Q2 2023 Lincoln Educational Services Corporation Earnings Call
Okay.
Yeah.
Good day and welcome to the Q2 2023 Lincoln Educational services earnings Conference call. At this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone and you will done here.
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Be advised that today's conference is being recorded.
I'd now like to hand, the conference over to your Speaker today, Michael Paul would you. Please go ahead.
Thank you Abigail and good morning, everyone before the market opened today Lincoln educational services issued its useful we used for 40 financial results for the second quarter ended June 32023.
The release is available on the Investor Relations portion of the company's corporate website at Www Dot dot.
Joining us today on the call or Scott Shaw, President and CEO , and Brian Meyers Chief Financial Officer.
Today's call is being recorded.
It is being broadcast live on the company's website and replay of the call will be archived on the company's webs.
Right.
Statements made by Lincoln's management today's call regarding the company's business that are not historical facts may be forward looking.
Statements that determines identified in federal Securities Laws Award May will expect believe anticipate project plan intend.
Estimate and continue as well as similar expressions 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 get these statements reflect current expectations about the company's future performance or banks and are subject to a number of uncertainties risks and other influences many of which are beyond the company's control that may airport, the accuracy of the statements and the projections upon which the segment and statements are based.
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 quarterly report on Form 10-Q 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.
As of the time with respect to future events.
Also statements Archaea co op ex.
Excuse me are qualified in their entirety by this cautionary statement.
There is no obligation to revise or update any forward looking statements, whether as a result of new information.
Our Bachelor or otherwise after the date thereof, now I would like to hand, the call over to Scott Shaw President Lincoln educational.
Surfaces.
Please go ahead. Thanks.
Thanks, Michael and good morning, everyone. Today, we reported strong second quarter results as revenue from campus operations grew nearly 10% over last year student starts increased approximately 18% and net income more than tripled.
<unk> also achieved a significant milestone as we completed the sale of our Nashville campus, which generated net cash proceeds of 33 million at quarter end, we remain debt free and had approximately $95 million in cash and short term securities.
Despite continued historically low unemployment our strategy to prepare an increasing number of students for productive rewarding in our central careers, while helping American corporations close their skills gap is clearly working.
The combination of our hybrid teaching bottle marketing programs centralization of our financial aid process are all assisting and increased student starts rising placement rates and enhancing returns to our shareholders. Furthermore, we continue to make good progress with replicating high in demand programs.
Two existing campuses and expanding our footprint with our new Atlanta campus.
Both of these initiatives will provide additional growth in 2024 and beyond our performance. During the first half of 2023 enables us to now revised upwards several guidance metrics, which Brian will review in a few minutes.
This positions Lincoln for an even stronger performance in 2024 and positions us well for our 2025 goals.
The rollout of our hybrid teaching model is progressing as planned and will help us become more scalable and efficient once fully in place in 2025 as we've discussed with you in the past the model combines hands on learning our campus facilities, while delivering a greater component of classroom work through online instruction.
It enables our students to work part time or manage other commitments wildly pursue their Lincoln education and is specifically designed to help a higher percentage of students to graduate.
The model also standardized as our programs across campuses with on campus time slots of morning afternoon, and evening courses and with consistent start dates that provide greater flexibility efficiency and overall capacity at our existing campuses.
Rollout of our hybrid model at most campuses, coupled with adding existing proven programs at select campuses position us to drive higher campus in company profitability in the long term.
Another key component to our growth strategy is the centralization of our financial aid process. During the second quarter. We believe improvements we've made with our centralization effort contributed to our student start growth rate and we just moved the last group of schools to the new software platform several weeks ago.
We have analyzed the data from schools that were transitioned earlier this year and clearly we are seeing an improvement in a number of areas for instance, the new process has reduced the number of days. It takes to package in Applegate financial aid. This improved efficiency helps the student know as quickly as possible how they can pay for their education.
And it helps us convert our lead generated through our marketing programs into a start while the full rollout of this process will take through the end of the year. We do expect to see continued gradual contributions from this effort during the second half.
Another key component of our growth strategy includes opening 10, new program replications across our existing campuses by the first quarter of 2025.
These programs are focused on preparing students for rewarding careers and electrical HVAC welding automotive and medical assisting which are some of our most successful and in demand programs.
Replication model provides lincoln with substantial organic growth opportunities through the fastest and highest return on investment as we leverage our existing infrastructure campus management and market knowledge.
