LINCOLN EDUCATIONAL SERVICES CORP
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
LINC$17.66+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001140361-25-018385
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0001140361-25-030226
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 87 previous paragraphs and 115 current paragraphs.
52 unchanged; 18 reworded; 40 added; 17 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 18 previous and 35 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Revenue. Revenue increased $13.6 million, or 13.2% to $116.5 million for the three months ended June 30, 2025 from $102.9 million in the prior year comparable period. Revenue growth was primarily due to a 16.0% increase in average student population, reflecting 21.4% start growth during the first half in 2025 from our campus operations.
Current report
Includes 2,764 student starts on July 1, 2025, to align with comparable student start activity in the prior year which occurred in the last week of June 2024
Current report
Educational services and facilities expense. Educational services and facilities expense increased by $1.2 million, or 2.7%, to $46.8 million for the three months ended June 30, 2025, compared to $45.6 million for the same period in 2024. This increase includes a $1.0 million reduction related to the Transitional segment, which incurred expenses in the prior year but not in the current period. On a comparable basis, educational services and facilities expense increased by $2.3 million.
Current report
The primary driver of the increase was $1.4 million or 44.3% in depreciation expense, largely resulting from capital investments to support our growth initiatives, including two new campus expansions, new program development, and the relocation of two campuses to modern facilities. The remaining increase was attributable to higher costs associated with supporting a larger student population, including market-based adjustments to instructional compensation to remain competitive and retain talent.
Current report
As a percentage of revenue, instructional expenses decreased to 20.2% for the three months ended June 30, 2025, from 22.3% in the prior-year period, reflecting improved operating efficiency. Similarly, educational services and facilities expense as a percentage of revenue declined to 40.2% from 44.3% in the prior year. These improvements demonstrate continued margin expansion as we scale operations.
Current report
Selling, general and administrative expense. Selling, general and administrative expense increased $9.2 million, or 15.9% to $67.1 million for the three months ended June 30, 2025, compared to $57.9 million for the same period in 2024. This includes a $1.1 million reduction related to the Transitional segment, which had expenses in the prior year but none in the current period.
Current report
Administrative expenses rose $7.6 million, or 36.5%, primarily due to higher medical claims and increased costs associated with our expanding student population and improved financial performance.
Current report
Student services expense increased $0.9 million or 17.3%, driven by continued investments in staffing and support infrastructure to serve a growing student base.
Current report
Marketing expense increased modestly by $0.3 million, or 2.8%. Despite the increase in absolute dollars, marketing expense declined as a percentage of revenue, reflecting improved efficiency. Notably, cost per start declined 14.0% compared to the prior-year period, underscoring a higher return on marketing investment.
Current report
Selling, general and administrative expenses, as a percentage of revenue was 57.6% for the three months ended June 30, 2025, compared to 56.2% for the same period in 2024.
Current report
Net interest income/(expense). Net interest expensewas $0.8 millionfor the three months ended June 30, 2025, compared to an immaterial amount in the same period in 2024. The increase was primarily driven by a reduction in interest income resulting from lower average cash balances during the period, as funds were used for capital expenditures.
Current report
Income taxes. Income tax provision was $0.5 million for the three months ended June 30, 2025, representing an effective tax rate of 25.1% of pre-tax income. This compares to an income tax benefit of $0.5 million in the prior-year period, which reflected a 40.4% effective tax rate on a pre-tax net loss. The change in effective tax rate was primarily driven by the shift from a pre-tax loss to pre-tax income, as well as the impact of discrete tax items recognized in each period.
Current report
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Current report
Consolidated Results of Operations
Current report
Educational services and facilities expense. Educational services and facilities expense increased by $5.6 million, or 6.3%, to $94.2 million for the six months ended June 30, 2025, compared to $88.6 million for the same period in 2024. This increase includes a $2.2 million reduction related to the Transitional segment, which incurred expenses in the prior year but not in the current period. On a comparable basis, educational services and facilities expense increased by $7.8 million.
Current report
The primary driver of the increase was $2.2 million or 37.6% in depreciation expense, largely resulting from capital investments to support our growth initiatives, including two new campus expansions, new program development, and the relocation of two campuses to modern facilities. The remaining increase was attributable to higher costs associated with supporting a larger student population, including market-based adjustments to instructional compensation to remain competitive and retain talent.
