Q2 2024 Universal Technical Institute Inc Earnings Call

Operator: Good day, and welcome to the Universal Technical Institute second quarter 2024 earnings conference call. All participants will be in listen-only mode.

Good day and welcome to the Universal Technical Institute second quarter 2024 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opera.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Matt Kempton, Vice President of Corporate Finance. Please go ahead. Hello, and welcome to Universal.

Operator: Community to ask questions to ask a question you May Press Star then one on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded.

Operator: I'd now like to turn the conference over to Matt Kempton Vice President of corporate Finance. Please go ahead, Hello, and welcome to Universal Technical Institute's fiscal second quarter 2024 earnings call. Joining me today are CEO, Jerome Grant and CFO transition.

Matthew Kempton: Welcome to Universal Technical Institute's fiscal second quarter 2024 earnings call. Joining me today are CEO Jerome Grant and CFO Troy Anderson. Following our prepared remarks, we will open the call for your questions. A replay of this call, its transcript, and our investor presentation will be archived on the Investor Relations section of our website at investor.uti.edu, along with our earnings release issued earlier today and furnished to the SEC. During this call, we may make comments that contain forward-looking statements as defined in the Private Securities and Litigation Reform Act of 1995, which, by their nature, address matters that are in the future and are uncertain.

Matthew Kempton: Following our prepared remarks, we will open the call for your questions.

Matthew Kempton: A replay of this call its transcript in our investor presentation will be archived on the Investor Relations section of our website at Investor Day in U T. I D E to you along with our earnings release issued earlier today and furnished to the SEC.

Matthew Kempton: These statements reflect management's current beliefs and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. These factors include, but are not limited to, those discussed in our earnings release and SEC filings. These statements do not guarantee future performance, and therefore undue reliance should not be placed upon them.

Matthew Kempton: During this call we may make comments that contain forward looking statements as defined in the private Securities Litigation Reform Act of 1995, which by their nature address matters that are in the future and are uncertain.

Matthew Kempton: These statements reflect management's current beliefs and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements.

Matthew Kempton: These factors include but are not limited to those discussed in our earnings release and SEC filings.

Matthew Kempton: These statements do not guarantee future performance and therefore undue reliance should not be placed upon them.

Matthew Kempton: We do not intend to update these forward-looking statements as a result of new information or future developments, except as required by law. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of fiscal 2023. The information presented today also includes non-GAAP financial measures. These should be viewed in addition to and not as a substitute for the company's reported results prepared in accordance with U.S. GAAP.

Matthew Kempton: We do not intend to update these forward looking statements as a result of new information or future developments, except as required by law.

Matthew Kempton: He's note unless otherwise stated all comparisons in this call will be against our results for the comparable period of fiscal 2023 the.

Matthew Kempton: The information presented today also includes non-GAAP financial measures. These should be viewed in addition to and not as a substitute for the company's reported results prepared in accordance with U S. GAAP.

Matthew Kempton: All non-GAAP financial measures referenced in today's call are reconciled in our earnings press release to the most directly comparable GAAP measure. For more information regarding definitions of our non-GAAP measures, please see our earnings release, financial supplement, and investor presentation. With that, I will turn the call over to Jerome Grant, CEO of Universal Technical Institute, for his prepared remarks.

Matthew Kempton: All non-GAAP financial measures referenced in today's call are reconciled in our earnings press release to the most directly comparable GAAP measure.

Matthew Kempton: For more information regarding definitions of our non-GAAP measures. Please see our earnings release financial supplement and Investor presentation.

Matthew Kempton: With that I will turn the call over to Jerome Grant CEO of Universal Technical Institute for his prepared remarks Jerome.

Jerome A. Grant: Thank you, Matt. Good afternoon, everyone. We carried our operational momentum into the second quarter of 2024. Across our key metrics, we performed consistent with, and in most cases, better than our expectations. We had 5,480 new student starts in the quarter, which is an 18.5% increase, and our second quarter revenue grew 12.4% to $184.2 million. Both of these were above our expectations.

Jerome A. Grant: Thank you Matt Good afternoon, everyone. We carried our operational momentum into the second quarter of 2024.

Jerome A. Grant: Across our key metrics, we performed consistent with and in most cases better than our expectations.

Jerome A. Grant: We had 50 480, new student starts in the quarter, which is an 18, 5% increase in our second quarter revenue grew 12, 4% to $184 2 million. Both of these were above our expectations for profitability net income was $7 8 million diluted.

Jerome A. Grant: For profitability, net income was $7.8 million, diluted earnings per share was $0.14, and adjusted EBITDA increased 17.8% to $22.6 million, all right in line with our expectations. Our performance through the first half of Fiscal 24 continues to demonstrate the strength of our execution on our growth, diversification, and optimization strategy. I'd like to thank our divisional and corporate teams for their continued leadership, as well as our faculty, staff, partners, and students for their hard work and commitment.

Jerome A. Grant: <unk> per share was <unk> 14 cents and adjusted EBITDA increased 17, 8% to $22 6 million all right in line with our expectations.

Jerome A. Grant: Our performance through the first half of fiscal 'twenty four.

Jerome A. Grant: <unk> to demonstrate the strength of our execution on our growth diversification and optimization strategy I'd like to thank our divisional and corporate teams for their continued leadership as well as our faculty staff partners and students for their hard work and commitment.

Jerome A. Grant: As another point of pride, we were prominently featured in a recent Wall Street Journal article about Gen Z is becoming the tool belt generation. The article highlights one of our welding graduates as a case study for young workers' increased interest in trade professions, or what we refer to as skilled collar jobs.

Jerome A. Grant: That's another point of Pride, we were permanently featured in a recent Wall Street Journal article how Gen Z is becoming the tool belt generation.

Jerome A. Grant: The article highlights one of our welding graduates as a case study for young workers increased interest in trade professions, or what we refer to as skilled collar jobs.

Jerome A. Grant: This trend has received more visibility of late, including a recent study funded by the Gates Foundation that found that students are both increasingly skeptical about the ROI of a traditional four-year college education and are becoming more aware of their alternatives to college. As traditional higher education enrollments decline and as an older generation of skilled tradespeople retire, we believe we are optimally positioned to address the rising demand for technical training among the new generation of workers.

Jerome A. Grant: This trend has received more visibility of late including a recent study funded by the Gates Foundation that found that students are both increasingly skeptical about the ROI of the traditional four year College education and are becoming more aware of their alternatives to college.

Jerome A. Grant: As traditional higher education enrollments decline and as the older generation of skilled trades people retire. We believe we are optimally positioned to address the rising demand for tactical training among the new generation of workers.

Jerome A. Grant: Our advantage also extends to the healthcare fields we serve, which have experienced even greater job demand momentum. According to the U.S. Bureau of Labor Statistics, job growth in healthcare support occupations is projected to outpace all other occupational groups, growing at an estimated 15.4 percent between 2022 and 2032.

Jerome A. Grant: Our advantage also extends to the health care field, we serve which has experienced even greater job demand momentum. According.

Jerome A. Grant: According to the U S Bureau of Labor statistics job growth in health care support occupations is projected to outpace all other occupational groups drawing at an estimated 15.4% between 2022 and 2032, so as we welcome and train the next generation of students in both divisions facilitator.

Jerome A. Grant: So, as we welcome and train the next generation of students in both divisions, facilitating superior graduation rates and employment outcomes remains core to our growth strategy. I'd now like to review recent performance and highlights by division. Starting with our healthcare division, Kevin Crane and his Conquer division have continued to outperform our growth expectations, with student start growth of approximately 17% and revenue growth of 8%. Concord's newest program rollouts came in ahead of schedule as the necessary regulatory approvals for the two planned dental hygiene programs were obtained in February, and the programs officially started in April. Combined, these programs had approximately 50 students in their first cohort.

Jerome A. Grant: Superior graduation rates and employment outcomes remains core to our growth strategy.

Jerome A. Grant: Concord also continues to make progress with the expansion of its San Diego Dental Hygiene Program, which remains on track to launch later this year. Additionally, as Troy will discuss later in the call, Start Performance also benefited from our new Phlebotomy and Sterile Processing Technician Program. Market demand remains impressive for Concord's growing core and clinical program offering. For the division more broadly, Kevin and his team have continued to identify and execute on optimization and efficiency opportunities, as well as evaluate other growth avenues, such as expanded online offerings and additional programming.

Jerome A. Grant: I'd now like to review, our recent performance and highlights by Division, starting with our health Care Division, Kevin Payne and as conquer division have continued to outperform our growth expectations with student start growth of approximately 17% and revenue growth of 8%.

Jerome A. Grant: Conchords newest program Rollouts came in ahead of schedule as the necessary regulatory approvals for the two planned dental hygiene programs were obtained in February and the program officially started in April.

Jerome A. Grant: Bind these programs had approximately 50 students in their first cohort.

Jerome A. Grant: Concord also continues to make progress with the expansion of San Diego Dental Hygiene program, which remains on track to launch later this year as Troy will discuss later in the call start performance also benefited from our new phlebotomy and sterile processing technician programs.

Jerome A. Grant: Market demand remains impressive for Congress growing core and clinical program offerings.

Jerome A. Grant: Or the division more broadly Kevin and his team have continued to identify and execute on optimization and efficiency opportunities as well as evaluate other growth avenues, such as expanded online offerings and additional program expansions. The team at Concord is also focused on deepening and expanding their partnership network.

