Lincoln Educational Shares Slide On Q2 Miss, Student Start Rate Challenges

Lincoln Educational Shares Slide On Q2 Miss, Student Start Rate Challenges
  • Lincoln Educational Services Corp LINC reported second-quarter FY22 sales growth of 2.1% year-on-year to $82.14 million, missing the consensus of $83.47 million.
  • Educational services and facilities expenses increased 7.2% to $36.1 million.
  • Segment Results: Transportation and skilled trades segment revenue increased 1.8%, Healthcare and other professions revenue rose 2.9%.
  • The operating margin was 0.5%, and operating income for the quarter fell 88.5% to $0.396 million.
  • The company held $66.9 million in cash and equivalents as of June 30, 2022.
  • Adjusted EBITDA decreased 60.3% to $2.4 million.
  • EPS of $0.00 missed the analyst consensus of $0.04.
  • CEO Scott Shaw said, "Although we achieved four percent student start growth during the quarter, our start growth was less than we anticipated. Throughout this year, we have experienced strong double-digit growth in enrollments across our campuses. However, conversion of these enrollments into new student starts has become more challenging in the current environment. As a result, we ended the quarter with a lower student start rate than we anticipated and expect that these challenges will continue into the second half of the year."
  • Outlook: Lincoln sees FY22 sales of $340 million - $350 million.
  • The company expects Student start decline / growth of -3% to 3%. Adjusted EBITDA of $25 million - $30 million. 
  • Price Action: LINC shares are trading lower by 8.21% at $6.71 on the last check Monday.

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