☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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New Jersey
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57-1150621
|
|
(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
|
Title of each class
|
Name of exchange on which registered
|
|
Common Stock, no par value per share
|
The NASDAQ Stock Market LLC
|
Large accelerated filer ☐
|
Accelerated filer ☐
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Non-accelerated filer ☐
|
Smaller reporting company ☒
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PART I.
|
1
|
|
ITEM 1.
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1
|
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ITEM 1A.
|
19
|
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ITEM 1B.
|
30
|
|
ITEM 2.
|
31
|
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ITEM 3.
|
32
|
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ITEM 4.
|
32
|
|
PART II.
|
33
|
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ITEM 5.
|
33
|
|
ITEM 6.
|
36
|
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ITEM 7.
|
38
|
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ITEM 7A.
|
54
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ITEM 8
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54
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ITEM 9.
|
55
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ITEM 9A.
|
55
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ITEM 9B.
|
55
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PART III.
|
56
|
|
ITEM 10.
|
56
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ITEM 11.
|
56
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ITEM 12.
|
56
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ITEM 13.
|
56
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ITEM 14.
|
56
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PART IV.
|
57
|
|
ITEM 15.
|
57
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· | our failure to comply with the extensive regulatory framework applicable to our industry or our failure to obtain timely regulatory approvals in connection with a change of control of our company or acquisitions; |
· | our success in updating and expanding the content of existing programs and developing new programs in a cost-effective manner or on a timely basis; |
· | our ability to implement our strategic plan; |
· | risks associated with changes in applicable federal laws and regulations including pending rulemaking by the U.S. Department of Education; |
· | uncertainties regarding our ability to comply with federal laws and regulations regarding the 90/10 rule and cohort default rates; |
· | risks associated with opening new campuses and closing existing campuses; |
· | risks associated with integration of acquired schools; |
· | industry competition; |
· | conditions and trends in our industry; |
· | general economic conditions; and |
· | other factors discussed under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |
Programs Offered
|
|||||||||||
Area of Study
|
Bachelor's
Degree
|
Associate's Degree
|
Diploma and Certificate
|
Average Enrollment
|
Percent of Total Enrollment
|
||||||
Automotive
|
Auto Service Technology
|
Automotive Service Management, Automotive Technology, Collision Repair & Refinishing Service Management, Diesel & Truck Service Management
|
Automotive Mechanics, Automotive Technology, Automotive Technology with BMW FastTrack, Automotive Technology with Mopar X-Press, Automotive Technology with High Performance, Collision Repair and Refinishing Technology, Diesel & Truck Mechanics, Diesel & Truck Technology, Diesel & Truck Technology with Transport Refrigeration, Diesel & Truck with Automotive Technology, Heavy Equipment Maintenance Technology, Heavy Equipment and Truck Technology, Motorcycle Technology
|
5,390
|
41
|
%
|
|||||
Health Sciences
|
Health Information Administration, RN to BSN
|
Medical Assisting Technology, Dental Office Management, Health Information Technology, Medical Office Management, Mortuary Science, Occupational Therapy Assistant, Dental Hygiene, Dental Administrative Assistant, Advanced Medical Coding & Billing, Nursing
|
Medical Office Assistant, Medical Assistant, Patient Care Technician, Pharmacy Technician, Medical Coding & Billing, Dental Assistant, Licensed Practical Nursing
|
3,712
|
29
|
%
|
|||||
Skilled Trades
|
-
|
Electronic Engineering Technology, HVAC, Electronics Systems Service Management
|
Electrical Technology, Electronics Systems Technician, HVAC, Welding Technology, CNC
|
2,206
|
17
|
%
|
Programs Offered (Continued)
|
|||||||||||
Area of Study
|
Bachelor's
Degree
|
Associate's Degree
|
Diploma or Certificate
|
Average Enrollment
|
Percent of Total Enrollment
|
||||||
Hospitality Services
|
Culinary Management, International Baking and Pastry
|
Culinary Arts, Salon Management, International Baking and Pastry
|
Culinary Arts, Cosmetology, Aesthetics, Italian Culinary Arts, International Baking and Pastry, Nail Technolgy, Therapeutic Massage & Bodywork Technician
|
1,074
|
8
|
%
|
|||||
Business and Information Technology
|
Business Management, Criminal Justice, Funeral Service Management
|
Business Administration, Criminal Justice, Business Management, Broadcasting and Communications, Paralegal, Computer Networking and Support, Accounting, Human Services, Dental Hygiene
|
Criminal Justice, Computer Networking and Security, Computer & Network Support Technician
|
599
|
5
|
%
|
|||||
Total:
|
12,981
|
100
|
%
|
School
|
Last Accreditation Letter
|
Next Accreditation
|
Type of Accreditation
|
|||
Philadelphia, PA2
|
September 30, 2013
|
May 1, 2018
|
National
|
|||
Union, NJ1
|
May 29, 2014
|
February 1, 2019
|
National
|
|||
Mahwah, NJ1
|
March 11, 2015
|
August 1, 2019
|
National
|
|||
Melrose Park, IL2
|
March 13, 2015
|
November 1, 2019
|
National
|
|||
Denver, CO1
|
March 9, 2011
|
February 1, 20163
|
National
|
|||
Columbia, MD
|
March 7, 2012
|
February 1, 2017
|
National
|
|||
Grand Prairie, TX1
|
December 7, 2011
|
August 1, 20163
|
National
|
|||
Allentown, PA1
|
March 7, 2012
|
January 1, 2017
|
National
|
|||
Nashville, TN1
|
November 30, 2012
|
May 1, 2017
|
National
|
|||
Indianapolis, IN
|
November 30, 2012
|
November 1, 2017
|
National
|
|||
New Britain, CT
|
June 5, 2014
|
January 1, 2018
|
National
|
|||
Shelton, CT2
|
March 5, 2014
|
September 1, 2018
|
National
|
|||
Queens, NY1
|
June 4, 2013
|
June 1, 2018
|
National
|
|||
Hartford, CT
|
March 11, 2015
|
November 1, 2019
|
National
|
|||
East Windsor, CT2
|
December 4, 2013
|
February 1, 2018
|
National
|
|||
South Plainfield, NJ1
|
September 2, 2014
|
August 1, 2019
|
National
|
1 | Branch campus of main campus in Indianapolis, IN |
2 | Branch campus of main campus in New Britain, CT |
3 | Campus undergoing re-accreditation. Each campus has received written confirmation that it remains accredited pending consideration of its application for reaccreditation. |
School
|
Last Accreditation Letter
|
Next Accreditation
|
Type of Accreditation
|
|||
Brockton, MA1
|
August 28, 2014
|
December 31, 2020
|
National
|
|||
Lincoln, RI1
|
August 28, 2014
|
December 31, 2019
|
National
|
|||
Lowell, MA1
|
January 5, 2015
|
December 31, 2019
|
National
|
|||
Somerville, MA1
|
August 28, 2014
|
December 31, 2019
|
National
|
|||
Philadelphia (Center City), PA1
|
April 26, 2013
|
December 31, 20162
|
National
|
|||
Edison, NJ
|
April 26, 2013
|
December 31, 20162
|
National
|
|||
Marietta, GA1
|
August 28, 2014
|
December 31, 2019
|
National
|
|||
Moorestown, NJ1
|
April 26, 2013
|
December 31, 20162
|
National
|
|||
Paramus, NJ1
|
April 26, 2013
|
December 31, 20162
|
National
|
|||
Philadelphia (Northeast), PA1
|
April 26, 2013
|
December 31, 20162
|
National
|
|||
West Palm Beach, FL1
|
August 28, 2014
|
December 31, 2019
|
National
|
|||
Las Vegas (Summerlin), NV1
|
August 29, 2014
|
December 31, 2019
|
National
|
|||
Henderson (Green Valley), NV1
|
January 5, 2015
|
December 31, 2019
|
National
|
1 | Branch campus of main campus in Edison, NJ |
2 | Campus undergoing re-accreditation. |
School
|
Last Accreditation Letter
|
Comprehensive Evaluation
|
Type of Accreditation
|
|||
Southington, CT
|
June 29, 2012
|
Fall 2017
|
Regional
|
School
|
Last Accreditation Letter
|
Next Accreditation
|
Type of Accreditation
|
|||
Fern Park, FL
|
August 2, 2015
|
March 31, 2016
|
National
|
Main Instituion/Campus(es)
|
Additional Location(s)
|
|
Edison, NJ
|
Moorestown, NJ
|
|
Paramus, NJ
|
||
Philadelphia, PA (Center City)
|
||
Philadelphia, PA (Northeast)
|
||
Somerville, MA
|
||
Lowell, MA
|
||
Brockton, MA
|
||
Lincoln, RI
|
||
Marietta, GA
|
||
West Palm Beach, FL
|
||
Henderson, NV (Green Valley)
|
||
Las Vegas, NV (Summerlin)
|
||
Hartford, CT
|
||
New Britain, CT
|
Shelton, CT
|
|
Philadelphia, PA
|
||
East Windsor, CT
|
||
Melrose Park, IL
|
||
Fern Park, FL
|
||
Indianapolis, IN
|
Grand Prairie, TX
|
|
Nashville, TN
|
||
Denver, CO
|
||
Union, NJ
|
||
Mahwah, NJ
|
||
Queens, NY
|
||
Allentown, PA
|
||
South Plainfield, NJ
|
||
Columbia, MD
|
||
Southington, CT
|
·
|
the equity ratio, which measures the institution's capital resources, ability to borrow and financial viability;
|
· | the primary reserve ratio, which measures the institution's ability to support current operations from expendable resources; and |
· | the net income ratio, which measures the institution's ability to operate at a profit. |
· | Posting a letter of credit in an amount determined by the DOE and equal to at least 50% of the total Title IV Program funds received by the institution during the institution's most recently completed fiscal year; |
· | Posting a letter of credit in an amount determined by the DOE and equal to at least 10% of such prior year's Title IV Program funds, accepting provisional certification, complying with additional DOE monitoring requirements and agreeing to receive Title IV Program funds under an arrangement other than the DOE's standard advance funding arrangement |
· | comply with all applicable federal student financial aid requirements; |
· | have capable and sufficient personnel to administer the Title IV Programs; |
· | administer Title IV Programs with adequate checks and balances in its system of internal controls over financial reporting; |
· | divide the function of authorizing and disbursing or delivering Title IV Program funds so that no office has the responsibility for both functions; |
· | establish and maintain records required under the Title IV regulations; |
· | develop and apply an adequate system to identify and resolve discrepancies in information from sources regarding a student’s application for financial aid under Title IV; |
· | have acceptable methods of defining and measuring the satisfactory academic progress of its students; |
· | refer to the Office of the Inspector General any credible information indicating that any applicant, student, employee, third party servicer or other agent of the school has been engaged in any fraud or other illegal conduct involving Title IV Programs; |
· | not be, and not have any principal or affiliate who is, debarred or suspended from federal contracting or engaging in activity that is cause for debarment or suspension; |
· | provide adequate financial aid counseling to its students; |
· | submit in a timely manner all reports and financial statements required by the regulations; and |
· | not otherwise appear to lack administrative capability. |
Institution
|
Expiration Date of Current
Program Participation
Agreement
|
|
Columbia, MD
|
September 30, 2017
|
|
Edison, NJ
|
September 30, 20161
|
|
Indianapolis, IN
|
September 30, 20161
|
|
New Britain, CT
|
June 30, 20161
|
|
Southington, CT
|
June 30, 2017
|
|
Fern Park, FL
|
June 30, 2017
|
|
Hartford, CT
|
September 30, 2017
|
1
|
Provisionally certified.
|
· | Any adverse action, including a probation or similar action, taken against the institution by its accrediting agency; |
· | Any event that causes the institution, or related entity to realize any liability that was noted as a contingent liability in the institution's or related entity's most recent audited financial statements; |
· | Any violation by the institution of any loan agreement; |
· | Any failure of the institution to make a payment in accordance with its debt obligations that results in a creditor filing suit to recover funds under those obligations; |
· | Any withdrawal of owner's equity from the institution by any means, including by declaring a dividend; or |
· | Any extraordinary losses, as defined under Accounting Standards Codification 220-20. |
· | Require the repayment of Title IV funds; |
· | Impose a less favorable payment system for the institution's receipt of Title IV funds; |
· | Place the institution on provisional certification status; |
· |
Revoke or deny an institution’s eligibility to participate in the Title IV Programs; or
|
· | Commence a proceeding to impose a fine or to limit, suspend or terminate the participation of the institution in Title IV Programs. |
·
|
posting a letter of credit in an amount equal to at least 50% of the total Title IV Program funds received by the institution during the institution's most recently completed fiscal year;
|
·
|
posting a letter of credit in an amount equal to at least 10% of such prior year's Title IV Program funds, accepting provisional certification, complying with additional DOE monitoring requirements and agreeing to receive Title IV Program funds under an arrangement other than the DOE's standard advance funding arrangement; and/or
|
· | Student dissatisfaction with our programs and services; |
· | Diminished access to high school student populations; |
· | Our failure to maintain or expand our brand or other factors related to our marketing or advertising practices; and |
· | Our inability to maintain relationships with employers in the automotive, diesel, skilled trades and IT services industries. |
· | authorize the issuance of blank check preferred stock that could be issued by our board of directors to thwart a takeover attempt; |
· | prohibit cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors; |
· | require super-majority voting to effect amendments to certain provisions of our amended and restated certificate of incorporation; |
· | limit who may call special meetings of both the board of directors and stockholders; |
· | prohibit stockholder action by non-unanimous written consent and otherwise require all stockholder actions to be taken at a meeting of the stockholders; |
· | establish advance notice requirements for nominating candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholders' meetings; and |
· | require that vacancies on the board of directors, including newly created directorships, be filled only by a majority vote of directors then in office. |
Location
|
Brand
|
Approximate Square Footage
|
||
Henderson, Nevada
|
Euphoria Institute
|
18,000
|
||
Las Vegas, Nevada
|
Euphoria Institute
|
19,000
|
||
Southington, Connecticut
|
Lincoln College of New England
|
113,000
|
||
Columbia, Maryland
|
Lincoln College of Technology
|
110,000
|
||
Denver, Colorado
|
Lincoln College of Technology
|
212,000
|
||
Grand Prairie, Texas
|
Lincoln College of Technology
|
146,000
|
||
Indianapolis, Indiana
|
Lincoln College of Technology
|
189,000
|
||
Marietta, Georgia
|
Lincoln College of Technology
|
30,000
|
||
Melrose Park, Illinois
|
Lincoln College of Technology
|
88,000
|
||
West Palm Beach, Florida
|
Lincoln College of Technology
|
117,000
|
||
Hartford, Connecticut
|
Lincoln Technical Institute
|
367,000
|
||
Allentown, Pennsylvania
|
Lincoln Technical Institute
|
26,000
|
||
Brockton, Massachusetts
|
Lincoln Technical Institute
|
22,000
|
||
East Windsor, Connecticut
|
Lincoln Technical Institute
|
289,000
|
||
Edison, New Jersey
|
Lincoln Technical Institute
|
64,000
|
||
Fern Park, Florida
|
Lincoln Technical Institute
|
46,000
|
||
Lincoln, Rhode Island
|
Lincoln Technical Institute
|
59,000
|
||
Lowell, Massachusetts
|
Lincoln Technical Institute
|
21,000
|
||
Mahwah, New Jersey
|
Lincoln Technical Institute
|
79,000
|
||
Moorestown, New Jersey
|
Lincoln Technical Institute
|
35,000
|
||
New Britain, Connecticut
|
Lincoln Technical Institute
|
35,000
|
||
Northeast Philadelphia, Pennsylvania
|
Lincoln Technical Institute
|
25,000
|
||
Paramus, New Jersey
|
Lincoln Technical Institute
|
30,000
|
||
Philadelphia, Pennsylvania
|
Lincoln Technical Institute
|
36,000
|
||
Philadelphia, Pennsylvania
|
Lincoln Technical Institute
|
29,000
|
||
Queens, New York
|
Lincoln Technical Institute
|
48,000
|
||
Shelton, Connecticut
|
Lincoln Technical Institute
|
47,000
|
||
Somerville, Massachusetts
|
Lincoln Technical Institute
|
33,000
|
||
South Plainfield, New Jersey
|
Lincoln Technical Institute
|
60,000
|
||
Union, New Jersey
|
Lincoln Technical Institute
|
56,000
|
||
Nashville, Tennessee
|
Lincoln College of Technology
|
281,000
|
||
West Orange, New Jersey
|
Corporate Office
|
52,000
|
||
Plymouth Meeting, Pennsylvania
|
Corporate Office
|
6,000
|
||
Suffield Connecticut
|
132,000
|
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Price Range of Common Stock
|
||||||||||||
High
|
Low
|
Dividend
|
||||||||||
Fiscal Year Ended December 31, 2015
|
||||||||||||
First Quarter
|
$
|
3.10
|
$
|
2.08
|
$
|
-
|
||||||
Second Quarter
|
$
|
2.71
|
$
|
1.93
|
$
|
-
|
||||||
Third Quarter
|
$
|
1.93
|
$
|
0.20
|
$
|
-
|
||||||
Fourth Quarter
|
$
|
2.40
|
$
|
0.53
|
$
|
-
|
||||||
Price Range of Common Stock
|
||||||||||||
High
|
Low
|
Dividend
|
||||||||||
Fiscal Year Ended December 31, 2014
|
||||||||||||
First Quarter
|
$
|
5.27
|
$
|
3.63
|
$
|
0.07
|
||||||
Second Quarter
|
$
|
4.49
|
$
|
3.56
|
$
|
0.07
|
||||||
Third Quarter
|
$
|
4.57
|
$
|
2.21
|
$
|
0.02
|
||||||
Fourth Quarter
|
$
|
3.66
|
$
|
2.42
|
$
|
0.02
|
Plan Category
|
Number of
Securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights
|
Weighted-
average
exercise
price of
outstanding
options,
warrants and
rights
|
Number of
securities
remaining
available for
future issuance
under equity
compensation
plans (excluding
securities
reflected in
column (a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity compensation plans approved by security holders
|
246,167
|
$
|
12.52
|
1,192,270
|
||||||||
Equity compensation plans not approved by security holders
|
-
|
-
|
-
|
|||||||||
Total
|
246,167
|
$
|
12.52
|
1,192,270
|
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
(In thousands, except per share amounts)
|
||||||||||||||||||||
Statement of Operations Data, Year Ended December 31:
|
||||||||||||||||||||
Revenue
|
$
|
193,220
|
$
|
202,889
|
$
|
215,596
|
$
|
233,727
|
$
|
271,281
|
||||||||||
Cost and expenses:
|
||||||||||||||||||||
Educational services and facilities
|
92,165
|
100,335
|
102,489
|
107,063
|
116,789
|
|||||||||||||||
Selling, general and administrative
|
98,319
|
110,901
|
116,841
|
127,124
|
144,531
|
|||||||||||||||
Loss (gain) on sale of assets
|
1,742
|
(57
|
)
|
(282
|
)
|
(71
|
)
|
(1
|
)
|
|||||||||||
Impairment of goodwill and long-lived assets
|
216
|
3,201
|
-
|
8,268
|
311
|
|||||||||||||||
Total costs and expenses
|
192,442
|
214,380
|
219,048
|
242,384
|
261,630
|
|||||||||||||||
Operating income (loss)
|
778
|
(11,491
|
)
|
(3,452
|
)
|
(8,657
|
)
|
9,651
|
||||||||||||
Other:
|
||||||||||||||||||||
Interest income
|
52
|
62
|
37
|
2
|
11
|
|||||||||||||||
Interest expense
|
(7,438
|
)
|
(5,169
|
)
|
(4,267
|
)
|
(4,078
|
)
|
(3,978
|
)
|
||||||||||
Other income
|
4,142
|
297
|
18
|
14
|
18
|
|||||||||||||||
(Loss) income from continuing operations before income taxes
|
(2,466
|
)
|
(16,301
|
)
|
(7,664
|
)
|
(12,719
|
)
|
5,702
|
|||||||||||
Provision (benefit) for income taxes (1)
|
242
|
(1,479
|
)
|
19,591
|
(2,602
|
)
|
3,254
|
|||||||||||||
(Loss) income from continuing operations
|
(2,708
|
)
|
(14,822
|
)
|
(27,255
|
)
|
(10,117
|
)
|
2,448
|
|||||||||||
(Loss) gain from discontinued operations, net of income taxes
|
(642
|
)
|
(41,311
|
)
|
(24,031
|
)
|
(27,069
|
)
|
15,092
|
|||||||||||
Net (loss) income
|
$
|
(3,350
|
)
|
$
|
(56,133
|
)
|
$
|
(51,286
|
)
|
$
|
(37,186
|
)
|
$
|
17,540
|
||||||
Basic
|
||||||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.12
|
)
|
$
|
(0.65
|
)
|
$
|
(1.21
|
)
|
$
|
(0.46
|
)
|
$
|
0.11
|
||||||
(Loss) earnings per share from discontinued operations
|
(0.02
|
)
|
(1.81
|
)
|
(1.07
|
)
|
(1.22
|
)
|
0.69
|
|||||||||||
Net (loss) income per share
|
$
|
(0.14
|
)
|
$
|
(2.46
|
)
|
$
|
(2.28
|
)
|
$
|
(1.68
|
)
|
$
|
0.80
|
||||||
Diluted
|
||||||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.12
|
)
|
$
|
(0.65
|
)
|
$
|
(1.21
|
)
|
$
|
(0.46
|
)
|
$
|
0.11
|
||||||
(Loss) earnings per share from discontinued operations
|
(0.02
|
)
|
(1.81
|
)
|
(1.07
|
)
|
(1.22
|
)
|
0.68
|
|||||||||||
Net (loss) income per share
|
$
|
(0.14
|
)
|
$
|
(2.46
|
)
|
$
|
(2.28
|
)
|
$
|
(1.68
|
)
|
$
|
0.79
|
||||||
Weighted average number of common shares outstanding:
|
||||||||||||||||||||
Basic
|
23,167
|
22,814
|
22,513
|
22,195
|
22,020
|
|||||||||||||||
Diluted
|
23,167
|
22,814
|
22,513
|
22,195
|
22,155
|
|||||||||||||||
Other Data:
|
||||||||||||||||||||
Capital expenditures
|
$
|
2,218
|
$
|
7,472
|
$
|
6,538
|
$
|
8,839
|
$
|
38,119
|
||||||||||
Depreciation and amortization from continuing operations
|
11,920
|
15,303
|
16,553
|
17,673
|
18,783
|
|||||||||||||||
Number of campuses
|
31
|
31
|
33
|
33
|
34
|
|||||||||||||||
Average student population from continuing operations (2)
|
7,553
|
8,132
|
8,479
|
9,103
|
10,927
|
|||||||||||||||
Cash dividend declared per common share
|
$
|
-
|
$
|
0.18
|
$
|
0.28
|
$
|
0.28
|
$
|
0.07
|
||||||||||
Balance Sheet Data, At December 31:
|
||||||||||||||||||||
Cash, cash equivalents and restricted cash
|
$
|
61,041
|
$
|
42,299
|
$
|
67,386
|
$
|
61,708
|
$
|
26,524
|
||||||||||
Working capital (deficit) (3)
|
33,818
|
29,585
|
47,041
|
40,939
|
1,540
|
|||||||||||||||
Total assets
|
210,279
|
213,707
|
305,949
|
346,774
|
362,251
|
|||||||||||||||
Total debt (4)
|
58,224
|
65,181
|
90,116
|
73,527
|
36,508
|
|||||||||||||||
Total stockholders' equity
|
80,997
|
83,010
|
145,196
|
198,477
|
239,025
|
· | Our internal financing is provided to students only after all other funding resources have been exhausted; thus, by the time this funding is available, students have completed approximately two-thirds of their curriculum and are more likely to graduate; |
· | Funding for students who interrupt their education is typically covered by Title IV funds as long as they have been properly packaged for financial aid; and |
· | Creditworthy criteria to demonstrate a student’s ability to pay. |
· | Educational services and facilities. Major components of educational services and facilities expenses include faculty compensation and benefits, expenses of books and tools, facility rent, maintenance, utilities, depreciation and amortization of property and equipment used in the provision of education services and other costs directly associated with teaching our programs excluding student services which is included in selling, general and administrative expenses. |
· | Selling, general and administrative. Selling, general and administrative expenses include compensation and benefits of employees who are not directly associated with the provision of educational services (such as executive management and school management, finance and central accounting, legal, human resources and business development), marketing and student enrollment expenses (including compensation and benefits of personnel employed in sales and marketing and student admissions), costs to develop curriculum, costs of professional services, bad debt expense, rent for our corporate headquarters, depreciation and amortization of property and equipment that is not used in the provision of educational services and other costs that are incidental to our operations. Selling, general and administrative expenses also includes the cost of all student services including financial aid and career services. All marketing and student enrollment expenses are recognized in the period incurred. |
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenue
|
$
|
112,882
|
$
|
122,133
|
$
|
125,916
|
||||||
Loss before income tax
|
(642
|
)
|
(37,411
|
)
|
(3,870
|
)
|
||||||
Income tax benefit
|
-
|
(2,746
|
)
|
-
|
||||||||
Net loss from discontinued operations
|
$
|
(642
|
)
|
$
|
(34,665
|
)
|
$
|
(3,870
|
)
|
Year Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Revenue
|
$
|
2,140
|
$
|
3,512
|
||||
Loss before income tax
|
(6,731
|
)
|
(2,635
|
)
|
||||
Income tax benefit
|
(85
|
)
|
-
|
|||||
Net loss from discontinued operations
|
$
|
(6,646
|
)
|
$
|
(2,635
|
)
|
Year Ended
December 31,
|
||||
2013
|
||||
Revenue
|
$
|
7,724
|
||
Loss before income tax
|
(17,287
|
)
|
||
Income tax expense (benefit)
|
239
|
|||
Net loss from discontinued operations
|
$
|
(17,526
|
)
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||
Costs and expenses:
|
||||||||||||
Educational services and facilities
|
47.7
|
%
|
49.5
|
%
|
47.5
|
%
|
||||||
Selling, general and administrative
|
50.9
|
%
|
54.7
|
%
|
54.2
|
%
|
||||||
Gain (loss) on sale of assets
|
0.9
|
%
|
0.0
|
%
|
-0.1
|
%
|
||||||
Impairment of goodwill and long-lived assets
|
0.1
|
%
|
1.6
|
%
|
0.0
|
%
|
||||||
Total costs and expenses
|
99.6
|
%
|
105.8
|
%
|
101.6
|
%
|
||||||
Operating income (loss)
|
0.4
|
%
|
-5.8
|
%
|
-1.6
|
%
|
||||||
Interest expense, net
|
-1.7
|
%
|
-2.3
|
%
|
-1.9
|
%
|
||||||
Loss from continuing opeartions before income taxes
|
-1.3
|
%
|
-8.1
|
%
|
-3.5
|
%
|
||||||
Provision (benefit) for income taxes
|
0.1
|
%
|
-0.8
|
%
|
9.1
|
%
|
||||||
Loss from continuing operations
|
-1.4
|
%
|
-7.3
|
%
|
-12.6
|
%
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Transportation and Skilled Trades
|
$
|
183,821
|
$
|
188,669
|
-2.6
|
%
|
||||||
Transitional
|
9,399
|
14,220
|
-33.9
|
%
|
||||||||
Total
|
$
|
193,220
|
$
|
202,889
|
-4.8
|
%
|
||||||
Operating Income (Loss):
|
||||||||||||
Transportation and Skilled Trades
|
$
|
26,778
|
$
|
19,519
|
37.2
|
%
|
||||||
Transitional
|
(6,859
|
)
|
(7,647
|
)
|
10.3
|
%
|
||||||
Corporate
|
(19,141
|
)
|
(23,363
|
)
|
18.1
|
%
|
||||||
Total
|
$
|
778
|
$
|
(11,491
|
)
|
106.8
|
%
|
|||||
Starts:
|
||||||||||||
Transportation and Skilled Trades
|
7,794
|
8,289
|
-6.0
|
%
|
||||||||
Transitional
|
224
|
488
|
-54.1
|
%
|
||||||||
Total
|
8,018
|
8,777
|
-8.6
|
%
|
||||||||
Average Population:
|
||||||||||||
Transportation and Skilled Trades
|
7,238
|
7,603
|
-4.8
|
%
|
||||||||
Transitional
|
315
|
529
|
-40.5
|
%
|
||||||||
Total
|
7,553
|
8,132
|
-7.1
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Transportation and Skilled Trades
|
6,617
|
7,210
|
-8.2
|
%
|
||||||||
Transitional
|
194
|
418
|
-53.6
|
%
|
||||||||
Total
|
6,811
|
7,628
|
-10.7
|
%
|
· | Educational services and facilities expense reduced by $6.5 million comprised of: (a) $3.7 million, or 9.8%, reduction in facilities expense, primarily due to lower depreciation expense as a result of discontinued depreciation for one campus included in assets held for sale and lower asset base due to prior long-lived asset impairments; and (b) lower instructional expenses of $2.4 million, or 5.8%, and books and tools expense of $0.4 million, or 4.7% as a result of lower student population. |
·
|
Selling, general and administrative expenses reduced by $5.7 million comprised of: (a) $2.6 million, or 11.8%, reduction in sales expenses offset by a $0.8 million, or 5.8%, increase in marketing. The decrease in sales expense was attributable to a reduction in the number of admissions representatives dedicated to the destination schools replaced with a centralized call center thus reducing travel costs and salary expense, while the marketing increase was a result of increased spending on production costs associated with our new marketing campaign as “Lincoln Tech, America’s Technical Institute”; (b) $1.1 million reduction in student services driven by lower student population; and (c) $2.8 million, or 8.2%, reduction in administrative expenses primarily as a result of a reduction in bad debt expense. The improvement in bad debt expense was mainly the result of improvement in current collections and collections history.
|
·
|
Gain on sale of assets increased by $1.6 million as a result of a one-time charge in relation to one of our campuses that was previously classified as held for sale in 2014. During 2015 the Company had re-classified this campus out of held for sale and recorded catch-up depreciation in the amount of $1.6 million.
|
·
|
Impairment of goodwill and long-lived assets of $0.2 million compared to $1.7 million for the years ended December 31, 2015 and 2014, respectively.