Jerome A. Grant: The team at Concord is also focused on deepening and expanding their partnership. These relationships not only benefit graduates with employment opportunities but also enhance the accessibility and affordability of conference programs. One great partner example is Marquis Companies, a fifth-generation, family-owned, senior living health care company based in Portland, Oregon.

Jerome A. Grant: These relationships not only benefit graduate employment opportunities.

Jerome A. Grant: But also enhance the accessibility and affordability of Congress programs.

Jerome A. Grant: One great partner example is marquee companies a fifth generation family owned senior living Health care company based in Portland, Oregon.

Jerome A. Grant: For the last three years, Marquee has partnered with Concord to meet the growing demand for workers. It subsidizes tuition for its employees who want to upskill to become vocational or practical nurses, with tuition subsidies ranging from 25% to 100% based on the student's commitment to stay with the company. We appreciate Marquis' generous support of our students and look forward to making additional partnership progress. The UTI division also had a strong quarter, with year-over-year student enrollment and revenue growth of approximately 20% and 15%, respectively.

Jerome A. Grant: For the last three years Mark He has partnered with Concord to meet the growing demand for workers marquee subsidizes tuition for its employees, who want to upskill to become vocational or practical nurses with tuition subsidies ranging from 25% to 100% based on the student's commitment to stay with the company.

Jerome A. Grant: We appreciate Marquis generous support of our students and look forward to making additional partnership progress.

Jerome A. Grant: And the UTI Division also had a strong quarter with year over year students start in revenue growth of approximately 20% and 15% respectively.

Jerome A. Grant: From a program standpoint, Tracy Lorenz and her team are making great progress on the second phase of the division's program expansion. Two of the four Heating, Ventilation, Air Conditioning, and Refrigeration Program expansions, which we announced last fall, are now enrolling students at the Avondale and Long Beach campuses. These classes are expected to begin in June and July, respectively.

Jerome A. Grant: From a program standpoint, Tracy Lorenz and her team are making great progress on the second phase of the division's program expansion.

Jerome A. Grant: Two of them before heating ventilation and air conditioning, and refrigeration program expansions, which we announced last fall are now enrolling students at the Avondale and long Beach campuses. These classes are expected to begin in June and July respectively.

Jerome A. Grant: As for UTI's other two HVAC program expansions, the Bloomfield campus is now enrolling students, with the first cohort expected to start in September, while the Sacramento campus is on track to start its first cohort of students early next year, pending regulatory approval. The other 14 new programs, which were launched primarily in late fiscal 2023, have continued to grow nicely, with over 550 combined new student starts between Q4 last year and Q2 this year.

Jerome A. Grant: As for Uti's other two H P. A C program expansions. The Bloomfield campus is now enrolling students with the first cohort expected to start in September while the Sacramento campus is on track to start its first cohort of students early next year pending regulatory approval.

Jerome A. Grant: The other 14, new programs, which were launched primarily in late fiscal 2023 have continued to grow nicely with over 550 combined new students starts between Q4 last year and Q2 this year.

Jerome A. Grant: Market demand for these new programs continues to build, and we remain confident in having at least 1,000 new students start in these programs this fiscal year. As we've also discussed on previous calls, the most recent program launches are just the first step towards expanding the MIT-sourced aviation, skilled trades, and energy programs across the UTI division footprint. The unification process of UTI's divisions to Houston operations into a single campus remains on track to complete later this calendar year with the phase transition process now underway.

Jerome A. Grant: Market demand for these new programs continues to build and we remain confident in having at least 1000 new students starts in these programs this fiscal year.

Jerome A. Grant: As we've also discussed on previous calls the most recent program launches are just the first step towards expanding the M. I T sourced aviation skilled trades and energy programs across the UTI Division footprint.

Jerome A. Grant: The unification process of U T I's divisions to Houston operations into a single campus remains on track to complete later this calendar year with a phased transition process now underway.

Jerome A. Grant: The Houston Unification Project is a prime example of our strategic focus on optimization, which is designed to drive greater operating efficiencies while enhancing the student experience and outcomes. The UTI team has also grown the division's extensive partnership base. During the second quarter, UTI announced a new partnership with Hawaiian Airlines and continued to expand its employment program partnership. The Division has also announced a five-year renewal of its alliance with Interstate Batteries, a leading automotive replacement battery brand, and the exclusive battery provider to all UTI automotive, diesel, and marine technician training programs across its footprint.

Jerome A. Grant: The Houston Unification project is a prime example of our strategic focus on optimization.

Jerome A. Grant: Which is designed to drive greater operating efficiencies, while enhancing the student experience and outcomes.

Jerome A. Grant: The Ti team has also grown the division's extensive partnership base.

Jerome A. Grant: During the second quarter U T I announced a new partnership with Hawaiian Airlines and continued to expand its employment program partners.

Jerome A. Grant: The Division has also announced a five year renewal of alliance with Interstate batteries, a leading automotive replacement battery bran and the exclusive battery provider to all U T I automotive diesel and marine technician training programs across our footprint.

Jerome A. Grant: We appreciate this long-running alliance and look forward to building on the division's industry relationship for years to come. Turning to our expectations for the balance of 2024 and thoughts on fiscal 2025, we are announcing positive adjustments to our starts, revenue, and profitability guidance for 2024. For new student starts, based on our results to date and expectations for the upcoming quarters, we now feel confident in increasing our prior range to between 25,500 and 26,500. We also expect to generate between $720 million and $730 million in revenue and between $102 million and $104 million in adjusted EBITDA for the fiscal year. Troy will provide additional layers of commentary on these adjustments and expected quarterly phasing for the second half of the year.

Jerome A. Grant: We appreciate this long running alliance and look forward to building on the divisions industry relationship for years to come.

Jerome A. Grant: Turning to our expectations for the balance of 2024 and thoughts on fiscal 2025, we are announcing positive adjustments to our starts revenue and profitability guidance for 2024.

Jerome A. Grant: For new students starts based on our results to date and expectations for the upcoming quarters. We now feel confident in increasing our prior range to between 25000 526500 starts for this fiscal year.

Jerome A. Grant: We also expect to generate between $720 million and $730 million in revenue and between $102 million and $104 million and adjusted EBITDA for the fiscal year.

Jerome A. Grant: Troy will provide additional layers of commentary on these adjustments and expected quarterly phasing for the second half of the year.

Troy R. Anderson: With our confidence in our strategy and solid execution in 2024, we've developed our initial projections for fiscal 2025. Based upon our currently announced program expansions, low- to mid-single-digit baseline student start growth, and currently planned optimization initiatives, we're estimating 2025 revenue of nearly $800 million with approximately 10% year-over-year growth and adjusted EBITDA margin of approximately 15%, which represents at least 100 basis points in margin. With our robust and proven multidivisional model, we are well-positioned for continued growth, diversification, and optimization. I'd now like to turn the call over to Troy to review our financial results and our guidance in more detail. Troy?

Jerome A. Grant: With our confidence in our strategy and solid execution in 2024, we've develop our initial projections for fiscal 2025.

Troy: Upon our currently announced program expansion low to mid single digit baseline student start growth.

Troy: And currently planned optimization initiatives, we're estimating 2025 revenue of nearly $800 million with approximately 10% year over year growth.

Troy: And adjusted EBITDA margin of approximately 15%, which represents at least 100 basis points in margin expansion.

Troy R. Anderson: With our robust and proven multi divisional model, we are well positioned for continued growth diversification and optimization I'd now like to turn the call over to Troy to review, our financial results and our guidance in more depth Troy.

Troy: Thank you Jerome.

Troy R. Anderson: Thank you, Jerome. We continue to deliver positive operational and financial performance through the second quarter, meeting or exceeding expectations across our key metrics. As an important reminder, this marks the first quarter with a full year-over-year comparison for Concord since we closed the acquisition in December 2022. For New Student Starts, we saw double-digit year-over-year growth from both divisions during the quarter, where we delivered 5,480 total starts, representing 18.5% growth, which was above our expectations.

Troy: We continued to deliver positive operational and financial performance through the second quarter meeting or exceeding expectations across our key metrics.

Troy R. Anderson: An important reminder, this marks the first quarter with the full year over year comparison for cardboard since we closed the acquisition in December 2022.

Troy R. Anderson: The UTI division delivered 2,840 new student starts and grew 19.6%; same campus, same program growth was a big contributor, and we continue to see the benefits from our new program launch. The Concord Division delivered 2,640 new student starts and grew 17.2%.

Troy R. Anderson: New student starts we saw double digit year over year growth from both divisions during the quarter, where we delivered 5480 total starts representing 18, 5% growth, which was above our expectations.

Troy R. Anderson: UGI Division delivered 2840, new student starts and grew 19, 6% same.

Troy R. Anderson: Same campus St program growth was a big contributor and we continue to see the benefits from our new program launches.

Troy R. Anderson: Concord Division delivered 2000, and 640, new student starts and grew 17, 2%.

Troy R. Anderson: We also saw strong same-campus, same-program growth with Concord, with a modest contribution from the recent new program launches, as the start cohorts are smaller and less frequent than those of the UTI program. Clinical starts grew 24.9% while core starts grew 12.4%; both reflect the benefits of increased marketing investments in grant programs. Additionally, as Jerome mentioned, our core program, StartGrowth, includes contributions from the Phlebotomy and Sterile Processing Technician Programs, which are shorter cash pay programs we are working to expand across the Concord Campus footprint.

