, or 3.7% to $39.6 million from $41.1 million in the prior year comparable quarter. The decrease was partially due to a $2.4 million reduction in bad debt expense resulting from the new government guidance on the uses of institutional CARES Act funds.
- Operating income increased to $6.0 million from an operating loss of $1.3 million in the prior year comparable quarter.
- Pre-tax income increased to $5.7 million, from a pre-tax loss of $1.7 million in the prior year comparable quarter.
- Provision for income taxes increased to $1.2 million, from less than $0.1 million in the prior year comparable quarter. The increase quarter over quarter was due to the reversal of a full valuation allowance at December 31, 2020, resulting in an effective tax rate of 21.7% in the current quarter.
- Net income improved to $4.5 million, or $0.13 per diluted share, compared to a net loss of $1.8 million, or $0.08 per diluted share.