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Lincoln Educational Services Corporation Reports Fourth Quarter And 2010 Year End Results

Statements in this press release regarding Lincoln's business which are not historical facts may be "forward-looking statements" that involve risks and uncertainties. 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 Form 10-K for the year ended December 31, 2009 and Form 10-Q for the quarterly period ended September 30, 2010. All forward-looking statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes no obligation to revise or update this news release to reflect events or circumstances after the date hereof.

(Please see financial attachments.)

 
LINCOLN EDUCATIONAL SERVICES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
 
   Three Months Ended December 31,  
   (Unaudited) Years Ended December 31,
         
  2010 2009 2010 2009
         
REVENUE  $ 167,022  $ 157,459  $ 639,494  $ 552,536
COSTS AND EXPENSES:        
Educational services and facilities 59,446 54,226 239,738 211,295
Selling, general and administrative 59,370 62,925 270,879 252,673
Loss (gain) on sale of assets -- 45 (8) 35
Impairment of goodwill 6,244 215 6,244 215
Total costs and expenses 125,060 117,411 516,853 464,218
OPERATING INCOME 41,962 40,048 122,641 88,318
OTHER:        
Interest income 4 4 30 29
Interest expense (1,149)  (1,042)  (4,533)  (4,275)
Other income 4 8 45 35
INCOME BEFORE INCOME TAXES 40,821 39,018 118,183 84,107
PROVISION FOR INCOME TAXES 17,626 16,684 48,452 34,868
NET INCOME $ 23,195 $ 22,334 $ 69,731 $ 49,239
         
Earnings per share -- Basic $ 1.06 $ 0.84 $ 2.86 $ 1.87
         
Earnings per share – Diluted $ 1.04 $ 0.82 $ 2.79 $ 1.82
         
Weighted average number of common shares outstanding:        
Basic 21,883 26,565 24,418 26,337
Diluted 22,338 27,341 25,024 27,095
         
Other data:        
         
Adjusted EBITDA (1) $ 54,759 $ 46,935 $ 155,148 $ 112,808
Depreciation and amortization 6,551 6,664 26,218 24,240
Number of campuses 45 43 45 43
Average enrollment 32,352 31,321 31,535 27,808
Stock based compensation 806 849 2,665 2,377
Net cash provided by operating activities 46,387 30,304 114,464 73,169
Net cash used in investing activities (8,494) (15,555) (42,111) (51,593)
Net cash provided by (used in) financing activities $ 13,672 $ (6,729) $ (52,434) $ 9,266
   
   
Selected Consolidated Balance Sheet Data: December 31,
(In thousands) 2010
   
Cash and cash equivalents $ 65,995
Current assets 117,492
Working deficit (4,176)
Total assets 412,822
Current liabilities 121,668
Long-term debt and capital lease obligations, including current portion 56,945
Total stockholders' equity $ 222,485

(1) Reconciliation of Non-GAAP Financial Measures

EBITDA is a measurement not recognized in financial statements presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We define EBITDA as income from continuing operations before interest expense (net of interest income), provision for income taxes and depreciation and amortization. EBITDA is presented because we believe it is a useful indicator of our performance and our ability to make strategic acquisitions and meet capital expenditure and debt service requirements. It is not, however, intended to represent cash flows from operations as defined by GAAP and should not be used as an alternative to net income (loss) as an indicator of operating performance or to cash flow as a measure of liquidity. EBITDA is not necessarily comparable to similarly titled measures used by other companies. Adjusted EBITDA includes non cash charges related to impairment of goodwill. Following is a reconciliation of income from continuing operations to Adjusted EBITDA:

  Three Months Ended December 31,  
  (Unaudited) Years Ended December 31,
         
  2010 2009 2010 2009
         
Net Income $23,194 $22,334 $69,731 $49,239
Interest expense, net 1,144 1,038 4,503 4,246
Provision for income taxes 17,626 16,684 48,452 34,868
Depreciation and amortization 6,551 6,664 26,218 24,240
EBITDA  48,515  46,720  148,904  112,593
Impairment of goodwill 6,244 215 6,244 215
Adjusted EBITDA $54,759 $46,935 $155,148 $112,808
CONTACT: Lincoln Educational Services Corporation
         Cesar Ribeiro, CFO
         973-736-9340

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