Troy R. Anderson: We also saw strong same campus St program growth with Concord with a modest contribution from the recent new program launches as it start cohorts are smaller and less frequent than those of the UTI programs.

Troy R. Anderson: Clinical starts grew 24, 9% while core starts grew 12, 4%.

Troy R. Anderson: Both reflect the benefits of increased marketing investments and grant programs.

Troy R. Anderson: Additionally, as Jerome mentioned, our core programs start growth includes contributions from the phlebotomy and sterile processing technician programs.

Troy R. Anderson: Which are shorter cash pay programs, we are working to expand across the Concorde campus footprint.

Troy R. Anderson: As we look ahead to the third and fourth quarters, I'm sure many of you have heard about the Department of Education's FAFSA Simplification Initiative and recent challenges with its implementation. We are keeping a watchful eye on these developments and doing everything we can to support our students as we jointly navigate through the new process. This is particularly important for incoming high school students.

Troy R. Anderson: As we look ahead to the third and fourth quarters I'm sure. Many of you have heard about the department of educations fast the simplification initiatives and recent challenges with the implementation.

Troy R. Anderson: We are keeping a watchful eye on these developments and doing everything we can to support our students as we jointly navigate through the new process.

Troy R. Anderson: This is particularly important for our incoming high school students.

Troy R. Anderson: Turning to our financial results, revenue on a consolidated basis was $184.2 million, which also exceeded our expectations and reflects an increase of 12.4% year-over-year. UTI's revenue of $123.3 million increased 14.7%, and Concord's revenue of $60.9 million increased 8.2%. Consolidated net income was $7.8 million, which more than doubled versus the prior year quarter. This translated to $0.14 of diluted earnings per share, which now reflects the full benefit of the December 2023 preferred share conversion.

Troy R. Anderson: Turning to our financial results revenue on a consolidated basis was $184 2 million, which also exceeded our expectations and reflects an increase of 12, 4% year over year.

Troy R. Anderson: UGI division's revenue of $123 3 million increased 14, 7%.

Troy R. Anderson: And concord's revenue of $60 9 million increased eight 2%.

Troy R. Anderson: Consolidated net income was $7 8 million, which more than doubled versus the prior year quarter.

Troy R. Anderson: This translated to 14th sense of diluted earnings per share, which now reflects the full benefit of the December 2023 preferred share conversion.

Troy R. Anderson: At the end of the second quarter, we had $53 8 million total shares outstanding.

Troy R. Anderson: At the end of the second quarter, we had 53.8 million total shares outstanding, and suggested EBITDA was $22.6 million, an increase of 17.8% year-over-year. Overall, our profitability performance was in line with our expectations and continues to reflect the improved operating leverage associated with our growth in students and revenue, as well as cost efficiencies as we generate higher yield from our growth investments and optimization efforts. As of the end of the second quarter, our total available liquidity was $145.1 million, which included $29 million of available capacity from our revolving credit facility.

Troy R. Anderson: Adjusted EBITDA was $22 6 million, an increase of 17, 8% year over year.

Troy R. Anderson: Overall, our profitability performance was in line with our expectations and continues to reflect the improved operating leverage associated with our growth in students in revenue as well as cost efficiencies as we generate higher yields from our growth investments and optimization efforts.

Troy R. Anderson: As of the end of the second quarter. Our total available liquidity was $145 1 million, which includes $29 million of available capacity from our revolving credit facility.

Troy R. Anderson: As I noted last quarter, we are now managing the revolver to maintain a modest level of positive working capital at the end of each quarter, which translated to a net pay down of $19 million for the quarter. We continue to pace ahead of last year in terms of operating and adjusted free cash flow generation, which reflects our improved profitability and lower level of growth investments in CapEx. Year-to-date operating cash flow was $8.3 million, and adjusted free cash flow was $3.7 million; year-to-date capital expenditures were $9.8 million. Our CAPEX spend has been running lower than planned during the first half of the year. We expect it to be higher in the second half.

Troy R. Anderson: As I noted last quarter, we are now managing the revolver to maintain a modest level of positive working capital at the end of each quarter.

Troy R. Anderson: Which translated to a net pay down of $19 million for the quarter.

Troy R. Anderson: We continued to pace ahead of last year in terms of operating and adjusted free cash flow generation, which reflects our improved profitability and lower level of growth investments and capex spend.

Troy R. Anderson: Year to date operating cash flow was $8 3 million and adjusted free cash flow was $3 7 million.

Troy R. Anderson: Year to date capital expenditures were $9 8 million.

Troy R. Anderson: Our capex spend has been running lighter than planned during the first half of the year and we expect it to be higher in the second half.

Troy R. Anderson: Overall, we believe we have ample liquidity to fund continued organic growth initiatives, such as additional program expansions and new campuses. As Jerome mentioned, we are positively adjusting our new student start, revenue, and profitability guidance for fiscal year 2024, reflecting our current visibility and continued confidence in our execution. The updated guidance ranges are as follows: total new student starts of 25,500 to 26,500, a 1,000-start increase to the midpoint; total revenue of $720 million to $730 million, which increases the midpoint by 10 million; net income of $37 million to $41 million, an increase of $1 million to the mid-diluted earnings per share of 68 cents to 73 cents. An increase of one cent at the midpoint.

Troy R. Anderson: Overall, we believe we have ample liquidity to fund continued organic growth initiatives, such as additional program expansions and new campuses.

Troy R. Anderson: As Jerome mentioned, we are positively adjusting our new students start revenue and profitability guidance for fiscal year 2024.

Troy R. Anderson: Reflecting our current visibility and continued confidence in our execution.

Troy R. Anderson: Stated guidance ranges are as follows.

Troy R. Anderson: Total new student starts of 25000, and 526500 1000 start increase to the midpoint.

Troy R. Anderson: Total revenue of $720 million to $730 million, which increases the midpoint by $10 million.

Troy R. Anderson: Net income of 37 million to 41 million, an increase of 1 million to the midpoint.

Troy R. Anderson: Diluted earnings per share of <unk> 68 to 73 cents, an increase of one set at the midpoint.

Troy R. Anderson: And total adjusted EBITDA of $102 to $104 million, which narrows the range and increases the midpoint by $1.5 million. This translates to adjusted EBITDA margin of 14.2% at the midpoint, or roughly 350 basis points of margin expansion versus last year. We remain highly confident in our prior adjusted free cash flow guidance of $62 to $66 million, which includes total CapEx spend of approximately $30 million.

Troy R. Anderson: And total adjusted EBITDA of $102 million to $104 million, which narrows the range and increases the midpoint by $1 5 million.

Troy R. Anderson: This translates to adjusted EBITDA margin of 14, 2% at the midpoint, we're roughly 350 basis points of margin expansion versus last year.

Troy R. Anderson: We remain highly confident in our prior adjusted free cash flow guidance of $62 million to $66 million, which includes total capex spend of approximately $30 million.

Troy R. Anderson: We will continue to evaluate our guidance throughout the remainder of the year as we gain further insight into our actual and expected performance and make adjustments accordingly. As far as phasing expectations over the next two quarters, for new student starts, we expect low to mid-single-digit growth each quarter. Following from what we've seen in the first two quarters, as we begin to lap the many initiatives and the UTI program expansions we implemented last year, with a smaller relative impact from both the UTI and Concord new program expansions launching this year.

Troy R. Anderson: We will continue to evaluate our guidance throughout the remainder of the year as we gain further insight into our actual and expected performance and make adjustments accordingly.

Troy R. Anderson: As far as phasing expectations over the next two quarters for new students starts we expect low to mid single digit growth each quarter slowing from what we've seen in the first two quarters as we begin to lap the many initiatives and the UTI program expansions, we implemented last year.

Troy R. Anderson: With a smaller relative impact from both a UTI in Concord, New program extensions launching this year.

Troy R. Anderson: For revenue, we expect low double-digit growth each quarter, reflecting the ongoing ramp of our recent program expansions and the student start growth momentum we are seeing in both divisions. As a reminder about seasonality, we typically see revenue decrease from the second to third quarter and then measurably increase in the fourth quarter as a result of higher start volumes and growth in the student population. This is more pronounced for UTI than it is for concordance.

Troy R. Anderson: For revenue, we expect low double digit growth each quarter, reflecting the ongoing ramp of our recent program expansions and the student start growth momentum we are seeing in both divisions.

Troy R. Anderson: As a reminder, on seasonality, we typically see revenue decrease from the second to third quarter, and then measurably increase in the fourth quarter as a result of higher start volumes and growth in the student population.

Troy R. Anderson: This is more pronounced for U T I than it is for cockpit.

Troy R. Anderson: Earnings Before Interest and Tax Diluted Earnings per Share and Adjusted EBITDA, we continue to expect significant year-over-year growth each quarter, with third quarter profitability down relative to the second quarter, similar to revenue, and the fourth quarter being the highest profitability quarter for the year by far. Since our last earnings call, we've spent time evaluating the trajectory of the business, as well as potential new growth investments over the next few years. While we don't have anything to announce on the latter points just yet, we are sharing our initial projections for fiscal year 2025, which Jerome also touched upon.

Troy R. Anderson: Turning to net income diluted earnings per share and adjusted EBITDA. We continue to expect significant year over year growth each quarter with third quarter profitability down relative to the second quarter similar to revenue.

Troy R. Anderson: In the fourth quarter being the highest profitability quarter for the year by far.

