In This Article:
Lincoln Educational Services Corporation LINC reported mixed results for third-quarter 2024. Its earnings missed the Zacks Consensus Estimate, but revenues topped the same.
Nonetheless, both metrics increased year over year, driven by a 10.6% increase in the average student population. This uptick resulted from four consecutive quarters of double-digit start growth and the recently opened East Point, GA campus, which generated $3.4 million in revenues in the third quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Shares of this diversified career-oriented post-secondary education provider gained 3.6% on Monday. Investors’ sentiments might have got a boost after the company raised its 2024 guidance.
Strong demand for its programs, impressive graduation and placement rates, new campus development strategy, and improving efficiencies position Lincoln well to achieve its long-term objectives. In 2027, LINC expects to generate approximately $550 million in revenues and $90 million in adjusted EBITDA.
Inside the Headlines
LINC reported adjusted earnings per share (EPS) of 13 cents, which missed the Zacks Consensus Estimate of 14 cents by 7.1% but rose 18.2% from the year-ago quarter.
Lincoln Educational Services Corporation Price, Consensus and EPS Surprise
Lincoln Educational Services Corporation price-consensus-eps-surprise-chart | Lincoln Educational Services Corporation Quote
Total revenues of $114.4 million surpassed the consensus estimate of $111.1 million by 3% and increased 14.8% from the prior year.
Student starts grew 21.1% to 6,243 and quarter-end student population rose 13.3% to 15,887 from the year-ago quarter. Average population was 14,309 compared with 12,942 a year ago.
Selling, general and administrative expense increased 16.3% year over year to $63.3 million, mainly due to costs associated with new programs, new campuses and campus relocations. Also, costs associated with a larger student population and increased marketing investments, which helped drive student starts, were additional headwinds.
Adjusted EBITDA was $10.2 million, up 66.7% year over year.
Segment Details
Campus Operations Segment: The segment’s revenues increased 15% year over year to $114.4 million. Adjusted EBITDA increased 38.6% to $19.9 million from the prior year.
Transitional Segment: In the fourth quarter of 2023, the completed teach-out of its Somerville, MA, campus.
Financial Details
As of Sept. 30, 2024, LINC had total liquidity of $93.96 million, including cash and cash equivalents of $53.96 million.
Cash provided by operating activities was $5.6 million in the third quarter of 2024 versus net cash used in operating activities of $6.8 million in the year-ago period.