Q2 2024 Lincoln Educational Services Corp Earnings Call

August 8, 2024

Hedgehog THE END

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the second quarter Lincoln Educational Services earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Michael Polyviou, Investor Relations. Please go ahead.

Michael Polyviou: Before the market opened today, Lincoln Educational Services issued its news release reporting financial results and recent corporate developments for the second quarter and six months ended June 30, 2024. The release is available on the investor relations portion of the company's corporate website at www.lincolntech.edu. Joining us today on the call is Scott Shaw, President and CEO, and Brian Meyers, Chief Financial Officer. Today's call has been recorded and is being broadcast live on the company's website. A replay of the call will be archived on the company's website.

Unknown Executive: Statements made by Lincoln Management on today's call regarding the company's business that are not historical facts may be forward-looking statements as the term is identified in federal securities law. The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions, are intended to identify overlooked statements. Total containment should not be read as a guarantee of future performance or events. The company cautions you that these statements reflect certain expectations about the company's future performance or events and are subject to a number of uncertainties, risks, and other influences, many of which are beyond the company's control, and may influence the accuracy of the statement and projection upon which the segment and statements are based.

Unknown Executive: Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the Risk Factor section of the Annual Report in Form 10-K and the Quarterly Report in Form 10-Q filed with the Securities and Exchange Commission. All of those statements are based on the information available at the time those statements are made and management's good faith belief at the time with respect to future events.

Unknown Executive: All overlooked statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes no obligation to publicly revise or update any form, whether as a result of new information, case, or event, or otherwise, after the date that. One other housekeeping matter.

Speaker Change: Ladies and gentlemen, thank you for standing by. Welcome to the second quarter Lincoln Educational Services earnings conference call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session.

Speaker Change: To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Michael Polyviou, Investor Relations. Please go ahead.

Michael Polyviou: Thank you, Michelle. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued its news release reporting financial results in recent corporate developments for the second quarter and six months ended June 30, 2024.

Speaker Change: the release is available on the invesest relation portion of the company'scorporate website at w do when conttect dod

Speaker Change: wining a cityy on the colge scot t president in yell and brian marerss chief nic loss

Speaker Change: Today's call has been recorded and is being broadcast live on the company's website. A replay of the call will be archived on the company's website.

Lincoln Management: Statements made by Lincoln Management on today's call regarding the company's business that are not historical facts may be overlooked in statements as the term is identified in federal securities laws.

Speaker Change: The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions are intended to identify if the outlook is stated.

Michael Polyviou: Total containment should not be read as a guarantee of future performance.

Michael Polyviou: Company cautions you that these statements reflect

Michael Polyviou: for an expectation about the company's future performance or events.

Michael Polyviou: and are subject to a number of uncertainties, risks, and other risks.

Speaker Change: for influences, many of which are beyond the company's control, and may influence the accuracy of the statement and projection upon which the segment and statements are based.

Speaker Change: Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the Risk Factor section of the Annual Report in Form 10-K and the Quarterly Report in Form 10-Q filed with the Securities and Exchange Commission.

Speaker Change: All of those statements are based on the information available at the time those statements were made and management's good faith belief as of the time with respect to future events.

Michael Polyviou: All forward-looking statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date thereof.

Speaker Change: One other housekeeping matter. During the Q&A portion of our call today, we would appreciate it if questioners limited themselves to two questions and then recue to ask any additional questions. In advance, we thank you for your cooperation.

Michael Polyviou: During the Q&A portion of our call today, we would appreciate it if questioners limited themselves to two questions and then retreated to ask any additional questions. In advance, we thank you for your time. Now I welcome the call over to Scott Shaw, President and CEO of Lincoln Educational Services. Scott, please go ahead.

Michael Polyviou: Now I would like to call over Scott Shaw, President and CEO of Lincoln Educational Services. Scott, please go ahead.

Scott Shaw: Thank you, Michael, and good morning, everyone. For several quarters, our team has been generating strong operating and financial momentum, leading to consistent revenue, student start, and profitability growth. We continued these trends during our second quarter, and we are well on our way to meeting our 2024 guidance metrics. In fact, we are adjusting our guidance in a positive direction, which Brian will review in his remarks.

Scott Shaw: Thank you, Michael, and good morning, everyone.

Scott Shaw: For several quarters, our team has been generating strong operating and financial momentum, leading to consistent revenue, student start, and profitability growth. We continued these trends during our second quarter, and we are well on our way to meeting our 2024 guidance metrics.

Scott Shaw: in fact we are adjusting our guidance in a positive direction which brian will review in his remarks

Scott Shaw: The investments we've made in our transformative strategies over the past several years are driving our, Additionally, we continue to capitalize on America's expanding interest in career opportunities that avoid the cost and time of a four-year college degree and help the nation close the skills gap inhibiting corporate growth. During the second quarter, without relying on acquisitions, we grew revenue 16% over the prior-year period, and students started to increase 12.3%. Our student retention rate continues to be strong, and we ended the quarter with an average student population increase over last year in excess of 11%.

Brian: the invments we've made in our transformative strategies of the past several years are driving our growth

Brian: Additionally, we continue to capitalize on America's expanding interest in career opportunities that avoid the cost and time of a four-year college degree and help the nation close the skills gap inhibiting corporate growth.

Brian: during the second quarter without relying on acquisitions we grew revenuees sixteen percent over the prior year period and student starts to increase twelve point three percent our student retention rate continue to be strong and we ended the quarter with an average student population increase over last year in excess of eleven percent

Operator: Ladies and gentlemen, thank you for standing by.

Scott Shaw: Our top line performance, coupled with increased operating efficiencies driven by the implementation of our highly scalable hybrid instructional platform, Lincoln 10.0, led to adjusted EBITDA of $6 million. I'll let Brian address our adjusted EBITDA performance during his remarks, but I do want to note our second quarter result was approximately two and a half times greater than what we generated during last year's second quarter. Furthermore, our total SG&A expenses during the second quarter fell below 56% as compared to 57.6%.

Operator: Welcome to the second quarter Lincoln Educational Services earnings conference call. At this time, all participants are in a listen-only mode.

Brian: Our top-line performance, coupled with increased operating efficiencies driven by the implementation of our highly scalable hybrid instructional platform, Lincoln 10.0, led to adjusted EBITDA of $6 million.

Operator: After the speakers presentation, there will be a question and answer session. To ask a question during this session, you would need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again.

Speaker Change: I'll let Brian address our adjusted EBITDA performance during his remarks, but I do want to note our second quarter result was approximately two and a half times greater than what we generated during last year's second quarter.

Operator: Please be advised that today's conference is being recorded.

Brian: Furthermore, our total SG&A expenses during the second quarter fell below 56% as compared to 57.6%, and our educational services and facilities expenses as a percentage of revenue also declined, further demonstrating the operating leverage we are beginning to realize.

Michael Polyviou: I would like now to turn the conference over to Michael Polyviou, Investor Relations. Please go ahead. Thank you, Michelle.

Scott Shaw: And our educational services and facilities expenses as a percentage of revenue also declined, further demonstrating the operating leverage we are beginning to realize. When we complete the rollout of Lincoln 10.0 by the end of this year, the platform will be used in teaching approximately 65% of our students. We continue to see numerous indications that the platform improves our operating efficiencies while also playing a major factor in a student's decision to enroll at Lincoln.

Michael Polyviou: Good morning, everyone. I've put a market open today, Lincoln Educational Services issued its news release for uploading financial results in recent corporate developments for the second quarter in six months and the June 30, 2024. The release is available on the Investor Relations portion of the company's corporate website at www.linkentek.edu.

Speaker Change: When we complete the rollout of Lincoln 10.0 by the end of this year, the platform will be used in teaching approximately 65% of our students.

Speaker Change: We continue to see numerous indications that the platform improves our operating efficiencies while also playing a major factor in a student's decision to enroll at Lincoln.

Michael Polyviou: Joining us today on the call is Scott Shaw, president and CEO and Brian Myers, chief niche law firm. Today's call has been recorded and is being broadcast live on the company's website. We play the call, be archived on the website.

Scott Shaw: The platform reduces the time to complete many of our programs, speeding up graduates to begin their careers. This enhanced training productivity is also attractive to our corporate partners, who remain constrained by the lack of skilled employees.

Brian: The platform reduces the time to complete many of our programs, speeding up graduates to begin their careers. This enhanced training productivity is also attractive to our corporate partners who remain constrained by the lack of skilled employees.

Unknown Executive: Statements made by Lincoln Management on today's call regarding the company's business that are not historical facts, maybe for a look at statements as a term is identified and that will secure his loss. The words may will expect the lead in debate, project, intent, estimate and continue as well as similar expressions are intended to identify our local statements. Our local statements should not be read as a guarantee of speech performance. Company caution's you that these statements reflect certain expectations about the company's speech performance or event and are subject to a number of uncertainties, risks, and other certain influences many of which are beyond the company's control and the influence of the accuracy of the statement and projection upon which the segment and statements are based.

Scott Shaw: While I've mentioned before how Lincoln 10.0 has fundamentally changed how we teach our students and position the company for the future, its transformational impact on our company bears repeating. The platform is serving as the foundation for our focused growth strategies of opening new campuses and replicating successful programs and existing campuses. For example, the East Point, Georgia campus is our first new Greenfield campus developed in some 18 years. This brand new, state-of-the-art facility features 56,000 square feet of training space and includes 15 automotive service spaces and up to 60 welding booths, labs, classrooms, and work areas.

Brian: While I've mentioned before how Lincoln 10.0 has fundamentally changed how we teach our students and position the company for the future, its transformational impact on our company bears repeating.

Brian: The platform is serving as the foundation for our focused growth strategies of opening new campuses and replicating successful programs and existing campuses.

Brian: For example, the East Point, Georgia campus is our first new greenfield campus developed in some 18 years. This brand new state of the art facility features 56,000 square feet of training space.

Brian: and includes 15 automotive service spaces and up to 60 welding booths, labs, classrooms, and work areas. We welcomed the first class during the first quarter, and by the end of June , we had already enrolled more students at East Point than we had initially budgeted for for the entire year.

Scott Shaw: We welcomed the first class during the first quarter, and by the end of June, we had already enrolled more students at East Point than we had initially budgeted for for the entire year. The campus' strong results prove the success of our site selection process and bodes well for our future new campuses and relocations. We designed East Point to be unique among trade schools, and for those who have visited the campus, it is apparent when you first enter the campus.

Unknown Executive: Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the risk factor section, the annual report of form 10K, and the quarterly report of form 10K filed with securities and exchange commissions. So those statements are based on the information available at the time, those statements are made and management's good take the lead as at the time with respect to future events.

Brian: The campus' strong results prove the success of our site selection process and bodes well for our future new campuses and relocations.

Speaker Change: we design these point to be unique among trade schools and for those who have visited the campus it is a parent when you first enter the campus

Unknown Executive: All federal good statements are qualified in their entirety by this cautionary statement and Lincoln undertakes new obligations to public to revise or update any federal statement, whether as we result of new information, future events or otherwise after the date they're out.

Scott Shaw: We sought to create a setting that was both sleek and modern, elevating the student and teaching experience. Everything about the campus has been thoughtfully designed to deliver exceptional hands-on education and training with robust labs and shops. Moreover, we're utilizing the best-in-class curriculum and training aids. For example, in our automotive program, we're the only school group in the United States utilizing Elektude curriculum and their integrated trainers. Elektude is the global leader in automotive training in high schools and colleges.

Speaker Change: We sought to create a setting that was both sleek and modern, elevating the student and teaching experience.

Brian: Everything about the campus has been thoughtfully designed to deliver exceptional hands-on education and training with robust labs and shops.

Unknown Executive: One other housekeeping matter during the Q&A portion of recall today, we would appreciate if questioners limited to themselves two questions and then we queued to ask any additional questions. In advance, we thank you for your cooperation.

Brian: Moreover, we are utilizing the best-in-class curriculum and training aids. For example, in our automotive program, we are the only school group in the United States utilizing electewed curriculum and their integrated trainers.

Scott Shaw: Now I'd like to welcome the call over Scotchman, president and CEO of Lincoln Educational Services. Scotch, good go. Thank you, Michael and good morning everyone. For several quarters, our team has been generating strong operating and financial momentum leading to consistent revenue, student start and profitability growth. We continued these trends during our second quarter and we were well on our way to meeting our 2024 guidance metrics. In fact, we are adjusting our guidance in a positive direction, which Brian will review in his remarks.

Scott Shaw: Elektude's cloud-based e-learning platform allows instructors access to interactive and engaging foundational lessons, gamified formative and summative assessments, teaching resources, tools to build their own curriculum, analytical tools to identify learners' needs, and coursework in multiple languages.

Electude: Electude is the global leader in automotive training in high schools and colleges. Electude's cloud-based e-learning platform allows our instructors access to interactive and engaging foundational lessons, gamified formative and summative assessments,

Brian: teaching resources, tools to build their own curriculum, analytical tools to identify learners' needs, and coursework in multiple languages.

Scott Shaw: Moreover, their proprietary trainers seamlessly integrate with the curriculum and provide students with a clear understanding of all the major systems in a car. At the heart of the program is the principle of discovery learning, which is how younger generations have become so adept at mastering today's technology. Again, based on the robust response generated today in the form of leads, applications, and starts, we're off to an excellent start with East Point, and the early results have increased our confidence in our new campus strategy.

Scott Shaw: The investments we've made in our transformative strategies over the past several years are driving our growth. Additionally, we continue to capitalize on America's expanding interest in career opportunities that avoid the cost and time of a four-year college degree and help the nation close the skills gap, inhibiting corporate growth. During the second quarter, without relying on acquisitions, we grew revenue 16% over the prior year period, and students start to increase 12.3%. Our student retention rate continued to be strong, and we ended the quarter with an average student population increase over last year in excess of 11%.

Speaker Change: Moreover, their proprietary trainers seamlessly integrate with the curriculum and provide students with a clear understanding of all the major systems in a car.

Speaker Change: At the heart of the program is the principle of discovery learning, which is how younger generations have become so adept in mastering today's technology.

Speaker Change: Again, based on the robust response generated to date in the form of leads, applications, and starts, we are off to an excellent start with East Point, and the early results have increased our confidence in our new campus strategy.

Scott Shaw: Our future Nashville and Levittown campuses are scheduled to open during the first half of 2025. As a reminder, both campuses are totally new from the ground up and replace existing operations in those markets and include additional programs at both campuses. Our fourth new campus in Houston is meeting its construction and build out schedule, but local regulatory timelines are causing our startup of this campus to be pushed out. We now see starting our first class in Houston during the fourth quarter of 2025.

Brian: Our future Nashville and Levittown campuses are scheduled to open during the first half of 2025.

Scott Shaw: Our top-line performance coupled with increased operating efficiencies driven by the implementation of our highly scalable hybrid instructional platform, Lincoln 10.0, led to adjusted EBITDAV 6 million. I'll let Brian address our adjusted EBITDAV performance during history marks, but I do want to note our second quarter result was approximately 2.5 times greater than what we generated during last year's second quarter. Furthermore, our total SGNA expenses during the second quarter fell below 56%, as compared to 57.6%, and our educational services and facilities expenses as a percentage of revenue also declined, further demonstrating the operating leverage we are beginning to realize.

Brian: As a reminder, both campuses.

Brian: are totally new from the ground up and replace existing operations in those markets and include additional programs at both campuses.

Brian: Our fourth new campus in Houston is meeting its construction and build-out schedule, but local regulatory timelines are causing our startup of this campus to be pushed out. We now see starting our first class in Houston during the fourth quarter of 2025.

Scott Shaw: A fifth new campus is in the initial stages of development, and our plan is to announce its location by our third quarter results conference call. This campus would open in 2026. In addition to the new campuses, replicating and expanding successful programs that are existing campuses remains a key growth strategy. Currently, we have related initiatives, which Brian will provide more detail on. However, we continue to expect that each of these programs will generate approximately one million dollars in profitability within three years of opening, if not sooner.

Brian: A fifth new campus is in the initial stages of development, and our plan is to announce its location via our third quarter results conference call. This campus would open in 2026.

Brian: In addition to the new campuses, replicating and expanding successful programs that are existing campuses remains a key growth strategy.

Scott Shaw: When we complete the rollout of Lincoln 10.0 by the end of this year, the platform will be used in teaching approximately 65% of our students. We continue to see numerous indications that the platform improves our operating efficiencies while also playing a major factor in a student's decision to enroll at Lincoln. The platform reduces the time to complete many of our programs, speeding up graduates to begin their careers. This enhanced training productivity is also attractive to our corporate partners who remain constrained by the lack of skilled employees.

Brian: currently we have related initiatives which brian will provide more detail on however we continue to expect that each of these programs will generate approximately one million of profitability within three years of openness if not sooner

Scott Shaw: Our focus on offering innovative, efficient student curriculums is enabling a growing number of graduates to enter rewarding, in-demand careers. This focus is also attracting additional corporate partners and broadening our relationship with existing partners. Our corporate partnership development activity remained quite robust during the second quarter, and we expanded our relationship with Peterbilt Corporation to our Denver campus after successfully starting up that partnership at the Nashville campus a year ago. On our last call, we reviewed the five-year workforce development agreement signed with Container Maintenance Corporation.

Brian: Our focus on offering innovative, efficient student curriculums is enabling a growing number of graduates to enter rewarding in-demand careers.

Brian: This focus is also attracting additional corporate partners and broadening our relationship with existing partners.

Speaker Change: Our corporate partnership development activity remained quite robust during the second quarter, and we expanded our relationship with Peterbilt Corporation to our Denver campus after successfully starting up that partnership at the Nashville campus a year ago.

Scott Shaw: While I've mentioned before how Lincoln 10.0 has fundamentally changed how we teach our students and position the company for the future, its transformational impact on our company bears repeating. The platform is serving as the foundation for our focused growth strategies of opening new campuses and replicating successful programs and existing campuses. For example, the East Point Georgia campus is our first new Greenfield campus developed in some 18 years. This brand new state of the art facility features 56,000 square feet of training space and includes 15 automotive service spaces and up to 60 welding booths, labs, classrooms, and work areas.

