Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 000-51371 | |
Entity Registrant Name | LINCOLN EDUCATIONAL SERVICES CORP | |
Entity Central Index Key | 0001286613 | |
Entity Incorporation, State or Country Code | NJ | |
Entity Tax Identification Number | 57-1150621 | |
Entity Address, Address Line One | 14 Sylvan Way, Suite A | |
Entity Address, City or Town | Parsippany | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07054 | |
City Area Code | 973 | |
Local Phone Number | 736-9340 | |
Title of 12(b) Security | Common Stock, no par value per share | |
Trading Symbol | LINC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,255,580 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 69,619 | $ 83,307 |
Accounts receivable, less allowance of $27,364 and $26,837 at September 30, 2022 and December 31, 2021, respectively | 31,902 | 26,159 |
Inventories | 2,714 | 2,721 |
Prepaid expenses and other current assets | 2,255 | 4,881 |
Assets held for sale | 4,559 | 4,559 |
Total current assets | 111,049 | 121,627 |
PROPERTY, EQUIPMENT AND FACILITIES - At cost, net of accumulated depreciation and amortization of $147,843 and $153,335 at September 30, 2022 and December 31, 2021, respectively | 23,842 | 23,119 |
OTHER ASSETS: | ||
Noncurrent receivables, less allowance of $6,438 and $5,084 at September 30, 2022 and December 31, 2021, respectively | 21,864 | 20,028 |
Deferred income taxes, net | 23,644 | 23,708 |
Operating lease right-of-use assets | 95,522 | 91,487 |
Goodwill | 14,536 | 14,536 |
Other assets, net | 819 | 794 |
Total other assets | 156,385 | 150,553 |
TOTAL ASSETS | 291,276 | 295,299 |
CURRENT LIABILITIES: | ||
Unearned tuition | 22,744 | 25,405 |
Accounts payable | 16,242 | 12,297 |
Accrued expenses | 10,038 | 15,669 |
Income taxes payable | 514 | 1,017 |
Current portion of operating lease liabilities | 10,313 | 11,479 |
Other short-term liabilities | 32 | 15 |
Total current liabilities | 59,883 | 65,882 |
NONCURRENT LIABILITIES: | ||
Pension plan liabilities | 1,250 | 1,607 |
Long-term portion of operating lease liabilities | 91,999 | 86,410 |
Total liabilities | 153,132 | 153,899 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Common stock, no par value - authorized: 100,000,000 shares at September 30, 2022 and December 31, 2021; issued and outstanding: 26,255,580 shares at September 30, 2022 and 27,000,687 shares at December 31, 2021 | 51,784 | 141,377 |
Additional paid-in capital | 32,814 | 32,439 |
Treasury stock at cost - 0 and 5,910,541 shares at September 30, 2022 and December 31, 2021, respectively | 0 | (82,860) |
Retained earnings | 42,865 | 39,702 |
Accumulated other comprehensive loss | (1,301) | (1,240) |
Total stockholders' equity | 126,162 | 129,418 |
TOTAL LIABILITIES, SERIES A CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS EQUITY | 291,276 | 295,299 |
Series A Convertible Preferred Stock [Member] | ||
SERIES A CONVERTIBLE PREFERRED STOCK | ||
Preferred stock, no par value - 10,000,000 shares authorized, Series A convertible preferred shares, 12,700 shares issued and outstanding at September 30, 2022 and December 31, 2021 | $ 11,982 | $ 11,982 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Accounts receivable, allowance | $ 27,364 | $ 26,837 |
PROPERTY, EQUIPMENT AND FACILITIES - accumulated depreciation and amortization | 147,843 | 153,335 |
OTHER ASSETS: | ||
Noncurrent receivables, allowance | $ 6,438 | $ 5,084 |
STOCKHOLDERS' EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 26,255,580 | 27,000,687 |
Common stock, shares outstanding (in shares) | 26,255,580 | 27,000,687 |
Treasury stock, shares (in shares) | 0 | 5,910,541 |
Series A Convertible Preferred Stock [Member] | ||
SERIES A CONVERTIBLE PREFERRED STOCK | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 12,700 | 12,700 |
Preferred stock, shares outstanding (in shares) | 12,700 | 12,700 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||
REVENUE | $ 91,813 | $ 89,059 | $ 256,510 | $ 247,520 |
COSTS AND EXPENSES: | ||||
Educational services and facilities | 39,933 | 38,105 | 112,234 | 104,143 |
Selling, general and administrative | 46,984 | 45,209 | 139,503 | 128,159 |
Loss (gain) on disposition of assets | 16 | 0 | (178) | 1 |
Total costs & expenses | 86,933 | 83,314 | 251,559 | 232,303 |
OPERATING INCOME | 4,880 | 5,745 | 4,951 | 15,217 |
OTHER: | ||||
Interest expense | (36) | (292) | (114) | (874) |
INCOME BEFORE INCOME TAXES | 4,844 | 5,453 | 4,837 | 14,343 |
PROVISION FOR INCOME TAXES | 1,300 | 1,614 | 761 | 3,589 |
NET INCOME | 3,544 | 3,839 | 4,076 | 10,754 |
PREFERRED STOCK DIVIDENDS | 304 | 304 | 912 | 912 |
INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ 3,240 | $ 3,535 | $ 3,164 | $ 9,842 |
Basic | ||||
Net income per common share (in dollars per share) | $ 0.1 | $ 0.11 | $ 0.1 | $ 0.3 |
Diluted | ||||
Net income per common share (in dollars per share) | $ 0.1 | $ 0.11 | $ 0.1 | $ 0.3 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 25,381,447 | 25,135,381 | 25,692,094 | 25,043,357 |
Diluted (in shares) | 25,381,447 | 25,135,381 | 25,692,094 | 25,043,357 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME [Abstract] | ||||
Net income | $ 3,544 | $ 3,839 | $ 4,076 | $ 10,754 |
Other comprehensive income (loss) | ||||
Derivative qualifying as a cash flow hedge, net of taxes (nil) | 0 | 65 | 0 | 326 |
Employee pension plan adjustments, net of taxes (nil) | (21) | (134) | (61) | (403) |
Comprehensive income | $ 3,523 | $ 3,770 | $ 4,015 | $ 10,677 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Other comprehensive income (loss) | ||||
Derivative qualifying as a cash flow hedge, taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Employee pension plan adjustments, taxes | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Total | Preferred Stock [Member] Series A Convertible Preferred Stock [Member] |
BALANCE at Dec. 31, 2020 | $ 141,377 | $ 30,512 | $ (82,860) | $ 6,203 | $ (4,165) | $ 91,067 | $ 11,982 |
BALANCE (in shares) at Dec. 31, 2020 | 26,476,329 | 12,700 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 0 | 0 | 0 | 4,489 | 0 | 4,489 | $ 0 |
Preferred stock dividend | 0 | 0 | 0 | (304) | 0 | (304) | 0 |
Employee pension plan adjustments | 0 | 0 | 0 | 0 | (134) | (134) | 0 |
Derivative qualifying as cash flow hedge | 0 | 0 | 0 | 0 | 211 | 211 | 0 |
Stock-based compensation expense | |||||||
Restricted stock | $ 0 | 493 | 0 | 0 | 0 | 493 | $ 0 |
Restricted stock (in shares) | 574,614 | 0 | |||||
Net share settlement for equity-based compensation | $ 0 | (962) | 0 | 0 | 0 | (962) | $ 0 |
Net share settlement for equity-based compensation (in shares) | (154,973) | 0 | |||||
BALANCE at Mar. 31, 2021 | $ 141,377 | 30,043 | (82,860) | 10,388 | (4,088) | 94,860 | $ 11,982 |
BALANCE (in shares) at Mar. 31, 2021 | 26,895,970 | 12,700 | |||||
BALANCE at Dec. 31, 2020 | $ 141,377 | 30,512 | (82,860) | 6,203 | (4,165) | 91,067 | $ 11,982 |
BALANCE (in shares) at Dec. 31, 2020 | 26,476,329 | 12,700 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 10,754 | ||||||
Derivative qualifying as cash flow hedge | 326 | ||||||
BALANCE at Sep. 30, 2021 | $ 141,377 | 31,643 | (82,860) | 16,045 | (4,242) | 101,963 | $ 11,982 |
BALANCE (in shares) at Sep. 30, 2021 | 26,978,432 | 12,700 | |||||
BALANCE at Mar. 31, 2021 | $ 141,377 | 30,043 | (82,860) | 10,388 | (4,088) | 94,860 | $ 11,982 |
BALANCE (in shares) at Mar. 31, 2021 | 26,895,970 | 12,700 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 0 | 0 | 0 | 2,426 | 0 | 2,426 | $ 0 |
Preferred stock dividend | 0 | 0 | 0 | (304) | 0 | (304) | 0 |
Employee pension plan adjustments | 0 | 0 | 0 | 0 | (134) | (134) | 0 |
Derivative qualifying as cash flow hedge | 0 | 0 | 0 | 0 | 49 | 49 | 0 |
Stock-based compensation expense | |||||||
Restricted stock | $ 0 | 844 | 0 | 0 | 0 | 844 | $ 0 |
Restricted stock (in shares) | 76,195 | 0 | |||||
BALANCE at Jun. 30, 2021 | $ 141,377 | 30,887 | (82,860) | 12,510 | (4,173) | 97,741 | $ 11,982 |
BALANCE (in shares) at Jun. 30, 2021 | 26,972,165 | 12,700 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 0 | 0 | 0 | 3,839 | 0 | 3,839 | $ 0 |
Preferred stock dividend | 0 | 0 | 0 | (304) | 0 | (304) | 0 |
Employee pension plan adjustments | 0 | 0 | 0 | 0 | (134) | (134) | 0 |
Derivative qualifying as cash flow hedge | 0 | 0 | 0 | 0 | 65 | 65 | 0 |
Stock-based compensation expense | |||||||
Restricted stock | $ 0 | 756 | 0 | 0 | 0 | 756 | $ 0 |
Restricted stock (in shares) | 6,267 | 0 | |||||
BALANCE at Sep. 30, 2021 | $ 141,377 | 31,643 | (82,860) | 16,045 | (4,242) | 101,963 | $ 11,982 |
BALANCE (in shares) at Sep. 30, 2021 | 26,978,432 | 12,700 | |||||
BALANCE at Dec. 31, 2021 | $ 141,377 | 32,439 | (82,860) | 39,702 | (1,240) | 129,418 | $ 11,982 |
BALANCE (in shares) at Dec. 31, 2021 | 27,000,687 | 12,700 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 0 | 0 | 0 | 272 | 0 | 272 | $ 0 |
Preferred stock dividend | 0 | 0 | 0 | (304) | 0 | (304) | 0 |
Employee pension plan adjustments | 0 | 0 | 0 | 0 | (30) | (30) | 0 |
Stock-based compensation expense | |||||||
Restricted stock | $ 0 | 1,239 | 0 | 0 | 0 | 1,239 | $ 0 |
Restricted stock (in shares) | 528,121 | 0 | |||||
Net share settlement for equity-based compensation | $ 0 | (1,992) | 0 | 0 | 0 | (1,992) | $ 0 |
Net share settlement for equity-based compensation (in shares) | (268,654) | 0 | |||||
BALANCE at Mar. 31, 2022 | $ 141,377 | 31,686 | (82,860) | 39,670 | (1,270) | 128,603 | $ 11,982 |
BALANCE (in shares) at Mar. 31, 2022 | 27,260,154 | 12,700 | |||||
BALANCE at Dec. 31, 2021 | $ 141,377 | 32,439 | (82,860) | 39,702 | (1,240) | 129,418 | $ 11,982 |
BALANCE (in shares) at Dec. 31, 2021 | 27,000,687 | 12,700 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 4,076 | ||||||
Derivative qualifying as cash flow hedge | 0 | ||||||
BALANCE at Sep. 30, 2022 | $ 51,784 | 32,814 | 0 | 42,865 | (1,301) | 126,162 | $ 11,982 |
BALANCE (in shares) at Sep. 30, 2022 | 26,255,580 | 12,700 | |||||
BALANCE at Mar. 31, 2022 | $ 141,377 | 31,686 | (82,860) | 39,670 | (1,270) | 128,603 | $ 11,982 |
BALANCE (in shares) at Mar. 31, 2022 | 27,260,154 | 12,700 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 0 | 0 | 0 | 259 | 0 | 259 | $ 0 |
Preferred stock dividend | 0 | 0 | 0 | (304) | 0 | (304) | 0 |
Employee pension plan adjustments | 0 | 0 | 0 | 0 | (10) | (10) | 0 |
Stock-based compensation expense | |||||||
Restricted stock | $ 0 | 491 | 0 | 0 | 0 | 491 | $ 0 |
Restricted stock (in shares) | 78,829 | 0 | |||||
Treasury stock cancellation | $ (82,860) | 0 | 82,860 | 0 | 0 | 0 | $ 0 |
Share repurchase | $ (2,538) | 0 | 0 | 0 | 0 | (2,538) | |
Stock repurchase (in shares) | (414,963) | 0 | |||||
BALANCE at Jun. 30, 2022 | $ 55,979 | 32,177 | 0 | 39,625 | (1,280) | 126,501 | $ 11,982 |
BALANCE (in shares) at Jun. 30, 2022 | 26,924,020 | 12,700 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 0 | 0 | 0 | 3,544 | 0 | 3,544 | $ 0 |
Preferred stock dividend | 0 | 0 | 0 | (304) | 0 | (304) | 0 |
Employee pension plan adjustments | 0 | 0 | 0 | 0 | (21) | (21) | 0 |
Derivative qualifying as cash flow hedge | 0 | ||||||
Stock-based compensation expense | |||||||
Restricted stock | $ 0 | 637 | 0 | 0 | 0 | 637 | $ 0 |
Restricted stock (in shares) | 0 | 0 | |||||
Share repurchase | $ (4,195) | 0 | 0 | 0 | 0 | (4,195) | |
Stock repurchase (in shares) | (668,440) | 0 | |||||
BALANCE at Sep. 30, 2022 | $ 51,784 | $ 32,814 | $ 0 | $ 42,865 | $ (1,301) | $ 126,162 | $ 11,982 |
BALANCE (in shares) at Sep. 30, 2022 | 26,255,580 | 12,700 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ 3,544 | $ 272 | $ 3,839 | $ 4,489 | $ 4,076 | $ 10,754 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 4,618 | 5,620 | |||||
Amortization of deferred finance charges | 0 | 136 | |||||
Deferred income taxes | 64 | 3,636 | |||||
(Gain) loss on disposition of assets | (178) | 1 | |||||
Fixed asset donations | (245) | (2,050) | |||||
Provision for doubtful accounts | 24,888 | 19,816 | |||||
Stock-based compensation expense | 2,367 | 2,093 | |||||
(Increase) decrease in assets: | |||||||
Accounts receivable | (32,467) | (22,122) | |||||
Inventories | 7 | (761) | |||||
Prepaid income taxes and income taxes payable | (503) | (729) | |||||
Prepaid expenses and current assets | 2,550 | 725 | |||||
Other assets, net | 329 | 274 | |||||
Increase (decrease) in liabilities: | |||||||
Accounts payable | 3,800 | (186) | |||||
Accrued expenses | (5,631) | (914) | |||||
Unearned tuition | (2,661) | 1,238 | |||||
Other liabilities | (402) | 219 | |||||
Total adjustments | (3,464) | 6,996 | |||||
Net cash provided by operating activities | 612 | 17,750 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | (7,053) | (5,252) | |||||
Proceeds from sale of property and equipment | 2,390 | 0 | |||||
Net cash used in investing activities | (4,663) | (5,252) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Payments on borrowings | 0 | (1,500) | |||||
Dividend payment for preferred stock | (912) | (912) | |||||
Share repurchase | (6,733) | 0 | |||||
Net share settlement for equity-based compensation | (1,992) | (962) | |||||
Net cash used in financing activities | (9,637) | (3,374) | |||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (13,688) | 9,124 | |||||
CASH AND CASH EQUIVALENTS-Beginning of period | $ 83,307 | $ 38,026 | 83,307 | 38,026 | $ 38,026 | ||
CASH AND CASH EQUIVALENTS-End of period | $ 69,619 | $ 47,150 | 69,619 | 47,150 | $ 83,307 | ||
Cash paid for: | |||||||
Interest | 132 | 795 | |||||