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
% Change
|
||||||||||
Revenue:
|
||||||||||||
Transportation and Skilled Trades
|
$
|
188,669
|
$
|
196,230
|
-3.9
|
%
|
||||||
Transitional
|
14,220
|
19,366
|
-26.6
|
%
|
||||||||
Total
|
$
|
202,889
|
$
|
215,596
|
-5.9
|
%
|
||||||
Operating Income (Loss):
|
||||||||||||
Transportation and Skilled Trades
|
$
|
19,519
|
$
|
27,917
|
-30.1
|
%
|
||||||
Transitional
|
(7,647
|
)
|
(5,938
|
)
|
-28.8
|
%
|
||||||
Corporate
|
(23,363
|
)
|
(25,431
|
)
|
8.1
|
%
|
||||||
Total
|
$
|
(11,491
|
)
|
$
|
(3,452
|
)
|
-232.9
|
%
|
||||
Starts:
|
||||||||||||
Transportation and Skilled Trades
|
8,289
|
8,518
|
-2.7
|
%
|
||||||||
Transitional
|
488
|
616
|
-20.8
|
%
|
||||||||
Total
|
8,777
|
9,134
|
-3.9
|
%
|
||||||||
Average Population:
|
||||||||||||
Transportation and Skilled Trades
|
7,603
|
7,860
|
-3.3
|
%
|
||||||||
Transitional
|
529
|
809
|
-34.6
|
%
|
||||||||
Total
|
8,132
|
8,668
|
-6.2
|
%
|
||||||||
End of Period Population:
|
||||||||||||
Transportation and Skilled Trades
|
7,210
|
7,178
|
0.4
|
%
|
||||||||
Transitional
|
418
|
527
|
-20.7
|
%
|
||||||||
Total
|
7,628
|
7,705
|
-1.0
|
%
|
· | Educational services and facilities expense increased by $0.3 million comprised of $1.0 million, or 2.6%, increase in facilities expense, primarily due to an increase in insurance of $0.5 million coupled with a $0.4 million increase in real estate taxes offset $0.6 million, or 1.4%, lower instructional expenses relating to a lower student population. |
· | Selling, general and administrative expenses reduced by $1.1 million comprised of (a) $2.2 million, or 5.8%, reduction in sales and marketing expenses attributable to $1.3 million lower sales salary and travel expense coupled with a $1.2 million reduction in our TV marketing initiatives.; (b) $0.5 million reduction in student services due to the smaller student population; and (c) $1.6 million, or 5.0% increase in administrative expenses primarily as a result of an increase in bad debt expense. |
· | Impairment of goodwill and long lived asset increased by $1.7 million as a result of one-time charges in relation to one of our campuses during the year ended December 31, 2014. |
Cash Flow Summary
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
(In thousands)
|
||||||||||||
Net cash provided by operating activities
|
$
|
14,337
|
$
|
12,022
|
$
|
3,246
|
||||||
Net cash used in investing activities
|
$
|
(1,767
|
)
|
$
|
(7,405
|
)
|
$
|
(5,788
|
)
|
|||
Net cash provided by (used in) financing activities
|
$
|
13,551
|
$
|
(5,204
|
)
|
$
|
(46,280
|
)
|
As of December 31,
|
||||||||
2015
|
2014
|
|||||||
Term loan
|
$
|
44,653
|
$
|
-
|
||||
Credit agreement
|
-
|
30,000
|
||||||
Finance obligation
|
9,672
|
9,672
|
||||||
Capital lease-property (with a rate of 8.0%)
|
3,899
|
25,509
|
||||||
Subtotal
|
58,224
|
65,181
|
||||||
Less current maturities
|
(10,114
|
)
|
(30,471
|
)
|
||||
Total long-term debt
|
$
|
48,110
|
$
|
34,710
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 year
|
1-3 years
|
3-5 years
|
More than
5 years
|
||||||||||||||||
Credit agreement (including interest)
|
$
|
58,867
|
$
|
15,026
|
$
|
12,260
|
$
|
31,581
|
$
|
-
|
||||||||||
Capital leases (including interest) (1)
|
7,109
|
422
|
845
|
845
|
4,997
|
|||||||||||||||
Operating leases
|
93,638
|
19,013
|
33,123
|
23,643
|
17,859
|
|||||||||||||||
Rent on finance obligation (2)
|
1,588
|
1,588
|
-
|
-
|
-
|
|||||||||||||||
Total contractual cash obligations
|
$
|
161,202
|
$
|
36,049
|
$
|
46,228
|
$
|
56,069
|
$
|
22,856
|
(1) | The Fern Park, Florida capital lease is included in the scheduled maturities of $7.1 million; however, subsequent to December 31, 2015, the Company entered into an agreement to terminate the lease which included a termination fee of $2.8 million. |
(2) | On January 20, 2016 the lease was amended. |
/s/ Scott Shaw
|
|
Scott Shaw
|
|
Chief Executive Officer
|
|
March 10, 2016
|
|
/s/ Brian Meyers
|
|
Brian Meyers
|
|
Chief Financial Officer
|
|
March 10, 2016
|
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
1. | Financial Statements |
2. | Financial Statement Schedule |
3. | Exhibits Required by Securities and Exchange Commission Regulation S-K |
Exhibit
Number
|
Description
|
3.1
|
Amended and Restated Certificate of Incorporation of the Company (23).
|
3.2
|
By-laws of the Company (1).
|
4.1
|
Management Stockholders Agreement, dated as of January 1, 2002, by and among Lincoln Technical Institute, Inc., Back to School Acquisition, L.L.C. and the Stockholders and other holders of options under the Management Stock Option Plan listed therein (2).
|
4.2
|
Assumption Agreement and First Amendment to Management Stockholders Agreement, dated as of December 20, 2007, by and among Lincoln Educational Services Corporation, Lincoln Technical Institute, Inc., Back to School Acquisition, L.L.C. and the Management Investors parties therein (3).
|
4.3
|
Registration Rights Agreement, dated as of June 27, 2005, between the Company and Back to School Acquisition, L.L.C. (1).
|
4.4
|
Specimen Stock Certificate evidencing shares of common stock (2).
|
10.1
|
Credit Agreement, dated as of July 31, 2015, among Lincoln Educational Services Corporation and its wholly-owned subsidiaries, the Lenders and Collateral Agents party thereto, and HPF Service, LLC, as Administrative Agent (17).
|
10.2
|
First Amendment to Credit Agreement, dated as of December 31, 2015, among Lincoln Educational Services Corporation and its wholly-owned subsidiaries, the Lenders and Collateral Agents party thereto, and HPF Service, LLC, as Administrative Agent (18).
|
10.3
|
Second Amendment to Credit Agreement, dated as of February 29, 2016, among Lincoln Educational Services Corporation and its wholly-owned subsidiaries, the Lenders party thereto, and HPF Service, LLC, as Administrative Agent and Tranche A Collateral Agent (22).
|
10.4
|
Credit Agreement, dated as of April 5, 2012, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (4).
|
10.5
|
First Amendment to the Credit Agreement, dated as of June 18, 2013, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (5).
|
10.6
|
Second Amendment to the Credit Agreement, dated as of December 20, 2013, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (6).
|
10.7
|
Third Amendment to the Credit Agreement, dated as of December 29, 2014, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (7).
|
10.8
|
Fourth Amendment and Waiver to the Credit Agreement, dated as of March 4, 2015, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (8).
|
10.9
|
Employment Agreement, dated as of January 30, 2015, between the Company and Shaun E. McAlmont (9).
|
10.10
|
Separation Agreement, dated as of May 6, 2015, between the Company and Shaun E. McAlmont (17).
|
10.11
|
Employment Agreement, dated as of January 30, 2015, between the Company and Scott M. Shaw (9).
|
10.12
|
Amendment to Employment Agreement, dated as of August 31, 2015, between the Company and Scott M. Shaw (19).
|
10.13
|
Employment Agreement, dated as of June 2, 2014, between the Company and Kenneth M. Swisstack (10).
|
10.14
|
Amendment to Employment Agreement, dated as of March 12, 2015, between the Company and Kenneth M. Swisstack. (20)
|
10.15
|
Separation Agreement, dated as of January 15, 2016, between the Company and Kenneth M. Swisstack (21).
|
10.16
|
Employment Agreement, dated as of March 12, 2015, between the Company and Brian K. Meyers (20).
|
10.17
|
Lincoln Educational Services Corporation Amended and Restated 2005 Long-Term Incentive Plan (11).
|
10.18
|
Lincoln Educational Services Corporation 2005 Non-Employee Directors Restricted Stock Plan (12).
|
10.19
|
Lincoln Educational Services Corporation 2005 Deferred Compensation Plan (2).
|
10.20
|
Lincoln Technical Institute Management Stock Option Plan, effective January 1, 2002 (2).
|
10.21
|
Form of Stock Option Agreement, dated January 1, 2002, between Lincoln Technical Institute, Inc. and certain participants (2).
|
10.22
|
Form of Stock Option Agreement under our 2005 Long-Term Incentive Plan (13).
|
10.23
|
Form of Restricted Stock Agreement under our 2005 Long-Term Incentive Plan (14).
|
10.24
|
Form of Performance-Based Restricted Stock Award Agreement under our Amended & Restated 2005 Long-Term Incentive Plan (15).
|
10.25
|
Management Stock Subscription Agreement, dated January 1, 2002, among Lincoln Technical Institute, Inc. and certain management investors (2).
|
10.26
|
Stock Repurchase Agreement, dated as of December 15, 2009, among Lincoln Educational Services Corporation and Back to School Acquisition, L.L.C (16).
|
21.1*
|
Subsidiaries of the Company.
|
23*
|
Consent of Independent Registered Public Accounting Firm.
|
31.1 *
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2 *
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32 *
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101**
|
The following financial statements from Lincoln Educational Services Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Comprehensive (Loss) Income, (v) Consolidated Statement of Changes in Stockholders’ Equity and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.
|
(1) | Incorporated by reference to the Company’s Form 8-K filed June 28, 2005. |
(2)
|
Incorporated by reference to the Company’s Registration Statement on Form S-1 (Registration No. 333-123644).
|
(3) | Incorporated by reference to the Company’s Registration Statement on Form S-3 (Registration No. 333-148406). |
(4) | Incorporated by reference to the Company’s Form 8-K filed April 11, 2012. |
(5) | Incorporated by reference to the Company’s Form 8-K filed June 20, 2013. |
(6) | Incorporated by reference to the Company’s Form 8-K filed December 27, 2013. |
(7) | Incorporated by reference to the Company’s Form 8-K filed January 5, 2015. |
(8) | Incorporated by reference to the Company’s Form 8-K filed March 10, 2015. |
(9) | Incorporated by reference to the Company’s Form 8-K filed February 5, 2015. |
(10) | Incorporated by reference to the Company’s Annual Report on Form 10-Q filed August 8, 2014. |
(11) | Incorporated by reference to the Company’s Form 8-K filed May 6, 2013. |
(12) | Registration Statement on Form S-8 (Registration No. 333-188240). |
(13) | Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. |
(14) | Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. |
(15) | Incorporated by reference to the Company’s Form 8-K filed May 5, 2011. |
(16) | Incorporated by reference to the Company’s Form 8-K filed December 21, 2009. |
(17) | Incorporated by reference to the Company’s Form 8-K filed May 6, 2015. |
(18) | Incorporated by reference to the Company’s Form 8-K filed January 7, 2016. |
(19) | Incorporated by reference to the Company’s Form 8-K filed September 3, 2015. |
(20) | Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2014. |
(21) | Incorporated by reference to the Company’s Form 8-K filed January 22, 2016. |
(22) | Incorporated by reference to the Company’s Form 8-K filed March 4, 2016 |
(23) | Incorporated by reference to the Company’s Registration Statement on Form S-1/A (Registration No. 333-123644). |
* | Filed herewith. |
** | As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 |
Date: March 10, 2016
|
|||
LINCOLN EDUCATIONAL SERVICES CORPORATION
|
|||
By:
|
/s/ Brian Meyers
|
||
Brian Meyers
|
|||
Executive Vice President, Chief Financial Officer and Treasurer
|
|||
(Principal Accounting and Financial Officer)
|
Signature
|
Title
|
Date
|
||
/s/ Scott M. Shaw
|
||||
Scott M. Shaw
|
Chief Executive Officer and Director
|
March 10, 2016
|
||
/s/ Brian K. Meyers
|
Executive Vice President, Chief Financial Officer and
|
March 10, 2016
|
||
Brian K. Meyers
|
Treasurer (Principal Accounting and Financial Officer)
|
|||
/s/ Alvin O. Austin
|
Director
|
March 10, 2016
|
||
Alvin O. Austin
|
||||
/s/ Peter S. Burgess
|
Director
|
March 10, 2016
|
||
Peter S. Burgess
|
||||
/s/ James J. Burke, Jr.
|
Director
|
March 10, 2016
|
||
James J. Burke, Jr.
|
||||
/s/ Celia H. Currin
|
Director
|
March 10, 2016
|
||
Celia H. Currin
|
||||
/s/ Ronald E. Harbour
|
Director
|
March 10, 2016
|
||
Ronald E. Harbour
|
||||
/s/ J. Barry Morrow
|
Director
|
March 10, 2016
|
||
J. Barry Morrow
|
Page Number
|
|
Reports of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2015 and 2014
|
F-4
|
Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013
|
F-6
|
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2015, 2014 and 2013
|
F-7
|
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2015, 2014 and 2013
|
F-8
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013
|
F-9
|
Notes to Consolidated Financial Statements
|
F-11
|
Schedule II-Valuation and Qualifying Accounts
|
F-36
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
38,420
|
$
|
12,299
|
||||
Restricted cash
|
7,362
|
30,000
|
||||||
Accounts receivable, less allowance of $9,126 and $12,193 at December 31, 2015 and 2014, respectively
|
9,613
|
13,533
|
||||||
Inventories
|
1,043
|
1,486
|
||||||
Prepaid income taxes and income taxes receivable
|
349
|
879
|
||||||
Assets held for sale
|
45,911
|
50,930
|
||||||
Prepaid expenses and other current assets
|
2,566
|
3,937
|
||||||
Total current assets
|
105,264
|
113,064
|
||||||
PROPERTY, EQUIPMENT AND FACILITIES - At cost, net of accumulated depreciation and amortization of $122,037 and $136,910 at December 31, 2015 and 2014, respectively
|
66,508
|
69,740
|
||||||
OTHER ASSETS:
|
||||||||
Noncurrent restricted cash
|
15,259
|
-
|
||||||
Noncurrent receivables, less allowance of $797 and $1,016 at December 31, 2015 and 2014, respectively
|
4,993
|
6,235
|
||||||
Deferred finance charges
|
2,529
|
158
|
||||||
Goodwill
|
14,536
|
22,207
|
||||||
Other assets, net
|
1,190
|
2,303
|
||||||
Total other assets
|
38,507
|
30,903
|
||||||
TOTAL
|
$
|
210,279
|
$
|
213,707
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Current portion of term loan and credit agreement
|
$
|
10,000
|
$
|
30,000
|
||||
Current portion of capital lease obligations
|
114
|
471
|
||||||
Unearned tuition
|
21,390
|
26,469
|
||||||
Accounts payable
|
12,863
|
11,894
|
||||||
Accrued expenses
|
12,157
|
13,865
|
||||||
Liabilities held for sale
|
14,236
|
-
|
||||||
Other short-term liabilities
|
686
|
780
|
||||||
Total current liabilities
|
71,446
|
83,479
|
||||||
NONCURRENT LIABILITIES:
|
||||||||
Long-term term loan
|
34,653
|
-
|
||||||
Long-term capital lease obligations
|
3,785
|
25,038
|
||||||
Long-term finance obligation
|
9,672
|
9,672
|
||||||
Pension plan liabilities
|
5,549
|
5,299
|
||||||
Accrued rent
|
4,177
|
6,852
|
||||||
Other long-term liabilities
|
-
|
357
|
||||||
Total liabilities
|
129,282
|
130,697
|
||||||
COMMITMENTS AND CONTINGENCIES
|
||||||||
STOCKHOLDERS' EQUITY:
|
||||||||
Preferred stock, no par value - 10,000,000 shares authorized, no shares issued and outstanding at December 31, 2015 and 2014
|
-
|
-
|
||||||
Common stock, no par value - authorized 100,000,000 shares at December 31, 2015 and 2014, issued and outstanding 29,727,555 shares at December 31, 2015 and 29,933,086 shares at December 31, 2014
|
141,377
|
141,377
|
||||||
Additional paid-in capital
|
27,292
|
26,350
|
||||||
Treasury stock at cost - 5,910,541 shares at December 31, 2015 and 2014
|
(82,860
|
)
|
(82,860
|
)
|
||||
Retained earnings
|
2,260
|
5,610
|
||||||
Accumulated other comprehensive loss
|
(7,072
|
)
|
(7,467
|
)
|
||||
Total stockholders' equity
|
80,997
|
83,010
|
||||||
TOTAL
|
$
|
210,279
|
$
|
213,707
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
REVENUE
|
$
|
193,220
|
$
|
202,889
|
$
|
215,596
|
||||||
COSTS AND EXPENSES:
|
||||||||||||
Educational services and facilities
|
92,165
|
100,335
|
102,489
|
|||||||||
Selling, general and administrative
|
98,319
|
110,901
|
116,841
|
|||||||||
Loss (gain) on sale of assets
|
1,742
|
(57
|
)
|
(282
|
)
|
|||||||
Impairment of goodwill and long-lived assets
|
216
|
3,201
|
-
|
|||||||||
Total costs and expenses
|
192,442
|
214,380
|
219,048
|
|||||||||
OPERATING INCOME (LOSS)
|
778
|
(11,491
|
)
|
(3,452
|
)
|
|||||||
OTHER:
|
||||||||||||
Interest income
|
52
|
62
|
37
|
|||||||||
Interest expense
|
(7,438
|
)
|
(5,169
|
)
|
(4,267
|
)
|
||||||
Other income
|
4,142
|
297
|
18
|
|||||||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(2,466
|
)
|
(16,301
|
)
|
(7,664
|
)
|
||||||
PROVISION (BENEFIT) FOR INCOME TAXES
|
242
|
(1,479
|
)
|
19,591
|
||||||||
LOSS FROM CONTINUING OPERATIONS
|
(2,708
|
)
|
(14,822
|
)
|
(27,255
|
)
|
||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES
|
(642
|
)
|
(41,311
|
)
|
(24,031
|
)
|
||||||
NET LOSS
|
$
|
(3,350
|
)
|
$
|
(56,133
|
)
|
$
|
(51,286
|
)
|
|||
Basic
|
||||||||||||
Loss per share from continuing operations
|
$
|
(0.12
|
)
|
$
|
(0.65
|
)
|
$
|
(1.21
|
)
|
|||
Loss per share from discontinued operations
|
(0.02
|
)
|
(1.81
|
)
|
(1.07
|
)
|
||||||
Net loss per share
|
$
|
(0.14
|
)
|
$
|
(2.46
|
)
|
$
|
(2.28
|
)
|
|||
Diluted
|
||||||||||||
Loss per share from continuing operations
|
$
|
(0.12
|
)
|
$
|
(0.65
|
)
|
$
|
(1.21
|
)
|
|||
Loss per share from discontinued operations
|
(0.02
|
)
|
(1.81
|
)
|
(1.07
|
)
|
||||||
Net loss per share
|
$
|
(0.14
|
)
|
$
|
(2.46
|
)
|
$
|
(2.28
|
)
|
|||
Weighted average number of common shares outstanding:
|
||||||||||||
Basic
|
23,167
|
22,814
|
22,513
|
|||||||||
Diluted
|
23,167
|
22,814
|
22,513
|
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net loss
|
$
|
(3,350
|
)
|
$
|
(56,133
|
)
|
$
|
(51,286
|
)
|
|||
Other comprehensive loss
|
||||||||||||
Employee pension plan adjustments, net of taxes of $0, $0 and $1,283 for the years ended December 31, 2015, 2014 and 2013, respectively
|
395
|
(3,905
|
)
|
3,214
|
||||||||
Comprehensive loss
|
$
|
(2,955
|
)
|
$
|
(60,038
|
)
|
$
|
(48,072
|
)
|
Common Stock
|
Additional
Paid-in |
Treasury
|
Retained
|
Accumulated
Other |
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stock
|
Earnings
|
Loss
|
Total
|
||||||||||||||||||||||
BALANCE - January 1, 2013
|
29,659,457
|
$
|
141,377
|
$
|
22,677
|
$
|
(82,860
|
)
|
$
|
124,059
|
$
|
(6,776
|
)
|
$
|
198,477
|
|||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(51,286
|
)
|
-
|
(51,286
|
)
|
|||||||||||||||||||
Employee pension plan adjustments, net of taxes
|
-
|
-
|
-
|
-
|
-
|
3,214
|
3,214
|
|||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||
Restricted stock
|
400,779
|
-
|
2,893
|
-
|
-
|
-
|
2,893
|
|||||||||||||||||||||
Stock options
|
-
|
-
|
102
|
-
|
-
|
-
|
102
|
|||||||||||||||||||||
Tax deficiency of stock-based awards and canceled
|
-
|
-
|
(698
|
)
|
-
|
-
|
-
|
(698
|
)
|
|||||||||||||||||||
Net share settlement for equity-based compensation
|
(140,475
|
)
|
-
|
(797
|
)
|
-
|
-
|
-
|
(797
|
)
|
||||||||||||||||||
Cash dividend of $0.28 per common share
|
-
|
-
|
-
|
-
|
(6,709
|
)
|
-
|
(6,709
|
)
|
|||||||||||||||||||
BALANCE - December 31, 2013
|
29,919,761
|
141,377
|
24,177
|
(82,860
|
)
|
66,064
|
(3,562
|
)
|
145,196
|
|||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(56,133
|
)
|
-
|
(56,133
|
)
|
|||||||||||||||||||
Employee pension plan adjustments, net of taxes
|
-
|
-
|
-
|
-
|
-
|
(3,905
|
)
|
(3,905
|
)
|
|||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||
Restricted stock
|
158,308
|
-
|
2,517
|
-
|
-
|
-
|
2,517
|
|||||||||||||||||||||
Stock options
|
-
|
-
|
104
|
-
|
-
|
-
|
104
|
|||||||||||||||||||||
Net share settlement for equity-based compensation
|
(144,983
|
)
|
-
|
(448
|
)
|
-
|
-
|
-
|
(448
|
)
|
||||||||||||||||||
Cash dividend of $0.18 per common share
|
-
|
-
|
-
|
-
|
(4,321
|
)
|
-
|
(4,321
|
)
|
|||||||||||||||||||
BALANCE - December 31, 2014
|
29,933,086
|
141,377
|
26,350
|
(82,860
|
)
|
5,610
|
(7,467
|
)
|
83,010
|
|||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(3,350
|
)
|
-
|
(3,350
|
)
|
|||||||||||||||||||
Employee pension plan adjustments, net of taxes
|
-
|
-
|
-
|
-
|
-
|
395
|
395
|
|||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||
Restricted stock
|
(119,791
|
)
|
-
|
1,095
|
-
|
-
|
-
|
1,095
|
||||||||||||||||||||
Stock options
|
-
|
-
|
33
|
-
|
-
|
-
|
33
|
|||||||||||||||||||||
Net share settlement for equity-based compensation
|
(85,740
|
)
|
-
|
(186
|
)
|
-
|
-
|
-
|
(186
|
)
|
||||||||||||||||||
BALANCE - December 31, 2015
|
29,727,555
|
$
|
141,377
|
$
|
27,292
|
$
|
(82,860
|
)
|
$
|
2,260
|
$
|
(7,072
|
)
|
$
|
80,997
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
$
|
(3,350
|
)
|
$
|
(56,133
|
)
|
$
|
(51,286
|
)
|
|||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
14,506
|
19,338
|
23,701
|
|||||||||
Amortization of deferred finance costs
|
554
|
818
|
474
|
|||||||||
Deferred income taxes
|
-
|
(4,528
|
)
|
26,490
|
||||||||
Loss (gain) on disposition of assets
|
1,738
|
41
|
(506
|
)
|
||||||||
Gain on capital lease termination
|
(3,062
|
)
|
-
|
-
|
||||||||
Impairment of goodwill and long-lived assets
|
216
|
42,958
|
6,194
|
|||||||||
Fixed asset donation
|
(20
|
)
|
(92
|
)
|
(37
|
)
|
||||||
Provision for doubtful accounts
|
13,583
|
15,500
|
15,532
|
|||||||||
Stock-based compensation expense
|
1,128
|
2,621
|
2,995
|
|||||||||
Deferred rent
|
(638
|
)
|
(740
|
)
|
(888
|
)
|
||||||
(Increase) decrease in assets, net of acquisition of business:
|
||||||||||||
Accounts receivable
|
(13,216
|
)
|
(14,470
|
)
|
(15,049
|
)
|
||||||
Inventories
|
9
|
372
|
408
|
|||||||||
Prepaid income taxes and income taxes receivable
|
530
|
7,638
|
(1,432
|
)
|
||||||||
Prepaid expenses and current assets
|
444
|
(986
|
)
|
(106
|
)
|
|||||||
Other assets
|
(1,460
|
)
|
231
|
(1,177
|
)
|
|||||||
Increase (decrease) in liabilities, net of acquisition of business:
|
||||||||||||
Accounts payable
|
1,004
|
(2,732
|
)
|
1,461
|
||||||||
Accrued expenses
|
(450
|
)
|
3,806
|
829
|
||||||||
Pension plan liabilities
|
-
|
(271
|
)
|
(672
|
)
|
|||||||
Unearned tuition
|
2,627
|
(1,190
|
)
|
(4,453
|
)
|
|||||||
Other liabilities
|
194
|
(159
|
)
|
768
|
||||||||
Total adjustments
|
17,687
|
68,155
|
54,532
|
|||||||||
Net cash provided by operating activities
|
14,337
|
12,022
|
3,246
|
|||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Capital expenditures
|
(2,218
|
)
|
(7,472
|
)
|
(6,538
|
)
|
||||||
Proceeds from sale of property and equipment
|
451
|
67
|
750
|
|||||||||
Net cash used in investing activities
|
(1,767
|
)
|
(7,405
|
)
|
(5,788
|
)
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds from borrowings
|
53,500
|
47,500
|
59,500
|
|||||||||
Payments on borrowings
|
(38,847
|
)
|
(72,000
|
)
|
(42,500
|
)
|
||||||
Reclassifications of payments from borrowings to restricted cash
|
30,000
|
24,500
|
-
|
|||||||||
Reclassifications of proceeds from borrowings to restricted cash
|
(22,621
|
)
|
-
|
(54,500
|
)
|
|||||||
Payment of deferred finance fees
|
(2,823
|
)
|
-
|
(863
|
)
|
|||||||
Net share settlement for equity-based compensation
|
(186
|
)
|
(448
|
)
|
(797
|
)
|
||||||
Dividends paid
|
-
|
(4,321
|
)
|
(6,709
|
)
|
|||||||
Payments under capital lease obligations
|
(5,472
|
)
|
(435
|
)
|
(411
|
)
|
||||||
Net cash provided by (used in) financing activities
|
13,551
|
(5,204
|
)
|
(46,280
|
)
|
|||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
26,121
|
(587
|
)
|
(48,822
|
)
|
|||||||
CASH AND CASH EQUIVALENTS—Beginning of year
|
12,299
|
12,886
|
61,708
|
|||||||||
CASH AND CASH EQUIVALENTS—End of year
|
$
|
38,420
|
$
|
12,299
|
$
|
12,886
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$
|
7,159
|
$
|
4,597
|
$
|
4,209
|
||||||
Income taxes
|
$
|
89
|
$
|
145
|
$
|
410
|
||||||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||||||
Liabilities accrued for or noncash purchases of fixed assets
|
$
|
979
|
$
|
1,613
|
$
|
93
|
1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2.