Scott Shaw: In June, we began curriculum development for this program at CMC's Charleston, South Carolina facility. Over five years, the agreement is expected to generate approximately $6 million in revenue to Lincoln. While our company has successfully executed workforce development programs for organizations in the past, the CMC agreement represents a new scale and level for Lincoln. Rather than bringing employees to one of our campuses, we are leveraging our curriculum and training resources to upskill CMC employees at its facilities. This approach is an emerging opportunity for Lincoln and one we believe has the potential to become a significant contributor to our business. We expect to be able to announce additional contracts before year end.

Speaker Change: On our last call, we reviewed the five-year workforce development agreement signed with Container Maintenance Corporation. In June, we began the curriculum development for this program at CMC's Charleston, South Carolina facility. Over five years, the agreement is expected to generate approximately $6 million in revenue to Lincoln.

Speaker Change: whileour company has successfully executed workforce development programs for organizations in the past the c m c agreement represents a new scale and level for lincoln

Scott Shaw: We welcome the first class during the first quarter and by the end of June, we had already enrolled more students at East Point than we had initially budget for for the entire year. The campus's strong results prove the success of our site selection process and both well for our future new campuses and relocations. We designed East Point to be unique among trade schools and for those who have visited the campus, it is apparent when you first enter the campus.

Brian: Rather than bringing employees to one of our campuses, we are leveraging our curriculum and training resources to upskill CMC employees at its facilities.

Brian: this approach is an emerging opportunity for lincoln and one we believe that has the potential become a significant contributor to our business we expect to be able to announce additional contracts before year-end

Scott Shaw: Meanwhile, we continue to have enormous opportunities with our campus-focused growth strategies. Through the end of 2026, we expect to add three Greenfield campuses while relocating and expanding to others and have 10 program replications fully up and running. As each of these campuses and replications comes online, we consistently expand our opportunities to increase overall student enrollment. In addition, we remain focused on maintaining the solid organic start growth at existing programs. Our marketing programs continue to generate a high return on investment as leads continue to increase at a strong double-digit level.

Brian: Meanwhile, we continue to have enormous opportunities with our campus-focused growth strategies.

Scott Shaw: We sought to create a setting that was both sleek and modern, elevating the student and teaching experience. Everything about the campus has been thoughtfully designed to deliver exceptional hands on education and training with robust labs and shops. Moreover, we are utilizing the best in class curriculum and training aids. For example, in our automotive program, we are the only school group in the United States utilizing a lectured curriculum and their integrated trainers.

Brian: Through the end of 2026, we expect to layer on three Greenfield campuses while relocating and expanding to others, and have ten program replications fully up and running. As each of these campuses and replications comes online, we consistently expand our opportunities to increase overall student starts.

Brian: In addition, we remain focused on maintaining the solid organic start growth at existing programs. Our marketing programs continue to generate a high return on investment as leads continue to increase at a strong double-digit level. Additionally,

Scott Shaw: Electude is the global leader in automotive training in high schools and colleges. Electude's cloud-based e-learning platform allows our instructors access to interactive and engaging foundational lessons, gamified formative and summative assessments, teaching resources, tools to build their own curriculum, analytical tools to identify learners' needs and coursework in multiple languages. Actors. Moreover, their proprietary trainers seamlessly integrate with the curriculum and provide students with a clear understanding of all the major systems in a car.

Scott Shaw: Additionally, our expansion of outreach efforts in the states of Connecticut and Maryland, where we join forces with employers, government agencies, unions, and community colleges to increase awareness of the opportunities available through skilled trades careers, has been a resounding success. In the case of Maryland, we've been engaged to coordinate a similar program next year with increased funding from the state. As you can see, we are achieving strong growth in revenues and profitability and remain on track to achieve our long-term goals of $550 million in revenue and $90 million in adjusted EBITDA in 2027.

Brian: Our expansion of outreach efforts in the states of Connecticut and Maryland, in which we join forces with employers, government agencies, unions, and community colleges to increase awareness of the opportunities available through skilled trades careers, has been a resounding success.

Brian: In the case of Maryland, we've been engaged to coordinate a similar program next year with increased funding from the state.

Speaker Change: As you can see, we are achieving strong growth in revenues and profitability and remain on track to achieve our long-term goals of $550 million of revenue and $90 million of adjusted EBITDA in 2027.

Scott Shaw: Our opportunities have never been better. From 1980 until 2020, our country pushed the need to go to a four-year school, no matter the cost or the outcome. During this time, the value of career education was pushed to the side, despite the growing need for more highly trained middle-skilled workers.

Scott Shaw: At the heart of the program is the principle of discovery learning, which is how younger generations have become so adept in mastering today's technology. Again, based on the robust response generated date in the form of leads applications and starts, we're off to an excellent start with East Point and the early results have increased our confidence. Our future Nashville Nevitown campuses are scheduled to open during the first half of 2025. As a reminder, both campuses are totally new from the ground up and replace existing operations in those markets, and include additional programs at both campuses.

Speaker Change: Our opportunities have never been better. From 1980 until 2020, our country pushed the need to go to a four-year school no matter the cost or the outcome. During this time, the value of career education was pushed to the side, despite the growing need for more highly trained middle-skilled workers.

Scott Shaw: The discussion around the skills gap grew during the first two decades of the 21st century as employers began to struggle to find technicians, electricians, welders, and health care workers. Then COVID hit, and the shortage of middle skills workers became abundantly clear to everyone, which is why, for the most part, our students remained employed during the pandemic since we needed food and medical supplies to be delivered, which requires trucks and vans to remain operational.

Brian: The discussion around the skills gap grew during the first two decades of the 21st century as employers began to struggle to find technicians, electricians, welders, and healthcare workers.

Brian: Then COVID hit and the shortage of middle skills workers became abundantly clear to everyone, which is why, for the most part, our students remained employed during the pandemic, since we needed food and medical supplies to be delivered, which requires trucks and vans to remain operational.

Scott Shaw: Our fourth new campus in Houston is meeting its construction and build out schedule, but local regulatory timelines are causing our startup of this campus to be pushed out. We now see starting our first class in Houston during the fourth quarter of 2025. A fifth new campus is in the initial stages of development and our plan is to announce its location by our third quarter results conference call. This campus would open in 2026.

Scott Shaw: Electricians and HVAC technicians are needed to keep our homes, hospitals, supermarkets, and other facilities up and running. Furthermore, our health care system is stretched to almost the breaking point as the demand for nurses and health care workers skyrocketed.

Brian: electricans and hvac technicians were needed to keep our homes hospital supermarkets and other facilities up and running our health care system was stretched almost the breaking point as the demand for nurses and health care workers skyrocket

Scott Shaw: In short, Lincoln Tech trains the essential workers that allow us to live our lives in the manner to which we are accustomed. We see the need for what we are doing. We see the need for what we do growing despite the economic environment. There are unrefutable changes happening that are driving increased need for our students. For example, our population is aging, and the need for healthcare and healthcare workers will only grow.

Brian: In short, Lincoln Tech trains the essential workers that allow us to live our lives in the manner to which we are accustomed.

Scott Shaw: In addition to the new campuses, replicating and expanding successful programs that are existing campuses remains a key growth strategy. Currently, we have related initiatives which Brian will provide more detail on. However, we continue to expect that each of these programs will generate approximately one million of profitability within three years of opening, if not sooner. Our focus on offering innovative, efficient student curriculums is enabling a growing number of graduates to enter rewarding in-demand careers.

Speaker Change: We see the need for what we are doing, we see the need for what we do growing despite the economic environment. There are unrefutable changes happening that are driving increased need for our students. For example, our population is aging and the need for healthcare and healthcare workers will only grow.

Scott Shaw: Society's demand for the Internet, AI, connectivity, and communication will only grow, as will demand for electricians, HVAC techs, and other workers to maintain server farms, install networks, and rebuild our power grid. The demand for cleaner energy will continue to increase, whether mandated by government or by citizens who see an opportunity to make a positive change for society. On this last point, I want to highlight a partnership that we have with Fujitsu, a world leader in HVAC systems, and in particular, split unit systems utilizing inverter technology.

Speaker Change: societyess demand for the internet a i connectivity and communication will only grow as will demandfor electricians hv tex and other workers to make maintain server farms installed networks and rebuild our power grid

Scott Shaw: This focus is also attracting additional corporate partners and broadening our relationship with existing partners. Our corporate partnership development activity remained quite robust during the second quarter, and we expanded our relationship with Peter built corporation to our Denver campus after successfully starting up that partnership at the Nashville campus a year ago. On our last call, we reviewed the five year workforce development agreement signed with Container Maintenance Corporation. In June, we began their curriculum development for this program at CMC's Charles in South Carolina facility.

Brian: de manand for cleaner end your energy will continue to increase whether mandated by government or by citizens who see an opportunity to make a positive change for society

Speaker Change: On this last point, I want to highlight a partnership that we have with Fujitsu, a world leader in HVAC systems, and in particular, split unit systems utilizing inverter technology.

Scott Shaw: Over five years, the agreement is expected to generate approximately six million in revenue to Lincoln. While our company has successfully executed workforce development programs for organizations in the past, the CMC agreement represents a new scale and level for Lincoln. Rather than bringing employees to one of our campuses, we are leveraging our curriculum and training resources to upscale CMC employees at its facilities. This approach is an emerging opportunity for Lincoln and one we believe that has the potential to become a significant contributor to our business.

Scott Shaw: These new systems are extremely efficient and can now be used in colder climates to very cost effectively heat and cool homes and offices. Across the country, we are seeing mandates proposed that are discouraging the installation of heating and cooling systems that emit greenhouse gases and switching to mini-split systems.

Speaker Change: These new systems are extremely efficient and can now be used in colder climates to very cost-effectively heat and cool homes and offices.

Brian: Across the country, we are seeing mandates proposed that are discouraging installing heating and cooling systems that emit greenhouse gases and switch to mini-split systems. Our partnership with Fujitsu will help ensure that our students are acquiring the skills that can be used today and into the future.

Scott Shaw: Our partnership with Fujitsu will help ensure that our students are acquiring skills that can be used today and into the future. Part of our very successful company is a skilled and experienced board of directors at Lincoln. We have consistently excelled at attracting excellent board members and recently continued this tradition with the appointments of marketing executive Marta Newhart and former Treasurer of the United States, Ana Cabral. Marta is a highly recognized marketing expert, and her professional experience will help broaden our board's perspective and enhance our ability to achieve our long-term strategy.

Speaker Change: Part of our very successful company is a skilled and experienced board of directors. At Lincoln, we have consistently excelled at attracting excellent board members and recently continued this tradition with the appointments of Marketing Executive Marta Newhart and former Treasurer of the United States, Ana Cabral.

Scott Shaw: We expect to be able to announce additional contracts before year end. Meanwhile, we continue to have enormous opportunities with our campus focus growth strategies. Through the end of 2026, we expect a layer on three greenfield campuses while relocating and expanding to others and have 10 program replications fully up and running. As each of these campuses and replications comes online, we consistently expand our opportunities increased overall student starts. In addition, we remain focused on maintaining the solid organic start growth at existing programs.

Speaker Change: Marta is a highly recognized marketing expert, and her professional experience will help broaden our board's perspective and enhance our ability to achieve our long-term strategy.

Scott Shaw: Ana's exemplary background in public service will be an enormous asset to our organization and diverse community of students. Her work in government, building coalitions from diverse points of view, will be a great benefit to Lincoln as we navigate through the highly regulated environment in which we operate. In summary, we are on our way to achieving our full-year guidance and are well positioned for growth in 2025 and beyond. We are transforming our company into an exceptional provider of educational services that meets the needs of America's corporations, as well as its workforce.

Speaker Change: Anna's exemplary background in public service will be an enormous asset to our organization and diverse community of students. Her work in government, building coalitions from diverse points of view, will be a great benefit to Lincoln as we navigate through the highly regulated environment in which we operate.

Scott Shaw: Our marketing programs continue to generate a high return on investment as leads continue to increase at a strong double digit level. Additionally, our expansion of outreach efforts in the states of Connecticut and Maryland in which we join forces with employers, government agencies, unions, and community colleges to increase awareness of the opportunities available through skilled trades, careers has been a resounding success. In the case of Maryland, we've been engaged to coordinate a similar program next year with increased funding from the state.

Speaker Change: In summary, we are on our way to achieving our full year guidance and are well positioned for growth in 2025 and beyond. We are transforming our company into an exceptional provider of educational services that meets the needs of America's corporations as well as America's workforce.

Scott Shaw: Finally, I'd like to note I'll be in Chicago on August 28th for the annual Midwest Ideas Conference, as well as participating in Barrington's Virtual Fall Investment Conference on September 12th to educate investors about the enhanced valuation potential offered through our shares. Now I'll turn the call over to Brian Meyers so he can review some of our recent financial highlights and guidance. Brian. Thank you, Scott.

Speaker Change: Finally, I'd like to note I'll be in Chicago on August 28th for the annual Midwest Ideas Conference, as well as partaking in Barrington's Virtual Fall Investment Conference on September 12th to educate investors about the enhanced valuation potential offered through our shares.

Scott Shaw: As you can see, we are achieving strong growth in revenues and profitability and remain on track to achieve our long-term goals of 550 million of revenue and 90 million of adjusted EBITDA in 2027. Our opportunities have never been better. From 1980 until 2020, our country pushed the needs to go to a four year school no matter the cost or the outcome. During this time, the value of career education was pushed to the side despite the growing need for more highly trained middle skill work workers.

brian myyers: now i'll turn the call over to brian myyers so it can review some of our recent financial highlights and guidance brian

Brian Meyers: And thank you for joining our second quarter 2024 earnings call this morning. I'm pleased to share our financial results along with some key operational highlights. Starting with the quarter's financial performance, total revenue was nearly $103 million, representing an increase of about $14 million or 16%, mainly driven by our robust stock growth over the last seven consecutive quarters. During the second quarter, student starts grew by 12.3 percent.

Brian Meyers: Thank you, Scott. Good morning, everybody.

brian myyers: Thank you, Scott. Good morning, everybody, and thank you for joining our second quarter 2024 earnings call. This morning, I'm pleased to share our financial results along with along with some key operational highlights.

brian myyers: Starting with the quarter's financial performance, total revenue was nearly $103 million, representing an increase of about $14 million or 16%, mainly driven by our robust stock growth over the last seven consecutive quarters.

Scott Shaw: The discussion around the skills gap grew during the first two decades of the 21st century as employers began to struggle to find technicians, electricians, welders and health care workers. Then COVID hit and the shortage of middle skills workers became abundantly clear to everyone, which is why for the most part, our students remained employed during the pandemic since we needed food and medical supplies to be delivered, which requires trucks and vans to remain operational.

brian myyers: during the second quarter suents stars grew by twelve point three percent this marks the third consecutive quarter of double-digit growth in both revenuing starts

Brian Meyers: This marks the third consecutive quarter of double-digit growth in both revenue and starts. As a result, we had approximately 1,500 more students as of June 30, 2024 compared to the prior year, propelling revenue growth for the second half and beyond. As Scott mentioned, the new East Point Campus is performing exceptionally well, exceeding enrollment goals and contributing to the company's top line.

brian myyers: as a result we had approximately fifteen hundred more students as of june thirtieth two thousand and twenty four compared to prior year propelling revenue growth for the second half and beyond

Brian Meyers: While the East Point Campus contributed to our robust stock growth, we also continue to achieve solid organic stock growth from existing campuses. Excluding the new East Point Campus, we grew our organic campus revenue by $13 million, with the incremental revenue contributing an operating margin of over 30%. Now turn to the expenses for the quarter, which, as a reminder, for comparability purposes, exclude one expense for our new East Point campus during its opening period, two pre-opening costs associated with the new and relocating campuses, three other non-recurring expenses, and four, the transitional segment in 2023.

Scott Shaw: Electricians and HVAC technicians were needed to keep our homes, hospitals, supermarkets and other facilities up and running. Our health care system was stretched to almost the breaking point at the demand for nurses and health care workers skyrocketed. In short, Lincoln Tech trains the essential workers that allow us to live our lives in the manner to which we are accustomed. We see the need for what we are doing, we see the need for what we do growing despite the economic environment.

brian myyers: As Scott mentioned, the new East Point Campus is performing exceptionally well, exceeding enrollment goals and contributing to the company's top line. While the East Point Campus contributed to our robust stock growth, we also continue to achieve solid, organic stock growth from existing campuses.

Scott Shaw: Excluding the new East Point Campus, we grew our organic campus revenue by $13 million with the incremental revenue contributing an operating margin of over 30%.

Scott Shaw: There are unrefutable changes happening that are driving increased need for our students. For example, our population is aging and the need for health care and health care workers will only grow. Society's demand for the internet, AI, connectivity and communication will only grow as we will demand for electricians, HVAC techs and other workers to maintain server farms, installed networks and rebuild our power grid. The demand for cleaner energy will continue to increase whether mandated by government or by citizens who see an opportunity to make a positive change for society.

Speaker Change: Now turn to the expenses for the quarter, which as a reminder, for comparability purposes,

Speaker Change: 1. Expenses of our new East Point Campus during its opening period. 2. Pre-open costs associated with the new and relocating campuses. 3. Other non-recurring expenses. 4. The transitional segment in 2023.

brian myyers: further details on these items are available in the non-gaap disclosures of our q two earnings release

brian myyers: total operating expenses were close to ninety-nine million which is reflective our growing population

Scott Shaw: On this last point, I want to highlight a partnership that we have with Fujitsu, a world leader in HVAC systems and in particular split unit systems utilizing inverter technology. These new systems are extremely efficient and can now be used in colder climates to very cost effectively heat and cool homes and offices. Across the country, we are seeing mandates proposed that are discouraging, installing heating and cooling systems that emit greenhouse gases and switch to many split systems. Our partnership with Fujitsu will help ensure that our students are acquiring the skills that can be used today and into the future.

Speaker Change: excuse me, and in line with expectations.

Speaker Change: Education service and facility expenses as a percentage of revenue is down to 42% from 44.4% in the prior year.

