Q1 2021 Lincoln Educational Services Corp Earnings Call
Okay.
Good day, and thank you for standing by and welcome to the first quarter 2021, Lincoln Educational services operating and financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session task of question during the session of each person.
One on the telephone please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker day, Michael from the day you with E V. C Group. Please go ahead.
Thank you Catherine and good morning, everyone. That's one of the market opened today Lincoln educational services issued a news release reporting financial results for the first quarter ended March 31, 2021 of the release is available on the Investor Relations. The portion of the company's corporate website at Www Dot Lincoln Tech Dog E D.
Joining us today on the call of our Scott Shaw, President and CEO and Brian Meyers Chief Financial Officer, today's call is being broadcast live on the company's website and a replay of the call will be archived on the company's website.
Statements made by Lincoln's management on today's call regarding the company's business that are not historical facts may be forward looking statements as the terms of identified in the federal Securities laws of the words May will expect believe anticipate anticipate project plan intend estimate continue as well as similar traction.
These are intended to identify forward looking statements forward looking statements should not be read as a guarantee of future performance or results.
The company cautions you that these statements reflect current expectations about the company's future performance or events and are subject to a number of uncertainties risks and other influences many of which are beyond the company's control. The may influence of the accuracy of the statements and the projections upon which the segment and statements are based.
Factors that may affect the company's results include but are not limited to the risks and uncertainties discussed in the risk factors section of the annual report on form 10-K, and the quarterly report on form 10-Q filed with the securities.
Excuse me filed with Securities and Exchange Commission.
Forward looking statements are based on the information available at the time those statements are made and management's good faith belief as of the time with respect to the future events.
All forward looking statements are qualified in their entirety by this cautionary statement and Lincoln undertakes no obligation to publicly revise or update any forward looking statement, whether as a result of new information future events or otherwise after the date thereof, now I'd like to turn the call over to Scott Shaw, President and CEO of Lincoln Educational services.
Scott. Please go ahead.
You Michael and good morning, everyone. Thank you for joining our call to discuss Lincoln educational services continued progress with the reporting of another substantial quarter of growth and operating excellence.
Our first quarter 2021 results compared very favorable favorably with the first quarter of 2020, when we took the necessary precautions to close our 22 campuses towards the end of last year's quarter and swiftly transferred our operations two of distance learning model.
Thankfully, we had no such disruption during the first quarter of 2021, and the Lincoln team has executed our strategies exceptionally well.
As a result, our first quarter results are better than we anticipated when we spoke with you two months ago and this fine start gives us the comfort to increase certain metrics of our full year guidance, which Brian will provide detail on during his remarks.
Later this year in November to be precise Lincoln of all markets 75th year of providing the training required for students seeking a central and high in demand careers.
Our operating structure enables Lincoln to swiftly modify curriculums and entire courses to reflect the advances and skilled trade technologies and processes at a pace that are publicly funded peers are not able to match. This ability to quickly react to macro conditions enabled our rapid transition to of distance learning model.
During the first and second quarter of 2020, then reopened all of those campuses by August of 2020 and generate of 10, 7% increase in student starts for the full year 2020.
Meanwhile, other training methods and processes were either inhibited or limited and many in our field saw student enrollment decline.
The momentum we generated in 2020, despite all of the challenges has built during our first quarter from a financial perspective, the team of double digit increases we shared with you during our last call continued.
For instance, revenue and student starts which grew at a faster rate than we expected. When we spoke in early March and the ending student population all experienced solid double digit growth. In fact students starts increased an astonishing 36% as compared to last year's first quarter of rate that was somewhat impacted by our need to.
Many students starts that had been scheduled to begin in mid March 2020 to the second quarter.
As a result of the strong top line performance and the numerous efficiency we've introduced over the past several years of variety of profitability metrics registered large first quarter gains, including consolidated operating income adjusted EBITDA net income and earnings per share of.
All of these achievements demonstrate why we remain bullish about our prospects for the remainder of the year.
Several operating factors combined to drive our growth the demand for skilled labor and the relatively high unemployment rates certainly are a contributor.
However, we see the vast portion of our growth coming from our team's successful execution, we've improved our ability to recruit students remotely and to help them through the financial aid process through a new centralized approach. We are training students for careers and feels deemed essential and we are converting leads in the students starts at the increasing rate.
Our graduation, and placement rates are higher than our nonprofit peers and we've invested in new software systems and processes to better help our graduates secure their new careers.
R 22 campuses continue to perform well in March we detailed the substantial progress of our Indianapolis campus, which of the combination of new leadership at that campus.