Troy R. Anderson: Since our last earnings call. We spent time evaluating the trajectory of the business as well as potential new growth investments over the next few years, while we don't have anything to announce on the latter point just yet we are sharing our initial projections for fiscal year 2025, which drove also touched upon.

Troy R. Anderson: In that regard, we currently estimate revenue of nearly $800 million for the year, representing approximately 10% growth, and we estimate an adjusted EBITDA margin of approximately 15%, or at least 100 basis points of margin expansion versus fiscal 2024. These projections reflect the momentum we expect to carry out of fiscal 2024 based upon our updated guidance, currently completed and announced program executives, ongoing baseline new student start growth of low to mid-single digits, and in increasing the yield on our growth and optimization investments as we gain further operating leverage and enhance the efficiency of our operational infrastructure.

Troy R. Anderson: In that regard we currently estimate revenue of nearly 800 million for the year, representing approximately 10% growth and we estimate adjusted EBITDA margin of approximately 15% or at least 100 basis points of margin expansion versus fiscal 2024.

Troy R. Anderson: These projections reflect the momentum we expect to carry out of fiscal 2024 based upon our updated guidance. Our currently completed and announced program expansions ongoing baseline new student start growth of low to mid single digits in.

Troy R. Anderson: And increasingly yield on our growth and optimization investments as we gain further operating leverage and enhance the efficiency of our operational infrastructure.

Troy R. Anderson: While not considered official guidance, we feel it is important to provide a longer-term view to the investment community along with the rationale behind it. We expect to provide formal fiscal 2025 guidance in November along with our fiscal 2024 results, consistent with our normal cadence.

Troy R. Anderson: While not considered official guidance, we feel it is important to provide a longer term view to the investment community along with the rationale behind it we expect to provide formal fiscal 2025 guidance in November along with our fiscal 2024 results consistent with our normal cadence.

Jerome A. Grant: As always, we encourage everyone to review our press release, financial supplement, and investor presentation, as well as the 10-Q once it is filed, as these materials include the most current information on our consolidated and segment actual results, our strategic roadmap, and our guidance. We are excited about our performance for the first half of the year and believe we are entering the second half of fiscal 2024 on very sound footing. I would like to thank our team, students, partners, and investors for their continued engagement and support. I'll now turn the call back over to Jerome for closing remarks. Thank you, Troy.

Troy R. Anderson: As always we encourage everyone to review our press release financial supplement and Investor presentation as well as the 10-Q once it is filed as these materials include the most current information on a consolidated and segment actual results, our strategic roadmap and our guidance.

Jerome A. Grant: We're excited about our performance for the first half of the year and believe we are entering the second half of fiscal 'twenty 'twenty four on very sound footing.

Jerome A. Grant: Like to thank our team students partners and investors for their continued engagement and support.

Jerome A. Grant: I'll now turn the call back over to Jerome for closing remarks.

Operator: In the coming quarters, we intend to make additional progress on our three strategic tenets, growth, diversification, and optimization. We're actively pursuing organic initiatives in three primary ways. First, we are continuing to consider expansion of our campus locations into new geography. We are also continuing to expand the geographic reach of our existing programs as well as exploring adding new in-demand program offerings to our portfolio. And finally, we'll continue to add new partner relationships across our programs.

Jerome: Troy in the coming quarters, we intend to make additional progress on our three strategic tenants growth diversification and optimization.

Operator: We're actively pursuing organic initiatives in three primary ways first we are continuing to consider expansion of our campus locations into new geographies. We are also continuing to expand the geographic reach of our existing programs as well as exploring adding new in demand program offerings to our portfolio.

Operator: And finally, we will continue to add new partner relationships across our programs.

Operator: From an inorganic perspective, we remain active opportunistically in pursuing additional strategic M&A targets. As we discussed previously, we intend to bolster our healthcare presence as well as program offerings to complement our current Concord business. Although we have nothing to announce today, we believe our current and future diversification pathways will strengthen our industry leadership, especially as market demand continues to grow across our field. And, of course, in the second half of 2024, we'll continue driving the key operational focus areas that you've come to expect.

Operator: From an inorganic perspective, we remain active opportunistically and pursuing additional strategic M&A targets as.

Operator: As we discussed previously we intend to bolster our health care presence as well as program offerings to complement our current Concord business.

Operator: Although we have nothing to announce today, we believe our current and future diversification pathways will strengthen our industry leadership, especially as market demand continues to grow across our fields and.

Operator: And of course in the second half of 2024, we will continue driving the key operational focus areas that you've come to expect.

Operator: These include ramping up the most recent campus and program launches in both divisions to drive enrollment, revenue, and profitability growth; Enhancing the Yield of Our Marketing and Admission Investments to optimize lead generation and inquiry conversion; and optimizing our workforce and facilities utilization to drive greater program availability, margin, and Improved Operating Levels. To date, our company's strategic progress has enhanced our capabilities as a leading workforce solutions provider, all while maintaining our focus on facilitating superior outcomes for an expanding range of in-demand fields. We look forward to providing further updates on our exciting trajectory over the coming quarters. And I'd now like to turn the call over to the operator for Q&A. Operator?

Operator: These include ramping the most recent campus and program launches in both divisions to drive enrollment revenue and profitability growth.

Speaker Change: Hansen, the yield of our marketing and admission investments.

Operator: To optimize lead generation and inquiry conversion and optimizing our workforce and facilities utilization to drive greater program availability margin expansion and improved operating leverage.

Operator: To date, our company's strategic progress has enhanced our capabilities as a leading workforce solutions provider all while maintaining our focus on facilitating superior outcomes for an expanding range of in demand feels we look forward to providing further updates on our exciting trajectory over the coming quarters and I would now like to turn the <unk>.

Operator: Call over to the operator for Q&A operator.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. The first question comes from Alex Paris with Barrington Research. Please go ahead.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speaker phone. Please pick up your handset before pressing the keys.

Alexander Peter Paris: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Operator: The first question comes from Alex Paris with Barrington Research. Please go ahead.

Alexander Peter Paris: Hi guys, thanks for taking my questions. Nice job on the quarter and on the guidance.

Alexander Peter Paris: Hi, guys. Thanks for taking my questions and nice job on the quarter and on the guidance.

Jerome A. Grant: Great. Thanks, Alex. Thanks, Alex.

Speaker Change: Great Thanks, Alex and thanks, Alex.

Jerome A. Grant: So, my first question is just the big picture within your operations. What's driving demand? You know, we had headwinds of COVID and inflation. Those headwinds have apparently eased. Would you call it a tailwind at this point?

Alexander Peter Paris: So my first question is just a big picture within your operations, what's driving demand.

Jerome A. Grant: We had headwinds headwinds of COVID-19 headwinds of inflation.

Jerome A. Grant: Those headwinds have apparently eased.

Jerome A. Grant: Would you call it a tailwind at this point.

Jerome A. Grant: Well, I'd say we're seeing momentum build. I think, you know, there's been a great deal of positive press about the ROI of skilled trades, especially as we enter the summer months, and people are making decisions about their direction post-high school. And so, you know, we're seeing an environment that feels more favorable to considering alternatives like ours. And that's what we're hearing in the conversations, and clearly, that's what we're seeing in the numbers.

Speaker Change: Well, I'd say, where we're seeing momentum build I think.

Jerome A. Grant: You know theres been a great deal of positive press about the ROI of skilled trades.

Jerome A. Grant: Especially as we enter the summer months and people are making decisions about.

Jerome A. Grant: Directions Post high school and so.

Jerome A. Grant: We're seeing are in environment that feels more favorable to considering all alternatives like ours and that's what we're hearing in our conversations and clearly that's what we're seeing in the numbers.

Jerome A. Grant: That's great. I'm hearing the same thing. Now, as I recall, on the fourth-quarter call, we discussed that you significantly increased your presence in the high school market by adding field reps, and you did something similar, although it's a smaller sales force and military. How has that been going?

Speaker Change: That's great I'm hearing the same thing.

Jerome A. Grant: Now as I recall on the fourth quarter call. We discussed that you significantly increased your presence in the high school market by adding.

Jerome A. Grant: Field reps and you did something similar although it's a smaller sales force in military how has that been a ramp it.

Jerome A. Grant: It's ramping well. As we said, this is the second year. So we added resources in high school last fall of 2022, and they really catch their stride as they move into their second year. They've got their relationships with counselors, with the teachers, with the students, and begin to catch their stride.

Jerome A. Grant: It's ramping well as we said this is the second year. So we added the resources and in high School last fall.

Jerome A. Grant: 2022, and and they really catch their stride as they move into their second year, they've got their relationships with counselors with the teachers.

Jerome A. Grant: With the students and begin to catch their stride, so where we're seeing them do exactly what we needed them to do military is having a very good year.

Jerome A. Grant: We're seeing them do exactly what we needed them to do. The military's having a very good year. And we added six new military recruiters on the bases at that same time in 2022. And they're coming through quite nicely for us. Yeah, Alex, this is Troy.

Jerome A. Grant: And we added six new military recruiters on the basis at that same time in 2022, and they are coming through quite nicely for us dialysis Detroit you can see in our financial supplement where we have the break out on the new student start details both military and high school actually all three of the channels where.

Troy R. Anderson: You can see in our financial supplement where we have the breakout on the new student start details, both military and high school. Actually, all three of the channels were double digits, really the last two quarters in a row. So, you know, just strong performance across the board.

Troy: Double digits.

Troy: Really the last two quarters in a row. So yeah, just strong performance across the board.

