New Jersey		57-1150621
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
200 Executive Drive, Suite 340		07052
West Orange, NJ		(Zip Code)
(Address of principal executive offices)

Large accelerated filer o		Accelerated filer  ý
Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets at September 30, 2013 (unaudited) and December 31, 2012	1
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2013 and 2012 (unaudited)	4
	Condensed Consolidated Statement of Changes in Stockholders’ Equity for the nine months ended September 30, 2013 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 (unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31
PART II.	OTHER INFORMATION	31
Item 1.	Legal Proceedings	31
Item 6.	Exhibits	31

		September 30, 2013				December 31, 2012
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	6,250			$	61,708
Accounts receivable, less allowance of $14,368 and $17,751 at September 30, 2013 and December 31, 2012, respectively			25,960				17,370
Inventories			2,380				2,677
Prepaid income taxes and income taxes receivable			18,497				7,085
Deferred income taxes, net			6,229				7,729
Prepaid expenses and other current assets			2,278				2,944
Total current assets			61,594				99,513
PROPERTY, EQUIPMENT AND FACILITIES - At cost, net of accumulated depreciation and amortization of $147,410 and $137,834 at September 30, 2013 and December 31, 2012, respectively			137,371				154,096
OTHER ASSETS:
Noncurrent receivables, less allowance of $835 and $1,078 at September 30, 2013 and December 31, 2012, respectively			5,496				6,109
Deferred finance charges			574				774
Deferred income taxes, net			18,409				17,065
Goodwill			62,465				65,527
Other assets, net			4,377				3,690
Total other assets			91,321				93,165
TOTAL		$	290,286			$	346,774

		September 30, 2013				December 31, 2012
		(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and lease obligations		$	426			$	412
Unearned tuition			35,792				34,648
Accounts payable			11,160				13,500
Accrued expenses			15,580				9,746
Other short-term liabilities			340				268
Total current liabilities			63,298				58,574
NONCURRENT LIABILITIES:
Long-term debt and lease obligations, net of current portion			35,293				73,115
Pension plan liabilities			5,960				6,901
Accrued rent			8,268				8,663
Other long-term liabilities			1,052				1,044
Total liabilities			113,871				148,297
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, no par value - 10,000,000 shares authorized, no shares issued and outstanding at September 30, 2013 and December 31, 2012			-				-
Common stock, no par value - authorized: 100,000,000 shares at September 30, 2013 and December 31, 2012; issued and outstanding: 29,999,684 shares at September 30, 2013 and 29,659,457 shares at December 31, 2012			141,377				141,377
Additional paid-in capital			24,334				22,677
Treasury stock at cost - 5,910,541 shares at September 30, 2013 and December 31, 2012			(82,860	)			(82,860	)
Retained earnings			99,890				124,059
Accumulated other comprehensive loss			(6,326	)			(6,776	)
Total stockholders' equity			176,415				198,477
TOTAL		$	290,286			$	346,774

		Three Months Ended September 30,								Nine Months Ended September 30,
		2013				2012				2013				2012
REVENUE		$	88,509			$	102,057			$	263,809			$	300,246
COSTS AND EXPENSES:
Educational services and facilities			46,830				49,426				137,810				145,594
Selling, general and administrative			44,482				50,807				147,252				157,921
(Gain) loss on sale of assets			(301	)			8				(508	)			(36	)
Impairment of goodwill and long-lived assets			-				-				6,194				14,244
School closing costs			195				-				1,214				-
Total costs & expenses			91,206				100,241				291,962				317,723
OPERATING (LOSS) INCOME			(2,697	)			1,816				(28,153	)			(17,477	)
OTHER:
Interest income			20				-				37				2
Interest expense			(1,088	)			(1,051	)			(3,382	)			(3,412	)
Other income			-				3				18				13
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES			(3,765	)			768				(31,480	)			(20,874	)
BENEFIT FOR INCOME TAXES			(1,489	)			(318	)			(12,339	)			(5,946	)
(LOSS) INCOME FROM CONTINUING OPERATIONS			(2,276	)			1,086				(19,141	)			(14,928	)
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES			-				(2,570	)			-				(10,319	)
NET LOSS		$	(2,276	)		$	(1,484	)		$	(19,141	)		$	(25,247	)
Basic
(Loss) income per share from continuing operations		$	(0.10	)		$	0.05			$	(0.85	)		$	(0.67	)
Loss per share from discontinued operations			-				(0.12	)			-				(0.47	)
Net loss per share		$	(0.10	)		$	(0.07	)		$	(0.85	)		$	(1.14	)
Diluted
(Loss) income per share from continuing operations		$	(0.10	)		$	0.05			$	(0.85	)		$	(0.67	)
Loss per share from discontinued operations			-				(0.12	)			-				(0.47	)
Net loss per share		$	(0.10	)		$	(0.07	)		$	(0.85	)		$	(1.14	)
Weighted average number of common shares outstanding:
Basic			22,528				22,195				22,480				22,172
Diluted			22,528				22,281				22,480				22,172

		Three Months Ended September 30,								Nine Months Ended September 30,
		2013				2012				2013				2012
Net loss		$	(2,276	)		$	(1,484	)		$	(19,141	)		$	(25,247	)
Other comprehensive income
Employee pension plan adjustments, net of taxes			150				-				450				-
Comprehensive loss		$	(2,126	)		$	(1,484	)		$	(18,691	)		$	(25,247	)