|
FINANCIAL AID AND REGULATORY COMPLIANCE
|
● | Posting a letter of credit in an amount determined by the DOE equal to at least 50% of the total Title IV Program funds received by the institution during the institution's most recently completed fiscal year; |
● | Posting a letter of credit in an amount determined by the DOE equal to at least 10% of such prior year's Title IV Program funds, accepting provisional certification, complying with additional DOE monitoring requirements and agreeing to receive Title IV Program funds under an arrangement other than the DOE's standard advance funding arrangement. |
3.
|
WEIGHTED AVERAGE COMMON SHARES
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Basic shares outstanding
|
23,166,977
|
22,814,105
|
22,513,391
|
|||||||||
Dilutive effect of stock options
|
-
|
-
|
-
|
|||||||||
Diluted shares outstanding
|
23,166,977
|
22,814,105
|
22,513,391
|
4. | DISCONTINUED OPERATIONS |
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenue
|
$
|
112,882
|
$
|
122,133
|
$
|
125,916
|
||||||
Loss before income tax
|
(642
|
)
|
(37,411
|
)
|
(3,870
|
)
|
||||||
Income tax benefit
|
-
|
(2,746
|
)
|
-
|
||||||||
Net loss from discontinued operations
|
$
|
(642
|
)
|
$
|
(34,665
|
)
|
$
|
(3,870
|
)
|
Year Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Revenue
|
$
|
2,140
|
$
|
3,512
|
||||
Loss before income tax
|
(6,731
|
)
|
(2,635
|
)
|
||||
Income tax benefit
|
(85
|
)
|
-
|
|||||
Net loss from discontinued operations
|
$
|
(6,646
|
)
|
$
|
(2,635
|
)
|
Year Ended
December 31,
|
||||
2013
|
||||
Revenue
|
$
|
7,724
|
||
Loss before income tax
|
(17,287
|
)
|
||
Income tax expense (benefit)
|
239
|
|||
Net loss from discontinued operations
|
$
|
(17,526
|
)
|
5. | GOODWILL AND OTHER INTANGIBLES |
Gross
Goodwill
Balance
|
Accumulated
Impairment
Losses
|
Net
Goodwill
Balance
|
||||||||||
Balance as of January 1, 2014
|
$
|
117,176
|
$
|
(54,711
|
)
|
$
|
62,465
|
|||||
Asset held for sale (2)
|
(1,304
|
)
|
-
|
(1,304
|
)
|
|||||||
Goodwill impairment (1)
|
-
|
(38,954
|
)
|
(38,954
|
)
|
|||||||
Balance as of December 31, 2014
|
115,872
|
(93,665
|
)
|
22,207
|
||||||||
Asset held for sale, net (2)
|
(7,455
|
)
|
-
|
(7,455
|
)
|
|||||||
Goodwill impairment
|
-
|
(216
|
)
|
(216
|
)
|
|||||||
Balance as of December 31, 2015
|
$
|
108,417
|
$
|
(93,881
|
)
|
$
|
14,536
|
(1) | $38.8 million included in discontinued operations in the year ended December 31, 2014. |
(2) | Refer to Note 6 for more information on assets held for sale. |
Trade
Name
|
Accreditation
|
Curriculum
|
Total
|
|||||||||||||
Gross carrying amount at December 31, 2014
|
$
|
310
|
$
|
1,064
|
$
|
550
|
$
|
1,924
|
||||||||
Asset held for sale (2)
|
-
|
(1,064
|
)
|
(390
|
)
|
(1,454
|
)
|
|||||||||
Gross carrying amount at December 31, 2015
|
310
|
-
|
160
|
470
|
||||||||||||
Accumulated amortization at December 31, 2014
|
264
|
-
|
469
|
733
|
||||||||||||
Amortization
|
44
|
-
|
21
|
65
|
||||||||||||
Asset held for sale (2)
|
-
|
-
|
(378
|
)
|
(378
|
)
|
||||||||||
Accumulated amortization at December 31, 2015
|
308
|
-
|
112
|
420
|
||||||||||||
Net carrying amount at December 31, 2015
|
$
|
2
|
$
|
-
|
$
|
48
|
$
|
50
|
||||||||
Weighted average amortization period (years)
|
7
|
Indefinite
|
10
|
Indefinite
Trade
Name
|
Trade
Name
|
Accreditation
|
Curriculum
|
Non-compete
|
Total
|
|||||||||||||||||||
Gross carrying amount at December 31, 2013
|
$
|
180
|
$
|
335
|
$
|
1,166
|
$
|
1,124
|
$
|
200
|
$
|
3,005
|
||||||||||||
Impairment (1)
|
(180
|
)
|
(25
|
)
|
(102
|
)
|
(574
|
)
|
(200
|
)
|
(1,081
|
)
|
||||||||||||
Gross carrying amount at December 31, 2014
|
-
|
310
|
1,064
|
550
|
-
|
1,924
|
||||||||||||||||||
Accumulated amortization at December 31, 2013
|
-
|
228
|
-
|
828
|
68
|
1,124
|
||||||||||||||||||
Impairment (1)
|
-
|
(12
|
)
|
-
|
(448
|
)
|
(95
|
)
|
(555
|
)
|
||||||||||||||
Amortization
|
-
|
48
|
-
|
89
|
27
|
164
|
||||||||||||||||||
Accumulated amortization at December 31, 2014
|
-
|
264
|
-
|
469
|
-
|
733
|
||||||||||||||||||
Net carrying amount at December 31, 2014
|
$
|
-
|
$
|
46
|
$
|
1,064
|
$
|
81
|
$
|
-
|
$
|
1,191
|
||||||||||||
Weighted average amortization period (years)
|
Indefinite
|
7
|
Indefinite
|
10
|
3
|
(1) | Refer to Note 1 for more information related to the impairment. |
(2) | Refer to Note 6 for more information on assets held for sale. |
Year Ending December 31,
|
||||
2016
|
$
|
18
|
||
2017
|
16
|
|||
2018
|
16
|
|||
$
|
50
|
6. | PROPERTY, EQUIPMENT AND FACILITIES |
Useful life
(years)
|
At December 31,
|
|||||||||||
2015
|
2014
|
|||||||||||
Land
|
-
|
$
|
10,054
|
$
|
5,338
|
|||||||
Buildings and improvements
|
1-25
|
112,270
|
128,973
|
|||||||||
Equipment, furniture and fixtures
|
1-7
|
65,445
|
71,005
|
|||||||||
Vehicles
|
3
|
617
|
1,300
|
|||||||||
Construction in progress
|
-
|
159
|
34
|
|||||||||
188,545
|
206,650
|
|||||||||||
Less accumulated depreciation and amortization
|
(122,037
|
)
|
(136,910
|
)
|
||||||||
$
|
66,508
|
$
|
69,740
|
At December 31,
2015 |
At December 31,
2014 |
|||||||
Inventories
|
$
|
845
|
$
|
411
|
||||
Accounts receivable, less allowance of $3,923 and $1,545 at December 31, 2015 and 2014, respectively
|
5,323
|
1,527
|
||||||
Prepaid expense and other current assets
|
868
|
-
|
||||||
Noncurrent receivables, less allowance of $228 and $95 at December 31, 2015 and 2014, respectively
|
1,669
|
671
|
||||||
Property, equipment and facilities - at cost, net of accumluated depreciation and amortization of $36,038 and $17,843 at December 31, 2015and 2014, respectively
|
27,250
|
50,252
|
||||||
Goodwill
|
8,759
|
1,304
|
||||||
Other assets, net
|
1,197
|
-
|
||||||
Unearned tuition
|
(10,242
|
)
|
(2,536
|
)
|
||||
Accrued expenses
|
(1,720
|
)
|
(699
|
)
|
||||
Accrued rent
|
(2,274
|
)
|
-
|
|||||
Assets held for sale, net
|
$
|
31,675
|
$
|
50,930
|
7. | ACCRUED EXPENSES |
At December 31,
|
||||||||
2015
|
2014
|
|||||||
Accrued compensation and benefits
|
$
|
6,526
|
$
|
5,787
|
||||
Accrued rent and real estate taxes
|
$
|
1,928
|
$
|
3,251
|
||||
Other accrued expenses
|
3,703
|
4,827
|
||||||
$
|
12,157
|
$
|
13,865
|
8. | LONG-TERM DEBT AND LEASE OBLIGATIONS |
At December 31,
|
||||||||
2015
|
2014
|
|||||||
Term loan (a)
|
$
|
44,653
|
$
|
-
|
||||
Credit agreement (a)
|
-
|
30,000
|
||||||
Finance obligation (b)
|
9,672
|
9,672
|
||||||
Capital lease-property (with a rate of 8.0%) (c)
|
3,899
|
25,509
|
||||||
58,224
|
65,181
|
|||||||
Less current maturities
|
(10,114
|
)
|
(30,471
|
)
|
||||
$
|
48,110
|
$
|
34,710
|
Year ending December 31,
|
||||
2016
|
$
|
10,151
|
||
2017
|
1,566
|
|||
2018
|
3,596
|
|||
2019
|
29,858
|
|||
2020
|
157
|
|||
Thereafter
|
3,224
|
|||
$
|
48,552
|
9. | STOCKHOLDERS' EQUITY |
Shares
|
Weighted
Average Grant
Date Fair Value
Per Share
|
|||||||
Nonvested restricted stock outstanding at December 31, 2013
|
1,247,946
|
$
|
6.77
|
|||||
Granted
|
337,100
|
3.50
|
||||||
Cancelled
|
(178,792
|
)
|
6.47
|
|||||
Vested
|
(480,435
|
)
|
5.36
|
|||||
Nonvested restricted stock outstanding at December 31, 2014
|
925,819
|
5.04
|
||||||
Granted
|
234,651
|
2.28
|
||||||
Cancelled
|
(354,462
|
)
|
4.97
|
|||||
Vested
|
(355,514
|
)
|
5.00
|
|||||
Nonvested restricted stock outstanding at December 31, 2015
|
450,494
|
3.69
|
Shares
|
Weighted
Average
Exercise Price
Per Share
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic Value
|
||||||||||
Outstanding December 31, 2012
|
655,875
|
$
|
14.72
|
4.89 years
|
$
|
-
|
|||||||
Cancelled
|
(108,750
|
)
|
14.64
|
-
|
|||||||||
Outstanding December 31, 2013
|
547,125
|
14.73
|
4.56 years
|
-
|
|||||||||
Cancelled
|
(122,958
|
)
|
18.49
|
-
|
|||||||||
Outstanding December 31, 2014
|
424,167
|
13.65
|
4.18 years
|
-
|
|||||||||
Cancelled
|
(178,000
|
)
|
15.20
|
||||||||||
Outstanding December 31, 2015
|
246,167
|
12.52
|
3.98 years
|
-
|
|||||||||
Vested or expected to vest as of December 31, 2015
|
246,167
|
12.52
|
3.98 years
|
-
|
|||||||||
Exercisable as of December 31, 2015
|
246,167
|
12.52
|
3.98 years
|
-
|
At December 31, 2015
|
||||||||||||||||||||||
Stock Options Outstanding
|
Stock Options Exercisable
|
|||||||||||||||||||||
Range of Exercise Prices
|
Shares
|
Contractual
Weighted
Average life
(years)
|
Weighted
Average Price
|
Shares
|
Weighted
Exercise Price
|
|||||||||||||||||
$
|
4.00-$13.99
|
172,667
|
4.24
|
$
|
9.57
|
172,667
|
$
|
9.57
|
||||||||||||||
$
|
14.00-$19.99
|
42,500
|
2.48
|
18.61
|
42,500
|
18.61
|
||||||||||||||||
$
|
20.00-$25.00
|
31,000
|
4.60
|
20.62
|
31,000
|
20.62
|
||||||||||||||||
246,167
|
3.98
|
12.52
|
246,167
|
12.52
|
10. | PENSION PLAN |
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
CHANGES IN BENEFIT OBLIGATIONS:
|
||||||||||||
Benefit obligation-beginning of year
|
$
|
24,299
|
$
|
20,314
|
$
|
23,169
|
||||||
Service cost
|
28
|
23
|
37
|
|||||||||
Interest cost
|
884
|
892
|
790
|
|||||||||
Actuarial (gain) loss
|
(782
|
)
|
4,149
|
(2,614
|
)
|
|||||||
Benefits paid
|
(1,088
|
)
|
(1,079
|
)
|
(1,068
|
)
|
||||||
Benefit obligation at end of year
|
23,341
|
24,299
|
20,314
|
|||||||||
CHANGE IN PLAN ASSETS:
|
||||||||||||
Fair value of plan assets-beginning of year
|
19,000
|
18,792
|
16,268
|
|||||||||
Actual return on plan assets
|
(120
|
)
|
1,017
|
2,919
|
||||||||
Employer contributions
|
-
|
270
|
673
|
|||||||||
Benefits paid
|
(1,088
|
)
|
(1,079
|
)
|
(1,068
|
)
|
||||||
Fair value of plan assets-end of year
|
17,792
|
19,000
|
18,792
|
|||||||||
BENEFIT OBLIGATION IN EXCESS OF FAIR VALUE FUNDED STATUS:
|
$
|
(5,549
|
)
|
$
|
(5,299
|
)
|
$
|
(1,522
|
)
|
At December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Noncurrent liabilities
|
$
|
(5,549
|
)
|
$
|
(5,299
|
)
|
$
|
(1,522
|
)
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Accumulated loss
|
$
|
(9,438
|
)
|
$
|
(9,833
|
)
|
$
|
(5,928
|
)
|
|||
Deferred income taxes
|
2,366
|
2,366
|
2,366
|
|||||||||
Accumulated other comprehensive loss
|
$
|
(7,072
|
)
|
$
|
(7,467
|
)
|
$
|
(3,562
|
)
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
COMPONENTS OF NET PERIODIC BENEFIT COST
|
||||||||||||
Service cost
|
$
|
28
|
$
|
23
|
$
|
37
|
||||||
Interest cost
|
884
|
892
|
790
|
|||||||||
Expected return on plan assets
|
(1,243
|
)
|
(1,287
|
)
|
(1,141
|
)
|
||||||
Recognized net actuarial loss
|
976
|
513
|
955
|
|||||||||
Net periodic benefit cost
|
$
|
645
|
$
|
141
|
$
|
641
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) |
Significant Other
Observable Inputs
(Level 2) |
Significant
Unobservable
Inputs
(Level 3) |
Total
|
|||||||||||||
Equity securities
|
$
|
8,473
|
$
|
-
|
$
|
-
|
$
|
8,473
|
||||||||
Fixed income
|
5,943
|
-
|
-
|
5,943
|
||||||||||||
International equities
|
3,288
|
-
|
-
|
3,288
|
||||||||||||
Cash and equivalents
|
88
|
-
|
-
|
88
|
||||||||||||
Balance at December 31, 2015
|
$
|
17,792
|
$
|
-
|
$
|
-
|
$
|
17,792
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) |
Significant Other
Observable Inputs
(Level 2) |
Significant
Unobservable
Inputs
(Level 3) |
Total
|
|||||||||||||
Equity securities
|
$
|
9,566
|
$
|
-
|
$
|
-
|
$
|
9,566
|
||||||||
Fixed income
|
6,099
|
-
|
-
|
6,099
|
||||||||||||
International equities
|
3,328
|
-
|
-
|
3,328
|
||||||||||||
Cash and equivalents
|
7
|
-
|
-
|
7
|
||||||||||||
Balance at December 31, 2014
|
$
|
19,000
|
$
|
-
|
$
|
-
|
$
|
19,000
|
2015
|
2014
|
2013
|
||||||||||
Equity securities
|
48
|
%
|
50
|
%
|
51
|
%
|
||||||
Fixed income
|
33
|
%
|
32
|
%
|
31
|
%
|
||||||
International equities
|
19
|
%
|
18
|
%
|
18
|
%
|
||||||
Cash and equivalents
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
2015
|
2014
|
2013
|
||||||||||
Discount rate
|
3.94
|
%
|
3.66
|
%
|
4.46
|
%
|
||||||
Rate of compensation increase
|
2.50
|
%
|
1.13
|
%
|
2.00
|
%
|
2015
|
2014
|
2013
|
||||||||||
Discount rate
|
3.94
|
%
|
4.46
|
%
|
3.55
|
%
|
||||||
Rate of compensation increase
|
2.50
|
%
|
1.13
|
%
|
2.00
|
%
|
||||||
Long-term rate of return
|
6.50
|
%
|
7.00
|
%
|
7.00
|
%
|
Year Ending December 31,
|
||||
2016
|
$
|
1,225
|
||
2017
|
1,303
|
|||
2018
|
1,373
|
|||
2019
|
1,408
|
|||
2020
|
1,416
|
|||
Years 2021-2025
|
7,232
|
11. | INCOME TAXES |
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
-
|
$
|
-
|
$
|
(7,369
|
)
|
|||||
State
|
242
|
200
|
709
|
|||||||||
Total
|
242
|
200
|
(6,660
|
)
|
||||||||
Deferred:
|
||||||||||||
Federal
|
-
|
(1,420
|
)
|
21,103
|
||||||||
State
|
-
|
(259
|
)
|
5,148
|
||||||||
Total
|
-
|
(1,679
|
)
|
26,251
|
||||||||
Total provision (benefit)
|
$
|
242
|
$
|
(1,479
|
)
|
$
|
19,591
|
At December 31,
|
||||||||
2015
|
2014
|
|||||||
Noncurrent deferred tax assets (liabilities)
|
||||||||
Allowance for bad debts
|
$
|
5,617
|
$
|
5,926
|
||||
Accrued rent
|
2,952
|
3,255
|
||||||
Stock-based compensation
|
498
|
907
|
||||||
Depreciation
|
14,941
|
15,754
|
||||||
Goodwill
|
(380
|
)
|
1,002
|
|||||
Other intangibles
|
274
|
452
|
||||||
Pension plan liabilities
|
2,215
|
2,115
|
||||||
Net operating loss carryforwards
|
14,765
|
14,332
|
||||||
Sale leaseback-deferred gain
|
2,629
|
2,580
|
||||||
AMT credit
|
424
|
424
|
||||||
Total noncurrent deferred tax assets
|
43,935
|
46,747
|
||||||
Less valuation allowance
|
(43,935
|
)
|
(46,747
|
)
|
||||
Noncurrent deferred tax assets, net of valuation allowance
|
$
|
-
|
$
|
-
|
Year Ended December 31,
|
||||||||||||||||||||||||
2015
|
2014
|
2013
|
||||||||||||||||||||||
Loss from continuing operations before taxes
|
$
|
(2,466
|
)
|
$
|
(16,301
|
)
|
$
|
(7,664
|
)
|
|||||||||||||||
Expected tax benefit
|
$
|
(863
|
)
|
35.0
|
%
|
$
|
(5,705
|
)
|
35.0
|
%
|
$
|
(2,682
|
)
|
35.0
|
%
|
|||||||||
State tax benefit (net of federal)
|
242
|
(9.8
|
)
|
(43
|
)
|
0.3
|
(92
|
)
|
1.2
|
|||||||||||||||
Permanent impairment
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Valuation allowance
|
723
|
(29.3
|
)
|
4,121
|
(25.3
|
)
|
22,135
|
(288.8
|
)
|
|||||||||||||||
Other
|
140
|
(5.7
|
)
|
148
|
(0.9
|
)
|
230
|
(3.0
|
)
|
|||||||||||||||
Total
|
$
|
242
|
-9.8
|
%
|
$
|
(1,479
|
)
|
9.1
|
%
|
$
|
19,591
|
-255.6
|
%
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Balance at January 1,
|
$
|
-
|
$
|
-
|
$
|
135
|
||||||
Decrease for tax positions of prior years
|
-
|
-
|
(135
|
)
|
||||||||
Increase for tax positions of current year
|
-
|
-
|
-
|
|||||||||
Balance at December 31,
|
$
|
-
|
$
|
-
|
$
|
-
|
12. | FAIR VALUE |
December 31, 2015
|
||||||||||||||||||||
Carrying
Amount
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
38,420
|
$
|
38,420
|
$
|
-
|
$
|
-
|
$
|
38,420
|
||||||||||
Restricted cash
|
7,362
|
7,362
|
-
|
-
|
7,362
|
|||||||||||||||
Prepaid expenses and other current assets
|
2,566
|
-
|
2,566
|
-
|
2,566
|
|||||||||||||||
Noncurrent restricted cash
|
15,259
|
15,259
|
-
|
-
|
15,259
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Accrued expenses
|
$
|
10,999
|
$
|
-
|
$
|
10,999
|
$
|
-
|
$
|
10,999
|
||||||||||
Other short term liabilities
|
686
|
-
|
686
|
-
|
686
|
|||||||||||||||
Term loan
|
44,653
|
-
|
36,795
|
-
|
36,795
|
December 31, 2014
|
||||||||||||||||||||
Carrying
Amount
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
12,299
|
$
|
12,299
|
$
|
-
|
$
|
-
|
$
|
12,299
|
||||||||||
Restricted cash
|
30,000
|
30,000
|
-
|
-
|
30,000
|
|||||||||||||||
Prepaid expenses and other current assets
|
3,937
|
-
|
3,937
|
-
|
3,937
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Accrued expenses
|
$
|
13,865
|
$
|
-
|
$
|
13,865
|
$
|
-
|
$
|
13,865
|
||||||||||
Other short term liabilities
|
780
|
-
|
780
|
-
|
780
|
|||||||||||||||
Credit agreement
|
30,000
|
-
|
30,000
|
-
|
30,000
|
13. | SEGMENT REPORTING |
For the Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||
Revenue
|
Operating (Loss) Income
|
|||||||||||||||||||||||||||||||||||
2015
|
% of
Total
|
2014
|
% of
Total
|
2013
|
% of
Total
|
2015
|
2014
|
2013
|
||||||||||||||||||||||||||||
Transportation and Skilled Trades
|
$
|
183,821
|
95.1
|
%
|
$
|
188,669
|
93.0
|
%
|
$
|
196,230
|
91.0
|
%
|
$
|
26,778
|
$
|
19,519
|
$
|
27,917
|
||||||||||||||||||
Transitional
|
9,399
|
4.9
|
%
|
14,220
|
7.0
|
%
|
19,366
|
9.0
|
%
|
(6,860
|
)
|
(7,646
|
)
|
(5,938
|
)
|
|||||||||||||||||||||
Corporate
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
(19,140
|
)
|
(23,364
|
)
|
(25,431
|
)
|
|||||||||||||||||||||
Total
|
$
|
193,220
|
100
|
%
|
$
|
202,889
|
100
|
%
|
$
|
215,596
|
100
|
%
|
$
|
778
|
$
|
(11,491
|
)
|
$
|
(3,452
|
)
|
Total Assets
|
||||||||
December 31, 2015
|
December 31, 2014
|
|||||||
Transportation and Skilled Trades
|
$
|
90,045
|
$
|
97,650
|
||||
Transitional
|
1,795
|
2,184
|
||||||
Corporate
|
72,528
|
51,473
|
||||||
Discontinued Operations
|
45,911
|
62,400
|
||||||
Total
|
$
|
210,279
|
$
|
213,707
|
14. | COMMITMENTS AND CONTINGENCIES |
Year Ending December 31,
|
Credit
Agreement
|
Operating
Leases
|
Capital
Leases
|
|||||||||
2016
|
$
|
15,026
|
$
|
19,013
|
$
|
422
|
||||||
2017
|
5,276
|
17,226
|
422
|
|||||||||
2018
|
6,984
|
15,898
|
422
|
|||||||||
2019
|
31,581
|
13,641
|
422
|
|||||||||
2020
|
-
|
10,002
|
422
|
|||||||||
Thereafter
|
-
|
17,858
|
4,998
|
|||||||||
58,867
|
93,638
|
7,108
|
||||||||||
Less amount representing interest
|
(14,214
|
)
|
-
|
(3,209
|
)
|
|||||||
$
|
44,653
|
$
|
93,638
|
$
|
3,899
|
15.