We continue to anticipate that these 10, new programs will reach their full run rate. After approximately three years of operation at which time each is expected to provide an average of $1 billion in added profitability annually.
We did plan to open three replication programs by the end of the current year, however, staffing issues at local government and regulatory agencies are delaying the startup of these programs by three to five months and we now see these additions getting underway in the first quarter of 2024, which should enhance next year start growth.
During the quarter, we actively implemented the new campus component to our growth strategy. We continued to build out the new Atlanta campus and remain on track to enroll our first students at the facility during the first quarter of next year with the sale of our Nashville campus complete we now are aggressively moving to secure a new site in that market and hope to have news.
<unk> in place by the end of the year.
Meanwhile, we continue to fully operate at the existing campus.
In addition to the Nashville campus. Our goal is to open one new campus a year over the next five years and based on ongoing site selection and negotiations we are fully confident of achieving that objective.
Our efforts to broaden existing corporate partnerships, while adding new ones continue to make steady progress.
During the quarter, we announced a new collaboration with Hunter engineering, the leading name in the under car service industry.
Later this summer our Denver campus will become the latest site to House Hunter Training Center, where students can train directly on patented hunter equipment.
Local repair shops will also have the opportunity to send technicians to the Lincoln campus to train on the Hunter equipment.
In addition, we recently opened our second Tesla training program at our Columbia, Maryland campus and Tesla has asked us to help with securing additional locations.
Mark the 25th graduating class from our long standing Hussman partnership, which provides qualified Lincoln Tech HVAC graduates with free advanced level training and a career with hussman all over the United States discussions are ongoing with our current OEM partners to expand to other campuses as well as new corporate partners.
<unk>.
We've had a strong first half of 2023 and our team is executing quite well we achieved a one 5% increase in our start rate during the second quarter, which we attribute to the increased number of leads being generated by our marketing programs. The more efficient financial aid packaging that is emerging from the centralization effort and.
The timing of starts under the hybrid teaching model. These three factors combined to positively impact both high school graduate starts as well as the adult students starts during the quarter.
We expect our students start growth rate to slow during the second half of the year simply because the implementation of our hybrid model means we have fewer start dates in July compared to the prior year. In addition, with the opening of the three programs at existing campuses now moving to the first quarter of next year, we won't have those starts in the second half of this year.
The net impact is that we do expect to finish the full year with 6% to 10% student start growth and Brian will provide some more color on this metric during his remarks.
Overall, we believe our strategies have put Lincoln and are positioned to consistently grow the interest in our programs is quite strong and employers continue to have a dire need for trained employees at the same time prospective students are looking for alternatives to four year College are strong graduation, and placement rates provide excellent.
<unk> points, and our balance sheet, which has never been stronger is enabling lincoln to expand our programs and locations, which will create long lasting benefits to our students. Our graduates are instructors, our corporate partners and increasing returns to our shareholders.
Finally, our momentum has been gaining increased recognition in recent weeks of particular note for today's call was our inclusion in the broad market Russell 3000 Index on June 26, the inclusion meant that Lincoln was also included in the Russell 2000 index.
Buying these milestones have created additional demand for Lincoln shares from indexed investors and served to increase awareness of our company by institutional investors.
I'm also proud to report that our Marietta, Georgia campus was named a school of distinction by our accrediting body ACC SEC.
Every three to five years schools or re accredited and only a handful of them received this recognition.
Pleased with our organization's performance at every level and I continue to believe that we are poised for even greater success as we truly make a difference in helping our country address it skills gap.
Now I'd like to ask Brian to provide his review of our second quarter financial results and our updated guidance Brian .
Thanks, Scott Good morning, and thank you for joining our second quarter earnings call I am pleased to report our solid financial results and highlight recent developments that can we continue to advance our strategic growth initiatives.
Before we turn to the operating results, we completed the sale of our Nashville, Tennessee campus property for net proceeds of $33 3 million the sell resulting in a gain of $39 million and a noncash impairment charge of $4 $2 million related to the goodwill and long lived assets of the Nashville campus.
To ensure campus operations remain unknown interrupted for our students we entered into a leaseback agreement for an 18 month period to provide for the relocation to a more modern and efficient facility within the Nashville market.
The initial 15 months of this lease is rent free meaning there are no cash payments due however for accounting purposes, we record the fair value of the free rent as a $2 3 million prepaid asset, which will be amortized monthly as noncash rent expense.