Brian Meyers: The majority of the decrease relates to instructional expenses, which increased over the prior year due to costs associated with our larger student base, but decreased as a percentage of revenue as we begin to experience efficiencies and benefits from our higher population and our hybrid learning model. Adjusted EBITDA was $6.2 million for the second quarter, compared to $2.4 million the prior year, representing more than a 150% increase. We had an income tax benefit for the quarter of approximately $500,000, including a discrete item benefit associated with stock theft.

brian myyers: the majority of the decrease relates to instructctionural expenses which increase over prioryear due to quts associated with our largger student base but decrease as a percentage of revenue as we begin to experience efficiencies and benefits from our higher population and our hardware learning model

brian myyers: adjusted ebitda was six point two lion for the second quarter compared to two point four million the prior year representing more than one hundred and fiftypercent increase

Scott Shaw: Part of our very successful company is a skilled and experienced board of directors. At Lincoln, we have consistently excelled at attracting excellent board members and recently continued this tradition with the appointments of marketing executive Marta Newhart and former Treasurer of the United States, Anna Cabral. Marta is a highly recognized marketing expert and her professional experience will help broaden our board's perspective and enhance our ability to achieve our long-term strategy. Anna's exemplary background in public service will be enormous asset to our organization and diverse community of students. Her working government, building coalitions from diverse points of view will be a great benefit to Lincoln as we navigate through the highly regulated environment in which we operate.

Speaker Change: anincome tax benefit for the quoter of approximately five hundred thousand including a discrete iteonm benefit associated with stock vesty for the second half of the year we expect our effective tax rate to be approximately thirty percent

Brian Meyers: For the second half of the year, we expect our effective tax rate to be approximately 30%. Turning to the balance sheet, the balance sheet remains robust with total liquidity exceeding $100 million, cash and cash equivalents of $67 million, no debt, and working capital of around $50 million. Our CapEx for the three months was approximately $10 million relating to multiple exciting projects which will drive growth next year and beyond. First, we continue to manage the build out of ten additional programs, which are either a program replication at an additional campus or an expansion of an existing campus based on construction patient approvals. We expect six programs to be rolled out by year end, and the remaining to be launched in the first half of twenty twenty five.

Speaker Change: Turning to the balance sheet, a balance sheet remains robust with total liquidity exceeding $100 million, cash and cash equivalents of $67 million, no debt, and working capital of around $50 million.

Speaker Change: Our CapEx for the three months was approximately $10 million, relating to multiple exciting projects which will drive growth next year and beyond.

Speaker Change: first we continue to manage the build out of ten additional programs which are our either a program replication as an additional campus for an expansion of an existing campus based on the construction patient approvals we expect six programs to be rolled out by year-end and remaining to be launch in the first half of two thousand and twenty five

Scott Shaw: In summary, we are on our way to achieving our full year guidance and our well position for growth in 2025 and beyond. We are transforming our company into an exceptional provider of educational services that meets the needs of America's corporations as well as America's workforce. Finally, I like to note, I'll be in Chicago on August 28th, where the annual Midwest Ideas Conference, as well as partaking in Barrington's virtual fall investment conference on September 12th. To educate investors about the enhanced valuation potential offered through our shares.

Brian Meyers: Second, we are working towards the opening of three new SteadyDR facilities in 2025, comprised of two campus relocations and one brand new location. However, we are seeing some delays in the timing of our capital spending, which will shift about $20 million to 2025, leading us to reduce our CapEx guidance for the year. However, we were slightly ahead of schedule in two of the three projects. Starting with the Nashville and Leavittown relocations, both projects continue to make great progress and are now expected to be completed in the first half of 2025. The new Houston campus build has experienced some delays, driving a majority of the CapEx shift into 2025.

Speaker Change: second we are working towards the opening of three new steady the offfacilities in two thousand and twenty- five comprise of two campus relocations and one brand new and one brand new location

Speaker Change: we are seeing some delays in the timey or a capital spending which will shift about twenty million to two thousand and twenty five leading us to reduce our capex guidance for the year however we were sly ahead of schedu in two of the three projects

Brian Meyers: Now, I'll turn the call over to Brian Meyers, so he can review some of our recent financial highlights and guidance. Brian. Thank you, Scott. Good morning, everybody.

Speaker Change: Signing with the Nashville and Leavittown relocations, both projects continue to make great progress and now are expected to be completed in the first half of 2025.

Brian Meyers: And thank you for joining our second quarter of 2024 earnings call this morning. I'm pleased to share our financial results along with along with some key operational highlights. Starting with the quarters financial performance, total revenue was nearly 103 million, representing an increase of about 14 million or 16% mainly driven by our robust stock growth over the last seven consecutive quarters. During the second quarter, students starts grew by 12.3%. This marks the third consecutive quarter of double digit growth in both revenue and starts.

Speaker Change: The new Houston campus buildout has experienced some delays driving a majority of the capex shift into 2025. As a result, we now anticipate the campus to open towards the end of 2025.

Brian Meyers: As a result, we now anticipate the campus to open towards the end of 2025. Looking ahead to the remainder of 2024, based on these project statuses, we are reducing our full-year CAPEX guidance to $45 million to $55 million. Our second quarter operating financial results, as well as the outlook for the remainder of the year, led us to raise our outlook for revenue and increase the low-end range of adjusted EBITDA, adjusted net income, and student starts.

Speaker Change: looking ahead to the remainder of two thousand andtwenty-four based on these project statuses we are reducing full year our full year cax coidance in the forty-five million fifty-five million

Speaker Change: Our second quarter operating financial results, as well as the outlook for the remainder of the year, leads us to raise our outlook for revenue and increase the low-end range of adjusted EBITDA, adjusted net income, and student starts.

Brian Meyers: As a result, we had approximately 1500 more students as of June 30th, 2024, compared to prior year, preparing revenue growth for the second half and beyond. As Scott mentioned, the new East Point campuses reforming exceptionally well, exceeding enrollment goals and contributing to the company's top line. While the East Point campus contributed to our robust stock growth, we also continue to achieve solid organic stock growth from existing campuses. Excluding the new East Point campus, we grew our organic campus revenue by 13 million with the incremental revenue contributing and operating margin of over 30%.

Brian Meyers: The outlook for guidance has been updated to revenue ranging between $423 million and $430 million, adjusted EBITDA in the range of $39 million to $42 million, adjusted net income ranging between $14 million and $17 million, and student start growth of 9 to 12 percent. As a reminder, a full year of financial guidance for adjusted EBITDA and adjusted net income excludes the impact of East Point Campus pre-opening costs related to new and relocated campuses, program expansions, and non-cash stock-based compensation.

brian myyers: the outlook for guidance has been updated to revenue ranging between four hundred and twenty three million to fourhundred and thirty million adjusted ebit on the range or thirty nine million to forty two million adjusted net income ranging between fourteen million and seventeen million and some den starts growth of nine to twelve percent

Speaker Change: As a reminder, a full year of financial guidance for adjusted EBITDA and adjusted net income excludes the impact of East Point Campus pre-opening costs related to new and relocated campuses, program expansions, and non-cash stock-based compensation.

Brian Meyers: Now turn to the expenses to the quarter, which has a reminder for comparability purposes exclude one exclude expenses of our new East Point campus during its opening period. To pre-open costs associated with the new and relocating campuses, three other non recurring expenses and for the transitional segment in 2023. For the details on these items are available in the non-gap disclosures of our Q2 earnings release. Total operating expenses were close to 99 million, which is reflective of our growing population.

Brian Meyers: Also, in terms of depreciation and amortization, we expect a slight increase in the second half of the year, resulting in approximately $7.5 million of expense recorded fairly evenly over each quarter. Lastly, interest expense is anticipated to be near $500,000 in the second half, evenly dividing Q3 and Q4.

Speaker Change: Also, in terms of depreciation and amortization, we expect a slight increase in the second half of the year, resulting in approximately $7.5 million of expense recorded fairly even over each quarter.

Speaker Change: Lastly, interest expense is anticipated to be near $500,000 in the second half, evenly dividing Q3 and Q4.

Operator: In conclusion, we are very pleased with our performance in 2024. We have solid growth plans and will work to continue to explore new opportunities to expand and drive efficiency. As we highlighted in our Q2 investor presentation, under the strategic growth slide that we posted to our website later today, our long-term vision and goal is to generate revenue of approximately $550 million and adjusted EBITDA of about $90 million in 2027. Our team is working diligently together, and we believe we are well-positioned to achieve this target. We sincerely appreciate the entire Lincoln team, especially our faculty, for making a difference each day in changing our students' lives. Now, I'll turn the call back over to the operator for any questions. Operator.

brian myyers: In conclusion, we are very pleased with our performance in 2024. We have a solid growth plan and work to continue to explore new opportunities to expand and drive efficiencies.

Brian Meyers: Excuse me, and in line with expectations, education, service, and facility expenses as a percentage of revenue is down to 42% from 44.4% in the prior year. The majority of the decrease relates to instructional expenses, which increase over prior year due to costs associated with our largest student base, but decrease as a percentage of revenue as we begin to experience efficiencies and benefits from our higher population and our higher learning model. Judgedee, but I was 6.2 million for the second quarter compared to 2.4 million in the prior year, representing more than 150% increase.

Speaker Change: As we highlight in our Q2 Investor presentation, under the strategic growth slide that we posted to our website later today, our long-term vision and goal is to generate revenue of approximately $550 million in adjusted EBIT out of a

Speaker Change: of about ninety million in two thousand and twenty seven our team is working dozly together and we believe we are well positioned to achieve this target

Speaker Change: wesince ily appreciate trial lincoln team especially our capitalty for making it difference to each day in changing our students wives

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. And our first question comes from Alex Paris with Barrington Research. Your line is now open.

Speaker Change: inow'll turn the call back over to the operor for any questions operator thank you as a reminder to ask a question please press star one one on your telephone and wait for your name to be announced to withdraw a question please press star one one again

Brian Meyers: An income tax benefit for the quarter of approximately 500,000 including a discrete item benefit associated with stock best, for the second half of the year, we expect our effective tax rate to be approximately 30%. Turning to the balance sheet, a balance sheet remains robust with total liquidity exceeding 100 million cash and cash equivalent of 67 million, no debt and working capital of around 50 million. Our cap-backs for this three months was approximately 10 million relating to multiple exciting projects which will drive growth next year and beyond.

Alex Paris: and our first question comes from alex paris with bearrington research your line is now open

Alex Paris: Hi guys, thanks for taking my question. I want to congratulate you on the beat and raise.

Speaker Change: Hi guys, thanks for taking my question. I want to congratulate you on the beat and raise.

Unknown Executive: Thanks Alex, I appreciate that. We're excited by it as well.

Alex Paris: A couple of quick questions. Both you, Scott, and Brian said at the end of the call that your targets for 2027 are $550,000 and $90,000 for revenue and adjusted EBITDA. Is that a rounding thing, or are you increasing it? Because I think you said it at investor day 540 and 88.

Speaker Change: Thanks, Alex. Appreciate that. We're excited by it as well.

Alex Paris: A couple of quick questions.

Brian Meyers: First, we continue to manage the build-out of 10 additional programs which are either a program replication at an additional campus or an expansion of an existing campus. Based on the construction and patient approvals, we expect six programs to be rolled out by year-end and they're remaining to be launched in the first half of 2025. Second, we are working towards the opening of three new steady-to-off facilities in 2025. We comprise of two campus relocations and one brand new location.

Speaker Change: Both you Scott and Brian said at the end of the call that your your targets for 2027 are 550 and 90 for revenue and adjusted EBITDA. Is that around anything? Are you increasing it? Because I think you said it at investor day 540 and 88.

Unknown Executive: Right, it was actually increased slightly because the start of that strategic growth plan starts with the mid range of our guidance. So as we increase that, it increases the future 2027 as well. But yeah, so we.

Speaker Change: Right, it was actually increased slightly because the start of that strategic growth plan starts with the mid-range of our guidance, so as we increase that, it increases the 2027 as well. Yeah, so we did make an adjustment up since the investor meeting.

Unknown Executive: Yes, we did make an adjustment since the investor meeting.

Brian Meyers: We are seeing some delays in the Tommy or a capital spending which will shift about 20 million to 2025 leading us to reduce our cap-backs guidance for the year. However, we were slightly ahead of schedule in two of the three projects. Sawning with the natural and leviton relocations, both projects continue to make great progress and now are expected to be completed in the first half of 2025. The new use in campus build-out has experienced some delays, driving the majority of the CapEx shift into 2025. As a result, we now anticipate the campus opens towards the end of 2025.

Alex Paris: Is this the first time you've seen it, or have you seen it previously? I don't recall.

Speaker Change: Is this the first time you've seen it or did you see it previously? I don't recall.

Unknown Executive: No, I think this is the first time, and it will be out on our website later today.

Speaker Change: No, I think this is the first time, and it will be out on our website later today.

Alex Paris: Well, congratulations on that. Here are my two questions.

Speaker Change: All right, well congratulations on that. Here are my two questions. I wanted to focus on starts. Starts were up more than we had expected. We expected 4,600 starts, you came in closer to 5,000, starts up 12%.

Alex Paris: I wanted to focus on starts. Starts were higher than we had expected. We expected 4,600 starts, but you came in closer to 5,000.

Unknown Executive: It starts up 12%. What do you attribute that to? I'm assuming the increase in marketing. And then has that momentum continued into the third quarter? You know, what was your experience in July and August? Sure.

Brian Meyers: Looking ahead to the remainder of 2024, based on these project statuses, we are reducing our full-year CapEx guidance for the 45 million to 55 million. Our second quarter operating financial results, as well as the outlook for the remainder of the year, leads us to raise our outlook for revenue and increase the low-end range of adjusted EBITDA, adjusted net income and student starts. The outlook for guidance has been updated to revenue ranging between 423 million to 430 million, adjusted EBITDA on the range of 39 million to 42 million, adjusted net income ranging between 14 million and 17 million, and student starts growth of 9 to 12%.

Speaker Change: What do you attribute that to? I'm assuming the increase in marketing. And then has that momentum continued into the third quarter? What's your experience in July and August ?

Unknown Executive: Sure. We definitely achieved greater success than we were thinking. However, to support that, we are seeing continued success moving forward. There definitely is increased demand at a double-digit level for our programs kind of across the board. And it really comes down to a lot of execution to achieve those goals as well as just timing of when some of the starts take place within the quarter.

Speaker Change: Sure. Well, definitely, we achieved greater success than we were thinking. However, to

Speaker Change: to support that, we are seeing continued success moving forward. There definitely is increased demand at a double-digit level.

Speaker Change: for our programs kind of across the board.

Speaker Change: and it really comes down to a lot of execution to achieve those as well as just timing of when some of the starts take place.

Speaker Change: within the quarter. But the basic fact is we see strong demand continuing. That's why we raised our guidance, you know, the midpoint of our guidance is, you know, 10-11 percent. I guess closer to 11 percent and that's where we anticipate will come out for the year.

Brian Meyers: As a reminder, our full-year financial guidance for adjusted EBITDA and adjusted net income excludes the impact of the East Point campus pre-opening course related to new and relocated campuses, program expansions, and non-cash stock-based compensation. Also in terms of depreciation and ionization, we expect this slight increase in the second half of the year, resulting in approximately 7.5 million of expense recorded value even over each quarter. Lastly, interest expense is anticipated to be near 500,000 in the second half, evenly dividing Q3 and Q4.

Unknown Executive: But the basic fact is we see strong demand continuing. That's why we raised our guidance. You know, the midpoint of our guidance is at 11%, I guess closer to 11%. And that's where we anticipate coming out for the year.

Alex Paris: Above and beyond the renaissance in skilled trades, the appeal of these blue-collar jobs that can't be outsourced or replaced by AI, you've increased marketing year over year. I think you said in the press release that it was up two million dollars year over year.

Speaker Change: And, you know...

Speaker Change: above and beyond the renissance in skilled trades the appeal of these blue color jobs that can't be outsourced or replaced by ai you've increased marketing here over i think you said in the press lease was up two million dollars year over-year

Unknown Executive: Yeah, it is in hand. I'm sorry, Alex.

Speaker Change: Yes.

Brian Meyers: In conclusion, we are very pleased with our performance in 2024. We have a solid growth plan to work and continue to explore new opportunities to expand and drive efficiencies. As we highlight in our Q2 investor presentation, under the strategic growth slide that we posted to our website later today, our long-term vision and goal to generate revenue over approximately 550 million and adjusted EBITDA of about 90 million in 2027. Our team is working diligently together, and we believe we are a well-positioned to achieve this target.

Alex Paris: I was just going to say, and has that had any impact on the cost per lead? or Cosper Start. Yeah, Cosper Start.

Speaker Change: Yeah, there is enhanced, I'm sorry Alex, you didn't finish.

Unknown Executive: The good news is we follow that very closely in Cosper Start. It is relatively flat, you know; maybe it is up a percentage or two, but nothing significant. And it kind of changes quarter by quarter. Again, it's kind of just timing of when we spend the money and when the students start. I think at the end of the day, though, there is this increased demand. You know, some people don't think that people just naturally come to you just because people talk about it.

Alex Paris: I was just going to say, and has that had any impact on the cost per lead?

Speaker Change: The good news is we follow that very closely, and the cost per start is relatively flat. It might be up a percentage or two, but nothing significant, and it kind of changes quarter by quarter again. It's kind of just timing of when we spend the money and when the students start.

Speaker Change: I think at the at the end of the day though, there is this increased demand, you know, some people don't think that people just naturally come to you just because people talk about it. We still have to be out there and in front of people. But as long as we continue to maintain our cost per start, which we have over the last five years, we're going to continue to make those investments and drive greater growth.

Unknown Executive: We still have to be out there and in front of people. But as long as we continue to maintain our Cosper Start, which we have done over the last five years, we're going to continue to make those investments and drive greater growth. Makes sense. And here's my last one.

Brian Meyers: We sincerely appreciate the entire Lincoln team, especially our faculty for making a difference each day and changing our students' lives.

Operator: Now I'll turn the call back over to the operator for any questions operator. Thank you as a reminder to ask a question. Please press store 11 on your telephone and wait for your name to be announced to withdraw your question.

Alex Paris: I know we're limited by program population by program starts by program. The Starts, the overall start number of up 12% was really driven by the transportation and skilled trade side of the business, up 21%. Healthcare and other professions were down 6% in the quarter. What do you, and it was up 9% in the first quarter, so it definitely declined in the second quarter. What do you attribute that to?

Speaker Change: Makes sense. And here's my last one. I know we're limited to two. By program, population by program, starts by program, the

Alexander Paris: Please press store 11 again and our first question comes from Alex Paris with Barrington Research. Your line is now open. Hi guys, thanks for taking my question. I want to congratulate you on the beaten raise. Thanks Alex. Appreciate that. We're excited by it as well.

Speaker Change: The overall starts number of up 12% was really driven by the transportation and skilled trade side of the business of 21%.

Speaker Change: healthcare and other professions were down six percent in the quarter. What do you, and it was up nine percent in the first quarter, so it definitely declined in the second quarter. What do you attribute that to?