|
UNAUDITED QUARTERLY FINANCIAL INFORMATION
|
Quarter
|
||||||||||||||||
2015
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
Revenue
|
$
|
47,674
|
$
|
44,739
|
$
|
51,951
|
$
|
48,856
|
||||||||
(Loss) income from continuing operations
|
(6,142
|
)
|
(5,595
|
)
|
3,633
|
5,394
|
||||||||||
(Loss) income from discontinued operations
|
(741
|
)
|
(2,010
|
)
|
(1,052
|
)
|
3,163
|
|||||||||
Net (loss) income
|
(6,883
|
)
|
(7,605
|
)
|
2,581
|
8,557
|
||||||||||
Basic
|
||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.27
|
)
|
$
|
(0.24
|
)
|
$
|
0.16
|
$
|
0.23
|
||||||
(Loss) earnings per share from discontinued operations
|
(0.03
|
)
|
(0.09
|
)
|
(0.05
|
)
|
0.14
|
|||||||||
Net (loss) earnings per share
|
$
|
(0.30
|
)
|
$
|
(0.33
|
)
|
$
|
0.11
|
$
|
0.37
|
||||||
Diluted
|
||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.27
|
)
|
$
|
(0.24
|
)
|
$
|
0.16
|
$
|
0.23
|
||||||
(Loss) earnings per share from discontinued operations
|
(0.03
|
)
|
(0.09
|
)
|
(0.05
|
)
|
0.14
|
|||||||||
Net (loss) earnings per share
|
$
|
(0.30
|
)
|
$
|
(0.33
|
)
|
$
|
0.11
|
$
|
0.37
|
||||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
23,056
|
23,132
|
23,230
|
23,247
|
||||||||||||
Diluted
|
23,056
|
23,132
|
23,270
|
23,347
|
Quarter
|
||||||||||||||||
2014
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
Revenue
|
$
|
48,177
|
$
|
46,673
|
$
|
54,892
|
$
|
53,146
|
||||||||
(Loss) income from continuing operations
|
(9,804
|
)
|
(8,868
|
)
|
(263
|
)
|
4,113
|
|||||||||
(Loss) income from discontinued operations
|
(1,290
|
)
|
(2,728
|
)
|
(37,818
|
)
|
525
|
|||||||||
Net (loss) income
|
(11,094
|
)
|
(11,596
|
)
|
(38,081
|
)
|
4,638
|
|||||||||
Basic
|
||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.43
|
)
|
$
|
(0.39
|
)
|
$
|
(0.01
|
)
|
$
|
0.18
|
|||||
(Loss) earnings per share from discontinued operations
|
(0.06
|
)
|
(0.13
|
)
|
(1.66
|
)
|
0.02
|
|||||||||
Net (loss) earnings per share
|
$
|
(0.49
|
)
|
$
|
(0.52
|
)
|
$
|
(1.67
|
)
|
$
|
0.20
|
|||||
Diluted
|
||||||||||||||||
(Loss) earnings per share from continuing operations
|
$
|
(0.43
|
)
|
$
|
(0.39
|
)
|
$
|
(0.01
|
)
|
$
|
0.18
|
|||||
(Loss) earnings per share from discontinued operations
|
(0.06
|
)
|
(0.13
|
)
|
(1.66
|
)
|
0.02
|
|||||||||
Net (loss) earnings per share
|
$
|
(0.49
|
)
|
$
|
(0.52
|
)
|
$
|
(1.67
|
)
|
$
|
0.20
|
|||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
22,723
|
22,800
|
22,843
|
22,888
|
||||||||||||
Diluted
|
22,723
|
22,800
|
22,843
|
23,004
|
16. | DIVIDENDS |
Description
|
Balance at
Beginning
of Period
|
Charged to
Expense
|
Accounts
Written-off
|
Balance at
End of
Period
|
||||||||||||
Allowance accounts for the year ended:
|
||||||||||||||||
December 31, 2015 Student receivable allowance
|
$
|
14,849
|
$
|
13,583
|
$
|
(14,358
|
)
|
$
|
14,074
|
|||||||
December 31, 2014 Student receivable allowance
|
$
|
14,769
|
$
|
15,500
|
$
|
(15,420
|
)
|
$
|
14,849
|
|||||||
December 31, 2013 Student receivable allowance
|
$
|
18,829
|
$
|
15,532
|
$
|
(19,592
|
)
|
$
|
14,769
|
Exhibit Index
|
||
Exhibit
Number
|
Description
|
|
3.1
|
Amended and Restated Certificate of Incorporation of the Company (23).
|
|
3.2
|
By-laws of the Company (1).
|
|
4.1
|
Management Stockholders Agreement, dated as of January 1, 2002, by and among Lincoln Technical Institute, Inc., Back to School Acquisition, L.L.C. and the Stockholders and other holders of options under the Management Stock Option Plan listed therein (2).
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4.2
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Assumption Agreement and First Amendment to Management Stockholders Agreement, dated as of December 20, 2007, by and among Lincoln Educational Services Corporation, Lincoln Technical Institute, Inc., Back to School Acquisition, L.L.C. and the Management Investors parties therein (3).
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4.3
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Registration Rights Agreement, dated as of June 27, 2005, between the Company and Back to School Acquisition, L.L.C. (1).
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4.4
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Specimen Stock Certificate evidencing shares of common stock (2).
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10.1
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Credit Agreement, dated as of July 31, 2015, among Lincoln Educational Services Corporation and its wholly-owned subsidiaries, the Lenders and Collateral Agents party thereto, and HPF Service, LLC, as Administrative Agent (17).
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10.2
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First Amendment to Credit Agreement, dated as of December 31, 2015, among Lincoln Educational Services Corporation and its wholly-owned subsidiaries, the Lenders and Collateral Agents party thereto, and HPF Service, LLC, as Administrative Agent (18).
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10.3
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Second Amendment to Credit Agreement, dated as of February 29, 2016, among Lincoln Educational Services Corporation and its wholly-owned subsidiaries, the Lenders party thereto, and HPF Service, LLC, as Administrative Agent and Tranche A Collateral Agent (22).
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10.4
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Credit Agreement, dated as of April 5, 2012, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (4).
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10.5
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First Amendment to the Credit Agreement, dated as of June 18, 2013, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (5).
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10.6
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Second Amendment to the Credit Agreement, dated as of December 20, 2013, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (6).
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10.7
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Third Amendment to the Credit Agreement, dated as of December 29, 2014, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (7).
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10.8
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Fourth Amendment and Waiver to the Credit Agreement, dated as of March 4, 2015, among the Company, the Guarantors from time to time parties thereto, the Lenders from time to time parties thereto and Bank of America, N.A., as Administrative Agent (8).
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10.9
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Employment Agreement, dated as of January 30, 2015, between the Company and Shaun E. McAlmont (9).
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10.10
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Separation Agreement, dated as of May 6, 2015, between the Company and Shaun E. McAlmont (17).
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10.11
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Employment Agreement, dated as of January 30, 2015, between the Company and Scott M. Shaw (9).
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10.12
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Amendment to Employment Agreement, dated as of August 31, 2015, between the Company and Scott M. Shaw (19).
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10.13
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Employment Agreement, dated as of June 2, 2014, between the Company and Kenneth M. Swisstack (10).
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10.14
|
Amendment to Employment Agreement, dated as of March 12, 2015, between the Company and Kenneth M. Swisstack. (20)
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10.15
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Separation Agreement, dated as of January 15, 2016, between the Company and Kenneth M. Swisstack (21).
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10.16
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Employment Agreement, dated as of March 12, 2015, between the Company and Brian K. Meyers (20).
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10.17
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Lincoln Educational Services Corporation Amended and Restated 2005 Long-Term Incentive Plan (11).
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10.18
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Lincoln Educational Services Corporation 2005 Non-Employee Directors Restricted Stock Plan (12).
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10.19
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Lincoln Educational Services Corporation 2005 Deferred Compensation Plan (2).
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10.20
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Lincoln Technical Institute Management Stock Option Plan, effective January 1, 2002 (2).
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10.21
|
Form of Stock Option Agreement, dated January 1, 2002, between Lincoln Technical Institute, Inc. and certain participants (2).
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10.22
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Form of Stock Option Agreement under our 2005 Long-Term Incentive Plan (13).
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10.23
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Form of Restricted Stock Agreement under our 2005 Long-Term Incentive Plan (14).
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10.24
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Form of Performance-Based Restricted Stock Award Agreement under our Amended & Restated 2005 Long-Term Incentive Plan (15).
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10.25
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Management Stock Subscription Agreement, dated January 1, 2002, among Lincoln Technical Institute, Inc. and certain management investors (2).
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10.26
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Stock Repurchase Agreement, dated as of December 15, 2009, among Lincoln Educational Services Corporation and Back to School Acquisition, L.L.C (16).
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Subsidiaries of the Company.
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||
Consent of Independent Registered Public Accounting Firm.
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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||
101**
|
The following financial statements from Lincoln Educational Services Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Comprehensive (Loss) Income, (v) Consolidated Statement of Changes in Stockholders’ Equity and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.
|
(1) | Incorporated by reference to the Company’s Form 8-K filed June 28, 2005. |
(2) | Incorporated by reference to the Company’s Registration Statement on Form S-1 (Registration No. 333-123644). |
(3) | Incorporated by reference to the Company’s Registration Statement on Form S-3 (Registration No. 333-148406). |
(4) | Incorporated by reference to the Company’s Form 8-K filed April 11, 2012. |
(5) | Incorporated by reference to the Company’s Form 8-K filed June 20, 2013. |
(6) | Incorporated by reference to the Company’s Form 8-K filed December 27, 2013. |
(7) | Incorporated by reference to the Company’s Form 8-K filed January 5, 2015. |
(8) | Incorporated by reference to the Company’s Form 8-K filed March 10, 2015. |
(9) | Incorporated by reference to the Company’s Form 8-K filed February 5, 2015. |
(10) | Incorporated by reference to the Company’s Annual Report on Form 10-Q filed August 8, 2014. |
(11) | Incorporated by reference to the Company’s Form 8-K filed May 6, 2013. |
(12) | Registration Statement on Form S-8 (Registration No. 333-188240). |
(13) | Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. |
(14) | Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. |
(15) | Incorporated by reference to the Company’s Form 8-K filed May 5, 2011. |
(16) | Incorporated by reference to the Company’s Form 8-K filed December 21, 2009. |
(17) | Incorporated by reference to the Company’s Form 8-K filed May 6, 2015. |
(18) | Incorporated by reference to the Company’s Form 8-K filed January 7, 2016. |
(19) | Incorporated by reference to the Company’s Form 8-K filed September 3, 2015. |
(20) | Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2014. |
(21) | Incorporated by reference to the Company’s Form 8-K filed January 22, 2016. |
(22) | Incorporated by reference to the Company’s Form 8-K filed March 4, 2016. |
(23) | Incorporated by reference to the Company’s Registration Statement on Form S-1/A (Registration No. 333-123644). |
* | Filed herewith. |
Name
|
Jurisdiction
|
Lincoln Technical Institute, Inc. (wholly owned)
|
New Jersey
|
New England Acquisition LLC (wholly owned through Lincoln Technical Institute, Inc.)
|
Delaware
|
Southwestern Acquisition LLC (wholly owned through Lincoln Technical Institute, Inc.)
|
Delaware
|
Nashville Acquisition, LLC (wholly owned through Lincoln Technical Institute, Inc.)
|
Delaware
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Euphoria Acquisition, LLC (wholly owned through Lincoln Technical Institute, Inc.)
|
Delaware
|
New England Institute of Technology at Palm Beach, Inc. (wholly owned through Lincoln Technical Institute, Inc.)
|
Florida
|
LTI Holdings, LLC (wholly owned through Lincoln Technical Institute, Inc.)
|
Colorado
|
LCT Acquisition, LLC (wholly owned through Lincoln Technical Institute, Inc.)
|
Delaware
|
NN Acquisition, LLC (wholly owned through Lincoln Technical Institute, Inc.)
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Delaware
|
1. | I have reviewed this Annual Report on Form 10-K of Lincoln Educational Services Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Date: March 10, 2016
|
|
/s/ Scott Shaw
|
|
Scott Shaw
|
|
Chief Executive Officer
|
1. | I have reviewed this Annual Report on Form 10-K of Lincoln Educational Services Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 10, 2016
|
|
/s/ Brian Meyers
|
|
Brian Meyers
|
|
Chief Financial Officer
|
Date: March 10, 2015
|
|
/s/ Scott Shaw
|
|
Scott Shaw
|
|
Chief Executive Officer
|
/s/ Brian Meyers
|
|
Brian Meyers
|
|
Chief Financial Officer
|
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Mar. 08, 2016 |
Jun. 30, 2015 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | LINCOLN EDUCATIONAL SERVICES CORP | ||
Entity Central Index Key | 0001286613 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 44,658,126 | ||
Entity Common Stock, Shares Outstanding | 23,758,509 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
ASSETS | ||
Accounts receivable, allowance | $ 9,126 | $ 12,193 |
PROPERTY, EQUIPMENT AND FACILITIES - accumulated depreciation and amortization | 122,037 | 136,910 |
OTHER ASSETS : | ||
Noncurrent receivables, allowance | $ 797 | $ 1,016 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
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) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
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) | 29,727,555 | 29,933,086 |
Common stock, shares outstanding (in shares) | 29,727,555 | 29,933,086 |
Treasury stock, shares (in shares) | 5,910,541 | 5,910,541 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME [Abstract] | |||
Net loss | $ (3,350) | $ (56,133) | $ (51,286) |
Other comprehensive loss | |||
Employee pension plan adjustments, net of taxes of $0, $0 and $1,283 for the years ended December 31, 2015, 2014 and 2013, respectively | 395 | (3,905) | 3,214 |
Comprehensive loss | $ (2,955) | $ (60,038) | $ (48,072) |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Other comprehensive loss | |||
Employee pension plan adjustments, taxes | $ 0 | $ 0 | $ 1,283 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2014 |
Dec. 31, 2013 |
|
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY [Abstract] | ||
Cash dividend (in dollars per share) | $ 0.18 | $ 0.28 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Business Activities—Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”) provide diversified career-oriented post-secondary education to recent high school graduates and working adults. The Company currently operates 31 schools in 15 states and offer 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, medical administrative assistant and pharmacy technician, among other programs), hospitality services (which include culinary, therapeutic massage, cosmetology and aesthetics) and business and information technology (which includes information technology and criminal justice programs). The schools operate under the Lincoln Technical Institute, Lincoln College of Technology, Lincoln College of New England, Lincoln Culinary Institute, and Euphoria Institute of Beauty Arts and Sciences 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”) 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. In the first quarter of 2015, the Company reorganized its operations into three reportable business segments: (a) Transportation and Skilled Trades, (b) Healthcare and Other Professions, and (c) Transitional which refers to businesses that are currently being phased out. In November, 2015, the Board of Directors of the Company approved a plan for the Company to divest 17 of the 18 schools included in its Healthcare and Other Professions business segment and, then, in December, 2015, the Board of Directors approved a plan to cease operations of the remaining school in this segment located in Hartford, Connecticut. That school is scheduled to close in the fourth quarter of 2016. Divestiture of the Healthcare and Other Professions business segment marks a shift in the Company’s business strategy intended to enable the Company to focus energy and resources predominantly on Transportation and Skilled Trades though some other programs will continue to be available at some campuses. The results of operations of the 17 campuses included in the Healthcare and Other Professions segment that are being divested are reflected as discontinued operations in the consolidated financial statements. Liquidity—For the last several years, the Company and the proprietary school sector have faced deteriorating earnings. Government regulations have negatively impacted earnings by making it more difficult for prospective students to obtain loans, which, when coupled with the overall economic environment, have hindered prospective students from enrolling in post-secondary schools. In light of these factors, the Company has incurred significant operating losses as a result of lower student population. Despite these events, the Company believes that its likely sources of cash should be sufficient to fund operations for the next twelve months. At December 31, 2015, the Company’s sources of cash primarily included cash from operations, and cash and cash equivalents of $61.0 million (of which $22.6 million is restricted) which increased from December 31, 2014 mainly from $19.2 million related to the Company’s new term loan net of finance fees. The Company is also continuing to take actions to improve cash flow by aligning its cost structure to its student population. In addition to the current sources of capital discussed above that provide short term liquidity, the Company plans to sell approximately $31.7 million in assets net of liabilities, which are currently classified as held for sale and are expected to be sold within one year from the date of classification in which up to $10 million will be required to pay down debt. Principles of Consolidation—The accompanying consolidated financial statements include the accounts of Lincoln Educational Services Corporation and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Revenue Recognition— Revenues are derived primarily from programs taught at the Company’s schools. Tuition revenues, textbook sales and one-time fees, such as nonrefundable application fees and course material fees, are recognized on a straight-line basis over the length of the applicable program as the student proceeds through the program, which is the period of time from a student’s start date through his or her graduation date, including internships or externships that take place prior to graduation, and the Company completes the performance of teaching the student which entitles the Company to the revenue. Other revenues, such as tool sales and contract training revenues are recognized as services are performed or goods are delivered. On an individual student basis, tuition earned in excess of cash received is recorded as accounts receivable, and cash received in excess of tuition earned is recorded as unearned tuition. Refunds are calculated and paid in accordance with federal, state and accrediting agency standards. The Company evaluates whether collectability of revenue is reasonably assured prior to the student attending class and reassesses collectability of tuition and fees when a student withdraws from a course. The Company calculates the amount to be returned under Title IV and its stated refund policy to determine eligible charges and, if there is a balance due from the student after this calculation, the Company expect payment from the student and the Company has a process to pursue uncollected accounts whereby, based upon the student’s financial means and ability to pay, a payment plan is established with the student to ensure that collectability is reasonable. The Company continuously monitors its historical collections to identify potential trends that may impact our determination that collectability of receivables for withdrawn students is realizable. If a student withdraws from a program prior to a specified date, any paid but unearned tuition is refunded. Refunds are calculated and paid in accordance with federal, state and accrediting agency standards. Generally, the amount to be refunded to a student is calculated based upon the period of time the student has attended classes and the amount of tuition and fees paid by the student as of his or her withdrawal date. These refunds typically reduce deferred tuition revenue and cash on our consolidated balance sheets as the Company generally does not recognize tuition revenue in its consolidated statements of income (loss) until the related refund provisions have lapsed. Based on the application of its refund policies, the Company may be entitled to incremental revenue on the day the student withdraws from one of its schools. Prior to the year-ended December 31, 2015, the Company recorded this incremental revenue, any related student receivable and any estimate of the amount it did not expect to collect as bad debt expense during the quarter a student withdrew based on its analysis of the collectability of such amounts on an aggregate student portfolio basis, for which the Company had significant historical experience. Beginning in the three months ended December 31 2015, the Company recorded revenue for students who withdraw from one of its schools when payment is received because collectability on an individual student basis is not reasonably assured. The Company determined incremental revenue recognized for students who withdrew during the nine-months ended September 30, 2015 to be an immaterial error which was corrected during the fourth quarter of 2015. This resulted in a reduction of net revenues by $0.3 million and bad debt expense by $0.2 million, which resulted in an increase to the loss from continuing operations of $0.1 million for the year ended December 31, 2015. Additionally, this correction reduced net student receivables from continuing operations by $0.1 million. Prior year amounts, including quarterly financial results were not restated because the effects were not material. Cash and Cash Equivalents—Cash and cash equivalents include all cash balances and highly liquid short-term investments, which contain original maturities within three months of purchase. Pursuant to the Department of Education’s cash management requirements, the Company retains funds from financial aid programs under Title IV of the Higher Education Act in segregated cash management accounts. The segregated accounts do not require a restriction on use of the cash and, as such, these amounts are classified as cash and cash equivalents on the consolidated balance sheet. Restricted Cash—Restricted cash consists of deposits maintained at financial institutions under a cash collateralized agreement under the Company’s credit agreement and cash collateralized for letters of credit. $15.3 million of restricted cash is included in long-term assets on the consolidated balance sheet as the restriction is greater than one year. Refer to Note 8 for more information on the Company’s term loan. Accounts Receivable—The Company reports accounts receivable at net realizable value, which is equal to the gross receivable less an estimated allowance for uncollectible accounts. Noncurrent accounts receivable represent amounts due from graduates in excess of 12 months from the balance sheet date. Allowance for uncollectible accounts—Based upon experience and judgment, an allowance is established for uncollectible accounts with respect to tuition receivables. In establishing the allowance for uncollectible accounts, the Company considers, among other things, current and expected economic conditions, a student's status (in-school or out-of-school), whether or not a student is currently making payments, and overall collection history. Changes in trends in any of these areas may impact the allowance for uncollectible accounts. The receivables balances of withdrawn students with delinquent obligations are reserved for based on our collection history. Inventories—Inventories consist mainly of textbooks, computers, tools and supplies. Inventories are valued at the lower of cost or market on a first-in, first-out basis. Property, Equipment and Facilities—Depreciation and Amortization—Property, equipment and facilities are stated at cost. Major renewals and improvements are capitalized, while repairs and maintenance are expensed when incurred. Upon the retirement, sale or other disposition of assets, costs and related accumulated depreciation are eliminated from the accounts and any gain or loss is reflected in operating (loss) income. For financial statement purposes, depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, and amortization of leasehold improvements is computed over the lesser of the term of the lease or its estimated useful life. Rent Expense—Rent expense related to operating leases where scheduled rent increases exist, is determined by expensing the total amount of rent due over the life of the operating lease on a straight-line basis. The difference between the rent paid under the terms of the lease and the rent expensed on a straight-line basis is included in accrued rent and other long-term liabilities on the accompanying consolidated balance sheets. Advertising Costs—Costs related to advertising are expensed as incurred and approximated $15.1 million, $15.1 million and $15.6 million from continuing operations for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts are included in selling, general and administrative expenses in the consolidated statements of operations. Goodwill and Other Intangible Assets— The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its reporting unit’s carrying value to its implied fair value. Impairment may result from, among other things, deterioration in the performance of the acquired business, adverse market conditions, adverse changes in applicable laws or regulations, reductions in market value of the Company, including changes that restrict the activities of the acquired business, and a variety of other circumstances. If the Company determines that an impairment has occurred, it is required to record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made. In evaluating the recoverability of the carrying value of goodwill and other indefinite-lived intangible assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact these judgments in the future and require an adjustment to the recorded balances. At December 31, 2015, the Company conducted its annual test for goodwill impairment and determined it did not have an impairment. The fair value of the Company’s reporting units were determined using Level 3 inputs included in its multiple of earnings and discounted cash flow approach. The Company concluded that as of September 30, 2015 there was an indicator of potential impairment as a result of a decrease in market capitalization and, accordingly, the Company tested goodwill for impairment. The test indicated that one of the Company’s reporting units was impaired, which resulted in a pre-tax non-cash charge of $0.2 million ($0.2 million of which is included in the transportation and skilled trades segment) for the three months ended September 30, 2015. At December 31, 2014, the Company conducted its annual test for goodwill impairment and determined it did not have an impairment. The fair value of the Company’s reporting units were determined using Level 3 inputs included in its multiple of earnings and discounted cash flow approach. The Company concluded that as of September 30, 2014 there was an indicator of potential impairment as a result of a decrease in market capitalization and, accordingly, the Company tested goodwill for impairment. The test indicated that ten of the Company’s reporting units were impaired, which resulted in a pre-tax non-cash charge of $39.0 million for the three months ended September 30, 2014 ($0.2 million and $38.8 million of which is included in the transportation and skilled trades segment and discontinued operations, respectively). At December 31, 2013, the Company conducted its annual test for goodwill impairment and determined it did not have an impairment. The fair value of the Company’s reporting units were determined using Level 3 inputs included in its multiple of earnings and discounted cash flow approach. As of June 30, 2013, the Company concluded that current period losses at two reporting units, which resulted in a deterioration of current and projected cash flows, was an indicator of potential impairment and, accordingly, tested goodwill and long-lived assets for impairment. The tests indicated that these two reporting units were impaired, which resulted in a pre-tax non-cash charge of $3.1 million for the three months ended June 30, 2013 ($3.1 million of which is included in discontinued operations). Impairment of 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. The Company evaluates long-lived assets for impairment by examining 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. The Company concluded that for the three months ended December 31, 2015, there was no long-lived asset impairment. Long-lived assets were tested at the campuses as a result of classifying assets held for sale and certain financial indicators such as the Company’s history of losses, current respective period losses, as well as future projected losses at these campuses. The Company concluded that for the three months ended December 31, 2014 and September 30, 2014, there was sufficient evidence to conclude that there was an impairment of certain long-lived assets at one and six of the Company’s campuses, respectively. Long-lived assets had been tested at these campuses as a result of certain financial indicators such as the Company’s history of losses, current respective period losses, as well as future projected losses at these campuses. The long-lived assets impairment resulted in a pre-tax charge of $1.5 million for leasehold improvements ($1.5 million included in the transportation and skilled trades segment) as of December 31, 2014 and $1.9 million for leasehold improvements ($1.5 million and $0.4 million included in the transitional segment and discontinued operations, respectively) and $0.5 million ($0.5 million included in discontinued operations) for intangible assets as of September 30, 2014. The Company concluded that for the three months ended December 31, 2013, there was no long-lived asset impairment. The Company concluded that as of June 30, 2013 and March 31, 2013, there was sufficient evidence to conclude that there were impairments of certain long-lived assets at four and two of our campuses, respectively. Long lived assets had been tested at these campuses as a result of certain financial indicators such as our history of losses, our current respective period losses, as well as future projected losses at these campuses. The long-lived assets impairment resulted in a pre-tax charge of $1.4 million ($1.4 million included in discontinued operations) and $1.7 million ($1.7 million included in discontinued operations) for leasehold improvements as of June 30, 2013 and March 31, 2013, respectively. Concentration of Credit Risk—Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments. The Company places its cash and cash equivalents with high credit quality financial institutions. The Company's cash balances with financial institutions typically exceed the Federal Deposit Insurance limit of $0.25 million. The Company's cash balances on deposit at December 31, 2015, exceeded the balance insured by the FDIC Corporation (“FDIC”) by approximately $60.1 million. The Company has not experienced any losses to date on its invested cash. The Company extends credit for tuition and fees to many of its students. The credit risk with respect to these accounts receivable is mitigated through the students' participation in federally funded financial aid programs unless students withdraw prior to the receipt of federal funds for those students. In addition, the remaining tuition receivables are primarily comprised of smaller individual amounts due from students. With respect to student receivables, the Company had no significant concentrations of credit risk as of December 31, 2015 and 2014. Use of Estimates in the Preparation of Financial Statements—The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“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 related to revenue recognition, bad debts, impairments, fixed assets, income taxes, benefit plans and certain accruals. Actual results could differ from those estimates. Stock-Based Compensation Plans—The Company measures the value of stock options on the grant date at fair value, using the Black-Scholes option valuation model. The Company amortizes the fair value of stock options, net of estimated forfeitures, utilizing straight-line amortization of compensation expense over the requisite service period of the grant. The Company measures the value of service and performance-based restricted stock on the fair value of a share of common stock on the date of the grant. The Company amortizes the fair value of service based restricted stock utilizing straight-line amortization of compensation expense over the requisite service period of the grant. The Company amortizes the fair value of the performance-based restricted stock based on determination of the probable outcome of the performance condition. If the performance condition is expected to be met, then the Company amortizes the fair value of the number of shares expected to vest utilizing straight-line basis over the requisite performance period of the grant. However, if the associated performance condition is not expected to be met, then the Company does not recognize the stock-based compensation expense. Income Taxes—The Company accounts for income taxes in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 740, “Income Taxes” (“ASC 740”). 