Lincoln (LINC) Completes Nashville Campus Divestiture to SLC
Lincoln Educational Services Corporation LINC sold its Nashville campus to Southern Land Company’s (SLC) affiliate for $33.8 million.
On Sep 24, 2021, LINC entered into a Contract for the Purchase of Real Estate to sell 524 Gallatin Avenue, Nashville, TN property. Per the deal, LINC and SLC signed a lease agreement, which allowed Lincoln to continue to occupy the nearly 16-acre property on a rent-free basis for the next 15 months. Also, Lincoln had three options to extend the lease for consecutive 30-day terms at $150,000 per extension term.
Although LINC has not yet determined the new location, it expects the new facility to be EBITDA neutral for the first year of operations with anticipated efficiencies. It also expects to invest $15-$20 million for the buildout of the new campus, including two new programs — HVAC and Electrical.
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On Jun 13, the company’s stock plunged 2.78% in a day trading session but grew 1.27% in the after-hours trading hour. In the year-to-date period, the stock of this Zacks Rank #3 (Hold) company jumped 9.7% compared with the Zacks Schools industry’s 2.7% rise.
In first-quarter 2023, the company’s adjusted earnings grew 3 times from a year-ago level. Revenues also rose 6.9% year over year, backed by its new hybrid teaching model. The new model increased program efficiency and accelerated revenues for certain evening programs. A 9% increase in average revenue per student driven by higher tuition also added to the growth.
Backed by solid first-quarter results, the company raised its 2023 guidance. Revenues are now expected within the $355-$365 million range compared with $345-$360 million projected earlier. Adjusted EBITDA is likely to be $21-$25 million, up from $19-$24 million expected earlier. Adjusted net income is projected in the range of $9-$12 million versus prior anticipation of $7-$11 million. Student start is anticipated to increase by 5-10%.
In May, LINC partnered with Hunter Engineering, the leading under-car service company, to open a Hunter Training Center for students and many employer partners/technicians.
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