• Revenue Growth: Q4 revenue increased by 16.4% to $119.4 million.
• Student Starts: Grew by 9.6% in Q4, marking 9 consecutive quarters of growth.
• Adjusted EBITDA: Increased 22% to $19.2 million in Q4, with a margin of 16.1%.
• Net Income: Q4 net income was $6.8 million, or $0.22 per diluted share.
• Cash Flow from Operations: Generated approximately $30 million in Q4, up 38% from the prior year.
• Cash and Liquidity: Ended the year with nearly $60 million in cash and total liquidity of nearly $100 million.
• Full Year Revenue: $440.1 million, reflecting a 16.4% year-over-year growth.
• Full Year Adjusted EBITDA: Increased nearly 60% to $42.3 million.
• Full Year Adjusted Net Income: $17.3 million, up 70% from the prior year.
• Capital Expenditures: $64.1 million for the full year, with 70% related to growth initiatives.
• 2025 Guidance: Revenue of $480 million to $490 million, adjusted EBITDA of $55 million to $60 million, and net income of $8 million to $13 million.

• Warning! GuruFocus has detected 7 Warning Sign with LINC.

Release Date: February 24, 2025

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

Positive Points

• Lincoln Educational Services Corp (NASDAQ:LINC) achieved or exceeded all of its guidance metrics for 2024, demonstrating strong operational and financial performance.
• The company reported a 16% increase in revenue for the fourth quarter, driven by a 10% growth in student starts and a 14% rise in the student population.
• Lincoln's hybrid teaching model, Lincoln 10, has been successfully implemented, providing flexibility and efficiency, and is now used by 65% of the student population.
• The East Point campus in Atlanta, a new greenfield campus, exceeded internal objectives by enrolling over 700 students and operating profitably by the third quarter.
• Lincoln Educational Services Corp (NASDAQ:LINC) has strong financial resources, with nearly $60 million in cash and no debt, supporting its growth strategies and shareholder returns.

Negative Points

• Operating expenses increased to $108.4 million in the fourth quarter, primarily due to costs associated with servicing a larger student population and expansion activities.
• The company is exiting lower ROI programs such as cosmetology, culinary, and massage therapy, which may impact short-term revenue from these segments.
• There are concerns about potential delays in Title IV funds and expansions due to turmoil within the Department of Education.
• The demand for collision programs has softened, leading to the decision to phase out such programs at certain campuses.
• The nursing program at the Paramus campus is currently unable to enroll new students until pass rates meet the required benchmarks, impacting growth in this segment.

Q & A Highlights

Q: Are there any changes to the new campuses and programs plan compared to Q3? A: Scott Shaw, President and CEO: No changes have been made. Nashville is ahead of schedule, with welding classes already started. Levittown is expected to open in early Q3, and Houston remains on track to open in the last quarter of the year.

Q: What impact might the new administration have on regulatory burdens and Department of Education operations? A: Scott Shaw, President and CEO: The new administration is expected to create a level playing field for all educational institutions. We are engaging with the Department of Education to address operational issues, such as delays in Title IV fund approvals, and anticipate improvements over time.

Q: Are there any changes in demand for skilled trades programs? A: Scott Shaw, President and CEO: Demand remains strong across skilled trades, with more growth in this area due to space efficiency. While auto and diesel programs show organic growth, demand for collision programs has softened, leading to strategic adjustments.

Q: Does the strategic growth plan include the new Hicksville campus? A: Brian Meyers, CFO: The $550 million revenue target does not include the Hicksville campus, which is expected to open in Q4 2026.

Q: What is the status of the nursing programs, particularly at the Paramus campus? A: Scott Shaw, President and CEO: The Paramus campus has achieved the necessary pass rates, but we are waiting for the nursing board's approval to resume new starts. We do not anticipate new starts at Paramus in 2025, but all seven campuses now meet the required standards.

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