Lincoln Educational Services Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the fourth quarter 2025 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 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 1-1 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Michael Poliview. Please go ahead.

Thank you, Michelle. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued news release recording financial results for the fourth quarter and full year-end of December 31, 2025, as well as recent corporate developments. 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 are Scott Shaw, CEO and President, and Brian Myers, Chief Financial Officer and Executive Vice President. Today's call is being recorded and is being broadcast live on the company's website. A replay of the call will be archived on the company's website as well. Statements made by Lincoln's management on today's call regarding the company's business that are not historical facts and may be forward-looking statements as a term identified in federal securities laws. The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance. 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, may influence the accuracy of the statement and protection upon which the segmented statements are based. Factors that may affect the company's results include, excuse me, but are not limited to the risks and uncertainties discussed in the risk factor section of the annual report on Form 10-K and the quarterly report on Form 10-Q-5 with the Securities and Exchange Commission. Further look at statements are based on information available at the time those statements are made and management's good faith belief as of the time with respect to future events. All forward-looking statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes no obligation to publicly revise or update any forward-looking statement, whether as a result of new information, future events, or otherwise, after the date thereof. One other housekeeping matter. During the Q&A portion of the call today, we would ask questioners to limit themselves to two questions and then we ask any additional questions. In advance, we thank you for your cooperation. Now, I'd like to turn the call over to Scott Shaw, CEO and President. Scott, please go ahead.

Thank you, Michael, and good morning, everyone. Thank you for joining us today to recap our exceptional fourth quarter and full year operating and financial performance, as well as introduce our guidance for 2026. Lincoln Tech is riding the building interest across America in skilled trades training as employer demand for skilled workers continues to exceed supply and the public's questioning of the value of the traditional four-year college education continues to grow. In addition, concerns about the negative impact of artificial intelligence on white-collar jobs, the growing awareness of the robust salaries that solidly bring you into the middle class, and ever-increasing employer opportunities have fostered demand for training in the skilled trade. While we read about tens of thousands of jobs being eliminated by major corporations around the country, the placement of Lincoln Tech graduates in rewarding long-term careers like HVAC, electrical, automotive technician, welding, and healthcare have hit recent highs and shows no signs of letting up. At Lincoln, we have focused our strategies on maximizing our opportunities in this increasingly receptive environment. The successful execution of these strategies has resulted in solid growth throughout our core operations, while new programs at existing campuses and new Greenfield campuses have expanded our growth. Together, these factors led us to exceed our financial guidance for 2025 and have set the stage for consistent long-term growth and shareholder returns in the years ahead. During the fourth quarter of 2025, we achieved 15.7% student start growth, and we have now grown student starts for 13 consecutive quarters. While the new campus openings and program replications at existing campuses meaningfully contributed to the overall increase, student starts at our programs operating for more than one year grew by 4% on a same campus and same program basis. This core growth was a major contributor to our near doubling of net income and a 51.7% increase in adjusted EBITDA during the fourth quarter. We also generated double digit increases in total student population and total revenue over last year's fourth quarter. During 2025, we completed the most ambitious expansion in our company's recent history. We relocated our Nashville, Tennessee campus which has been operating for more than 100 years to a new state-of-the-art facility atop a hill overlooking the city. Once our existing automotive technician and welding programs were relocated to the new campus, we introduced our HVAC and electrical programs to the Nashville market and renamed the campus the Nashville Auto Diesel College. This impressive facility will host our upcoming Investor Day in less than a month on March 19th. We also relocated our Philadelphia campus and its highly successful automotive technician program to a new facility in Levittown, Pennsylvania, which is just as impressive as our Nashville campus. This 90,000 square foot building now houses newly opened HVAC electrical and welding programs, as well as the automotive program, and provides Lincoln Tech with ample space to grow over the coming years to help Pennsylvania employers meet demand for skilled workers. 