Income taxes | 1,216 | 681 | |||||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | |||||||
Liabilities accrued for or noncash additions of fixed assets | $ 501 | $ 2,684 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Business Activities - Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our” and “us”, as applicable) provide diversified career-oriented post-secondary education to recent high school graduates and working adults. The Company, which currently operates 22 schools in 14 states, offers programs in automotive technology, skilled trades (which include HVAC, welding and computerized numerical control and electronic systems technology, among other programs), healthcare services (which include nursing, dental assistant and medical administrative assistant, among other programs), hospitality services (which include culinary, therapeutic massage, cosmetology and aesthetics) and information technology. The schools operate under Lincoln Technical Institute, Lincoln College of Technology, Lincoln Culinary Institute, and Euphoria Institute of Beauty Arts and Sciences and associated brand names. Most of the campuses serve major metropolitan markets and each typically offers courses in multiple areas of study. Five of the campuses are destination schools, which attract students from across the United States and, in some cases, from abroad. The Company’s other campuses primarily attract students from their local communities and surrounding areas. All of the campuses are nationally or regionally accredited and are eligible to participate in federal financial aid programs by the U.S. Department of Education (the “DOE” or the “Department”) and applicable state education agencies and accrediting commissions which allow students to apply for and access federal student loans as well as other forms of financial aid. The Company’s business is organized into two reportable business segments: (a) Transportation and Skilled Trades, and (b) Healthcare and Other Professions (“HOPS”). Basis of Presentation – The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements. Certain information and footnote disclosures normally included in annual financial statements have been omitted or condensed pursuant to such regulations. These financial statements, which should be read in conjunction with the December 31, 2021 audited consolidated financial statements and notes thereto and related disclosures of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 ( “ ” The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Use of Estimates in the Preparation of Financial Statements – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. On an ongoing basis, the Company evaluates the estimates and assumptions, including those used to determine the incremental borrowing rate to calculate lease liabilities and right-of-use (“ROU”) assets, lease term to calculate lease cost, revenue recognition, bad debts, impairments, useful lives of fixed assets, income taxes, benefit plans and certain accruals. Actual results could differ from those estimates. New Accounting Pronouncements – In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. This amendment introduced the requirement for an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with the requirements of FASB Accounting Standards Codification (“ASC”) “Topic 606, Revenue from Contracts with Customers”, rather than at fair value. The Company has evaluated the ASU and has determined that there is no impact on its condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provided temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provided optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It was intended to help stakeholders during the global market-wide reference rate transition period. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848): Scope” which clarified that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company has evaluated the ASU and has determined that there is no impact on its condensed consolidated financial statements and related disclosure s. In August 2020, the FASB issued ASU 2020-06, “ Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) inancial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) Income Taxes – The Company accounts for income taxes in accordance with ASC Topic 740, “ Income Taxes This statement requires an asset and a liability approach for measuring deferred taxes based on temporary differences between the financial statement and tax bases of assets and liabilities existing at each balance sheet date using enacted tax rates for years in which taxes are expected to be paid or recovered. In accordance with ASC 740, the Company assesses our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable. A valuation allowance is required to be established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. In accordance with ASC 740, our assessment considers whether there has been sufficient income in recent years and whether sufficient income is expected in future years in order to utilize the deferred tax asset. In evaluating the realizability of deferred income tax assets, the Company considers, among other things, historical levels of income, expected future income, the expected timing of the reversals of existing temporary reporting differences, and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Significant judgment is required in determining the future tax consequences of events that have been recognized in our consolidated financial statements and/or tax returns. Differences between anticipated and actual outcomes of these future tax consequences could have a material impact on the Company’s consolidated financial position or results of operations. Changes in, among other things, income tax legislation, statutory income tax rates, or future income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods. On August 16, 2022, the Inflation Reduction Act was enacted and signed into law. The act is a budget reconciliation package that includes significant changes relating to tax, climate change, energy, and health care. The tax provisions include, among other items, a corporate alternative minimum tax of 15%, an excise tax of 1% on corporate stock buy-backs, energy-related tax credits, and additional IRS funding. The Company does not expect the tax provisions of the act to have a material impact to our condensed consolidated financial statements. During the three and nine months ended September 30, 2022 and 2021, the Company did not recognize any interest or penalties expense associated with uncertain tax positions. Derivative Instruments - The Company records the fair value of derivative instruments as either assets or liabilities on the condensed consolidated balance sheet. The accounting for gains and losses resulting from changes in fair value is dependent on the use of the derivative and whether it is designated and qualifies for hedge accounting. All qualifying hedging activities are documented at the inception of the hedge and must meet the definition of highly effective in offsetting changes to future cash. The Company utilizes the change in variable cash flows method to evaluate hedge effectiveness quarterly. We record the fair value of the qualifying hedges in other long-term liabilities (for derivative liabilities) and other assets (for derivative assets). All unrealized gains and losses on derivatives that are designated and qualify for hedge accounting are reported in other comprehensive income (loss) and recognized when the underlying hedged transaction affects earnings. Changes in the fair value of these derivatives are recognized in other comprehensive income. The Company classifies the cash flows from a cash flow hedge within the same category as the cash flows from the items being hedged. |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2022 | |
NET INCOME PER COMMON SHARE [Abstract] | |
NET INCOME PER COMMON SHARE | 2. NET INCOME PER COMMON SHARE The Company presents basic and diluted income per common share using the two-class method which requires all outstanding Series A Preferred Stock and unvested restricted stock that contain rights to non-forfeitable dividends and therefore participate in undistributed income with common shareholders to be included in computing income per common share. Under the two-class method, net income is reduced by the amount of dividends declared in the period for each class of common stock and participating security. The remaining undistributed income is then allocated to common stock and participating securities, based on their respective rights to receive dividends. Series A Preferred Stock and unvested restricted stock contain non-forfeitable rights to dividends on an if-converted basis and on the same basis as common shares, respectively, and are considered participating securities. The Series A Preferred Stock and unvested restricted stock are not included in the computation of basic income per common share in periods in which we have a net loss, as the Series A Preferred Stock and unvested restricted stock are not contractually obligated to share in our net losses. However, the cumulative dividends on Series A Preferred Stock for the period decreases the income or increases the net loss allocated to common shareholders unless the dividend is paid in the period. Basic income per common share has been computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding. The basic and diluted net income amounts are the same for the three and nine months ended September 30, 2022 and 2021 as a result of the anti-dilutive impact of the potentially dilutive securities . The Company uses the more dilutive method of calculating the diluted income per share by applying the more dilutive of either (a) the treasury stock method, if-converted method, or (b) the two-class method in its diluted income per common share calculation. Potentially dilutive shares are determined by applying the treasury stock method to the assumed exercise of outstanding stock options and the assumed vesting of restricted stock. Potentially dilutive shares issuable upon conversion of the Series A Preferred Stock are calculated using the if-converted method. The following is a reconciliation of the numerator and denominator of the diluted net income per share computations for the periods presented below: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except share data) 2022 2021 2022 2021 Numerator: Net income $ 3,544 $ 3,839 $ 4,076 $ 10,754 Less: preferred stock dividend (304 ) (304 ) (912 ) (912 ) Less: allocation to preferred stockholders (540 ) (582 ) (522 ) (1,629 ) Less: allocation to restricted stockholders (155 ) (232 ) (153 ) (634 ) Net income allocated to common stockholders $ 2,545 $ 2,721 $ 2,489 $ 7,579 Basic income per share: Denominator: Weighted average common shares outstanding 25,381,447 25,135,381 25,692,094 25,043,357 Basic income per share $ 0.10 $ 0.11 $ 0.10 $ 0.30 Diluted income per share: Denominator: Weighted average number of: Common shares outstanding 25,381,447 25,135,381 25,692,094 25,043,357 Dilutive potential common shares outstanding: Series A Preferred Stock - - - - Unvested restricted stock - - - - Dilutive shares outstanding 25,381,447 25,135,381 25,692,094 25,043,357 Diluted income per share $ 0.10 $ 0.11 $ 0.10 $ 0.30 The following table summarizes the potential weighted average shares of common stock that were excluded from the determination of our diluted shares outstanding as they were anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except share data) 2022 2021 2022 2021 Series A Preferred Stock 5,381,356 5,381,356 5,381,356 5,381,356 Unvested restricted stock 1,548,265 815,383 1,582,493 823,662 6,929,621 6,196,739 6,963,849 6,205,018 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE RECOGNITION [Abstract] | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION Substantially all of our revenues are considered to be revenues from our contracts with students. The related accounts receivable balances are recorded in our condensed consolidated balance sheets as student accounts receivable. We do not have significant revenue recognized from performance obligations that were satisfied in prior periods, and we do not have any transaction price allocated to unsatisfied performance obligations other than in our unearned tuition. We record revenue for students who withdraw from our schools only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Unearned tuition represents contract liabilities primarily related to our tuition revenue. We have elected not to provide disclosure about transaction prices allocated to unsatisfied performance obligations if original contract durations are less than one-year, or if we have the right to consideration from a student in an amount that corresponds directly with the value provided to the student for performance obligations completed to date in accordance with ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606)” Unearned tuition in the amount of $22.7 million and $25.4 million is recorded in the current liabilities section of the accompanying condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively. The change in this contract liability balance during the nine-month period ended September 30, 2022 is the result of payments received in advance of satisfying performance obligations, offset by revenue recognized during that period. Revenue recognized for the nine-month period ended September 30, 2022 that was included in the contract liability balance at the beginning of the year was $24.6 million. The following table depicts the timing of revenue recognition: Three months ended September 30, 2022 Nine months ended September 30, 2022 Transportation and Skilled Trades Segment Healthcare and Other Professions Segment Consolidated Transportation and Skilled Trades Segment Healthcare and Other Professions Segment Consolidated Timing of Revenue Recognition Services transferred at a point in time $ 6,059 $ 1,651 $ 7,710 $ 12,904 $ 4,570 $ 17,474 Services transferred over time 61,270 22,833 84,103 171,183 67,853 239,036 Total revenues $ 67,329 $ 24,484 $ 91,813 $ 184,087 $ 72,423 $ 256,510 Three months ended September 30, 2021 Nine months ended September 30, 2021 Transportation and Skilled Trades Segment Healthcare and Other Professions Segment Consolidated Transportation and Skilled Trades Segment Healthcare and Other Professions Segment Consolidated Timing of Revenue Recognition Services transferred at a point in time $ 6,203 $ 1,618 $ 7,821 $ 14,788 $ 4,234 $ 19,022 Services transferred over time 58,747 22,491 81,238 162,798 65,700 228,498 Total revenues $ 64,950 $ 24,109 $ 89,059 $ 177,586 $ 69,934 $ 247,520 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