		Common Stock								Additional Paid-in				Treasury				Retained				Accumulated Other Comprehensive
		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			-				-				-				-				(19,141	)			-				(19,141	)
Employee pension plan adjustments, net of taxes			-				-				-				-				-				450				450
Stock-based compensation expense
Restricted stock			400,779				-				2,317				-				-				-				2,317
Stock options			-				-				138				-				-				-				138
Tax deficiency of stock-based awards and cancels			-				-				(409	)			-				-				-				(409	)
Net share settlement for equity-based compensation			(60,552	)			-				(389	)			-				-				-				(389	)
Cash dividend of $0.21 per common share			-				-				-				-				(5,028	)			-				(5,028	)
BALANCE - September 30, 2013			29,999,684			$	141,377			$	24,334			$	(82,860	)		$	99,890			$	(6,326	)		$	176,415

		Nine Months Ended September 30,
		2013				2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(19,141	)		$	(25,247	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization			17,570				20,449
Amortization of deferred finance charges			312				147
Deferred income taxes			(144	)			(4,672	)
Gain on disposition of assets			(508	)			(32	)
Impairment of goodwill and long-lived assets			6,194				23,683
Fixed asset donation			(37	)			-
Provision for doubtful accounts			11,539				16,091
Stock-based compensation expense			2,455				2,609
Deferred rent			(233	)			488
(Increase) decrease in assets, net of acquisition of business:
Accounts receivable			(19,516	)			(15,763	)
Inventories			297				(1	)
Prepaid income taxes and income taxes receivable			(11,821	)			(8,485	)
Prepaid expenses and current assets			650				775
Other assets			(864	)			(129	)
Increase (decrease) in liabilities, net of acquisition of business:
Accounts payable			(2,795	)			(1,842	)
Accrued expenses			5,672				3,293
Pension plan liabilities			(672	)			(544	)
Unearned tuition			1,144				(2,994	)
Other liabilities			561				275
Total adjustments			9,804				33,348
Net cash (used in) provided by operating activities			(9,337	)			8,101
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(3,531	)			(6,779	)
Proceeds from sale of property and equipment			747				82
Acquisition of business, net of cash acquired			-				(1,472	)
Net cash used in investing activities			(2,784	)			(8,169	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on borrowings			(42,500	)			-
Proceeds from borrowings			5,000				-
Net share settlement for equity-based compensation			(389	)			(212	)
Dividends paid			(5,028	)			(4,782	)
Payment of deferred finance fees			(112	)			(659	)
Principal payments under capital lease obligations			(308	)			(374	)
Net cash used in financing activities			(43,337	)			(6,027	)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(55,458	)			(6,095	)
CASH AND CASH EQUIVALENTS—Beginning of period			61,708				26,524
CASH AND CASH EQUIVALENTS—End of period		$	6,250			$	20,429

		Nine Months Ended September 30,
		2013				2012
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest		$	3,082			$	3,070
Income taxes		$	375			$	226
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Cash paid during the year for:
Fair value of assets acquired		$	-			$	2,876
Net cash paid for the acquisition			-				(1,472	)
Liabilities assumed		$	-			$	1,404
Liabilities accrued for or noncash purchases of fixed assets		$	895			$	599

		Three Months Ended September 30,								Nine Months Ended September 30,
		2013				2012				2013				2012
Basic shares outstanding			22,528,478				22,194,731				22,480,308				22,171,757
Dilutive effect of stock options			-				86,402				-				-
Diluted shares outstanding			22,528,478				22,281,133				22,480,308				22,171,757

		Three Months Ended September 30,				Nine Months Ended September 30,				Year Ended December 31,
		2013				2013				2012				2011				2010
Revenue		$	(18	)		$	7,261			$	19,924			$	35,099			$	61,028
Operating expenses			(3,898	)			(19,322	)			(33,564	)			(29,885	)			(31,947	)
Operating (loss) income		$	(3,916	)		$	(12,061	)		$	(13,640	)		$	5,214			$	29,081

		Three Months Ended September 30,				Nine Months Ended September 30,
		2012				2012
Revenue		$	2,087			$	9,134
Loss before income taxes			(4,277	)			(17,173	)
Income tax benefit			(1,707	)			(6,854	)
Net loss from discontinued operations		$	(2,570	)		$	(10,319	)

		Gross Goodwill Balance				Accumulated Impairment Losses				Net Goodwill Balance
Balance as of January 1, 2013		$	117,176			$	(51,649	)		$	65,527
Goodwill impairment			-				(3,062	)			(3,062	)
Balance as of September 30, 2013		$	117,176			$	(54,711	)		$	62,465

		Student Contracts				Indefinite Trade Name				Trade Name				Accreditation				Curriculum				Non-compete				Total
Gross carrying amount at December 31, 2012		$	25			$	180			$	366			$	1,268			$	1,124			$	200			$	3,163
Write-off (1)			(25	)			-				(31	)			-				-				-				(56	)
Gross carrying amount at September 30, 2013			-				180				335				1,268				1,124				200				3,107
Accumulated amortization at December 31, 2012			25				-				209				-				670				28				932
Write-off (1)			(25	)			-				(31	)			-				-				-				(56	)
Amortization			-				-				37				-				101				30				168
Accumulated amortization at September 30, 2013			-				-				215				-				771				58				1,044
Net carrying amount at September 30, 2013		$	-			$	180			$	120			$	1,268			$	353			$	142			$	2,063
Weighted average amortization period (years)						Indefinite					7			Indefinite					9				3

Year Ending December 31,
Remainder of 2013		$	56
2014			224
2015			156
2016			112
2017			46
Thereafter			21
		$	615

		September 30, 2013				December 31, 2012
Credit agreement (a)		$	-			$	37,500
Finance obligation (b)			9,672				9,672
Capital lease-property (rate of 8.0%) (c)			26,047				26,344
Capital leases-equipment (rates ranging from 5.0% to 8.5%)			-				11
			35,719				73,527
Less current maturities			(426	)			(412	)
		$	35,293			$	73,115

Year ending December 31,
2013		$	426
2014			462
2015			515
2016			10,405
2017			623
Thereafter			23,288
		$	35,719