10 days ago, we celebrated the campus's initial success in classes with a grand opening attended by local and regional government and corporate leaders. Our third campus opening during 2025 occurred in our newest market, Houston, Texas, where facility matching those in Nashville and Levittown began classes in late September. The Houston campus is our second greenfield expansion during the past decade and adds to our presence in the Texas market where some 240,000 new jobs demanding skilled trades training are expected to be created over the next six years. We held the grand opening of the Houston campus last Wednesday, and like all the campuses opened in 2025, the initial enrollments are meeting or exceeding expectations and are expected to be a major contributor to our continued stark growth in 2026. Our new campus development efforts were expanded during 2025 and we now aim to initiate two new campus projects each year. In 2026, we are focusing our developing new campuses in Hicksville, New York, and Rowlett, Texas. Hicksville is on schedule to open during the fourth quarter of this year, while Rowlett is expected to begin classes in the first quarter of 2027. Both campuses will provide HVAC, electrical, automotive technician, and welding training programs, and expand Lincoln's presence in growing metropolitan locations. In the case of Hicksville, it's metropolitan New York, where we have a very successful automotive technician and electrical program in Queens. In the case of Rowlett, it's metropolitan Dallas, where our Grand Prairie campus has been one of our most successful operations. The adding of a second campus in an underserved growing metropolitan market has been a most successful strategy for Lincoln. first executed at our East Point campus in Atlanta, which opened in 2024. The demand for our programs at East Point exceeded our initial expectations, and in 2025, we signed a lease to build out an additional 10,000 square feet of space at that facility. We expect to complete this expansion in 2026. In addition to new campuses, we have successfully executed the bulk of our program replication strategy at existing campuses. However, in January of 2026, we opened an electrical program at our Plainfield, New Jersey campus, which was the 12th replication at an existing campus during the past two years. Like new campuses, these replications are significant contributors to our 15% start growth during 2025 and our outlook for continued start growth in 2026. However, I want to emphasize that our core business is also very strong, with approximately half of this year's growth coming from campuses and programs that have been open for more than a year. We believe our Lincoln 10.0 hybrid teaching platform is also playing a major role in this growth by providing flexibility to our students who often need to balance work and life while earning their certificate or degree. We have achieved this flexibility by combining hands-on learning at campus facilities with a component of classroom work delivered through online instruction, which reduces the time needed to complete many of our curriculums and accelerates our graduates to their highly rewarding careers. We have realized instructional efficiencies, space efficiencies, and organizational productivity through Lincoln 10.0 and anticipate this trend continuing during 2026. Meanwhile, we continue to evaluate opportunities to expand into other underserved U.S. markets and build on our core operations growth. For instance, we've expanded investments in targeted high school initiatives that are leading to greater interest among students, parents, and school districts. At the same time, and further reflecting the shift in mindset, high schools are reaching out to us to explore how to offer our skilled trades programs to their students. Under what we call our high school share program, students attend linking classes during their junior and senior years of high school, and then continue after high school to gain their certificate in less time, which accelerates their entry into a rewarding career. Our corporate partnerships are also important source of additional profitability and hiring opportunities for our students. A couple of weeks ago, we signed an agreement with New Jersey Transit under which our workforce link division will provide diesel and electrical systems training to New Jersey transit technicians at New Jersey maintenance facilities. In addition, we expanded our highly successful partnership with Johnson Controls with a new initiative that will provide technicians for their growing data center AI business, and Container Maintenance Corporation also reached out to expand training to even more of their workforce. Landing new accounts while expanding existing relationships clearly demonstrates Lincoln Tech's ability to deliver high ROI training to employers desperate to grow their workforce. The opportunity ahead for our Workforce Link Division is to effectively communicate the value proposition that we provide so we can meaningfully capture more business. Our 2026 guidance illustrates our confidence in continuing the growth trends at both existing and recently launched operations going forward. We now believe we could approach the $600 million revenue level for the full year. We have made great strides during 2025 at reducing our bad debt levels. This progress, along with our other operating efficiencies being realized throughout our operations, presents the opportunity to build on the exceptional adjusted EBITDA growth we experienced during the past year while further enhancing the Lincoln student experience. We have established a standard of excellence within our programs that meet or exceed all regulatory standards. and we've continued to build our student placement rate in rewarding long-term careers. Our outlook for the year ahead is robust, and we look forward to presenting a full five-year roadmap during our Investor Day at our new Nashville campus on March 19th. For nearly 80 years, Lincoln has remained focused on delivering high-quality, life-changing career education, and no one else has our combination of longevity, scale, and proven experience. By continuing to execute our strategies to expand our network of schools and replicating our most in-demand programs at our existing campuses, we are well-positioned to help America close its chronic and severe skills gap by meeting the growing demand for more talented men and women to enter the skilled trades. Finally, I'd like to note, aside from the Investor Day on March 19th, we'll be continuing our investor outreach efforts and continue to attend conferences and do non-deal roadshows with our covering analysts. Now I'll turn the call over to Brian Myers so he can review the financial highlights for the fourth quarter and full year 2025 and our 2026 guidance. Brian.