Attached files
| file | filename |
|---|---|
| 8-K - 8-K - LINCOLN EDUCATIONAL SERVICES CORP | form8k.htm |
Exhibit 99.1
Lincoln Educational Services Corporation2020 Annual Meeting of Shareholders Welcome
PUT YOUR POTENTIAL TO WORK Year Ending 2019
Cautionary Statement Statements during this Annual Meeting regarding Lincoln’s business that are not
historical facts may be “forward-looking statements” that involve risks and uncertainties. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the
times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with
respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause
such differences include, but are not limited to, our failure to comply with the extensive regulatory framework applicable to our industry or our failure to obtain timely regulatory approvals, as required; our success in updating and
expanding the content of existing programs and developing new programs in a cost-effective manner or on a timely basis; risks associated with changes in applicable federal laws and regulations, including pending rulemaking by the U.S.
Department of Education; uncertainties regarding our ability to comply with federal laws and regulations regarding the 90/10 rule and cohort default rates; risks associated with the opening of new campuses; risks associated with integration
of acquired schools; industry competition; our ability to execute our growth strategies; conditions and trends in our industry; the COVID-19 pandemic and its impact on our business and the U.S. and global economies; general economic
conditions; and other factors discussed in our annual report on Form 10-K for the year ended December 31, 2019. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the
forward-looking statements, see “Risk Factors” in Lincoln’s annual report on Form 10-K for the year ended December 31, 2019. All forward-looking statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes
no obligation to revise or update the remarks made to reflect events or circumstances after the date of the 2020 Annual Meeting of Shareholders.
Demand for “Middle Skills Training” 4 Middle-skill jobs, which require education beyond high school
but not a four-year degree, make up the largest part of America’s labor market. (Source: National Skills Coalition)
Lincoln Graduates are Essential Workers 5 Approximately 90% of our students are pursuing careers that
the U.S Department of Homeland Security considers Essential Critical Infrastructure Workers.
Drivers of Organic Demand for Training 6
Significant Opportunity for Organic Growth 7 BLS data for annual new hires for Lincoln’s top
programs Transportation and Skilled Trades Healthcare and Other Professions Automotive Technology 76,000 LPN 63,000 Diesel Technology 42,000 Medical Assisting 95,000 Collision Repair 17,100 Dental
Assisting 46,000 Electrical 82,000 Culinary 146,000 Welding 46,000 Baking & Pastry 29,000 HVAC 39,000 Cosmetology 85,000 Electronic Systems Technology 12,000 Aesthetics 8,000 CNC Manufacturing
Technology 17,000 Information Technology 44,000 Lincoln’s Market Share ~1.5% Lincoln’s Market Share ~0.5% National figures cited above are based on projected annual job openings which refers to the average annual job openings due to
growth and net replacement. This data was compiled from the U.S. Dept. of Labor, Bureau of Labor Statistics, for the years 2016 through 2026, www.careeronestop.org, captured on March 27, 2018. State-specific employment projections can also be
found at careeronestop.org.
Company Overview
Nasdaq : LINC 9 A national leader with nearly 75 years of experienceFocused on providing hands-on
training serving national, large regional, and local employers in transportation, skilled trades, and healthcareStrong student outcomes and regulatory recordThe growing “middle skills gap” will drive growth for the next decade Increased
student starts has returned Lincoln to profitabilityHigh operating leverage as enrollment growsRecent financing transactions provide flexibility to accelerate growth Opportunities to expand footprint and program offerings for additional
growth Stock Price as of 12/31/2019 $2.70 Revenues (2019) $273 million 52-week Price Range $1.66 - $3.30 EBITDA (2019) $13.4 million Common Shares Outstanding 25.2 million Institutional Ownership 74% Market
Capitalization $68.1 million Insider Ownership 6% Average Volume (3 mo.) 19,478
Campuses Across the Country 10 Opportunity for expansion in the South and West
Pro Forma Operations Annual Revenue, Starts, & Average Population* ($ in millions) 11 Revenue
Average Population Starts $245 $257 * 2017 & 2018 exclude transitional segment (closed schools) and are presented as pro forma operations. +3.7% +7.7% +5.0%
Pro Forma Operations ($ in millions) 12 Approximately 11,300 students enrolled at 22 campuses as of
12/31/2019Nine consecutive quarters of start growthKey metrics such as revenue, student starts, student graduation, and placement rates continue to grow Margin4.9% * 2017 & 2018 exclude transitional segment (closed schools) and are
presented as pro forma operations. Refer to appendix.
Transportation and Skilled Trades ($ in millions) 13 Approximately 7,400 students enrolled at 13
campuses as of 12/31/2019High demand for training in Automotive, Diesel, HVAC, CNC, Welding, ElectricalGrowing list of industry partners Margin15.1% Margin14.2%
Healthcare and Other Professions ($ in millions) 14 Approximately 3,900 students at 9 campuses as of
12/31/2019Growing demand for healthcare professionalsStrong demand by students especially for Licensed Practical Nursing Margin10.0%
Increasing Profitability ($ in millions) 15 Lincoln’s EBITDA has increased in each quarter of 2019 as
compared to 20182019 EBITDA was $13.4M
EBITDA & Net Income Pro Forma Summary* ($ in millions) 16 * 2017 & 2018 exclude transitional
segment (closed schools) and are presented as pro forma operations. Refer to appendix.
Earnings Per Share 17
Balance Sheet & Cash Flow Summaries 18
November 2019 Transactions ($ in millions) 19 Strengthened liquidity position provides flexibility to
execute growth initiativesIncreased available liquidity by more than $30 millionAnnualized interest expense savings of approximately $1 millionNew $60 million credit facility$20 million funded term loan$10 million delayed draw term loan$15
million revolving line of credit ($10 sublimit for standby letters of credit)$15 million cash collateralized line of credit when outstanding Issued $12.7 million of 9.6% convertible preferred stock ($2.36 conversion price)Improved balance
sheet due to financing activities 9/30/19* 12/31/19 Cash $11.8 $23.6 Restricted cash 4.0 15.0** Bank debt (26.9) (34.0)** Net Cash (Debt) $ (11.1) $ 4.6 Cash and available liquidity $11.8 > $40 * Quarter before
financing activities**$15 million of restricted cash was repaid in January 2020
Growing Base of Industry Partners 20 Positions Lincoln as long-term solutions provider for both entry
level technicians and advanced workforce trainingEmployers appreciate the technical and soft skills of our studentsPartners provide validation of the quality of our educationCo-branding opportunities with elite partners helps attract new
studentsPartners provide better job opportunities for our graduates
Entering 2020 : a New Chapter for Lincoln 21
2020 Priorities Pre-COVID-19 22 * These financial goals were per-COVID 19 and guidance was withdrawn
on May 13, 2020
23 Initial Response Medium Term Longer Term Impact of COVID-19
Investment Merits 24 A national leader in hands-on transportation, skilled trades, and healthcare
trainingOrganic revenue growth with increasing profitabilityThe skills gap will drive growth for the next decadeOpportunities to expand footprint and program offerings for additional growthCapacity at campuses provides high operating leverage
on incremental growth$66.7 million of tax loss carryforwards reduces future cash outflows*In a down economy, Lincoln’s growth and profitability can increase substantiallyStrong student outcomes and regulatory record * Subject to 382
limitation expected to be completed Q2 2020 and not reflected on balance sheet due to having a full tax valuation allowance.
Thank You