• Total Revenue: $114.4 million, a 15% increase.
• Adjusted EBITDA: $10.2 million, a 67% increase from the prior year.
• Student Start Growth: 21.1% overall; 15% same-campus growth.
• Cash and Cash Equivalents: $54 million.
• Cash Flow from Operations: $5.6 million generated in the third quarter.
• Capital Expenditures: Approximately $20 million in the third quarter.
• Projected Full-Year Revenue Guidance: $430 million to $435 million.
• Projected Full-Year Adjusted EBITDA Guidance: $41 million to $43 million.
• Projected Full-Year Adjusted Net Income Guidance: $16 million to $18 million.
• Projected Full-Year Student Start Growth: 13% to 15%.
• Projected Full-Year Capital Expenditures: $50 million to $55 million.

• Warning! GuruFocus has detected 6 Warning Sign with LINC.

Release Date: November 11, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lincoln Educational Services Corp (NASDAQ:LINC) reported a 15% increase in total revenue for the third quarter, driven by a 10.6% increase in average student population.
• The company achieved a 67% growth in adjusted EBITDA, reflecting strong financial performance.
• Lincoln 10.0 hybrid teaching model is proving successful, contributing to student growth and operational efficiencies.
• The new East Point campus exceeded expectations with 600 enrollments and $5 million in revenue, achieving positive EBITDA.
• Lincoln Educational Services Corp (NASDAQ:LINC) raised its full-year guidance for 2024, indicating confidence in continued growth.

Negative Points

• Operating expenses increased by 11%, driven by growth initiatives and higher student population.
• The Euphoria Institute campus in Las Vegas is underperforming, with an EBITDA loss forecasted for the year.
• The company faces challenges with New York state regulations for its planned Long Island campus.
• The Paramus, New Jersey campus is below benchmark, affecting student enrollment in nursing programs.
• Despite strong lead generation, the company acknowledges the need for continuous evaluation of marketing performance.

Q & A Highlights

Q: Can you provide more details about the new Long Island campus plans and any regulatory concerns in New York State? A: We are close to signing the lease for the new Long Island campus, identified as a needed location using the same methodology as our East Point campus. We have a partnership with the Greater New York Dealers Association, and there's a strong demand for skilled trades in Long Island. Although New York is a challenging state for regulation, our 20-year presence there gives us confidence in navigating these challenges. We expect the campus to be operational within 24 months.

Q: Why is Lincoln Educational Services divesting the Euphoria Institute in Las Vegas? A: The Euphoria Institute is our only cosmetology program and does not align with our core focus on transportation, skilled trades, and healthcare. We are not closing it but transitioning it to a new owner who specializes in cosmetology schools. This move will allow the program to grow more effectively outside of Lincoln's system.

Q: What is the size of the new Long Island campus, and how does it compare to East Point? A: The Long Island campus will be approximately 65,000 square feet, slightly larger than the 56,000 square feet East Point campus.

Q: How is Lincoln Educational Services managing lead generation, and is it due to increased macro demand or improved strategies? A: It's a combination of both. While our marketing team believes we are getting smarter at lead generation, there is also a significant macro trend with increased interest in skilled trades. This trend is boosting our lead generation efforts.

Q: With the change in administration, do you foresee any regulatory changes affecting your industry? A: We anticipate less onerous regulations under the new administration, similar to the previous Trump administration. However, our long-term strategy remains unchanged, focusing on providing high ROI programs. We hope for more permanent regulatory changes that level the playing field for all educational institutions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.