Consolidated facilities the launch of the new welding program, a reinvigorated corporate partnership changes to the admissions teams and the implementation of some operating efficiencies became a success story from all perspectives. The first of our four new programs that we plan to launch this year will be at Indianapolis. This much.
We will be launching of medical assisting program at this campus.
In addition by the end of the second quarter, we are expecting to start the the start of our second new 2021 program, which is welding at the Mahwah, New Jersey campus. We remain on plan to launch two additional programs by the end of the summer and we will keep you posted on these developments.
Our first quarter financial performance was also positively impacted by a reduction in bad debt.
I'm going to let Bryan explain the specifics that led to that development.
I would like to focus on in this decision I'd like to focus on.
Is the decision of our board of directors and management.
We made the combined resources from the cares act along with Lincoln's own resources made available to our significantly improved financial performance and condition as well as our strong start in 2021 to provide helped the students impacted by COVID-19, there were several line items at the corporate level that we could of allocated the portion of the cares Act.
Funds available to Lincoln with the board of management decided to do after the department of Education issued rulings on March 19th of this year was to help our students we understood. The challenges of our students faced when we had no choice, but to shutdown of our campuses last March many of our students lost jobs that enabled them to attend Lincoln.
Well the lost child care, there's a myriad of factors that combine to cause many of our students to drop out with the burden of student debt.
We decided to do was to help these students by allocating a substantial portion of the cares funds available to our corporation along with contributing additional funds that we have resulted from our improved financial condition should we leave students impacted by COVID-19 of this burden, which also resulted in reducing our bad debt.
Furthermore to celebrate our 75th anniversary as as the role we see Lincoln having in training some of the people who need to be trained to revive the revitalized the nation's infrastructure, we are increasing the scholarship opportunities at Lincoln to $75 million over the next five years on average this pledge will increase Lincoln.
Annual scholarship funding by approximately 25%, we think it's of fitting way to celebrate our 75 years of putting students first while continuing our tradition of being student focused as well as prudent stewards of our shareholders' investment.
This increased scholarship funding, which is effective immediately will help lessen our students burden as a trained for careers that should enable them to become productive contributors to our national economic well being in growth.
Much attention has been paid in recent weeks.
To the job creation during the first months of 2021 and the progress the nation is making putting the millions of people who lost their job as a result of COVID-19 pandemic back to work.
We applaud this progress and are proud of our small but growing role in enabling people who lost their jobs. During 2020 to train four and entered new more satisfying higher paying careers that holds strong promise for personal and professional growth over the next several years of.
As the nation makes progress in terms of job creation, we are finding that the skills gap that we've talked about for many years, meaning the GAAP between the skills required to perform the jobs being created and the skill set of the available labor pool. Despite the high unemployment rate is re emerging as an issue.
The hiring market is strong and with the continued reopening of the economy as demonstrated by the six 4% GDP growth during the first quarter of the year, we see the hiring of market continuing to be strong. We also see continuing and thats. The contributor to our outlook for continued student start growth for each remaining quarter of 2021.
Is the difficulty employers are having at finding qualified trained candidates. The higher for example, as we speak to you today Lincoln is more skilled positions available for our graduates then we have graduates and.
In addition to our state of the industry training that enables the graduate to become an immediate contributor to their employer. There are other factors why Lincoln graduates are sought out by employers for instance are 75 years of experience at training of Central workers has enabled the company to identify the characteristics that contribute to employee retention.
In March we told you about the corporate partner, who over the past three years has inverted the two year retention rate of new hires going from 40% of hires at the first two years of employment to 80%, while working with Lincoln. This retention trend is an oft repeated success story with our corporate partners and a contributing factor.
Behind our three years of student start growth.
When a student enters of corporate partnership training program. They do so after demonstrating our commitment and interest in the career and obtain the skills required.
Another differentiating characteristic of the Lincoln approach is the previously mentioned ability and eagerness to develop and modify if necessary curriculum cater tailored to the individual corporations needs such an approach is virtually impossible to deployed through most other educational delivery models as our rapid changes to our curriculum.
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Our customized approach extends to the student where we provide the individual a wide variety of student of Sir.
Sorry, the wide variety of support to maximize their opportunity to both learn as well as excel in the program as well as with the employer again. This support is not available or feasible through most of their educational delivery models.
Another distinguishing characteristic of Lincoln as compared to our publicly funded peers is our ability to provide life skills support to students.
These life skills.
