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December 4, 2021

China Liberal Education Holdings Limited Reports Financial Results for the First Six Months of Fiscal Year 2021

BEIJING, Dec. 3, 2021 /PRNewswire/ — China Liberal Education Holdings Limited (Nasdaq: CLEU) (“China Liberal”, or the “Company”, or “we”), a China-based company that provides smart campus solutions and other educational services, today announced its financial results for the first six months of fiscal year 2021.

Ms. Ngai Ngai Lam, Chairwoman and CEO of China Liberal, commented, “We still delivered respectable results in the first half of the fiscal year 2021, although the ongoing uncertainties associated with the COVID-19 pandemic caused many Chinese universities and colleges to hold off on their ‘smart campus’ project plans. Through our efforts and dedication, we achieved highly resilient financial results while prioritizing our customers during the pandemic. For the first half of fiscal year 2021, our revenue decreased by 18.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $1.85 million from $2.27 million for the same period last year. However, our gross profit reached $1.37 million, an increase of 74.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from $0.79 million for the same period of last year, and our gross margin was 74.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, a year-over-year increase of 39.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from 34.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for the same period of last year. We are also excited about our business progress of integration of enterprises and vocational education business(tailored job readiness training services). To address the actual needs of regional economic development and industrial upgrading and transformation, we provided colleges and universities with school-enterprise integrated education solutions. We strived to establish a talent training system and a comprehensive platform, providing talent trainings and co-op opportunities for students. In addition, our self-developed and patented all-in-one teaching machine, AI-Space machine, has been recognized by the market and the industry and installed in several colleges and universities across China, including Beijing Foreign Studies University, Beijing Language and Culture University, and Straits Institute of Minjiang University, laying a solid foundation for our future potential revenue growth. We believe that we are well-positioned for the future with our brand awareness, innovative technologies, and loyal customer base.”

First Six Months of Fiscal Year 2021 Financial Highlights

	For the Six Months Ended June 30,
($ millions, except per share data)	2021	2020	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}Change
Revenue	1.85	2.27	-18.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Gross profit	1.37	0.79	74.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Gross margin	74.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	34.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	39.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Income (Loss) from operations	0.30	(0.11)	NM
Operating profit(loss) margin	16.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	-5.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	NM
Net income (loss)	0.23	(0.08)	NM
Basic and diluted earnings (loss) per share	0.03	(0.02)	NM

Revenue decreased by 18.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $1.85 million for the six months ended June 30, 2021 from $2.27 million for the same period last year.
Gross profit increased by 74.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $1.37 million for the six months ended June 30, 2021 from $0.79 million for the same period last year.
Gross margins were 74.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} and 34.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for the six months ended June 30, 2021 and 2020, respectively.
Income from operations was $0.30 million for the six months ended June 30, 2021, compared to loss from operations of $0.11 million for the same period last year. Operating profit margin was 16.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for the six months ended June 30, 2021, compared to operating loss margin of 5.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for the same period last year.
Net income was $0.23 million for the six months ended June 30, 2021, compared to net loss of $0.08 million for the same period last year.
Basic and diluted earnings per share were $0.03 for the six months ended June 30, 2021, compared to basic and diluted loss per share of $0.02 for the same period last year.

First Six Months of Fiscal Year 2021 Financial Results

Revenue

Revenue decreased by 18.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $1.85 million for the six months ended June 30, 2021 from $2.27 million for the same period last year. The decrease in revenue was mainly driven by decreased revenue from technological consulting services for smart campus solutions as the Company did not enter into new large “smart campus” project contract with Chinese universities/ colleges during the six months ended June 30, 2021 since continued uncertainties associated with the COVID-19 pandemic caused many Chinese universities/colleges to hold off on their “smart campus” project plans.

	For the Six Months Ended June 30,
($ millions)	2021			2020
Revenue	Revenue	Cost of Revenue	Gross Margin	Revenue	Cost of Revenue	Gross Margin
Sino-foreign Jointly Managed Academic Programs	1.42	0.23	84.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	1.26	0.26	79.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Technological Consulting Services for Smart Campus Solutions	0.34	0.19	43.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	0.93	1.21	-29.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Overseas Study Consulting Services	0.03	0.02	29.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	0.07	0.01	82.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Tailored Job Readiness Training Services	0.07	0.04	37.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	–	–	–
Total	1.85	0.48	74.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	2.27	1.48	34.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

For the six months ended June 30, 2021, revenue from sino-foreign jointly managed academic programs increased by $0.16 million, or 12.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $1.42 million, from $1.26 million for the same period last year. This increase was primarily attributed to an increase in the number of students by 173 or 6.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to 2,841 students in six months ended June 30, 2021, from 2,668 students in six months ended June 30, 2020. Furthermore, the increase is also attributable to an approximately 9.03{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} positive impact from foreign currency fluctuation when the average exchange rate used in converting RMB into USD increased from $1 to RMB 7.0416 in the six months ended June 30, 2020 to $1 to RMB 6.4587 in the six months ended June 30, 2021. The increase is partially offset by a 3.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} decrease in average tuition fees. The decrease in average tuition fee was mainly caused by change in student mix enrolled in different academic programs with the universities/ colleges.