Jerome A. Grant: Yes, strongly double-digit. High teens, low 20s. I see that. And then, just for orders of magnitude, what is the size of the high school rep group, and what is the size of the military rep group?

Alex: Yes strongly double digit high teens, low twenty's I see that.

Jerome A. Grant: And then just for orders of magnitude what is the size of the high School Rep group and what is the size of the military Rep group.

Jerome A. Grant: We've got 24 recruiters in the military group that covers both transitioning service people as well as veterans. And then we've got in the low 150s, 152, and 153 high school representatives.

Jerome A. Grant: We've got 24.

Jerome A. Grant: Recruiters in the military group that cover both.

Jerome A. Grant: Transitioning service people as well as batteries and then.

Jerome A. Grant: We've got in the low $1 50 is 150 to 153 high school.

Jerome A. Grant: Representatives.

Jerome A. Grant: Great, and then... I just wanted to follow up a little bit on the corporate partnerships. On the UTI side, you've always had a lot of really high-quality corporate partnerships. It sounds like you're adding and renewing those as well. What are the initiatives over on the Concord side? As I recall, I don't believe they have as developed a corporate partnership program as UTI did.

Speaker Change: Great and then.

Jerome A. Grant: I just wanted to follow up a little bit on the corporate partnerships.

Jerome A. Grant: On the U T. I said, you've always had a lot of really high quality corporate partnerships sounds like you're adding in renewing those as well.

Jerome A. Grant: What are the initiatives over on the kind of courts I I as I recall I don't believe they had developed a corporate partnerships than U T I did.

Jerome A. Grant: Yeah, I mean, you know, UTI is an impressive group for BOLEM relationships, over 6,000 employer partners, and on the Concord side, their B2B partnerships were really around clinical placements and relationships with hospitals and dental centers and things along those lines for clinical placements, but they weren't really as far along in terms of B2B relationships for training relationships, upskilling relationships, scholarship relationships was one of them we mentioned in there, and so, you know, we've been adding resources on the Concord side to focus on, you know, some of those things that have made UTI great for all these years.

Speaker Change: Yeah I mean.

Jerome A. Grant: Usually at UGI has an impressive volume relationships over 6000 employer partners.

Jerome A. Grant: And on the Concord side, there there are b to B partnerships were really around clinical placements and relationships with hospitals and Dow centers and things along those lines.

Jerome A. Grant: For for clinical placements, but they werent really as far along in terms of <unk> relationships with training relationships Upskilling relationships Scott.

Jerome A. Grant: Scholarship relationships was one of them, we mentioned in our in there and so we've been adding resources on the concrete side due to focus on on some of those things that have made UTI great for all these years.

Jerome A. Grant: Great. I appreciate the additional color. I'll get back into the queue. Thanks.

Speaker Change: Great I appreciate the additional color I'll get back into the queue. Thanks.

Jerome A. Grant: Great. Thanks. Thank you all.

Jerome A. Grant: Great.

Speaker Change: Thank you Ralph.

Operator: And the next question comes from Eric Martinuzzi with Lake Street. Please go ahead.

Jerome A. Grant: And the next question comes from Eric Mark to Newsy with Lake Street. Please go ahead.

Eric Martinuzzi: Yeah, the thousand students and new students start bumping up here, you know, the you talked about a little bit better on the new program timing. But just trying to bridge that upward revision to the new student starts. Is it more around just helping macro demand? Is it more around new programs? Accelerated Launches, what's, you know, pick that apart.

Operator: Yeah.

Eric Martinuzzi: The thousand students and new students start bump up here.

Eric Martinuzzi: You talked about a little bit better on the new program timing.

Eric Martinuzzi: I'm, just trying to bridge that upward revision to the new student starts.

Eric Martinuzzi: More around just helping macro demand is it more around new program.

Eric Martinuzzi: Accelerated launches what's.

Eric Martinuzzi: Pick that apart for me.

Eric Martinuzzi: Sure, yeah. Eric, thanks. This is Troy.

Speaker Change: Sure Yeah.

Eric Martinuzzi: Eric Thanks destroy the.

Troy: Really it's more that the we've said all along and Jerome touched on demand and the first question, but we've said all along that our inquiry flow has been strong and really our focus has been on conversion rates against that inquiry flow. We continue to see very strong lead generation, we focused very heavily on the marketing efforts.

Troy R. Anderson: We've said all along, and Jerome touched on demand in the first question, but we've said all along that our inquiry flow has been strong, and really, our focus has been on conversion rates against that inquiry flow. We continue to see very strong lead generation. We focus very heavily on marketing efforts and the different tools available to us to maximize inquiry generation and high-quality inquiry generation. With Concord, we've invested more in marketing and have seen a great response there, so I'd say a good portion of that uplift has been better performance on the Concord side in response to some of the additional marketing investments there, and then just overall just better conversion as we've been progressing through the year.

Troy R. Anderson: And the different tools available to us to maximize.

Troy R. Anderson: The inquiry generation and high quality inquiry generation weed with Concord, we've invested more in marketing.

Troy R. Anderson: And have seen great response, there so I'd say a good portion of that uplift has been.

Troy R. Anderson: Better performance on the Concorde side in response to some of the additional marketing investments there and then just overall just better conversion as we've been progressing through the year. We commented last quarter that we had with the strong Q1 that we were flowing through the revenue lift there and didn't have quite enough data at that point despite the.

Troy R. Anderson: We commented last quarter with the strong Q1 that we were flowing through the revenue lift there and didn't have quite enough data at that point despite the strong start performance to raise guidance, and now we're halfway through the year and another very strong start quarter, and so now we're at a point where we're comfortable doing that.

Troy R. Anderson: Strong start performance to raise guidance and now we're halfway through the year and another very strong.

Troy R. Anderson: <unk> quarter end. So now we're at a point, where we're comfortable doing that.

Eric Martinuzzi: Okay, and then given the inflationary pressures, you know, originally inflation was a headwind for kind of the new student start, but I'd like to flip it around and just talk about the inflationary pressures in the business. You know, you guys are talking about essentially at the midpoint here, you know. We'd be looking at roughly a 20 to 25 percent incremental margin from the additional $75 million of revenue between your current FY24 and your FY25.

Speaker Change: Okay, and then given the inflationary pressures.

Eric Martinuzzi: Originally a fleet inflation was a headwind for kind of the new student start, but I'd like to flip it around and just talk about the inflationary pressures in the business.

Eric Martinuzzi: You guys are talking about essentially at the midpoint here, we'd be looking at.

Eric Martinuzzi: <unk>.

Eric Martinuzzi: Yes.

Eric Martinuzzi: Yeah.

Eric Martinuzzi: Yeah.

Eric Martinuzzi: You know roughly at 20% to 25% incremental margin from the additional.

Eric Martinuzzi: $75 million of revenue between your current FY 'twenty or in Europe, FY 'twenty five it doesn't look like you're factoring in I mean, it looks like you're factoring in some good margin expansion and I'm. Just curious do you feel like those inflationary pressures and cost structure are not going to be a headwind.

Eric Martinuzzi: It doesn't look like you're factoring in, I mean, it looks like you're factoring in some good margin expansion, and I'm just curious, do you feel like those inflationary pressures and your cost structure are not going to be a headwind?

Troy R. Anderson: Yeah, I mean we've touched on this in some prior calls too. I mean, we haven't seen that significant of an impact from inflationary pressures on the instructor workforce side. It tends to be more in health care given the larger adjunct population there and the pressure on wages in the health care space overall rippling into our workforce. You know, we've seen some moderation frankly among some of the support organizations relative to what we were seeing last year or the year before.

Eric Martinuzzi: Yeah, I mean, we've we've.

Troy R. Anderson: Touched on this in some in some prior calls too I mean, we.

Troy R. Anderson: We haven't seen that significant of an impact from inflationary pressures.

Troy R. Anderson: On the instructor workforce side, it tends to be more on the health care.

Troy R. Anderson: Given the larger adjunct population, there and the pressure on wages in the health care space overall rippling into to our workforce.

Troy R. Anderson: Yeah, we've seen some moderation frankly and some of that support organizations.

Troy R. Anderson: But relative to what we were seeing last year or the year before.

Troy R. Anderson: Finance organizations like that as we've been growing some of those organizations along with the company.

Troy R. Anderson: You know finance IT organizations like that, as we've been growing some of those organizations along with the company. So we really, and really our commodities and the like, we haven't really seen a ton of pressure there, a little bit here and there again when inflation was really spiking with things like welding supplies. But generally speaking, I'd say given our cost structure, with so much of it being labor and then marketing expenses, and then facilities, we haven't seen that much pressure on it.

Troy R. Anderson: So we really are and really are commodities and the like.

Troy R. Anderson: We haven't really seen a ton of pressure there is a little bit here and there again when inflation was really spiking.

Troy R. Anderson: With with things like welding supplies, but so generally speaking I would say.

Troy R. Anderson: And given our cost structure, so much with the labor and then marketing expense and then facilities.

Troy R. Anderson: We haven't seen that much pressure on it.

Troy R. Anderson: We do have investments that we're continuing to make, and we've tried to factor that in a bit in the forward guide projection for next year, but you know we really haven't factored in any excess inflationary pressure per se in that.

Troy R. Anderson: We do have investments that we're continuing to make and we and we've tried to factor that in a bit and the forward guide our projection for next year.

Troy R. Anderson: You know, we really havent factored in any any excess inflationary pressure per se in that.

