Lincoln Educational Services Reports 14.8% Revenue Growth in Q3 2024

Lincoln Educational Services Corporation reported a significant increase in financial performance for the third quarter of 2024, with revenues reaching $114.4 million, a 14.8% increase from $99.6 million in the same period last year. For the nine months ending September 30, 2024, total revenue was $320.7 million, up 16.4% from $275.5 million in the prior year. The growth in revenue was primarily attributed to a 10.6% increase in average student population, bolstered by a 21.1% rise in student starts during the quarter. The newly opened East Point, Georgia campus contributed $3.4 million to this revenue growth.

The company's operating income for the third quarter was $5.8 million, a substantial increase from $2.0 million in the same quarter of 2023. For the nine-month period, operating income was $4.2 million, down from $24.4 million in the previous year, largely due to a significant gain from the sale of the Nashville property in 2023 that did not recur. The educational services and facilities expenses increased by 11.4% to $48.0 million for the quarter, driven by costs associated with new programs and campuses, while selling, general, and administrative expenses rose by 16.3% to $63.3 million.

Operationally, Lincoln Educational Services has maintained a steady growth trajectory, with a total student population of 15,887 as of September 30, 2024, reflecting a 13.2% increase from the previous year. The company operates 22 campuses across 13 states, focusing on career-oriented education in various fields, including skilled trades, healthcare, and information technology. The company has also made strategic moves, such as the opening of new campuses in Nashville and Houston, which are expected to enhance its market presence.

In terms of financial health, Lincoln Educational Services reported total assets of $404.0 million as of September 30, 2024, compared to $345.2 million at the end of 2023. The company’s cash and cash equivalents decreased to $54.0 million from $80.3 million, primarily due to capital expenditures related to campus expansions and incentive compensation payments. The company has also entered into a secured credit agreement with Fifth Third Bank, providing a revolving credit facility of $40 million to support its operational needs.

Looking ahead, Lincoln Educational Services is optimistic about its growth prospects, driven by continued enrollment increases and the expansion of its program offerings. However, the company remains cautious about potential regulatory changes affecting federal student financial aid programs, which could impact its operations. The planned sale of its Las Vegas campus is also on the horizon, with expectations to close the transaction in January 2025, subject to regulatory approvals.