Revenue from technological consulting services for smart campus solutions decreased by $0.59 million, or 63.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $0.34 million for the six months ended June 30, 2021, from $0.93 million for the same period last year. The decrease was primarily because the Company did not obtain smart campus projects of large size during the six months ended June 30, 2021. In addition, the continued uncertainties associated with COVID-19 caused many Chinese universities/colleges to hold their “smart campus” project plans.

Revenue from overseas study consulting services decreased by $0.04 million, or 64.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $0.03 million for the six months ended June 30, 2021, from $0.07 million for the same period last year. The decrease was mainly due to the impact of the COVID-19 pandemic which caused certain countries closed its borders and imposed travel restrictions. As a result, the number of students interested in seeking overseas education reduced significantly. A portion of our revenue from overseas study consulting services was recognized when the students received offers and obtained appropriate visas. For the six months ended June 30, 2021, none of the students who participated in overseas consulting services received offers or visas as they have not yet completed their trainings and studies compared to 11 students who received school offers and obtained visas in the same period in 2020.

Revenue from tailored job readiness training services was $0.07 million for the six months ended June 30, 2021, compared with nil for the same period last year. The Company provided tailored job readiness training services to more than 130 students for the six months ended June 30, 2021.

Cost of Revenue

Cost of revenue decreased by $1.00 million, or 67.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $0.48 million for the six months ended June 30, 2021, from $1.48 million for the same period last year, primarily due to the decreased hardware costs of $1.02 million associated with the smart campus projects.

Gross Profit

Gross profit increased by $0.58 million, or 74.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $1.37 million for the six months ended June 30, 2021, from $0.79 million for the same period last year, while gross profit margin increased by 39.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to 74.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for the six months ended June 30, 2020, from 34.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for the same period last year. The increase in gross profit and gross margin was primarily due to decreased hardware costs associated with the Company’s technological consulting service projects.

Operating Expenses

Selling expenses decreased by $53,872, or 41.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $76,593 for the six months ended June 30, 2021, from $130,465 for the same period last year. The decrease in selling expenses was primarily attributable to the decrease in the rental and office expenses and depreciation expenses by $54,679 when the Company relocated to a smaller office space.

General and administrative expenses increased by $224,833, or 29.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $995,451 for the six months ended June 30, 2021, from $770,618 for the same period last year, primarily due to an increase in salaries and welfares expenses of $74,630 resulting from increased number of administrative employees, an increase in professional services fees of $57,300, an increase in share-based compensation to independent directors of $53,250 and an increase in independent director compensation of $28,419.

Interest Income

Interest income decreased by $22,797 or 27.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $59,973 for the six months ended June 30, 2021, from $82,770 for the same period last year. In connection with the Company’s technological consulting services for smart campus projects, the Company recognized financing component resulted from a timing difference between when control is transferred and when the Company collected cash consideration from the customer. For the six months ended June 30, 2021 and 2020, the Company recognized $56,511 and $79,907 interest income in connection with the aforementioned financing component, respectively.

Other Expense

Other expense was $7,249 and $907 for the six months ended June 30, 2021 and 2020, respectively, the increase was due to increased bank charges.

Income Tax Provision

Income tax provision was $0.12 million for the six months ended June 30, 2021, increased from $0.05 million for the same period of last year due to higher taxable income.

Net Income (Loss)

Net income was $0.23 million for the six months ended June 30, 2021, compared to a net loss of $0.08 million for the same period last year. Basic and diluted earnings per share were $0.03 for the six months ended June 30, 2021, compared to basic and diluted loss per share of $0.02 for the same period last year.

Financial Condition

During the six months ended June 30, 2021, the Company had negative cash flow from operations. As of June 30, 2021, the Company had cash of approximately $33.7 million and had positive working capital of approximately $40.8 million. The Company’s liquidity is influenced by the level of its operations, the numerical volume and dollar value of its sales contracts, the progress of execution on its customer contracts, and the timing of accounts receivable collections. Management believes that the Company’s current cash as of June 30, 2021 will be sufficient to meet its working capital needs for at least the next 12 months from the date of the Company’s interim financial statements are issued.

As of June 30, 2021, the Company had cash of $33.70 million, compared to $5.01 million as of December 31, 2020.

Net cash used in operating activities was $1.89 million for the six months ended June 30, 2021, compared to $0.94 million for the same period last year.

Net cash provided by investing activities was $1.45 million for the six months ended June 30, 2021, compared net cash used in investing activities of $0.01 million for the same period last year.

Net cash provided by financing activities was $29.06 million for the six months ended June 30, 2021, compared to $5.50 million for the same period last year.