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 considered, 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. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2015 and 2014, the interest and penalties expense associated with uncertain tax positions are not significant to the Company’s results of operations or financial position. Start-up Costs—Costs related to the start of new campuses are expensed as incurred. Reclassification— On November 3, 2015 the Board of Directors approved a plan for the Company to divest 17 of the 18 schools included in its Healthcare and Other Professions business segment. In 2015, the Company reclassified amount reflected in the 2014 and 2013 consolidated statements of operations related to the 17 schools into discontinued operations. New Accounting Pronouncements In November 2015, the FASB issued guidance which simplifies the balance sheet classification of deferred taxes. The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This guidance is effective for public business entities for annual periods, and for interim periods within those periods, beginning after December 15, 2016 with early adoption permitted. The Company early adopted as of December 31, 2015. While the guidance does have an impact on our balance sheet classification, it does not have a material impact on our results of operations, financial condition or the financial statement disclosures. In April 2015, the FASB issued accounting guidance related to the presentation of debt issuance costs in the balance sheet as a direct reduction from the carrying amount of the debt liability, consistent with debt discounts, rather than as an asset. Amortization of debt issuance costs will continue to be reported as interest expense. Debt issuance costs related to revolving credit arrangements, however, will continue to be presented as an asset and amortized ratably over the term of the arrangement. In August 2015, the FASB issued accounting guidance related to the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements which clarifies that companies may continue to present unamortized debt issuance costs associated with line of credit arrangements as an asset. These pronouncements are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The Company will not early adopt this new guidance and it will not have a material impact on the Company’s financial statements. In January 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-01, Income Statement – Extraordinary and Unusual Items. ASU 2015-01 simplifies income statement classification by removing the concept of extraordinary items from U.S. GAAP. Under the existing guidance, an entity is required to separately disclose extraordinary items, net of tax, in the income statement after income from continuing operations if an event or transaction is of unusual nature and occurs infrequently. This separate, net-of-tax presentation (and corresponding earnings per share impact) will no longer be allowed. The existing requirement to separately present items that are of unusual nature or occur infrequently on a pre-tax basis within income from continuing operations has been retained. The new guidance also requires similar separate presentation of items that are both unusual and infrequent. The guidance, effective for the Company on January 1, 2016, with earlier application permitted as of the beginning of the fiscal year of adoption, is not expected to have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued a new standard – ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern - that will explicitly require management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. According to the new standard, substantial doubt about an entity’s ability to continue as a going concern exists if it is probable that the entity will be unable to meet its obligations as they become due within one year after the date the entity’s financial statements are issued. In order to determine the specific disclosures, if any, that would be required, management will need to assess if substantial doubt exists, and, if so, whether its plans will alleviate such substantial doubt. The new standard requires assessment each annual and interim period and will be effective for the Company on December 31, 2016 with earlier application permitted. The Company does not believe this guidance will have any impact on its consolidated financial statements. In May 2014, the FASB issued a new standard related to revenue recognition, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new standard will replace most of the existing revenue recognition standards in GAAP. In July 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. In August 2015, the FASB issued ASU 2015-14, wherein it was approved to defer the effective date of revenue standard ASU 2014-09 by one year for all entities and permits early adoption on a limited basis. The new standard can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application. The Company is assessing the potential impact of the new standard on financial reporting and has not yet selected a transition method. In April 2014, the FASB issued amended guidance on the use and presentation of discontinued operations in an entity's consolidated financial statements. The new guidance restricts the presentation of discontinued operations to business circumstances when the disposal of business operations represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The guidance became effective on January 1, 2015. Adoption is on a prospective basis. The Company adopted the new guidance as of December 31, 2014. |
FINANCIAL AID AND REGULATORY COMPLIANCE |
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FINANCIAL AID AND REGULATORY COMPLIANCE [Abstract] | |||||||||
FINANCIAL AID AND REGULATORY COMPLIANCE |
Financial Aid The Company’s schools and students participate in a variety of government-sponsored financial aid programs that assist students in paying the cost of their education. The largest source of such support is the federal programs of student financial assistance under Title IV of the Higher Education Act of 1965, as amended, commonly referred to as the Title IV Programs, which are administered by the U.S. Department of Education (the "DOE"). During the years ended December 31, 2015, 2014 and 2013, approximately 80% respectively, of net revenues on a cash basis were indirectly derived from funds distributed under Title IV Programs. For the years ended December 31, 2015, 2014 and 2013, the Company calculated that no individual DOE reporting entity received more than 90% of its revenue, determined on a cash basis under DOE regulations, from the Title IV Program funds. The Company’s calculations may be subject to review by the DOE. Under DOE regulations, a proprietary institution that derives more than 90% of its total revenue from the Title IV Programs for two consecutive fiscal years becomes immediately ineligible to participate in the Title IV Programs and may not reapply for eligibility until the end of two fiscal years. An institution with revenues exceeding 90% for a single fiscal year ending after August 14, 2008, will be placed on provisional certification and may be subject to other enforcement measures. If one of the Company’s institutions violated the 90/10 Rule and became ineligible to participate in Title IV Programs but continued to disburse Title IV Program funds, the DOE would require the institution to repay all Title IV Program funds received by the institution after the effective date of the loss of eligibility. Regulatory Compliance To participate in Title IV Programs, a school must be authorized to offer its programs of instruction by relevant state education agencies, be accredited by an accrediting commission recognized by the DOE and be certified as an eligible institution by the DOE. For this reason, the schools are subject to extensive regulatory requirements imposed by all of these entities. After the schools receive the required certifications by the appropriate entities, the schools must demonstrate their compliance with the DOE regulations of the Title IV Programs on an ongoing basis. Included in these regulations is the requirement that the Company must satisfy specific standards of financial responsibility. The DOE evaluates institutions for compliance with these standards each year, based upon the institution’s annual audited financial statements, as well as following a change in ownership resulting in a change of control of the institution. The DOE calculates the institution's composite score for financial responsibility based on its (i) equity ratio, which measures the institution's capital resources, ability to borrow and financial viability; (ii) primary reserve ratio, which measures the institution's ability to support current operations from expendable resources; and (iii) net income ratio, which measures the institution's ability to operate at a profit. This composite score can range from -1 to +3. The composite score must be at least 1.5 for the institution to be deemed financially responsible without the need for further oversight. If an institution’s composite score is below 1.5, but is at least 1.0, it is in a category denominated by the DOE as “the zone.” Under the DOE regulations, institutions that are in the zone typically may be permitted by the DOE to continue to participate in the title IV programs by choosing one of two alternatives: 1) the “Zone Alternative” under which we are required to make disbursements to students under the Heightened Cash Monitoring 1 (HCM1) payment method and to notify the DOE within 10 days after the occurrence of certain oversight and financial events or 2) submit a letter of credit to the DOE in an amount determined by the DOE and equal to at least 50 percent of the Title IV funds received by our institutions during the most recent fiscal year. Under the HCM1 payment method, the institution is required to make Title IV disbursements to eligible students and parents before it requests or receives funds for the amount of those disbursements from the DOE. As long as the student accounts are credited before the funding requests are initiated, we are permitted to draw down funds through the DOE’s electronic system for grants management and payments for the amount of disbursements made to eligible students. Unlike the Heightened Cash Monitoring 2 (HCM2) and reimbursement payment methods, the HCM1 payment method typically does not require schools to submit documentation to the DOE and wait for DOE approval before drawing down Title IV funds. If a Company’s composite score is below 1.5 for three consecutive years a Company may be able to continue to operate under the Zone Alternative; however, this determination is made solely by the DOE. If a Company’s composite score drops below 1.0 in a given year or if its composite score remains between 1.0 and 1.4 for three or more consecutive years, it may be required to meet alternative requirements for continuing to participate in Title IV programs by submitting a letter of credit, complying with monitoring requirements, disbursing Title IV funds under the HCM1, HCM2, or reimbursement payment methods, and complying with other requirements and conditions. Effective July 1, 2016, a school under HCM1, HCM2 or reimbursement payment methods must also pay any credit balances due to a student before drawing down funds for the amount of those disbursements from the DOE, even if the student or parent provide written authorization for the school to hold the credit balance. This requirement may have a material adverse effect on our cash flows, results of operations and financial position. The DOE permits an institution to participate under the “Zone Alternative” for a period of up to three consecutive fiscal years; however, this determination is made solely by the DOE. If an institution’s composite score is between 1.0 and 1.4 after three or more consecutive years with a composite score below 1.5, it may be required to meet alternative requirements for continuing to participate in Title IV programs by submitting a letter of credit, complying with monitoring requirements, disbursing Title IV funds under the HCM1, HCM2, or reimbursement payment methods, and complying with other requirements and conditions. If an institution's composite score is below 1.0, the institution is considered by the DOE to lack financial responsibility. If the DOE determines that an institution does not satisfy the DOE's financial responsibility standards, depending on its composite score and other factors, that institution may establish its financial responsibility on an alternative basis by, among other things:
The DOE has evaluated the financial responsibility of our institutions on a consolidated basis. The Company has submitted to the DOE our audited financial statements for the 2014 and 2013 fiscal year reflecting a composite score of 1.3 and 1.4, respectively, based upon its calculations. The Company chose the “Zone Alternative” option described above because, among other things, it does not require the Company to submit a letter of credit to the DOE and because the HCM1 payment method is less burdensome than the HCM2 or reimbursement methods of payment that the DOE has the authority to impose. The Company believes that, prior to moving to the HCM1 payment method on October 22, 2014, its procedures for processing Title IV payments were similar to those now required under the HCM1 payment method. As of this date, the Company not identified any impact on our ability to make disbursements of Title IV funds to its students or to receive funds for the amount of those disbursements from the DOE. If we remain on the HCM1 payment method on or after July 1, 2016, we may have to modify our procedures for payment of credit balances to student to comply with the aforementioned new requirements to pay credit balances before drawing down funds from the DOE. For the 2015 fiscal year, the Company calculated its composite score to be 1.9. This number is subject to determination by the DOE once it receives and reviews the Company’s audited financial statements for the 2015 fiscal year. If the DOE determines that our composite score is 1.5 or higher, our composite score would be high enough for our institutions to be deemed financially responsible and could result in the DOE no longer requiring us to comply with the Zone Alternative requirements or the requirement to use the HCM1 payment method. Such determination would be subject to DOE determination and the absence of other factors supporting these requirements. |
WEIGHTED AVERAGE COMMON SHARES |
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WEIGHTED AVERAGE COMMON SHARES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WEIGHTED AVERAGE COMMON SHARES |
The weighted average number of common shares used to compute basic and diluted income per share for the years ended December 31, 2015, 2014 and 2013, respectively were as follows:
For the year ended December 31, 2015, 2014 and 2013, options to acquire 60,161; 119,722; and 222,707 shares were excluded from the above table because the Company reported a net loss for the year and therefore their impact on reported loss per share would have been antidilutive. For the years ended December 31, 2015, 2014 and 2013, options to acquire 391,935; 795,985; and 657,083 shares; respectively, were excluded from the above table because they have an exercise price that is greater than the average market price of the Company’s common stock and therefore their impact on reported (loss) earnings per share would have been antidilutive. In 2013 and 2014, the Company issued certain members of management performance shares that vest when certain performance conditions are met. As of December 31, 2015, 2014 and 2013 none of these performance conditions were not met. Accordingly, 152,837; 360,402; and 441,552 shares of outstanding performance shares have been excluded from the computation of diluted earnings per share for the year ended December 31, 2014 and 2013, respectively. Refer to Note 9 for more information on performance shares. |
DISCONTINUED OPERATIONS |
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DISCONTINUED OPERATIONS |
2015 Event On November 3, 2015 the Board of Directors approved a plan for the Company to divest 17 of the 18 schools included in its Healthcare and Other Professions segment. The planned divestiture of the Company’s Healthcare and Other Professions segment constitutes a strategic shift for the Company. The results of operations of these campuses are reflected as discontinued operations in the consolidated financial statements. Implementation of the plan will result in the Company’s operations focused solely on the Transportation and Skilled Trades segment. On December 3, 2015, our Board of Directors approved a plan to cease operations at the Hartford, Connecticut school which is scheduled to close in the fourth quarter of 2016. In addition, as of September 30, 2015 the Company had two campuses held for sale. With the approval of the plan to divest the Healthcare and Other Professions segment one of the campuses is no longer included as held for sale as the Company plans to sell this campus have changed; the campus is included in the transportation and skilled trades segment. The results of operations at these 17 campuses for the three year periods ended December 31, 2015 were as follows (in thousands):
Amounts include impairments of goodwill and long-lived assets for these campuses of $37.6 million and $3.9 million for the year ended December 31, 2014 and 2013, respectively. 2014 Event On December 3, 2014, the Company’s Board of Directors approved a plan to cease operations at five training sites in Florida. The Company performed a cost benefit analysis on several schools and concluded that the training sites contained a high fixed cost component and has had difficulty attracting enough students due to high competition to maintain a stable profit margin. Accordingly, the Company ceased operations at these campuses as of December 31, 2014. This was a strategic shift to close all of the Company’s training sites and all locations that do not accept Title IV payments. The results of operations of these campuses are reflected as discontinued operations in the consolidated financial statements. The results of operations at these five training sites for the two year periods ended December 31, 2014 were as follows (in thousands):
Amounts include impairments of goodwill and long-lived assets for these campuses of $2.1 million for the year ended December 31, 2014. 2013 Event On June 18, 2013, the Company’s Board of Directors approved a plan to cease operations at four campuses in Ohio and one campus in Kentucky consisting of the Company’s Dayton institution and its branch campuses. Federal legislation implemented on July 1, 2012 that prohibits “ability to benefit” (“ATB”) students from participating in federal student financial aid programs led to a dramatic decrease in the number of students attending these five campuses. Accordingly, the Company ceased operations at these campuses as of December 31, 2013. The results of operations of these campuses are reflected as discontinued operations in the consolidated financial statements. The results of operations at these five campuses for the year ended December 31, 2013 were as follows (in thousands):
Amounts include impairments of goodwill and long-lived assets for these campuses of $2.3 million for the year ended December 31, 2013. |
GOODWILL AND OTHER INTANGIBLES |
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GOODWILL AND OTHER INTANGIBLES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLES |
Changes in the carrying amount of goodwill during the years ended December 31, 2015 and 2014 are as follows:
Intangible assets, which are included in other assets in the accompanying consolidated balance sheets, consisted of the following:
Amortization of intangible assets for the years ended December 31, 2015, 2014 and 2013 was approximately $0.1 million, $0.2 million and $0.4 million, respectively. The following table summarizes the estimated future amortization expense:
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PROPERTY, EQUIPMENT AND FACILITIES |
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PROPERTY, EQUIPMENT AND FACILITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, EQUIPMENT AND FACILITIES |
Property, equipment and facilities consist of the following:
Included above in buildings and improvements are buildings acquired under capital leases as of December 31, 2015 and 2014 of $3.0 million and $26.8 million, respectively, net of accumulated depreciation of $1.4 million and $10.6 million, respectively. Included above in equipment, furniture and fixtures are assets acquired under capital leases as of December 31, 2015 and 2014 of $0.1 million and $0.4 million, respectively, net of accumulated depreciation of $0.1 million and $0.4 million, respectively. Included above in buildings and improvements is capitalized interest as of December 31, 2015 and 2014 of $0.6 million and $0.6 million, respectively, net of accumulated depreciation of $0.6 million and $0.5 million, respectively. Depreciation and amortization expense of property, equipment and facilities was $11.9 million, $15.3 million and $16.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. As discussed in Note 4, on November 3, 2015 the Board of Directors approved a plan for the Company to divest 17 of the 18 schools included in its Healthcare and Other Professions business segment. The Company anticipates that these properties will be sold during 2016. Accordingly, the assets have been reflected as “held for sale” in the accompanying consolidated balance sheet. In addition, during the quarter ended September 30, 2015 the Company had two campuses held for sale. With the approval of the plan to divest the Healthcare and Other Professions business segment one of the campuses is no longer included as held for sale. The assets and liabilities held for sale consist of the following:
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ACCRUED EXPENSES |
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ACCRUED EXPENSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES |
Accrued expenses consist of the following:
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LONG-TERM DEBT AND LEASE OBLIGATIONS |
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LONG-TERM DEBT AND LEASE OBLIGATIONS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS |
Long-term debt and lease obligations consist of the following:
(a) On July 31, 2015, the Company entered into a credit agreement with three lenders, Alostar Bank of Commerce (“Alostar”), HPF Holdco, LLC and Rushing Creek 4, LLC, led by HPF Service, LLC, as administrative agent and collateral agent (the “Agent”), for an aggregate principal amount of $45 million (the “Term Loan”). The July 31, 2015 credit agreement, along with subsequent amendments to the Credit Agreement dated December 31, 2015 and February 29, 2016, are collectively referred to as the “Credit Agreement.” As of December 31, 2015 and prior to the effectiveness of a second amendment to the Credit Agreement on February 29, 2016 (the “Second Amendment”), the Term Loan consisted of a $30 million term loan (the “Term Loan A”) from HPF Holdco, LLC, Rushing Creek 4, LLC and Tiger Capital Group, LLC, secured by a first priority lien in favor of the Agent on substantially all of the real and personal property owned by the Company, and a $15 million term loan (the “Term Loan B”) from Alostar secured by a $15.3 million cash collateral account. Pursuant to the Second Amendment, the Company received an additional $5 million term loan from Alostar with which the Company repaid $5 million of the principal amount of the Term Loan A. Accordingly, upon the effectiveness of the Second Amendment, the aggregate term loans outstanding under the Credit Agreement remains at approximately $45 million, consisting of an approximate $25 million Term Loan A and a $20 million Term Loan B. In addition, pursuant to the Second Amendment, the amount of cash collateral securing the Term Loan B was increased to $20.3 million. At the Company’s request, a percentage of the cash collateral may be released to the Company at the Agent’s sole discretion and with the consent of Alostar upon the satisfaction of certain criteria as outlined in the Credit Agreement. The Term Loan, which matures on July 31, 2019, replaces a previously existing $20 million revolving credit facility with Bank of America, N.A. and other lenders, which was due to expire on April 5, 2016. The previously existing revolving credit facility was terminated concurrently with the effective date of the Credit Agreement on July 31, 2015 (the “Closing Date”). A portion of the proceeds of the Term Loan were used by the Company to (i) repay approximately $6.3 million in outstanding principal, accrued interest and fees due under the previously existing revolving credit facility, (ii) fund the $20.3 million cash collateral account securing the portion of the Term Loan provided by Alostar, (iii) fund approximately $7.4 million in a cash collateral account securing the letters of credit issued under the previously existing revolving credit facility that remain outstanding after the termination of that facility and (iv) pay transaction expenses in connection with the Term Loan and the termination of the previously existing revolving credit facility. The remaining proceeds of the Term Loan of approximately $13.3 million may be used by the Company to finance capital expenditures and for general corporate purposes consistent with the terms of the Credit Agreement. Interest will accrue on the Term Loan at a per annum rate equal to the greater of (i) 11% or (ii) 90-day LIBOR plus 9% determined monthly by the Agent and will be payable monthly in arrears. The principal balance of the Term Loan will be repaid in equal monthly installments, commencing on August 1, 2017, determined as the quotient of (i) 10% of the outstanding principal balance of the Term Loan as of July 2, 2017 divided by (ii) 12. A final installment of principal and all accrued and unpaid interest will be due on the maturity date of the Term Loan. The Term Loan may be prepaid in whole or in part at any time, subject to the payment of a prepayment premium equal to (i) 5% of the principal amount prepaid at any time up to but not including the second anniversary of the Closing Date and (ii) 3% of the principal amount prepaid at any time commencing on the second anniversary of the Closing Date up to but not including the third anniversary of the Closing Date. In the event of any sale or other disposition of a school or real property by the Company permitted under the Term Loan, the net proceeds of such sale or disposition must be used to prepay the Loan in an amount determined pursuant to the Credit Agreement, subject to the applicable prepayment premium; provided, however, that no prepayment premium will be due with respect to up to $15 million of aggregate repayments of the Term Loan made during the first year that the Term Loan is outstanding. A portion of the net cash proceeds of any disposition of a school in an amount determined pursuant to the terms of the Term Loan, must be deposited and held as cash collateral in a deposit account controlled by the Agent until the conditions for release set forth in the Term Loan are satisfied. In connection with the assets which are currently classified as held for sale and are expected to be sold within one year, the Company is required to classify $10.0 million as short term debt due to the Term Loan prepayment minimum required with respect to any such disposition. The Term Loan contains customary representations, warranties and covenants such as minimum financial responsibility composite score, cohort default rate, and other financial covenants, including minimum liquidity, maximum capital expenditures, maximum 90/10 ratio and minimum EBITDA (as defined in the Term Loan), as well as affirmative and negative covenants and events of default customary for facilities of this type. The Company was in compliance with all covenants as of December 31, 2015. Subsequent to the fiscal year end, pursuant to the Second Amendment, the financial covenants were adjusted and, at the Company’s election, will be adjusted for fiscal year 2017 and for each subsequent fiscal year until the maturity of the Term Loan at either the levels applicable to fiscal year 2016 (and each fiscal quarter thereof) contained in the Credit Agreement as of the Closing Date or the levels applicable to fiscal year 2016 (and each fiscal quarter thereof) contained in the Second Amendment. In the event that the Company elects to re-set the financial covenants at the 2016 covenant levels contained in the Second Amendment, the Company will be required to prepay on or before January 15, 2017, without prepayment penalty, amounts outstanding under the Term Loan up to $4 million. The Credit Agreement contains events of default, the occurrence and continuation of which provide the Company’s lenders with the right to exercise remedies against the Company and the collateral securing the Term Loan, including the Company’s cash. These events of default include, among other things, the Company’s failure to pay any amounts due under the Term Loan, a breach of covenants under the Credit Agreement, the Company’s insolvency and the insolvency of its subsidiaries, the occurrence of a material adverse effect, the occurrence of any default under certain other indebtedness, and a final judgment against the Company in an amount greater than $1,000,000. Also, in connection with the Term Loan, the Company paid to the Agent a commitment fee of $1.0 million on the Closing Date and is required to pay to the Agent other customary fees for facilities of this type. Total fees for the Term Loan were $2.8 million during fiscal year 2015, which are included in deferred finance charges on the consolidated balance sheet. Subsequent to the fiscal year end, in connection with the effectiveness of the Second Amendment, the Company paid to the Agent a loan modification fee of $.5 million. For the year ended December 31, 2015, $0.4 million of the Term Loan was repaid in connection with the Company’s sale of real property located in Springdale, Ohio. The Company had $44.7 million outstanding under the Term Loan as of December 31, 2015. The Company had $30.0 million outstanding under its previously existing revolving credit facility as of December 31, 2014, which was repaid on January 3, 2015. The interest rate on this borrowing was 7.25%. (b) The Company completed a sale and a leaseback of several facilities on December 28, 2001. The Company retained a continuing involvement in the lease and as a result it is prohibited from utilizing sale-leaseback accounting. Accordingly, the Company has treated this transaction as a finance lease. Annual rent payments under this obligation for each of the three years in the period ended December 31, 2015 were $1.6 million, respectively. These payments have been reflected in the accompanying consolidated statements of operations as interest expense for all periods presented since the effective interest rate on the obligation is greater than the scheduled payments. The lease expiration date is December 31, 2016. Beginning in January 2016 the lease was amended to cure issues related to continuing involvement and achieved sales treatment. In 2016, the lease will be converted to an operating lease and rent payments will be included in educational, services and facilities expense in the consolidate statement of operations. In addition, the finance obligation, net of land and buildings, will be amortized straight-line through December 31, 2016. (c) In 2009, the Company assumed real estate capital leases in Fern Park, Florida and Hartford, Connecticut. These leases bear interest at 8%. On December 3, 2015, the Company’s Board of Directors approved a plan to cease operations at the Hartford, Connecticut school which is scheduled to close in the fourth quarter of 2016. In connection therewith, the Company paid a $5 million lease termination fee on December 31, 2015 to its landlord in connection with the early termination of a lease agreement under which the Company leased property in Hartford, Connecticut for a term continuing through July 31, 2031. The terminated lease agreement was replaced with a short-term lease agreement in order to allow students currently enrolled at the school to complete their course of study. On February 27, 2015, the Company’s Board of Directors approved a plan to cease operations at the Fern Park, Florida school which is scheduled to close in the first quarter of 2016. The Company paid a $2.8 million lease termination fee on February 12, 2016 to its landlord in connection with the early termination of a lease agreement under which the Company leased property in Fern Park, Florida for a term continuing through October 31, 2032. The early terminated lease agreement will continue in effect until April 10, 2016 in order to allow students currently enrolled at the school to complete their course of study. Scheduled maturities of long-term debt and lease obligations at December 31, 2015 are as follows:
The finance obligation of $9.7 million is excluded from the scheduled maturities schedule as it is a non-cash liability. The Fern Park, Florida capital lease is included in the scheduled maturities of $3.9 million ($0.1 million included in each year ended 2016, 2017, 2018, 2019 and 2020; $3.4 million included thereafter), however, as mentioned above, subsequent to December 31, 2015 the Company entered into an agreement to terminate the lease which included a termination fee of $2.8 million. |
STOCKHOLDERS' EQUITY |
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STOCKHOLDERS' EQUITY [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY |
Restricted Stock The Company has two stock incentive plans: a Long-Term Incentive Plan (the “LTIP”) and a Non-Employee Directors Restricted Stock Plan (the “Non-Employee Directors Plan”). Under the LTIP, certain employees 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 fair market value of a share of common stock on the date of grant. The service-based restricted shares granted during 2012 vest ratably on the grant date and the first through fourth anniversaries of the grant date. The service-based restricted shares granted during 2014 vest ratably on the grant date and the first through third anniversaries of the grant date. On June 2, 2014 and December 18, 2014, performance-based shares were granted which vest over three years based upon the attainment of (i) a specified operating income margin during any one or more of the fiscal years in the period beginning January 1, 2015 and ending December 31, 2017 and (ii) the attainment of earnings before interest, taxes, depreciation and amortization targets during each of the fiscal years ended December 31, 2015 through 2017. There is no vesting period on the right to vote or the right to receive dividends on any of the restricted shares. On April 29, 2013, performance-based shares were granted which vest over four years based upon the attainment of (i) a specified operating income margin during any one or more of the fiscal years in the period beginning January 1, 2013 and ending December 31, 2016 and (ii) the attainment of earnings before interest, taxes, depreciation and amortization targets during each of the fiscal years ended December 31, 2013 through 2016. There is no vesting period on the right to vote or the right to receive dividends on any of the restricted shares. 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; however, there is no vesting period on the right to vote or the right to receive dividends on these restricted shares. In 2015, 2014 and 2013, the Company completed a net share settlement for 85,740, 144,983 and 140,475 restricted shares and stock options exercised, 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 or exercise of the stock options. The net share settlement was in connection with income taxes incurred on restricted shares or stock option exercises that vested and were transferred to the employee during 2015, 2014 and/or 2013, creating taxable income for the employee. At the employees’ request, the Company will pay these taxes on behalf of the employees in exchange for the employees returning an equivalent value of restricted shares or stock options to the Company. These transactions resulted in a decrease of approximately $0.2 million, $0.4 million and $0.8 million in 2015, 2014 and 2013, respectively, to equity as the cash payment of the taxes effectively was a repurchase of the restricted shares or stock options granted in previous years. The following is a summary of transactions pertaining to restricted stock:
The restricted stock expense for each of the years ended December 31, 2015, 2014 and 2013 was $1.1 million, $2.5 million and $2.9 million, respectively. The unrecognized restricted stock expense as of December 31, 2015 and 2014 was $1.3 million and $4.2 million, respectively. As of December 31, 2015, unrecognized restricted stock expense will be expensed over the weighted-average period of approximately 1.2 years. As of December 31, 2015, outstanding restricted shares under the LTIP had an aggregate intrinsic value of $0.9 million. Stock Options During 2015, 2014 and 2013 there were no new stock option grants. The following is a summary of transactions pertaining to the option plans:
As of December 31, 2015, there are no unrecognized pre-tax compensation expense for unvested stock option awards. The following table presents a summary of options outstanding at December 31, 2015:
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PENSION PLAN |
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PENSION PLAN [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION PLAN |
The Company sponsors a noncontributory defined benefit pension plan covering substantially all of the Company's union employees. Benefits are provided based on employees' years of service and earnings. This plan was frozen on December 31, 1994 for non-union employees. The following table sets forth the plan's funded status and amounts recognized in the consolidated financial statements:
For the year ended December 31, 2015, the actuarial gain of $0.8 million was due to the increase in the discount rate from 3.66% to 3.94%. Amounts recognized in the consolidated balance sheets consist of:
Amounts recognized in accumulated other comprehensive loss consist of:
The accumulated benefit obligation was $23.3 million and $24.3 million at December 31, 2015 and 2014, respectively. The following table provides the components of net periodic cost for the plan:
The estimated net loss, transition obligation and prior service cost for the plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next year is $0.9 million. Employee pension plan adjustments of $0.4 million for the year ended December 31, 2015 includes $1.0 million of recognized actuarial losses reclassified from accumulated other comprehensive income. The following tables present plan assets using the fair value hierarchy as of December 31, 2015 and 2014. The fair value hierarchy has three levels based on the reliability of inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using observable prices that are based on inputs not quoted in active markets but observable by market data, while Level 3 includes the fair values estimated using significant non-observable inputs. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair value of total plan assets by major asset category as of December 31:
Weighted-average assumptions used to determine benefit obligations as of December 31:
Weighted-average assumptions used to determine net periodic pension cost for years ended December 31:
As this plan was frozen to non-union employees on December 31, 1994, the difference between the projected benefit obligation and accumulated benefit obligation is not significant in any year. The Company invests plan assets based on a total return on investment approach, pursuant to which the plan assets include a diversified blend of equity and fixed income investments toward a goal of maximizing the long-term rate of return without assuming an unreasonable level of investment risk. The Company determines the level of risk based on an analysis of plan liabilities, the extent to which the value of the plan assets satisfies the plan liabilities and the plan's financial condition. The investment policy includes target allocations ranging from 30% to 70% for equity investments, 20% to 60% for fixed income investments and 0% to 10% for cash equivalents. The equity portion of the plan assets represents growth and value stocks of small, medium and large companies. The Company measures and monitors the investment risk of the plan assets both on a quarterly basis and annually when the Company assesses plan liabilities. The Company uses a building block approach to estimate the long-term rate of return on plan assets. This approach is based on the capital markets assumption that the greater the volatility, the greater the return over the long term. An analysis of the historical performance of equity and fixed income investments, together with current market factors such as the inflation and interest rates, are used to help make the assumptions necessary to estimate a long-term rate of return on plan assets. Once this estimate is made, the Company reviews the portfolio of plan assets and makes adjustments thereto that the Company believes are necessary to reflect a diversified blend of equity and fixed income investments that is capable of achieving the estimated long-term rate of return without assuming an unreasonable level of investment risk. The Company also compares the portfolio of plan assets to those of other pension plans to help assess the suitability and appropriateness of the plan's investments. The Company does not expect to make contributions to the plan in 2016. However after considering the funded status of the plan, movements in the discount rate, investment performance and related tax consequences, the Company may choose to make additional contributions to the plan in any given year. The total amount of the Company’s contributions paid under its pension plan was zero and $0.3 million for the years ended December 31, 2015 and 2014, respectively. Information about the expected benefit payments for the plan is as follows:
The Company has a 401(k) defined contribution plan for all eligible employees. Employees may contribute up to 25% of their compensation into the plan. The Company would contribute an additional 30% of the employee's contributed amount up to 6% of compensation; however, the Company suspended the additional 30% match as of June 2015. For the years ended December 31, 2015, 2014 and 2013, the Company's expense for the 401(k) plan amounted to $0.7 million, $1.6 million and $1.9 million, respectively. |
INCOME TAXES |
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INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
Components of the provision for income taxes from continuing operations were as follows:
The components of the deferred tax assets are as follows:
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence was the cumulative losses incurred by the Company in recent years. On the basis of this evaluation the Company believes it is not more likely than not that it will realize its net deferred tax assets. As a result, as of December 31, 2015 and 2014, the Company has recorded a valuation allowance of $43.9 million and $46.7 million, respectively, against its net deferred tax assets. The difference between the actual tax provision and the tax provision that would result from the use of the Federal statutory rate is as follows:
As of December 31, 2015 and 2014, the Company has NOL carryforwards of $32.6 million and $32.3 million, respectively, which, if unused, will expire beginning in 2027 and ending in 2035. Utilization of the NOL carryforwards may be subject to a substantial limitation due to ownership change limitations that may occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state and foreign provisions. These ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. The following table summarizes the activity related to the Company’s uncertain tax positions:
As of December 31, 2015, 2014 and 2013, the Company no longer has any liability for uncertain tax positions. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states. The Company is no longer subject to U.S. federal income tax examinations for years before 2014 and, generally, is no longer subject to state and local income tax examinations by tax authorities for years before 2010. |
FAIR VALUE |
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FAIR VALUE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE |
The carrying amount and estimated fair value of the Company’s financial instrument assets and liabilities, which are not measured at fair value on the Consolidated Balance Sheets, are listed in the table below:
The fair value of the Term loan is estimated based on a present value analysis utilizing aggregate market yields obtained from independent pricing sources for similar financial instruments. The carrying value of the Credit agreement approximates fair value as it was executed in December 2014. The carrying amounts reported on the Consolidated Balance Sheets for Cash and cash equivalents, Restricted cash and Noncurrent restricted cash approximate fair value because they are highly liquid. The carrying amounts reported on the Consolidated Balance Sheets 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. |
SEGMENT REPORTING |
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SEGMENT REPORTING [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING |
The for-profit education industry has been impacted by numerous regulatory changes, the changing economy and an onslaught of negative articles in the press. As a result of these actions, student populations have declined and operating costs have increased. Over the past few years, the Company has closed over 10 locations and exited its online business. The Company reviewed how it has been structured and decided to change its organization to enable the Company to better allocate financial and human resources to respond to its markets and with the goal of improving its profitability and competitive advantage. In the past, the Company offered any combination of programs at any campus. The Company has changed its focus to program offerings that create greater differentiation and attain excellence to attract more students and gain market share. Also strategically, the Company began offering continuing education training to employers who hire its students and this is best achieved at campuses focused on their profession. As a result of these environmental, market forces and strategic decisions, the Company operated in three reportable segments: a) Transportation and Skilled Trades, b) Healthcare and Other Professions, and c) Transitional which refers to business that is currently being phased out. The Company’s reportable segments have been determined based on the method by which our chief operating decision maker now evaluates performance and allocates resources. Each reportable segment represents a group of post-secondary education providers that offer a variety of degree and non-degree academic programs. These segments are organized by key market segments to enhance operational alignment within each segment to more effectively execute the Company’s strategic plan. Each of the Company’s schools is a reporting unit and an operating segment. The Company’s operating segments have been aggregated into three reportable segments because, in the Company’s judgment, the reporting units have similar services, types of customers, regulatory environment and economic characteristics. On November 3, 2015 the Board of Directors approved a plan for the Company to divest 17 of the 18 schools included in the Healthcare and Other Professions business segment. Then, in December 2015, the Board of Directors approved a plan to cease operations of the remaining school in this segment located in Hartford, Connecticut. That school is scheduled to close in the fourth quarter of 2016. Divestiture of the Company’s Healthcare and Other Professions business segment marks a strategic shift in business strategy. The results of operations of these 17 campuses are reflected as discontinued operations in the consolidated financial statements. The Hartford, Connecticut campus, which was previously included in the Healthcare and Other Professions segment is now included in the Transitional segment. Implementation of the plan would result in the Company’s operations focused solely on the Transportation and Skilled Trades segment. The Company’s two remaining reporting segments are described below. Transportation and Skilled Trades – Transportation and Skilled Trades offers academic programs mainly in the career-oriented disciplines of transportation and skilled trades (e.g. automotive, diesel, HVAC, welding and manufacturing). Transitional – Transitional refers to operations that are being phased out and consists of the Company’s Fern Park, Florida and Hartford, Connecticut campuses, which are currently being taught out. Each school is employing a gradual teach-out process that enables the schools to continue to operate while current students complete their course of study. These schools are no longer enrolling new students. In the first quarter of 2015, the Company announced that it was teaching out the campus in Fern Park, Florida. On December 3, 2015, the Company announced it was teaching out the Hartford, Connecticut campus. The teach-out at theses campuses is expected to be complete by March 2016 and December 2016, respectively. The Company evaluates 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:
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COMMITMENTS AND CONTINGENCIES |
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COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES |
Lease Commitments—The Company leases office premises, educational facilities and various equipment for varying periods through the year 2032 at basic annual rentals (excluding taxes, insurance, and other expenses under certain leases) as follows:
The finance obligation of $9.7 million is excluded from the scheduled maturities schedule as it is a non-cash liability. The Fern Park, Florida capital lease is included in the scheduled maturities of $7.1 million, however, subsequent to December 31, 2015 the Company entered into an agreement to terminate the lease which included a termination fee of $2.8 million. Rent expense, included in operating expenses in the accompanying consolidated statements of operations for the three years ended December 31, 2015, 2014 and 2013 is $11.7 million, $11.9 million and $12.0 million, respectively. Interest expense related to the financing obligation in the accompanying statements of operations for the years ended December 31, 2015, 2014 and 2013 is $1.6 million, $1.6 million, and $1.5 million respectively. Litigation and Regulatory Matters— In the ordinary conduct of our business, we are subject to periodic lawsuits, investigations and claims, including, but not limited to, claims involving students or graduates and routine employment matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, we do not believe that any currently pending legal proceeding to which we are a party will have a material effect on our business, financial condition, results of operations or cash flows. On November 21, 2012, the Company received a Civil Investigative Demand from the Attorney General of the Commonwealth of Massachusetts relating to its investigation of whether the Company and certain of its academic institutions have complied with certain Massachusetts state consumer protection laws. On July 29, 2013, and January 17, 2014, the Company received additional Civil Investigative Demands pursuant to which the Attorney General requested from the Company and certain of its academic institutions in Massachusetts documents and detailed information for the time period from January 1, 2008 to the present. On July 13, 2015, the Commonwealth of Massachusetts filed a complaint against the Company in the Suffolk County Superior Court alleging certain violations of the Massachusetts Consumer Protection Act since at least 2010 and continuing through 2013. At the same time, the Company agreed to the entry of a Final Judgment by Consent in order to avoid the time, burden, and expense of contesting such liability. As part of the Final Judgment by Consent, the Company denied all allegations of wrongdoing and any liability for the claims asserted in the complaint. The Company, however, paid the sum of $850,000 to the Attorney General and has agreed to forgive $165,000 of debt consisting of unpaid balances owed to the Company by certain graduates in the sole discretion of the Massachusetts Attorney General. The Final Judgment by Consent also provided certain requirements for calculation of job placement rates in Massachusetts and imposed certain disclosure obligations that are consistent with the regulations that have been previously enacted by the Massachusetts Attorney General’s Office. On December 15, 2015, the Company received an administrative subpoena from the Attorney General of the State of Maryland. Pursuant to the subpoena, Maryland’s Attorney General has requested from the Company documents and detailed information relating to its Columbia, Maryland campus. The Company has responded to this request and intends to continue cooperating with the Maryland Attorney General’s Office. Student Loans—At December 31, 2015, the Company had outstanding net loan commitments to its students to assist them in financing their education of approximately $24.8 million. Vendor Relationship—The Company is party to an agreement with Matco Tools (“Matco”), which expires on July 31, 2017. The Company has agreed to grant Matco exclusive access to 12 campuses and its students and instructors. This exclusivity includes but is not limited to, all other tool manufacturers and/or tool distributors, by whatever means, during the term of the agreement. Under the agreement, the Company will be provided, on an advance commission basis, credits which are redeemable in branded tools, tools storage, equipment, and diagnostics products over the term of the contract. The Company is party to an agreement with Snap-on Industrial (“Snap-on”), which expires on December 31, 2018. The Company has agreed to grant Snap-on exclusive rights to one automotive campus to display advertising and supply certain tools. The Company earns credits that are redeemable for certain tools and equipment based on the sales to students and to the Company. Executive Employment Agreements—The Company entered into employment contracts with key executives that provide for continued salary payments if the executives are terminated for reasons other than cause, as defined in the agreements. The future employment contract commitments for such employees were approximately $3.0 million at December 31, 2015. Change in Control Agreements—In the event of a change of control several key executives will receive continued salary payments based on their employment agreements. Surety Bonds—Each of the Company’s campuses must be authorized by the applicable state education agency in which the campus is located to operate and to grant degrees, diplomas or certificates to its students. The campuses are subject to extensive, ongoing regulation by each of these states. In addition, the Company’s campuses are required to be authorized by the applicable state education agencies of certain other states in which the campuses recruit students. The Company is required to post surety bonds on behalf of its campuses and education representatives with multiple states to maintain authorization to conduct its business. At December 31, 2015, the Company has posted surety bonds in the total amount of approximately $14.9 million. |
UNAUDITED QUARTERLY FINANCIAL INFORMATION |
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UNAUDITED QUARTERLY FINANCIAL INFORMATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED QUARTERLY FINANCIAL INFORMATION |
Quarterly financial information for 2015 and 2014 is as follows:
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DIVIDENDS |
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DIVIDENDS [Abstract] | |||
DIVIDENDS |
During 2014 and 2013, the Board of Directors declared cash dividends of $0.18 and $0.28 per share of common stock outstanding, respectively. On February 27, 2015, the Board of Directors discontinued the quarterly cash dividend. |
Schedule II-Valuation and Qualifying Accounts |
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Schedule II-Valuation and Qualifying Accounts | Schedule II—Valuation and Qualifying Accounts (in thousands, continuing and discontinued operations)
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Business Activities | Business Activities—Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”) provide diversified career-oriented post-secondary education to recent high school graduates and working adults. The Company currently operates 31 schools in 15 states and offer 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, medical administrative assistant and pharmacy technician, among other programs), hospitality services (which include culinary, therapeutic massage, cosmetology and aesthetics) and business and information technology (which includes information technology and criminal justice programs). The schools operate under the Lincoln Technical Institute, Lincoln College of Technology, Lincoln College of New England, Lincoln Culinary Institute, and Euphoria Institute of Beauty Arts and Sciences 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”) 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. In the first quarter of 2015, the Company reorganized its operations into three reportable business segments: (a) Transportation and Skilled Trades, (b) Healthcare and Other Professions, and (c) Transitional which refers to businesses that are currently being phased out. In November, 2015, the Board of Directors of the Company approved a plan for the Company to divest 17 of the 18 schools included in its Healthcare and Other Professions business segment and, then, in December, 2015, the Board of Directors approved a plan to cease operations of the remaining school in this segment located in Hartford, Connecticut. That school is scheduled to close in the fourth quarter of 2016. Divestiture of the Healthcare and Other Professions business segment marks a shift in the Company’s business strategy intended to enable the Company to focus energy and resources predominantly on Transportation and Skilled Trades though some other programs will continue to be available at some campuses. The results of operations of the 17 campuses included in the Healthcare and Other Professions segment that are being divested are reflected as discontinued operations in the consolidated financial statements. |
Liquidity | Liquidity—For the last several years, the Company and the proprietary school sector have faced deteriorating earnings. Government regulations have negatively impacted earnings by making it more difficult for prospective students to obtain loans, which, when coupled with the overall economic environment, have hindered prospective students from enrolling in post-secondary schools. In light of these factors, the Company has incurred significant operating losses as a result of lower student population. Despite these events, the Company believes that its likely sources of cash should be sufficient to fund operations for the next twelve months. At December 31, 2015, the Company’s sources of cash primarily included cash from operations, and cash and cash equivalents of $61.0 million (of which $22.6 million is restricted) which increased from December 31, 2014 mainly from $19.2 million related to the Company’s new term loan net of finance fees. The Company is also continuing to take actions to improve cash flow by aligning its cost structure to its student population. In addition to the current sources of capital discussed above that provide short term liquidity, the Company plans to sell approximately $31.7 million in assets net of liabilities, which are currently classified as held for sale and are expected to be sold within one year from the date of classification in which up to $10 million will be required to pay down debt. |
Principles of Consolidation | Principles of Consolidation—The accompanying consolidated financial statements include the accounts of Lincoln Educational Services Corporation and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. |
Revenue Recognition | Revenue Recognition— Revenues are derived primarily from programs taught at the Company’s schools. Tuition revenues, textbook sales and one-time fees, such as nonrefundable application fees and course material fees, are recognized on a straight-line basis over the length of the applicable program as the student proceeds through the program, which is the period of time from a student’s start date through his or her graduation date, including internships or externships that take place prior to graduation, and the Company completes the performance of teaching the student which entitles the Company to the revenue. Other revenues, such as tool sales and contract training revenues are recognized as services are performed or goods are delivered. On an individual student basis, tuition earned in excess of cash received is recorded as accounts receivable, and cash received in excess of tuition earned is recorded as unearned tuition. Refunds are calculated and paid in accordance with federal, state and accrediting agency standards. The Company evaluates whether collectability of revenue is reasonably assured prior to the student attending class and reassesses collectability of tuition and fees when a student withdraws from a course. The Company calculates the amount to be returned under Title IV and its stated refund policy to determine eligible charges and, if there is a balance due from the student after this calculation, the Company expect payment from the student and the Company has a process to pursue uncollected accounts whereby, based upon the student’s financial means and ability to pay, a payment plan is established with the student to ensure that collectability is reasonable. The Company continuously monitors its historical collections to identify potential trends that may impact our determination that collectability of receivables for withdrawn students is realizable. If a student withdraws from a program prior to a specified date, any paid but unearned tuition is refunded. Refunds are calculated and paid in accordance with federal, state and accrediting agency standards. Generally, the amount to be refunded to a student is calculated based upon the period of time the student has attended classes and the amount of tuition and fees paid by the student as of his or her withdrawal date. These refunds typically reduce deferred tuition revenue and cash on our consolidated balance sheets as the Company generally does not recognize tuition revenue in its consolidated statements of income (loss) until the related refund provisions have lapsed. Based on the application of its refund policies, the Company may be entitled to incremental revenue on the day the student withdraws from one of its schools. Prior to the year-ended December 31, 2015, the Company recorded this incremental revenue, any related student receivable and any estimate of the amount it did not expect to collect as bad debt expense during the quarter a student withdrew based on its analysis of the collectability of such amounts on an aggregate student portfolio basis, for which the Company had significant historical experience. Beginning in the three months ended December 31 2015, the Company recorded revenue for students who withdraw from one of its schools when payment is received because collectability on an individual student basis is not reasonably assured. The Company determined incremental revenue recognized for students who withdrew during the nine-months ended September 30, 2015 to be an immaterial error which was corrected during the fourth quarter of 2015. This resulted in a reduction of net revenues by $0.3 million and bad debt expense by $0.2 million, which resulted in an increase to the loss from continuing operations of $0.1 million for the year ended December 31, 2015. Additionally, this correction reduced net student receivables from continuing operations by $0.1 million. Prior year amounts, including quarterly financial results were not restated because the effects were not material. |