The sale proceeds along with our cash flow from operation boosted our ending cash balance of 95 million at quarter end exceeding our previously disclosed estimate of 85 billion. Our cash position is one highlight of our strong balance sheet and financial position as we are debt free and that working capital of nearly <unk>.
$70 million.
Besides working capital needs, we expect to utilize the cash to fund current and future growth initiatives, including the build out costs of the new cap Nashville campus, which is expected to range between $15 million to $20 million in capex.
The Buildout includes additions of two of Lincoln's in demand programs each back in electrical which will be new offerings at this campus.
Our capital expenses during the court during the second quarter were $7 6 million, which included the ongoing build out of our new Atlanta campus and the expansion and addition of new programs at existing campuses.
During the quarter. We also incurred 300000 of expenses related to the opening of the Atlantic campus. We continue to explore additional expansions and new campus growth opportunities, which we anticipate funding with cash on hand.
Kevin invested a significant amount of our total cash balances and low risk market securities, including Treasury bills. These investments yielded a half a million dollars in interest income during the second quarter.
Now turning to our financial results unless otherwise noted all comparisons exclude the sum of old campus that is being closed this year and included in our transitional segment and the pre opening expenses of our new Atlanta campus.
Revenue increased nine 8% or $7 9 million to $88 $2 million higher revenues were achieved due to one an eight 6% increase in average revenue per student and two our strong 17, 9% increase in student starts in the quarter.
Revenue per student increase in part due to tuition increases and the transition to a hybrid teaching model, which increases program efficiencies and deliberative deliberate accelerated revenue recognition, particularly in in our evening programs.
Another contributing factor was a higher tool revenue related to increased starts in the quarter, which led us to finish the quarter with a higher population than last year driving future revenue growth.
Our robust student start growth was aided by marketing investments emissions initiatives and the progress we continue to make with our centralization of financial aid, which slightly increased our enrollment to start rate.
Operating expenses were $88 million in line with our expectations when adjusted for the National sale items and the other nonrecurring items detailed in our adjusted EBITDA calculation reflected in our Q2 earnings release.
As we have previously communicated while the implementation of our hybrid learning and centralized financial aid will drive future efficiencies. We are incurring duplicate expenses this year related to both projects.
Adjusted EBITDA was $2 4 million ft, excluding nonrecurring items detailed in our Q2 earnings release. This was slightly higher than last year's $2 3 million and ahead of our expectations going into the year.
Our financial results for the six months were ahead of our internal plan and provide a strong foundation as we enter the second half of the year. We're excited to have the resources to enable us to continue to improve our processes and services for our students.
Developing new growth opportunities.
Turning to the cash flow, we generate over $10 million in cash flow from operations in the quarter.
We invested $7 6 million in capital expenditures largely related to growth initiatives. We also had some activity under our share repurchase plan in the second quarter, we repurchased 61000 shares at an average price of $5 49.
In total since May 2022, we repurchased 161 7 million shares for $10 3 million.
Lastly, I'll provide some details on our revised outlook for the full year our.
Our strong start growth in the second quarter, resulting in a 12, 5% stock growth through the first half of the year, we anticipate stock growth in the second half of the year will be lower with second half saw slightly above prior year at.
As Scott mentioned during his comments, we attribute this outlook mainly due to the timing of start dates and new program Rollouts under our new hybrid teaching model, we no longer have significant start dates in July which lift.
Which we had in prior years as a result, we benefited as some students elected to accelerate their start dates to Q2 from Q3.
In addition, we are experiencing delays in the rollout of certain new programs at existing campuses that will lead to a shift of approximately 150 starts. We originally expected in 2023 to 2024. This despite the shift of some starts and program delays, we still anticipate stock growth for the balance of the year.
In total our strong performance in the first half allows us to refine our outlook for full year starts.
We're making an upward revision to our financial guidance, which we previously updated after Q1, our full year guidance is now the following revenue in the range of 360 million to $370 million.
Adjusted EBITDA in the range of 22 million to $26 million adjusted net income in the range of $10 million to $13 million.
Student starts growth of 6% to 10%.
As our investments in the Atlantic campus and other growth initiatives will accelerate in the second half of the year, our projection for capital expenditures remains unchanged at $35 million to $40 million.
In terms of stock based compensation, we now forecast to be $5 million for the full year based on our improved performance and outlook. Accordingly, we anticipate $1 6 million of expense recognized evenly in the second half of the year.