The Company intends to finance its future working capital requirements and capital expenditures from cash generated from operating activities. However, the Company may seek additional financings, to the extent required, and there can be no assurances that such financing will be available on favorable terms or at all.

COVID-19

The Company’s operations may be further affected by the ongoing COVID-19 pandemic. For the six months ended June 30, 2021, the Company’s revenue from sino-foreign jointly managed academic programs was not significantly impacted because Chinese universities/colleges have resumed on-site instruction since May 2020 and the number of students enrolled in the Company’s sino-foreign jointly managed education programs with two colleges increased during the 2021 academic school year. The total enrolled number of students increased by 14{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} as compared to the same period of last year. The teaching services that the Company has been providing to students have returned to normal, and no dropout has been reported to the Company during the six months ended June 30, 2021. However, due the impact of COVID-19, the internal payment processes of the partnering schools were temporarily delayed. As a result, the Company and these partnering schools mutually agreed to extend the tuition payment term by three to six months. The Company does not believe such delay will result in any collectability risk and the entire tuition receivable balance is expected to be fully received but only slightly later than a typical operating year. Furthermore, this temporary delay in tuition payment does not represent a change in the Company’s cooperation model with these partnering schools and the Company does not expect to incur further tuition payment delays in the future.

The continued uncertainties associated with the COVID-19 have caused many Chinese universities/ colleges to temporarily hold off on their “smart campus” project construction plans and accordingly the Company did not obtain new large “smart campus” project contract during the six months ended June 30, 2021, which led to a decrease in the Company’s revenue from technological consulting and supporting services during current period. Additionally, the COVID-19 pandemic continues to have a negative impact over the Company’s study abroad consulting services. A portion of the Company’s revenue from overseas study consulting services were recognized when students received offers and obtained appropriate visas. However, due to the COVID-19 pandemic, certain countries closed their borders and imposed travel restrictions. For the six months ended June 30, 2021, none of the students receiving overseas consulting services received offers or visas, compared to 11 students who received school offers and obtained visas in the same period in 2020. Due to the uncertainties around international travels, it is expected that the COVID-19 pandemic may continue to result in students being restricted from pursuing their overseas education in the near terms and may have further negative impact over the oversea study consulting service revenue stream.

About China Liberal Education Holdings Limited

China Liberal, headquartered in Beijing, is an educational services provider in China. It provides a wide range of services, including those under sino-foreign jointly managed academic programs; overseas study consulting services; technological consulting services for Chinese universities to improve their campus information and data management system and to optimize their teaching, operating and management environment, creating a “smart campus”; and tailored job readiness training to graduating students. For more information, please visit the company’s website at ir.chinaliberal.com.

Forward-Looking Statements

This document contains forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s expectations and projections about future events, which the Company derives from the information currently available to the Company. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this press release and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review risk factors that may affect its future results in the Company’s registration statement and in its other filings with the U.S. Securities and Exchange Commission.

Investor Relations Contact

China Liberal Education Holdings Limited
Email:ir@chinaliberal.com

Ascent Investor Relations LLC
Ms. Tina Xiao
Email:tina.xiao@ascent-ir.com
Tel: +1 917 609 0333

China Liberal Education Holdings Limited
Condensed Consolidated Balance Sheets
(Unaudited)

		June 30,			December 31,
		2021			2020
Assets
Current Assets
Cash	$		33,698,671	$		5,007,449
Accounts receivable, net			1,547,175			915,618
Contract receivable, net, current			2,352,267			4,448,946
Advance to suppliers, net			4,033,956			94,648
Due from a related party			–			1,439,080
Prepaid expenses and other current assets			358,576			419,713
Total current assets			41,990,645			12,325,454

Property and equipment, net			41,750			49,148
Operating lease right-of-use lease assets, net			92,980			136,695
Contract receivable, net– non-current			168,869			262,617
Total non-current assets			303,599			448,460
Total Assets		$	42,294,244		$	12,773,914

Liabilities and STOCKHOLDERS’ Equity

CURRENT LIABILITIES
Account payable	$		83,524	$		125,223
Deferred revenue			111,772			154,927
Taxes payable			766,835			633,651
Due to a related party			12,390			–
Operating lease liabilities, current			92,980			90,253
Accrued expenses and other current liabilities			116,038			105,829
TOTAL CURRENT LIABILITIES			1,183,539			1,109,883

Operating lease liabilities, non-current			–			23,102
TOTAL LIABILITIES			1,183,539			1,132,985

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Ordinary shares, $0.001 par value, 50,000,000 shares authorized, 12,348,333 and 6,333,333 shares issued and
outstanding at June 30, 2021 and December 31, 2020, respectively			12,348			6,333
Additional paid-in capital			38,452,810			9,358,487
Statutory reserve			623,476			551,146
Retained earnings			1,719,509			1,565,817
Accumulated other comprehensive income			302,562			159,146
Total stockholders’ equity			41,110,705			11,640,929