Current report
As a percentage of revenue, instructional expenses decreased to 19.9% for the six months ended June 30, 2025, from 22.0% in the prior-year period, reflecting improved operating efficiency. Similarly, educational services and facilities expense as a percentage of revenue declined to 40.3% from 42.9% in the prior year. These improvements demonstrate continued margin expansion as we scale operations.
Current report
Selling, general and administrative expense. Selling, general and administrative expense increased $15.6 million, or 13.2%, to $134.0 million for the six months ended June 30, 2025, compared to $118.4 million for the same period in 2024. This includes a $2.3 million reduction related to the Transitional segment, which had expenses in the prior year but none in the current period.
Current report
Administrative expenses rose $13.8 million, or 31.5%, primarily due to higher medical claims and increased costs associated with our expanding student population and improved financial performance.
Current report
Student services expense increased $1.7 million, or 15.2%, driven by continued investments in staffing and support infrastructure to serve a growing student base.
Current report
Marketing expense slightly decreased by $0.5 million or 2.3% year over year, demonstrating improved efficiencies. Notably, cost per start declined 17.3% compared to the prior-year period, underscoring a higher return on marketing investment.
Current report
Selling, general and administrative expenses, as a percentage of revenue, was 57.3%, consistent with the prior year.
Current report
Segment Results of Operations
Current report
Campus Operations
Current report
Operating income increased $18.2 million, or 80.1% to $41.0 million for the six months ended June 30, 2025 from $22.8 million in the prior year comparable period. The change compared to the prior year was mainly driven by the following factors:
Current report
Transitional
Current report
Corporate and Other
Current report
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $34.7 million for the six months ended June 30, 2025 compared to $23.5 million in the prior year. The increase was primarily driven by higher salaries and benefits due to workforce expansion to support a larger student population and to execute our growth initiatives. Additionally, medical claims increased and performance-based incentive compensation increased in line with improved financial performance.
Current report
Index
Current report
Net cash provided by financing activities for the six months ended June 30, 2025 was $11.3 million, compared to $3.7 million of cash used in financing activity in the six months ended June 30, 2024. The increase in cash position was primarily due to net borrowings in the current period.
Current report
Index
Current report
As of June 30, 2025, the Company had $13.0 million outstanding under the Facility.
Current report
Negotiated Rulemaking
Current report
On April 4, 2025, the DOE published a notice in the Federal Register announcing its intention to commence negotiated rulemaking and to establish one or more negotiated rulemaking committees to prepare proposed regulations related to the Title IV Programs. The DOE conducted negotiated rulemaking sessions from June 30 to July 2, 2025 to discuss potential proposed regulations on issues related to public service student loan forgiveness and loan repayment plan programs, but did not reach consensus on the final content of the proposed regulations. The DOE is expected to proceed with preparing and publishing proposed regulations for public notice and comment before publishing final regulations.
Current report
On July 24, 2025, the DOE announced in the Federal Register its intent to establish two negotiated rulemaking committees. One committee will consider changes to the federal student loan programs and the other committee will consider changes to institutional and programmatic accountability, the Pell Grant Program, and other changes to the Title IV, HEA programs. This rulemaking is necessary to implement recent statutory changes to the Title IV, HEA programs included in the OBBB Act, as well as to implement other Trump Administration priorities.
Current report
Congressional and Presidential Action
Current report
Political and budgetary concerns significantly affect Title IV Programs. Congress periodically revises the HEA (“Higher Education Act”) and other laws governing Title IV Programs. See 10-K Part I, Item 1 at “Regulatory Environment – Congressional and Presidential Action.” Congress passed a law signed by the President on July 4, 2025, entitled the “One Big Beautiful Bill Act,” (“the OBBB Act”). The OBBB Act has a general effective date of July 1, 2026 (with exceptions) and enacts several changes to the HEA that will impact us and our schools including, but not limited to:
Current report
Index
Current report
The new accountability metrics do not apply to our non-degree undergraduate programs (although all our non-degree and degree programs are within the scope of the gainful employment regulations). See 10-K Part I, Item 1 at “Regulatory Environment – Gainful Employment.” Moreover, we are still reviewing the new law and waiting for further rules and guidance from the DOE regarding the implementation of the new law. Accordingly, it is difficult for us to predict with certainty how our educational programs will perform under the new metrics and the extent to which certain programs, if any, could lose Direct Loan eligibility.