I've often been the difference for Corp, keeping and losing of new hire when combined with our career services, we provide well rounded professional and life skills development to our students that lead to enhancing their opportunities to build that life changing career.
Based on where we are of the first four months of this year 'twenty 'twenty. One is shaping up to be one of the best years in our long history Lincoln continues to implement enhancements to the students learning experience as well as expand our programs on curriculums to help a broader range of students gain the critical skills needed to begin whereas the.
Vance rewarding careers deemed as essential.
As we look out over the remainder of the year our efforts to explore other similar tailored opportunities continue and we hope and we do hope to expand the approximately dozen corporate partnerships currently underway is 2021 unfolds.
We do not expect to generate student start growth.
We do expect it to generate student start growth for the second quarter. However, given the movement of many first quarter 'twenty 'twenty starts to the second quarter of 2020. The rate is expected to be within the range of our annual guidance of 5% to 10% growth.
In addition, we continue to believe our summer of high School starts we will most likely be several hundreds of students less than last year simply because we were not able to engage as easily with students since many high schools had been close to in person visits. However, we also can you continue to see strong demand for our programs from.
Students of trend that has been evident for several quarters.
As I mentioned, our student start growth remains between five and 10% for the full year.
In addition to the expected second quarter growth. We currently believe that we will generate year over year student start growth for both the third and fourth quarters of the year.
In summary, Lincoln is achieving for the students corporate partners faculty and shareholders and we have put in place the strategies to continue growing the company improving ROI for our students and building returns to our shareholders. We are off to a great start and look forward to reporting to you on our progress.
Now I'd like to turn the call over to Brian for a review of our first quarter results and updated guidance Brian.
Thanks, Scott Good morning, and thank you for joining us this morning, I'd like to share some additional details behind our strong financial performance during the first quarter highlighting our performance we generated over $4 million of net income during the first quarter. This result is particularly impressive given our seasonality in which our financial results during the first quarter.
There are historically the lowest four of any quarterly periods during the year there.
The first quarter success was driven in part by the momentum we generated during Q4 of 2020 and carried into 2021. Our strong result last year enable Lincoln to enter 2021 with the beginning population of approximately of thousands soon it's more of that on January 2020, which represents an increase of around 9%.
Now briefly reviewing our top line performance.
Revenue for the quarter was $78 million up $8 million or 11, 4% over the prior year quarter, mainly driven by nine 8% increase in average student population to be clear, there's nearly 10% increase in average student population. It is net of approximately of 100 students on COVID-19 leave of absence or low.
Yes.
As a reminder, most of these remaining alloys are health care students that have been place on on COVID-19 leave of absence as they could not complete their externships due to the ongoing COVID-19 restrictions. Our team has been diligently working with these students and the.
And at that end and at the end of April the Loa's student count is down down about 30% from March 31st levels.
We had 3500 of 48, new students start to of Lincoln education. During the first quarter. This represents stock growth of 36% or an increase of 832 students over prior year, an impressive achievement as both segments continue to produce double digit growth of <unk>.
Portion of the significant percentage growth is the result of the impact of all of the onset of COVID-19 on last year's starts if you recall last year of approximately 300 students had their students start dates postponed from the first quarter to the second quarter of 2020 for comparison purposes our students.
The growth would have been approximately 17% of we included the soonest starts and accounts for Q1 of 2020.
We attribute our strong growth to our enhance admissions approach and our ongoing marketing initiatives, while our marketing spend may fluctuate between quarters based on our on opportunities. Our overall student acquisition cost continues to decrease this favorable trend has been occurring over the past several years. So.
Early demonstrates the efficiencies and effectiveness of both of our marketing and admission initiatives.
The strong growth in Q1 starts to continue our third consecutive year of student start growth for Lincoln of milestone, which our team is extremely proud.
Net of positive metric during the quarter was our ending student population, which is 17 hundreds of students or 15.5% higher than the 12600 last year. These figures are net of students that are of classified on COVID-19 leave of absence.
This is an important metric because the higher beginning population for the second quarter will help drive continuing revenue.
Growth through the remainder of the year.
Now I'd like to shift to our operating expenses for the quarter education services and facility expense increased $2 1 million or 7% of $32 3 million, primarily due to continued growth of our student population.
Selling general and administrative expenses decreased $2 6 billion or seven 8% at $30 4 million.
The decrease was mainly due to a favorable variance in bad debt expense of $2 4 million quarter over quarter. This was a result of the new guidance published on March 19, 2021 by the department of Education.
This new guidance clarify previously issued guidance pertaining to.