Total Liabilities and STOCKHOLDERS’ Equity	$		42,294,244	$		12,773,914

China Liberal Education Holdings Limited
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)

	For the six months ended June 30,
	2021		2020

REVENUE, NET	$	1,850,551	$	2,270,788
COST OF REVENUE		(476,727)		(1,482,515)
GROSS PROFIT		1,373,824		788,273

OPERATING EXPENSES
Selling expenses		(76,593)		(130,465)
General and administrative expenses		(995,451)		(770,618)
Total operating expenses		(1,072,044)		(901,083)

INCOME (LOSS) FROM OPERATIONS		301,780		(112,810)

OTHER INCOME (EXPENSES)
Interest income		59,973		82,770
Other expense, net		(7,249)		(907)
Total other income, net		52,724		81,863

INCOME (LOSS) BEFORE INCOME TAXES		354,504		(30,947)

INCOME TAX PROVISION		(128,482)		(48,675)

NET INCOME (LOSS)		226,022		(79,622)

COMPREHENSIVE INCOME (LOSS)
Total foreign currency translation adjustment		143,416		(113,868)
TOTAL COMPREHENSIVE INCOME (LOSS)		369,438		(193,490)

Weighted average number of shares, basic and diluted		8,756,372		5,366,300
Basic and diluted earnings (loss) per ordinary share	$	0.03	$	(0.02)

China Liberal Education Holdings Limited
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	For the Six Months Ended
	June 30,
	2021		2020
Cash flows from operating activities
Net income (loss)	$	226,022	$	(79,622)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		10,810		12,234
Loss from disposal of property and equipment		606		27,381
Amortization of operating lease right-of-use lease assets		45,148		18,181
Share-based compensation		53,250		–
Changes in operating assets and liabilities:				–
Accounts receivable, net		(621,655)		172,176
Contract receivable, net		2,239,613		(1,834,390)
Advances to suppliers		(3,937,025)		571,128
Prepaid expenses and other current assets		64,982		121,107
Accounts payable		(43,011)		332,972
Deferred revenue		(38,853)		(390,331)
Taxes payable		126,429		77,397
Accrued expenses and other current liabilities		(18,412)		33,843
Net cash used in operating activities		(1,892,096)		(937,924)

Cash flows from investing activities
Purchase of property and equipment		(3,500)		(12,831)
Repayment from a related party		1,453,853		–
Net cash provided by (used in) investing activities		1,450,353		(12,831)

Cash flows from financing activities
Proceeds from borrowing from a related party		12,386		94,804
Net proceeds from issuance of ordinary shares		29,047,088		5,405,451
Net cash provided by financing activities		29,059,474		5,500,255

Effect of exchange rate changes on cash		73,491		(28,696)

Net increase in cash		28,691,222		4,520,804

Cash, beginning of period		5,007,449		1,702,279
Cash, end of period		$33,698,671		$6,223,083
Supplemental disclosure of cash flow information:
Income taxes paid	$	40,463	$	20,321
Interest paid	$	–	$	–

Cision

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SOURCE China Liberal Education Holdings Limited

November 8, 2021

Lincoln Educational Services Reports Solid Third Quarter Results

Conference call today at 10 a.m. ET

PARSIPPANY, N.J., Nov. 08, 2021 (GLOBE NEWSWIRE) — Lincoln Educational Services Corporation (Nasdaq: LINC) today, reported operating and financial results for the third quarter ended September 30, 2021 as well as recent business developments.

Third Quarter 2021 Financial Highlights and Recent Operating Developments

Revenue of $89.1 million, a 13.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase compared to prior year quarter
Operating income of $5.7 million, up 49.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} compared to prior year quarter
Adjusted EBITDA* of $8.4 million compared to $6.3 million for the prior year quarter
Student starts of 5,430 compared to 5,510 for the prior year quarter despite limited access to high schools over the past 18 months due to COVID restrictions
Ending student population of 14,000, up 6.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} compared to prior year quarter
Net cash of $31.3 million at quarter end, compared net debt of $1.5 million last year
Recently announced fourth quarter closing of the $46.5 million sale-leaseback transaction involving Denver, CO and Grand Prairie, TX properties further strengthens balance sheet

*See Use of “Non-GAAP Financial Information” below.

“Our team performed well during the third quarter as we generated better than expected high school starts, driving revenue growth into the fourth quarter,” said Scott Shaw, President & CEO. “ We also achieved continued enrollment strength, ending the quarter with a student population 6.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} higher than last year. Employers remain extremely challenged at finding skilled employees, which is increasing the already strong demand for Lincoln graduates and leading to additional opportunities with existing and potential corporate partners.”

“The real estate transactions announced in September have been moving forward and we recently closed on the first of these, the sale-leaseback of our Denver and Grand Prairie properties. The net cash proceeds from this transaction have been used to retire all of our outstanding debt and provide approximately $28.5 million in net proceeds, which will be recorded in the fourth quarter. With our significantly increased financial resources, we believe that we are well positioned to execute our growth strategies for the foreseeable future while continuing to invest in our core programs and operations. The combination of our third quarter performance and continued operational and financial momentum enables us to refine our 2021 full year guidance.”