LEASES [Abstract] | |
LEASES | 4. LEASES The Company determines if an arrangement is a lease at inception. The Company considers any contract where there is an identified asset as to which the Company has the right to control its use in determining whether the contract contains a lease. An operating lease right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are to be recognized at the commencement date based on the present value of lease payments over the lease term. As all of the Company’s operating leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. We estimate the incremental borrowing rate based on a yield curve analysis, utilizing the interest rate derived from the fair value analysis of our credit facility and adjusting it for factors that appropriately reflect the profile of secured borrowing over the expected term of the lease. The operating lease ROU assets include any lease payments made prior to the rent commencement date and exclude lease incentives. Our leases have remaining lease terms of one year to 19 years. Lease terms may include options to extend the lease term used in determining the lease obligation when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments are recognized on a straight-line basis over the lease term for operating leases. See Note 13 which discusses the sale leaseback transaction relating to the Company’s Denver and Grand Prairie campuses which closed on October 29, 2021. On June 30, 2022, the Company executed a lease for approximately 55,000 square feet of space to serve as the Company’s new campus, in Atlanta, Georgia. Our o perati September $ million and $ $ million and $ Our variable lease cost for the three and nine months ended September million. September Supplemental cash flow information and non-cash activity related to our operating leases are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 4,382 $ 3,972 $ 13,702 $ 11,009 Non-cash activity: Lease liabilities arising from obtaining right-of-use assets $ 5,844 $ 1,220 $ 12,561 $ 4,421 During the nine months ended September This re-measurement includes the Atlanta, Georgia location, the lease of which commenced in August 2022. Weighted-average remaining lease term and discount rate for our operating leases is as follows: As of September 30, 2022 2021 Weighted-average remaining lease term 11.36 years 5.49 years Weighted-average discount rate 7.21 % 10.77 % Maturities of lease liabilities by fiscal year for our operating leases as of September 30, 2022 are as follows: Year ending December 31, 2022 (excluding the nine months ended September 30, 2022) $ 4,741 2023 16,167 2024 16,780 2025 14,841 2026 12,416 2027 9,532 Thereafter 69,499 Total lease payments 143,976 Less: imputed interest (41,664 ) Present value of lease liabilities $ 102,312 |
GOODWILL AND LONG-LIVED ASSETS
GOODWILL AND LONG-LIVED ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
GOODWILL AND LONG-LIVED ASSETS [Abstract] | |
GOODWILL AND LONG-LIVED ASSETS | 5. GOODWILL AND LONG-LIVED ASSETS The Company reviews the carrying value of its long-lived assets and identifiable intangibles for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. For other long-lived assets, including right-of-use lease assets, the Company evaluates assets for recoverability when there is an indication of potential impairment. If the undiscounted cash flows from a group of assets being evaluated is less than the carrying value of that group of assets, the fair value of the asset group is determined and the carrying value of the asset group is written down to fair value. When we perform the quantitative impairment test for long-lived assets, we examine estimated future cash flows using Level 3 inputs. These cash flows are evaluated by using weighted probability techniques as well as comparisons of past performance against projections. Assets may also be evaluated by identifying independent market values. If the Company determines that an asset’s carrying value is impaired, it will record a write-down of the carrying value of the asset and charge the impairment as an operating expense in the period in which the determination is made. As of September 30, 2022 and 2021 there were no long-lived asset impairments. On December 31, 2021, as a result of impairment testing it was determined that there was an i This property was sold during the second quarter of 2022, generating net proceeds of approximately $2.4 million and resulting in a gain on sale of asset of $0.2 million. The carrying amount of goodwill at September 30 , and is as follows: Gross Goodwill Balance Accumulated Impairment Losses Net Goodwill Balance Balance as of January 1, 2022 $ 117,176 $ (102,640 ) $ 14,536 Adjustments - - - Balance as of September 30 2022 $ 117,176 $ (102,640 ) $ 14,536 Gross Goodwill Balance Accumulated Impairment Losses Net Goodwill Balance Balance as of January 1, 2021 $ 117,176 $ (102,640 ) $ 14,536 Adjustments - - - Balance as of September 30 2021 $ 117,176 $ (102,640 ) $ 14,536 As of each of September 30 , and the goodwill balance of $14.5 million is related to the Transportation and Skilled Trades segment. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2022 | |
LONG-TERM DEBT [Abstract] | |
LONG-TERM DEBT | 6. LONG-TERM DEBT Credit Facility On November 14, 2019, the Company entered into a senior secured credit agreement (the “Credit Agreement”) with its lender, Sterling National Bank (the “Lender”), providing for borrowing in the aggregate principal amount of up to $60 million (the “Credit Facility”). Initially, the Credit Facility was comprised of four facilities: (1) a $20 million senior secured term loan maturing on December 1, 2024 (the “Term Loan”), with monthly interest and principal payments based on a 120-month amortization with the outstanding balance due on the maturity date; (2) a $10 million senior secured delayed draw term loan maturing on December 1, 2024 (the “Delayed Draw Term Loan”), with monthly interest payments for the first 18 months and thereafter monthly payments of interest and principal based on a 120-month amortization and all balances due on the maturity date; (3) a $15 million senior secured committed revolving line of credit providing a sublimit of up to $10 million for standby letters of credit maturing on November 13, 2022 (the “Revolving Loan”), with monthly payments of interest only; and (4) a $15 million senior secured non-restoring line of credit maturing on January 31, 2021 (the “Line of Credit Loan”). At the closing of the Credit Facility, the Company entered into a swap transaction with the Lender for 100% of the principal balance of the Term Loan maturing on the same date as the Term Loan. Under the terms of the Credit Facility accrued interest on each loan was payable monthly in arrears with the Term Loan and the Delayed Draw Term Loan bearing interest at a floating interest rate based on the then one-month London Interbank Offered Rate (“LIBOR”) plus 3.50% and subject to a LIBOR interest rate floor of 0.25% if there was no swap agreement. Revolving Loans bore interest at a floating interest rate based on the then LIBOR plus an indicative spread determined by the Company’s leverage as defined in the Credit Agreement or, if the borrowing of a Revolving Loan was to be repaid within 30 days of such borrowing, the Revolving Loan accrued interest at the Lender’s prime rate plus 0.50% with a floor of 4.0%. Line of Credit Loans bore interest at a floating interest rate based on the Lender’s prime rate of interest. Letters of credit issued under the Revolving Loan reduced, on a dollar-for-dollar basis, the availability of borrowings under the Revolving Loan. Letters of credit were charged an annual fee equal to (i) an applicable margin determined by the leverage ratio of the Company less (ii) 0.25%, paid quarterly in arrears, in addition to the Lender’s customary fees for issuance, amendment and other standard fees. Borrowings under the Line of Credit Loan were secured by cash collateral. The Lender received an unused facility fee of 0.50% per annum payable quarterly in arrears on the unused portions of the Revolving Loan and the Line of Credit Loan. In addition to the foregoing, the Credit Agreement contained customary representations, warranties, and affirmative and negative covenants (including financial covenants that (i) restricted capital expenditures, (ii) restricted leverage, (iii) required maintaining minimum tangible net worth, (iv) required maintaining a minimum fixed charge coverage ratio and (v) required the maintenance of a minimum of $5 million in quarterly average aggregate balances on deposit with the Lender, which, if not maintained, would result in the assessment of a quarterly fee of $12,500), as well as events of default customary for facilities of this type. The Credit Agreement also limited the payment of cash dividends during the first 24-months of the agreement to $1.7 million but an amendment to the Credit Agreement entered into on November 10, 2020 raised the cash dividend limit to $2.3 million in such 24-month period to increase the amount of permitted cash dividends that the Company can pay on its Series A Preferred Stock. As further discussed below, the Credit Facility was secured by a first priority lien in favor of the Lender on substantially all of the personal property owned by the Company, as well as a pledge of the stock and other equity in the Company’s subsidiaries and mortgages on parcels of real property owned by the Company in Colorado, Tennessee and Texas, at which three of the Company’s schools are located, as well as a former school property owned by the Company located in Connecticut. On September 23, 2021, in connection with entering into the agreements relating to the sale leaseback transaction for the Company’s Denver, Grand Prairie and Nashville campuses (collectively, the “Property Transactions”), the Company and certain of its subsidiaries entered into a Consent and Waiver Letter Agreement (the “Consent Agreement”) to the Company’s Credit Agreement with its Lender. The Consent Agreement provides the Lender’s consent to the Property Transactions and waives certain covenants in the Credit Agreement, subject to certain specified conditions. In addition, in connection with the consummation of the Property Transactions, the Lender released its mortgages and other liens on the subject-properties upon the Company’s payment in full of the outstanding principal and accrued interest on the Term Loan and any swap obligations arising from any swap transaction. Upon the consummation of the Property Transaction on October 29, 2021 the Company paid the Lender approximately $16.7 million in repayment of the Term Loan and the swap termination fee and no further borrowings may be made under the Term Loan or the Delayed Draw Term Loan. Further, during the sec ond quarter of 2022, the Company sold a property located in Suffield, Connecticut for net proceeds of approximately Pursuant to certain amendments and modifications to the Credit Agreement and other loan documents, the Term Loan and the Delayed Draw Term Loan were paid off in full and on January 21, 2021, the Line of Credit expired by the terms, conditions and provisions of the Credit Agreement and the Credit Agreement was extended and would have matured on November 14, 2023. As of September 30, 2022, and December 31, 2021, the Company had zero debt outstanding under the Credit Facility for both periods and was in compliance with all debt covenants. As of September 30, 2022, and December 31, 2021, letters of credit in the aggregate outstanding principal amount of $4.0 million and $4.0 million, respectively, were outstanding under the Credit Facility. Subsequent to the end of the quarter, on November 4, 2022, the Company agreed with its Lender to terminate the Credit Agreement and the remaining Revolving Loan. The Lender has agreed to allow the Company’s existing letters of credit to remain outstanding provided that they are cash collateralized. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | 7. STOCKHOLDERS’ EQUITY Common Stock Holders of our common stock are entitled to receive dividends when and as declared by our Board of Directors and have the right to one vote per share on all matters requiring shareholder approval. The Company has not declared or paid any cash dividends on our common stock since the Company’s Board of Directors discontinued our quarterly cash dividend program in February 2015. The Company has no current intentions to resume the payment of cash dividends to holders of common stock in the foreseeable future. Preferred Stock On November 14, 2019, the Company raised gross proceeds of $12.7 million from the sale of 12,700 shares of its newly designated Series A Convertible Preferred Stock, no par value per share (the “Series A Preferred Stock”). The Series A Preferred Stock was designated by the Company’s Board of Directors pursuant to a certificate of amendment to the Company’s amended and restated certificate of incorporation (the “Charter Amendment”). The liquidation preference associated with the Series A Preferred Stock was $1,000 per share as of December 31, 2021. Upon issuance each share of Series A Preferred Stock was convertible at $2.36 per share of common stock (as may be adjusted pursuant to the Charter Amendment, the “Conversion Price”) into 423,729 shares of common stock (the number of shares into which the Series A Preferred Stock is convertible at any time, the “Conversion Shares”). The Company incurred issuance costs of $0.7 million as part of this transaction. The description below provides a summary of certain material terms of the Series A Preferred Stock: Securities Purchase Agreement. The Series A Preferred Stock was sold by the Company pursuant to a Securities Purchase Agreement dated as of November 14, 2019 (the “SPA”) among the Company, Juniper Targeted Opportunity Fund, L.P. and Juniper Targeted Opportunities, L.P. (together, the “Juniper Purchasers”) and Talanta Investment, Inc. (“Talanta,” together with the Juniper Purchasers, the “Investors”). Among other things, the SPA includes covenants relating to the appointment of a director to the Company’s Board of Directors to be selected solely by the holders of the Series A Preferred Stock. Dividends. Dividends on the Series A Preferred Stock (“Series A Dividends”), at the initial annual rate of 9.6% is to be paid, in arrears, from the date of issuance quarterly on each December 31, March 31, June 30 and September 30 with September 30, 2020 being the first dividend payment date. The Company, at its option, may pay dividends either (a) in cash or (b) by increasing the number of Conversion Shares by the dollar amount of the dividend divided by the Conversion Price. The dividend rate is subject to increase (a) 2.4% per annum on the fifth anniversary of the issuance of the Series A Preferred Stock and (b) by 2% per annum but in no event above 14% per annum should the Company fail to perform certain obligations under the Charter Amendment. The Series A Preferred Stock is not currently redeemable and may not become redeemable in the future. As a result, the Company is not required to re-measure the Series A Preferred Stock and does not accrete changes in the redemption value. As of September 30, 2022, and December 31, 2021, we paid $0.9 million and $1.2 million, respectively, in cash dividends on the outstanding shares of Series A Preferred Stock rather than increasing the number of Conversion Shares. Dividends are included in the condensed consolidated balance sheets within additional paid-in-capital when the Company maintains an accumulated deficit. Holders of Series A Preferred Stock Right to Convert into Common Stock. Each share of Series A Preferred Stock, at any time, is convertible into a number of shares of common stock equal to (i) the sum of (A) $1,000 (subject to adjustment as provided in the Charter Amendment) plus (B) the dollar amount of any declared Series A Dividends not paid in cash divided by (ii) the Conversion Price ($2.36 per share subject to anti-dilution adjustments) as of the applicable Conversion Date (as defined in the Charter Amendment). At all times, however, the number of Conversion Shares that can be issued to any holder of Series A Preferred Stock may not result in such holder and its affiliates owning more than 19.99% of the total number of shares of common stock outstanding after giving effect to the conversion (the “Hard Cap”), unless prior shareholder approval is obtained or no longer required by the rules of the principal stock exchange on which the Company’s common stock trades. Mandatory Conversion. If, at any time following November 14, 2022, the volume weighted average price of the Company’s common stock equals or exceeds 2.25 times the Conversion Price (currently $5.31 per share) for a period of 20 consecutive trading days and during this period the average trading volume exceeds 20,000 shares of common stock, the Company may, at its option and subject to the Hard Cap, require that any or all of the then outstanding shares of Series A Preferred Stock be automatically converted into Conversion Shares. Redemption. Beginning November 14, 2024, the Company may redeem all or any of the Series A Preferred Stock for a cash price equal to the greater of (“Liquidation Preference”) (i) the sum of $1,000 (subject to adjustment as provided in the Charter Amendment) plus the dollar amount of any declared Series A Dividends not paid in cash and (ii) the value of the Conversion Shares were such Series A Preferred Stock converted (as determined in the Charter Amendment) without regard to the Hard Cap. Change of Control. In the event of certain changes of control, some of which are not in the Company’s control, as defined in the Charter Amendment as a “Fundamental Change” or a “Liquidation” (as defined in the Charter Amendment), the holders of Series A Preferred Stock shall be entitled to receive the Liquidation Preference, unless such Fundamental Change is a stock merger in which certain value and volume requirements are met, in which case the Series A Preferred Stock will be converted into common stock in connection with such stock merger. The Company has classified the Series A Preferred Stock as mezzanine equity on the condensed consolidated balance sheet based upon the terms of a change of control which could be outside the Company’s control. Voting. Holders of shares of Series A Preferred Stock are entitled to vote with the holders of shares of common stock and not as a separate class, at any annual or special meeting of shareholders of the Company, on an as-converted basis, in all cases subject to the Hard Cap. In addition, a majority of the voting power of the Series A Preferred Stock must approve certain significant actions of the Company, including (i) declaring a dividend or otherwise redeeming or repurchasing any shares of common stock and other junior securities, if any, subject to certain exceptions, (ii) incurring indebtedness, except for certain permitted indebtedness and (iii) creating a subsidiary other than a wholly-owned subsidiary. Additional Provisions. The Series A Preferred Stock is perpetual and, therefore, does not have a maturity date. The conversion price of the Series A Preferred Stock is subject to anti-dilution protections if the Company affects a stock split, stock dividend, subdivision, reclassification or combination of its common stock and certain other economically dilutive events. Registration Rights Agreement. The Company also is a party to a Registration Rights Agreement (“RRA”) with the holders of the Series A Preferred Stock. The RRA provides for unlimited demand registration rights, of which there can be two underwritten offerings each for at least $5 million in gross proceeds, and piggyback registration rights, with respect to the Conversion Shares. In addition, the RRA obligated the Company to register “for the shelf” the resale of the Conversion Shares through the filing of a registration statement to such effect (the “Resale Shelf Registration Statement”) and have such Resale Shelf Registration Statement declared effective by the Securities and Exchange Commission (the “SEC”). The SEC declared the Resale Shelf Registration Statement effective on October 16, 2020. Restricted Stock The Company currently has three stock incentive plans: a Long-Term Incentive Plan (the “LTIP”), a Non-Employee Directors Restricted Stock Plan (the “Non-Employee Directors Plan”) and the Lincoln Educational Services Corporation 2020 Incentive Compensation Plan (the “2020 Plan”). 2020 Plan On March 26, 2020, the Board adopted the 2020 Plan to provide an incentive to certain directors, officers, employees and consultants of the Company to align their interests in the Company’s success with those of its shareholders through the grant of equity-based awards. On June 16, 2020, the shareholders of the Company approved the 2020 Plan. The 2020 Plan is administered by the Compensation Committee of the Board, or such other qualified committee appointed by the Board, who will, among other duties, have full power and authority to take all actions and to make all determinations required or provided for under the 2020 Plan. Pursuant to the 2020 Plan, the Company may grant options, share appreciation rights, restricted shares, restricted share units, incentive stock options and nonqualified stock options. Under the 2020 Plan, employees may surrender shares as payment of applicable income tax withholding on the vested restricted stock. The Plan has a duration of 10 years. Subject to adjustment as described in the 2020 Plan, the aggregate number of common shares available for issuance under the 2020 Plan was 2,000,000 shares. LTIP Under the LTIP, certain employees have received awards of restricted shares of common stock based on service and performance. The number of shares granted to each employee is based on the amount of the award and the fair market value of a share of common stock on the date of grant. Non-Employee Directors Plan Pursuant to the Non-Employee Directors Plan, each non-employee director of the Company receives an annual award of restricted shares of common stock on the date of the Company’s annual meeting of shareholders. The number of shares granted to each non-employee director is based on the fair market value of a share of common stock on that date. The restricted shares vest on the first anniversary of the grant date. There is no restriction on the right to vote or the right to receive dividends with respect to any of such restricted shares. For the nine months ended September 30, 2022 and 2021, the Company completed a net share settlement for 268,654 and 154,973 restricted shares, respectively, on behalf of certain employees that participate in the LTIP upon the vesting of the restricted shares pursuant to the terms of the LTIP. The net share settlement was in connection with income taxes incurred on restricted shares that vested and were transferred to the employees during 2021 and/or 2020, creating taxable income for the employees. At the employees’ request, the Company has paid these taxes on behalf of the employees in exchange for the employees returning an equivalent value of restricted shares to the Company. These transactions resulted in a decrease of $2.0 million and less than $1.0 million for each of the three and nine months ended September 30, 2022 and 2021, respectively, to equity on the condensed consolidated balance sheets as the cash payment of the taxes effectively was a repurchase of the restricted shares granted in previous years. The following is a summary of transactions pertaining to restricted stock: Shares Weighted Average Grant Date Fair Value Per Share Nonvested restricted stock outstanding at December 31, 2021 1,743,846 $ 3.89 Granted 606,950 7.21 Canceled - - Vested (802,530 ) 4.18 Nonvested restricted stock outstanding at September 30 2022 1,548,266 5.18 The restricted stock expense for the three months ended September 30, 2022 and 2021 was $0.6 million and $0.8 million, respectively. The restricted stock expense for the nine months ended September 30, 2022 and 2021 was $2.4 million and $2.1 million, respectively. The unrecognized restricted stock expense as of September 30, 2022 and December 31, 2021 was $8.0 million and $4.4 million, respectively. As of September 30, 2022, outstanding restricted shares under the Prior Plan had aggregate intrinsic value of $8.4 million. Stock Options The fair value of the stock options used to compute stock-based compensation is the estimated present value at the date of grant using the Black-Scholes option pricing model. The following is a summary of transactions pertaining to stock options: Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2021 81,000 $ 7.79 0.17 $ - Granted/Vested - - - - Canceled (81,000 ) 7.79 - - Outstanding at September 30 2022 - - - - Vested as of September 30 2022 - - - - Exercisable as of September 30 2022 - - - - As of September 30 , , there was unrecognized pre-tax compensation expense. Share Repurchase Plan On May 24, 2022, the Company announced that its Board of Directors has authorized a share repurchase program of up to $30.0 million of the Company’s outstanding common stock. The repurchase program has been authorized for twelve months. Purchases may be made, from time to time, in open-market transactions at prevailing market prices, in privately negotiated transactions or by other means as determined by the Company’s management and in accordance with applicable federal securities laws. The timing of purchases and the number of shares repurchased under the program will depend on a variety of factors including price, trading volume, corporate and regulatory requirements and market conditions. The Company retains the right to limit, terminate or extend the share repurchase program at any time without prior notice. During the three months ended |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 8. INCOME TAXES The income tax provision for the three months ended September 30, 2022 and 2021 was $1.3 million, or 26.8% of pre-tax income, compared to $1.6 million, or 29.6% of pre-tax income, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES In the ordinary conduct of its business, the Company is subject to certain lawsuits, investigations and claims, including, but not limited to, claims involving students or graduates and routine employment matters. Although the Company cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against it, the Company does not believe that any currently pending legal proceedings to which it is a party will have a material adverse effect on the Company’s business, financial condition, and results of operations or cash flows. |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2022 | |