Unknown Executive: A lot of it again is timing of when starts occur, and certain times we can have two nursing starts in the quarter, sometimes only one, so on a couple of the campuses, they are switching when those starts are taking place year over year. At the end of the day, I'm still expecting growth in the healthcare sector for the full year. I'm not worried about growing that area.

Scott Shaw: A couple of quick questions and both you, Scott and Brian, set at the end of the call that you're your targets for 2027 or 550 and 90 for revenue and a just to do. Is that a rounding thing? Are you increasing it because I think you said it investor day 540 and 88. Right, it was actually increased slightly because the start of that, you know, strategic growth plan for us with the mid range of our guidance.

Speaker Change: At the end of the day, I'm still expecting growth in the healthcare sector for the full year. I'm not worried about growing that area.

Unknown Executive: Our biggest decline was in LPN, and it was due to the timing of the starts.

Speaker Change: Our biggest decline was in LPN and it was due to the timing of COVID-19.

Alex Paris: Gotcha. Do you still not think that the auto and skilled trades will increase at a greater rate than health care and other professions for the full year?

Speaker Change: Opening of the starts.

Speaker Change: Gotcha. Do you still, though, think that auto and skilled trades will increase at a greater rate than healthcare and other professions for the full year?

Scott Shaw: So as we increased that, it increases the 2027 as well. Yeah, so we did make a adjustment up since the investor meeting. First, I mean, standard previously I don't know. No, I think this is the first time and it will be out on our website later today. Great. Well, congratulations on that.

Unknown Executive: Yes, simply because that's where we're replicating our programs as of now. We have future opportunity, we believe, to replicate the healthcare programs, but right now, we're focused on the skilled trades and auto programs. So the answer is definitely yes.

Speaker Change: Yes, simply because that's where we're replicating our programs as of now. We have future opportunity, we believe, to replicate the healthcare programs, but right now we're focused on the skilled trades and auto programs. So the answer is definitely yes.

Alex Paris: It makes sense, guys. Thank you very much.

Speaker Change: It makes sense, guys. Thank you very much.

Operator: And the next question comes from Steven Frankel with Rosenblatt Securities. Your line is now open.

Speaker Change: thank d

Scott Shaw: Here are my two questions. I wanted to focus on starts. Starts were more than we had expected. We expected 4,600 starts. You came in closer to 5,000 starts at 12%. What do you attribute that to? I'm assuming the increased in marketing. And then has that momentum continued into the third quarter? What's your experience in July and August? Sure. Well, definitely we are, we achieved greater success than we were thinking. However, to support that, we are seeing continued success moving forward.

Speaker Change: And the next question comes from Stephen Frankel with Rosenblatt Securities. Your line is now open.

Steven Frankel: Good morning. Alex stole my thunder, but maybe we'll dig into health care a little bit more, you know. What's the size of the funnel there relative to the prospect funnel on the skills on the skilled trade side? Is there still a very good funnel there? Or are you finding that people are less interested? in this area post COVID. I know there's plenty of job openings, but what's the interest level like? Yeah, it was interesting.

Stephen Frankel: Good morning. Alex stole my thunder, but maybe we'll dig into health care.

Speaker Change: A little bit more.

Stephen Frankel: is what's the size of the funnel

Stephen Frankel: They're relative to the prospect funnel on the skilled trade side. Is there still a very good funnel there, or are you finding that people are less interested?

Speaker Change: in this area of post code and knowthere's plenty of job things but what's the interest leve like

Unknown Executive: Yeah, interest still remains strong in health care. It's definitely growing. It's up over last year. As I said, I'm very comfortable that our full year health care numbers will be meaningfully higher. Again, our skilled trades and auto are going to be up more because that is where we're having more replications and expansions take place. But overall, demand is strong across the board. I'm not worried, frankly, about any demand indicators shifting negatively or maybe they'll shift more positively, but they're definitely robust, I'd say.

Scott Shaw: There definitely is increased demand at a double digit level for our programs kind of across the board. And it really comes down to a lot of execution to achieve those as well as just timing of when some of the starts take place within the quarter. But the basic premise or the basic fact is we see strong demand continuing. That's why we raised our guidance, you know, the point of our guidance is, you know, 10, 11%.

Speaker Change: Yeah, interest still remains strong in health care. It's definitely growing. It's up over last year.

Speaker Change: As I said, I'm very comfortable that our full year healthcare numbers will be meaningfully up.

Speaker Change: again our skill trads in auto are going to be up more because that is where we're having more replications in expansions take place

Speaker Change: But overall, demand is strong across the board, not worried, frankly, about any demand indicators shifting negatively, or maybe it'll shift more positively. But they're definitely robust, I'd say, Stephen, across the board for us.

Scott Shaw: I guess closer to 11% and that's where we anticipate will come out for the year. And above and beyond the renaissance in skilled trades, the appeal of these blue collar jobs that can't be outsourced or replaced by AI, you've increased marketing year over year. I think you said in the press releases of $2 million, year over year. Yeah, there is in hand, I'm sorry, I wish we didn't finish. I was just going to say and has that had any impact on the cost per lead?

Unknown Executive: I appreciate the update on the cash pay program on skilled trades and auto. Are there any prospects for replicating that kind of success in healthcare? Absolutely. And, you know, healthcare

Stephen Frankel: I appreciate the update on the cash pay program in skilled trades and auto. Are there any prospects for replicating that kind of success on the healthcare side?

Steven Frankel: Absolutely. And, you know, the healthcare side of the house is an area that we're putting increased focus on. We recently hired a new individual, a VP of healthcare, to help us drive that business going forward. So, I would anticipate, certainly, as we get into 2025, sharing more of what those new opportunities will be for us. Great, thank you.

Speaker Change: Absolutely, and you know the health care side of the house is an area that we're putting increased focus on. We recently hired a new individual, a VP of health care, frankly to help us drive that business going forward. So I would anticipate certainly as we get into 2025 sharing more of what those new opportunities will be for us.

Scott Shaw: No cost per start. Yeah, cost per so good news is we follow that very close in the cost per start is relatively flat, you know, might be up a percentage or two, but nothing significant and it kind of changes quarter by quarter again. It's kind of just timing of when we spend the money and when the students start. I think at the end of the day, though, there is this increased demand.

Speaker Change: Great, thank you.

Operator: And our next question comes from Eric Martinuzzi with Lake Street Capital Markets. Your line is now open. Eric, your line is now open. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced.

Speaker Change: And our next question comes from Eric Martinuzzi with Lake Street Capital Markets. Your line is now open.

Scott Shaw: You know, some people don't think that people just naturally come to you, just because people talk about it, we still have to be out there and in front of people. But as long as we continue to maintain our cost per start, which we have over the last five years, we're going to continue to make those investments and drive greater growth makes sense.

Speaker Change: Eric, your line is now open.

Speaker Change: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced.

Scott Shaw: And here's my last one. I know we're limited to to by program population by program starts by program. The starts the over all starts number of up 12% was really driven by the transportation and skilled trade site of the business up 21%. Healthcare and other professions were down 6% in the quarter. What be you would and it was up 9% in the first quarter. So it's definitely declining at the second quarter.

Speaker Change: And the next question comes from Raj Sharma with B Raleigh. Your line is now open.

Operator: Yeah, thank you. Good morning.

Raj Sharma: yes thank you good morningand thanks for taking my question

Eric Martinuzzi: Thanks for taking my question. You know, I wanted to understand the starch color a little bit better. So, if I heard it correctly, the healthcare starch was down 6%, and that's largely explainable from timing. Is that right? My follow-on question is the X of Atlanta, the East Point, Georgia Campus. You know, what was the start to growth rate? And was Atlanta almost all transportation? Right. Well, the land is definitely all ours.

Raj Sharma: I wanted to understand the starch color a little bit better, so if I heard it correctly, the healthcare starch were down 6%, and that's largely explainable from timing, is that right?

Scott Shaw: What do you attribute that to? A lot of it again is timing of when starts occur and certain times we can have two nursing starts in the quarter. Sometimes only one. So in a couple of the campuses are switching. Of when those starts were taking place here over year, at the end of the day, I'm still expecting growth in the healthcare sector for the full year. I'm not worried about growing that area.

Speaker Change: My follow-on question is the X of Atlanta, the East Point,

Speaker Change: Georgia Campus, you know, what was the start to growth rate and was Atlanta almost all transportation, right?

Unknown Executive: Well, the land is definitely all transportation skilled trades, is it again, automotive, electrical, HVAC, and welding, and the growth without it was about 5.5%. There's a slide in our investor section on the website that shows you that. So we had good, solid, solid.

Scott Shaw: Our biggest design was in LPN and was due to the timing of the starts. Gotcha. Do you still don't think that that auto and skilled trades will increase at a greater rate than healthcare and other professions for the full year? Yes, simply because that's where we're replicating our programs as of now. We have a huge opportunity. We believe to replicate the healthcare programs. But right now we're we're focused on the skill trades and auto programs. So the answer is definitely yes. Makes sense, guys. Thank you very much. Thanks Alex.

Speaker Change: Well, the land is definitely all transportation skilled trades, is it again, automotive, electrical, HVAC and welding. And the growth without it was about 5.5%. There's a slide in our investor up on the website that shows you that.

Unknown Executive: Thanks.

Raj Sharma: So we had good, solid, solid growth, you know, without that new campus.

Unknown Executive: Right. And what is the enrollment you're expecting at the East Point campus?

Raj Sharma: Right, and what are the, what are, what is the enrollment you're expecting at the East Point campus?

Raj Sharma: so we are ou have

Unknown Executive: We modeled the campus at getting to enrollment around 700, 750 students. At the end of the end of this year, we originally thought there might be 300 students, and we're exceeding that.

Speaker Change: Well I'll just tell you what we modeled the campus at a getting to enrollment around 700-750 students. At the end of the end of this year we originally thought there might be 300 students and we're exceeding that.

Steven Frankel: And the next question comes from Stephen Prinkle with Rosenblatt Securities. Your line is now open. Good morning Alex.

Scott Shaw: So my thunder, but maybe we'll dig into healthcare. A little bit more. You know, it is what's the size of the funnel there, relative to the prospect funnel on the skills on the skill trade side. There's still a very good funnel there or are you finding that people are left interested in this area post code. I know there's plenty of job openings, but what's the interest level like? Yeah, interest still remains strong in healthcare.

Unknown Executive: Right. And that makes sense in the health care start you expect for the year to be positive, growth, any sort of target.

Raj Sharma: right and

Speaker Change: That makes sense. And the health care start you expect for the year to be positive growth, any sort of target on that?

Unknown Executive: I can't, to be honest with you; I haven't looked at it in that way. All I know is that there is positive growth. I know, Brian, if you have any more information, yeah, we're flat for the 6 months, and we're expecting the 2nd half to be positive. And again, you know, for our 2 big programs, there is MA, which was up for this quarter, and the 2nd quarter was over 30%. As Scott described, LPN was down, but that was all due to the number of slots we have because it fluctuates from quarter to quarter there. So hopefully, that'll catch up in Q3. So we are anticipating.

brian myyers: I can't, to be honest with you, I haven't looked at it in that way. All I know is that there is positive growth. I know, Brian , if you have any more information. Yeah, we're flat for the six months, and we're expecting the second half to be positive. And again, you know, for our two big programs, there is MA, which was up for this quarter, the second quarter, over 30%. As Scott described, LPN was down, but that was all due to the number of slots we have, because it fluctuates from quarter to quarter there. So hopefully that'll catch up in Q3. So we are anticipating to be positive. I don't have the number there.

Scott Shaw: It's definitely growing. It's up over last year. As I said, I'm very comfortable that our full year healthcare numbers will be meaningfully up. Again, our skilled trades and auto are going to be up more because that is where we're having more replications and expansions take place. But overall demand is strong across the board, not worried frankly about any demand indicators shifting negatively or maybe we'll shift more positively, but they've definitely robust. I'd say Stephen and cross the board for us.

Eric Martinuzzi: Got it. Well, that's very helpful. And just my last question on Lincoln 10.0: I see that you have covered 65%, you said, if I heard that correctly, 65% of the students would be under Lincoln 10.0. And I understand that there are cost efficiencies to be seen. Are there cost efficiencies to be seen? And where would you see them in the metrics, you know, next year versus this year? That would be great.

Speaker Change: Got it. Well, that's very helpful. And just my last question on Lincoln 10.0, I see that you have covered 65% you said.

Scott Shaw: I'd appreciate the update on the cash pay programs on skilled trades and auto. Are there any prospects for replicating that kind of success on the healthcare side? Absolutely, and the healthcare side of the house is an area that we're putting increased focus on. We recently hired a new individual, a VP of healthcare, frankly, to help us drive that business going forward. So I would anticipate certainly as we get into 2025, sharing more of what those new opportunities will be for us.

Speaker Change: If I heard that correctly, 65% of the students would be under Lincoln 10.0. And I understand that there are cost efficiencies to be seen. Are there cost efficiencies to be seen? And where would you see them in the metrics? You know, for next year versus this year, that'd be great. Some color on that.

Unknown Executive: Great, thank you.

Unknown Executive: Yeah, you'd see them in the educational line because of the increased efficiency that we'll have with faculty. We're starting to see it now, but to your point, we'll definitely see more of it in 2025, as we see the benefits of blended learning coming to fruition. It does provide some better student-to-teacher ratios and better utilization of the classrooms, which all adds to the efficiency, but it's basically in the instructional line that you'll see the savings.

Speaker Change: Yeah, you'd see them in the educational line because of the increased efficiency that we'll have with faculty. We're starting to see it now, but to your point, we'll definitely see more of it in 2025, as we see the benefits of blended learning coming to fruition. It does provide some better student to teacher ratios and better utilization of the classrooms, which all adds to the efficiency, but it's basically in the instructional line that you'll see the savings.

Eric Martinuzzi: And our next question comes from Eric Martinuzzi with Lake Street Capital Market, your line is now open.

Eric Martinuzzi: Got it.

Eric Martinuzzi: Thank you for taking my questions. Again, congratulations.

Raj Sharma: dghter

Raj Sharma: Thank you for taking my questions. Again, congratulations. Solid results.

Operator: As a reminder to ask a question, please press star 11 on your telephone. The next question comes from Eric Martinuzzi with Lake Street Capital Markets. Your line is open.

Raj Sharma: Thanks Raj. Thanks Raj.

Speaker Change: as a reminder to ask a question please press stre one one on your telephone the next question comes from eric martin newuy with lake street capital markets your line is open

Operator: Eric, your line is now open. As a reminder to ask a question, please press star 111 on your telephone and wait for your name to be announced.

Operator: Okay, we'll try this again. Can you hear me? We can hear you, Eric. Okay, I promise I was not on mute and am not sure what happened, but let's dive in here.

Speaker Change: Okay, we'll try this again. Can you hear me?

Raj Sharma: And the next question comes from Raj Sharma with B.

Eric Martinuzzi: So, the 2027 plan, is that based on the existing campus footprint that we have, as well as that new location that's planned for 2026, or is there a build out beyond the 2026 campus location?

Speaker Change: We can hear you, Eric.

Raj Sharma: Rowley, your line is now open. Yeah, thank you. Good morning. Thanks for taking my questions. You know, I wanted to understand the starts color a little bit better. So from if I heard it correctly, the healthcare starts were down 6% and that's largely explainable from timing. Is that right? And my follow on question on is the acts of Atlanta, these point Georgia campus, you know, what was the start for growth rate and was Atlanta almost all transportation, right?

Speaker Change: Okay, I promise I was not on mute and not sure what happened, but let's dive in here. So the 2027 plan, is that based on the existing campus footprint that we have as well as that new location that's planned for 2026?

Speaker Change: or if they're built out beyond the 2026 campus location that's...

Unknown Executive: It's still the same thing we talked about on investor day. So it's two relocating campuses, and one camp is the new Atlantic campus. So it's just those campuses. Anything additional will be edited to that and are, you know, the new programs that we discussed and that and so he all yeah, and it includes Houston as well, I'm sorry, the Atlanta campus Houston, and the two relocating but not the one that Scott described that we'll be announcing shortly. Yeah, so just to be clear.

Speaker Change: so it's still the same thing we talked about on the investor day so it's a two relocating campuses and one cam the new atlanta cpit so it's just those campuses anything additional will be edited to that and are the new program that we discussed

Speaker Change: and that

Raj Sharma: Well, the land is definitely all transportation skill trades is it against automotive electrical HVAC and welding and the growth without it was about 5.5%. There's a slide in our investor on the website that shows you that. So we had good solid, solid growth, you know, without that new campus. Right. And what are the, what are, what is the enrollment you're expecting at the East Point campus? Well, we might not have. I'll just tell you what we might, we might all the campus at a getting to enrollment around 700, 750 students.

Speaker Change: And so it includes, I'm sorry, Houston as well. I'm sorry, the Atlanta campus, Houston, and the two relocating, but not the one that Scott described that we'll be announcing shortly. Yeah, so just to be clear, everything we've announced to date.

Unknown Executive: Yes, so just to be clear, everything we've announced to date, except for the new one that we anticipate we'll be announcing in the next quarter, it drives.

Speaker Change: except for the new one that we anticipate we'll be announcing in the next quarter. It drives us to those results.

Eric Martinuzzi: And then follow up on that, Houston. What specifically is the regulatory or the barrier to be rolled out there? Why do we have to kick the cannon?

Speaker Change: And then a follow-up on that, Houston, what specifically is the regulatory or the barrier to rule out there, why do we have to kick the can on Houston?

Unknown Executive: building permits, you know. Everyone thinks of Houston. I mean, Texas is very open and free with a lot of things, but for whatever reason, it took us longer to get some building permits approved.

Speaker Change: building permits you know

Speaker Change: Everyone thinks of Houston. I mean, Texas is being very open and free with a lot of things, but for whatever reason, it took us longer to get some building permits approved.

Raj Sharma: At the end of the end of this year, we originally thought there might be 300 students and we're exceeding that. Right. And that makes something that the healthcare starts you expect for the year to be positive growth, any sort of target on that. I can't, to be honest with you, I haven't looked at it in that way. All I know is that there is positive growth. I know Brian, if you have any more information.

Eric Martinuzzi: Okay, and you said, so new students by the end of 2025, is that Q4 of 25, Q3, or still TVC? Yes. Yes, at some point.