2021 THIRD QUARTER FINANCIAL RESULTS
(Quarter ended September 30, 2021 compared to quarter ended September 30, 2020)

Revenue increased $10.3 million, or 13.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $89.1 million from $78.8 million. The increase in revenue results from an 8.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} higher average student population, driven by the 8.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in student starts for the nine months, and a 4.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in average revenue per student in the current quarter.
Educational services and facilities expense increased $3.9 million, or 11.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $38.1 million from $34.2 million in the prior year comparable period. Additional costs were concentrated in instruction expense, books and tools expense and facilities expense. Instructional increases were driven in part by inflationary pressures on instructor salaries due to widespread instructor shortages and higher student population, which also drove additional books and tools expense. Facilities expense increased from the normalization of housing expenses for students during the quarter.
Selling, general and administrative expense increased $4.5 million, or 11.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $45.2 million driven primarily by increases in incentive and stock-based compensation due to our improved financial performance in addition to increased marketing investments
Operating income increased to $5.7 million from $3.8 million
Pre-tax income increased to $5.5 million from $3.6 million
Net income improved to $3.8 million, or $0.11 per diluted share, compared to $3.5 million, or $0.08 per diluted share

THIRD QUARTER SEGMENT RESULTS
Transportation and Skilled Trades Segment
Revenue increased $8.1 million, or 14.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $64.9 million from $56.8 million in the prior year comparable period. The increase in revenue results from a 10.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} higher average student population, driven by the 10.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in student starts for the nine months, and a 3.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in average revenue per student in the current quarter.

Operating income improved to $11.8 million from $9.1 million in the prior year comparable quarter, driven mainly by revenue growth.

Healthcare and Other Professions Segment
Revenue increased $2.1 million, or 9.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $24.1 million from $22.0 million in the prior year comparable period. The increase in revenue results from a 4.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} higher average student population, driven by the 5.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in student starts for the nine months, and a 5.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in average revenue per student in the current quarter.

Operating income increased to $1.8 million from $1.7 million in the prior year comparable quarter. Operating leverage during the quarter was impacted by higher operating expenses, primarily driven by inflationary pressures on instructor salaries due to the widespread instructor shortage, especially in the nursing field.

Corporate and Other
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $7.9 million and $6.9 million for each of the three months ended September 30, 2021 and 2020, respectively. The additional expense in 2021 was primarily due to incentive and stock-based compensation tied in part to improved financial performance.

NINE MONTHS FINANCIAL RESULTS
(Period ended September 30, 2021 compared to September 30, 2020)

Total revenue increased by $36.2 million, or 17.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $247.5 million, compared to $211.3 million
Student starts grew by 1,026, or 8.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to 12,681 compared to 11,655
Transportation and Skilled Trades segment revenue increased by $28.8 million, or 19.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $177.6 million, compared to $148.8 million
The Healthcare and Other Professions segment revenue increased by $7.4 million, or 11.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $69.9 million, compared to $62.5 million
Operating income increased to $15.2 million as compared to $3.7 million

FULL YEAR 2021 OUTLOOK
As a result of the Company’s performance through the first nine months of 2021 and management’s outlook for the remainder of the year, Lincoln is now refining its 2021 full year guidance as follows:

Revenue growth in the range of 12{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to 14{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Student start growth in the range of 7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to 8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Adjusted EBITDA* in the range of $35.0 million to $37.0 million
Pre-tax Income in the range of $25.0 million to $27.0 million
Capital expenditures of approximately $7.5 million

The above full year guidance excludes the gain related to the sale-leaseback transaction and the associated expenses in the fourth quarter.

*See Use of “Non-GAAP Financial Information” below.

CONFERENCE CALL INFO
Lincoln will host a conference call today at 10:00 a.m. Eastern Daylight Time to discuss results. To access the live webcast of the conference call, please go to the Investor Relations section of Lincoln’s website at http://www.lincolntech.edu.

Participants can also listen to the conference call by dialing 844-413-0946 (domestic) or 216-562-0456 (international) and providing access code 4862849.

Please log in or dial into the call at least 10 minutes prior to the start time.

An archived version of the webcast will be accessible for 90 days at http://www.lincolntech.edu.
A replay of the call will also be available for seven days by calling 855-859-2056 (domestic) or 404-537-3406 (international) and providing access code 4862849.

ABOUT LINCOLN EDUCATIONAL SERVICES CORPORATION
Lincoln Educational Services Corporation is a provider of diversified career-oriented post-secondary education helping to provide solutions to America’s skills gap. For 75 years, Lincoln has offered and continues to offer recent high school graduates and working adults degree and diploma programs. The Company operates under two reportable segments: Transportation and Skilled Trades and Healthcare and Other Professions. Lincoln has provided the nation’s workforce with skilled technicians since its inception in 1946. For more information, go to www.lincolntech.edu.