SEGMENTS [Abstract] | |
SEGMENTS | 10. SEGMENTS We operate our business in two reportable segments: (a) Transportation and Skilled Trades – The Transportation and Skilled Trades segment offers academic programs mainly in the career-oriented disciplines of transportation and skilled trades (e.g. automotive, diesel, HVAC, welding and manufacturing). Healthcare and Other Professions – The Healthcare and Other Professions segment offers academic programs in the career-oriented disciplines of health sciences, hospitality and business and information technology (e.g. dental assistant, medical assistant, practical nursing, culinary arts and cosmetology). The Company also utilizes the Transitional segment on a limited basis solely when and if it closes a school. We evaluate segment performance based on operating results. Adjustments to reconcile segment results to consolidated results are included under the caption “Corporate,” which primarily includes unallocated corporate activity. Summary financial information by reporting segment is as follows: For the Three Months Ended September 30, Revenue Operating income (Loss) 2022 % of Total 2021 % of Total 2022 2021 Transportation and Skilled Trades $ 67,329 73.3 % $ 64,950 72.9 % $ 11,768 $ 11,842 Healthcare and Other Professions 24,484 26.7 % 24,109 27.1 % 1,180 1,833 Corporate - - (8,068 ) (7,930 ) Total $ 91,813 100.0 % $ 89,059 100.0 % $ 4,880 $ 5,745 For the Nine Months Ended September 30, Revenue Operating income (Loss) 2022 % of Total 2021 % of 2022 2021 Transportation and Skilled Trades $ 184,087 71.8 % $ 177,586 71.7 % $ 26,108 $ 35,423 Healthcare and Other Professions 72,423 28.2 % 69,934 28.3 % 4,095 7,743 Corporate - - (25,252 ) (27,949 ) Total $ 256,510 100.0 % $ 247,520 100.0 % $ 4,951 $ 15,217 Total Assets September 30, 2022 December 31, 2021 Transportation and Skilled Trades $ 150,715 $ 156,531 Healthcare and Other Professions 36,263 33,959 Corporate 104,298 104,809 Total $ 291,276 $ 295,299 |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2022 | |
FAIR VALUE [Abstract] | |
FAIR VALUE | 11. FAIR VALUE The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers: Level 1: Level 2: Level 3: The carrying amounts reported on the condensed consolidated balance sheet for Cash and cash equivalents approximate fair value because they are highly liquid. The carrying amounts reported on the condensed consolidated balance sheet for Prepaid expenses and other current assets, Accrued expenses and Other short-term liabilities approximate fair value due to the short-term nature of these items. Qualifying Hedge Derivative On November 14, 2019, in connection with its Credit Facility, the Company entered into an interest rate swap for the Term Loan with a notional amount of $20 million which expires on December 1, 2024. On October 29, 2021 the Term Loan was repaid and the interest rate swap was paid in full. The loan had a 10-year straight line amortization. A principal amount of $0.2 million was paid monthly. This interest rate swap converted the floating interest rate Term Loan to a fixed rate, plus a borrowing spread. The interest rate was variable based on LIBOR plus 3.50% and the Company’s fixed rate is 5.36%. The Company designated this interest rate swap as a cash flow hedge to hedge exposure resulting from the interest rate risk. The purpose of the hedge was to reduce the variability of the interest rate based on LIBOR. The Company managed this exposure within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and the Company does not use derivatives for speculative trading purposes. The following summarizes the financial statement classification and amount of interest expense recognized on hedging instruments: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Interest Expense Interest Rate Swap $ - $ 100 $ - $ 200 The following summarizes the effect of derivative instruments designated as hedging instruments in Other Comprehensive Income: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Derivative qualifying as cash flow hedge Interest rate swap income $ - $ 65 $ - $ 326 |
COVID-19 PANDEMIC AND CARES ACT
COVID-19 PANDEMIC AND CARES ACT | 9 Months Ended |
Sep. 30, 2022 | |
COVID-19 PANDEMIC AND CARES ACT [Abstract] | |
COVID-19 PANDEMIC AND CARES ACT | 12. COVID-19 PANDEMIC AND CARES ACT The Company began seeing the impact of the global COVID-19 pandemic on its business in early March 2020 and some effects of the pandemic have continued. The spread of COVID-19 has had an unprecedented impact on higher educational institutions across the country, including our schools, and has led to the closure of campuses and the transition of academic programs from in-person instruction to online, remote learning and back. The impact for the Company primarily related to transitioning classes from in-person, hands-on learning to online, remote learning which resulted in, among other things, additional expenses. Further, related to this transition, some students were placed on leave of absence as they could not complete their externships and some students chose not to participate in online learning. As a result, certain programs were extended due to restricted access to externship sites and classroom labs which did not have a material impact on our consolidated financial statements. In accordance with phased re-opening as applied on a state-by-state basis, all of our schools have now re-opened and the majority of the students who were on leave of absence or had deferred their programs returned to school to finish their programs. In response to the COVID-19 pandemic, in 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law, providing a $2 trillion federal economic relief package of financial assistance and other relief to individuals and businesses impacted by the pandemic. Among other things, the CARES Act includes a $14 billion higher education emergency relief fund (“HEERF”) for the DOE to distribute directly to institutions of higher education. The DOE has allocated funds to each institution of higher education based on a formula contained in the CARES Act. The formula is heavily weighted toward institutions with large numbers of Pell Grant recipients. The DOE allocated $ million to our schools distributed in equal installments and required them to be utilized by April 30, 2021 and May 14, 2021, respectively. As of September 30, 2021, the Company had distributed the full $ million of its first installment as emergency grants to students and . Proceeds from the second installment for permitted expenses were primarily utilized to either offset original expenses incurred or to reduce student accounts receivable, driving a decrease in bad debt expense. Both uses resulted in a decrease in our selling, general and administrative expenses In December 2020, the Consolidated Appropriations Act, 2021 was enacted which included the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (“CRRSAA”). CRRSAA provided an additional $81.9 billion to the Education Stabilization Fund including $22.7 billion for the HEERF, which were originally created by the CARES Act in March 2020. The higher education provisions of the CRRSAA are intended in part to provide additional financial assistance benefitting students and their postsecondary institutions in the wake of the spread of COVID-19 across the country and its impact on higher educational institutions. In March 2021, the $1.9 trillion American Rescue Plan Act of 2021 (“ARPA”) was signed into law. Among other things, the ARPA provides $40 billion in relief funds that will go directly to colleges and universities with $395.8 million going to for-profit institutions. The DOE has allocated a total of $24.4 million to our schools from the funds made available under CRRSAA and ARPA. As of September 30, 2022, the Company has drawn down and distributed to our students $14.8 million of these allocated funds. The remainder of the funds are on hold by the DOE and will be distributed to the students upon release. Failure to comply with requirements for the usage and reporting of these funds could result in requirements to repay some or all of the allocated funds and in other sanctions. |
PROPERTY SALE AGREEMENTS
PROPERTY SALE AGREEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
PROPERTY SALE AGREEMENTS [Abstract] | |
PROPERTY SALE AGREEMENTS | 13. Property Sale Agreements Property Sale Agreement - Nashville, Tennessee Campus On September 24, 2021, Nashville Acquisition, LLC, a subsidiary of the Company (“Nashville Acquisition”), entered into a Contract for the Purchase of Real Estate (the “Nashville Contract”) to sell the property located at 524 Gallatin Avenue, Nashville, Tennessee 37206, at which the Company operates its Nashville campus, to SLC Development, LLC, a subsidiary of Southern Land Company (“SLC”), for an aggregate sale price of $34.5 million, subject to customary adjustments at closing. The Company intends to relocate its Nashville campus to a more efficient and technologically advanced facility in the Nashville metropolitan area but has not yet determined a location. The Company and SLC have agreed to an extension of the due diligence period under the Nashville Contract. Consequently, this transaction is expected to close during the second quarter of 2023. During this time, non-refundable payments will be made to the Company by SLC totaling $1.1 million in the aggregate through March 2023. The payments will be applied towards the purchase price assuming a closing does occur. As of September 30, 2022, the Company has received approximately $0.2 million in non-refundable payments from SLC. The Nashville, Tennessee property is currently classified as assets held for sale in the condensed consolidated balance sheet as of September 30, 2022. Sale Leaseback Transaction - Denver, Colorado and Grand Prairie, Texas Campuses On September 24, 2021, Lincoln Technical Institute, Inc. and LTI Holdings, LLC, each a wholly-owned subsidiary of the Company (collectively, “Lincoln”), entered into an Agreement for Purchase and Sale of Property for the sale of the properties located at 11194 E. 45th Avenue, Denver, Colorado 80239 and 2915 Alouette Drive, Grand Prairie, Texas 75052, at which the Company operates its Denver and Grand Prairie campuses, respectively, to LNT Denver (Multi) LLC, a subsidiary of LCN Capital Partners (“LNT”), for an aggregate sale price of $46.5 million, subject to customary adjustments at closing. Closing of the sale occurred on October 29, 2021. Concurrently with consummation of the sale, the parties entered into a triple-net lease agreement for each of the properties pursuant to which the properties are being leased back to Lincoln Technical Institute, Inc. for a twenty-year term at an initial annual base rent, payable quarterly in advance, of approximately $2.6 million for the first year with annual 2.00% increases thereafter and includes four subsequent five-year renewal options in which the base rent is reset at the commencement of each renewal term at then current fair market rent for the first year of each renewal term with annual 2.00% increases thereafter in each such renewal term. The lease, in each case, provides Lincoln with a right of first offer should LNT wish to sell the property. The Company has provided a guaranty of the financial and other obligations of Lincoln Technical Institute, Inc. under each lease. The Company evaluated factors in ASC Topic 606, Revenue Recognition , to conclude that the transaction qualified as a sale. This included analyzing the right of first offer clause to determine whether it represents a repurchase agreement that would preclude the transaction from being accounted for as a successful sale. At the consummation of the sale, the Company recognized a gain on sale of assets of $22.5 million. Additionally, the Company evaluated factors in ASC Topic 842, Leases , and concluded that the newly created leases met the definition of an operating lease. The Company also recorded ROU Asset and lease liabilities of $40.1 million. The sale leaseback transaction provided the Company with net proceeds of approximately $ million, with the proceeds partially used for the repayment of the Company’s outstanding term loan of $16.2 million and swap termination fee of $ million. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 14. Subsequent EventS On November 3, 2022, the Board of Directors approved a plan to close the Somerville, Massachusetts campus. The owner of the Somerville property has exercised an option to terminate the l ease on December 8, 2023 Additionally, subsequent to the end of the quarter, on November 4, 2022, the Company agreed with its Lender to terminate the Credit Agreement and the remaining Revolving Loan. The Lender has agreed to allow the Company’s existing letters of credit to remain outstanding provided that they are cash collateralized. |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION [Abstract] | |