Current report
The OBBB Act has a general effective date of July 1, 2026 with certain exceptions and grandfathering provisions. We cannot predict the timing and content of any rules or guidance the DOE may issue to implement or interpret the OBBB Act, nor can we predict with certainty the extent to which our schools and our educational programs will be able to comply with the revised requirements or the extent to which the revisions and reduced aid eligibility will impact our enrollments.
Removed paragraphs (17)
Previous report
Educational services and facilities expense. Oureducational services and facilities expense increased $4.4 million, or 10.2%, to $47.4 million for the three months ended March 31, 2025, compared to $43.0 million for the three months ended March 31, 2024.
Previous report
The increase over the prior year includes approximately $1.1 million in preopening costs for the new Houston, Texas, and Hicksville, New York, campuses and costs related to the relocation of the Nashville, Tennessee and Levittown, Pennsylvania campuses, and investments to implement and expand new programs at existing campuses.
Previous report
Total educational services and facilities expense increase was primarily driven by a $1.4 million or 21.4% higher books and tools expense due to 16.2% higher student starts and price increases;$1.7 million or 14.9% higher facilities expense primarily driven byhigher rent expense and other facilities-related costs. Remaining increase was primarily due to $0.8 million or 29.8% higher depreciation expense and $0.5 million or 2.2% higher instructional costs, which increased slightly but declined as a percentage of revenue, reflecting continued margin expansion.
Previous report
Educational services and facilities expense, as a percentage ofrevenue, decreased to 40.3% from 41.6% for the three months ended March 31, 2025 and 2024,
Previous report
respectively, reflecting positive margin leverage.
Previous report
Selling, general and administrative expense. Our selling, general and administrative expense increased $6.4 million, or 10.6% to $66.9 million for the three months ended March 31, 2025, compared to $60.5 million for the three months ended March 31, 2024. Included in the increase over the prior year are approximately $0.4 million of preopening costs including new campusand campus relocation costs as well as costs associated with implementation and expansion of new programs at existing campuses. Total selling, general and administrative expense increase was primarily due to $6.1 million or 26.9% higher administrative expense, driven by increased compensation and benefits expense as a result of expanded workforce to support our larger student population, which included $1.0 million higher pay incentive expense due to improved financial performance; and $0.7 million higher student services expenses.
Previous report
Student services expense increased $0.7 million or 13.2%, primarily driven by increased personnel to continue to support and drive student population growth and program expansions.
Previous report
Marketing expense decreased slightly year over year, demonstrating increased efficiencies per dollar spent with cost per start decreasing 20% compared to prior year. Additional marketing initiatives have contributed to the 16.2% student start growth over the prior year and will continue to yield returns through the end of the year.
Previous report
Selling, general and administrative expense, as a percentage of revenue, decreased to 56.9% from 58.5% for the three months ended March 31, 2025 and 2024, respectively, reflecting positive margin leverage.
Previous report
We currently lease all of our campuses.
Previous report
Net cash used in financing activities for the three months ended March 31, 2025 and 2024 was $2.6 million and $3.6 million, respectively. The decrease in cash used was primarily driven by tenant allowance payment received in the current quarter, partially offset by higher cash outflows in the current year related to the tax impact for vested stock grants.
Previous report
As of March 31, 2025, there was no debt outstanding under the Facility.
Previous report
Negotiated Rulemaking. The DOE has initiated and engaged in rulemaking which has included negotiated rulemaking meetings held in late 2023 and early 2024 on several topics including state authorization, accreditation, return of unearned Title IV Program funds for students who withdraw from school without completing their educational programs, cash management, distance education, and student debt relief. See 10-K at Part I, Item 1. “Business – Regulatory Environment – Negotiated Rulemaking,” “Business – Regulatory Environment – State Authorization,” “Business – Regulatory Environment – Accreditation,” and “Business – Regulatory Environment – Return of Title IV Program Funds.”