		Shares				Weighted Average Grant Date Fair Value Per Share
Nonvested restricted stock outstanding at December 31, 2012			1,341,084			$	7.79
Granted			434,308				5.62
Canceled			(33,529	)			16.70
Vested			(271,396	)			8.52
Nonvested restricted stock outstanding at September 30, 2013			1,470,467				6.66

		Shares				Weighted Average Exercise Price Per Share			Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2012			655,875			$	14.72		4.89 years		$	-
Canceled			(21,000	)			17.31					-
Outstanding at September 30, 2013			634,875				14.63		4.16 years			-
Vested or expected to vest			615,277				14.85		4.03 years			-
Exercisable as of September 30, 2013			536,884				15.88		3.38 years			-

			At September 30, 2013
			Stock Options Outstanding												Stock Options Exercisable
Range of Exercise Prices			Shares				Contractual Weighted Average Life (years)				Weighted Average Price				Shares				Weighted Average Exercise Price
$4.00-$13.99				259,792				6.39			$	9.60				161,801			$	10.70
$14.00-$19.99				270,083				2.47				16.48				270,083				16.48
$20.00-$25.00				105,000				3.02				22.33				105,000				22.33
				634,875				4.16				14.63				536,884				15.88

		Three Months Ended September 30,				Nine Months Ended September 30,				Year Ended December 31,
		2013				2013				2012				2011				2010
Revenue		$	(18	)		$	7,261			$	19,924			$	35,099			$	61,028
Operating expenses			(3,898	)			(19,322	)			(33,564	)			(29,885	)			(31,947	)
Operating (loss) income		$	(3,916	)		$	(12,061	)		$	(13,640	)		$	5,214			$	29,081

		Three Months Ended September 30,				Nine Months Ended September 30,
		2012				2012
Revenue		$	2,087			$	9,134
Loss before income taxes			(4,277	)			(17,173	)
Income tax benefit			(1,707	)			(6,854	)
Net loss from discontinued operations		$	(2,570	)		$	(10,319	)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2013				2012				2013				2012
Revenue			100.0	%			100.0	%			100.0	%			100.0	%
Costs and expenses:
Educational services and facilities			52.9	%			48.4	%			52.3	%			48.5	%
Selling, general and administrative			50.2	%			49.8	%			55.8	%			52.6	%
Gain on sale of assets			-0.3	%			0.0	%			-0.2	%			0.0	%
Impairment of goodwill and long-lived assets			0.0	%			0.0	%			2.3	%			4.7	%
School closing costs			0.2	%			0.0	%			0.5	%			0.0	%
Total costs and expenses			103.0	%			98.2	%			110.7	%			105.8	%
Operating (loss) income			-3.0	%			1.8	%			-10.7	%			-5.8	%
Interest expense, net			-1.3	%			-1.0	%			-1.3	%			-1.2	%
(Loss) income from continuing opeartions before income taxes			-4.3	%			0.8	%			-12.0	%			-7.0	%
Benefit for income taxes			-1.7	%			-0.3	%			-4.7	%			-2.0	%
(Loss) income from continuing operations			-2.6	%			1.1	%			-7.3	%			-5.0	%

 

Bad debt expense as a percentage of revenue was 4.5% for the quarter ended September 30, 2013, compared to 6.0% for the quarter ended September 30, 2012. The reduction in bad debt as a percentage of revenue was due to our improved efforts on the financial aid processes and collection activities.

Income taxes.    The benefit for income taxes for the quarter ended September 30, 2013 was $1.5 million, or 39.5% of pretax loss, compared to a benefit for income taxes of $0.3 million, or 41.4% of pretax income for the quarter ended September 30, 2012. The effective tax rate decrease was due to the effect of permanent items compared to projected higher loss for the year.

The decrease in average student population was impacted by regulatory changes under the Appropriations Act, which eliminated our ability to enroll ATB students as well as our decision in early 2012 to stop enrolling fully online students.  In addition, we believe current economic conditions have increased the number of potential students who are hesitant to incur debt and therefore, have not enrolled in our schools.  These factors have led to a significant decline in student starts and average student population.

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As a result, educational services and facilities expenses, as a percentage of revenue, increased to 52.3% for the nine months ended September 30, 2013 from 48.5% for the nine months ended September 30, 2012.

Income taxes.    The benefit for income taxes for the nine months ended September 30, 2013 was $12.3 million, or 39.2% of pretax loss, compared to a benefit for income taxes of $5.9 million, or 28.5% of pretax loss for the nine months ended September 30, 2012. The increased benefit and effective tax rate increase was due to the effect of nondeductible permanent items mainly comprised of certain goodwill impairment charges recorded during the quarter ended September 30, 2012.

Liquidity and Capital Resources

Our primary capital requirements are for facility maintenance and expansion, acquisitions and the development of new programs.  Our principal sources of liquidity have been cash provided by operating activities and borrowings under our Credit Facility (as defined below).