Business Activities | Business Activities - Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our” and “us”, as applicable) provide diversified career-oriented post-secondary education to recent high school graduates and working adults. The Company, which currently operates 22 schools in 14 states, offers programs in automotive technology, skilled trades (which include HVAC, welding and computerized numerical control and electronic systems technology, among other programs), healthcare services (which include nursing, dental assistant and medical administrative assistant, among other programs), hospitality services (which include culinary, therapeutic massage, cosmetology and aesthetics) and information technology. The schools operate under Lincoln Technical Institute, Lincoln College of Technology, Lincoln Culinary Institute, and Euphoria Institute of Beauty Arts and Sciences and associated brand names. Most of the campuses serve major metropolitan markets and each typically offers courses in multiple areas of study. Five of the campuses are destination schools, which attract students from across the United States and, in some cases, from abroad. The Company’s other campuses primarily attract students from their local communities and surrounding areas. All of the campuses are nationally or regionally accredited and are eligible to participate in federal financial aid programs by the U.S. Department of Education (the “DOE” or the “Department”) and applicable state education agencies and accrediting commissions which allow students to apply for and access federal student loans as well as other forms of financial aid. The Company’s business is organized into two reportable business segments: (a) Transportation and Skilled Trades, and (b) Healthcare and Other Professions (“HOPS”). |
Basis of Presentation | Basis of Presentation – The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements. Certain information and footnote disclosures normally included in annual financial statements have been omitted or condensed pursuant to such regulations. These financial statements, which should be read in conjunction with the December 31, 2021 audited consolidated financial statements and notes thereto and related disclosures of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 ( “ ” The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. On an ongoing basis, the Company evaluates the estimates and assumptions, including those used to determine the incremental borrowing rate to calculate lease liabilities and right-of-use (“ROU”) assets, lease term to calculate lease cost, revenue recognition, bad debts, impairments, useful lives of fixed assets, income taxes, benefit plans and certain accruals. Actual results could differ from those estimates. |
New Accounting Pronouncements | New Accounting Pronouncements – In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. This amendment introduced the requirement for an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with the requirements of FASB Accounting Standards Codification (“ASC”) “Topic 606, Revenue from Contracts with Customers”, rather than at fair value. The Company has evaluated the ASU and has determined that there is no impact on its condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provided temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provided optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It was intended to help stakeholders during the global market-wide reference rate transition period. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848): Scope” which clarified that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company has evaluated the ASU and has determined that there is no impact on its condensed consolidated financial statements and related disclosure s. In August 2020, the FASB issued ASU 2020-06, “ Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) inancial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) |
Income Taxes | Income Taxes – The Company accounts for income taxes in accordance with ASC Topic 740, “ Income Taxes This statement requires an asset and a liability approach for measuring deferred taxes based on temporary differences between the financial statement and tax bases of assets and liabilities existing at each balance sheet date using enacted tax rates for years in which taxes are expected to be paid or recovered. In accordance with ASC 740, the Company assesses our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable. A valuation allowance is required to be established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. In accordance with ASC 740, our assessment considers whether there has been sufficient income in recent years and whether sufficient income is expected in future years in order to utilize the deferred tax asset. In evaluating the realizability of deferred income tax assets, the Company considers, among other things, historical levels of income, expected future income, the expected timing of the reversals of existing temporary reporting differences, and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Significant judgment is required in determining the future tax consequences of events that have been recognized in our consolidated financial statements and/or tax returns. Differences between anticipated and actual outcomes of these future tax consequences could have a material impact on the Company’s consolidated financial position or results of operations. Changes in, among other things, income tax legislation, statutory income tax rates, or future income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods. On August 16, 2022, the Inflation Reduction Act was enacted and signed into law. The act is a budget reconciliation package that includes significant changes relating to tax, climate change, energy, and health care. The tax provisions include, among other items, a corporate alternative minimum tax of 15%, an excise tax of 1% on corporate stock buy-backs, energy-related tax credits, and additional IRS funding. The Company does not expect the tax provisions of the act to have a material impact to our condensed consolidated financial statements. During the three and nine months ended September 30, 2022 and 2021, the Company did not recognize any interest or penalties expense associated with uncertain tax positions. |
Derivative Instruments | Derivative Instruments - The Company records the fair value of derivative instruments as either assets or liabilities on the condensed consolidated balance sheet. The accounting for gains and losses resulting from changes in fair value is dependent on the use of the derivative and whether it is designated and qualifies for hedge accounting. All qualifying hedging activities are documented at the inception of the hedge and must meet the definition of highly effective in offsetting changes to future cash. The Company utilizes the change in variable cash flows method to evaluate hedge effectiveness quarterly. We record the fair value of the qualifying hedges in other long-term liabilities (for derivative liabilities) and other assets (for derivative assets). All unrealized gains and losses on derivatives that are designated and qualify for hedge accounting are reported in other comprehensive income (loss) and recognized when the underlying hedged transaction affects earnings. Changes in the fair value of these derivatives are recognized in other comprehensive income. The Company classifies the cash flows from a cash flow hedge within the same category as the cash flows from the items being hedged. |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
NET INCOME PER COMMON SHARE [Abstract] | |
Reconciliation of Numerator and Denominator of Diluted Net Income Per Share Computations | The following is a reconciliation of the numerator and denominator of the diluted net income per share computations for the periods presented below: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except share data) 2022 2021 2022 2021 Numerator: Net income $ 3,544 $ 3,839 $ 4,076 $ 10,754 Less: preferred stock dividend (304 ) (304 ) (912 ) (912 ) Less: allocation to preferred stockholders (540 ) (582 ) (522 ) (1,629 ) Less: allocation to restricted stockholders (155 ) (232 ) (153 ) (634 ) Net income allocated to common stockholders $ 2,545 $ 2,721 $ 2,489 $ 7,579 Basic income per share: Denominator: Weighted average common shares outstanding 25,381,447 25,135,381 25,692,094 25,043,357 Basic income per share $ 0.10 $ 0.11 $ 0.10 $ 0.30 Diluted income per share: Denominator: Weighted average number of: Common shares outstanding 25,381,447 25,135,381 25,692,094 25,043,357 Dilutive potential common shares outstanding: Series A Preferred Stock - - - - Unvested restricted stock - - - - Dilutive shares outstanding 25,381,447 25,135,381 25,692,094 25,043,357 Diluted income per share $ 0.10 $ 0.11 $ 0.10 $ 0.30 |
Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the potential weighted average shares of common stock that were excluded from the determination of our diluted shares outstanding as they were anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except share data) 2022 2021 2022 2021 Series A Preferred Stock 5,381,356 5,381,356 5,381,356 5,381,356 Unvested restricted stock 1,548,265 815,383 1,582,493 823,662 6,929,621 6,196,739 6,963,849 6,205,018 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE RECOGNITION [Abstract] | |
Depicts Timing of Revenue Recognition | The following table depicts the timing of revenue recognition: Three months ended September 30, 2022 Nine months ended September 30, 2022 Transportation and Skilled Trades Segment Healthcare and Other Professions Segment Consolidated Transportation and Skilled Trades Segment Healthcare and Other Professions Segment Consolidated Timing of Revenue Recognition Services transferred at a point in time $ 6,059 $ 1,651 $ 7,710 $ 12,904 $ 4,570 $ 17,474 Services transferred over time 61,270 22,833 84,103 171,183 67,853 239,036 Total revenues $ 67,329 $ 24,484 $ 91,813 $ 184,087 $ 72,423 $ 256,510 Three months ended September 30, 2021 Nine months ended September 30, 2021 Transportation and Skilled Trades Segment Healthcare and Other Professions Segment Consolidated Transportation and Skilled Trades Segment Healthcare and Other Professions Segment Consolidated Timing of Revenue Recognition Services transferred at a point in time $ 6,203 $ 1,618 $ 7,821 $ 14,788 $ 4,234 $ 19,022 Services transferred over time 58,747 22,491 81,238 162,798 65,700 228,498 Total revenues $ 64,950 $ 24,109 $ 89,059 $ 177,586 $ 69,934 $ 247,520 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
LEASES [Abstract] | |
Supplemental Cash Flow Information and Non-cash Activity Related to Operating Leases | Supplemental cash flow information and non-cash activity related to our operating leases are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 4,382 $ 3,972 $ 13,702 $ 11,009 Non-cash activity: Lease liabilities arising from obtaining right-of-use assets $ 5,844 $ 1,220 $ 12,561 $ 4,421 |
Weighted Average Remaining Lease Term and Discount Rate | Weighted-average remaining lease term and discount rate for our operating leases is as follows: As of September 30, 2022 2021 Weighted-average remaining lease term 11.36 years 5.49 years Weighted-average discount rate 7.21 % 10.77 % |
Maturities of Lease Liabilities | Maturities of lease liabilities by fiscal year for our operating leases as of September 30, 2022 are as follows: Year ending December 31, 2022 (excluding the nine months ended September 30, 2022) $ 4,741 2023 16,167 2024 16,780 2025 14,841 2026 12,416 2027 9,532 Thereafter 69,499 Total lease payments 143,976 Less: imputed interest (41,664 ) Present value of lease liabilities $ 102,312 |
GOODWILL AND LONG-LIVED ASSETS
GOODWILL AND LONG-LIVED ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
GOODWILL AND LONG-LIVED ASSETS [Abstract] | |
Changes in Carrying Amount of Goodwill | The carrying amount of goodwill at September 30 , and is as follows: Gross Goodwill Balance Accumulated Impairment Losses Net Goodwill Balance Balance as of January 1, 2022 $ 117,176 $ (102,640 ) $ 14,536 Adjustments - - - Balance as of September 30 2022 $ 117,176 $ (102,640 ) $ 14,536 Gross Goodwill Balance Accumulated Impairment Losses Net Goodwill Balance Balance as of January 1, 2021 $ 117,176 $ (102,640 ) $ 14,536 Adjustments - - - Balance as of September 30 2021 $ 117,176 $ (102,640 ) $ 14,536 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
STOCKHOLDERS' EQUITY [Abstract] | |