Previous report
Congressional and Presidential Action. As previously disclosed, Congress or the President could take action to downsize or eliminate the DOE or transfer some or all of the authority and responsibilities of the DOE to another agency. Because a significant percentage of our revenues are derived from Title IV Programs, any action by Congress, the President or the DOE that significantly reduces Title IV Program funding, that limits or restricts the ability of our schools, programs, or students to receive funding through the Title IV Programs, or that imposes new restrictions or constraints upon our business or operations could reduce our student enrollment and our revenues, and could increase our administrative costs and require us to arrange for alternative sources of financial aid for our students and require us to modify our practices in order for our schools to comply fully with Title IV Program requirements. See 10-K at “Business – Regulatory Environment – Congressional and Presidential Action.”
Previous report
On March 20, 2025, the President signed an Executive Order (EO) to take all necessary steps to facilitate the closure of the DOE. The EO did not specify the precise steps or schedule that would be followed for closing the DOE or how the federal student aid programs would be administered or potentially transferred to another agency. The DOE was created in 1979 through Congressional action and similar Congressional action would be required to dissolve the DOE. Accordingly, we cannot predict whether, when, and to what extent the DOE will be downsized, eliminated or replaced and whether Congressional action and/or judicial action in response to lawsuits could impede efforts by the President and DOE to make such changes.
Previous report
On March 11, 2025, the DOE announced a reduction in force (RIF) impacting nearly 50% of the DOE’s workforce and placing the impacted DOE staff on administrative leave beginning on March 21, 2025. The DOE noted that all divisions within the DOE were impacted by the RIF with some divisions requiring significant reorganization. However, notwithstanding these actions and assurances by the DOE, it is possible that the RIF and other changes at DOE could result in delays and disruptions to Title IV funding at our schools or to other actions by the DOE related to our participation in the Title IV Programs such as, but not limited to, granting approvals for school acquisitions, adding new programs to existing schools, or adding new school locations.
Previous report
Further, as previously disclosed, current requirements for student or school participation in Title IV Programs may change or one or more of the present Title IV Programs could be replaced by other programs with materially different student or school eligibility requirements. The potential for changes related to the DOE or Title IV Programs that may be adverse to us and other for-profit schools like ours may increase as a result of changes in political leadership. We cannot predict the scope, timing or likelihood of future actions and changes by Congress, the President or the DOE with respect to the operations and existence of the DOE or the laws and regulations applicable to and the funding for the Title IV Programs. If we cannot comply with the provisions of the HEA and the regulations of the DOE as they may be revised or with the terms of an executive order or Presidential action or if the cost of such compliance is excessive or if funding is materially reduced or disrupted by changes in Title IV Programs or DOE, our revenues or profit margin could be materially adversely affected. See 10-K at “Business – Regulatory Environment – Congressional and Presidential Action.”
Reworded paragraphs (18)
Previous wording
Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our”, and “us”, as applicable) provide diversified career-oriented postsecondary education to recent high school graduates and working adults. The Company, which currently operates 21 campuses in 12 states, has entered into leases for two new campuses: one in Houston, Texas, with programs expected to begin in the second half of 2025, and one in Hicksville, New York, with programs expected to begin by the end of 2026. The Company entered into the Houston lease and Hicksville lease on October 31, 2023 and December 12, 2024, respectively. The Company offers programs in skilled trades, automotive technology, healthcare services and information technology. The schools operate under the brands Lincoln Technical Institute, Lincoln College of Technology and Nashville Auto Diesel College.
Current wording
Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our”, and “us”, as applicable) provide diversified career-oriented postsecondary education to recent high school graduates and working adults. The Company, which currently operates 21 campuses in 12 states, has entered into leases for two new campuses: one in Houston, Texas, with programs expected to begin in the second half of 2025, and one in Hicksville, New York, with programs expected to begin by the end of 2026. The Company entered into the Houston lease and Hicksville lease on October 31, 2023 and December 12, 2024, respectively. The Company offers programs in skilled trades, automotive, health sciences and information technology. The schools operate under the brands Lincoln Technical Institute, Lincoln College of Technology and Nashville Auto Diesel College.
Previous wording
Results of Operations for the Three Months Ended March 31, 2025
Current wording
Results of Operations for the Three and Six Months Ended June 30, 2025
Previous wording
(Gain) Loss on Sale of Assets. Gain on sale was $0.2 million for the three months ended March 31, 2025 associated with fixed assets sale, compared to $0.3 million of loss on sale of asset related to the sale of Levittown, Pennsylvania property for the three months ended March 31, 2024, respectively.