Speaker Change: Okay, and you said, so new students by the end of 2025, is that Q4 of 25, Q3, or still TVC?

Unknown Executive: At some point within the fourth quarter of 2025, we'll have our first students start at that campus. Got it. Thanks for taking my question. No problem. Glad you were able to connect.

Speaker Change: Yes, at some point within the fourth quarter of 2025, we'll have our first starts at that campus.

Speaker Change: Got it. Thanks for taking my question.

Operator: As a reminder, to ask a question, please press star 11 on your telephone. Okay, I have no further questions at this time. I would now like to turn the call back to Scott for closing remarks.

Speaker Change: No problem. Glad you were able to connect with us.

Speaker Change: As a reminder, to ask a question, please press star 11 on your telephone.

Raj Sharma: Yeah, we're flat for the six months and we're expecting the second half to be positive. But and again, you know, for our two big programs there is MA, which was up for this quarter to second quarter over 30%. That Scott described LPN was down, but that was all due to the number of thoughts we have because it fluctuates from quarter to quarter there. So hopefully that'll catch up in Q3. So we are anticipating to be positive I don't have the numbers, there.

Speaker Change: i show no further questions at this time i' would now like to turn the call back to scot for closing remarks

Scott Shaw: Thanks, Operator. And we just want to thank everyone for joining our call. As you can see, Lincoln has a lot of positive momentum, and we really see that continuing into next year and, I believe, even the year after. There's so much that's happening that we serve, and the need for what we do is increasing, given the demand we hear from employers and given the trends we're seeing in society, waking up to the fact that there are other opportunities for people to start their careers in a shorter, faster, more economical And that's certainly what we're all about at Lincoln Tech. We like to, as we say, help students put their potential to work, and we look forward to doing that with more and more students.

Speaker Change: Thanks, Operator. And we just want to thank everyone for joining our call. As you can see, Lincoln has a lot of positive momentum and we really see that continuing into next year and I believe even the year after. There's so much that's happening that we serve and the need for what we do, we see increasing given the demand we hear from employers and given the trends we are seeing in society, waking up to the fact that there are other opportunities for people to start their careers in a shorter, faster, more economical way. And that's certainly what we're all about at Lincoln Tech. We like to, as we say, we help students put their potential to work and we look forward to doing that with more and more students.

Raj Sharma: Got it. Well, that's very helpful. And just the my last question on Lincoln 10.0, I see that you have covered 65% who said, if I heard that correctly, 65% of the students would be under the Lincoln 10.0. And I understand that there are cost efficiencies to be seen. Are there cost efficiencies to see. And where would you see them in the metrics, you know, or next year. This is this year. That would be great.

Operator: We look forward to updating you on our next earnings call, and we hope you all have a wonderful day. Thank you. This does conclude today's conference call. Thank you for participating. You may now disconnect.

Raj Sharma: Some color of that. Yeah, you would see them in the educational line because of the increased efficiency that we'll have with faculty. We're starting to see it now, but to your point, we'll definitely see more of it in 2025. As we see the benefits of blended learning, coming to fruition does provide some better student to teacher ratios and better utilization of the classrooms, which all adds to the efficiency. But it's basically in the instructional line that you'll see the savings. Got it. Thank you for taking the questions again.

Speaker Change: We look forward to updating you at our next earnings call, and we hope you all have a wonderful day. Thank you.

Operator: This does conclude today's conference call. Thank you for participating. You may now disconnect. [music] Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music [music] Copyright © 2020, New Thinking Allowed Foundation Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music, [music] Ladies and gentlemen, thank you for standing by.

Michael Polyviou: Welcome to the second quarter Lincoln Educational Services earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you would need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Michael Polyviou, Investor Relations. Please go ahead.

Speaker Change: This does conclude today's conference call. Thank you for participating. You may now disconnect.

Unknown Executive: Statements made by Lincoln Management on today's call regarding the company's business that are not historical facts may be forward-looking statements as the term is identified in federal securities law. The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions, are intended to identify if overlooked statements. Total containment should not be read as a guarantee of future performance or events. The company cautions you that these statements reflect certain expectations about the company's future performance or events and are subject to a number of uncertainties, risks, and other influences, many of which are beyond the company's control, and may influence the accuracy of the statement and projection upon which the segment and statements are based.

Unknown Executive: Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the risk factor section of the Annual Report in Form 10-K and the Quarterly Report in Form 10-Q filed with the Securities and Exchange Commission. All of those statements are based on the information available at the time those statements were made and management's good faith belief as of the time with respect to future events.

Unknown Executive: All photo-related statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes no obligation to publicly revise or update any photo, whether as a result of new information, case, or event, or otherwise, after the date that... One other housekeeping matter. During the Q&A portion of our call today, we would appreciate it if questioners limited themselves to two questions and then retreated to ask any additional questions. In advance, we thank you for your cooperation. Now I welcome the call from Scott Shaw, President and CEO of Lincoln Educational Services. Scott.

Raj Sharma: Congratulations solid results. Thanks, Roger.

Scott Shaw: When we complete the rollout of Lincoln 10.0 by the end of this year, the platform will be used for teaching approximately 65% of our students. We continue to see numerous indications that the platform improves our operating efficiencies while also playing a major factor in a student's decision to enroll at Lincoln. The platform reduces the time to complete many of our programs, speeding up graduates to begin their careers. This enhanced training productivity is also attractive to our corporate partners, who remain constrained by the lack of skilled employees.

Operator: As a reminder to ask a question, please press store 1-1 on your telephone.

Scott Shaw: While I've mentioned before how Lincoln 10.0 has fundamentally changed how we teach our students and position the company for the future, its transformational impact on our company bears repeating. The platform is serving as the foundation for our focused growth strategies of opening new campuses and replicating successful programs and existing campuses. For example, the East Point, Georgia campus is our first new greenfield campus developed in some 18 years. This brand new, state-of-the-art facility features 56,000 square feet of training space and includes 15 automotive service spaces and up to 60 welding booths, labs, classrooms, and work areas.

Eric Martinuzzi: The next question comes from Eric Martin Newsy with Lake Street Capital Markets. Your line is open. Okay, we'll try this again. Can you hear me? We can hear you. I promise I was not on mute. I'm not sure what happened, but let's dive in here.

Scott Shaw: We sought to create a setting that was both sleek and modern, elevating the student and teaching experience. Everything about the campus has been thoughtfully designed to deliver exceptional hands-on education and training with robust labs and shops. Moreover, we are utilizing the best-in-class curriculum and training aids. For example, in our automotive program, we're the only school group in the United States utilizing the Elektude curriculum and their integrated trainers. Elektude is the global leader in automotive training in high schools and colleges.

Scott Shaw: Our future Nashville and Levittown campuses are scheduled to open during the first half of 2025. As a reminder, both campuses are totally new from the ground up and replace existing operations in those markets and include additional programs at both campuses. Our fourth new campus in Houston is meeting its construction and build-out schedule, but local regulatory timelines are causing our startup of this campus to be pushed out. We now see starting our first class in Houston during the fourth quarter of 2025.

Scott Shaw: Additionally, our expansion of outreach efforts in the states of Connecticut and Maryland, in which we join forces with employers, government agencies, unions, and community colleges to increase awareness of the opportunities available through skilled trades careers, has been a resounding success. In the case of Maryland, we've been engaged to coordinate a similar program next year with increased funding from the state. As you can see, we are achieving strong growth in revenues and profitability and remain on track to achieve our long-term goals of $550 million in revenue and $90 million in adjusted EBITDA in 2027.

Scott Shaw: Electricians and HVAC technicians are needed to keep our homes, hospitals, supermarkets, and other facilities up and running. Similarly, our health care system is stretched to almost the breaking point as the demand for nurses and health care workers skyrockets.

Scott Shaw: So the 2027 plan. Is that is that based on the existing campus footprint that we have as well as that new location that's planned for 2026 or is there build out beyond the 2026 campus location? No, it's still the same thing we talked about on the investor day. So it's a two relocating campuses and one campus is the new Atlantic campus. So it's just those campuses. Anything additional will be edited to that and are the new programs that we discussed.

Scott Shaw: In short, Lincoln Tech trains the essential workers that allow us to live our lives in the manner to which we are accustomed. We see the need for what we are doing. We see the need for what we do growing, despite the economic environment. There are unrefutable changes happening that are driving an increased need for our students. For example, our population is aging, and the need for healthcare and healthcare workers will only grow.

Scott Shaw: Society's demand for the Internet, AI, connectivity, and communication will only grow, as will demand for electricians, HVAC techs, and other workers to maintain server farms, install networks, and rebuild our power grid. Demand for cleaner energy will continue to increase, whether mandated by government or by citizens who see an opportunity to make a positive change for society. On this last point, I want to highlight a partnership that we have with Fujitsu, a world leader in HVAC systems, and in particular, split unit systems utilizing inverter technology.

Alex Paris: Hi guys, thanks for taking my question. I want to congratulate you on the beat and raise.

Unknown Executive: Thanks Alex, I appreciate that. We're excited by it as well.

Alex Paris: A couple of quick questions then. Both you, Scott, and Brian said at the end of the call that your targets for 2027 are $550 and $90 for revenue and adjusted EBITDA. Is that a rounding thing, or are you increasing it? Because I think you said it at investor day, $540 and $88.

Scott Shaw: Finally, I'd like to note I'll be in Chicago on August 28th for the annual Midwest Ideas Conference, as well as participating in Barrington's virtual fall investment conference on September 12th to educate investors about the enhanced valuation potential offered through our shares. Now I'll turn the call over to Brian Meyers so he can review some of our recent financial highlights and guidance. Brian. Thank you, Scott.

Brian Meyers: Thank you, Scott. Good morning, everybody, and thank you for joining our second quarter 2024 earnings call. This morning, I'm pleased to share our financial results along with some key operational highlights. Starting with the quarter's financial performance, total revenue was nearly $103 million, representing an increase of about $14 million, or 16%, mainly driven by our robust stock growth over the last seven consecutive quarters. During the second quarter, student starts grew by 12.3 percent.

Unknown Executive: Yeah, so we did make an adjustment since the investor meeting.

Brian Meyers: This marks the third consecutive quarter of double-digit growth in both revenue and enrollment. As a result, we had approximately 1,500 more students as of June 30, 2024 compared to the prior year, propelling revenue growth for the second half and beyond. As Scott mentioned, the new East Point Campus is performing exceptionally well, exceeding enrollment goals and contributing to the company's top line.

Alex Paris: Is this the first time you've seen it, or have you seen it previously? I don't recall.

Brian Meyers: While the East Point Campus contributed to our robust stock growth, we also continue to achieve solid organic stock growth from existing campuses. Excluding the new East Point Campus, we grew our organic campus revenue by $13 million, with the incremental revenue contributing an operating margin of over 30%. Now turn to the expenses for the quarter, which, as a reminder, for comparability purposes, exclude expenses for our new East Point campus during its opening period, two pre-opening costs associated with the new and relocating campuses, three other non-recurring expenses, and four, the transitional segment in 2023.

Unknown Executive: No, I think this is the first time, and it will be out on our website later today.

Brian Meyers: Further details on these items are available in the non-GAAP disclosures of our Q2 earnings release. Total operating expenses were close to $99 million, which is reflective of our growing population and in line with expectations. Education service and facility expenses as a percentage of revenue are down to 42% from 44.4% in the prior year. The majority of the decrease relates to instructional expenses, which increased over the prior year due to costs associated with our larger student base, but decreased as a percentage of revenue as we begin to experience efficiencies and benefits from our higher population and our hybrid learning model. Justin Ibarra earned $6.2 million for the second quarter, compared to $2.4 million in the prior year, representing more than a 150% increase.

Alex Paris: All right, well, congratulations on that. Here are my two questions.

Brian Meyers: We had an income tax benefit for the quarter of approximately $500,000, including a discrete item benefit associated with stock theft. For the second half of the year, we expect our effective tax rate to be approximately 30%. Turning to the balance sheet, the balance sheet remains robust with total liquidity exceeding $100 million, cash and cash equivalents of $67 million, no debt, and working capital of around $50 million. Our CapEx for the three months was approximately $10 million relating to multiple exciting projects which will drive growth next year and beyond.

Alex Paris: First of all, I wanted to focus on starts. Starts were up more than we had expected. We expected 4,600 starts. You came in closer to 5,000 starts at 12%. What do you attribute that to? I'm assuming an increase in marketing. And then has that momentum continued into the third quarter? You know, what was your experience in July and August?

Brian Meyers: First, we continue to manage the build out of ten additional programs, which are either a program replication at an additional campus or an expansion of an existing campus based on construction patient approvals. We expect six programs to be rolled out by year end, and the remaining to be launched in the first half of twenty twenty five.

Unknown Executive: But the basic fact is we see strong demand continuing. That's why we raised our guidance. You know, the midpoint of our guidance is 10, 11 percent, I guess closer to 11 percent. And that's where we anticipate it coming out for the year.

Brian Meyers: As a result, we now anticipate the campus to open towards the end of 2025. Looking ahead to the remainder of 2024, based on these project statuses, we are reducing our full-year CAVX guidance to $45 million to $55 million. Our second quarter operating financial results, as well as the outlook for the remainder of the year, led us to raise our outlook for revenue and increase the low-end range of adjusted EBITDA, adjusted net income, and student starts.

Alex Paris: and, and, you know, Above and beyond the renaissance in skilled trades, the appeal of these blue-collar jobs that can't be outsourced or replaced by AI, you've increased marketing year over year. I think you said in the press release that it was up $2 million year over year.

Brian Meyers: The outlook for guidance has been updated to revenue ranging between $423 million and $430 million, adjusted EBITDA in the range of $39 million to $42 million, adjusted net income ranging between $14 million and $17 million, and student start growth of 9 to 12 percent. As a reminder, a full year of financial guidance for adjusted EBITDA and adjusted net income excludes the impact of the East Point Campus pre-opening costs related to new and relocated campuses, program expansions, and net non-cash stock-based compensation.

Unknown Executive: Yeah, it is in hand. I'm sorry, Alice.

Alex Paris: I was just going to say, and has that had any impact on the cost per lead? Or Cost Per Start? Yeah, Cost Per Start. The good news is we follow that very closely, and the cost per start is relatively flat. You know, it might be up a percentage or two, but nothing significant. And it kind of changes quarter by quarter.

Brian Meyers: In conclusion, we are very pleased with our performance in 2024. We have solid growth plans and will work to continue to explore new opportunities to expand and drive efficiency. As we highlighted in our Q2 investor presentation, under the strategic growth slide that we posted to our website later today, our long-term vision and goal is to generate revenue of approximately $550 million and adjusted EBITDA of about $90 million in 2027. Our team is working diligently together, and we believe we are well-positioned to achieve this target. We sincerely appreciate the entire Lincoln team, especially our faculty, for making a difference each day in changing our students' lives. Now, I'll turn the call back over to the operator for any questions. Operator?

Unknown Executive: Again, it's kind of just timing of when we spend the money and when the students start. I think, at the end of the day, though, there is this increased demand. You know, some people don't think that people just naturally come to you just because people talk about it.

Unknown Executive: We still have to be out there and in front of people. But as long as we continue to maintain our cost per start, which we have done over the last five years, we're going to continue to make those investments and drive greater growth. Makes sense. And here's my last one.

Alex Paris: I know we're limited by program population by program starts by program. The overall start number of up 12% was really driven by the transportation and skilled trade side of the business, up 21%. Healthcare and other professions were down 6% in the quarter. And it was up 9% in the first quarter, so it definitely declined in the second quarter. What do you attribute that to?

Unknown Executive: A lot of it again is timing of when starts occur. At certain times, we can have two nursing starts in the quarter, sometimes only one. So at a couple of the campuses, they switch when those starts are taking place year over year. At the end of the day, I'm still expecting growth in the healthcare sector for the full year. I'm not worried about that.

Scott Shaw: And that and so he and it includes all sorry, Houston as well. I'm sorry. The Atlantic campus used in and the two relocating, but not the one that Scott described that will be announcing shortly. Yeah, so just to be clear, everything we've announced today except for the new one that we anticipate will be announcing in the next quarter. It drives us to those results. Gotcha.

Scott Shaw: And then follow up on that. Houston, what specifically is the regulatory or the barrier to rule out there? Why do we have to take the can on Houston? Building permits. You know, everyone thinks of Houston. I mean, Texas is being very open and free with a lot of things, but for whatever reason took us longer to get some building permits approved. Okay.

Operator: And you said it's so new students by the end of 2025. Is that Q4 25 Q3 or yeah, it's at some point within the fourth quarter of 2025 will have our first starts at that campus. Thanks for taking my question. Thank you. No problem, glad you were able to connect with us. As a reminder to ask a question, please press star 11 on your telephone.

Unknown Executive: Our biggest decline was in LPN, and it was due to the timing of the starts.

Alex Paris: Gotcha. Do you still not think that the auto and skilled trades will increase at a greater rate than health care and other professions for the full year?

Alex Paris: It makes sense, guys. Thank you very much.

Operator: And the next question comes from Steven Frankel with Rosenblatt Securities. Your line is now open.

Steven Frankel: Good morning. Alex stole my thunder, but maybe we'll dig into health care a little bit more. What's the size of the funnel there relative to the prospect funnel on the skills on the skilled trade side? Is there still a very good funnel there? Or are you finding that people are less interested in this area post-COVID? I know there are plenty of job openings, but what's the interest level like?

Unknown Executive: Absolutely. And you know, the health care side of the house is an area that we're putting increased focus on. We recently hired a new individual, a VP of health care, to help us drive that business going forward. So I would anticipate, certainly, as we get into 2025, sharing more of what those new opportunities will be for us. Great, thank you.

Unknown Executive: Yeah, interest still remains strong in healthcare. It's definitely growing.

Unknown Executive: It's up over last year. As I said, I'm very comfortable that our full year healthcare numbers will be meaningfully higher. Again, our skilled trades and auto are going to be up more because that is where we're having more replications and expansions take place. But overall, demand is strong across the board. I'm not worried, frankly, about any demand indicators shifting negatively, or maybe they'll shift more positively, but they're definitely robust, I'd say, Stephen, across the board for us.

Steven Frankel: I appreciate the update on the cash pay program on skilled trades and auto. Are there any prospects for replicating that kind of success in healthcare? Absolutely. And, you know, healthcare

Steven Frankel: And our next question comes from Eric Martinuzzi with Lake Street Capital Markets. Your line is now open. Eric, your line is now open. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced.