Transactions Pertaining to Restricted Stock | The following is a summary of transactions pertaining to restricted stock: Shares Weighted Average Grant Date Fair Value Per Share Nonvested restricted stock outstanding at December 31, 2021 1,743,846 $ 3.89 Granted 606,950 7.21 Canceled - - Vested (802,530 ) 4.18 Nonvested restricted stock outstanding at September 30 2022 1,548,266 5.18 |
Transactions Pertaining to Option Plans | The fair value of the stock options used to compute stock-based compensation is the estimated present value at the date of grant using the Black-Scholes option pricing model. The following is a summary of transactions pertaining to stock options: Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2021 81,000 $ 7.79 0.17 $ - Granted/Vested - - - - Canceled (81,000 ) 7.79 - - Outstanding at September 30 2022 - - - - Vested as of September 30 2022 - - - - Exercisable as of September 30 2022 - - - - |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
SEGMENTS [Abstract] | |
Financial Information by Reporting Segment | Summary financial information by reporting segment is as follows: For the Three Months Ended September 30, Revenue Operating income (Loss) 2022 % of Total 2021 % of Total 2022 2021 Transportation and Skilled Trades $ 67,329 73.3 % $ 64,950 72.9 % $ 11,768 $ 11,842 Healthcare and Other Professions 24,484 26.7 % 24,109 27.1 % 1,180 1,833 Corporate - - (8,068 ) (7,930 ) Total $ 91,813 100.0 % $ 89,059 100.0 % $ 4,880 $ 5,745 For the Nine Months Ended September 30, Revenue Operating income (Loss) 2022 % of Total 2021 % of 2022 2021 Transportation and Skilled Trades $ 184,087 71.8 % $ 177,586 71.7 % $ 26,108 $ 35,423 Healthcare and Other Professions 72,423 28.2 % 69,934 28.3 % 4,095 7,743 Corporate - - (25,252 ) (27,949 ) Total $ 256,510 100.0 % $ 247,520 100.0 % $ 4,951 $ 15,217 Total Assets September 30, 2022 December 31, 2021 Transportation and Skilled Trades $ 150,715 $ 156,531 Healthcare and Other Professions 36,263 33,959 Corporate 104,298 104,809 Total $ 291,276 $ 295,299 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
FAIR VALUE [Abstract] | |
Financial Statement Classification and Amount of Interest Expense Recognized on Hedging Instruments | The following summarizes the financial statement classification and amount of interest expense recognized on hedging instruments: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Interest Expense Interest Rate Swap $ - $ 100 $ - $ 200 |
Derivative Instruments Designated as Hedging Instruments in Other Comprehensive Income | The following summarizes the effect of derivative instruments designated as hedging instruments in Other Comprehensive Income: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Derivative qualifying as cash flow hedge Interest rate swap income $ - $ 65 $ - $ 326 |
DESCRIPTION OF BUSINESS AND B_3
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) State | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) School Campus Segment State | Sep. 30, 2021 USD ($) | |
Business Activities [Abstract] | ||||
Number of schools | School | 22 | |||
Number of states in which schools operate across the United States | State | 14 | 14 | ||
Number of campuses treated as destination schools | Campus | 5 | |||
Number of reportable operating segments | Segment | 2 | |||
Income Taxes [Abstract] | ||||
Interest and penalties expense | $ | $ 0 | $ 0 | $ 0 | $ 0 |
NET INCOME PER COMMON SHARE (De
NET INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator [Abstract] | ||||||||
Net income | $ 3,544 | $ 259 | $ 272 | $ 3,839 | $ 2,426 | $ 4,489 | $ 4,076 | $ 10,754 |
Less: preferred stock dividend | (304) | (304) | (912) | (912) | ||||
Less: allocation to preferred stockholders | (540) | (582) | (522) | (1,629) | ||||
Less: allocation to restricted stockholders | (155) | (232) | (153) | (634) | ||||
Net income allocated to common stockholders | $ 2,545 | $ 2,721 | $ 2,489 | $ 7,579 | ||||
Denominator [Abstract] | ||||||||
Weighted average common shares outstanding (in shares) | 25,381,447 | 25,135,381 | 25,692,094 | 25,043,357 | ||||
Basic income per share (in dollars per share) | $ 0.1 | $ 0.11 | $ 0.1 | $ 0.3 | ||||
Denominator [Abstract] | ||||||||
Weighted average number of common shares outstanding (in shares) | 25,381,447 | 25,135,381 | 25,692,094 | 25,043,357 | ||||
Diluted shares outstanding (in shares) | 25,381,447 | 25,135,381 | 25,692,094 | 25,043,357 | ||||
Diluted income per share (in dollars per share) | $ 0.1 | $ 0.11 | $ 0.1 | $ 0.3 | ||||
Antidilutive Shares [Abstract] | ||||||||
Antidilutive shares excluded from computation of loss per share (in shares) | 6,929,621 | 6,196,739 | 6,963,849 | 6,205,018 | ||||
Series A Preferred Stock [Member] | ||||||||
Denominator [Abstract] | ||||||||
Dilutive potential common shares outstanding (in shares) | 0 | 0 | 0 | 0 | ||||
Antidilutive Shares [Abstract] | ||||||||
Antidilutive shares excluded from computation of loss per share (in shares) | 5,381,356 | 5,381,356 | 5,381,356 | 5,381,356 | ||||
Unvested Restricted Stock [Member] | ||||||||
Denominator [Abstract] | ||||||||
Dilutive potential common shares outstanding (in shares) | 0 | 0 | 0 | 0 | ||||
Antidilutive Shares [Abstract] | ||||||||
Antidilutive shares excluded from computation of loss per share (in shares) | 1,548,265 | 815,383 | 1,582,493 | 823,662 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
REVENUE RECOGNITION [Abstract] | |||||
Unearned tuition | $ 22,744 | $ 22,744 | $ 25,405 | ||
Revenue recognized included in contract liability | 24,600 | ||||
Disaggregation of Revenue [Abstract] | |||||
Total revenues | 91,813 | $ 89,059 | 256,510 | $ 247,520 | |
Services Transferred at a Point in Time [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Total revenues | 7,710 | 7,821 | 17,474 | 19,022 | |
Services Transferred over Time [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Total revenues | 84,103 | 81,238 | 239,036 | 228,498 | |
Transportation and Skilled Trades Segment [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Total revenues | 67,329 | 64,950 | 184,087 | 177,586 | |
Transportation and Skilled Trades Segment [Member] | Services Transferred at a Point in Time [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Total revenues | 6,059 | 6,203 | 12,904 | 14,788 | |
Transportation and Skilled Trades Segment [Member] | Services Transferred over Time [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Total revenues | 61,270 | 58,747 | 171,183 | 162,798 | |
Healthcare and Other Professions Segment [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Total revenues | 24,484 | 24,109 | 72,423 | 69,934 | |
Healthcare and Other Professions Segment [Member] | Services Transferred at a Point in Time [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Total revenues | 1,651 | 1,618 | 4,570 | 4,234 | |
Healthcare and Other Professions Segment [Member] | Services Transferred over Time [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Total revenues | $ 22,833 | $ 22,491 | $ 67,853 | $ 65,700 |
LEASES (Details)
LEASES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) Squarefeet | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) Squarefeet Lease Option | Sep. 30, 2021 USD ($) | Aug. 31, 2022 USD ($) | |
Operating Leases [Abstract] | |||||
Approximate area of leased school space | Squarefeet | 55,000 | 55,000 | |||
Undiscounted lease payments | $ 41,664 | $ 41,664 | $ 12,200 | ||
Operating lease term | 12 years | 12 years | |||
Number of renewal options | Option | 2 | ||||
Renewal lease term | 5 years | 5 years | |||
Capital expenditures | $ 100 | ||||
Rent paid | 100 | ||||
Operating lease cost | 4,800 | $ 3,800 | $ 14,100 | $ 11,400 | |
Operating cash flow information [Abstract] | |||||
Cash paid for amounts included in the measurement of operating lease liabilities | 4,382 | 3,972 | 13,702 | 11,009 | |
Non-cash activity [Abstract] | |||||
Lease liabilities arising from obtaining right-of-use assets | $ 5,844 | $ 1,220 | $ 12,561 | $ 4,421 | |
Number of new leases | Lease | 2 | ||||
Number of lease modifications | Lease | 1 | ||||
Weighted Average Remaining Lease Term and Discount Rate [Abstract] | |||||
Weighted-average remaining lease term | 11 years 4 months 9 days | 5 years 5 months 26 days | 11 years 4 months 9 days | 5 years 5 months 26 days | |
Weighted-average discount rate | 7.21% | 10.77% | 7.21% | 10.77% | |
Maturities of Lease Liabilities [Abstract] | |||||
2022 (excluding the nine months ended September 30, 2022) | $ 4,741 | $ 4,741 | |||
2023 | 16,167 | 16,167 | |||
2024 | 16,780 | 16,780 | |||
2025 | 14,841 | 14,841 | |||
2026 | 12,416 | 12,416 | |||
2027 | 9,532 | 9,532 | |||
Thereafter | 69,499 | 69,499 | |||
Total lease payments | 143,976 | 143,976 | |||
Less: imputed interest | (41,664) | (41,664) | $ (12,200) | ||
Present value of lease liabilities | $ 102,312 | $ 102,312 | |||
Minimum [Member] | |||||
Operating Leases [Abstract] | |||||
Remaining lease term | 1 year | 1 year | |||
Maximum [Member] | |||||
Operating Leases [Abstract] | |||||
Remaining lease term | 19 years | 19 years | |||
Variable lease cost | $ 100 | $ 100 |
GOODWILL AND LONG-LIVED ASSET_2
GOODWILL AND LONG-LIVED ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
GOODWILL AND LONG-LIVED ASSETS [Abstract] | |||||
Impairment of long-lived assets | $ 0 | $ 0 | |||
Impairment of property amount | $ 700 | ||||
Carrying value of property amount | 2,900 | ||||
Fair value estimate current value of property | 2,200 | ||||
Impairment carrying value reduced | 700 | ||||
Net proceeds from sale of assets | $ 2,400 | 2,390 | 0 | ||
Gain on sale of asset | $ 200 | 178 | (1) | ||
Changes in carrying amount of goodwill [Abstract] | |||||
Gross Goodwill Balance | 117,176 | 117,176 | 117,176 | $ 117,176 | |
Accumulated Impairment Losses | (102,640) | (102,640) | (102,640) | (102,640) | |
Net Goodwill Balance | 14,536 | 14,536 | $ 14,536 | $ 14,536 | |
Adjustments | $ 0 | $ 0 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Nov. 11, 2020 USD ($) | Nov. 10, 2020 USD ($) | Nov. 14, 2019 USD ($) Facility | Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) School | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Oct. 29, 2021 USD ($) | |
Long-term debt [Abstract] | ||||||||
Net proceeds from sale of assets | $ 2,400 | $ 2,390 | $ 0 | |||||
Term Loan [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Repayment of term loan and swap termination fee | $ 16,700 | |||||||
Credit Agreement [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Minimum quarterly average aggregate balances to be maintained | 5,000 | |||||||
Bank fees if minimum quarterly average aggregate balances is not maintained | $ 12,500 | |||||||
Period of consideration for payment of cash dividend | 24 months | |||||||
Limit on payment of cash dividends | $ 2,300 | $ 1,700 | ||||||
Credit Facility [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 60,000 | |||||||
Number of facilities available in 2019 credit agreement | Facility | 4 | |||||||
Number of schools in states covered under first priority lien | School | 3 | |||||||
Credit agreement | $ 0 | $ 0 | ||||||
Letters of credit outstanding | 4,000 | $ 4,000 | ||||||
Credit Facility [Member] | Letter of Credit [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Percentage of letter of credit fee, quarterly installment | 0.25% | |||||||
Percentage of letter of credit fee, annual payment | 0.50% | |||||||
Credit Facility [Member] | Term Loan [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 20,000 | $ 0 | ||||||
Expiration date of credit facility | Dec. 01, 2024 | |||||||
Line of credit facility, amortization schedule based period for interest and principal payments | 120 months | |||||||
Line of credit facility, frequency of principal and interest periodic payment | monthly | |||||||
Percentage of swap transaction of principal balance | 100% | |||||||
Credit Facility [Member] | Term Loan [Member] | LIBOR [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Term of variable rate | 1 month | |||||||
Interest rate on credit facility | 3.50% | |||||||
Credit Facility [Member] | Term Loan [Member] | LIBOR [Member] | Interest Rate Floor [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Interest rate on credit facility | 0.25% | |||||||
Credit Facility [Member] | Delayed Draw Term Loan [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 10,000 | $ 0 | ||||||
Expiration date of credit facility | Dec. 01, 2024 | |||||||
Line of credit facility, amortization schedule based period for interest and principal payments | 120 months | |||||||
Line of credit facility, monthly interest payment period | 18 months | |||||||
Line of credit facility, frequency of principal and interest periodic payment | monthly | |||||||
Credit Facility [Member] | Delayed Draw Term Loan [Member] | LIBOR [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Term of variable rate | 1 month | |||||||
Interest rate on credit facility | 3.50% | |||||||
Credit Facility [Member] | Delayed Draw Term Loan [Member] | LIBOR [Member] | Interest Rate Floor [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Interest rate on credit facility | 0.25% | |||||||
Credit Facility [Member] | Credit Agreement [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 15,000 | |||||||
Expiration date of credit facility | Jan. 31, 2021 | |||||||
Credit Facility [Member] | Revolving Loan [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 15,000 | |||||||
Expiration date of credit facility | Nov. 13, 2022 | |||||||
Loan repayment period | 30 days | |||||||