Eric Martinuzzi: Okay, and the last question is on the Concord expansion of the existing footprint. I think there were some Department of Ed hurdles, not obstacles, but anniversaries you needed to celebrate with sort of post-acquisition that you needed to own it for 12 months or so, prove that you're a responsible owner, and then you could invest in growing the number of students at given campuses.

Troy R. Anderson: Okay and then last question is on the Concord expansion of the existing footprint I think there was some department of Ed hurdle not hurdles that anniversaries you needed to celebrate with a sort of post acquisition that you needed to own it for 12 months or so prove that your.

Eric Martinuzzi: Responsible owner and then you could invest in growing the number of students that given campuses are we at that point yet.

Jerome A. Grant: All right, well, let me sharpen that a bit. One of the reasons for the momentum we're seeing is that we're seeing some extremely positive responses to increased investment in marketing and admissions, and so, you know, Concord's doing quite well in terms of its growth on its campuses. What we aren't able to do, due to the growth restrictions imposed by the Department of Education post-merger, which is a standard operating practice in a merger, is we're not allowed to open a new campus, and we're not allowed to start new programs that weren't previously approved before the merger.

Speaker Change: Alright, well, let me, let me sharpen that a bit is is that.

Jerome A. Grant: We are absolutely growing the number of students that at the Concord campuses one of the reasons for the momentum. We're seeing is that we're seeing some extremely positive response to increased investment in marketing and admissions and the.

Jerome A. Grant: Concord is doing quite well in terms of.

Jerome A. Grant: Their their growth on their campuses, what we arent able to do.

Jerome A. Grant: Due to the growth restrictions.

Jerome A. Grant: Imposed by the Department of Education post merger, which is a standard operating practice and the merger is we're not allowed to open a new campus and were not allowed to start new programs that Werent previously approved before the merger and so what that really means is you won't see a new Concord campus until late 'twenty six or 'twenty seven.

Jerome A. Grant: Kevin.

Jerome A. Grant: When those growth restrictions are scheduled to be our scheduled to be lifted.

Jerome A. Grant: And so, what that really means is, you won't see a new Concord campus until late 26 or 27, when those growth restrictions are scheduled to be lifted. But in the meantime, we're working very diligently on filling those Concord classes beyond where they had been filled before. You know, you talk about margin expansion, and we've said this in the past, the fastest way to increase margins is to fill more seats in a classroom, right, that may be empty. And so, you know, we're working very hard to continue to expand those margins by expanding the representation in each classroom.

Jerome A. Grant: But in the meantime, we are working very diligently on.

Jerome A. Grant: <unk>.

Jerome A. Grant: On filling those Concord classes beyond where they had been filled before you talk about margin expansion and we've said this in the past.

Jerome A. Grant: The the fastest way to margin expansion is to fill more seats in a classroom right that are that may be empty and so we're working very hard to continue to expand those margins by by expanding the representation in each classroom.

Eric Martinuzzi: Congratulations on the quarter and the bright outlook for this year and the next.

Speaker Change: Got it.

Jerome A. Grant: That's on the quarter and the bright outlook for this year and 25.

Jerome A. Grant: Great. Thanks, Eric.

Eric Martinuzzi: Great.

Speaker Change: Thanks, Eric.

Operator: And the next question comes from Raj Sharma with B. Reilly. Please go ahead.

Jerome A. Grant: And the next question comes from Raj Sharma with B Riley. Please go ahead.

Rajiv Sharma: Hi, thank you for taking my questions again. Solid, solid results. Beat and raise. If I can start, could you explain the cadence of the new start growth going from the high teens in the first half to, I think you indicated mid-single digits in the second half. Is that, why is that drop happening again? Is it that the new program ramps that are happening in the first half are not happening in the second half?

Rajiv Sharma: Hi, Thank you for taking my questions again.

Rajiv Sharma: Solid.

Rajiv Sharma: Solid results beaten raise.

Rajiv Sharma: <unk>.

Rajiv Sharma: If I can start could you explain the cadence of new starts growth is going from the high teens in the first half two I think you indicated mid single digits in the second half is that.

Rajiv Sharma: Why is that drop happening again is that some new program ramps that happened in the first half and not happening in second half.

Troy R. Anderson: Yeah, correct Raj, this is Troy. A few factors. One is we do start to lap the UTI program expansions that started launching in July of last year. We'll still have some growth there on a year-over-year basis as they launch throughout the quarter, and of course, the first set of starts aren't usually as robust. We try and temper those a little bit just to get, you know, work out some of the kin

Speaker Change: Yes, correct Raj destroy the.

Troy R. Anderson: A few factors one is we.

Troy R. Anderson: We do start to lap the UTI program expansions that started launching.

Troy R. Anderson: In July of last year.

Troy R. Anderson: Still have some growth there on a year over year basis.

Troy R. Anderson: As they launched throughout the quarter and of course, the first set of starts arent usually is robust we try and temporary theres a little bit just to get work out some of the Kinks.

Troy R. Anderson: We also have just some seasonality in the Concord clinical programs as far as the number of starts available given the programmatic accreditors and the frequency of starts that we can have within a given clinical program, and so we have some fluctuation with that on a year-over-year basis and across the quarters. And then we implemented a number of initiatives. Jerome talked earlier about the reps in both the military and high school hitting their stride.

Troy R. Anderson: We also have.

Troy R. Anderson: Just some seasonality effect of the Concorde clinical programs.

Troy R. Anderson: As far as the number of starts available given the programmatic creditors and the frequency of starts that we can have within a given clinical program and so we have some fluctuation with that on a year over year basis and across the quarters.

Troy R. Anderson: And then we implemented a number of initiatives drum talked earlier about the the reps in both military and high school are hitting their stride again, where we're now coming to the end of year. Two so we're getting to a point, where there they're still driving increased productivity, but it's less on a relative basis than it was earlier in the year we had.

Troy R. Anderson: Again, we're now coming to the end of year two, so we're getting to a point where they're still driving increased productivity, but it's less on a relative basis than it was earlier in the year. We implemented some pretty major changes in our adult transformation or a transformation in our adult lead flow and enrollment process that really was throughout 2023, so again, as we get into the back half of the year, that's a much more mature process.

Troy R. Anderson: Implemented some pretty major changes in our adult.

Troy R. Anderson: Transformation, our transformation and our adult.

Troy R. Anderson: Lead flow and enrollment process that really was throughout 2023, so again as we get into the back half of the year. That's a much more mature process and so it's just a number of different factors you know frankly that I'm kind.

Troy R. Anderson: And so just a number of different factors, you know, that kind of all roll together to give us a lift in the first half of the year because of those things still generating significantly more year-over-year, and that becomes more normalized in the back half of the year.

Troy R. Anderson: Kind of all roll together that we are getting a lift in the front half of the year because of those things still generating significantly more year over year and that becomes more normalized in the back half of the year.

Troy R. Anderson: Thank you. That's helpful. And then for the fiscal 25 guidance, are you, what? I think you're assuming mid-single-digit starts?

Speaker Change: Thank you that's helpful and then for the fiscal 'twenty five guidance are you what are you assuming mid single digit starts.

Troy R. Anderson: Yeah, our core projection, just clarification on that, our baseline start growth, we've always said we believe we can generate a low to mid-single digit growth rate in starts in any given environment, and so that's always our baseline starting point. We do have a little bit of flow-through on the new programs that would be a bit incremental to that, and we're launching four UTI HVACR programs here in the latter part of the year and into next year.

Speaker Change: Yes, our core.

Speaker Change: So projection just clarification on that.

Troy R. Anderson: Our baseline start growth. We've always said, we believe we can generate low to mid single digit growth rate.

Troy R. Anderson: In starts.

Troy R. Anderson: In any given environment and so that's always our baseline starting point, we do have a little bit of flow through on the new programs that would be a bit incremental to that you know we're launching for UTI HVA CR programs here in the latter part of the year and into next year. The dental hygiene programs that we touched upon in our prepared remarks.

Troy R. Anderson: The dental hygiene programs that we touched upon are PREPARE2MARKS launching, and those are, by the way, only one start a year, and as we mentioned, about 50 starts per year, so not huge drivers. So, we have some of that flow-through from the new programs in addition to the baseline growth, but not significant. And then the last point, as you've said in the past, is that it really takes about 36 months for new campuses to ramp up, and Miramar and Austin will hit that point throughout 2025, so those are the building blocks to what we said would likely be a double-digit increase in revenue and 100 basis points, at least 100 basis points, in margin expansion.

Troy R. Anderson: Mark's launching and those are by the way only one start of year.

Troy R. Anderson: And as we mentioned about 50 starts per year, so not huge drivers, but so we have some of that flow through from the new programs. In addition to the baseline growth, but not significant and then the last the last point.

Troy R. Anderson: The last point is we.

Troy R. Anderson: As we've said in the past is that it really takes about 36 months for new campuses.

Troy R. Anderson: In Miramar in Austin hit that point.

Troy R. Anderson: <unk> 2025 so.

Troy R. Anderson: That's that's.

Troy R. Anderson: Thus the building blocks to what we said would likely be a.

Troy R. Anderson: Double digit increase in <unk>.

Troy R. Anderson: In revenue and 100 basis points at least 100 basis points in margin expansion.

Troy R. Anderson: Great. That's really helpful. And then just what is causing the Vidal margin to expand next year? Is that purely operating leverage?

Troy R. Anderson: Great.

Troy R. Anderson: Really helpful and then just the.