In conclusion, our results and outlook for the balance of 2023, we reflect the growing demand of our programs and continued progress on our key initiatives for the year.
To thank our entire team for their efforts and contribution in delivering another strong performance this past quarter, while continuing to position Lincoln for growth in the second half of the year and beyond.
We look forward to communicating our progress following the third quarter and now I will turn the call back over to the operator, So we can take your questions operator.
Thank you at this time, we will conduct a question and answer session. We ask that you limit to one question and one follow up and return to the queue for additional questions. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced one moment for our first question.
Our first question comes from Alex Paris, with Barrington Research. Your line is open.
Hi, Thank you for taking my questions congratulations on the quarter and getting the Nashville campus sale closed.
Thanks, Alex Thanks Al.
Yes.
Point of clarification before my question.
Yeah.
I missed it.
Scott when you were talking about the replication model.
What where are we expecting in terms of new student sorry, New program Replications This year and what we have as a result of the delays in.
Personnel and the regulatory offices.
Sure well as Brian mentioned in his there are about 150 starts that are moving into next year, which were three programs really at our Lincoln, Rhode Island campus that are being delayed simply because of timing of getting building permits and things of that nature executed so its still on track.
Still going to open just about a quarter later than we had anticipated. So that's kind of as far as program replication, that's kind of the major change.
Going forward.
I think you launched two in the first quarter medical assisting in electrical.
Did you launch any in the second quarter and then how many in the second half do we anticipate given this change at Lincoln, Rhode Island.
Sure Yes.
Brian has listened yes, so we are launching.
The timing I'll have to get back to you on so there is.
I'd say there is five that we're launching but somewhat program expansions like we have two welding programs that were expanding.
But there will be about five that we're launching this year that will have starts.
So just to be clear, we're expanding which we don't normally we don't counties, but we did expand two of our welding programs simply because we have such good demand for those two markets and then we have a medical assisting program at Columbia, Maryland that is.
Is about to open and we have a opportunity potentially for electrical program, possibly could open in the fourth quarter, which would actually be ahead of schedule alright.
So in summary, I guess this for Theres, two medical assisting and possibly two welding expansion.
So as we said 150 or moving into Q.
2024, so theres about 300 that was budgeted about 150 were projected to take place during 2023, and another 150 moving to a 100 to 2024.
Great and then you expect a number of replications next year as well right.
Correct, Yes, we should have a good lineup of activity that.
To get us to Nintendo NASA.
Then my last question before hop in the queue would be starts growth starts growth was very impressive.
Again, driven by in terms of programs driven by transportation and skilled trades up 18, 6% in the quarter and then the healthcare and other professions up six 5%, what's driving transportation and skilled trades over.
Healthcare and other professions year to date.
But I think that actually both are doing quite well and some of it is just timing when start to occur but overall what is so encouraging is the fact that we have this low unemployment rate and yet we're seeing strong demand, which to me is just I think people I guess read the papers more than I thought.
People are understanding that there are great opportunities out there for the trades you can get an education without spending for years and accumulating a lot of that and I think that that message is resonating with more people and the programs that we're offering are ones that are just that.
The opportunities, we just have more employers coming to us and we have graduates and that maybe is also getting out there in the marketplace that these are good long term opportunities in their real careers that can give you a solid.
Opportunity. So we are doing well with our marketing can't take that away from my marketing team, we seem to be attracting and getting stronger acceptance and stronger lead flow than we had counted on to be honest. So.
Part of it has to be market part of it has to be what our team is doing to access the market and as Scott mentioned, we are having a slight pick up because not many programs now did not have a start in July so some of those students elected to come in in June . So there was a slight pickup from that as well.
Great. Thank you guys and I'll get back in the queue.
Great. Thanks, Alex.
One moment for our next question.
Our next question comes from Steven Frankel with Rosenblatt Securities. Your line is open.
Good morning, I'm wondering if you could.
Maybe give us.
Some help on how much was the streamlining.
<unk> financial aid and factor.
And starts maybe how many points you would say at the start growth was.
Was it contributed contributed from that.
Yes, I wish I could do that scientifically for you I can't break it out as to what percent is all I can tell you Stephen is with the process that we've put in place we've refined it and I'll say it. This way we will have a process that we're calling financial aid packaging on demand which is.
The metric I can tell you is that the number of days to get someone package at those campuses that are implementing that approach is much less than what it was and the reason why we implemented the approach was because we know that the sooner students know how they can pay for their education. The more likely it is that they're going to start so.