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The following chart summarizes the principal elements of our cash flows (in thousands):

		Nine Months Ended September 30,
		2013				2012
Net cash (used in) provided by operating activities		$	(9,337	)		$	8,101
Net cash used in investing activities			(2,784	)			(8,169	)
Net cash used in financing activities			(43,337	)			(6,027	)

At September 30, 2013, we had cash and cash equivalents of $6.3 million, representing a decrease of approximately $55.5 million as compared to $61.7 million as of December 31, 2012.  This decrease is primarily due to the $37.5 million repayment of borrowings under our Credit Facility on January 3, 2013 coupled with negative cash flows from operating activities resulting from a net loss during the nine months ended September 30, 2013 and cash outflows for purchases of capital expenditures and dividend payments.  Historically, we have financed our operating activities and organic growth primarily through cash generated from operations.  We have financed acquisitions primarily through borrowings under our Credit Facility and cash generated from operations.  For the first nine months of 2013 we experienced negative cash from operations however we expect that this will reverse in the near future and until that does occur we anticipate that we will be able to meet our short-term cash needs, as well as our need to fund operations and meet our obligations beyond the next twelve months with cash generated by operations, existing cash balances and borrowings under our Credit Facility.  In addition, we may also consider accessing the financial markets in the future as a source of liquidity for capital requirements, acquisitions and general corporate purposes to the extent such requirements are not satisfied by cash on hand, borrowings under our Credit Facility or operating cash flows.  However, we cannot assure you that we will be able to raise additional capital on favorable terms, if at all. At September 30, 2013, we had net borrowings available under our Credit Facility of approximately $54.7 million, including a $19.7 million sub-limit on letters of credit.  As of September 30, 2013, we had no amounts outstanding under our Credit Facility.  In July 2013, we borrowed $5.0 million under our Credit Facility for working capital purposes which was repaid during the third quarter.  As of September 30, 2013, we had outstanding letters of credit aggregating $5.3 million which is primarily comprised of letters of credit for the DOE matters and security deposits in connection with certain of our real estate leases.

Our primary source of cash is tuition collected from students. The majority of students enrolled at our schools rely on funds received under various government-sponsored student financial aid programs to pay a substantial portion of their tuition and other education-related expenses. The largest of these programs are Title IV Programs which represented approximately 81% of our cash receipts relating to revenues in 2012. Students must apply for a new loan for each academic period. Federal regulations dictate the timing of disbursements of funds under Title IV Programs and loan funds are generally provided by lenders in two disbursements for each academic year. The first disbursement is usually received approximately 31 days after the start of a student's academic year and the second disbursement is typically received at the beginning of the sixteenth week from the start of the student's academic year. Certain types of grants and other funding are not subject to a 30-day delay.  In certain instances, if a student withdraws from a program prior to a specified date, any paid but unearned tuition or prorated Title IV financial aid is refunded according to state and federal regulations.

As a result of the significance of the Title IV funds received by our students, we are highly dependent on these funds to operate our business. Any reduction in the level of Title IV funds that our students are eligible to receive or any impact on our ability to be able to receive Title IV funds would have a significant impact on our operations and our financial condition.  See “Risk Factors” in Item 1A, included in our Annual Report on Form 10-K for the year ended December 31, 2012.

Operating Activities

Net cash used in operating activities was $9.3 million for the nine months ended September 30, 2013 as compared to net cash provided by operating activities of $8.1 million for nine months ended September 30, 2012.  The $17.4 million decrease in net cash primarily resulted from a reduction in net income and other working capital items.  For the nine months ended September 30, 2013 we had negative cash from operations.  For the first nine months of 2013 we experienced negative cash from operations however we expect that this will reverse in the near future and until that does occur we anticipate that we will be able to meet our short-term cash needs, as well as our need to fund operations and meet our obligations beyond the next twelve months with cash generated by operations, existing cash balances and borrowings under our Credit Facility.

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Investing Activities

Net cash used in investing activities decreased by $5.4 million to $2.8 million for the nine months ended September 30, 2013 from $8.2 million for the nine months ended September 30, 2012. The decrease was primarily attributable to a $3.2 million reduction in cash used for capital expenditures for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012 and the acquisition of FMTI in the second quarter of 2012.  Our 2013 capital expenditures mainly related to leasehold improvements, classroom furniture and shop technology.  The decrease was a result of decreased demand for expenditures due to reduced student population, assets transferred from closed schools and significant investments in prior periods.

We currently lease a majority of our campuses. We own our campuses in Grand Prairie, Texas; West Palm Beach, Florida; Nashville, Tennessee; Cincinnati (Tri-County), Ohio; Suffield, Connecticut; and Denver, Colorado.  Although our current growth strategy is to continue our organic growth, strategic acquisitions of operations will be considered. To the extent that these potential strategic acquisitions are large enough to require financing beyond available cash from operations and borrowings under our credit facilities, we may incur additional debt and/or issue additional debt or equity securities.

Capital expenditures are expected to range from 2% to 3% of revenues in 2013 as compared to 2.1% in 2012.  We expect to fund these capital expenditures with cash generated from operating activities and, if necessary, with borrowings under our credit facility.

Financing Activities

Net cash used in financing activities increased by $37.3 million to $43.3 million for the nine months ended September 30, 2013 from $6.0 million for the nine months ended September 30, 2012. This increase was primarily attributable to our net payments on borrowings of $37.5 million.

Credit Agreement

On April 5, 2012, we, as borrower, and certain of our wholly-owned subsidiaries, as guarantors, entered into a secured revolving credit agreement (the” Credit Agreement”) with a syndicate of four lenders led by Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, for an aggregate principal amount of up to $85 million (the “Credit Facility”).  On June 18, 2013, the Company, as borrower, and certain of its wholly-owned subsidiaries, as guarantors, entered into an amendment to the Credit Agreement (the “Amendment to the Credit Agreement”).

Under the Credit Agreement, we have the right to increase the aggregate amount available under the Credit Facility by up to $50 million upon satisfaction of certain conditions.  The Credit Facility may be used to finance capital expenditures and permitted acquisitions, to pay transaction expenses, for the issuance of letters of credit and for general corporate purposes.  The Credit Agreement includes a $5 million swing line sublimit and a $25 million letter of credit sublimit.  Borrowings under the Credit Facility are secured by a first priority lien on substantially all of our and our subsidiaries’ tangible and intangible assets exclusive of real estate.  The term of the Credit Facility is 36 months, maturing on April 5, 2015.