Troy R. Anderson: What is causing the EBITDA margin to expand next year is that purely operating leverage.

Troy R. Anderson: Well, it's operating leverage. Again, we had the growth and diversification strategy, and now you hear us say growth, diversification, and optimization. We've always had programs to optimize our operating model, but now we're driving a new level of that with our workforce optimization, more efficiency, productivity from a workforce perspective, and better space utilization so that we can expand programs in the future. This also drives some educational delivery optimization, so it's a combination of operating leverage as well as just getting more efficient as we continue to grow and scale and drive more optimization across the footprint, both in the UTI side as well as on the Concord side.

Troy R. Anderson: Well its operating leverage we are again, we added we had the growth and diversification strategy and now you hear us say growth diversification and optimization, we've always had programs to optimize our operating model, but now where we're driving.

Troy R. Anderson: New level of that with our workforce optimization more efficiency productivity from a workforce perspective more space better space utilization. So that we can expand our programs.

Troy R. Anderson: Programs in the future, which also drives some educational delivery optimization. So it's a combination of operating leverage as well as just getting more efficient.

Troy R. Anderson: As we continue to grow in scale and drive more optimization across the footprint both in the UGI side as well as on the concrete side and again, we've always said too with the Concord acquisition, which at the time of acquisition was an 8% margin this year to be about 10%.

Troy R. Anderson: And again, we've always said, too, with the Concord acquisition, which at the time of acquisition was an 8% margin, this year it'll be about 10%, and we said we would drive that toward the mid-teens through growth and through driving some of the consistent practices that we've previously implemented at UTI with centralization and more efficiency in various ways, and so that's also contributing towards that.

Troy R. Anderson: We said, we would drive that toward mid teens through growth and through driving some of the.

Troy R. Anderson: Consistent practices that we've previously implemented a UTI with with centralization and and more efficiency.

Troy R. Anderson: In various ways and so that's also contributing.

Troy R. Anderson: You know towards that.

Rajiv Sharma: Thank you again. Great color, solid results, and great execution. Thank you again. I'll take my questions offline.

Speaker Change: Thank you again, a great color.

Rajiv Sharma: And solid results and great execution. Thank you again I'll take my questions offline.

Speaker Change: Thank you thank you Raj.

Operator: The next question comes from Steve Frankel with Colliers. Please go ahead.

Rajiv Sharma: The next question comes from Steve Frankel with Colliers. Please go ahead.

Steven Bruce Frankel: Hi, Good afternoon, you mentioned a couple of cash pay programs at Concord could you give us a little more details on that and what kind of opportunities might you have on.

Steven Bruce Frankel: Good afternoon. You mentioned a couple cash pay programs at Concord. Could you give us a little more details on that, and what kind of opportunities might you have on the UTI side to create some cash pay programs there as well? Yeah, I'll add some.

Steven Bruce Frankel: On the UTI side to create some cash pay programs there as well.

Troy R. Anderson: This is Troy. Steve, thanks for the question. The cash pay programs on the Concord side, phlebotomy, sterile processing, they're really a subset of the MA program, the medical assistant program, and there's demand for that in the market. They're two to four month programs for a few thousand dollars. Usually, employers may participate in that, or it's a quick start for somebody to get into the medical workforce, and so we've seen some demand for that in a number of different markets, and we are continuing to look for more demand.

Speaker Change: Yeah, I'll add this Troy Steve Thanks for the question.

Troy R. Anderson: The cash pay programs on the concrete side phlebotomy sterile processing, there really a subset of the of the MA program the medical assistant program.

Troy R. Anderson: And there's demand for that in the market. There are two to four months programs few thousand dollars.

Troy R. Anderson: Usually our employers may participate in that or if it's a quick start for somebody to get into the the medical workforce and so we've seen some demand for that in a number of different markets are continuing to look for more demand. So that's something the Concord team and again back to the earlier question about the growth restrictions something the Concord team came up with.

Troy R. Anderson: So that's something the Concord team, and again back to the earlier question about the growth restrictions, something the Concord team came up with as a way to generate some growth in lieu of a Title IV Department of Ed certified program. It's an accredited program, so through our accreditors, but it doesn't require Department of Ed funding because we're not requiring Title IV funding for it.

Troy R. Anderson: As a way to generate some growth in lieu of.

Troy R. Anderson: A title for department of Ed.

Troy R. Anderson: Certified program.

Troy R. Anderson: Credit program, so through our creditors, but it doesn't require department of Ed because it's not we're.

Troy R. Anderson: We're not requiring title for funding for it.

Troy R. Anderson: So we'll continue looking at opportunities to expand those within the Concord footprint. On the UTI side, we're looking at different ways to try something similar, nothing imminent by any means, but we've considered some other types of programs, whether they're a short welding program, an evening or a weekend, a few weekends for a few months, and get somebody into the workforce again on a quicker basis, but we're working through some things like that on that side as well. Okay, and then you've done a great job building this START pipeline.

Troy R. Anderson: So we will continue looking at opportunities to expand is within the cockpit footprint on the UGI side.

Troy R. Anderson: We're looking at different ways to try something similar.

Troy R. Anderson: Nothing eminent by any means but we've considered some other type of programs, whether they're short welding program and evening or weekend few weekends.

Troy R. Anderson: For a few months and and get somebody into the work force again on a quicker basis, but you know what.

Troy R. Anderson: Working through some things like that on that side as well.

Troy R. Anderson: Okay and then.

Troy R. Anderson: Done a great job building this start pipeline.

Troy R. Anderson: What are you doing to make sure these students get to graduation? Well, our persistence, attrition persistence, there's a number of different metrics that are used, even within our own institutions but across the industry, have been trending very positively. So, we're seeing upticks in retaining students and graduating students, and, you know, we're not talking 5 and 10 percentage points, but, you know, 50 basis points makes a difference. That's a few hundred more students a year that are finishing the program, and, of course, that supports us from a financial performance perspective. So, a lot of focus on outcomes. That's what we've always said.

Troy R. Anderson: What are you doing to make sure the students get congratulation.

Troy R. Anderson: R R.

Troy R. Anderson: Our persistence.

Troy R. Anderson: Attrition persistence theres a number of different metrics that are used.

Troy R. Anderson: Even without our own institutions, but across the.

Troy R. Anderson: The industry has been trending very positively so where we're seeing upticks in.

Troy R. Anderson: In and retaining students and graduating students and you know we're not talking five to 10 percentage points, but.

Troy R. Anderson: 50 basis points makes a difference that's a few hundred more students.

Troy R. Anderson: A year that are finishing that program and of course support us from a financial performance perspective, So a lot of focus on outcomes. That's what we've always said we.

Jerome A. Grant: We start and end with outcomes, first and foremost, and, you know, between getting them started and getting them through as quickly as possible. So, pass rates, not having a lot of retakes, things along those lines, keeping them in schools, they're not out on LOAs and the like, so they can get out in the workforce faster, and then the employment side. And continuing our focus all the way through that life cycle. Yeah, the other point I'll make is our blended learning model, which is at full speed across the UTI curriculum, has already been in place, or was in place at Concord. It also mandates that the students are actually only in our building for about three hours a day doing their lab work because the didactic learning is all online.

Jerome A. Grant: I'll start and end with outcomes first and foremost and.

Jerome A. Grant: <unk>.

Jerome A. Grant: The getting that started getting them through as quickly as possible so pass rates, but not having that a lot of retakes things along those lines keeping them in schools are not out on <unk> and the like so they can get out of the workforce faster and then and then the employment side and.

Jerome A. Grant: Continuing our focus all the way through that lifecycle, yeah. The other point I'll make is our blended learning model, which is at full ramp across the U T. I a curriculum has already been in place. There was in place that has conquered also.

Jerome A. Grant: Mandates that the students are actually only in our building for about three hours a day doing their lab work because the didactic learning is all is all online that flexibility is allowing students to be able to keep their jobs, while they're in school do their work a symphony synchronously <unk> at other time.

Jerome A. Grant: That flexibility is allowing students to be able to keep their jobs while they're in school and do their work asynchronously at other times. And I think one of the things we're hearing is that this sort of welcome approach that gives flexibility is allowing more students who may have needed to back out because of financial pressures or life happens types of things to stay in the game because they now have, you know, more hours of the day they can use for other things like work.

Jerome A. Grant: And I think one of the things. We're hearing is that this sort of welcome approach that gives flexibility is allowing more students who may have needed to back out because of financial pressures or life happens types of things staying in the game because they now have.

Jerome A. Grant: More hours of the day that you can use for other things like work. So I think that's helping with our retention rates as well.

Jerome A. Grant: So, I think that's helping with our retention rates as well. Okay, and one of the trends you talked a lot about last year was employers kind of battling each other to get on campus to recruit and really fighting to get in front of those students by offering better terms, better tuition reimbursement, things like that. Where are we in that cycle today? Is that less of a factor, or are you still able to command these kind of terms from a potential employer?

Jerome A. Grant: Okay, and one of the trends you talked a lot about last year was.

Jerome A. Grant: <unk> kind of battling each other to get on campus to recruit and really fighting to get in front of us our students by offering better terms better tuition reimbursement and things like that.

Jerome A. Grant: Where are we in that cycle today or is that less of a factor or are you still able to command. Please kind of terms from potential employers.

Jerome A. Grant: Yeah, I think, demand for our graduates has never been higher. And so, there is, and continues to be, a significant deficit between the number of open jobs out there and the number of graduates across the industry. And so, you know, that demand really drives the behavior of the employment community. And so we're seeing, you know, the packages that are being put in front of our graduates continue to look better and better every year.