Parsing it out in determining exactly what how many basis points of improvement is due to that I don't know, but thats why we went after that strategy and we're getting results. So I can definitely attribute some of that improvement to that but there could be obviously other factors as well.
How much room is there for further improvement in revenue.
<unk> had in the back half.
So.
As I mentioned for our what we call our hybrid learning model, we did launch it in the second half of last year. So.
Where most of that pickup is in the <unk> program, where we shrunk it from 24 months out to 12 months. So since we did have some starts last year in the second half of the year from that.
It would be it will start tapering a little bit some of it going forward.
But the good news is we finished the quarter with more students. So that that's also going to contribute to our future revenue growth.
And then I'll sneak in one more here.
The trend in cost per lead or are you seeing.
Yes.
Friendlier advertising fire.
For the year.
We are I mean, our when you look at our total cost per start and marketing were actually down for the first six months compared to last year.
That is because of improved performance with the start rate, but we're not seeing or experiencing.
As much price inflation on our leads as we were last year that's for sure.
Great. Thank you.
One moment for our next question.
Our next question comes from Eric Martin <unk> with Lake Street Capital markets. Your line is open.
Yes, I wanted to dive in on the.
The revenue growth versus the growth in your educational services and facilities expense, we have revenue up 10%.
The educational services and facilities expense was up 11% wondering if are there one time items in there just looking for a point of leverage here going forward.
Right. So there are onetime items in both our two key initiatives. One is our hybrid model that we're still teaching out the old program, while we're teaching the new program. So there is some cost associated with that as well.
As well as there was in financial aid as we're still transitioning we still have many students.
These students many advisors at school as well as corporate right now we're still transitioning what we call I'll say re entries to be centralized and a few other areas. So as we're doing that there is some additional cost and financially as well, but the one thing I would look at there.
There were some onetime items as well in our earnings release that we talked about that contributed to the.
That overage.
Okay, and then I know you talked about the end of 2025 for the full transition to hybrid remind me again when is the financial aid.
Consolidation play decentralization.
Yes that financially it will be wrapped up by the end of this year as far as the fact that everyone will be on the new platform.
We will be.
Staffed accordingly for delivering on this new platform. So by the end of this year.
Gotcha, Alright, and the cash balance looks terrific I know were setting aside $15 million to $20 million of that.
90.
With the number.
$6 million or so.
What else so uses of cash it looks like you bought a little bit of stock.
Just curious to know if there is if it.
Pointing more towards.
Acquisition opportunities program investments or share repurchases.
Okay well.
And hopefully depending on the stock price will still support the stock, but a lot of it is due to our our guidance is $35 million to $40 million in capital expenditures in the first six half. His first six months of the year, we only spent $11 million. So it is going to ramp.
Our Atlanta campus is going to be spending in the neighborhood of about maybe another $9 million from now until the end of the year as well as new programs is probably going to be another $10 million as well. So a lot of that is I'll call our initiatives our growth initiatives will be spending a lot of it on.
Got it thanks for taking my questions.
No problem. Thank you. Thanks.
As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
One moment for our next question.
Our next question comes from Raj Sharma with B Riley Your line is open.
Yes. Thank you for taking my question congratulations on.
Really good results for Q2 could you.
Just explain a little bit more on the composition of the starts and the starts.
They are higher year on year significantly across nationally sort of the same trend.
And also.
Young adults high schoolers kind of composition.
Yes.
Sure. Thanks Raj, Yes, so we're seeing growth as you just mentioned kind of across the board in every state that we operate in.
There is a little bit stronger growth.
Programs around skilled trades in automotive.
Healthcare, but as you know that can fluctuate quarter to quarter as far as the growth as far as the the makeup I would say that for US high schools for the first six months are about flat frankly with last year.
But it's really in the adult market, which is somewhat counterintuitive again, given the low unemployment rate, but it's really on the adult side that we're seeing stronger growth than we had forecasted.
And nationally to you have the same sort of <unk>.
Increased trends or is there some areas that better.
No there really isn't any geography that tends to be better than the other I mean, it seems to be really very broad.
And the good news is for Q2, all but two schools that have stock growth.
Majority of our schools, but it did have a nice stock growth.
Right and and so you expect this interim.
Interest despite like you pointed out despite inflation still.
Being.
Somewhat elevated and higher costs do you expect the interest in programs from the adult young adults.