Permitted uses of the higher education of emergency relief funds or hurt we are providing financial relief to students who dropped out of school due to COVID-19 related circumstances, and who had unpaid accounts receivable balances during the period from March 15, 2020 through March 31 2021.
Nothing in the net bad debt favorable adjustment of approximately $3 million. This release relief is being provided from the company's financial resources combined with the her funds. Excluding this one time adjustment bad debt expense as a percentage of total revenue would have been comparable to prior year of Q1 bad debt expense.
Other reductions during the quarter included a decrease in sales expense driven by continued travel restrictions, resulting from COVID-19. During the current quarter. The same travel restrictions did not occur until mid mid March of 2020 at the onset of COVID-19.
Corporate expenses for the quarter increased one point of $1 million or 3% of $9 3 million the growth in expense.
The growth in this expense item was primarily driven by an increased salaries and benefit expense driven by our strong financial results and course on course of centralization of certain administrative functions.
Turning to our bottom line, our consolidated operating income improved by $7 4 million to $6 million compared to an operating loss in Q1 of 2020.
Adjusted EBITDA increased to $8 4 million from 800000 in the prior year.
The improvement of profitability was she achieved due to the revenue growth of 8 million and the significant operating leverage.
We are generating on revenue growth for the core the this this leverage amounts to approximately 93% of our revenue growth dropping to EBITDA.
We believe some extenuating circumstance of the contributed as very high leverage rate and expect to see a more normalized operating leverage of approximately 40% on future revenue growth.
Our pretax income was $5 7 million compared to a pretax loss of $1 7 million an improvement of $7 4 million.
Our income tax provision for the quarter was $1 2 million or.
All of our 21, 7% effective tax rate compared to less than 100000 last year.
The significant change year over year is because of year ago, our deferred tax assets were under a full valuation allowance, resulting of minimum state tax provision of only now since we no longer have evaluation of language. This quarters tax expense reflect a normalized federal and state tax rates.
This quarter's income tax provision was made up of two components $1 6 million base on our annual effective tax rate of 27.9% offset by <unk> 4 million discrete tax benefit the entity.
The discrete item relates to of restricted stock ex ex tax benefit is not expected to be material for the remainder of the year.
Now let me clarify.
What I just described our book income tax expense, which is different from our estimated tax cash payments. This is because we expect to utilize our federal Nols of $43 million and our state Nols of 77 million to offset taxable income in the 2021 as a result, we do not anticipate paying any.
Federal income taxes, and nominal state income taxes this year.
Lastly.
I will share the balance sheet highlights followed by an updated 2021 guidance.
At March 31, 2021, we had approximately $47 7 million of liquidity, including $21 million in availability under our current credit facility and $26 7 million in cash and cash equivalents. This represents a substantial 55% increase of liquidity compared to March 31, two.
<unk> thousand 20, we had a net cash balance of $10 million for the current quarter compared to a net debt balance of $8 8 million at March 31 2020.
Now I'd like to provide the recap of the cares Act funds utilized in total Lincoln was allocated $27 4 million in two equal parts. The first part of equaling $13 7 million to be utilized for direct distribution through students in order to offset additional expense they incurred in connection with the disruption of school.
As of March 31, 2020 of this full amount has been distributed to our students.
The second part also equaling $13 7 million was available to either offset Lincoln to increase costs associated with significant changes in the delivery of instruction as a result of the pandemic or to provide additional age of students as of the quarter. We utilize the full amount, which includes approximately $10 million, which provide a direct fee.
Financial benefits to our students.
Finally, due to our strong Q1 first quarter performance, putting US ahead of our plan for the full year, we are increasing some of our annual guidance metrics.
Adjusted EBITDA is now expected to be between $32 million at $37 million for the year, an increase of $3 million over prior year got over prior guidance.
Pretax income is now expected to be between $22 million and $27 million for the year, which is also of $3 million increase over our prior guidance.
In addition, we are reaffirming the following prior guidance annual revenue growth of between seven and 12% over prior year student start growth of 5% to 10% over prior year with growth in each of the year's remaining quarters as compared to the respective period.
The respective prior year period, and finally, we continue to expect of our capital expenditures to be approximately $7 5 million.
We look forward to communicating our progress towards these goals throughout 2021 with you.
Thank you for your time today and with that I'll now turn the call back over to the operator, So we can take your questions operator.
Thank you as a reminder to ask a question you're on mute.
Star one on your telephone withdraw your question press the pound key.