SAFE HARBOR
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 students will return from leaves of absence and be able to complete their programs of study with in-person labs and available externships 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, our inability to close on the sale of our Nashville campus; 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; the COVID-19 pandemic and its impact on our business and the U.S. and global economics; 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.

(Tables to Follow)
(In Thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	(Unaudited)						(Unaudited)
		2021			2020			2021			2020

REVENUE	$	89,059		$	78,792		$	247,520		$	211,303
COSTS AND EXPENSES:
Educational services and facilities		38,105			34,251			104,143			90,733
Selling, general and administrative		45,209			40,700			128,159			117,011
Loss (gain) on disposition of assets		–			1			1			(96	)
Total costs & expenses		83,314			74,952			232,303			207,648
OPERATING INCOME		5,745			3,840			15,217			3,655
OTHER:
Interest expense		(292	)		(278	)		(874	)		(960	)
INCOME BEFORE INCOME TAXES		5,453			3,562			14,343			2,695
PROVISION FOR INCOME TAXES		1,614			50			3,589			150
NET INCOME	$	3,839		$	3,512		$	10,754		$	2,545
PREFERRED STOCK DIVIDENDS		304			1,074			912			1,074
INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	3,535		$	2,438		$	9,842		$	1,471
Basic
Net income per common share	$	0.11		$	0.08		$	0.30		$	0.05
Diluted
Net income per common share	$	0.11		$	0.08		$	0.30		$	0.05
Weighted average number of common shares outstanding:
Basic		25,135			24,822			25,043			24,721
Diluted		25,135			24,822			25,043			24,721
Other data:

Adjusted EBITDA (1)	$	8,430		$	6,292		$	22,930		$	10,488
Depreciation and amortization	$	1,928		$	1,782		$	5,620		$	5,546
Number of campuses		22			22			22			22
Average enrollment		13,178			12,165			12,666			11,379
Stock-based compensation	$	757		$	670		$	2,093		$	1,287
Net cash provided by operating activities	$	16,683		$	3,754		$	17,750		$	10,222
Net cash used in investing activities	$	(1,736	)	$	(482	)	$	(5,252	)	$	(3,457	)
Net cash used in financing activities	$	(804	)	$	(1,647	)	$	(3,374	)	$	(17,816	)

Selected Consolidated Balance Sheet Data:	September 30, 2021
	(Unaudited)

Cash and cash equivalents	$	47,150
Current assets		110,953
Working capital		42,078
Total assets		253,456
Current liabilities		68,875
Long-term debt obligations, including current portion, net of deferred financing fees		15,848
Series A convertible preferred stock		11,982
Total stockholders’ equity		101,963

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company believes it is useful to present non-GAAP financial measures that exclude certain significant items as a means to understand the performance of its business. EBITDA, Adjusted EBITDA and reconciled net cash (debt) are measures not recognized in financial statements presented in accordance with GAAP.

We define EBITDA as income (loss) before interest expense (net of interest income), provision (benefit) for income taxes, depreciation and amortization.
We define Adjusted EBITDA as EBITDA plus stock compensation expense.
We define reconciled net cash (debt) as our cash and cash equivalents and restricted cash less both the short and long-term portion under the Company’s credit agreement, deferred financing fees, and amounts received under the CARES Act.

EBITDA, Adjusted EBITDA and reconciled net cash (debt) are presented because we believe they are useful indicators of our performance and our ability to make strategic acquisitions and meet capital expenditures and debt service requirements. However, they are not intended to represent cash flows from operations as defined by GAAP and should not be used as an alternative to net income (loss) as indicators of operating performance or cash flow as a measure of liquidity. EBITDA, Adjusted EBITDA and reconciled net cash (debt) are not necessarily comparable to similarly titled measures used by other companies.

Following is a reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and reconciled net cash (debt):

	Three Months Ended September 30,				Nine Months Ended September 30,
	(Unaudited)				(Unaudited)
	2021		2020		2021		2020

Net income	$	3,839	$	3,512	$	10,754	$	2,545
Interest expense, net		292		278		874		960
Provision for income taxes		1,614		50		3,589		150
Depreciation and amortization		1,928		1,782		5,620		5,546
EBITDA		7,673		5,622		20,837		9,201
Stock compensation expense		757		670		2,093		1,287
Adjusted EBITDA	$	8,430	$	6,292	$	22,930	$	10,488

	Three Months Ended September 30,
	(Unaudited)
	Transportation and Skilled Trades				Healthcare and Other Professions				Corporate
	2021		2020		2021		2020			2021			2020