Current wording
(Gain) Loss on Sale of Assets. Gain on sale was $0.3 million for the three months ended June 30, 2025, compared to a loss of $0.6 million in the prior year.
Previous wording
Operating income increased $9.1 million, or 71.9% to $21.7 million for the three months ended March 31, 2025 from $12.6 million in the prior year comparable period. The change compared to the prior year was mainly driven by the following factors:
Current wording
Operating income increased $9.2 million, or 90.4% to $19.3 million for the three months ended June 30, 2025 from $10.1 million in the prior year comparable period. The change compared to the prior year comparable period was mainly driven by the following factors:
Previous wording
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $18.3 million and $12.8 million for the three months ended March 31, 2025 and 2024, respectively. The increase over the prior year was primarily driven by salaries and benefits expense and higher pay incentive expense due to improved financial performance.
Current wording
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $16.4 million for the three months ended June 30, 2025, compared to $10.7 million in the prior year. The increase was primarily driven by higher salaries and benefits due to workforce expansion to support a larger student population and to execute our growth initiatives. Additionally, medical claims increased, and performance-based incentive compensation increased in line with improved financial performance.
Previous wording
Revenue. Revenue increased $14.1 million, or 13.7% to $117.5 million for the three months ended March 31, 2025 from $103.4 million in the prior year comparable period. Revenue growth was primarily due to a 13.1% increase in average student population.
Current wording
Revenue. Revenue increased $27.7 million, or 13.4% to $234.0 million for the six months ended June 30, 2025 from $206.3 million in the prior year comparable period. Revenue growth was primarily due to a 14.5% increase in average student population.
Previous wording
Net interest income/(expense). Net interest expensewas $0.6 millionfor the three months ended March 31, 2025 compared to net interest income of $0.1 million for the three months ended March 31, 2024 primarily driven by a decrease in net interest income due to lower cash investments and an increase in interest expense of $0.1 million related to capital leases.
Current wording
Net interest income/(expense). Net interest expensewas $1.4 millionfor the six months ended June 30, 2025 compared to net interest income of $0.1 million for the six months ended June 30, 2024, primarily driven by a reduction in interest income resulting from lower average cash balances during the period, as funds were used for capital expenditures.
Previous wording
Income taxes. Our income tax provision for the three months ended March 31, 2025 was $0.9 million, or 31.2% of pre-tax income compared to ($0.1) million, or 34.6% of pre-tax net loss in the prior year.
Current wording
Income taxes. Income tax provision was $1.4 million for the six months ended June 30, 2025, representing an effective tax rate of 28.6% of pre-tax income. This compares to an income tax benefit of $0.6 million in the prior-year period, which reflected a 39% effective tax rate on a pre-tax net loss.
Previous wording
As of March 31, 2025, the Company had $28.7 million in cash and cash equivalents, compared to $69.8 million in cash and cash equivalents as of March 31, 2024. The change in cash position from the prior year was primarily driven by increased capital expenditures due to campus expansion and continued use of cash in operating activities.
Current wording
As of June 30, 2025, the Company had $16.7 million in cash and cash equivalents, compared to $67.0 million in cash and cash equivalents as of June 30, 2024. The change in cash position from the prior year was primarily driven by increased capital expenditures due to campus expansion and continued use of cash in operating activities, partially offset by net proceeds from financing activities.
Previous wording
Net cash used in operating activities was $8.4 million for the three months ended March 31, 2025 compared to net cash used in operating activities of $14.9 million in the prior year comparable period. The increase in cash position was primarily driven by higher net income and improved cash collections, partially offset by changes in working capital.
Current wording
Net cash used in operating activities was $8.1 million for the six months ended June 30, 2025 compared to net cash used in operating activities of $6.6 million in the prior year comparable period. The decrease in cash position was primarily driven by changes in working capital, partially offset by higher net income.
Previous wording
Net cash used in investing activities was $19.6 million for the three months ended March 31, 2025 compared to $8.0 million net cash provided by investing activities in the prior year comparable period primarily driven by higher capital expenditures in the current period due to new campus expansion and relocation of new campuses.
Current wording
Net cash used in investing activities was $45.8 million for the six months ended June 30, 2025 compared to $3.0 million net cash provided by investing activities in the prior year comparable period primarily driven by higher capital expenditures associated with growth initiatives.