As a reminder, please limit yourself to one question and one follow up our first question comes from Alex Paris with Barrington Research. Your line is open.
Hey, guys congratulations on the launch.
Congratulations on the strong start to the.
The new year on here.
Have a few questions, but I'll just.
Knock it down to one of.
You had announced a couple of.
The investments planned for 2021.
One of which you called out on the last call of centralizing financially where are we now.
And Oh is that complete and what what did that essentially entail.
Sure, it's not complete yet Alex we're still underway won't be complete really until the probably the first quarter of next year and what it entails is simply moving the function out of the 22 campuses. It may regards in into a centralized call center, where we think we can better serve the students and.
Give them better access to the financial aid and do it on a more timely basis. So we're right on track with what our plan is and for our budget for the year.
Great.
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They said one question, but I'll just sneak one other in here if you don't mind, Okay, we've got to actually Didnt. They.
I didn't go to the other the next person yet I guess just on the starch side, it's obviously, an eye popping, 31% growth year over year on there and I heard the the breakdown.
The.
Uh huh.
What you had said this morning was similar to what you had said in March on the on the last quarter call that she is going to be a bit of a challenge the summer ive heard that from others in the space.
But strong demand from the adult students could lead to upside surprises.
Over the course of the year has adult men holding up as well as you had hoped.
Yes, yes, I mean, certainly our guidance.
Dave just a couple of months ago of.
Shows that yeah, we have nice strong and built on a roll mint and that seem to be continuing and we will just have to wait to see how it all plays out for the full year, but yes, that's a very positive trend.
Great Okay, well, thank you again and congratulations.
Thanks, Alex Thanks Al.
Thank you. Our next question comes from Steven Frankel, That's Colliers Your line is open.
Good morning, Scott. Thank you from the opportunity to ask some questions. This morning.
So you could take a little more into that adult population in the pipeline.
All of US on this side of the table, we'll continue the wonder in the winter you're going to see some kind of benefit from all of the economics.
Dislocation.
What do you see what can you do from a marketing point of view that maybe stimulate some of that demand.
Sure well I mean, we are getting some of that demand as you can see from the last several quarters of growth.
We're going to continue to do some additional marketing efforts to reach individuals we definitely though.
It's more anecdotal, but we know that the increased amount of unemployment assistance that people are getting are causing people to a delay certain decisions and I say that simply because we've been looking to hire some additional people, especially in some of our call centers and frankly been told.
You know the theyre going to wait until the fall before they make a decision. So I assume that that same thought process is probably critical link through to some of our students. So long story short we've seen some good growth we've achieved good growth with our adult and that momentum seems to be playing out for the near future at least.
Okay and.
How are things on the cost of.
Acquiring leads of your senior digital marketing of course decline now pulse collection.
We have seen our actual cost of leads increased by low single digits, but we're becoming better at acquiring leads and better at dealing with the lead. So our overall cost per start is actually down meaningfully in the first quarter.
And what's going on at least qualitatively with start rates.
On the start rates are holding show right. So yes, yes, the theyre staying about the same our conversion rates of leads into the enrollment is definitely stronger than it has been.
And overall as I said, our lead to start rate has been improving and the cost has been dropping.
Okay.
And.
When do you think the clear this health care of backlog and what does the pipeline look like for the.
The health care side do you think you could see an acceleration once this clears that there's still good demand for those programs.
Well it hasnt slowed down our demand we've kind of gone through that bump on the health care side. It's these are students that we are trying to get graduated by completing their clinical work and given all the talk of at least here in New Jersey, and New York, where the students reside of things getting back to normal in the next couple of months or.
These things more open I'm anticipating that the clinical sites will be available for these 80 or so students to complete their education and move on.
As far as new students coming we definitely see strong growth on the nursing side and as of right. Now we haven't had to push off or don't anticipate certainly in the next quarter pushing all of any of the starts in our health care sector.
Okay and.
Any update from the state of New Jersey on your desire to take on a new program there.
Yes, the only update is weight they haven't come to an agreement of how they are.
New allow schools like ours become degree granting.
When we submitted our application it will be two years. The September the head rules and regulations of how of that process would be and then in the midst of that decided to change the process and they still have not yet finalized the rules around that simply because I guess they've been distracted with COVID-19, but we are told we are at the top of.
On the list and so we anticipate or are anxious for them to come up with these new these new rules and regs and at which point, we'll just modify our application to be in accordance with what they are.
Great. Thanks for your time this morning.
Steve I appreciate your interest.
Thank you. Our next question comes from Austin <unk> with Canaccord. Your line is open.