Net income (loss)	$	11,842	$	9,138	$	1,833	$	1,655	$	(9,836	)	$	(7,281	)
Interest expense, net	–			–		–		–		292			278
Provision for income taxes	–			–		–		–		1,614			50
Depreciation and amortization		1,658		1,561		140		106		130			115
EBITDA		13,500		10,699		1,973		1,761		(7,800	)		(6,838	)
Stock Compensation Expense		–		–		–		–		757			670
Adjusted EBITDA	$	13,500	$	10,699	$	1,973	$	1,761	$	(7,043	)	$	(6,168	)


	Nine Months Ended September 30,
	(Unaudited)
	Transportation and Skilled Trades				Healthcare and Other Professions				Corporate
	2021		2020		2021		2020			2021			2020

Net income (loss)	$	35,423	$	18,848	$	7,743	$	6,387	$	(32,412	)	$	(22,690	)
Interest expense, net		–		–		–		–		874			960
Provision for income taxes		–		–		–		–		3,589			150
Depreciation and amortization		4,917		4,862		357		343		346			341
EBITDA		40,340		23,710		8,100		6,730		(27,603	)		(21,239	)
Stock Compensation Expense		–		–		–		–		2,093			1,287
Adjusted EBITDA	$	40,340	$	23,710	$	8,100	$	6,730	$	(25,510	)	$	(19,952	)

	September 30,
	(Unaudited)
		2021			2020
Current portion of credit agreement and term loan	$	(2,000	)	$	(2,000	)
Long-term credit agreement and term loan		(13,848	)		(15,667	)
Cash and cash equivalents		47,150			26,520
Restricted Cash		–			1,073
CARES Act impact		–			(11,460	)
Reconcilled net cash (debt)	$	31,302		$	(1,534	)

	Three Months Ended September 30,
		2021			2020		{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Change
Revenue:
Transportation and Skilled Trades	$	64,950		$	56,828		14.3	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
HOPS		24,109			21,964		9.8	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total	$	89,059		$	78,792		13.0	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Operating Income (Loss):
Transportation and Skilled Trades	$	11,842		$	9,138		29.6	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Healthcare and Other Professions		1,833			1,654		10.8	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Corporate		(7,930	)		(6,952	)	-14.1	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total	$	5,745		$	3,840		49.6	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Starts:
Transportation and Skilled Trades		3,976			3,982		-0.2	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Healthcare and Other Professions		1,454			1,528		-4.8	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total		5,430			5,510		-1.5	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Average Population:
Transportation and Skilled Trades		8,863			8,349		6.2	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Leave of Absence – COVID-19		(9	)		(333	)	97.3	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Transportation and Skilled Trades ¹		8,854			8,016		10.5	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions		4,326			4,286		0.9	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Leave of Absence – COVID-19		(2	)		(137	)	98.5	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Healthcare and Other Professions ¹		4,324			4,149		4.2	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total		13,189			12,635		4.4	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total ¹		13,178			12,165		8.3	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

End of Period Population:
Transportation and Skilled Trades		9,473			8,811		7.5	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Leave of Absence – COVID-19		–			(67	)	100.0	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Transportation and Skilled Trades ¹		9,473			8,744		8.3	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions		4,533			4,462		1.6	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Leave of Absence – COVID-19		–			(37	)	100.0	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Healthcare and Other Professions ¹		4,533			4,425		2.4	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total		14,006			13,273		5.5	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total ¹		14,006			13,169		6.4	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

¹Excluding Leave of Absence – COVID-19

	Nine Months Ended September 30,
		2021			2020		{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Change
Revenue:
Transportation and Skilled Trades	$	177,586		$	148,799		19.3	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
HOPS		69,934			62,504		11.9	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total	$	247,520		$	211,303		17.1	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Operating Income (Loss):
Transportation and Skilled Trades	$	35,423		$	18,848		87.9	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Healthcare and Other Professions		7,743			6,388		21.2	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Corporate		(27,949	)		(21,581	)	-29.5	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total	$	15,217		$	3,655		316.3	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Starts:
Transportation and Skilled Trades		8,824			8,004		10.2	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Healthcare and Other Professions		3,857			3,651		5.6	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total		12,681			11,655		8.8	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Average Population:
Transportation and Skilled Trades		8,312			7,651		8.6	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Leave of Absence – COVID-19		(16	)		(260	)	93.8	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Transportation and Skilled Trades ¹		8,296			7,391		12.2	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions		4,414			4,176		5.7	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Leave of Absence – COVID-19		(44	)		(188	)	76.6	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Healthcare and Other Professions ¹		4,370			3,988		9.6	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total		12,726			11,827		7.6	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total ¹		12,666			11,379		11.3	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

End of Period Population:
Transportation and Skilled Trades		9,473			8,811		7.5	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Leave of Absence – COVID-19		–			(67	)	100.0	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Transportation and Skilled Trades ¹		9,473			8,744		8.3	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions		4,533			4,462		1.6	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Leave of Absence – COVID-19		–			(37	)	100.0	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Healthcare and Other Professions ¹		4,533			4,425		2.4	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total		14,006			13,273		5.5	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total ¹		14,006			13,169		6.4	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

¹Excluding Leave of Absence – COVID-19

LINCOLN EDUCATIONAL SERVICES CORPORATION
Brian Meyers, CFO
973-736-9340

EVC GROUP LLC
Investor Relations: Michael Polyviou, mpolyviou@evcgroup.com, 732-933-2755
Media Relations: Tom Gibson, 201-476-0322

November 3, 2021

Zillow (Z) says it’s closing home-buying business, reports Q3 results

Zillow, the electronic serious estate organization, said on Tuesday that it can be exiting Delivers, its enterprise that purchases and flips properties, and removing 25{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} of its workforce.