Amounts borrowed as revolving loans under the Credit Facility will bear interest, at our option, at either (i) an interest rate based on LIBOR and adjusted for any reserve percentage obligations under Federal Reserve Bank regulations (the “Eurodollar Rate”) for specified interest periods or (ii) the Base Rate (as defined in the Credit Agreement), in each case, plus an applicable margin rate as determined under the Credit Agreement.  The “Base Rate”, as defined under the Credit Agreement, is the highest of (a) the prime rate, (b) the Federal Funds rate plus 0.50% and (c) a daily rate equal to the one-month LIBOR rate plus 1.0%.  Under the Credit Agreement, the margin interest rate is subject to adjustment within a range of 1.25% to 2.75% based upon changes in our consolidated leverage ratio and depending on whether we have chosen the Eurodollar Rate or the Base Rate option.  Swing line loans will bear interest at the Base Rate plus the applicable margin rate.  Letters of credit will require a fee equal to the applicable margin rate multiplied by the daily amount available to be drawn under each issued letter of credit plus an agreed upon fronting fee and customary issuance, presentation, amendment and other processing fees associated with letters of credit.  At September 30, 2013, we had no outstanding borrowings. At September 30, 2013, we had outstanding letters of credit aggregating $5.3 million which is primarily comprised of letters of credit for the DOE matters and security deposits in connection with certain of our real estate leases.

The Amendment to the Credit Agreement reduced the aggregate principal amount available under the Credit Facility from $85 million to $60 million.  The Credit Facility continues to provide us with a $25 million letter of credit sublimit and a $5 million swing line sublimit, the availability of which will be at the discretion of the swing line lender, and the right to increase the aggregate amount available under the Credit Facility by up to $50 million upon the satisfaction of certain conditions.  The Amendment to the Credit Agreement includes certain revisions relevant to the calculation of consolidated leverage ratio and consolidated fixed charge coverage ratio.

The Amendment to the Credit Agreement contains customary representations, warranties and covenants including consolidated adjusted net worth, consolidated leverage ratio, consolidated fixed charge coverage ratio, minimum financial responsibility composite score, cohort default rate and other financial covenants, certain restrictions on capital expenditures as well as affirmative and negative covenants and events of default customary for facilities of this type.  In addition, we are paying fees to the lenders that are customary for facilities of this type.  As of September 30, 2013, the Company is in compliance with all financial covenants under the Credit Agreement, as amended.

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The following table sets forth our long-term debt (in thousands):

		September 30, 2013				December 31, 2012
Credit agreement		$	-			$	37,500
Finance obligation			9,672				9,672
Capital lease-property (rate of 8.0%)			26,047				26,344
Capital leases-equipment (rates ranging from 5.0% to 8.5%)			-				11
			35,719				73,527
Less current maturities			(426	)			(412	)
		$	35,293			$	73,115

We believe that our working capital, cash flows from operations and borrowings available from our Credit Facility will provide us with adequate resources for our ongoing operations through 2013 as well as our currently identified and planned capital expenditures.

Contractual Obligations

Long-term Debt.  As of September 30, 2013, our long-term debt consisted of the finance obligation in connection with our sale-leaseback transaction in 2001 and amounts due under capital lease obligations.

Lease Commitments.  We lease offices, educational facilities and equipment for varying periods through the year 2032 at base annual rentals (excluding taxes, insurance, and other expenses under certain leases).

The following table contains supplemental information regarding our total contractual obligations as of September 30, 2013 (in thousands):

		Payments Due by Period
		Total				Less than 1 year				2-3 years				4-5 years				After 5 years
Capital leases (including interest)		$	50,392			$	2,494			$	5,004			$	4,916			$	37,978
Uncertain income taxes			135				135				-				-				-
Operating leases			126,406				22,209				37,518				28,446				38,233
Rent on finance obligation			5,024				1,546				3,092				386				-
Total contractual cash obligations		$	181,957			$	26,384			$	45,614			$	33,748			$	76,211

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of September 30, 2013, except for our letters of credit of $5.3 million which are primarily comprised of letters of credit for the DOE and security deposits in connection with certain of our real estate leases. These off-balance sheet arrangements do not adversely impact our liquidity or capital resources.

Update Regarding Regulatory Matters

On July 16, 2012, the DOE notified our Lincoln, Rhode Island campus that an on-site Program Review was scheduled to begin on August 6, 2012. The Program Review assessed the institution’s administration of Title IV, HEA Programs in which the campus participated for the 2010-2011 and 2011-2012 award years. On October 31, 2013, the DOE issued an Expedited Final Program Review Determination Letter that notified the Lincoln, Rhode Island campus of its decision to close the program review without any findings or monetary liabilities.

 

By letter dated August 1, 2013, the Accrediting Bureau of Health Education Schools, or ABHES, notified our school in Fern Park, Florida that ABHES had deferred action on the school’s application for a continued grant of accreditation and directed the school to show cause why its accreditation should not be withdrawn.  ABHES is the institutional accreditor for the Fern Park school.  The August 1, 2013, correspondence identified five findings of alleged noncompliance with certain ABHES accreditation requirements related to financial standards, program outcomes, admissions policies, availability of clinical experiences, and curriculum.  The campus submitted to ABHES by the November 1, 2013 deadline a response addressing each of the five findings.  ABHES has stated that the institution’s current grant of accreditation is continued through February 28, 2014, but that failure to address the issues set forth in the August 1, 2013 correspondence and to demonstrate compliance with accreditation requirements may result in a withdrawal of accreditation before that date.  The ABHES commission is expected to meet in January 2014 to review the Fern Park school’s response to the show cause directive.  ABHES could elect to continue the accreditation of the campus or take another action, including withdrawal of accreditation.  The loss of accreditation by the Fern Park school would result in the termination of eligibility of that school to participate in Title IV Programs and could cause us to close the school, which could have a material adverse effect on our business and operations.