Previous wording
Capital expenditures were 13.1% of revenues in 2024 and are expected to be approximately 16.0% of revenues in 2025. The increase in planned capital expenditures over the prior year will be driven by several factors that include but are not limited to the buildout of the Nashville, Tennessee, Levittown, Pennsylvania, Houston, Texas and Hicksville, New York campuses. In addition, we plan to invest $6.1 million into expanding programs at the Melrose, Illinois, Moorestown, New Jersey, South Plainfield, New Jersey and Allentown, Pennsylvania campuses and we plan to invest an additional $18.9 million for educational equipment, real estate improvements, and information technology across various campuses. We expect to fund future capital expenditures with cash generated from operating activities and cash on hand.
Current wording
Capital expenditures for the six months ending June 30, 2025 were $46.3 million compared to $12.7 million in prior period. The increase in planned capital expenditures include the buildouts to relocate the Nashville, Tennessee, Levittown, Pennsylvania campuses and buildout for the new campuses in Houston, Texas and Hicksville, New York. In addition, we continue to invest to expand programs at existing campuses which demonstrate high market demand and successful student outcomes. We expect to fund future capital expenditures with cash generated from operating activities and cash on hand.
Previous wording
On February 16, 2024, the Company entered into a secured credit agreement (the “Fifth Third Credit Agreement”) with Fifth Third Bank, National Association (the “Bank”), pursuant to which the Company, as borrower, has obtained a revolving credit facility in the aggregate principal amount of $40.0 million including a $10.0 million letter of credit sublimit and a $20.0 million accordion feature (the “Facility”), the proceeds of which are to be used for working capital, general corporate and certain other permitted purposes. The Facility is guaranteed by the Company’s wholly-owned subsidiaries and is secured by a first priority lien in favor of the Bank on substantially all of the personal property owned by the Company and its subsidiaries. The term of the Facility is 36 months, maturing on February 16, 2027.
Current wording
On February 16, 2024, the Company entered into a secured credit agreement (the “Fifth Third Credit Agreement”) with Fifth Third Bank, National Association (the “Bank”), pursuant to which the Company, as borrower, obtained a revolving credit facility in the aggregate principal amount of $40.0 million including a $10.0 million letter of credit sublimit and a $20.0 million accordion feature (the “Facility”), the proceeds of which are to be used for working capital, general corporate and certain other permitted purposes. The Facility is guaranteed by the Company’s wholly-owned subsidiaries and is secured by a first priority lien in favor of the Bank on substantially all of the personal property owned by the Company and its subsidiaries. The term of the Facility is 36 months, maturing on February 16, 2027.
Previous wording
Under the terms of the Fifth Third Credit Agreement, the Company will pay to the Bank an unused facility fee on the average daily unused balance of the Facility at a rate per annum equal to 0.50%, which fee is payable in arrears on dates when interest is due and payable. For the three months ended March 31, 2025, the Company has paid less than $0.1 million in unused facility fees, which were expensed as incurred. The Company will also pay to the Bank a letter of credit fee equal to the Applicable Margin for loans subject to the Tranche Rate multiplied by the maximum amount available to be drawn under such letter of credit.
Current wording
Under the terms of the Fifth Third Credit Agreement, the Company will pay to the Bank an unused facility fee on the average daily unused balance of the Facility at a rate per annum equal to 0.50%, which fee is payable in arrears on dates when interest is due and payable. For the three and six months ended June 30, 2025 the Company paid approximately $0.1 million, compared to less than $0.1 million in the three and six months ended June 30, 2024, in unused facility fees, which were expensed as incurred. The Company will also pay to the Bank a letter of credit fee equal to the Applicable Margin for loans subject to the Tranche Rate multiplied by the maximum amount available to be drawn under such letter of credit. For the three and six months ended June 30, 2025 and 2024 those fees were not material.
Previous wording
For the three months ended March 31, 2025 the Company paid fees of approximately $0.1 million in connection with the Fifth Third Credit Agreement’s Second Amendment, consisting of bank fees, legal costs and other customary fees and reimbursements. The fees were capitalized and are being amortized over the term of Fifth Third Credit Agreement.