Yeah, Hi, Thanks for taking my questions on.
Wondering if you're seeing any meaningful.
On.
Expense benefit from.
What youre doing with the.
Blended learning.
Yeah.
As of now we are not.
Because we're still on the development stage.
Eventually I think be more effective and efficient for us, but as we make the transition as we still look to make the the programs as robust as possible and you know frankly fully figure it out.
I would not say that we're receiving any kind of.
Meaningful savings from our blended program at this time.
So what would be the timeline on on that kind of development stage.
I'd say like 18 months from now.
Okay, and just last one of the Medicaid.
So I was just.
Can I add one of the benefits of the blended learning, we think sooner will be favorable for our students. So it should help our retention rates and other things given the students more flexibility. That's one of the main reasons, we're doing it even more so on the onset and the cost savings.
Got it okay.
And then given some consolidation in the industry on both the healthcare and technician sides can you walk through Lincolns M&A philosophy and strategy.
Sure I mean, we look at properties that are on the market or reach out to those that aren't on the market and we will continue to do so and when we find the right mix at the right price that we think is advantageous to US we will certainly move forward on net account.
As you may or May not know certainly preview of prior and our previous history. We made many acquisitions and so we are certainly not adverse to making acquisitions and we continue to look for.
Four of frankly attractive accretive things too to buy.
Got it okay. Thank you.
Great. Thank you Austin.
Thank you.
As a reminder, if you'd like to ask a question press. The Star then one key on your Touchtone telephone.
Our next question comes from Raj Sharma with B Riley Your line is open.
Hi, Good morning, then the congratulate Raj.
On the really solid results.
I had just the wanted to dig in a little bit more on the on the start something last four quarters.
Much higher starts.
And in the guidance of 5% to 10% is there.
Any sort of the degree of concern.
Or is it just tougher comps or.
Could you could you have talked about that and maybe also break it down on the starts between the high school and young adults and I.
The I know that you mentioned high school is tougher.
Just a little bit more color on that.
Yeah. So just in general about 20% of our starts are from the high schools and the full year.
And as we look at it going forward, we view that to be down several hundred starts.
So that says the reason why the last half of the year the start rate.
Sorry.
The start growth rate is less than in the first half of the year.
But we will certainly revise or we look at that at the end of the summer if need be but as of right now since our window for us most students start within about 30 to 60 days of reaching out to us.
It's only our high school market that we have a longer window of seeing what the demand is and again based off of what we see we see that the high school market will be probably down for us. This summer and then the question is how strong will the adult market b to compensate for that and that's how we'd come up with our projections for the rest of the year.
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Got it and on.
Note that you've already kind of mentioned the so the show rates are better.
Then the last few quarters or just the bottom line and also just could you talk about the interest levels the.
Interest levels.
Yeah. So the show rates of our steady they can fluctuate quarter by quarter, there's nothing dramatically going positive or negative on the show rates of demand overall is strong our leads.
Actually if you look at our total leads.
Our total leads are down, but that's the only because we've gotten out of third party leads so we're getting a much better lead and so our lead to start rate has been increasing.
Over the last three years, and we anticipate that that trend will continue frankly.
Right and just lastly, I know that this has also been kind of asked.
Perhaps just wanted to understand your growth plans for the next few years.
How do you see that these the grille.
The growth coming entirely from rising enrollment on existing programs the existing campuses of any sort of desire of appetite.
Core to start more program of slash acquire.
Schools.
The first of all of the definitely have an appetite to acquire schools as well as open schools and so while we anticipate that we will still continue to have growth in our existing core of 22 campuses are our desire and expectation is that we'll have more campuses than we have today in a few years.
And that will be probably a combination of organic as well as acquisitions.
Right.
Great.
Thank you so much again.
Stellar results congratulations.
Thank you. Thank you appreciate it rush.
Yeah.
Thank you.
If you would like to ask a question press. The Star then the one key on your Touchtone telephone.
While we compile the Q&A roster.
And I'm showing no questions at this time I would like to turn the call back to Mr. Scott Shaw for any closing remarks.
Thank you operator as always I want to thank our shareholders for your continued interest and support we had an excellent start to 2021, which has bolstered our growth outlook for the remainder of the year Lincoln financial condition in our operating leverage has improved dramatically and we are now able to make the investments needed to expand our opportunities.
<unk> for both our students and shareholders in the years ahead, Brian and I look forward to sharing our 2021 second quarter results with you on August until then stay safe. Thank you bye bye.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
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