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Seasonality and Trends

Seasonality

Our revenue and operating results normally fluctuate as a result of seasonal variations in our business, principally due to changes in total student population. Student population varies as a result of new student enrollments, graduations and student attrition. Historically, our schools have had lower student populations in our first and second quarters and we have experienced larger class starts in the third and fourth quarters and higher student attrition in the first half of the year. Our second half growth is largely dependent on a successful high school recruiting season. We recruit our high school students several months ahead of their scheduled start dates, and thus, while we have visibility on the number of students who have expressed interest in attending our schools, we cannot predict with certainty the actual number of new student enrollments and the related impact on revenue. Our expenses, however, typically do not vary significantly over the course of the year with changes in our student population and revenue. During the first half of the year, we make significant investments in marketing, staff, programs and facilities to ensure that we meet our second half of the year targets and, as a result, such expenses do not fluctuate significantly on a quarterly basis. To the extent new student enrollments, and related revenue, during the remainder of the year fall short of our estimates, our operating results could be negatively impacted. We expect quarterly fluctuations in operating results to continue as a result of seasonal enrollment patterns. Such patterns may change as a result of new school openings, new program introductions, and increased enrollments of adult students and/or acquisitions.

90/10 Rule

The Higher Education Act, enacted in 2008, (“HEA”) states that a proprietary institution will be ineligible to participate in Title IV programs if for any two consecutive fiscal years it derives more than 90% of its cash basis revenue from Title IV programs.    This is commonly known as the “90/10 Rule.”

We have calculated that, for our 2012 fiscal year, our institutions’ 90/10 Rule percentages ranged from 72.3% to 93.0%.  For 2012, our Dayton institution (consisting of a main campus and eight additional locations) derived 93.0% of its revenues from Title IV programs.  We regularly monitor compliance with this requirement to minimize the risk that any of our institutions would derive more than the maximum percentage of its revenues from Title IV Programs for any fiscal year.  We anticipate that our Dayton institution which is scheduled to close on December 31, 2013 will comply with the 90/10 Rule in 2013.

Effective July 1, 2008, the annual Stafford loans available for undergraduate students under the FFEL, increased. This increase, coupled with increases in grants from the Pell program and other Title IV loan limits, resulted in some of our schools experiencing an increase in the proportion of the revenues they receive from Title IV Programs. The HEA reauthorization provided temporary relief from the impact of the loan limit increases by counting as non-Title IV revenue in the 90/10 Rule calculation amounts received from loans received between July 1, 2008 and June 30, 2011 that are attributable to the increased annual loan limits.  The temporary relief under the HEA for calculating 90/10 Rule compliance expired for loans received on or after July 1, 2011 and expired for institutional loans made on or after July 1, 2012.

The HEA authorization also provided other relief by allowing institutions to include as non-Title IV revenue in its 90/10 Rule calculation the net present value of certain institutional loans subject to certain limitations and conditions.  During 2010 and continuing into the first half of 2011, we saw a reduction in the loan commitments we offered our students to help them bridge the gap between the tuition charged for their particular program and the amount of grants, third-party loans and parental assistance each student received.  We believe that those reductions were due to increases in student loan limits available to students as well as an increase in Pell Grants.  As a result, a greater percentage of students were able to finance their educations entirely from financial aid sources.  While this provided greater opportunities for our students, it also severely impacted our ability to comply with the 90/10 Rule.  Because of the increases in Title IV student loan limits and grants in recent years, it has and will continue to be difficult for us to comply with the 90/10 Rule.  We have considered two alternatives to aid us with our compliance with the 90/10 Rule: increasing tuition prices above the applicable maximums for Title IV student loans and grants or restructuring certain of our programs to create a financing gap.  We decided to restructure program offerings. This resulted in an increase in the financing gap between tuition and the amount of financial aid available. To assist our students in closing their financing gaps we provided loans to our students.  If any of our institutions loses eligibility to participate in Title IV programs, that loss would cause an event of default under our credit agreement, and would also adversely affect our students’ access to various government-sponsored student financial aid programs.  This could have a material adverse effect on the rate at which our students enroll in our programs and on our business and results of operations.

The overall increase in the percentages of Title IV received by our institutions has also caused us to look for other sources of non-Title IV cash.  This led to our acquisition of FMTI in April 2012 and may lead to additional acquisitions of complimentary “cash only” businesses.

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Cohort Default Rates

 

Gainful Employment

On June 13, 2011, the DOE published final regulations in the Federal Register regarding gainful employment that were scheduled to take effect on July 1, 2012 and apply to all educational programs that are subject to the DOE requirement of preparing students for gainful employment in a recognized occupation. Such educational programs would have included all of the Title IV-eligible educational programs at each of our institutions.  On June 30, 2012, the United States District Court for the District of Columbia issued a decision that vacated most of the gainful employment regulations and remanded those regulations to the DOE for further action.  On July 6, 2012, the DOE issued an electronic announcement acknowledging that the Court had vacated the repayment rate metric as well as the debt-to-income gainful employment metrics that would have gone into effect on July 1, 2012.  The DOE also noted that institutions are not required to comply with related regulations relating to gainful employment reporting requirements and adding new educational programs, but are required to comply with requirements to disclose certain information about educational programs.

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In June 2013, the DOE announced its intention to establish a negotiated rulemaking committee to prepare proposed regulations that would establish standards for programs that prepare students for gainful employment in a recognized occupation.  The committee is scheduled to conduct two negotiated rulemaking sessions, the first of which occurred in September 2013 and the second of which was delayed because of the partial government shutdown and is currently scheduled for November 2013.  In addition, the negotiators held an open conference call in September 2013.