Jerome A. Grant: I think demand for our graduates has never been higher and so there is there continues to be a significant deficit between the number of open jobs out there in the number of graduates across the industry and so that demand.

Jerome A. Grant: You know really drives the behavior of the employment community and so we're seeing you know that.

Jerome A. Grant: Packages that are being put in front of our graduates continue to look better and better every year. We've started the same programs on the concrete side, that's helping get it more organized.

Jerome A. Grant: You know, we've started the same programs on the concrete side, and that's helping get it more organized for access to the graduates. And I think that will help, you know, take those packages up as well. Perfect. Thank you so much. I'll jump back in the queue.

Speaker Change: For access to the graduates and I think that will help.

Jerome A. Grant: Let.

Jerome A. Grant: Let those packages tick up as well.

Speaker Change: Perfect. Thank you so much I'll jump back in the queue.

Speaker Change: Thanks, Steve.

Operator: The next question comes from Mike Grondahl with Northland Securities. Please go ahead.

Jerome A. Grant: The next question comes from Mike Grondahl with Northland Securities. Please go ahead.

Michael John Grondahl: Hey guys, thanks. First question is just about the 2025 kind of outlook. Is there anything embedded in that for new geographies or new campuses? If so, just curious, you know, roughly how much? And then if you could just remind us kind of the...

Michael John Grondahl: Hey, guys. Thanks first question is just about the 2025 kind of outlook.

Michael John Grondahl: Is there anything embedded in that for new geographies or new campuses.

Michael John Grondahl: If so just curious roughly how much and then if you could just remind us kind of the economics of the investment of a new campus and kind of how that grows.

Troy R. Anderson: Yeah, thanks for the question, Mike. This is Troy.

Speaker Change: Yeah. Thanks for the question might destroy the.

Troy: We tried to be fairly clear and I'm glad you asked the question. So we can make sure we get it here in the Q&A as well.

Troy R. Anderson: We tried to be fairly clear, and I'm glad you asked the question so we can make sure we get it here in the Q&A as well. It's all existing programs, already in operation, as well as programs that we have announced that we're planning to launch. Primarily, the four remaining HVACR programs, now that we have the dental hygiene programs with Concord already started, there'll be a small amount on the San Diego expansion that we've talked about.

Troy: It is it's all existing programs.

Troy R. Anderson: But.

Troy R. Anderson: In already in operation as well as programs that we have announced that we're planning the launch so primarily the four remaining HVA CR programs now that we have the the.

Troy R. Anderson: Dental hygiene programs with Concord already started there'll be a small amount on the San Diego expansion that we've talked about but but so really it's the old beyond what we already have it's the four HVAC our programs and then just the the lift we carry out of this year into next year with the start growth that we've seen.

Troy R. Anderson: Beyond what we already have, it's the four HVACR programs, and then just the lift we carry out of this year and the next year with the initial growth that we've seen and the ramp of those programs. But to be clear, we've yet to announce a new program launch portfolio for 2025, yet, and so that would be added to that. Yes, and potentially geographies.

Troy R. Anderson: And.

Troy R. Anderson: And the ramp of those those programs.

Troy R. Anderson: But to be clear, we have yet to announce a new program launch portfolio for 2025, yet and so that would be additive.

Troy R. Anderson: In addition to that, which segues to the second part of your question on the economics, we did add a slide in our investor presentation, it's in the appendix, that shows the campus economics and program economics for both UTI and Concord. We've talked a lot about dental hygiene with Concord as that's been the program they've primarily been expanding, and so we showed an illustrative example there along with the welding or HVACR program since that's what we've been launching mainly with UTI here more recently.

Troy R. Anderson: Yes, and potentially geographies in addition to that which segue to the second part of your question on the economics, we did add.

Troy R. Anderson: A slide in our investor presentation in the appendix.

Troy R. Anderson: That shows a campus economics and program economics for both UGI and Concord, We've talked a lot about dental hygiene with Concord as Thats been the program are they primarily been expanding and so we showed an illustrative.

Troy R. Anderson: Example, there are along with the welding our HVAC program since that's what we've been launching mainly.

Troy R. Anderson: Mainly with UGI here more recently, so but at campuses.

Troy R. Anderson: But a campus's current format and, historically, the UTI format was auto diesel welding and maybe a manufacturer program, about a $25 million a year run rate revenue generating between $10 to $12 million in direct EBITDA contribution, about a $15 million capital investment, and about three to four years to ramp up, commented on that earlier. And, you know, a four year payback or so on the cash investment. The programs, those are, Dental hygiene is a fairly expensive program to implement, relatively speaking, because the model that we use at Concord is that we actually build the clinical lab on our campus versus some of the other programs where they do the clinicals on the provider's site. So we have dentists on staff; we actually build out the dental operatories, the chairs, and everything.

Troy R. Anderson: Current format and historically the UTI format was auto diesel welding and maybe a manufacturer program about a 25 million dollar a year run rate revenue generating between 10 and.

Troy R. Anderson: $10 million to $12 million and direct EBITDA contribution.

Troy R. Anderson: About $15 million capital investment and about four three years to four years to ramp Jerome commented on that earlier.

Troy R. Anderson: And you know a four year payback or so on the cash investment the programs are those are.

Troy R. Anderson: Dental hygiene is a fairly extensive program to implement realm.

Troy R. Anderson: Relatively speaking because we are the model that we use at Concord is that we actually build the clinical lab in our campus versus some of the other programs where they do the clinical's on the Provider's site. So we have denniston staff, we actually build out the dental operatory the chairs and everything so it is.

Troy R. Anderson: So it is a few million dollars of investment, requires about 7,500 square feet, and you can see it's about a four, between a four and $5 million run rate revenue. HVACR is about a two and a half million run rate revenue. Dental hygiene is about a 40% margin, so $2 million. And HVACR is also about a 40% margin or so, but about a $600,000 investment. So a much lower investment, much smaller footprint, 4,000 square feet. I see it, Troy; thanks for pointing that out.

Troy R. Anderson: <unk>.

Troy R. Anderson: A few million dollars of investment requires about 7500 square feet.

Troy R. Anderson: And.

Troy R. Anderson: You can see it's about a four between $4 million to $5 million run rate revenue <unk> about two and a half million run rate revenue dental hygiene is about at about a 40% margins or to $2 million in HVAC.

Troy R. Anderson: Also about a 40% margin or so.

Troy R. Anderson: And but about a $600000 investment so much much lower investment in much smaller footprint 4000 square feet.

Troy R. Anderson: You've got great Troy, thanks for pointing that out.

Jerome A. Grant: And then, hey, just one follow-up question, maybe for Jerry. Concord, some online programs, online efforts, you know. I think you hired someone to head that up. How is that progressing, and what should we think about the growth coming out of this? Sure.

Troy: Hey, just one follow up question.

Jerome A. Grant: Maybe for Jerry you've talked about with Concord.

Speaker Change: Online programs online effort.

Jerry: I think you hired someone to head that up how is that progressing and how should we think about the growth coming out of that.

Jerome A. Grant: Progressing quite well. And again, it's not something you just hire someone and flip the switch, and suddenly you have 100 online courses that you didn't have before or another direction. And so, you know, we're starting the initial stages of looking at what we consider to be the low-hanging fruit in terms of marketing the courses that are already there, courses that may be underrepresented in the market. We're starting to see some uptick there.

Jerome A. Grant: Sure.

Jerry: Progressing quite well and again, it's not something you just hire someone and flip the switch and suddenly you have a 100 online courses.

Jerome A. Grant: You didn't have before or another direction and so we're starting the initial stages of looking at what we'd consider to be the low hanging fruit in terms of marketing. The courses that are already there are courses that are that may be underrepresented in the market and we're starting to see some uptick there.

Jerome A. Grant: And then we're doing a fair amount of the internal work right now, which will bear fruit over the next 36 months, redesigning courses, refashioning them to better work in the online environment, and then also thinking about both our admissions, marketing, and support models to better support a scaled online campus.

Jerome A. Grant: And then we're doing a fair amount of internal work right now, which will bear fruit over the next.

Jerome A. Grant: 36 months.

Jerome A. Grant: That.

Jerome A. Grant: Redesigning course is re fashioning them to better work in the online environment and then also thinking about both our admissions marketing and support models to better support a scaled.

Jerome A. Grant: The online campus if you will.

Speaker Change: Okay. Thank you.

Jerome A. Grant: Sure.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Jerome Grant for any closing remarks.

Jerome A. Grant: This concludes our question and answer session I would like to turn the conference back over to Jerome Grant for any closing remarks.

Jerome A. Grant: Thank you very much, and thank you very much for joining us today. I know it takes a lot out of your schedule to spend this time with us. I am looking forward to reporting to you again in three months. As a reminder, Troy and I are available for questions and answers over the next few days and throughout the quarter. We would like an air of transparency. We wanna make sure that you get everything answered that you can. So, have a great afternoon. Thanks.

Jerome A. Grant: Thank you very much and thank you very much for joining us today I know it takes a lot of your schedule to spend his time with us.

Jerome A. Grant: Where.

Jerome A. Grant: Looking forward to reporting to you again in three months, a reminder, Troy and I are available for questions and answers over the next few days and throughout the quarter, we we would like to and Eric transparency, we want to make sure that you get everything answered that you can so have a great afternoon.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.