Raj Sharma: Yeah, thank you. Good morning. Thanks for taking my question. You know, I wanted to understand the starch color a little bit better.

Unknown Executive: So if I heard it correctly, the health care starts were down six percent. And that's largely explainable from timing. Is that right? My follow-on question is the X of Atlanta, the East Point, Georgia Campus. What was the start to growth rate? And was it Atlanta, almost all transportation, right? Well, the land is definitely all transportation.

Unknown Executive: Right. And what is the enrollment you're expecting at the East Point campus?

Unknown Executive: We modeled the campus at getting to enrollment around 700-750 students. At the end of the end of this year, we originally thought there might be 300 students, and we're exceeding that.

Operator: As a reminder, to ask a question, please press star one one on your telephone. The next question comes from Eric Martinuzzi with Lake Street Capital Markets. Your line is open.

Unknown Executive: Right. And That makes sense in the health care starts you expect for the year to be positive, growth, any sort of target.

Unknown Executive: I can't, to be honest with you, I haven't looked at it in that way. All I know is that there is positive growth. Let me know, Brian, if you have any more information.

Unknown Executive: Yeah, we're flat for the six months, and we're expecting the second half to be positive. And again, you know, for our two big programs, there is MA, which was up over 30% in this quarter, the second quarter. As Scott described, LPN was down, but that was all due to the number of slots we have because it fluctuates from quarter to quarter there. So hopefully, that'll catch up in Q3. So we are anticipating.

Unknown Executive: Got it. Well, that's very helpful. And just my last question on Lincoln 10.0: I see that you have covered 65%, you said. If I heard that correctly, 65% of the students would be covered by Lincoln 10.0. And I understand that there are cost efficiencies to be seen. Are there cost efficiencies to be seen? And where would you see them in the metrics, you know, next year versus this year? That'd be great to have some color on that.

Unknown Executive: Yeah, you'd see them in the educational line because of the increased efficiency that we'll have with faculty. We're starting to see it now, but to your point, we'll definitely see more of it in 2025 as we see the benefits of blended learning coming to fruition. It does provide some better student-to-teacher ratios and better utilization of the classrooms, which all adds to the efficiency, but it's basically in the instructional line that you'll see the savings.

Eric Martinuzzi: Okay, we'll try this again. Can you hear me? We can hear you, Eric. Glad to hear you. Okay. I promise I was not on mute and am not sure what happened, but let's dive in here.

Unknown Executive: Got it.

Unknown Executive: So the 2027 plan, is that based on the existing campus footprint that we have as well as that new location that's planned for 2026, or is there a build out beyond the 2026 campus location that's. No, it's still the same thing we talked about on investor day. So, there are two relocating campuses, and one camp is the new Atlantic campus. So, it's just those two campuses. Anything additional will be edited to that and are, you know, the new programs that we discussed.

Unknown Executive: Thank you for taking my questions. Again, congratulations.

Unknown Executive: It includes Houston as well, I'm sorry, the Atlantic Campus, Houston, and the two relocating, but not the one that Scott described that we'll be announcing shortly.

Unknown Executive: Yeah, so just to be clear, everything we've announced to date, except for the new one that we anticipate we'll be announcing in the next quarter, it drives us to those results.

Unknown Executive: And then a follow-up on that. Houston, what specifically is the regulatory or the barrier to rule out there? Why do we have to kick the can?

Unknown Executive: Building Permits, you know. Everyone thinks of Houston. I mean, Texas is very open and free with a lot of things, but for whatever reason, it took us longer to get some building permits approved.

Unknown Executive: Okay, and you said, so new students by the end of 2025, is that Q4 of 25, Q3, or still QB of 25? Yes, at some point.

Scott Shaw: Thanks, Operator. And we just want to thank everyone for joining our call. As you can see, Lincoln has a lot of positive momentum, and we really see that continuing into next year and, I believe, even the year after. There's so much that's happening that we serve, and the need for what we do is increasing given the demand we hear from employers and given the trends we are seeing in society, waking up to the fact that there are other opportunities for people to start their careers in a shorter, faster, more economical way.

Scott Shaw: And that's certainly what we're all about at Lincoln Tech. We like to, as we say, help students put their potential to work, and we look forward to doing that with more and more students. We look forward to updating you on our next earnings call, and we hope you all have a wonderful day.

Operator: This does conclude today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: ladies and gentlemen thank you for standing by welcome to the second quarter lincoln educational services earnings conference call at this time all participants or in a listen only mote after the speaker' presentation that will be a question and answer session

Speaker Change: To ask a question during this session, you would need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

Speaker Change: to withdraw your question please press star one one again please be advised that today's conferences being recorded i would like now to turn the conference over to michael poy b you investor relations please go ahead

Speaker Change: Thank you, Michelle. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued its news release reporting financial results in recent corporate developments for the second quarter and six months ended June 30, 2024.

Speaker Change: The release is available on the investor relations portion of the company's corporate website at www.lincolntech.edu.

Speaker Change: winning a city on the colge scot ident in into yell and brian myers' chief niche loss

Speaker Change: Today's call has been recorded and is being broadcast live on the company's website. A replay of the call will be archived on the company's website.

Speaker Change: statements made by weink management on today's call regarding the company's business that are not historical facts may be forward-looking statements as a term identified in addle securities lawss

Speaker Change: The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions are intended to identify overlooked statements.

Speaker Change: Total containment should not be read as a guarantee of future performance.

Speaker Change: Company cautions you that these statements reflect certain expectations about the company's future performance or events, and are subject to a number of uncertainties, risks, and other social influences, many of which are beyond the company's control, and may influence the accuracy of the statement and projection upon which the segmented statements are based.

Speaker Change: Factors that may affect a company's results include, but are not limited to, the risks and uncertainties discussed in the Risk Factor section of the Annual Report in Form 10-K and the Quarterly Report in Form 10-Q filed with the Securities and Exchange Commission.

Speaker Change: all overlooking statements are qualified and their retireget by this cautionary statement and lincoln undertakes no obligation to publicty revisise or update any f to say

Speaker Change: Whether as a result of new information, future events, or otherwise, after the date thereof.

Speaker Change: One other housekeeping matter. During the Q&A portion of our call today, we would appreciate if questioners limited themselves to two questions and then requeued to ask any additional questions. In advance, we thank you for your cooperation.

Speaker Change: Now I would like to call over Scott Shaw, President and CEO of Lincoln Educational Services. Scott, please go ahead.

Scott Shaw: Thank you, Michael, and good morning, everyone.

Speaker Change: In fact, we are adjusting our guidance in a positive direction, which Brian will review in his remarks.

Speaker Change: The investments we've made in our transformative strategies over the past several years are driving our growth.

Speaker Change: Additionally, we continue to capitalize on America's expanding interest in career opportunities that avoid the cost and time of a four-year college degree and help the nation close the skills gap inhibiting corporate growth.

Speaker Change: During the second quarter, without relying on acquisitions, we grew revenue 16% over the prior year period, and student starts increased 12.3%. Our student retention rate continued to be strong, and we ended the quarter with an average student population increase over last year in excess of 11%.

Operator: Okay, I show no for the questions at this time.

Speaker Change: Our top-line performance, coupled with increased operating efficiencies driven by the implementation of our highly scalable hybrid instructional platform, Lincoln 10.0, led to adjusted EBITDA of $6 million.

brian myyers: Furthermore, our total SG&A expenses during the second quarter fell below 56% as compared to 57.6%, and our educational services and facilities expenses as a percentage of revenue also declined, further demonstrating the operating leverage we are beginning to realize.

Scott Shaw: I would now like to turn the call back to Scott for closing remarks. Thanks operator. And we just want to thank everyone for joining our call. As you can see, Lincoln has a lot of positive momentum. And we really see that continuing into next year and I believe in the year after there's so much that's happening that we serve in the need for what we do. We see increasing given the demand we hear from employers and given the trends we are seeing in society waking up to the fact that there are other opportunities for people to start their careers in a shorter, faster, more economical way.

Speaker Change: When we complete the rollout of Lincoln 10.0 by the end of this year, the platform will be used in teaching approximately 65% of our students.

Speaker Change: We continue to see numerous indications that the platform improves our operating efficiencies while also playing a major factor in a student's decision to enroll at Lincoln.

Speaker Change: The platform reduces the time to complete many of our programs, speeding up graduates to begin their careers. This enhanced training productivity is also attractive to our corporate partners who remain constrained by the lack of skilled employees.

Speaker Change: While I've mentioned before how Lincoln 10.0 has fundamentally changed how we teach our students and position the company for the future, its transformational impact on our company bears repeating.

Speaker Change: The platform is serving as the foundation for our focused growth strategies of opening new campuses and replicating successful programs and existing campuses.

Speaker Change: For example, the East Point, Georgia campus is our first new greenfield campus developed in some 18 years. This brand new state of the art facility features 56,000 square feet of training space.

Speaker Change: and includes 15 automotive service spaces and up to 60 welding booths, labs, classrooms, and work areas. We welcomed the first class during the first quarter, and by the end of June , we had already enrolled more students at East Point than we had initially budgeted for for the entire year.

Speaker Change: The campus' strong results prove the success of our site selection process and bodes well for our future new campuses and relocations.

Speaker Change: We designed East Point to be unique among trade schools, and for those who have visited the campus, it is apparent when you first enter the campus.

Speaker Change: We sought to create a setting that was both sleek and modern, elevating the student and teaching experience.

Speaker Change: Everything about the campus has been thoughtfully designed to deliver exceptional hands-on education and training with robust labs and shops.

Speaker Change: Moreover, we are utilizing the best-in-class curriculum and training aids. For example, in our automotive program, we are the only school group in the United States utilizing elective curriculum and their integrated trainers.

Scott Shaw: And that's certainly what we're all about at Lincoln Tech. We like that as we say we help students put their potential to work and we look forward to doing that with more and more students. We look forward updating you at our next earnings call and we hope you all have a wonderful day. Thank you.

Operator: This does conclude today's conference call. Thank you for participating. You may now disconnect. Thank you very much. Thank you.

Speaker Change: Electude is the global leader in automotive training in high schools and colleges. Electude's cloud-based e-learning platform allows our instructors access to interactive and engaging foundational lessons, gamified formative and summative assessments,

Unknown Executive: [inaudible] you, thank you, thank you,[inaudible] thank you, thank you, thank you,[inaudible] The New York Times and the New York Times The New York Times The New York Times and the New York Times The New York Times The New York Times and the New York Times Ladies and gentlemen, thank you for standing by.

Operator: Welcome to the second quarter Lincoln Educational Services earnings conference call. At this time, all participants are in a listen only mode. After the speech presentation, there will be a question and answer session. To ask a question during the session, you would need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded.

Speaker Change: Teaching Resources, Tools to Build Their Own Curriculum, Analytical Tools to Identify Learners' Needs, and Coursework in Multiple Languages.

Michael Polyviou: I would like now to turn the conference over to Michael Polyviou Investor Relations. Please go ahead. Thank you, Michelle.

Michael Polyviou: Good morning, everyone. For the market opened today, Lincoln Educational Services issued its news release reporting financial results in recent corporate developments for the second quarter in six months and the June 30, 2024. The release is available on the Investor Relations portion of the company's corporate website at www.linkentek.edu.

Speaker Change: Moreover, their proprietary trainers seamlessly integrate with the curriculum and provide students with a clear understanding of all the major systems in a car.

Michael Polyviou: Joining us today on the call is Scott Shaw, President and CEO and Brian Myers, Chief Nick Loser. Today's call has been recorded and is being broadcast live on the company's website. We play the call will be archived on the website.

Speaker Change: At the heart of the program is the principle of discovery learning, which is how younger generations have become so adept in mastering today's technology.

Unknown Executive: Statements made by Lincoln Management on today's call, regarding the company's business that are not historical facts, may be federal constituents as a term is identified and that will secure his loss. The words may will expect fully in the state project plan intent estimate and continue as well as social expressions are intended to identify federal statements. Public statement should not be read as a guarantee of future performance. Company caution to you that these statements reflect certain expectations about the company's future performance or event and are subject to a number of uncertainties risks and other influences many of which are beyond the company's control. I mean influence the accuracy of the statement and projection upon which the segmented statements are. Base.

Unknown Executive: Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the risk factor section, the annual report of form 10k, and the quarterly report of form 10q filed with the Securities and Exchange Commission. It takes new obligations to publicly revise or update any phone statements, whether as a result of new information, case events or otherwise, after the date they're out.

Speaker Change: Our future Nashville and Levittown campuses are scheduled to open during the first half of 2025.

Unknown Executive: One other housekeeping matter, during the Q&A portion of recall today, we would appreciate if questioners limited themselves two questions, and then recue to ask any additional questions in advance. We thank you for your cooperation.

Speaker Change: As a reminder, both campuses.

Speaker Change: are totally new from the ground up and replace existing operations in those markets and include additional programs at both campuses.

Scott Shaw: Now, I want to welcome the call over, Scott Shaw, president and CEO of Lincoln Educational Services Scott. Thank you, Michael, and good morning, everyone. For several quarters, our team has been generating strong operating and financial momentum, leading to consistent revenue, student start and profitability growth. We continue these trends during our second quarter, and we are well on our way to meeting our 2024 guidance metrics. In fact, we are adjusting our guidance in a positive direction, which Brian will will review in his remarks.

Speaker Change: Our fourth new campus in Houston is meeting its construction and build-out schedule, but local regulatory timelines are causing our startup of this campus to be pushed out. We now see starting our first class in Houston during the fourth quarter of 2025.

Speaker Change: A fifth new campus is in the initial stages of development, and our plan is to announce its location by our third quarter results conference call. This campus would open in 2026.

Speaker Change: In addition to the new campuses, replicating and expanding successful programs that are existing campuses remains a key growth strategy.

Speaker Change: Currently, we have related initiatives which Brian will provide more detail on. However, we continue to expect that each of these programs will generate approximately $1 million of profitability within three years of opening, if not sooner.

brian myyers: Our focus on offering innovative, efficient student curriculums is enabling a growing number of graduates to enter rewarding in-demand careers.

Speaker Change: This focus is also attracting additional corporate partners and broadening our relationship with existing partners.

Scott Shaw: The investments we've made in our transformative strategies of the past several years are driving our growth. Additionally, we continue to capitalize on America's expanding interest and career opportunities that avoid the cost and time of a four year college degree and help the nation close the skills gap, inhibiting corporate growth. During the second quarter, without relying on acquisitions, we grew revenue 16% over the prior year period, and student starts increase 12.3%. Our student retention rate continued to be strong, and we ended the quarter with an average student population increase over last year in excess of 11%.

Speaker Change: On our last call, we reviewed the five-year workforce development agreement signed with Container Maintenance Corporation.

Speaker Change: In June , we began the curriculum development for this program at CMC's Charleston, South Carolina facility. Over five years, the agreement is expected to generate approximately $6 million in revenue to Lincoln.

Scott Shaw: Our top line performance coupled with increased operating efficiencies driven by the implementation of our highly scalable hybrid instructional platform Lincoln 10.0. Led to adjusted EBITDA of 6 million. I'll let Brian address our adjusted EBITDA performance during his remarks, but I do want to note our second quarter result was approximately 2.5 times greater than what we generated during last year's second quarter. Furthermore, our total SGNA expenses during the second quarter fell below 56%, as compared to 57.6%, and our educational services and facilities expenses as a percentage of revenue also declined.

Speaker Change: While our company has successfully executed workforce development programs for organizations in the past, the CMC agreement represents a new scale and level for Lincoln. Rather than bringing employees to one of our campuses, we are leveraging our curriculum and training resources to upskill CMC employees at its facilities.

Speaker Change: This approach is an emerging opportunity for Lincoln and one we believe that has the potential to become a significant contributor to our business. We expect to be able to announce additional contracts before year end.

Speaker Change: Meanwhile, we continue to have enormous opportunities with our campus-focused growth strategies.

Speaker Change: Through the end of 2026, we expect to layer on three Greenfield campuses while relocating and expanding to others, and have ten program replications fully up and running. As each of these campuses and replications comes online, we consistently expand our opportunities to increase overall student starts.

Speaker Change: In addition, we remain focused on maintaining the solid organic start growth at existing programs. Our marketing programs continue to generate a high return on investment as leads continue to increase at a strong double-digit level. Additionally,

Scott Shaw: Further demonstrating the operating leverage we are beginning to realize. When we complete the rollout of Lincoln 10.0 by the end of this year, the platform will be used in teaching approximately 65% of our students. We continue to see numerous indications that the platform improves our operating efficiencies while also playing a major factor in a student's decision to enroll at Lincoln. The platform reduces the time to complete many of our programs, speeding up graduates to begin their careers.

Speaker Change: Our expansion of outreach efforts in the states of Connecticut and Maryland, in which we join forces with employers, government agencies, unions, and community colleges to increase awareness of the opportunities available through skilled trades careers, has been a resounding success.

Speaker Change: In the case of Maryland, we've been engaged to coordinate a similar program next year with increased funding from the state.

Speaker Change: Our opportunities have never been better. From 1980 until 2020, our country pushed the need to go to a four-year school, no matter the cost or the outcome. During this time, the value of career education was pushed to the side, despite the growing need for more highly trained middle-skilled workers.

Scott Shaw: This enhanced training productivity is also attractive to our corporate partners who remain constrained by the lack of skilled employees. While I've mentioned before how Lincoln 10.0 has fundamentally changed how we teach our students and position the company for the future, its transformational impact on our company bears repeating. The platform is serving as the foundation for our focused growth strategies of opening new campuses and replicating successful programs and existing campus. For example, the East Point Georgia campus is our first new Greenfield campus developed in some 18 years.

Scott Shaw: This brand new state of the art facility features 56,000 square feet of training space and includes 15 automotive service spaces and up to 60 welding booths, labs, classrooms and work areas. We welcome the first class during the first quarter and by the end of June we had already enrolled more students at East Point than we had initially budgeted for. For the entire year the campus is strong results prove the success of our site selection process and both well for our future new campuses and relocations.

Speaker Change: The discussion around the skills gap grew during the first two decades of the 21st century as employers began to struggle to find technicians, electricians, welders, and healthcare workers.

