Lincoln Educational Services Corporation

Good day, and welcome to the Lincoln Educational Services first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will 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, press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Michael Polibiu. Please go ahead.

Thank you, Sherry. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued a news release reporting financial results for the first quarter ended March 31, 2026, 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. Statements made by Lincoln's management on today's call regarding the company's business that are not historical facts may be forward-looking statements as term is 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 and may influence the accuracy of the statement in projection on which segmented statements are based. Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the risk factor section of the annual report on Form 10-K and the quarterly report on Form 10-Q filed with the Securities Exchange Commission. Our look at statements are based on information available at the time those statements are made and management's good faith to lead 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 link themselves to two questions and then re-queue to 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 of Lincoln Educational Services.

Scott, please go ahead. Thank you, Michael, and good morning, everyone. Thank you for joining us today to recap our outstanding first quarter. As we reported during our Investor Day presentation on May 9th, I'm sorry, March 19th, we expected a strong first quarter, and we did achieve 19.5% student start growth. Fully half of this student start growth came from our organic operations meaning those campuses and programs opened before 2025. We believe this metric is a solid proof point that Lincoln Tech is leading the way in an evolving skilled trades marketplace. As a recognized leader of education and training services for safe in-demand rewarding careers, we are clearly benefiting from the expanding interest across America in skilled trades training as employer demand for skilled workers continues to exceed supply. Some of this interest is driven by the growing concerns about the negative impact of artificial intelligence on white-collar jobs, especially in the technology and finance fields. A greater contributor is the attention created by the robust salaries bringing you solidly into the middle class and ever-increasing employer opportunities. These factors are helping to drive the skilled trades and the placement of Lincoln Tech graduates in rewarding long-term careers like HVAC, electrical, automotive technician, welding, and healthcare. At Lincoln, we have focused our strategies on simplifying operations to maximize opportunities at both existing campuses and at new Greenfield campuses. Our successful execution during the first quarter led to 22.5% revenue growth, nearly 85% adjusted EBITDA growth, and more than doubling our net income. Attesting to the improving efficiencies we are generating throughout our operations, we also generated cash from operations during the first quarter for the first time in 10 years. Our financial performance, as well as the current trends in our business, are leading us to increase our 2026 guidance, which Brian will review in a few minutes. The campus relocations and openings executed in 2025 to address underserved markets are all meeting our expectations. and all the program expansions at existing campuses are contributing to our strong start growth. In February, we launched the most recent program expansion with the opening of electrical program at our South Plainfield, New Jersey campus. In addition, as we previously reported, we began re-enrolling new students at our Paramus nursing program in January, which contributed to overall healthcare starts increasing 5% after declining in the fourth quarter. Our Hicksville, New York, and Rowlett, Texas new campus development projects remain on schedule. Hicksville is scheduled to begin enrollment during the fourth quarter, while Rowlett should begin enrolling students in the first quarter of 2027. Our efforts to identify suitable locations to expand into other underserved U.S. markets remains at a high pace, and we are hopeful we will be able to report additional Greenfield location expansions when we report our second quarter results in early August. Our other growth initiatives continue to be implemented. Negotiations with existing corporate partners to expand customized tailored education and training programs are underway, and we are constantly exploring new partnerships with a variety of corporate and governmental organizations, the most recent being the agreement we signed with New Jersey Transit, under which our Workforce Link Division is providing diesel and electrical systems training to New Jersey Transit technicians at New Jersey maintenance facilities. We also have several projects underway to build our high school starts, increase veteran enrollment, both of which are designed to generate longer-term results beginning in 2027. For instance, we have expanded investments in targeted high school initiatives that are leading to greater interest among students, parents, and school districts. At the same time, in further reflecting the evolving marketplace, 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 Lincoln classes during their junior and senior years and then continue after high school to gain their certificate in less time, which accelerates their entry into a rewarding career. There are currently more than two dozen requested high school share proposals under review by school districts, all of whom are keenly interested in offering quality skilled trades programs, but are waiting to see if they have dollars in their budgets to fund the programs. This is another initiative that is likely to see progress as we move into 2027. Meanwhile, we are expanding our efforts to educate government officials on the benefits of our education and training to their constituents. For instance, in April, we were honored to host Secretary of Education Linda McMahon at our Shelton, Connecticut campus, where our HVAC, electrical, LPN, and medical assistant students demonstrated some of the skills they have acquired while attending Lincoln Tech. The current administration is a huge proponent of skilled trade training and keen to understand how students can learn the in-demand rewarding skills needed to close the skills gap in America. Our leadership and results for our students are helping governments at all levels understand the possibilities. At the state and regional level, we were also honored to host Connecticut Governor Ned Lamont at our New Britain campus where he experienced Lincoln Tech's role in training electricians and HVAC technicians. And in Maryland, we've worked with the state to hold our third career quest. You may recall last year, we helped fund a high school career event that was attended by 500 high school students. This year, the event attracted more than 1,700 students. Just another example of the expanding interest in skilled trades training for in-demand rewarding and safe careers and Lincoln Tech's leadership role in helping students achieve their goals. We believe our Lincoln-Tempano hybrid teaching platform continues to play a major role in our growth. The platform provides students flexibility to those needing to balance work and life while earning their certificate or degree. We've 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 during the first quarter and fully anticipate this trend continuing throughout the remainder of the year. While our Lincoln 10.0 hybrid teaching platform continues to realize increasing levels of instructional efficiencies for the company, our instructors and our students, we are also investing some of the gains from these efficiencies in programs and processes to continuously drive improved student outcomes. For instance, we are providing emotional and life support to help students face the challenges they experience in pursuing a new career while holding down a job and or raising a family. This service has positively impacted our student retention rate at our programs open for more than a year, helping to build on our already high graduation rates. The strong start to the year illustrates the substantial progress we have made towards achieving our objective of providing the best education and training for safe, rewarding, and in-demand careers. It has also enabled us to raise our guidance, which Brian will review in a moment. We now see achieving $600 million in revenue for the full year as a growing possibility. Our momentum as well as the availability of resources from our recently increased credit facility brings us another step closer to achieving our 2030 objectives laid out during our Investor Day presentation on March 19th of $850 million in revenue and $150 million of adjusted EBITDA as we continue to expand on our leadership position. After 80 years of providing high-quality, life-changing career education, We've amassed an unmatched 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 providing a unique proven model 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. Before I turn the call over to Brian, I'd like to note we will be continuing our investor outreach efforts over the next few months by attending conferences and conducting non-deal roadshows with our covering analysts. Tomorrow, we'll be attending the Needham Technology, Media, and Consumer Conference in New York City. The following week, we'll be attending the LD Microinvitational and B. Reilly Institutional Conference, both in Los Angeles. Next month, we'll be attending the Rosenblatt Securities Conference East Coast Ideas Conference, and the Northland Securities Conference. Additionally, we'll be doing a West Coast non-deal roadshow with Barrington Securities and a non-deal roadshow with Texas Capital in New York City at the end of June. I believe this level of activity reflects the rising interest in the Lincoln Tech story from investors attracted to our track record and growth profile. 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? Thank you, Scott, and good morning, everyone.