And despite tight labor markets, you would expecting and seeing that to continue I mean other than the 150 starts that you say got pushed out to Q1.
Yes, I can tell you that our.
Our activity in the month of July from a lead perspective has not waned.
What was happening before so yes, we do expect it to to continue.
Again, I do believe that there is probably a shift out there that meet.
Certainly as you can look at the numbers of enrollments at community colleges and others.
People are making decisions and just takes a few few people in any market to decide to go to our school versus go to community College for us to get a bit of a lift.
We're not changing the world here drastically, but we're getting really strong results because of it.
And thank you and the tuition increases will be across the board as well or certain programs more so.
And do you see that.
Sort of being taken really well or do you see more increases.
Possibly yes.
Yes sure.
I'd like to raise tuition is obviously use it does make it more challenging for students, but at the same time, we can make sure that we're being prudent with our expenses and certainly last year. We saw the greatest increase that we've seen in a long time in many.
Cost items, so we did raise tuition.
<unk> in January slightly higher we typically were let's say, 2% to 3% this year, we're at closer to 5%.
Some of that was targeted more towards our nursing programs, where we saw higher amounts of certainly salary increases for nurses. So.
We don't anticipate that that is going to continue going forward, but.
Where it makes sense and where we are frankly need to given the cost of delivering the education will do well I should say, we will raise the tuition as modestly as possible.
Great and if I can just sneak in one more.
Yes.
Earlier caller had mentioned.
Tuck in.
Do you see possibility potential tuck in.
Opportunities.
<unk>.
Okay.
I apologize.
Could you I apologize could you repeat that.
Yes, I'm, saying do you see potential.
Tuck in acquisitions are you looking at them as the environment sort of.
Conducive.
Sure.
Yes. So we continue to look at acquisitions, frankly of all sizes tuck in or even larger.
It all comes down to valuation.
I've seen that seems like lots of values still remain I'll say higher than I would like.
But at the same time, there's always something new that's coming out onto the marketplace and we'll just continue to evaluate and make the best judgment at the time when there's the right opportunity for us.
Great Great. Thank you for answering my questions again.
Maturations no problem Brian Thank.
Thank you.
Hi, guys.
One moment for our next question.
Our next question comes from Bob <unk> with Epic Partners. Your line is open.
Good morning, gentlemen.
Good morning to good morning.
With the move to more the <unk>.
Hybrid.
Educational delivery.
Are you at all concerned and what steps.
Steps are you taking as it relates to outcomes.
Distance education.
Alright.
Reasonably demonstrated during the pandemic to be suboptimal.
Are you concerned about graduation rates and placement rates.
Alright.
Doing surgery to enhance those.
Yes, no. It's a good question.
Well first of all we're always concerned about our graduation placement rates and just to reiterate we have a goal of getting to 70% graduation rate and 85% placement rate and we're about 1% and two percentage points from that target.
We are implementing a lot of change with regards to our delivery of our education as well as making enhancements to our programs and just to remind you. When we say blended it's about 25 to maybe 30% of the program Thats online and we are a hands on institution.
We specialize in and Thats, what our students like and none of that's been cut back at all but there are theories and things that you do need to learn so always our programs were about 50% didactic and 50% hands on and what we've done is taken about half of that.
The theory part and put that online where we believe frankly, we can create I'll say, a better unified experience with videos and more consistent delivery of those theories, but we're not in any way cutting back at all in fact, we are looking at enhancing with new.
<unk>, new teaching techniques, and new teaching models and new teaching equipment as it comes out so that when the students do come to our campuses, it's going to be hopefully even more engaging for them than it was previously.
And to date as we've looked at comparing our our retention of students in the new model versus the old model, we are not seeing a degradation.
So thats reassuring to me, but with that said we are constantly monitoring that.
Thank you.
Sure.
Okay.
That concludes the question and answer session. At this time I would like to turn it back to Scott Shaw for closing remarks.
Great. Thank you all for joining us today and as you can see from our performance, we are making great progress and remain very excited by our numerous opportunities for continued growth I'd be remiss for not thanking and acknowledging all of our employees for their dedication and commitment to our students we change people's lives and to everyone at our campus.
<unk> takes this responsibility very seriously students come to Lincoln Tech to put their potential to work and we look forward to helping each and everyone strive for that goal.
Thank you again, and we look forward to updating you on our progress. This fall I hope you all have a wonderful rest of your summer so long for now bye bye.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Okay.
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Okay.
Okay.
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