Lincoln Educational Services Corporation (LINC) saw its loss widen to $10.93 million, or $0.46 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $6.07 million, or $0.26 a share.
Revenue during the quarter dropped 7.59 percent to $65.28 million from $70.64 million in the previous year period. Gross margin for the quarter expanded 244 basis points over the previous year period to 49.89 percent. Operating margin for the quarter stood at negative 8.77 percent as compared to a negative 8.84 percent for the previous year period.
Operating loss for the quarter was $5.73 million, compared with an operating loss of $6.24 million in the previous year period.
Adjusted EBITDA for the quarter stood at negative $3.58 million compared to negative $1.06 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at negative 5.48 percent for the quarter compared to negative 1.51 percent in the last year period.
"The first quarter's financial performance was as we had planned and we are on track to achieve our original guidance provided back in March," said Scott Shaw, president and chief executive officer. "Based on the lack of potential value creation for our shareholders obtained from a HOPS divestiture transaction, as well as the improvements our team has implemented in the HOPS operations and the potential for an improved federal regulatory environment for our industry, our Board has decided to abandon the divesture strategy for our HOPS operations. Given the positive impact of the various strategies our team executed while the divesture plan was in process, we believe that this segment can be a positive financial contributor to our overall results while we continue to enhance the student experience and education at the HOPS campuses."
Operating cash flow remains negative
Lincoln Educational Services Corporation has spent $11.47 million cash to meet operating activities during the quarter as against cash outgo of $9.17 million in the last year period. The company has spent $0.60 million cash to meet investing activities during the quarter as against cash outgo of $0.07 million in the last year period.
The company has spent $0.29 million cash to carry out financing activities during the quarter as against cash outgo of $9.01 million in the last year period.
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