Current wording
In connection with the Fifth Third Credit Agreement, total fees paid during 2024 were approximately $0.5 million, which included bank and legal costs, in addition to other customary expenses and reimbursements. These fees have been capitalized in the prior year and are being amortized over the term of the Fifth Third Credit Agreement. During the six months ended June 30, 2025, the Company has entered into a Second Amendment to the Fifth Third Credit Agreement and has incurred additional bank and legal fees of $0.1 million. The fees have been capitalized and are being amortized over the term of the Second Amendment.
Previous wording
Current portion of Long-Term Debt, Long-Term Debt and Lease Commitments. As of March 31, 2025, we had no debt outstanding. We lease offices, educational facilities and various items of equipment for varying periods through the year 2045 at basic annual rental rates (excluding taxes, insurance, and other expenses under certain leases).
Current wording
Current portion of Long-Term Debt, Long-Term Debt and Lease Commitments. As of June 30, 2025, we had $13.0 million in debt outstanding under the Facility. We lease offices, educational facilities and various items of equipment for varying periods through the year 2045 at basic annual rental rates (excluding taxes, insurance, and other expenses under certain leases).
Previous wording
As of March 31, 2025, we had outstanding loan principal commitments to our active students of $48.9 million. These are institutional loans and no cash is advanced to students. The full loan amount is not guaranteed unless the student completes the program. The institutional loans are considered commitments because the students are required to fund their education using these funds and they are not reported on our financial statements.
Current wording
As of June 30, 2025, we had outstanding loan principal commitments to our active students of $52.0 million. These are institutional loans and no cash is advanced to students. The full loan amount is not guaranteed unless the student completes the program. The institutional loans are considered commitments because the students are required to fund their education using these funds and they are not reported on our financial statements.
Previous wording
As previously disclosed, the DOE could issue new regulations and guidance in the future. See 10-K at “Business – Regulatory Environment – Negotiated Rulemaking.” On April 4, 2025, the DOE published a notice in the Federal Register announcing its intention to commence negotiated rulemaking and to establish one or more negotiated rulemaking committees to prepare proposed regulations related to the Title IV Programs. The DOE has not yet established a list of regulatory topics but has indicated that it is seeking feedback on ways to streamline current higher education regulations and federal assistance programs to create efficiencies for students, institutions, and key stakeholders. The DOE announced that it will receive feedback at two public hearings on April 29, 2025, and May 1, 2025, and from written comments from the public by May 5, 2025. We cannot predict the timing and scope of any regulations or guidance the DOE might issue during the negotiated rulemaking process or during any other process the DOE might complete in the future. Although some or all of the new DOE regulations could be favorable to us and our schools, the new DOE regulations could increase the possibility that our schools could be subject to additional reporting requirements, to potential liabilities and sanctions such as letter of credit requirements, and to potential loss of Title IV eligibility if our efforts to modify our operations to comply with any new requirements are unsuccessful which could have a significant impact on our business and results of operations.
Current wording
We cannot predict the timing, scope, and final content of any regulations or guidance the DOE might issue as a result of either of the ongoing negotiated rulemaking processes or during any other process the DOE might complete in the future. Although some or all of future DOE regulations could be favorable to us and our schools, new DOE regulations could increase the possibility that our schools could be subject to additional reporting requirements, to potential liabilities and sanctions such as letter of credit requirements, and to potential loss of Title IV eligibility if our efforts to modify our operations to comply with any new requirements are unsuccessful which could have a significant impact on our business and results of operations.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The change in operating performance was the result of closing the Summerlin campus and no longer enrolling new students at the campus.
Current report — wording carried from elsewhere
(Gain) Loss on Sale of Assets. Gain on sale was $0.5 million for the six months ended June 30, 2025, compared to a loss of $0.9 million in the prior year.
Current report — wording carried from elsewhere
We evaluate performance based on operating results. Adjustments to reconcile segment results with consolidated results are included in the caption “Corporate,” which primarily includes unallocated corporate activity.
Current report — wording carried from elsewhere
The following table presents selected operating metrics for our two reportable segments for the six months ended June 30, 2025 and 2024:
Current report — wording carried from elsewhere
In the fourth quarter of 2024, the Board of Directors approved a plan to close the Summerlin, Las Vegas campus. The sale of the Summerlin campus was consummated on January 1, 2025. During the prior year, the Summerlin campus was classified in the Transitional segment.