Lincoln Educational Services Announces New $40 Million Revolving Credit Facility Increasing Capital Resource Flexibility
- Securing a $40 million revolving credit facility with Fifth Third Bank enhances Lincoln Educational Services Corporation's financial resources.
- The credit agreement includes a $10 million sublimit for letters of credit and an option to increase the facility by $20 million.
- The proceeds from the credit facility may be used for working capital, general corporate purposes, and strategic growth initiatives.
- Lincoln's President & CEO, Scott Shaw, emphasizes the company's commitment to students and positive student experiences.
- With $80 million in cash, no debt, and potential additional liquidity from the credit facility, Lincoln's financial position is strong.
- The new credit facility aims to create long-lasting benefits for students, graduates, instructors, corporate partners, and shareholders.
- None.
Insights
The establishment of a $40 million revolving credit facility by Lincoln Educational Services Corporation with Fifth Third Bank indicates a strategic move to bolster the company's liquidity. Such a facility typically allows a company to draw down, repay and reborrow funds as needed, which can be particularly beneficial for managing working capital and supporting strategic initiatives.
From a financial perspective, this facility provides Lincoln with a cushion that can be used for various purposes, including program and campus expansions. This could potentially result in increased enrollment and revenue streams in the long term. Moreover, the inclusion of an accordion feature to increase the facility by an additional $20 million offers additional flexibility, reflecting positively on the company's creditworthiness and negotiation capabilities.
The company's statement of having $80 million in cash and no debt prior to this agreement is a strong indicator of financial health. Investors and shareholders might view this as a sign of prudent financial management and a commitment to sustainable growth.
Lincoln Educational Services Corporation's decision to secure additional liquidity through a credit facility may be interpreted as a proactive measure in an industry that is often subject to fluctuations in enrollment and funding. A revolving credit facility is a strategic financial tool for a company in the education services sector, which requires continuous investment in program development and infrastructure to remain competitive.
The impact of such a facility on the company's stock could be contingent on how effectively the funds are utilized towards growth initiatives. If the capital is deployed in areas that lead to enhanced student experiences and expanded offerings, it may lead to greater competitive advantage and market share, thereby potentially increasing investor confidence.
Lincoln Educational Services Corporation's move to secure a revolving credit facility signals a commitment to investing in strategic growth initiatives such as program and campus expansions. This is crucial in the education industry, where the quality of programs and facilities directly correlates with the institution's attractiveness to prospective students.
Given the company's emphasis on delivering positive student experiences, the credit facility could enable Lincoln to invest in state-of-the-art learning environments, updated technology and additional resources that enhance the value of its educational offerings. The potential long-term impact on the company's reputation and student outcomes could be significant and this may translate into stronger partnerships with corporate entities and an improved placement rate for graduates, further solidifying the institution's standing in the market.
Parsippany, NJ, Feb. 23, 2024 (GLOBE NEWSWIRE) -- Lincoln Educational Services Corporation (Nasdaq: LINC) today announced that it has entered into a
“This new revolving credit facility, complemented with an already robust balance sheet, enhances additional financial resources to execute our near- and longer-term growth initiatives,” commented Scott Shaw, Lincoln’s President & CEO. “We remain committed to our students and the proceeds from this credit facility will allow Lincoln greater financial flexibility to continue delivering positive student experiences. With
Additional information regarding the terms of the new credit facility are contained in a Form 8-K filed with the SEC.
ABOUT LINCOLN EDUCATIONAL SERVICES CORPORATION
Lincoln Educational Services Corporation is a leading provider of diversified career-oriented post-secondary education helping to provide solutions to America’s skills gap. Lincoln offers career-oriented programs to recent high school graduates and working adults in five principal areas of study: automotive technology, health sciences, skilled trades, business and information technology, and hospitality services. Lincoln has provided the workforce with skilled technicians since its inception in 1946 and currently operates 22 campuses in 13 states under 4 brands: Lincoln College of Technology, Lincoln Technical Institute, Lincoln Culinary Institute, and Euphoria Institute of Beauty Arts and Sciences. For more information, please go to www.lincolntech.edu.
FORWARD-LOOKING STATEMENTS
Statements in this press release and in oral statements made from time to time by representatives of Lincoln Educational Services Corporation regarding Lincoln’s business that are not historical facts, including those made in a conference call, may be “forward-looking statements” as that term is defined in the federal securities law. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions are intended to identify forward-looking statements. 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. 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. Generally, these statements relate to business plans or strategies and projections involving anticipated revenues, earnings, or other aspects of the Company’s operating results. Such forward-looking statements include the Company’s current belief that it is taking appropriate steps regarding the pandemic and that student growth will continue. The Company cautions you that these statements concern current expectations about the Company’s future performance or events and are subject to a number of uncertainties, risks, and other influences, many of which are beyond the Company’s control, that may influence the accuracy of the statements and the projects upon which the statements are based including, without limitation, impacts related to the COVID-19 pandemic or other epidemics or pandemics; our failure to comply with the extensive regulatory framework applicable to our industry or our failure to obtain timely regulatory approvals in connection with acquisitions or a change of control of our Company; our success in updating and expanding the content of existing programs and developing new programs for our students in a cost-effective manner or on a timely basis; risks associated with changes in applicable federal laws and regulations; uncertainties regarding our ability to comply with federal laws and regulations, such as the 90/10 rule and prescribed 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; general economic conditions; and other factors discussed in the “Risk Factors” section of our Annual Reports and Quarterly Reports filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise after the date hereof.
FAQ
What is the purpose of Lincoln Educational Services Corporation (LINC) securing a $40 million revolving credit facility with Fifth Third Bank?
What is the total aggregate principal amount of the credit agreement?
Who commented on the new revolving credit facility for Lincoln Educational Services Corporation?
How much cash does Lincoln Educational Services Corporation currently have?
Does Lincoln Educational Services Corporation have any existing debt?