Speaker Change: then covid hit andin shortage of middle skills workers became abundantly clear to everyone which is why for the most part our students remained employed during the pandemic since we needed food and medical supplies to be delivered which requires trucks advance to remain operational

Speaker Change: Electricians and HVAC technicians were needed to keep our homes, hospitals, supermarkets, and other facilities up and running. Our healthcare system was stretched to almost the breaking point as the demand for nurses and healthcare workers skyrocketed.

Speaker Change: In short, Lincoln Tech trains the essential workers that allow us to live our lives in the manner to which we are accustomed.

Speaker Change: Society's demand for the internet, AI, connectivity, and communication will only grow as will demand for electricians, HVAC techs, and other workers to maintain server farms, install networks, and rebuild our power grid.

Speaker Change: The demand for cleaner energy will continue to increase, whether mandated by government or by citizens who see an opportunity to make a positive change for society.

Speaker Change: These new systems are extremely efficient and can now be used in colder climates to very cost-effectively heat and cool homes and offices.

Speaker Change: Across the country, we are seeing mandates proposed that are discouraging installing heating and cooling systems that emit greenhouse gases and switch to mini-split systems. Our partnership with Fujitsu will help ensure that our students are acquiring the skills that can be used today and into the future.

Speaker Change: Part of our very successful company is a skilled and experienced Board of Directors. At Lincoln, we have consistently excelled at attracting excellent board members and recently continued this tradition with the appointments of Marketing Executive Marta Newhart and former Treasurer of the United States, Ana Cabral.

Speaker Change: Marta is a highly recognized marketing expert and her professional experience will help broaden our board's perspective and enhance our ability to achieve our long-term strategy.

Speaker Change: Now I'll turn the call over to Brian Meyers so he can review some of our recent financial highlights and guidance. Brian ?

Scott Shaw: We designed East Point to be unique among trade schools and for those who have visited the campus it is apparent when you first enter the campus. We sought to create a setting that was both sleek and modern elevating the student and teaching experience. Everything about the campus has been thoughtfully designed to deliver exceptional hands-on education and training with robust labs and shops. Moreover, we are utilizing the best in class curriculum and training aids.

Scott Shaw: For example, in our automotive program, we are the only school group in the United States utilizing a lectured curriculum and their integrated trainers. Electude is the global leader in automotive training in high schools and colleges. Electude's cloud-based e-learning platform allows our instructors access to interactive and engaging foundational lessons, gamified formative and summative assessments, teaching resources, tools to build their own curriculum, analytical tools to identify learners' needs and coursework in multiple languages.

Brian Meyers: fring with the quarter's financial performance total revenue was nearaly one hundred and three million representing an increase of about fourteen million or sixteen percent mainly driven by our robust stock growth over the last seven consecutive quarters

Scott Shaw: Moreover, their proprietary trainers seamlessly integrate with the curriculum and provide students with a clear understanding of all the major systems in a car. At the heart of the program is the principle of discovery learning, which is how younger generations have become so adept in mastering today's technology. Again, based on the robust response generated date in the form of leads, applications and starts, we are off to an excellent start with East Point and the early results have increased our confidence in our new campus strategy.

Brian Meyers: During the second quarter, student starts grew by 12.3 percent. This marks the third consecutive quarter of double-digit growth in both revenue and starts.

Scott Shaw: Our future Nashville Nevitown campuses are scheduled to open during the first half of 2025. As a reminder, both campuses are totally new from the ground up and replace existing operations in those markets and include additional programs at both campuses. Our fourth new campus in Houston is meeting its construction and build-out schedule but local regulatory timelines are causing our startup of this campus to be pushed out. We now see starting our first class in Houston during the fourth quarter of 2025.

Brian Meyers: As a result, we had approximately 1,500 more students as of June 30, 2024 compared to prior year, propelling revenue growth for the second half and beyond.

Scott Shaw: A fifth new campus is in the initial stages of development and our plan is to announce its location by our third quarter results conference call. This campus would open in 2026. In addition to the new campuses, replicating and expanding successful programs that are existing campuses remains a key growth strategy. Currently, we have related initiatives which Brian will provide more detail on. However, we continue to expect that each of these programs will generate approximately one million of profitability within three years of opening, if not sooner.

Brian Meyers: As Scott mentioned, the new East Point Campus is performing exceptionally well, exceeding enrollment goals and contributing to the company's top line. While the East Point Campus contributed to our robust stock growth, we also continue to achieve solid organic stock growth from existing campuses.

Scott Shaw: excluding the new eastpoint campus we grew our organic campus revenue by thirteen million with the incremental revenue contributing and operating margin of over thirty percent

Scott Shaw: Our focus on offering innovative, efficient student curriculums is enabling a growing number of graduates to enter rewarding in-demand careers. This focus is also attracting additional corporate partners and broadening our relationship with existing partners. Our corporate partnership development activity remained quite robust during the second quarter and we expanded our relationship with Peterbilt Corporation to our Denver campus after successfully starting up that partnership at the Nashville campus a year ago. On our last call, we reviewed the five year workforce development agreement signed with Container Maintenance Corporation.

Scott Shaw: In June, we began the curriculum development for this program at CMC's Charlts in South Carolina facility. Over five years, the agreement is expected to generate approximately six million in revenue to Lincoln. For a company that successfully executed workforce development programs for organizations in the past, the CMC agreement represents a new scale and level for Lincoln. Rather than bringing employees to one of our campuses, we are leveraging our curriculum and training resources to upskill CMC employees at its facilities.

Speaker Change: Now turn to the expenses for the quarter, which, as a reminder, for comparability purposes,

Scott Shaw: This approach is an emerging opportunity for Lincoln and one we believe that has the potential to become a significant contributor to our business. We expect to be able to announce additional contracts before year end. Meanwhile, we continue to have enormous opportunities with our campus focused growth strategies. Through the end of 2026, we expect to layer on three Greenfield campuses while relocating and expanding to others and have 10 program replications fully up and running.

Speaker Change: 1. Expenses of our new East Point Campus during its opening period 2. Pre-opening costs associated with the new and relocating campuses 3. Other non-recurring expenses and 4. The transitional segment in 2023

Scott Shaw: As each of these campuses and replications comes online, we consistently expand our opportunities increased overall student starts. In addition, we remain focused on maintaining the solid organic start growth at existing programs. Our marketing programs continue to generate a high return on investment as leads continue to increase at a strong double digit level. Additionally, our expansion of outreach efforts in the states of Connecticut and Maryland in which we join forces with employers, government agencies, unions and community colleges to increase awareness of the opportunities available through skilled trades careers has been a resounding success.

Speaker Change: Further details on these items are available in the non-GAAP disclosures of our Q2 earnings release.

Speaker Change: Total operating expenses were close to $99 million, which is reflective of our growing population.

Speaker Change: excuse me, and in line with expectations.

Speaker Change: education service and facility expenses as a percenters of revenue was down to forty-two percent from forty-four twenty four percent in the prior year

Speaker Change: the majority of the decrease relates to instructction expenses which increase over prior year due to quts associated with our largger student base but decrease as a percentage of revenue as we begin to experience efficiencies and benefits from our higher population and our hardwarero learning model

Speaker Change: Adjusted EBITDA was $6.2 million for the second quarter compared to $2.4 million the prior year, representing more than a 150% increase.

Brian Meyers: We had an income tax benefit for the quarter of approximately $500,000, including a discrete item benefit associated with stock vesting.

Brian Meyers: For the second half of the year, we expect our effective tax rate to be approximately 30 percent.

Brian Meyers: Turning to the balance sheet, a balance sheet remains robust with total liquidity exceeding $100 million, cash and cash equivalents of $67 million, no debt, and working capital of around $50 million.

Brian Meyers: Our CapEx for the three months was approximately $10 million relating to multiple exciting projects which will drive growth next year and beyond.

Brian Meyers: First, we continue to manage the build out of 10 additional programs, which are either a program replication at an additional campus or an expansion of an existing campus.

Speaker Change: Based on the construction patient approvals, we expect six programs to be rolled out by year-end and the remaining to be launched in the first half of 2025.

Speaker Change: Second, we are working towards the opening of three new SteadyDR facilities in 2025, comprised of two campus relocations and one brand new location.

Speaker Change: we are seeing some delays in the tomy or a capital spending which will shift about twenty million to two thousand and twenty five leading us to reduce our capex guidance for the year however we were sly ahead of aschedu in two of the three projects

Scott Shaw: In the case of Maryland, we've been engaged to coordinate a similar program next year with increased funding from the state. As you can see, we are achieving strong growth in revenues and profitability and remain on track to achieve our long term goals of 550 million of revenue and 90 million of adjusted EBITDA in 2027. Our opportunities have never been better. From 1980 until 2020, our country pushed the needs to go to a four-year school no matter the cost or the outcome.

Speaker Change: Signing with the Nashville and Leavittown relocations, both projects continue to make great progress and now are expected to be completed in the first half of 2025.

Scott Shaw: During this time, the value of career education was pushed to the side despite the growing need for more highly trained middle skill workers. The discussion around the skills gap grew during the first two decades of the 21st century as employers began to struggle to find technicians, electricians, welders and health care workers. Then COVID hit and the shortage of middle skills workers became abundantly clear to everyone, which is why for the most part, our students remained employed during the pandemic since we needed food and medical supplies to be delivered, which requires trucks and vans to remain operational.

Scott Shaw: Electricians and HVAC technicians were needed to keep our homes, hospitals, supermarkets and other facilities up and running. Our health care system was stretched to almost the breaking point as the demand for nurses and health care workers skyrocketed. In short, Lincoln Tech trains the essential workers that allow us to live our lives in the manner to which we are accustomed. We see the need for what we are doing, we see the need for what we do growing despite the economic environment.

Scott Shaw: There are unrefutable changes happening that are driving increased need for our students. For example, our population is aging and the need for health care and health care workers will only grow. Society's demand for the Internet, AI, connectivity and communication will only grow as we will demand for electricians, HVAC techs and other workers to maintain server farms, installed networks and rebuild our power grid. Their demand for cleaner energy will continue to increase whether mandated by government or by citizens who see an opportunity to make a positive change for society.

Speaker Change: Looking ahead to the remainder of 2024, based on these project statuses, we are reducing our full-year CAVX guidance to $45 million to $55 million.

Scott Shaw: Our partnership with with pujitsu will help ensure that our students are acquiring the skills that can be used today and into the future. Part of our very successful company is a skilled and experienced board of directors at Lincoln. We have consistently excelled at attracting attracting excellent board members and recently continued this tradition with the appointments of marketing executive Marta Newhart and former treasurer of the United States, Anna Cabral. Marta is a highly recognized marketing expert and her professional experience will help broaden our board's perspective and enhance our ability to achieve our long term strategy on as exemplary background and public service will be enormous asset to our organization and diverse community of students. Her working government, building coalitions from diverse points of view, will be a great benefit to Lincoln as we navigate through the highly regulated environment in which we operate.

Speaker Change: Revenue ranging between $423 million to $430 million, adjusted EBITDA in the range of $39 million to $42 million, adjusted net income ranging between $14 million and $17 million, and soon to start growth of 9% to 12%.

Speaker Change: Also in terms of depreciation and amortization, we expect a slight increase in the second half of the year, resulting in approximately 7.5 million of expense recorded fairly even over each quarter.

Speaker Change: Lastly, interest expense is anticipated to be near $500,000 in the second half, evenly dividing Q3 and Q4.

Speaker Change: In conclusion, we are very pleased with our performance in 2024. We have solid growth plans and work to continue to explore new opportunities to expand and drive efficiencies.

Speaker Change: of about $90 million in 2027. Our team is working diligently together, and we believe we are well-positioned to achieve this target.

Speaker Change: We sincerely appreciate the entire Lincoln team, especially our faculty, for making a difference each day and changing our students' lives.

Speaker Change: Now I'll turn the call back over to the operator for any questions. Operator? Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker Change: And our first question comes from Alex Paris with Barrington Research. Your line is now open.

Alex Paris: Hi guys, thanks for taking my question. I want to congratulate you on the beat and raise.

Speaker Change: Thanks, Alex. Appreciate that. We're excited by it as well.

Alex Paris: Both you, Scott, and Brian said at the end of the call that your targets for 2027 are $550,000 and $90,000 for revenue and adjusted EBITDA. Is that a rounding thing? Are you increasing it? Because I think you said it at Investor Day, $540,000 and $88,000.

Speaker Change: Right, it was actually increased slightly because the start of that, you know, strategic growth plan starts with the mid-range of our guidance, so as we increase that, it increases the 2027 as well. Yeah, so we did make an adjustment up since the investor meeting.

Speaker Change: Is this the first time you've seen it, or did you see it previously? I don't recall.

Speaker Change: No, I think this is the first time, and it will be out on our website later today.

Speaker Change: Great. Well, congratulations on that.

Speaker Change: Here are my two questions. First of all, I wanted to focus on starts. Starts were up more than we had expected.

Speaker Change: We expected 4,600 starts. You came in closer to 5,000 starts at 12%.

Speaker Change: What do you attribute that to, I'm assuming the increase in marketing, and then has that momentum continued into the third quarter? What's your experience in July and August ?

Scott Shaw: In summary, we are on our way to achieving our full full year guidance and our well position for growth in 2025 and beyond. We are transforming our company into an exceptional provider of educational services that meets the needs of America's corporations as well as America's workforce.

Speaker Change: Sure. Well, definitely, we achieved greater success than we were thinking. However, to

Speaker Change: to support that.

Scott Shaw: Finally, I'd like to note, I'll be in Chicago on August 28th where the annual Midwest ID is conference, as well as partaking in barrington's virtual fall investment conference on September 12th to educate investors about the enhanced valuation potential offered through our shares.

Speaker Change: We are seeing continued success moving forward. There definitely is increased demand at a double-digit level.

Speaker Change: for our programs kindpe across the board

Speaker Change: and it really comes down to a lot of execution to achieve those as well as just timing of when some of the starts take place.

Speaker Change: within the quarter. But the basic fact is we see strong demand continuing. That's why we raised our guidance, you know, the midpoint of our guidance is, you know,

Brian Meyers: Now, I'll turn the call over to Brian Myers so we can review some of our recent financial highlights and guidance. Brian. Thank you Scott, good morning everybody and thank you for joining our second quarter 2024 earnings call this morning. I'm pleased to share our financial result along with along with some key operational highlights. Starting with the quarters financial performance total revenue was nearly 103 million representing an increase of about 14 million or 16%.

Speaker Change: and 11%, I guess closer to 11%, and that's where we anticipate we'll come out for the year.

Speaker Change: And, you know...

Speaker Change #100: Above and beyond the renaissance in skilled trades, the appeal of these blue collar jobs that can't be outsourced or replaced by AI,

Speaker Change: you've increased marketing over i think he said in the press le up twomion dollars year-over-year

Speaker Change: Yes.

Speaker Change: Yeah, there is enhanced, I'm sorry Alex, you didn't finish.

Speaker Change #100: i was just going to say and has that had any impact on the cost per lead

Speaker Change: or Cost Per Start, what's going on there? Yeah, Cost Per Start. The good news is we follow that very closely, and the cost per start is relatively flat. You know, it might be up a percentage or two, but nothing significant, and it kind of changes quarter by quarter. Again, it's kind of just timing of when we spend the money and when the students start.

Brian Meyers: Mainly driven by our robust stock growth over the last seven consecutive quarters. During the second quarter, students starts grew by 12.3%. This marks the third consecutive quarter of double digit growth in both revenue and starts. As a result, we had approximately 1500 more students as of June 30th, 2024 compared to prior year, preparing revenue growth for the second half and beyond. As Scott mentioned, the new East Point campuses performing exceptionally well, exceeding enrollment goals and contributing to the company's top line while the East Point campus contributed to our robust stock growth. We also continue to achieve solid organic stock growth from existing campuses, excluding the new East Point campus, we grew our organic campus revenue by 13 million with incremental revenue contributing and operating margin of over 30%.

Speaker Change: I think at the end of the day, though, there is this increased demand. Some people, though, think that people just naturally come to you just because people talk about it. We still have to be out there and in front of people. But as long as we continue to maintain our cost per start, which we have over the last five years, we're going to continue to make those investments and drive greater growth.

Brian Meyers: Now turn to the expenses for the quarter, which has a reminder for comparability purposes exclude one exclude expenses of our new East Point campus during its opening period to pre-opening requests associated with the new and relocating campuses, three other non recurring expenses and for the transitional segment in 2023. For the details on these items are available in the non-gap disclosures of our Q2 earnings release. Total operating expenses were close to 99 million, which is reflective of our growing population.

Brian Meyers: Excuse me, and in line with expectations. Education, service, and facility expenses as a percentage of revenue is down to 42% from 44.4% in the prior year. The majority of the decrease relates to instructional expenses, which increase over prior year due to courts associated with our largest student base, but decrease as a percentage of revenue as we begin to experience efficiencies and benefits from our higher population and our higher learning model. The adjusted EBITDA was $6.2 million for the second quarter compared to $2.4 million in the prior year, representing more than 150% increase.

Brian Meyers: We had an income tax benefit for the quarter of our approximately 500,000, including a discrete item benefit associated with stock besting. For the second half of the year, we expect our effective tax rate to be approximately 30%. Turning to the balance sheet, our balance sheet remains robust, with total liquidity exceeding 100 million, cash and cash equivalent of 67 million, no debt, and working capital of around 50 million. Our capex for the three months was approximately 10 million relating to multiple exciting projects, which will drive growth next year and beyond.

Speaker Change: Makes sense. And here's my last one. I know we're limited to two. By program, population by program starts by program.

Speaker Change: The overall starts number of up 12% was really driven by the transportation and skilled trade side of the business of 21%.

Brian Meyers: First, we continue to manage the buildout of 10 additional programs, which are either a program replication at an additional campus or an expansion of an existing campus. Based on the construction and patient approvals, we expect six programs to be rolled out by year-end and are remaining to be launched in the first half of 2025. Second, we are working towards the opening of three new steady-to-off facilities in 2025, comprised of two campus relocations and one brand new location.

Speaker Change: health care and other professions were down 6% in the quarter. What do you would, and it was up 9% in the first quarter, so it definitely declined in the second quarter. What do you attribute that to?

Speaker Change: A lot of it again is timing of when starts occur and certain times we can have two nursing starts in the quarter, sometimes only one. So in a couple of the campuses are switching of when those starts were taking place year over year. At the end of the day, I'm still expecting growth in the healthcare sector for the full year. I'm not worried about growing that area.

