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Lincoln Educational Services (LINC) |
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WIKI ANALYSIS
Overview
Lincoln Educational Services Corporation (NASDAQ: LINC) is a provider of career-oriented, post-secondary education. The company was founded in 1946 as a post-war training school. Today, Lincoln Educational Services is one of the better-diversified for-profit providers of career-oriented training and education in the market. The company operates 34 schools in 17 states, enrolling nearly 18,000 students as of December 31, 2007. Lincoln offers high school graduates and working adults degree and diploma programs in 5 principal areas of study: automotive technology, health sciences, skilled trades, business & IT, as well as spa & culinary, with a strong geographic focus on the Northeast. The company targets individuals who want to acquire a specific skill set quickly to start a career of their choice in a short amount of time.
The company operate under the brand names of Lincoln Technical Institute, Lincoln College of Technology, Nashville Auto-Diesel College, Southwestern College, and Euphoria Institute of Beauty Arts and Sciences. In an effort to build a stronger brand name, a re-branding exercise was carried out in 2007. Now, 26 of 34 campuses operate under the Lincoln name. Students can use federal financial aid as well as special loans for their course fees under the Title IV program. The company also uses its own balance sheet to supplement lending to sub-prime students.
Revenue and Net Income
Student Enrollment by Area of Study
Trends and Forces
Bad economic outlook drives people back to school
Revenues have been increasing despite the poor economic outlook. This does not come as a surprise as student growth generally comes at times when job numbers deteriorate. Those who newly join the ranks of the unemployed would usually take the opportunity to expand their skill set by getting a new or further degree so as to increase their odds of finding employment in the future.
Post-Secondary Market Growing
Post-Secondary enrollments are on the rise due to population growth, a shift in the US economy from manufacturing to service, and an increasing wage gap between those with a post-secondary degree and those without. As such, even those who are still in the workforce will seek to enroll in online programs as students look to balance school with work and other personal obligations.
Persistent US Skilled Labor Shortages
As the US continues to suffer from a persistent skilled labor shortage, providers of training and education for skilled labor, such as Lincoln, should stand to benefit and grow as these needs are met.
Rising Skilled Labor Wages
As the demand for skilled labor further outstrips supply over time, Lincoln should also benefit from this trend.
US Federal Education Subsidy Cuts
While some measures have been passed to cut college loan subsidies regardless of the realities of the labor marketplace which has reduced Lincoln's revenues, no further measures have been taken, but persistent large Federal spending, deficits, and debt make this trend uncertain.
Competition
The for-profit, post-secondary education industry is highly competitive and highly fragmented, with significant market leader. The company competes mainly with other for-profit career oriented schools, as well as two-year junior and community colleges.
| In millions of USD | Lincoln Educational | Apollo Group | DeVry Inc | Corinthian Colleges | Capella Education | Princeton Review |
| Total Revenue | 335.7 | 3,023.5 | 1,047.9 | 1,036.5 | 238.7 | 147.8 |
| Operating Income | 28.9 | 702 | 102.29 | 126.8 | 33.9 | -9.4 |
| Net Income | 8.34 | 408.8 | 76.19 | 7.23 | 22.78 | (28.74) |
| Return on Average Assets | 6.39% | 20.5% | 11.33% | 3.62% | 15.23% | (21.59%) |
| Return on Average Equity | 9.70% | 45.65% | 17.16% | 5.96% | 20.24% | (71.96%) |
| Employees | 2,323 | 14,593 | 5,400 | 5,850 | 1,298 | 511 |
References
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