In August 2013, in advance of the first negotiated rulemaking session, the DOE released its initial draft regulatory language for discussion purposes.  The draft regulatory language would apply to all educational programs that are subject to the DOE requirement of preparing students for gainful employment in a recognized occupation.  Such educational programs would include all of the Title IV-eligible educational programs at each of our institutions.

The initial draft gainful employment regulatory language would, among other things, measure each educational program against threshold benchmarks under two debt-to-earnings metrics comparing a program’s annual loan payment (which the language would define  to include certain Title IV loans, private education loans, and debt owed to the institution) to the annual earnings of the students who completed the program.  The two debt-to-earnings metrics, one based on students’ discretionary income and one based on students’ annual earnings, would be calculated under complex methodologies and definitions outlined in the draft regulatory language and would be based on data that may not be readily accessible to institutions.  The draft regulatory language also would require institutions to report to the DOE certain information, and to make certain disclosures, with respect to their gainful employment programs.

Based on a program’s rates under the two metrics, the draft regulatory language would classify the program as a passing program, a zone program, or a failing program.  If an educational program is a failing program in two out of any three consecutive award years, the program would lose its Title IV eligibility for a period of at least three years.  If an educational program is not a passing program in any of four consecutive award years (i.e., the program is classified as either a failing program or zone program for four consecutive award years), the program would lose its Title IV eligibility for a period at least three years.

The draft regulatory language also would require an institution with an educational program that could become ineligible based on its debt-to-earnings rates for the subsequent award year to provide written warnings to enrolled students and prospective students related to the potential loss of Title IV eligibility.  The draft regulatory language also would limit the enrollment of students receiving Title IV funds in an educational program that is classified as a failing program.

The Department is expected to publish new regulations as part of the negotiated rulemaking process.  That process would typically include an opportunity for public notice and comment.  The new regulations, if published in final form on or before November 1, 2014, would typically take effect in July 2015.  The proposed regulations are still under negotiation and are subject to change before and after the negotiated rulemaking sessions are completed.  We cannot predict the timing, scope or content of the final regulation on gainful employment nor the impact of those final regulations on us or our institutions’ educational programs.  The new regulations could have a material adverse effect on our business and operations such as, for example, requiring us to eliminate certain educational programs, and any new warning, reporting, or disclosure requirements could have a material adverse effect on the rate at which students enroll in our programs.

ATB Students

ATB students are non-GED and non-high school graduates who are allowed to enroll in post-secondary institutions by passing a DOE approved exam.  ATB students are traditionally a higher risk population who complete their programs at a lower rate and default on their student loans at a higher rate than non-ATB students. On December 23, 2011, President Obama signed into law the Appropriations Act. This law eliminates the ability of ATB students who first enroll after July 1, 2012 to participate in federal student financial aid programs.  As a result, we stopped enrolling ATB students as of July 1, 2012.  This reduction in ATB students has negatively impacted our total enrollment and our revenue.

Cost Associated with Exit or Disposal Activities

On June 18, 2013, our Board of Directors approved a plan to cease operations at four campuses in Ohio and one campus in Kentucky consisting of our Dayton institution and its branch campuses.  Federal legislation implemented on July 1, 2012 that prohibits “ability to benefit” students from participating in federal student financial aid programs led to a dramatic decrease in the number of students attending these five campuses.  As a result, we adopted a plan to cease operations at these campuses and, in accordance with the plan, we stopped admitting new students at these five campuses, but provided currently enrolled students who were scheduled to graduate before December 31, 2013 with the ability to complete their course of study at these five campuses. For fiscal year 2013, these campuses were expected to contribute approximately $24.0 million in revenue and 1,800 student starts.

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In addition to the expected operational losses, we expect to incur approximately $12.5 million in additional pre-tax expenses subsequent to the announcement date to cease operations at these five campuses.  We hope to offset a portion of these cash charges by subleasing some of the properties impacted and transferring some students to other accredited institutions.  We expect all operations at these campuses to cease by December 31, 2013 at which time the results of operations for these campuses will be reflected as discontinued operations in our financial statements.

Losses for fiscal year 2013 attributable to these five campuses, including costs to cease operations, are expected to range between ($0.60) to ($0.65) per share.

The results of operations at these five campuses for the three and nine months ended September 30, 2013 and for the fiscal years ended December 31, 2012, 2011 and 2010 were as follows (in thousands):

		Three Months Ended September 30,				Nine Months Ended September 30,				Year Ended December 31,
		2013				2013				2012				2011				2010
Revenue		$	(18	)		$	7,261			$	19,924			$	35,099			$	61,028
Operating expenses			(3,898	)			(19,322	)			(33,564	)			(29,885	)			(31,947	)
Operating (loss) income		$	(3,916	)		$	(12,061	)		$	(13,640	)		$	5,214			$	29,081

Amounts indicated include impairments of goodwill and long-lived assets for these campuses of $2.3 million and $8.7 million for the nine months ended September 30, 2013 and for the year ended December 31, 2012, respectively.  For the three months ended September 30, 2013, our financial statements reflect $1.5 million of refunds to students as a reduction of revenue and $0.2 million of accrued compensation related to severance and stay bonuses at these campuses.  For the nine months ended September 30, 2013, amounts indicated include $1.5 million of student refunds as a reduction of revenue and $1.2 million of accrued compensation related to severance and stay bonuses at these campuses.

Outlook

In addition to the 90/10 Rule, cohort default rates, gainful employment and limits on the number of ATB students discussed above, changes to admissions advisor compensation policies, other changes promulgated by the DOE and the current economic slowdown have all led to significant deterioration in student enrollments. This deterioration continued into 2013.  We believe that we have started to see stabilization in our student starts for our continuing operations.  In particular our automotive and skill trade campuses appear to have stabilized while our other programs continue to experience some challenges.  Some of this can be attributable to large financing gaps at certain programs as well as the hesitation or inability of students to incur additional debt and/or make required monthly payments.  We continue to explore ways to help these students achieve their goals, including reducing tuition of certain programs or providing need based scholarships.  Students’ starts for the third quarter of 2013, excluding the Closing Schools, were down 5.2% as compared to the third quarter of 2012.