Cash and Cash Equivalents | Cash and Cash Equivalents—Cash and cash equivalents include all cash balances and highly liquid short-term investments, which contain original maturities within three months of purchase. Pursuant to the Department of Education’s cash management requirements, the Company retains funds from financial aid programs under Title IV of the Higher Education Act in segregated cash management accounts. The segregated accounts do not require a restriction on use of the cash and, as such, these amounts are classified as cash and cash equivalents on the consolidated balance sheet. |
Restricted Cash | Restricted Cash—Restricted cash consists of deposits maintained at financial institutions under a cash collateralized agreement under the Company’s credit agreement and cash collateralized for letters of credit. $15.3 million of restricted cash is included in long-term assets on the consolidated balance sheet as the restriction is greater than one year. Refer to Note 8 for more information on the Company’s term loan. |
Accounts Receivable | Accounts Receivable—The Company reports accounts receivable at net realizable value, which is equal to the gross receivable less an estimated allowance for uncollectible accounts. Noncurrent accounts receivable represent amounts due from graduates in excess of 12 months from the balance sheet date. |
Allowance for uncollectible accounts | Allowance for uncollectible accounts—Based upon experience and judgment, an allowance is established for uncollectible accounts with respect to tuition receivables. In establishing the allowance for uncollectible accounts, the Company considers, among other things, current and expected economic conditions, a student's status (in-school or out-of-school), whether or not a student is currently making payments, and overall collection history. Changes in trends in any of these areas may impact the allowance for uncollectible accounts. The receivables balances of withdrawn students with delinquent obligations are reserved for based on our collection history. |
Inventories | Inventories—Inventories consist mainly of textbooks, computers, tools and supplies. Inventories are valued at the lower of cost or market on a first-in, first-out basis. |
Property, Equipment and Facilities - Depreciation and Amortization | Property, Equipment and Facilities—Depreciation and Amortization—Property, equipment and facilities are stated at cost. Major renewals and improvements are capitalized, while repairs and maintenance are expensed when incurred. Upon the retirement, sale or other disposition of assets, costs and related accumulated depreciation are eliminated from the accounts and any gain or loss is reflected in operating (loss) income. For financial statement purposes, depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, and amortization of leasehold improvements is computed over the lesser of the term of the lease or its estimated useful life. |
Rent Expense | Rent Expense—Rent expense related to operating leases where scheduled rent increases exist, is determined by expensing the total amount of rent due over the life of the operating lease on a straight-line basis. The difference between the rent paid under the terms of the lease and the rent expensed on a straight-line basis is included in accrued rent and other long-term liabilities on the accompanying consolidated balance sheets. |
Advertising Costs | Advertising Costs—Costs related to advertising are expensed as incurred and approximated $15.1 million, $15.1 million and $15.6 million from continuing operations for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts are included in selling, general and administrative expenses in the consolidated statements of operations. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets— The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its reporting unit’s carrying value to its implied fair value. Impairment may result from, among other things, deterioration in the performance of the acquired business, adverse market conditions, adverse changes in applicable laws or regulations, reductions in market value of the Company, including changes that restrict the activities of the acquired business, and a variety of other circumstances. If the Company determines that an impairment has occurred, it is required to record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made. In evaluating the recoverability of the carrying value of goodwill and other indefinite-lived intangible assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact these judgments in the future and require an adjustment to the recorded balances. At December 31, 2015, the Company conducted its annual test for goodwill impairment and determined it did not have an impairment. The fair value of the Company’s reporting units were determined using Level 3 inputs included in its multiple of earnings and discounted cash flow approach. The Company concluded that as of September 30, 2015 there was an indicator of potential impairment as a result of a decrease in market capitalization and, accordingly, the Company tested goodwill for impairment. The test indicated that one of the Company’s reporting units was impaired, which resulted in a pre-tax non-cash charge of $0.2 million ($0.2 million of which is included in the transportation and skilled trades segment) for the three months ended September 30, 2015. At December 31, 2014, the Company conducted its annual test for goodwill impairment and determined it did not have an impairment. The fair value of the Company’s reporting units were determined using Level 3 inputs included in its multiple of earnings and discounted cash flow approach. The Company concluded that as of September 30, 2014 there was an indicator of potential impairment as a result of a decrease in market capitalization and, accordingly, the Company tested goodwill for impairment. The test indicated that ten of the Company’s reporting units were impaired, which resulted in a pre-tax non-cash charge of $39.0 million for the three months ended September 30, 2014 ($0.2 million and $38.8 million of which is included in the transportation and skilled trades segment and discontinued operations, respectively). At December 31, 2013, the Company conducted its annual test for goodwill impairment and determined it did not have an impairment. The fair value of the Company’s reporting units were determined using Level 3 inputs included in its multiple of earnings and discounted cash flow approach. As of June 30, 2013, the Company concluded that current period losses at two reporting units, which resulted in a deterioration of current and projected cash flows, was an indicator of potential impairment and, accordingly, tested goodwill and long-lived assets for impairment. The tests indicated that these two reporting units were impaired, which resulted in a pre-tax non-cash charge of $3.1 million for the three months ended June 30, 2013 ($3.1 million of which is included in discontinued operations). |
Impairment of Long-Lived Assets | Impairment of 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. The Company evaluates long-lived assets for impairment by examining 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. The Company concluded that for the three months ended December 31, 2015, there was no long-lived asset impairment. Long-lived assets were tested at the campuses as a result of classifying assets held for sale and certain financial indicators such as the Company’s history of losses, current respective period losses, as well as future projected losses at these campuses. The Company concluded that for the three months ended December 31, 2014 and September 30, 2014, there was sufficient evidence to conclude that there was an impairment of certain long-lived assets at one and six of the Company’s campuses, respectively. Long-lived assets had been tested at these campuses as a result of certain financial indicators such as the Company’s history of losses, current respective period losses, as well as future projected losses at these campuses. The long-lived assets impairment resulted in a pre-tax charge of $1.5 million for leasehold improvements ($1.5 million included in the transportation and skilled trades segment) as of December 31, 2014 and $1.9 million for leasehold improvements ($1.5 million and $0.4 million included in the transitional segment and discontinued operations, respectively) and $0.5 million ($0.5 million included in discontinued operations) for intangible assets as of September 30, 2014. The Company concluded that for the three months ended December 31, 2013, there was no long-lived asset impairment. The Company concluded that as of June 30, 2013 and March 31, 2013, there was sufficient evidence to conclude that there were impairments of certain long-lived assets at four and two of our campuses, respectively. Long lived assets had been tested at these campuses as a result of certain financial indicators such as our history of losses, our current respective period losses, as well as future projected losses at these campuses. The long-lived assets impairment resulted in a pre-tax charge of $1.4 million ($1.4 million included in discontinued operations) and $1.7 million ($1.7 million included in discontinued operations) for leasehold improvements as of June 30, 2013 and March 31, 2013, respectively. |
Concentration of Credit Risk | Concentration of Credit Risk—Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments. The Company places its cash and cash equivalents with high credit quality financial institutions. The Company's cash balances with financial institutions typically exceed the Federal Deposit Insurance limit of $0.25 million. The Company's cash balances on deposit at December 31, 2015, exceeded the balance insured by the FDIC Corporation (“FDIC”) by approximately $60.1 million. The Company has not experienced any losses to date on its invested cash. The Company extends credit for tuition and fees to many of its students. The credit risk with respect to these accounts receivable is mitigated through the students' participation in federally funded financial aid programs unless students withdraw prior to the receipt of federal funds for those students. In addition, the remaining tuition receivables are primarily comprised of smaller individual amounts due from students. With respect to student receivables, the Company had no significant concentrations of credit risk as of December 31, 2015 and 2014. |
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 generally accepted accounting principles in the United States (“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 related to revenue recognition, bad debts, impairments, fixed assets, income taxes, benefit plans and certain accruals. Actual results could differ from those estimates. |
Stock-Based Compensation Plans | Stock-Based Compensation Plans—The Company measures the value of stock options on the grant date at fair value, using the Black-Scholes option valuation model. The Company amortizes the fair value of stock options, net of estimated forfeitures, utilizing straight-line amortization of compensation expense over the requisite service period of the grant. The Company measures the value of service and performance-based restricted stock on the fair value of a share of common stock on the date of the grant. The Company amortizes the fair value of service based restricted stock utilizing straight-line amortization of compensation expense over the requisite service period of the grant. The Company amortizes the fair value of the performance-based restricted stock based on determination of the probable outcome of the performance condition. If the performance condition is expected to be met, then the Company amortizes the fair value of the number of shares expected to vest utilizing straight-line basis over the requisite performance period of the grant. However, if the associated performance condition is not expected to be met, then the Company does not recognize the stock-based compensation expense. |
Income Taxes | Income Taxes—The Company accounts for income taxes in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 740, “Income Taxes” (“ASC 740”). 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 considered, 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. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2015 and 2014, the interest and penalties expense associated with uncertain tax positions are not significant to the Company’s results of operations or financial position. |
Start-up Costs | Start-up Costs—Costs related to the start of new campuses are expensed as incurred. |
Reclassification | Reclassification— On November 3, 2015 the Board of Directors approved a plan for the Company to divest 17 of the 18 schools included in its Healthcare and Other Professions business segment. In 2015, the Company reclassified amount reflected in the 2014 and 2013 consolidated statements of operations related to the 17 schools into discontinued operations. |
New Accounting Pronouncements | New Accounting Pronouncements In November 2015, the FASB issued guidance which simplifies the balance sheet classification of deferred taxes. The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This guidance is effective for public business entities for annual periods, and for interim periods within those periods, beginning after December 15, 2016 with early adoption permitted. The Company early adopted as of December 31, 2015. While the guidance does have an impact on our balance sheet classification, it does not have a material impact on our results of operations, financial condition or the financial statement disclosures. In April 2015, the FASB issued accounting guidance related to the presentation of debt issuance costs in the balance sheet as a direct reduction from the carrying amount of the debt liability, consistent with debt discounts, rather than as an asset. Amortization of debt issuance costs will continue to be reported as interest expense. Debt issuance costs related to revolving credit arrangements, however, will continue to be presented as an asset and amortized ratably over the term of the arrangement. In August 2015, the FASB issued accounting guidance related to the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements which clarifies that companies may continue to present unamortized debt issuance costs associated with line of credit arrangements as an asset. These pronouncements are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The Company will not early adopt this new guidance and it will not have a material impact on the Company’s financial statements. In January 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-01, Income Statement – Extraordinary and Unusual Items. ASU 2015-01 simplifies income statement classification by removing the concept of extraordinary items from U.S. GAAP. Under the existing guidance, an entity is required to separately disclose extraordinary items, net of tax, in the income statement after income from continuing operations if an event or transaction is of unusual nature and occurs infrequently. This separate, net-of-tax presentation (and corresponding earnings per share impact) will no longer be allowed. The existing requirement to separately present items that are of unusual nature or occur infrequently on a pre-tax basis within income from continuing operations has been retained. The new guidance also requires similar separate presentation of items that are both unusual and infrequent. The guidance, effective for the Company on January 1, 2016, with earlier application permitted as of the beginning of the fiscal year of adoption, is not expected to have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued a new standard – ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern - that will explicitly require management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. According to the new standard, substantial doubt about an entity’s ability to continue as a going concern exists if it is probable that the entity will be unable to meet its obligations as they become due within one year after the date the entity’s financial statements are issued. In order to determine the specific disclosures, if any, that would be required, management will need to assess if substantial doubt exists, and, if so, whether its plans will alleviate such substantial doubt. The new standard requires assessment each annual and interim period and will be effective for the Company on December 31, 2016 with earlier application permitted. The Company does not believe this guidance will have any impact on its consolidated financial statements. In May 2014, the FASB issued a new standard related to revenue recognition, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new standard will replace most of the existing revenue recognition standards in GAAP. In July 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. In August 2015, the FASB issued ASU 2015-14, wherein it was approved to defer the effective date of revenue standard ASU 2014-09 by one year for all entities and permits early adoption on a limited basis. The new standard can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application. The Company is assessing the potential impact of the new standard on financial reporting and has not yet selected a transition method. In April 2014, the FASB issued amended guidance on the use and presentation of discontinued operations in an entity's consolidated financial statements. The new guidance restricts the presentation of discontinued operations to business circumstances when the disposal of business operations represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The guidance became effective on January 1, 2015. Adoption is on a prospective basis. The Company adopted the new guidance as of December 31, 2014. |
WEIGHTED AVERAGE COMMON SHARES (Tables) |
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WEIGHTED AVERAGE COMMON SHARES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average number of common shares used to compute basic and diluted income per share | The weighted average number of common shares used to compute basic and diluted income per share for the years ended December 31, 2015, 2014 and 2013, respectively were as follows:
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DISCONTINUED OPERATIONS (Tables) |
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Seventeen Campuses [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Results of operations at campuses | The results of operations at these 17 campuses for the three year periods ended December 31, 2015 were as follows (in thousands):
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Results of operations at campuses | The results of operations at these five training sites for the two year periods ended December 31, 2014 were as follows (in thousands):
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Results of operations at campuses | The results of operations at these five campuses for the year ended December 31, 2013 were as follows (in thousands):
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GOODWILL AND OTHER INTANGIBLES (Tables) |
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GOODWILL AND OTHER INTANGIBLES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in carrying amount of goodwill | Changes in the carrying amount of goodwill during the years ended December 31, 2015 and 2014 are as follows:
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Summary of finite-lived and indefinite-lived intangible assets | Intangible assets, which are included in other assets in the accompanying consolidated balance sheets, consisted of the following:
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Summary of estimated future amortization expense | The following table summarizes the estimated future amortization expense:
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PROPERTY, EQUIPMENT AND FACILITIES (Tables) |
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PROPERTY, EQUIPMENT AND FACILITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, equipment and facilities | Property, equipment and facilities consist of the following:
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Schedule of assets and liabilities held for sale | The assets and liabilities held for sale consist of the following:
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ACCRUED EXPENSES (Tables) |
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Accrued expenses | Accrued expenses consist of the following:
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LONG-TERM DEBT AND LEASE OBLIGATIONS (Tables) |
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Long-term debt and lease obligations | Long-term debt and lease obligations consist of the following:
(a) On July 31, 2015, the Company entered into a credit agreement with three lenders, Alostar Bank of Commerce (“Alostar”), HPF Holdco, LLC and Rushing Creek 4, LLC, led by HPF Service, LLC, as administrative agent and collateral agent (the “Agent”), for an aggregate principal amount of $45 million (the “Term Loan”). The July 31, 2015 credit agreement, along with subsequent amendments to the Credit Agreement dated December 31, 2015 and February 29, 2016, are collectively referred to as the “Credit Agreement.” As of December 31, 2015 and prior to the effectiveness of a second amendment to the Credit Agreement on February 29, 2016 (the “Second Amendment”), the Term Loan consisted of a $30 million term loan (the “Term Loan A”) from HPF Holdco, LLC, Rushing Creek 4, LLC and Tiger Capital Group, LLC, secured by a first priority lien in favor of the Agent on substantially all of the real and personal property owned by the Company, and a $15 million term loan (the “Term Loan B”) from Alostar secured by a $15.3 million cash collateral account. Pursuant to the Second Amendment, the Company received an additional $5 million term loan from Alostar with which the Company repaid $5 million of the principal amount of the Term Loan A. Accordingly, upon the effectiveness of the Second Amendment, the aggregate term loans outstanding under the Credit Agreement remains at approximately $45 million, consisting of an approximate $25 million Term Loan A and a $20 million Term Loan B. In addition, pursuant to the Second Amendment, the amount of cash collateral securing the Term Loan B was increased to $20.3 million. At the Company’s request, a percentage of the cash collateral may be released to the Company at the Agent’s sole discretion and with the consent of Alostar upon the satisfaction of certain criteria as outlined in the Credit Agreement. The Term Loan, which matures on July 31, 2019, replaces a previously existing $20 million revolving credit facility with Bank of America, N.A. and other lenders, which was due to expire on April 5, 2016. The previously existing revolving credit facility was terminated concurrently with the effective date of the Credit Agreement on July 31, 2015 (the “Closing Date”). A portion of the proceeds of the Term Loan were used by the Company to (i) repay approximately $6.3 million in outstanding principal, accrued interest and fees due under the previously existing revolving credit facility, (ii) fund the $20.3 million cash collateral account securing the portion of the Term Loan provided by Alostar, (iii) fund approximately $7.4 million in a cash collateral account securing the letters of credit issued under the previously existing revolving credit facility that remain outstanding after the termination of that facility and (iv) pay transaction expenses in connection with the Term Loan and the termination of the previously existing revolving credit facility. The remaining proceeds of the Term Loan of approximately $13.3 million may be used by the Company to finance capital expenditures and for general corporate purposes consistent with the terms of the Credit Agreement. Interest will accrue on the Term Loan at a per annum rate equal to the greater of (i) 11% or (ii) 90-day LIBOR plus 9% determined monthly by the Agent and will be payable monthly in arrears. The principal balance of the Term Loan will be repaid in equal monthly installments, commencing on August 1, 2017, determined as the quotient of (i) 10% of the outstanding principal balance of the Term Loan as of July 2, 2017 divided by (ii) 12. A final installment of principal and all accrued and unpaid interest will be due on the maturity date of the Term Loan. The Term Loan may be prepaid in whole or in part at any time, subject to the payment of a prepayment premium equal to (i) 5% of the principal amount prepaid at any time up to but not including the second anniversary of the Closing Date and (ii) 3% of the principal amount prepaid at any time commencing on the second anniversary of the Closing Date up to but not including the third anniversary of the Closing Date. In the event of any sale or other disposition of a school or real property by the Company permitted under the Term Loan, the net proceeds of such sale or disposition must be used to prepay the Loan in an amount determined pursuant to the Credit Agreement, subject to the applicable prepayment premium; provided, however, that no prepayment premium will be due with respect to up to $15 million of aggregate repayments of the Term Loan made during the first year that the Term Loan is outstanding. A portion of the net cash proceeds of any disposition of a school in an amount determined pursuant to the terms of the Term Loan, must be deposited and held as cash collateral in a deposit account controlled by the Agent until the conditions for release set forth in the Term Loan are satisfied. In connection with the assets which are currently classified as held for sale and are expected to be sold within one year, the Company is required to classify $10.0 million as short term debt due to the Term Loan prepayment minimum required with respect to any such disposition. The Term Loan contains customary representations, warranties and covenants such as minimum financial responsibility composite score, cohort default rate, and other financial covenants, including minimum liquidity, maximum capital expenditures, maximum 90/10 ratio and minimum EBITDA (as defined in the Term Loan), as well as affirmative and negative covenants and events of default customary for facilities of this type. The Company was in compliance with all covenants as of December 31, 2015. Subsequent to the fiscal year end, pursuant to the Second Amendment, the financial covenants were adjusted and, at the Company’s election, will be adjusted for fiscal year 2017 and for each subsequent fiscal year until the maturity of the Term Loan at either the levels applicable to fiscal year 2016 (and each fiscal quarter thereof) contained in the Credit Agreement as of the Closing Date or the levels applicable to fiscal year 2016 (and each fiscal quarter thereof) contained in the Second Amendment. In the event that the Company elects to re-set the financial covenants at the 2016 covenant levels contained in the Second Amendment, the Company will be required to prepay on or before January 15, 2017, without prepayment penalty, amounts outstanding under the Term Loan up to $4 million. The Credit Agreement contains events of default, the occurrence and continuation of which provide the Company’s lenders with the right to exercise remedies against the Company and the collateral securing the Term Loan, including the Company’s cash. These events of default include, among other things, the Company’s failure to pay any amounts due under the Term Loan, a breach of covenants under the Credit Agreement, the Company’s insolvency and the insolvency of its subsidiaries, the occurrence of a material adverse effect, the occurrence of any default under certain other indebtedness, and a final judgment against the Company in an amount greater than $1,000,000. Also, in connection with the Term Loan, the Company paid to the Agent a commitment fee of $1.0 million on the Closing Date and is required to pay to the Agent other customary fees for facilities of this type. Total fees for the Term Loan were $2.8 million during fiscal year 2015, which are included in deferred finance charges on the consolidated balance sheet. Subsequent to the fiscal year end, in connection with the effectiveness of the Second Amendment, the Company paid to the Agent a loan modification fee of $.5 million. For the year ended December 31, 2015, $0.4 million of the Term Loan was repaid in connection with the Company’s sale of real property located in Springdale, Ohio. The Company had $44.7 million outstanding under the Term Loan as of December 31, 2015. The Company had $30.0 million outstanding under its previously existing revolving credit facility as of December 31, 2014, which was repaid on January 3, 2015. The interest rate on this borrowing was 7.25%. (b) The Company completed a sale and a leaseback of several facilities on December 28, 2001. The Company retained a continuing involvement in the lease and as a result it is prohibited from utilizing sale-leaseback accounting. Accordingly, the Company has treated this transaction as a finance lease. Annual rent payments under this obligation for each of the three years in the period ended December 31, 2015 were $1.6 million, respectively. These payments have been reflected in the accompanying consolidated statements of operations as interest expense for all periods presented since the effective interest rate on the obligation is greater than the scheduled payments. The lease expiration date is December 31, 2016. Beginning in January 2016 the lease was amended to cure issues related to continuing involvement and achieved sales treatment. In 2016, the lease will be converted to an operating lease and rent payments will be included in educational, services and facilities expense in the consolidate statement of operations. In addition, the finance obligation, net of land and buildings, will be amortized straight-line through December 31, 2016. (c) In 2009, the Company assumed real estate capital leases in Fern Park, Florida and Hartford, Connecticut. These leases bear interest at 8%. |
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Scheduled maturities of long-term debt and lease obligation | Scheduled maturities of long-term debt and lease obligations at December 31, 2015 are as follows:
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STOCKHOLDERS' EQUITY (Tables) |
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STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of transactions pertaining to restricted stock | The following is a summary of transactions pertaining to restricted stock:
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Summary of transactions pertaining to option plans | The following is a summary of transactions pertaining to the option plans:
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Summary of options outstanding | The following table presents a summary of options outstanding at December 31, 2015:
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PENSION PLAN (Tables) |
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PENSION PLAN [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of plan's funded status | The following table sets forth the plan's funded status and amounts recognized in the consolidated financial statements:
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Amounts recognized in consolidated balance sheets | Amounts recognized in the consolidated balance sheets consist of:
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Amounts recognized in accumulated other comprehensive loss | Amounts recognized in accumulated other comprehensive loss consist of:
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Components of net periodic cost for plan | The following table provides the components of net periodic cost for the plan:
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Plan assets using fair value hierarchy | The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
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Fair value of total plan assets by major asset category | Fair value of total plan assets by major asset category as of December 31:
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Expected benefit payments for plan | Information about the expected benefit payments for the plan is as follows:
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Benefit Obligations [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average assumptions used | Weighted-average assumptions used to determine benefit obligations as of December 31:
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Periodic Pension Cost [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average assumptions used | Weighted-average assumptions used to determine net periodic pension cost for years ended December 31:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of provision for income taxes from continuing operations | Components of the provision for income taxes from continuing operations were as follows:
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Components of deferred tax assets | The components of the deferred tax assets are as follows:
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Difference between actual tax provision and tax provision that would result from use of Federal statutory rate | The difference between the actual tax provision and the tax provision that would result from the use of the Federal statutory rate is as follows:
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Activity related to uncertain tax positions | The following table summarizes the activity related to the Company’s uncertain tax positions:
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FAIR VALUE (Tables) |
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FAIR VALUE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value, by balance sheet grouping | The carrying amount and estimated fair value of the Company’s financial instrument assets and liabilities, which are not measured at fair value on the Consolidated Balance Sheets, are listed in the table below:
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SEGMENT REPORTING (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary financial information by reporting segment | Summary financial information by reporting segment is as follows:
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease commitments | The Company leases office premises, educational facilities and various equipment for varying periods through the year 2032 at basic annual rentals (excluding taxes, insurance, and other expenses under certain leases) as follows:
|
UNAUDITED QUARTERLY FINANCIAL INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED QUARTERLY FINANCIAL INFORMATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly financial information | Quarterly financial information for 2015 and 2014 is as follows:
|
PROPERTY, EQUIPMENT AND FACILITIES (Details) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Nov. 03, 2015
School
|
Sep. 30, 2015
Campus
|
Dec. 31, 2015
USD ($)
School
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
Sep. 30, 2014
USD ($)
|
Jun. 30, 2013
USD ($)
|
|
Property, equipment and facilities net [Abstract] | |||||||
Property, equipment and facilities, Gross | $ 188,545 | $ 206,650 | |||||
Less accumulated depreciation and amortization | (122,037) | (136,910) | |||||
Property, equipment and facilities, Net | 66,508 | 69,740 | |||||
Depreciation and amortization expense | $ 11,900 | 15,300 | $ 16,600 | ||||
Number of schools | School | 31 | ||||||
Long Lived Assets Held-for-sale [Line Items] | |||||||
Inventories | $ 845 | 411 | |||||
Accounts receivable, less allowance of $3,923 and $1,545 at December 31, 2015 and 2014, respectively | 5,323 | 1,527 | |||||
Prepaid expense and other current assets | 868 | 0 | |||||
Noncurrent receivables, less allowance of $228 and $95 at December 31, 2015 and 2014, respectively | 1,669 | 671 | |||||
Property, equipment and facilities - at cost, net of accumuluated depreciation and amortization of $36,038 and $17,843 at December 31, 2015and 2014, respectively | 27,250 | 50,252 | |||||
Goodwill | 8,759 | 1,304 | $ 38,800 | $ 3,100 | |||
Other assets, net | 1,197 | 0 | |||||
Unearned tuition | (10,242) | (2,536) | |||||
Accrued expenses | (1,720) | (699) | |||||
Accrued rent | (2,274) | 0 | |||||
Assets held for sale, net | 31,675 | 50,930 | |||||
Number of campuses held for sale | Campus | 2 | ||||||
Long lived assets held for sale, other information [Abstract] | |||||||
Accounts receivable, allowance | 3,923 | 1,545 | |||||
Noncurrent receivables, allowance | 228 | 95 | |||||
Property, equipment and facilities - accumulated depreciation and amortization | 36,038 | 17,843 | |||||
Healthcare and Other Professions Business Segment [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Number of schools approved to divest | School | 17 | ||||||
Number of schools | School | 18 | ||||||
Land [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Property, equipment and facilities, Gross | 10,054 | 5,338 | |||||
Buildings and Improvements [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Property, equipment and facilities, Gross | 112,270 | 128,973 | |||||
Capital leased assets, gross | 3,000 | 26,800 | |||||
Capital leased assets, accumulated depreciation | 1,400 | 10,600 | |||||
Capitalized interest cost | 600 | 600 | |||||
Accumulated depreciation on capitalized interest cost | $ 600 | 500 | |||||
Buildings and Improvements [Member] | Minimum [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Useful life | 1 year | ||||||
Buildings and Improvements [Member] | Maximum [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Useful life | 25 years | ||||||
Equipment, Furniture and Fixtures [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Property, equipment and facilities, Gross | $ 65,445 | 71,005 | |||||
Capital leased assets, gross | 100 | 400 | |||||
Capital leased assets, accumulated depreciation | $ 100 | 400 | |||||
Equipment, Furniture and Fixtures [Member] | Minimum [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Useful life | 1 year | ||||||
Equipment, Furniture and Fixtures [Member] | Maximum [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Useful life | 7 years | ||||||
Vehicles [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Useful life | 3 years | ||||||
Property, equipment and facilities, Gross | $ 617 | 1,300 | |||||
Construction in Progress [Member] | |||||||
Property, equipment and facilities net [Abstract] | |||||||
Property, equipment and facilities, Gross | $ 159 | $ 34 |
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
ACCRUED EXPENSES [Abstract] | ||
Accrued compensation and benefits | $ 6,526 | $ 5,787 |
Accrued rent and real estate taxes | 1,928 | 3,251 |
Other accrued expenses | 3,703 | 4,827 |
Accrued expenses | $ 12,157 | $ 13,865 |
LONG-TERM DEBT AND LEASE OBLIGATIONS (Details) |
12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 29, 2016
USD ($)
|
Feb. 12, 2016
USD ($)
|
Dec. 03, 2015
USD ($)
|
Jul. 31, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
Lender
|
Dec. 31, 2014
USD ($)
|
||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Long term debt and capital lease obligations | $ 58,224,000 | $ 65,181,000 | |||||||||||
Less current maturities | (10,114,000) | (30,471,000) | |||||||||||
Long-term debt and lease obligations | $ 48,110,000 | 34,710,000 | |||||||||||
Interest rate of debt instrument | 11.00% | ||||||||||||
Percentage of outstanding principal balance of loan | 10.00% | ||||||||||||
Percentage of principal amount prepaid but not including in the second anniversary | 5.00% | ||||||||||||
Percentage of principal amount prepaid but not including in the third anniversary | 3.00% | ||||||||||||
Sale and a leaseback of several facilities, Date | December 28, 2001 | ||||||||||||
Rent expense under finance lease | $ 1,600,000 | ||||||||||||
Lease expiration date | Dec. 31, 2016 | ||||||||||||
Scheduled maturities of long-term debt and lease obligations [Abstract] | |||||||||||||
2016 | $ 10,151,000 | ||||||||||||
2017 | 1,566,000 | ||||||||||||
2018 | 3,596,000 | ||||||||||||
2019 | 29,858,000 | ||||||||||||
2020 | 157,000 | ||||||||||||
Thereafter | 3,224,000 | ||||||||||||
Long term debt and capital lease obligations | 48,552,000 | ||||||||||||
Hartford [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Lease termination fee | $ 5,000,000 | ||||||||||||
Fern Park [Member] | |||||||||||||
Scheduled maturities of long-term debt and lease obligations [Abstract] | |||||||||||||
2016 | 100,000 | ||||||||||||
2017 | 100,000 | ||||||||||||
2018 | 100,000 | ||||||||||||
2019 | 100,000 | ||||||||||||
2020 | 100,000 | ||||||||||||
Thereafter | 3,400,000 | ||||||||||||
Long term debt and capital lease obligations | $ 3,900,000 | ||||||||||||
90-day LIBOR [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Debt instrument, basis spread on variable rate | 9.00% | ||||||||||||
Subsequent Event [Member] | Fern Park [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Lease termination fee | $ 2,800,000 | ||||||||||||
Credit Agreement [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Long-term line of credit | [1] | $ 0 | $ 30,000,000 | ||||||||||
Number of lenders | Lender | 3 | ||||||||||||
Interest rate of credit facility | 7.25% | ||||||||||||
Revolving Credit Facility [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Expiration date of credit facility | Apr. 05, 2016 | ||||||||||||
Repayment of outstanding principal, accrued interest and fees | $ 6,300,000 | ||||||||||||
Proceeds for remaining loan amount | 13,300,000 | ||||||||||||
Revolving Credit Facility [Member] | Bank of America and Other Lenders [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Long-term line of credit | 20,000,000 | ||||||||||||
Letter of Credit [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Cash collateral amount | 7,400,000 | ||||||||||||
Term Loan Agreement [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Long-term line of credit | [1] | $ 44,653,000 | $ 0 | ||||||||||
Outstanding term loan | 45,000,000 | ||||||||||||
Expiration date of credit facility | Jul. 31, 2019 | ||||||||||||
Short-term debt | $ 10,000,000 | ||||||||||||
Aggregate repayments of the Loan | 400,000 | ||||||||||||
Term loan maximum amount required for repayment | $ 4,000,000 | ||||||||||||
Judgment amount to cause breach of covenant | 1,000,000 | ||||||||||||
Commitment fee | 1,000,000 | ||||||||||||
Amount of fees for term loan | 2,800,000 | ||||||||||||
Term Loan Agreement [Member] | Subsequent Event [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Outstanding term loan | 45,000,000 | ||||||||||||
Amount of fees for term loan | 500,000 | ||||||||||||
Term Loan A [Member] | HPF Holdco, LLC, Rushing Creek 4, LLC and Tiger Capital Group, LLC [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Outstanding term loan | 30,000,000 | ||||||||||||
Term Loan A [Member] | Alostar Bank of Commerce [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Term loan principal repayment | 5,000,000 | ||||||||||||
Term Loan A [Member] | Subsequent Event [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Outstanding term loan | 25,000,000 | ||||||||||||
Term Loan B [Member] | Alostar Bank of Commerce [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Outstanding term loan | 15,000,000 | ||||||||||||
Cash collateral amount | 15,300,000 | ||||||||||||
Outstanding term loan additional amount | $ 5,000,000 | ||||||||||||
Term Loan B [Member] | Subsequent Event [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Outstanding term loan | 20,000,000 | ||||||||||||
Cash collateral amount | $ 20,300,000 | ||||||||||||
Maximum [Member] | Term Loan Agreement [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Aggregate repayments of the Loan | 15,000,000 | ||||||||||||
Finance Obligation [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Capital lease and finance obligation | [2] | 9,672,000 | 9,672,000 | ||||||||||
Capital Lease-Property (with a rate of 8.0%) [Member] | |||||||||||||
Long term debt and lease obligations [Abstract] | |||||||||||||
Capital lease and finance obligation | [3] | $ 3,899,000 | $ 25,509,000 | ||||||||||
Interest rate of debt instrument | 8.00% | ||||||||||||
|
STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015
USD ($)
Plan
$ / shares
shares
|
Dec. 31, 2014
USD ($)
$ / shares
shares
|
Dec. 31, 2013
USD ($)
$ / shares
shares
|
Dec. 31, 2012
USD ($)
$ / shares
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of stock incentive plans | Plan | 2 | |||
Vesting period of performance-based shares | 3 years | 3 years | 4 years | |
Specified operating income margin period | 1 year | 1 year | 1 year | |
Shares [Abstract] | ||||
Outstanding, beginning balance (in shares) | shares | 424,167 | 547,125 | 655,875 | |
Canceled (in shares) | shares | (178,000) | (122,958) | (108,750) | |
Outstanding, ending balance (in shares) | shares | 246,167 | 424,167 | 547,125 | 655,875 |
Vested or expected to vest (in shares) | shares | 246,167 | |||
Exercisable, ending balance (in shares) | shares | 246,167 | |||
Weighted Average Exercise Price Per Share [Abstract] | ||||
Outstanding, beginning balance (in dollars per share) | $ 13.65 | $ 14.73 | $ 14.72 | |
Cancelled (in dollars per share) | 15.20 | 18.49 | 14.64 | |
Outstanding, ending balance (in dollars per share) | 12.52 | $ 13.65 | $ 14.73 | $ 14.72 |
Vested or expected to vest (in dollars per share) | 12.52 | |||
Exercisable, ending balance (in dollars per share) | $ 12.52 | |||
Weighted Average Remaining Contractual Term [Abstract] | ||||
Outstanding, balance | 3 years 11 months 23 days | 4 years 2 months 5 days | 4 years 6 months 22 days | 4 years 10 months 20 days |
Vested or expected to vest | 3 years 11 months 23 days | |||
Exercisable, ending balance | 3 years 11 months 23 days | |||
Aggregate Intrinsic Value [Abstract] | ||||
Outstanding, beginning balance | $ | $ 0 | $ 0 | $ 0 | |
Cancelled | $ | 0 | 0 | ||
Outstanding, ending balance | $ | 0 | $ 0 | $ 0 | $ 0 |
Vested or expected to vest | $ | 0 | |||
Exercisable, ending balance | $ | $ 0 | |||
Stock Options Outstanding [Abstract] | ||||
Shares (in shares) | shares | 246,167 | |||
Contractual Weighted Average Life | 3 years 11 months 23 days | |||
Weighted Average Price (in dollars per share) | $ 12.52 | |||
Stock Options Exercisable [Abstract] | ||||
Shares (in shares) | shares | 246,167 | |||
Weighted Exercise Price (in dollars per share) | $ 12.52 | |||
Restricted Stock [Member] | ||||
Shares [Abstract] | ||||
Nonvested restricted stock outstanding, beginning balance (in shares) | shares | 925,819 | 1,247,946 | ||
Granted (in shares) | shares | 234,651 | 337,100 | ||
Cancelled (in shares) | shares | (354,462) | (178,792) | ||
Vested (in shares) | shares | (355,514) | (480,435) | ||
Nonvested restricted stock outstanding, ending balance (in shares) | shares | 450,494 | 925,819 | 1,247,946 | |
Weighted Average Grant Date Fair Value [Abstract] | ||||
Nonvested restricted stock outstanding, beginning balance (in dollars per share) | $ 5.04 | $ 6.77 | ||
Granted (in dollars per share) | 2.28 | 3.50 | ||
Cancelled (in dollars per share) | 4.97 | 6.47 | ||
Vested (in dollars per share) | 5.00 | 5.36 | ||
Nonvested restricted stock outstanding, ending balance (in dollars per share) | $ 3.69 | $ 5.04 | $ 6.77 | |
Recognized restricted stock expense | $ | $ 1,100 | $ 2,500 | $ 2,900 | |
Unrecognized restricted stock expense | $ | $ 1,300 | $ 4,200 | ||
Weighted average period | 1 year 2 months 12 days | |||
Aggregate Intrinsic Value [Abstract] | ||||
Weighted average period of unrecognized pre-tax compensation | 1 year 2 months 12 days | |||
Stock Options [Member] | ||||
Weighted Average Grant Date Fair Value [Abstract] | ||||
Weighted average period | 2 months 12 days | |||
Stock Options [Abstract] | ||||
Weighted average fair values of options granted (in dollars per share) | $ 2.52 | |||
Aggregate Intrinsic Value [Abstract] | ||||
Unrecognized pre-tax compensation expense | $ | $ 0 | |||
Weighted average period of unrecognized pre-tax compensation | 2 months 12 days | |||
LTIP [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Net share settlement for restricted stock (in shares) | shares | 85,740 | 144,983 | 140,475 | |
Net share settlement for stock options (in shares) | shares | 85,740 | 144,983 | 140,475 | |
Decrease in equity due to payment of tax for employee | $ | $ 200 | $ 400 | $ 800 | |
LTIP [Member] | Restricted Stock [Member] | ||||
Weighted Average Grant Date Fair Value [Abstract] | ||||
Outstanding restricted shares, intrinsic value | $ | $ 900 | |||
$ 4.00-$13.99 [Member] | ||||
Range of Exercise Prices [Abstract] | ||||
Range of Exercise Prices, Minimum (in dollars per share) | $ 4.00 | |||
Range of Exercise Prices, Maximum (in dollars per share) | $ 13.99 | |||
Stock Options Outstanding [Abstract] | ||||
Shares (in shares) | shares | 172,667 | |||
Contractual Weighted Average Life | 4 years 2 months 26 days | |||
Weighted Average Price (in dollars per share) | $ 9.57 | |||
Stock Options Exercisable [Abstract] | ||||
Shares (in shares) | shares | 172,667 | |||
Weighted Exercise Price (in dollars per share) | $ 9.57 | |||
$ 14.00-$19.99 [Member] | ||||
Range of Exercise Prices [Abstract] | ||||
Range of Exercise Prices, Minimum (in dollars per share) | 14.00 | |||
Range of Exercise Prices, Maximum (in dollars per share) | $ 19.99 | |||
Stock Options Outstanding [Abstract] | ||||
Shares (in shares) | shares | 42,500 | |||
Contractual Weighted Average Life | 2 years 5 months 23 days | |||
Weighted Average Price (in dollars per share) | $ 18.61 | |||
Stock Options Exercisable [Abstract] | ||||
Shares (in shares) | shares | 42,500 | |||
Weighted Exercise Price (in dollars per share) | $ 18.61 | |||
$ 20.00-$25.00 [Member] | ||||
Range of Exercise Prices [Abstract] | ||||
Range of Exercise Prices, Minimum (in dollars per share) | 20.00 | |||
Range of Exercise Prices, Maximum (in dollars per share) | $ 25.00 | |||
Stock Options Outstanding [Abstract] | ||||
Shares (in shares) | shares | 31,000 | |||
Contractual Weighted Average Life | 4 years 7 months 6 days | |||
Weighted Average Price (in dollars per share) | $ 20.62 | |||
Stock Options Exercisable [Abstract] | ||||
Shares (in shares) | shares | 31,000 | |||
Weighted Exercise Price (in dollars per share) | $ 20.62 |
PENSION PLAN, Plan's funded status (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
CHANGES IN BENEFIT OBLIGATIONS [Roll Forward] | |||
Benefit obligation-beginning of year | $ 24,299 | $ 20,314 | $ 23,169 |
Service cost | 28 | 23 | 37 |
Interest cost | 884 | 892 | 790 |
Actuarial (gain) loss | (782) | 4,149 | (2,614) |
Benefits paid | (1,088) | (1,079) | (1,068) |
Benefit obligation at end of year | 23,341 | 24,299 | 20,314 |
CHANGE IN PLAN ASSETS [Roll Forward] | |||
Fair value of plan assets-beginning of year | 19,000 | 18,792 | 16,268 |
Actual return on plan assets | (120) | 1,017 | 2,919 |
Employer contributions | 0 | 270 | 673 |
Benefits paid | (1,088) | (1,079) | (1,068) |
Fair value of plan assets-end of year | 17,792 | 19,000 | 18,792 |
BENEFIT OBLIGATION IN EXCESS OF FAIR VALUE FUNDED STATUS: | $ (5,549) | $ (5,299) | $ (1,522) |
PENSION PLAN (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
|
Amounts recognized in the consolidated balance sheets [Abstract] | |||||
Noncurrent liabilities | $ (5,549) | $ (5,299) | $ (1,522) | ||
Amounts recognized in accumulated other comprehensive loss [Abstract] | |||||
Accumulated loss | (9,438) | (9,833) | (5,928) | ||
Deferred income taxes | 2,366 | 2,366 | 2,366 | ||
Accumulated other comprehensive loss | (7,072) | (7,467) | (3,562) | ||
Accumulated benefit obligation | 23,300 | 24,300 | |||
Components of net periodic benefit cost [Abstract] | |||||
Service cost | 28 | 23 | 37 | ||
Interest cost | 884 | 892 | 790 | ||
Expected return on plan assets | (1,243) | (1,287) | (1,141) | ||
Recognized net actuarial loss | 976 | 513 | 955 | ||
Net periodic benefit cost | 645 | 141 | 641 | ||
Amortization of estimated net loss, transition obligation and prior service cost from accumulated other comprehensive income into net periodic benefit cost | 900 | ||||
Employee pension plan adjustments | 395 | (3,905) | 3,214 | ||
Actuarial loss | 1,000 | ||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 17,792 | $ 19,000 | $ 18,792 | $ 16,268 | |
Fair value of total plan assets by major asset category | 100.00% | 100.00% | 100.00% | ||
Weighted-average assumptions used to determine benefit obligations [Abstract] | |||||
Discount rate | 3.94% | 3.66% | 4.46% | ||
Rate of compensation increase | 2.50% | 1.13% | 2.00% | ||
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||||
Pension contributions | $ 0 | $ 300 | |||
Expected benefit payments for the plan [Abstract] | |||||
Maximum contribution by employee specified as percentage of compensation | 25.00% | ||||
Additional contribution by employer | 30.00% | ||||
Maximum percentage of compensation contributed by employer as matching contribution | 6.00% | ||||
Additional contribution suspended by employer | 30.00% | ||||
Compensation expense for the 401(k) plan | $ 700 | 1,600 | $ 1,900 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 17,792 | 19,000 | |||
Significant Other Observable Inputs (Level 2) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 0 | 0 | |||
Significant Unobservable Inputs (Level 3) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 0 | 0 | |||
Equity Securities [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 8,473 | $ 9,566 | |||
Fair value of total plan assets by major asset category | 48.00% | 50.00% | 51.00% | ||
Expected benefit payments for the plan [Abstract] | |||||
Target plan asset allocations, minimum | 30.00% | ||||
Target plan asset allocations, maximum | 70.00% | ||||
Equity Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 8,473 | $ 9,566 | |||
Equity Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 0 | 0 | |||
Equity Securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 0 | 0 | |||
Fixed Income [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 5,943 | $ 6,099 | |||
Fair value of total plan assets by major asset category | 33.00% | 32.00% | 31.00% | ||
Expected benefit payments for the plan [Abstract] | |||||
Target plan asset allocations, minimum | 20.00% | ||||
Target plan asset allocations, maximum | 60.00% | ||||
Fixed Income [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 5,943 | $ 6,099 | |||
Fixed Income [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 0 | 0 | |||
Fixed Income [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 0 | 0 | |||
International Equities [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 3,288 | $ 3,328 | |||
Fair value of total plan assets by major asset category | 19.00% | 18.00% | 18.00% | ||
International Equities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 3,288 | $ 3,328 | |||
International Equities [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 0 | 0 | |||
International Equities [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 0 | 0 | |||
Cash and Equivalents [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 88 | $ 7 | |||
Fair value of total plan assets by major asset category | 0.00% | 0.00% | 0.00% | ||
Expected benefit payments for the plan [Abstract] | |||||
Target plan asset allocations, minimum | 0.00% | ||||
Target plan asset allocations, maximum | 10.00% | ||||
Cash and Equivalents [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 88 | $ 7 | |||
Cash and Equivalents [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | 0 | 0 | |||
Cash and Equivalents [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||||
Plan assets using the fair value hierarchy [Abstract] | |||||
Fair value of plan assets | $ 0 | $ 0 | |||
Pension Plan [Member] | |||||
Weighted-average assumptions used to determine net periodic pension cost [Abstract] | |||||
Discount rate | 3.94% | 4.46% | 3.55% | ||
Rate of compensation increase | 2.50% | 1.13% | 2.00% | ||
Long-term rate of return | 6.50% | 7.00% | 7.00% | ||
Expected benefit payments for the plan [Abstract] | |||||
2016 | $ 1,225 | ||||
2017 | 1,303 | ||||
2018 | 1,373 | ||||
2019 | 1,408 | ||||
2020 | 1,416 | ||||
Years 2021-2025 | $ 7,232 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Current [Abstract] | |||
Federal | $ 0 | $ 0 | $ (7,369) |
State | 242 | 200 | 709 |
Total | 242 | 200 | (6,660) |
Deferred [Abstract] | |||
Federal | 0 | (1,420) | 21,103 |
State | 0 | (259) | 5,148 |
Total | 0 | (1,679) | 26,251 |
Total provision (benefit) | 242 | (1,479) | 19,591 |
Noncurrent deferred tax assets (liabilities) [Abstract] | |||
Allowance for bad debts | 5,617 | 5,926 | |
Accrued rent | 2,952 | 3,255 | |
Stock-based compensation | 498 | 907 | |
Depreciation | 14,941 | 15,754 | |
Goodwill | (380) | 1,002 | |
Other intangibles | 274 | 452 | |
Pension plan liabilities | 2,215 | 2,115 | |
Net operating loss carryforwards | 14,765 | 14,332 | |
Sale leaseback-deferred gain | 2,629 | 2,580 | |
AMT credit | 424 | 424 | |
Total noncurrent deferred tax assets | 43,935 | 46,747 | |
Less valuation allowance | (43,935) | (46,747) | |
Noncurrent deferred tax assets, net of valuation allowance | 0 | 0 | |
Difference between the actual tax provision and the tax provision that would result from the use of the Federal statutory rate [Abstract] | |||
Loss from continuing operations before taxes | (2,466) | (16,301) | (7,664) |
Expected tax benefit | (863) | (5,705) | (2,682) |
State tax benefit (net of federal) | 242 | (43) | (92) |
Permanent impairment | 0 | 0 | 0 |
Valuation allowance | 723 | 4,121 | 22,135 |
Other | 140 | 148 | 230 |
Total provision (benefit) | $ 242 | $ (1,479) | $ 19,591 |
Expected tax (benefit) expense | 35.00% | 35.00% | 35.00% |
State tax (benefit) expense (net of federal) | (9.80%) | 0.30% | 1.20% |
Permanent impairment | 0.00% | 0.00% | 0.00% |
Valuation allowance | (29.30%) | (25.30%) | (288.80%) |
Other | (5.70%) | (0.90%) | (3.00%) |
Total | (9.80%) | 9.10% | (255.60%) |
Net operating loss carryforwards | $ 32,600 | $ 32,300 | |
Net operating loss carryforwards, period of ownership change | 3 years | ||
Net operating loss carryforwards, minimum percentage of ownership change | 50.00% | ||
Activity related to uncertain tax positions [Roll Forward] | |||
Balance, beginning of period | $ 0 | 0 | $ 135 |
Decrease for tax positions of prior years | 0 | 0 | (135) |
Increase for tax positions of current year | 0 | 0 | 0 |
Balance, end of period | $ 0 | $ 0 | $ 0 |
FAIR VALUE (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Carrying Amount [Member] | ||
Financial Assets [Abstract] | ||
Cash and cash equivalents | $ 38,420 | $ 12,299 |
Restricted cash | 7,362 | 30,000 |
Prepaid expenses and other current assets | 2,566 | 3,937 |
Noncurrent restricted cash | 15,259 | |
Financial Liabilities [Abstract] | ||
Accrued expenses | 10,999 | 13,865 |
Other short-term liabilities | 686 | 780 |
Term loan | 44,653 | |
Credit agreement | 30,000 | |
Fair Value [Member] | ||
Financial Assets [Abstract] | ||
Cash and cash equivalents | 38,420 | 12,299 |
Restricted cash | 7,362 | 30,000 |
Prepaid expenses and other current assets | 2,566 | 3,937 |
Noncurrent restricted cash | 15,259 | |
Financial Liabilities [Abstract] | ||
Accrued expenses | 10,999 | 13,865 |
Other short-term liabilities | 686 | 780 |
Term loan | 36,795 | |
Credit agreement | 30,000 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value [Member] | ||
Financial Assets [Abstract] | ||
Cash and cash equivalents | 38,420 | 12,299 |
Restricted cash | 7,362 | 30,000 |
Prepaid expenses and other current assets | 0 | 0 |
Noncurrent restricted cash | 15,259 | |
Financial Liabilities [Abstract] | ||
Accrued expenses | 0 | 0 |
Other short-term liabilities | 0 | 0 |
Term loan | 0 | |
Credit agreement | 0 | |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value [Member] | ||
Financial Assets [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Prepaid expenses and other current assets | 2,566 | 3,937 |
Noncurrent restricted cash | 0 | |
Financial Liabilities [Abstract] | ||
Accrued expenses | 10,999 | 13,865 |
Other short-term liabilities | 686 | 780 |
Term loan | 36,795 | |
Credit agreement | 30,000 | |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value [Member] | ||
Financial Assets [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Prepaid expenses and other current assets | 0 | 0 |
Noncurrent restricted cash | 0 | |
Financial Liabilities [Abstract] | ||
Accrued expenses | 0 | 0 |
Other short-term liabilities | 0 | 0 |
Term loan | $ 0 | |
Credit agreement | $ 0 |
SEGMENT REPORTING (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Nov. 03, 2015
School
|
Dec. 31, 2015
USD ($)
School
Segment
Location
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
SEGMENT REPORTING [Abstract] | ||||
Number of locations closed | Location | 10 | |||
Number of remaining reportable segments | Segment | 2 | |||
Number of reportable segments | Segment | 3 | |||
Segment Reporting Information [Line Items] | ||||
Number of schools | School | 31 | |||
Summary financial information by reporting segment [Abstract] | ||||
Revenues | $ 193,220 | $ 202,889 | $ 215,596 | |
Percentage of Total Revenue | 100.00% | 100.00% | 100.00% | |
Operating (Loss) Income | $ 778 | $ (11,491) | $ (3,452) | |
Assets | 210,279 | 213,707 | ||
Healthcare and Other Professions Business Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Number of schools | School | 18 | |||
Number of schools approved to divest | School | 17 | |||
Reportable Segments [Member] | Transportation and Skilled Trades [Member] | ||||
Summary financial information by reporting segment [Abstract] | ||||
Revenues | $ 183,821 | $ 188,669 | $ 196,230 | |
Percentage of Total Revenue | 95.10% | 93.00% | 91.00% | |
Operating (Loss) Income | $ 26,778 | $ 19,519 | $ 27,917 | |
Assets | 90,045 | 97,650 | ||
Reportable Segments [Member] | Transitional [Member] | ||||
Summary financial information by reporting segment [Abstract] | ||||
Revenues | $ 9,399 | $ 14,220 | $ 19,366 | |
Percentage of Total Revenue | 4.90% | 7.00% | 9.00% | |
Operating (Loss) Income | $ (6,860) | $ (7,646) | $ (5,938) | |
Assets | 1,795 | 2,184 | ||
Corporate [Member] | ||||
Summary financial information by reporting segment [Abstract] | ||||
Revenues | $ 0 | $ 0 | $ 0 | |
Percentage of Total Revenue | 0.00% | 0.00% | 0.00% | |
Operating (Loss) Income | $ (19,140) | $ (23,364) | $ 25,431 | |
Assets | 72,528 | 51,473 | ||
Discontinued Operations [Member] | ||||
Summary financial information by reporting segment [Abstract] | ||||
Assets | $ 45,911 | $ 62,400 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jul. 13, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Credit Agreement [Abstract] | ||||
2016 | $ 15,026 | |||
2017 | 5,276 | |||
2018 | 6,984 | |||
2019 | 31,581 | |||
2020 | 0 | |||
Thereafter | 0 | |||
Credit agreement, Total | 58,867 | |||
Less amount representing interest | (14,214) | |||
Credit agreement net of interest | 44,653 | |||
Operating Leases [Abstract] | ||||
2016 | 19,013 | |||
2017 | 17,226 | |||
2018 | 15,898 | |||
2019 | 13,641 | |||
2020 | 10,002 | |||
Thereafter | 17,858 | |||
Operating Leases, Total | 93,638 | |||
Less amount representing interest | 0 | |||
Operating leases net of interest | 93,638 | |||
Capital Leases [Abstract] | ||||
2016 | 422 | |||
2017 | 422 | |||
2018 | 422 | |||
2019 | 422 | |||
2020 | 422 | |||
Thereafter | 4,998 | |||
Capital Leases, Total | 7,108 | |||
Less amount representing interest | (3,209) | |||
Capital leases net of interest | 3,899 | |||
Finance obligation excluded from scheduled maturities | 9,700 | |||
Termination fee | 2,800 | |||
Lease rent expense | 11,700 | $ 11,900 | $ 12,000 | |
Interest expense related to financing obligations | 1,600 | $ 1,600 | $ 1,500 | |
Settlement amount | $ 850,000 | |||
Debt forgiveness | $ 165,000 | |||
Outstanding net loan commitment | 24,800 | |||
Future employment contract commitments | 3,000 | |||
Surety bonds | $ 14,900 |
UNAUDITED QUARTERLY FINANCIAL INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
UNAUDITED QUARTERLY FINANCIAL INFORMATION [Abstract] | |||||||||||
Revenue | $ 48,856 | $ 51,951 | $ 44,739 | $ 47,674 | $ 53,146 | $ 54,892 | $ 46,673 | $ 48,177 | $ 193,220 | $ 202,889 | $ 215,596 |
(Loss) income from continuing operations | 5,394 | 3,633 | (5,595) | (6,142) | 4,113 | (263) | (8,868) | (9,804) | (2,708) | (14,822) | (27,255) |
(Loss) income from discontinued operations | 3,163 | (1,052) | (2,010) | (741) | 525 | (37,818) | (2,728) | (1,290) | (642) | (41,311) | (24,031) |
Net (loss) income | $ 8,557 | $ 2,581 | $ (7,605) | $ (6,883) | $ 4,638 | $ (38,081) | $ (11,596) | $ (11,094) | $ (3,350) | $ (56,133) | $ (51,286) |
Basic [Abstract] | |||||||||||
(Loss) earnings per share from continuing operations (in dollars per share) | $ 0.23 | $ 0.16 | $ (0.24) | $ (0.27) | $ 0.18 | $ (0.01) | $ (0.39) | $ (0.43) | $ (0.12) | $ (0.65) | $ (1.21) |
(Loss) earnings per share from discontinued operations (in dollars per share) | 0.14 | (0.05) | (0.09) | (0.03) | 0.02 | (1.66) | (0.13) | (0.06) | (0.02) | (1.81) | (1.07) |
Net loss per share (in dollars per share) | 0.37 | 0.11 | (0.33) | (0.30) | 0.20 | (1.67) | (0.52) | (0.49) | (0.14) | (2.46) | (2.28) |
Diluted [Abstract] | |||||||||||
(Loss) earnings per share from continuing operations (in dollars per share) | 0.23 | 0.16 | (0.24) | (0.27) | 0.18 | (0.01) | (0.39) | (0.43) | (0.12) | (0.65) | (1.21) |
(Loss) earnings per share from discontinued operations (in dollars per share) | 0.14 | (0.05) | (0.09) | (0.03) | 0.02 | (1.66) | (0.13) | (0.06) | (0.02) | (1.81) | (1.07) |
Net loss per share (in dollars per share) | $ 0.37 | $ 0.11 | $ (0.33) | $ (0.30) | $ 0.20 | $ (1.67) | $ (0.52) | $ (0.49) | $ (0.14) | $ (2.46) | $ (2.28) |
Weighted average number of common shares outstanding: | |||||||||||
Basic (in shares) | 23,247,000 | 23,230,000 | 23,132,000 | 23,056,000 | 22,888,000 | 22,843,000 | 22,800,000 | 22,723,000 | 23,166,977 | 22,814,105 | 22,513,391 |
Diluted (in shares) | 23,347,000 | 23,270,000 | 23,132,000 | 23,056,000 | 23,004,000 | 22,843,000 | 22,800,000 | 22,723,000 | 23,166,977 | 22,814,105 | 22,513,391 |
DIVIDENDS (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2014 |
Dec. 31, 2013 |
|
DIVIDENDS [Abstract] | ||
Cash dividend declared (in dollars per share) | $ 0.18 | $ 0.28 |
Schedule II-Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Movement in Valuation Allowances and Reserves [Abstract] | |||
Balance at Beginning of Period | $ 14,849 | $ 14,769 | $ 18,829 |
Charged to Expense | 13,583 | 15,500 | 15,532 |
Accounts Written-off | (14,358) | (15,420) | (19,592) |
Balance at End of Period | $ 14,074 | $ 14,849 | $ 14,769 |
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