The announcement was hooked up to Zillow’s 3rd-quarter earnings report. The firm’s revenue and earnings skipped analysts’ estimates.

“We’ve identified the unpredictability in forecasting household selling prices far exceeds what we expected,” Zillow CEO Prosperous Barton explained in the release. “Continuing to scale Zillow Provides would final result in much too substantially earnings and harmony-sheet volatility.”

The stock dropped about 7.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in extended trading following a 10{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} plunge for the duration of typical market place hours. The shares are now down about 10{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for the yr as of Tuesday’s close.

Right here are the important numbers from earnings:

Earnings for every share: reduction of 95 cents adjusted vs. income of 16 cents for each share expected in a Refinitiv survey of analysts

Profits: $1.74 billion vs. $2.01 billion anticipated by Refinitiv

Income in Zillow’s Delivers organization, which competes with Opendoor, climbed to $1.17 billion in the quarter. That’s way up from $186 million a year previously, which was in the center of the pandemic and in a dry period of time for transactions. Nevertheless, the houses phase, which is primarily Offers, missing $422 million in the quarter, creating an general net loss at the corporation.

Shares of Opendoor rose 7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in prolonged buying and selling. The inventory plunged alongside Zillow previously in the day, dropping 15{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} at the close.

Zillow released Delivers in December 2019, starting up with Southern California marketplaces. The iBuying, or immediate purchasing, product permitted householders to provide their home to Zillow for dollars, removing a lengthy bidding, product sales and closing method. They also failed to have to fear about costly repairs prior to placing their home on the market place.

“After closing on a property, Zillow will acquire treatment of vital repairs, functioning with regional contractors to comprehensive initiatives like a clean coat of paint, servicing HVAC models and other function a usual house owner would do to get their household completely ready for sale,” Zillow said in a push release at the time.

But the dwelling-flipping market place proved to be a drag for a enterprise that experienced crafted its manufacturer on listing houses across the nation and helping consumers and sellers link by way of a marketplace. Prior to shuttering the company, the business said on Monday that it would cease getting homes by way of the end of the year, citing restricted labor and supply marketplaces.

“We’re operating within just a labor- and source-constrained overall economy within a competitive authentic estate industry, specifically in the design, renovation and closing areas,” claimed Jeremy Wacksman, Zillow’s operating chief, in a statement this 7 days. “We have not been exempt from these market place and potential problems and we now have an operational backlog for renovations and closings.”

Barton explained to CNBC’s “Closing Bell” right after the report that Zillow’s top failure was its lack of ability to forecast housing price ranges precisely. At the start off of the Covid-19 pandemic, the marketplace dried up. It then bounced back again substantially, and charges in many marketplaces have climbed to history ranges.

For the household-flipping business to be worthwhile, a business has to be capable to market a dwelling for extra than the obtain price and have adequate margin remaining to deal with all the other fees, these as servicing and income and advertising and marketing expenditures. Barton mentioned the enterprise recognized that it really is not in a placement to correctly forecast in which household selling prices will be in 6 months “inside a narrow margin of error.”

Furthermore, Barton stated the Gives product reaches only a modest sliver of the company’s general viewers, which is successfully the full sector of homebuyers and sellers across the place.

Zillow’s net, media and engineering company grew profits 16{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in the quarter to $480 million, with gross income of just about $130 million.

“We just decided that remaining an iBuyer was as well risky, too unstable and eventually addressed also couple consumers,” Barton mentioned. He extra that, in closing the business enterprise, “the logic is clear, the emotion is challenging” mainly because of the layoffs.

Bloomberg claimed on Monday that Zillow was hunting to sell 7,000 properties for $2.8 billion to institutional investors, as it seemed to unload its portfolio of qualities. Some of these gross sales would be for underneath the order cost, Bloomberg mentioned.

Barton did not affirm or deny the quantities in the Bloomberg report. He told CNBC that the enterprise has constantly sold to these styles of consumers considering the fact that entering the market place, and he acknowledged that Zillow does have homes that it requirements to promote. The corporation acquired 3,805 houses in the second quarter and offered 2,086 in that time period.

“We are not in any form of fire sale,” he reported. “We are going to wind down the stock in an orderly way.”

Look at: Zillow misses on revenue