While we believe our student starts, excluding the Closing Schools, have leveled off, we continue to be challenged by the current economic environment as well as students’ and their parents’ continued hesitation to incur debt.  We expect that this trend will improve as the economy improves but cannot predict when this will occur.

The continued deterioration in our student population has produced negative operating margins for the first nine months of the year and has resulted in approximately $9.3 million of cash used during the first nine months of the year to sustain our operations.  While we experienced negative cash from operations we expect that this will reverse in the near future and until that does occur we anticipate that we will be able to meet our short-term cash needs, as well as our need to fund operations and meet our obligations beyond the next twelve months with cash generated by operations, existing cash balances and borrowings under our Credit Facility.

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks as part of our on-going business operations.  We have a Credit Agreement with a syndicate of banks.  Our obligations under the Credit Agreement are secured by a lien on substantially all of our assets and our subsidiaries and any assets that we or our subsidiaries may acquire in the future, including a pledge of substantially all of our subsidiaries’ common stock. As of September 30, 2013, we had no outstanding borrowings under our Credit Facility.

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Our interest rate risk is associated with miscellaneous capital equipment leases, which is not significant.

Item 4.

CONTROLS AND PROCEDURES

(a)  Evaluation of disclosure controls and procedures.  Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Securities Exchange Act Rule 13a-15(e)) as of the end of the quarterly period covered by this report, have concluded that our disclosure controls and procedures are adequate and effective to reasonably ensure that material information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s Rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting.  There were no changes made during our most recently completed fiscal quarter in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS

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 adverse effect on our business, financial condition, results of operations or cash flows.

On November 21, 2012, we received a Civil Investigation Demand from the Attorney General of the Commonwealth of Massachusetts relating to their investigation of whether we and certain of our academic institutions have complied with certain Massachusetts state consumer protection and finance laws.  On July 29, 2013, we received a follow-up Civil Investigative Demand.  Pursuant to both Civil Investigative Demands, the Attorney General has requested from us and certain of our academic institutions documents and detailed information from the time period January 1, 2008 to the present.  The Company has responded to this request and intends to continue cooperating with the Attorney General’s Office.

Item 6.

EXHIBITS

EXHIBIT INDEX

The following exhibits are filed with or incorporated by reference into this Form 10-Q.

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of the Company (1).
3.2	Amended and Restated By-laws of the Company (2).
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 (1).
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. (2).
4.4	Specimen Stock Certificate evidencing shares of common stock (1).
10.1	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 (5).

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10.2	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 (11).
10.3	Employment Agreement, dated as of January 8, 2013, between the Company and Scott M. Shaw (8).
10.4	Employment Agreement, dated as of January 8, 2013, between the Company and Cesar Ribeiro (8).
10.5	Employment Agreement, dated as of January 8, 2013, between the Company and Shaun E. McAlmont (8).
10.6	Employment Agreement, dated as of January 8, 2013, between the Company and Piper P. Jameson (8).
10.7	Lincoln Educational Services Corporation Amended and Restated 2005 Long-Term Incentive Plan (7).
10.8	Lincoln Educational Services Corporation Amended and Restated 2005 Non-Employee Directors Restricted Stock Plan (7).
10.9	Lincoln Educational Services Corporation 2005 Deferred Compensation Plan (1).
10.10	Lincoln Technical Institute Management Stock Option Plan, effective January 1, 2002 (1).
10.11	Form of Stock Option Agreement, dated January 1, 2002, between Lincoln Technical Institute, Inc. and certain participants (1).
10.12	Form of Stock Option Agreement under our 2005 Long-Term Incentive Plan (4).
10.13	Form of Restricted Stock Agreement under our 2005 Long-Term Incentive Plan (10).
10.14	Form of Performance-Based Restricted Stock Award Agreement under our Amended & Restated 2005 Long-Term Incentive Plan (9).
10.15	Management Stock Subscription Agreement, dated January 1, 2002, among Lincoln Technical Institute, Inc. and certain management investors (1).
10.16	Stock Repurchase Agreement, dated as of December 15, 2009, among Lincoln Educational Services Corporation and Back to School Acquisition, L.L.C (6).
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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, filed on November 8, 2013, formatted in XBRL: (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flows, (iv) Condensed Consolidated Statement of Changes in Stockholders’ Equity, and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and in detail.

 

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(1)	Incorporated by reference to the Company’s Registration Statement on Form S-1 (Registration No. 333-123644).

(2)	Incorporated by reference to the Company’s Form 8-K filed June 28, 2005.

(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 Annual Report on Form 10-K for the year ended December 31, 2007.

(5)	Incorporated by reference to the Company’s Form 8-K filed April 11, 2012.

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(6)	Incorporated by reference to the Company’s Form 8-K filed December 21, 2009.

(7)	Registration Statement on Form S-8 (Registration No. 333-188240).

(8)	Incorporated by reference to the Company’s Form 8-K filed January 10, 2013.

(9)	Incorporated by reference to the Company’s Form 8-K filed May 5, 2011.

(10)	Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

(11)	Incorporated by reference to the Company’s Form 8-K filed June 20, 2013.

*	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.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		LINCOLN EDUCATIONAL SERVICES CORPORATION
Date: November 8, 2013	By:	/s/ Cesar Ribeiro
		Cesar Ribeiro
		Chief Financial Officer
		(Duly Authorized Officer, Principal Accounting and Financial Officer)

 

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