Credit Facility [Member] | Revolving Loan [Member] | Interest Rate Floor [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Interest rate on credit facility | 4% | |||||||
Credit Facility [Member] | Revolving Loan [Member] | Prime Rate [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Interest rate on credit facility | 0.50% | |||||||
Credit Facility [Member] | Revolving Loan [Member] | Letter of Credit [Member] | ||||||||
Long-term debt [Abstract] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 10,000 |
STOCKHOLDERS' EQUITY, Common St
STOCKHOLDERS' EQUITY, Common Stock and Preferred Stock (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Nov. 14, 2019 USD ($) Number $ / shares shares | Sep. 30, 2022 USD ($) Vote $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) $ / shares | |
Dividends [Abstract] | ||||
Dividends paid on shares of Series A preferred stock | $ 912 | $ 912 | ||
Common Stock [Member] | ||||
Common Stock [Abstract] | ||||
Common stock voting rights per share | Vote | 1 | |||
Cash dividends declared or paid | $ 0 | |||
Preferred Stock [Abstract] | ||||
Number of shares issued upon conversion of preferred stock (in shares) | shares | 423,729 | |||
Series A Preferred Stock [Member] | ||||
Preferred Stock [Abstract] | ||||
Amount raised from issuance of stock | $ 12,700 | |||
Issuance of series A convertible preferred stock, net of issuance costs (in shares) | shares | 12,700 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0 | $ 0 | $ 0 | |
Liquidation preference per share (in dollars per share) | $ / shares | $ 1,000 | |||
Conversion price (in dollars per share) | $ / shares | $ 2.36 | $ 5.31 | ||
Stock issuance cost | $ 700 | |||
Dividends [Abstract] | ||||
Dividend rate | 9.60% | |||
First dividend payment date | Sep. 30, 2020 | |||
Increase in dividend rate on fifth anniversary | 2.40% | |||
Dividends paid on shares of Series A preferred stock | $ 900 | $ 1,200 | ||
Holders of Series A Preferred Stock Right to Convert into Common Stock [Abstract] | ||||
Conversion amount | $ 1,000 | |||
Mandatory Conversion [Abstract] | ||||
Consecutive trading days, in which common stock exceeds the conversion price | 20 days | |||
Redemption [Abstract] | ||||
Amount of adjustment provided in charter agreement after fifth anniversary | $ 1,000 | |||
Registration Rights Agreement [Abstract] | ||||
Number of underwritten offerings | Number | 2 | |||
Series A Preferred Stock [Member] | Minimum [Member] | ||||
Dividends [Abstract] | ||||
Dividend rate if failure to perform certain obligations | 2% | |||
Holders of Series A Preferred Stock Right to Convert into Common Stock [Abstract] | ||||
Percentage of common stock owned by holder and affiliates | 19.99% | |||
Mandatory Conversion [Abstract] | ||||
Weighted average price of common stock equals or exceeds the conversion price | 2.25 | |||
Number of shares traded on each trading day (in shares) | shares | 20,000 | |||
Registration Rights Agreement [Abstract] | ||||
Gross proceeds from underwritten offerings | $ 5,000 | |||
Series A Preferred Stock [Member] | Maximum [Member] | ||||
Dividends [Abstract] | ||||
Dividend rate if failure to perform certain obligations | 14% |
STOCKHOLDERS' EQUITY, Restricte
STOCKHOLDERS' EQUITY, Restricted Stock and Stock Options (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) Plan $ / shares shares | Sep. 30, 2021 USD ($) shares | Dec. 31, 2021 USD ($) $ / shares shares | Jun. 16, 2020 shares | |
Stockholders' Equity Note Details [Abstract] | ||||||
Number of stock incentive plans | Plan | 3 | |||||
Shares [Abstract] | ||||||
Outstanding, beginning balance (in shares) | 81,000 | |||||
Granted (in shares) | 0 | |||||
Vested (in shares) | 0 | |||||
Canceled (in shares) | (81,000) | |||||
Outstanding, ending balance (in shares) | 0 | 0 | 81,000 | |||
Vested (in shares) | 0 | 0 | ||||
Exercisable, ending balance (in shares) | 0 | 0 | ||||
Weighted Average Exercise Price Per Share [Abstract] | ||||||
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 7.79 | |||||
Granted (in dollars per share) | $ / shares | 0 | |||||
Vested (in dollars per share) | $ / shares | 0 | |||||
Canceled (in dollars per share) | $ / shares | 7.79 | |||||
Outstanding, ending balance (in dollars per share) | $ / shares | $ 0 | 0 | $ 7.79 | |||
Vested or expected to vest (in dollars per share) | $ / shares | 0 | 0 | ||||
Exercisable, ending balance (in dollars per share) | $ / shares | $ 0 | $ 0 | ||||
Weighted Average Remaining Contractual Term [Abstract] | ||||||
Outstanding | 2 months 1 day | |||||
Aggregate Intrinsic Value [Abstract] | ||||||
Outstanding, beginning balance | $ | $ 0 | |||||
Granted | $ | 0 | |||||
Canceled | $ | 0 | |||||
Vested | $ | 0 | |||||
Outstanding, ending balance | $ | $ 0 | 0 | $ 0 | |||
Vested or expected to vest | $ | 0 | 0 | ||||
Exercisable, ending balance | $ | $ 0 | $ 0 | ||||
Restricted Stock [Member] | ||||||
Shares [Abstract] | ||||||
Nonvested restricted stock outstanding, beginning balance (in shares) | 1,743,846 | |||||
Granted (in shares) | 606,950 | |||||
Canceled (in shares) | 0 | |||||
Vested (in shares) | (802,530) | |||||
Nonvested restricted stock outstanding, ending balance (in shares) | 1,548,266 | 1,548,266 | 1,743,846 | |||
Weighted Average Grant Date Fair Value [Abstract] | ||||||
Nonvested restricted stock outstanding, beginning balance (in dollars per share) | $ / shares | $ 3.89 | |||||
Granted (in dollars per share) | $ / shares | 7.21 | |||||
Canceled (in dollars per share) | $ / shares | 0 | |||||
Vested (in dollars per share) | $ / shares | 4.18 | |||||
Nonvested restricted stock outstanding, ending balance (in dollars per share) | $ / shares | $ 5.18 | $ 5.18 | $ 3.89 | |||
Recognized restricted stock expense | $ | $ 600 | $ 800 | $ 2,400 | $ 2,100 | ||
Unrecognized restricted stock expense | $ | 8,000 | 8,000 | $ 4,400 | |||
Stock Options [Member] | ||||||
Aggregate Intrinsic Value [Abstract] | ||||||
Unrecognized pre-tax compensation expense | $ | 0 | $ 0 | ||||
2020 Plan [Member] | ||||||
Stockholders' Equity Note Details [Abstract] | ||||||
Number of shares available for issuance under incentive plan (in shares) | 2,000,000 | |||||
2020 Plan [Member] | June 16, 2020 [Member] | ||||||
Stockholders' Equity Note Details [Abstract] | ||||||
Stock option award issuance, plan duration | 10 years | |||||
LTIP [Member] | ||||||
Stockholders' Equity Note Details [Abstract] | ||||||
Number of shares available for issuance under incentive plan (in shares) | 2,000,000 | |||||
LTIP [Member] | Restricted Stock [Member] | ||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||
Outstanding restricted shares, intrinsic value | $ | 8,400 | $ 8,400 | ||||
Non Employee Directors Plan [Member] | ||||||
Stockholders' Equity Note Details [Abstract] | ||||||
Net share settlement for restricted stock (in shares) | 268,654 | 154,973 | ||||
Decrease in equity due to payment of tax for employee | $ | $ 2,000 | $ 2,000 | $ 1,000 | |||
Non Employee Directors Plan [Member] | Maximum [Member] | ||||||
Stockholders' Equity Note Details [Abstract] | ||||||
Decrease in equity due to payment of tax for employee | $ | $ 1,000 |
STOCKHOLDERS' EQUITY, Share Rep
STOCKHOLDERS' EQUITY, Share Repurchase Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | May 24, 2022 | |
Share Repurchase Plan [Abstract] | |||
Authorized amount of share repurchase program | $ 30 | ||
Period over which common stock can be repurchased | 12 months | ||
Number of shares repurchased (in shares) | 668,440 | 1,083,403 | |
Amount of shares repurchased | $ 4.2 | $ 6.7 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
INCOME TAXES [Abstract] | ||||
Provision for income taxes | $ 1,300 | $ 1,614 | $ 761 | $ 3,589 |
Pretax income percentage | 26.80% | 29.60% | 15.70% | 25% |
SEGMENTS (Details)
SEGMENTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) Segment | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
SEGMENTS [Abstract] | |||||
Number of reportable operating segments | Segment | 2 | ||||
Summary financial information by reporting segment [Abstract] | |||||
Revenues | $ 91,813 | $ 89,059 | $ 256,510 | $ 247,520 | |
Percentage of Total Revenue | 100% | 100% | 100% | 100% | |
Operating income (Loss) | $ 4,880 | $ 5,745 | $ 4,951 | $ 15,217 | |
Total Assets | 291,276 | 291,276 | $ 295,299 | ||
Transportation and Skilled Trades [Member] | |||||
Summary financial information by reporting segment [Abstract] | |||||
Revenues | 67,329 | 64,950 | 184,087 | 177,586 | |
Healthcare and Other Professions [Member] | |||||
Summary financial information by reporting segment [Abstract] | |||||
Revenues | 24,484 | 24,109 | 72,423 | 69,934 | |
Reportable Segments [Member] | Transportation and Skilled Trades [Member] | |||||
Summary financial information by reporting segment [Abstract] | |||||
Revenues | $ 67,329 | $ 64,950 | $ 184,087 | $ 177,586 | |
Percentage of Total Revenue | 73.30% | 72.90% | 71.80% | 71.70% | |
Operating income (Loss) | $ 11,768 | $ 11,842 | $ 26,108 | $ 35,423 | |
Total Assets | 150,715 | 150,715 | 156,531 | ||
Reportable Segments [Member] | Healthcare and Other Professions [Member] | |||||
Summary financial information by reporting segment [Abstract] | |||||
Revenues | $ 24,484 | $ 24,109 | $ 72,423 | $ 69,934 | |
Percentage of Total Revenue | 26.70% | 27.10% | 28.20% | 28.30% | |
Operating income (Loss) | $ 1,180 | $ 1,833 | $ 4,095 | $ 7,743 | |
Total Assets | 36,263 | 36,263 | 33,959 | ||
Corporate [Member] | |||||
Summary financial information by reporting segment [Abstract] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Operating income (Loss) | (8,068) | $ (7,930) | (25,252) | $ (27,949) | |
Total Assets | $ 104,298 | $ 104,298 | $ 104,809 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Nov. 14, 2019 | |
Term Loan [Member] | |||||
Derivative [Abstract] | |||||
Amortization period | 10 years | ||||
Amount of principal payment | $ 200 | ||||
Interest Rate Swap [Member] | |||||
Fair Value, Outstanding Derivative [Abstract] | |||||
Notional amount | $ 20,000 | ||||
Interest Rate Swap [Member] | Term Loan [Member] | |||||
Derivative [Abstract] | |||||
Fixed rate | 5.36% | 5.36% | |||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | |||||
Classification and Amount of Interest Expense Recognized on Hedging Instruments [Abstract] | |||||
Interest expense | $ 0 | $ 100 | $ 0 | $ 200 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||||
Derivative Instruments Designated As Hedging Instruments In Other Comprehensive Income [Abstract] | |||||
Interest rate swap income | $ 0 | $ 65 | $ 0 | $ 326 | |
LIBOR [Member] | Interest Rate Swap [Member] | Term Loan [Member] | |||||
Derivative [Abstract] | |||||
Variable rate | 3.50% | 3.50% |
COVID-19 PANDEMIC AND CARES A_2
COVID-19 PANDEMIC AND CARES ACT (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 USD ($) Intallment | Sep. 30, 2021 USD ($) | |
COVID-19 [Abstract] | ||
Total amount expected to be received under CARES Act | $ 27.4 | |
Number of installments used to allocated funds to schools | Intallment | 2 | |
Emergency grants available in first installment under CARES Act | $ 13.7 | |
Utilized amount of permitted expenses | $ 13.7 | |
Deferred payments under CARES Act | $ 2.3 | |
DOE allocated amount to schools | 24.4 | |
Emergency grants distributed to students under CRRSAA and ARPA Act | $ 14.8 |
PROPERTY SALE AGREEMENTS, Prope
PROPERTY SALE AGREEMENTS, Property Sale Agreement (Details) - Property Sale Agreement [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 24, 2021 | Sep. 30, 2022 | |
Property Sale Agreement [Abstract] | ||
Sale price of agreement | $ 34.5 | |
Non-refundable amount to be received | $ 1.1 | |
Proceeds from non-refundable payments | $ 0.2 |
PROPERTY SALE AGREEMENTS, Sale-
PROPERTY SALE AGREEMENTS, Sale-Leaseback Transaction (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Oct. 29, 2021 USD ($) Option | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Sep. 24, 2021 USD ($) | |
Sale-Leaseback Transaction [Abstract] | ||||||||
Gain on sale of assets | $ (16) | $ 0 | $ 178 | $ (1) | ||||
Right of use assets | 95,522 | 95,522 | $ 91,487 | |||||
Lease liabilities | $ 102,312 | 102,312 | ||||||
Net proceeds amount | $ 2,400 | $ 2,390 | $ 0 | |||||
Colorado/Texas Sale Agreement [Member] | ||||||||
Sale-Leaseback Transaction [Abstract] | ||||||||
Sale price of sale-leaseback transaction | $ 46,500 | |||||||
Lease agreement term | 20 years | |||||||
Initial annual base rent | $ 2,600 | |||||||
Percentage of annual increase of rent | 2% | |||||||
Number of subsequent renewal options | Option | 4 | |||||||
Period of subsequent renewal options | 5 years | |||||||
Gain on sale of assets | $ 22,500 | |||||||
Right of use assets | 40,100 | |||||||
Lease liabilities | 40,100 | |||||||
Net proceeds amount | 45,400 | |||||||
Repayments of term loan | 16,200 | |||||||
Swap termination fee | $ 500 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 03, 2022 USD ($) Student | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Revenue from Contract with Customer [Abstract] | |||||
Revenues | $ 91,813 | $ 89,059 | $ 256,510 | $ 247,520 | |
Operating loss | $ 4,880 | $ 5,745 | 4,951 | $ 15,217 | |
Massachusetts [Member] | |||||
Revenue from Contract with Customer [Abstract] | |||||
Revenues | $ 5,300 | ||||
Percentage of revenue | 2.10% | ||||
Operating loss | $ (200) | ||||
Subsequent Event [Member] | Massachusetts [Member] | |||||
Revenue from Contract with Customer [Abstract] | |||||
Number of students | Student | 300 | ||||
Campus closing costs | $ 2,000 |