Brian Meyers: We are seeing some delays in the Tommy or a capital spending, which will shift about 20 million to 2025, leading us to reduce our capex guidance for the year. However, we were slightly ahead of a schedule in two of the three projects. Signing with the natural and levertown relocations, both projects continue to make great progress and now are expected to be completed in the first half of 2025. The new use in campus buildout has experienced some delays driving the majority of the capex shift into 2025.

Speaker Change: Our biggest decline was in LPN and it was due to the timing of the starts.

Brian Meyers: As a result, we now anticipate the campus opens towards the end of 2025. Looking ahead to the remainder of 2024, based on these project statuses, we are reducing our full year capex guidance for the 45 million to 55 million. Our second quarter operating financial result, as well as the outlook for the remainder of the year, leads us to raise our outlook for revenue and increase the low-end range of adjusted EBITDA, adjusted net income and student starts.

Speaker Change: Gotcha. Do you still, though, think that auto and skilled trades will increase at a greater rate than healthcare and other professions for the full year?

Brian Meyers: The outlook for guidance has been updated to revenue ranging between 423 million to 430 million, adjusted EBITDA on the range with 39 million to 42 million, adjusted net income ranging between 14 million and 17 million, and student starts growth of 9 to 12%. As a reminder, a full-year financial guidance for adjusted EBITDA and adjusted net income excludes the impact of the East Point campus pre-opening course related to new and relocated campuses, program expansions and non-cash stock-based compensation.

Brian Meyers: Also in terms of depreciation and amazement, we expect a slight increase in the second half of the year, resulting approximately 7.5 million of expense recorded value even over each quarter. Lastly, interest expense is anticipated to be near 500,000 in the second half, evenly dividing Q3 and Q4.

Brian Meyers: In conclusion, we are very pleased with our performance in 2024. We have a solid growth plan to work and continue to explore new opportunities to expand and drive efficiencies. As we highlight in our Q2 investor presentation, under the strategic growth slide that we posted to our website later today, our long-term vision and goal is to generate revenue over approximately 550 million in adjusted EBITDA of about 90 million in 2027. Our team is working diligently together, and we believe we are a well-positioned to achieve this target. We sincerely appreciate the entire Lincoln team, especially our faculty for making a difference each day and changing our students' lives.

Speaker Change: It makes sense, guys. Thank you very much.

Operator: Now I'll turn the call back over to the operator for any questions.

Operator: Operator. Thank you. As a reminder to ask a question, please press store 1-1 on your telephone and wait for your name to be announced. Two would draw you a question, please press store 1-1 again.

Alex Paris: Thanks, Alex.

Alexander Paris: And our first question comes from Alex Parris with Bearington Research. Your line is now open. Hi guys, thanks for taking my question. I want to congratulate you on the beaten raise. Thanks Alex. Appreciate that. We're excited to buy it as well.

Speaker Change: And the next question comes from Stephen Frankel with Rosenblatt Securities. Your line is now open.

Scott Shaw: A couple of quick questions and both you, Scott and Brian, set at the end of the call that you're targets for 2027 or 550 and 90 for revenue and adjusted EBITDA. Is that a rounding thing? Are you increasing it? Because I think you said it at investor day 540 and 88. Right, it was actually increased slightly because the start of that strategic growth plan brought us with the mid-range of our guidance.

Scott Shaw: So as we increased that, it increases the 2027 as well. Yeah, so we did make an adjustment up since the investor meeting. First time you've sounded previously, I don't recall. No, I think this is the first time and it will be out on our website later today. Great. Well, congratulations on that.

Scott Shaw: Here are my two questions. I wanted to focus on starts. Starts were more than we had expected. We expected 4,600 starts. You came closer to 5,000 starts at 12%. What do you attribute that to? I'm assuming the increase in marketing. And then has that momentum continued into the third quarter? What's your experience in July and August? Sure. Well, definitely we are, we achieved greater success than we were thinking. However, to support that, we are seeing continued success moving forward.

Speaker Change: good morning out stillll my thunder but maybe we did stig into health care

Speaker Change: A little bit more.

Speaker Change: yeah

Stephen Frankel: is what's the size of the funnel?

Speaker Change #100: They're relative to the prospect funnel on the skilled trade side. There's still a very good funnel there, or are you finding that...

Speaker Change: People are less interested.

Speaker Change: in this area post-COVID. I know there's plenty of job openings, but what's the interest level like?

Scott Shaw: There definitely is increased demand at a double digit level for our programs kind of across the board. And it really comes down to a lot of execution to achieve those as well as just timing of when some of the starts take place within the quarter. But the basic premise, or the basic fact is, we see strong demand continuing. That's why we raised our guidance, you know, the mid point of our guidance is, you know, at 11%.

Speaker Change: Yeah, interest still remains strong in health care. It's definitely growing. It's up over last year. As I said, I'm very comfortable that our full year health care numbers will be, you know, meaningfully up. Again, our skilled trades and auto are going to be up more, because that is where we're having more replications and expansions take place.

Speaker Change: but overall demand is strong across the board not worried frankly about any demand indicators shifting negatively or or maybe they'll shif more positively but they definitely robust i'd say stment across the board for us

Scott Shaw: I guess closer to 11% and that's where we anticipate will come out for the year. And above and beyond the renaissance in skilled trades, the appeal of these blue collar jobs that can't be outsourced or replaced by AI, you've increased marketing year over here. I think you said in the press release, it was up $2 million year over here. Yes. Yeah, there is in hand. I'm sorry, I should finish. I was just going to say and has that had any impact on the cost per lead.

Speaker Change: I appreciate the update on the cash pay programs in skilled trades and auto. Are there any prospects for replicating that kind of success on the healthcare side?

Speaker Change #107: Absolutely, and you know the health care side of the house is an area that we're putting increased focus on. We recently hired a new individual, a VP of health care, frankly to help us drive that business going forward. So I would anticipate certainly as we get into 2025 sharing more of what those new opportunities will be for us.

Scott Shaw: No cost for start. Yeah, cost for so good news is we follow that very closely. The cost for started is relatively flat. You know, might be up a percentage or two, but nothing significant. And it kind of changes quarter by quarter. Again, it's kind of this timing of when we spend the money and when the students start. I think at the end of the day, though, there is this increased demand. You know, some people don't think that people just naturally come to you just because people talk about it.

Speaker Change: great thank you

Speaker Change: And our next question comes from Eric Martinuzzi with Lake Street Capital Markets. Your line is now open.

Scott Shaw: We still have to be out there in front of people. But as long as we continue to maintain our cost per start, which we have over the last five years, we're going to continue to make those investments and drive greater growth. Makes sense.

Speaker Change: Eric, your line is now open.

Speaker Change #100: as a reminder to ask a question please p ress sar one one on your telephone and wait for your name to be announced

Scott Shaw: And here's my last one I know we're limited to by program population by program starts by program. The starts the overall starts number of up 12% was really driven by the transportation and skilled trade site of the business up 21%. Healthcare and other professions were down 6% in the quarter. What do you attribute that to? A lot of it again is timing of when starts occur and certain times we can have two nursing starts in the quarter, sometimes only one.

Speaker Change #101: and the next question comes from rod sma with b ralley your line is now open

Scott Shaw: So in a couple of the campuses are switching of when those starts were taking place here over a year. At the end of the day, I'm still expecting growth in the healthcare sector for the full year. I'm not worried about growing that area. Our biggest design was in LPN and was due to the timing of the starts. Gotcha. Do you still don't think that auto and skilled trades will increase at a greater rate than healthcare and other professions for the full year?

Rod Sma: yes thank you good morningand thanks for taking my question

Rod Sma: You know, I wanted to understand the starch color a little bit better. So if I heard it correctly, the health care starch were down 6 percent, and that's largely explainable from timing. Is that right?

Speaker Change: My follow-on question is, the X of Atlanta, the East Point

Speaker Change: Georgia Campus, you know what was the start to growth rate and and was Atlanta almost all transportation? Right.

Scott Shaw: Yes, simply because that's where we're replicating our programs as of now. We have a major opportunity we believe to replicate the healthcare programs, but right now we're focused on the skill trades and auto programs. So the answers definitely. Yes. Makes sense, guys. Thank you very much. Thanks, Alex. Thanks.

Speaker Change: So we had good, solid, solid growth, you know, without that new campus.

Speaker Change: Right, and what are the, what are, what is the enrollment you're expecting at the East Point campus?

Speaker Change: so we are mealals out that

Speaker Change #101: Well, I'll just tell you what, we modeled the campus at getting to enrollment around 700-750 students. At the end of this year, we originally thought there might be 300 students, and we're exceeding that.

Steven Frankel: And the next question comes from Steven Frankel with Rosenblatt Securities. Your line is now open. Good morning, Alex, so my thunder, but maybe we'll dig into healthcare a little bit more. You know, it is what's the size of the funnel there relative to the prospect funnel on the skills, on the skill trade side. There's still a very good funnel there or are you finding that people are left interested in this area post-COVID?

Speaker Change: right and

Speaker Change: That makes sense. And the health care start you expect for the year to be positive, growth, any sort of target on that?

Speaker Change: I can't, to be honest with you, I haven't looked at it in that way. All I know is that there is positive growth. I know, Brian , if you have any more information. Yeah, we're flat for the six months and we're expecting the second half to be positive. And again, you know, for our two big programs, there is MA, which was up for this quarter, the second quarter, over 30%. As Scott described, LPN was down, but that was all due to the number of starts we have because it fluctuates from quarter to quarter there. So hopefully that'll catch up in Q3. So we are anticipating to be positive. I don't have the number there.

Steven Frankel: I know there's plenty of job openings, but what's the interest level like? Yeah, interest still remains strong in healthcare. It's definitely growing. It's up over last year. As I said, I'm very comfortable that our full year healthcare numbers will be meaningfully up. Again, our skilled trades and auto are going to be up more because that is where we're having more replications and expansions take place. But overall demand is strong across the board. Not worried, frankly, about any demand indicators shifting negatively or maybe across.

Speaker Change: Got it. Well, that's very helpful. And just my last question on Lincoln 10.0, I see that you have covered 65% you said.

Scott Shaw: I'd appreciate the update on the cash pay programs on skilled trades and auto. Are there any prospects for replicating that kind of success on the healthcare side? Absolutely. And the healthcare side of the house is an area that we're putting increased focus on. We recently hired a new individual, a VP of healthcare, frankly, to help us drive that business going forward. So I would anticipate certainly as we get into 2025 sharing more of what those new opportunities will be for us.

Speaker Change: If I heard that correctly, 65% of the students would be under Lincoln 10.0. And I understand that there are cost efficiencies to be seen.

Unknown Executive: Great. Thank you.

Speaker Change: Are there cost efficiencies to be seen, and where would you see them in the metrics, you know, next year versus this year? That'd be great, some color on that.

Eric Martinuzzi: And our next question comes from Eric Martin Newsy with Lake Street Capital Market.

Speaker Change: As we see the benefits of blended learning coming to fruition, it does provide some better student-to-teacher ratios and better utilizations of the classrooms, which all adds to the efficiency. But it's basically in the instructional line that you'll see the savings.

Speaker Change: daughter

Speaker Change: Thank you for taking my questions. Again, congratulations. Solid results.

Operator: Your line is now open. Eric, your line is now open.

Speaker Change: Thanks Raj. Thanks Raj.

Speaker Change: as a reminder to ask a question please press stre one one on your telephone the next question comes from eric martin newuy with lake street capital markets your line is open

Operator: As a reminder to ask a question, please press star 111 on your telephone and wait for your name to be announced.

Speaker Change: Okay, we'll try this again. Can you hear me?

Raj Sharma: And the next question comes from Raj Sharma with B. Riley. Your line is now open. Yeah, thank you. Good morning. Thanks for taking my question. I wanted to understand the starts color a little bit better. So if I heard it correctly, the healthcare starts were down 6% and that's largely explainable from timing. Is that right? Yes, in my follow on question on is the acts of Atlanta, these point Georgia campus, you know, what was the starts growth rate and was Atlanta almost all transportation.

Speaker Change: We can hear you, Eric.

Eric: Okay, I promise I was not on mute and not sure what happened, but let's dive in here.

Eric Martin: So the 2027 plan, is that based on the existing campus footprint that we have, as well as that new location that's

Speaker Change: Plan for 2026, or is there a build-out beyond the 2026 campus location that's...

Speaker Change: No, it's still the same thing we talked about on the Investor Day. So it's the two relocating campuses and the one campus, the new Atlantic campus. So it's just those campuses. Anything additional will be edited to that and are, you know, the new programs that we discussed.

Raj Sharma: Right. Well, the land is definitely all transportation skill trades, is it against automotive electrical HVAC and welding, and the growth without it was about 5.5 percent. There's a slide in our investor on the website that shows you that. So we had good solid growth, you know, without that new campus. Right. And what are the, what are, what is the enrollment you're expecting at the East Point campus at the end of the year?

Speaker Change: and that

Speaker Change: except for the new one that we anticipate we'll be announcing in the next quarter. It drives us to those results.

Speaker Change: sco

Speaker Change: And then a follow-up on that, the Houston, what specifically is the regulatory or the barrier to rule out there? Why did we have to kick the can on Houston?

Raj Sharma: Well, I'll just tell you what, we model the campus at a getting to enrollment around 700 to 750 students. At the end of the end of this year, we originally thought there might be 300 students and we're exceeding that. Right. And that makes something that the healthcare starts you expect for the year to be positive growth, any sort of target on that. I can't, to be honest with you, I haven't looked at it in that way.

Speaker Change: Building permits, you know, everyone thinks of Houston, I mean Texas is being very open and free with a lot of things, but for whatever reason it took us longer to get some building permits approved.

Speaker Change: Okay, and you said, so new students by the end of 2025, is that Q4 of 25, Q3, or still TV? Yes.

Speaker Change: Yes, at some point within the fourth quarter of 2025, we'll have our first starts at that campus.

Speaker Change: thanks for taking my question

Speaker Change: No problem, glad you were able to connect with us.

Raj Sharma: All I know is that there is positive growth. I know, Brian, if you have any more information. Yeah, we're flat for the six months and we're expecting the second half to be positive. And again, you know, for our two big programs there is MA, which was up for the, for this quarter, the second quarter, over 30 percent. That's Scott described. LPN was down, but that was all due to the number of starts we have because it fluctuates from quarter to quarter there.

Speaker Change: As a reminder, to ask a question, please press star 11 on your telephone.

Speaker Change: Okay, I show no further questions at this time. I would now like to turn the call back to Scott for closing remarks.

Scott Shaw: Thanks, Operator. And we just want to thank everyone for joining our call. As you can see, Lincoln has a lot of positive momentum, and we really see that continuing into next year, and I believe even the year after. There's so much that's happening that we serve and the need for what we do, we see increasing given the demand we hear from employers, and given the trends we're seeing in society, waking up to the fact that there are other opportunities for people to start their careers in a shorter, faster, more economical way. And that's certainly what we're all about at Lincoln Tech. We like to, as we say, we help students put their potential to work, and we look forward to doing that with more and more students.

Raj Sharma: So hopefully that'll catch up in Q3. So we are anticipating to be positive. I don't have the number there. Got it. Well, that's that's very helpful. And just the my last question on Lincoln 10.0, I see that you have covered 65 percent who said, if I heard that correctly, 65 percent of the students would be under Lincoln 10.0. And I understand that there are cost efficiencies to be seen, are there cost efficiencies to see?

Raj Sharma: And where would you see them in the metrics? You know, sure next year, this year, that would be great some color of that. Yeah, you would see them in the educational line because of the increased efficiency that we'll have with faculty. We're starting to see it now, but to your point, we'll definitely see more of it in 2025 as we see the benefits of blended learning coming to fruition does provide some better student to teacher ratios and better utilization of the classrooms, which all adds to the efficiency. But it's basically in the instructional line that you'll see the savings. Got it. Thank you. Thank you for taking my questions again. Congratulations, solid results. Thanks, Ross.

Speaker Change: We look forward to updating you at our next earnings call and we hope you all have a wonderful day. Thank you.

Speaker Change: this does conclude today's conference call thank you for participating you may now disconnect

Operator: As a reminder to ask a question, please press star 11 on your telephone.

Operator: The next question comes from Eric Martin, Newsy with Lake Street Capital Markets. Your line is open. Okay, we'll try this again. Can you hear me? We can hear you, Eric. Glad to hear you. Okay, I promise I was not on mute. I'm not sure what happened, but let's dive in here. So the 2027 plan, is that based on the existing campus footprint that we have as well as that new location that's planned for 2026, or is there build out beyond the 2026 campus location that's?

Operator: No, it's still the same thing we talked about on the investor day, so it's a two relocating campuses and one campus is the new Atlantic campus. So it's just those campuses. Anything additional will be edited to that and are, you know, the new programs that we discuss. And so he all, and it includes all, sorry, Euston as well, I'm sorry, the Atlantic campus, Euston and the two relocating, but not the one that Scott described that will be announcing shortly.

Operator: Yeah, so just to be clear, everything we've announced today except for the new one that we anticipate will be announcing in the next quarter, it drives us to those results. Got to check. And then follow up on that, the Houston, what specifically is the regulatory or the barrier to rule out there? Why do we have to take the can on Houston? Building permits, you know, everyone thinks of Houston. I mean, Texas is being very open and free with a lot of things, but for whatever reason took us longer to get some building permits approved.

Operator: Okay, and you said, so new students by the end of 2025, is that Q4 25, Q3 or? Yeah, at some point within the fourth quarter of 2025, we'll have our first starts at that campus. Thanks for taking my question. No problem, but you were able to connect with us. As a reminder to ask a question, please press star 11 on your telephone. Okay, I show no for the questions at this time.

Scott Shaw: I would now like to turn the call back to Scott for closing remarks. Thanks operator. We just want to thank everyone for joining our call. As you can see, Lincoln has a lot of positive momentum and we really see that continuing into next year and I believe you in the year after there's so much that's happening that we serve and the need for what we do. We see increasing given the demand we hear from employers and given the trends we're seeing in society waking up to the fact that there are other opportunities for people to start their careers in a shorter, faster, more economical way.

Scott Shaw: And that's certainly what we're all about at Lincoln Tech. We like that as we say we help students put their potential to work and we look forward to doing that with more and more students. We look forward to updating you at our next earnings call and we hope you all have a wonderful day. Thank you. This does conclude today's conference call. Thank you for participating. You may now disconnect.

Q2 2024 Lincoln Educational Services Corp Earnings Call

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