Lincoln Educational Services Corporation

Hello and welcome to Lincoln Educational Services second quarter 2026 earnings 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 the question during the 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. I would now like to hand the conference over to Michael Polivio. You may begin.

Thank you, Tawanda. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued a news release reporting financial results for the first quarter, excuse me, for the second quarter ending June 30, 2026, as well as recent corporate development. 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, CEO and President, and Brian Meyers, 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 from 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 the 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 and projection upon which the 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 in Form 10-K and the quarterly report in Form 10-Q filed with the Securities and Exchange Commission. Follow-up 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 follow-up statements are qualified in their entirety by this cautionary statement. and Lincoln undertakes no obligation to publicly revise or update any further 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 re-queue to ask any additional questions. In advance, we thank you for your cooperation. Now, I'd like to 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 the progress Lincoln has made towards achieving our goals for 2026, as well as continued progress towards the 2030 target we communicated earlier this year. We had a strong second quarter as we generated 22.4% revenue growth, 42.4% adjusted EBITDA growth, and increased net income 25% over prior year quarter levels. We also realized a $22 million improvement in operating cash flow for the quarter and further boosted our liquidity and resources to execute our growth strategies with the expansion of our credit facility. As a result of our performance during the quarter and first half of the year and current trends, we are reiterating our full-year guidance while we increase our capital expenditure outlook to advance strategic growth initiatives. Brian will review our guidance in full during his comments. Lincoln Tech is leading the way in an evolving skilled trades marketplace as we have for the past 80 years. As a recognized leader of education and training services for safe, in-demand, rewarding careers in the skilled trades, transportation, and healthcare fields, we are benefiting from the continuously expanding interest across America as the demand for skilled workers exceeds supply. We have focused our strategies on simplifying operations to maximize graduate opportunities and skilled trades which have the highest demand. Our focused programs are for trades expected to remain in high demand as the effects of artificial intelligence deployment impacts white-collar and other jobs across the country. During the first quarter of this year, we achieved student start growth of nearly 20%, and we expected second quarter start growth to moderate to approximately half this rate. While enrollments for the quarter did grow at approximately 9%, our starts growth slowed to 1%. Throughout the quarter we identified changes in our leads and took action to ensure that prospective students were receiving accurate information to make the best decision for their future. With that said, the environment is dynamic as students utilize new AI tools in search for new career opportunities. The good news is that our strong brand and outcomes continues to drive up our organic leads and changes we are making to our website and other digital communications will further enable the large language models to better recognize and highlight our differentiation and superior outcomes. As we look to our second half, we see positive signs that our actions are improving our lead generation results. As per our start calendar, we had very few classes starting in July, but we have a very robust August, which we are expecting to be our company's largest in history. Given what we have achieved in the first half of the year and what looks like a return to robust growth in the third quarter, we remain confident in our full-year student start growth guidance of 10 to 14%. A contributing factor to August's projected strong starts is our reinvigorated high school recruiting platform. Last summer, we started an overhaul and expansion of our high school recruiting team, giving renewed interest by students, parents, and even guidance counselors in the skilled trades. At present, we expect our high school starts in the third quarter to be up more than 15%. While we see improvement this year from these investments, we expect even more growth next year as the teams build on their relationships and reach even more prospective students. During the quarter, we continued to execute our new campus development projects in Hicksville, New York, and Rowlett, Texas. Hicksville remains on schedule to begin enrollment during the fourth quarter of this year, while Rowlett should begin enrolling students in the first quarter of next year. Our efforts to identify suitable facilities in our underserved markets remain at a high pace, and during the quarter, we added another leg to our new market development strategy with the signing of a lease for our Focus Program Campus in Suitland, Maryland. At 36,000 square feet of space, the Suitland Campus is approximately 50% of the size of our traditional campus facility and will initially offer electrical and electrical systems technology and heating, ventilation, and air conditioning programs to meet the exploding demand for employees trained in these skilled trade areas in the metropolitan Washington, D.C. area. The Suitland Campus is our second in Maryland and we are hopeful it will generate similar marketing synergies that we continue to generate in the metropolitan Atlanta market with our East Point and Marietta campuses. The focus program development strategy being deployed in Suitland is expected to involve a $10 million capital investment versus our traditional campus development investment of approximately $25 million. It should produce about $5 million of EBITDA within three years. We are already building out the facility and plan to open during the fourth quarter of 2027. With the development of the Focused Campus Initiative, we've increased our expansion opportunities within and beyond the top 25 MSAs. I'm also pleased to announce that we are finalizing a lease for a 90,000 square foot facility in Tempe, Arizona, which is our first campus in Arizona. We expect it to open by the first quarter of 2028 to serve the greater Phoenix market. This campus will be similar to our Hicksville and Rowlett campuses, offering automotive, electrical, HVAC, and welding. Meanwhile, our other growth initiatives continue to progress. We recently added another member to our corporate development team in our advancing discussions with several corporations involved in developing the data-centered infrastructure needed to support the growing demands of AI organizations. Not only are employees trained in electrical, HVAC, and welding needed to build the centers, the electrical and HVAC trades are needed to maintain the centers to high-performance standards. Given Lincoln Tech's track record at enrolling, supporting, graduating, and placing students, we are excited about helping corporations maximize their potential through providing exceptionally trained skilled trade employees. Our leadership in skilled trades training is increasingly being recognized by third parties. For instance, in July, our Melrose Park, Illinois campus was included in USA Today's America's Top Vocational Schools for 2026. It was the second year in a row Melrose Park achieved inclusion in the list and comes after 81% of the campus' 600 graduates were hired for careers in their field. The USA Today survey evaluates career training schools based on five criteria including graduation rate, graduate salaries, diversity within the student body, anticipated years to pay off the program costs, and social mobility. In addition, our Grand Prairie, Texas campus was named a School of Excellence by the Accrediting Commission of Career Schools and Colleges, recognizing the campus's outstanding performance during its re-accreditation renewal. Earlier, I mentioned the success of our direct high school student recruiting efforts. In addition, we continue to generate substantial interest in our high school SHARE program, where 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. The list of interested school districts gets longer as we await funding decisions on some two dozen requested share proposals we have submitted to districts. If the proposals are accepted and funded, this will be another positive contributor to 2027. We continue to realize operating efficiencies across our Lincoln-Temperano hybrid teaching platform by providing students flexibility to those needing 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 through their highly rewarding careers. Thank you very much. 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 are offered. And we believe this service is positively impacting our student retention rate at our programs open for more than a year, helping to build our already high graduation rate. Striving to provide the best education and training for safe, rewarding, and in-demand careers continues to drive our entire organization forward. Achieving this quest has put us in a position to approach $600 million in revenue for the full year. 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 of $850 million in revenue and $150 million of EBITDA as we continue to expand our leadership position. After 80 years of providing high-quality, life-changing career education, We have 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. We've aggressively worked to increase the visibility of our message by those who can benefit from our training and career preparation and are constantly assessing how we can improve on our delivery. We've made substantial progress on this front in the past several weeks and are excited about the prospects for the second half of the year. 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 and other events with our covering analysts. We will be participating at the Barrington and Lake Street conferences in September as well as a fireside chat with Northland. Now, I'll turn the call over to Brian Meyers so he can review the financial highlights for the second quarter and first half of 2026 and review our reiterated 2026 guidance. Brian.