LINCOLN EDUCATIONAL SERVICES TO SIGNIFICANTLY STRENGTHEN ITS BALANCE SHEET THROUGH PLANNED REAL ESTATE TRANSACTIONS

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Parsippany, NJ, Sep 28, 2021 (GLOBE NEWSWIRE) – Lincoln Educational Services Corporation (NASDAQ: LINC), which celebrates its 75th anniversary as a national leader in specialized technical training, has entered into a sale-leaseback agreement for its Denver, CO and Grand Prairie, Texas campuses. In addition, Lincoln has entered into a separate agreement to sell the property housing its Nashville, TN campus in anticipation of a planned move in 2022 or 2023 to a more efficient and technologically advanced campus.

In total, the two transactions are expected to generate gross proceeds of $ 81 million and significantly strengthen the Company’s balance sheet by providing it with the financial resources necessary to execute its long-term growth initiatives.

“We believe the market conditions for commercial real estate assets are very attractive and we are capitalizing on the favorable opportunity to monetize these assets,” said Scott Shaw, President and CEO of Lincoln. “After paying off our outstanding term loan and closing costs, we expect to have approximately $ 60 million in additional investable capital that we intend to invest in the new Nashville campus and our initiatives. growth, including expansion of program offerings and entry into new geographic markets.

Sale-Leaseback Transaction – Denver, CO and Grand Prairie, TX Campuses

The sale agreement for Lincoln’s properties in Denver, CO and Grand Prairie, TX is for an aggregate purchase price of $ 46.5 million. Concurrently with the closing of the sale, Lincoln and the purchaser will enter into a triple net lease agreement under which the properties will be re-let to Lincoln for a term of twenty years with four subsequent five-year renewal options. Upon closing of the sale, which is expected to occur in the fourth quarter of 2021, the Company expects to record a gain on the sale of approximately $ 22 million.

The sale-leaseback transaction will result in linear rent charges of approximately $ 3 million per year, which is expected to be partially offset by a $ 1.5 million reduction in depreciation expense and interest savings of $ 0. , $ 8 million through repayment of amounts owed to the Company’s lender.

Property Sale Agreement – Nashville, TN Campus

Lincoln also entered into a contract to sell his property in Nashville, TN for a purchase price of $ 34.5 million. Upon closing of the sale, which is expected to occur in the first quarter of 2022, the Company expects to record a gain on the sale of approximately $ 29 million.

Under the terms of the agreement, Lincoln is permitted to continue to operate its Nashville campus rent-free for a period of 12 months with an option to extend the rental period at negotiated rates. The company plans to operate the existing Nashville campus until the move to the new campus is complete. Although the location of the new campus has not yet been determined, the Company expects the new facility to be EBITDA neutral given the anticipated efficiency gains.

The agreements for these two real estate transactions contain various closing conditions, so there can be no assurance that the conditions will be met or waived and that the sales will ultimately be completed on time or not at all.

Product use

Lincoln predicts that the completion of these real estate transactions will generate net proceeds of nearly $ 80 million, of which approximately $ 17 million will be used to pay off the outstanding balance of the company’s term loan, resulting in savings in financial interest of approximately $ 0.8 million. The company also plans to invest $ 10-15 million for the construction of its new Nashville campus, with the remaining proceeds available for strategic growth initiatives, including expanding program offerings and new geographic markets as well as general working capital needs. The Company expects to use its available federal and state net operating losses to largely offset the tax liability associated with the transactions.

Non-GAAP financial conditions

EBITDA is an unrecognized measure in financial statements presented in accordance with GAAP. We define EBITDA as earnings (loss) before interest expense (net of interest income), provision (benefit) for income taxes, depreciation and amortization.

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About Lincoln Educational Services Corporation

Lincoln Educational Services Corporation is a leading provider of diverse, career-oriented post-secondary education. Lincoln offers career-focused programs in five main areas of study for recent high school graduates and working adults: Automotive Technology, Health Sciences, Skilled Trades, Business and Information Technology, and Hospitality. Lincoln has provided the workforce with skilled technicians since its inception in 1946.

Lincoln currently operates 22 campuses in 14 states under four brands: Lincoln Technical Institute, Lincoln College of Technology, and Euphoria Institute of Beauty Arts and Sciences. Lincoln also operates Lincoln Culinary Institutes in Maryland and Connecticut.

For more information, visit lincolntech.edu.

Brian Meyers, Chief Financial Officer
Lincoln Educational Services
973-736-9340
[email protected]

Investor Relations: Michael Polyviou
EVC GROUP LLC
732-933-2755
[email protected]

Media Relations: Tom Gibson
EVC GROUP LLC
201-476-0322
[email protected]

Source: Lincoln Educational Services


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