Good day and welcome to the Legacy Education, Inc. Second Quarter Fiscal 2025 Earnings Conference Call. Today's call is being recorded and broadcast live. It will also be archived on the Legacy Education website for future reference. To kick off the call, I will like to turn it over to Nicole Joseph, Senior Vice President of Marketing, Legacy Education Inc.

Thank you and hello everyone. Legacy Education has issued a news release reporting its financial results and corporate developments for the second quarter and six months ended December 31st, 2024. The release is available in the Investor Relations' section of our corporate website at legacyed.com. With us today on the call are LeeAnn Rohmann, Chief Executive Officer; and Matt Berry, Senior Vice President, Financial Planning and Analysis. On today's earnings call, statements made by Legacy's management regarding the company's business, which are not historical facts, may be forward-looking statements as 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 current 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 that may influence the accuracy of these statements and projections upon which the 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 Factors section of the annual report on Form 10-K and the quarterly report on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements are based on the 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 Legacy 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. I will now hand the call over to LeeAnn Rohmann, CEO of Legacy Education. LeeAnn, to you.

Thanks, Nicole, and good afternoon everyone. First, I want to extend my gratitude to our employees, students, shareholders, and partners for their dedication and support as we continue to build a premier provider of career-focused education. While the second fiscal quarter reflected the seasonal trends we anticipated, we are energized by the strategic investments we've made in our team, facilities, and programs. Additionally, our recent acquisition of Contra Costa Medical Career College, which closed on December 18th, has been consolidated into our financial results for approximately two weeks of the second fiscal quarter. We anticipate the full financial impact of this strategic accretive addition to be reflected in our upcoming quarterly reports. Finally, I am thrilled to announce that we reached a pivotal milestone in our growth strategy, having surpassed more than 3,000 enrolled students as of January 31st, 2025, a testament to our team's dedication and the increasing value of our educational offerings. The second quarter of fiscal 2025 has been another strong period for Legacy Education, demonstrating consistent growth, operational excellence, and strategic momentum. Our Q2 2025 business highlights: Revenue grew 29.2% year-over-year to $13.6 million, driven by enrollment growth and expansion in high-demand healthcare programs. The new student starts increased by 3%, reflecting strong market demand and improved outreach strategies. Our net income reached $1.4 million with earnings per share at $0.10. The student population grew 44.8% year-over-year to 2,768 students, fueled by strong enrollments and the Contra Costa Medical Career College acquisition. EBITDA was $1.8 million and adjusted EBITDA was $1.9 million. We announced our new program approvals, which include Surgical Technology, Sterile Processing, Pharmacy Technician, and Dental Assistant, all rolled out at our Central Coast College campus in Salinas. We have already enrolled students in Surgical Technology and Dental Assisting, while Sterile Processing and Pharmacy Technician are soon to follow. The recent Los Angeles fires came within three blocks of our Pasadena campus. While we were fortunate to avoid structural damage, we immediately executed our emergency preparedness plan, and the campus was temporarily shut down, transitioning students online for less than a week with no downtime. Unfortunately, some employees and students lost their homes. Our sister campuses quickly rallied, organizing donation drives and fundraising initiatives to support the affected members of our community. I really want to give a heartfelt shout-out to Legacy Education employees and the students for their incredible efforts during this horrific time. I am pleased to report that Pasadena is now back to business as usual. These results validate our commitment to delivering a high-quality education, addressing critical workforce gaps, and enhancing shareholder value. Now, moving on to operational updates. In our healthcare program expansions, we continue to scale up our Nursing, Medical Assisting, and Imaging programs such as ultrasound, cardiac, and MRI. We are strengthening our relationships with our healthcare providers and adding new externships and job placements. In our technology and innovation, we expanded our use of hybrid learning models, increasing student flexibility and engagement with the full implementation of our learning management system, Blackboard Ultra. We have also integrated advanced simulation technology to enhance practical training, specifically focused on our Nursing programs and Imaging programs. As it relates to our campus growth and acquisitions, we are pleased with the final integration of the Contra Costa Medical Career College that closed on December 18th. This is unlocking new market opportunities for us, and we are adding 14 more programs. We are continuing to identify additional acquisition targets to expand our geographic footprint. In the regulatory environment, we are closely monitoring discussions within the Department of Education regarding potential changes and regulations affecting proprietary education. While some for-profit institutions face challenges, Legacy Education remains confident in our standing. Our focus is on high-demand allied health programs, where employers are eager for skilled professionals, which positions us well. We continue to work with regulators to ensure compliance and maintain our mission to provide career-focused education that leads to employment opportunities. With these advancements, we are positioning Legacy Education as a leader in career-focused training. As I move to the financial results, unfortunately, Brandon Pope, our CFO, could not be with us today. He had a minor, but not serious medical procedure this morning. He is doing fine and will be involved in post-earnings callbacks beginning tomorrow morning. In the absence of Brandon, I will now turn it over to Matt Berry, Senior Vice President for Financial Planning and Analysis, to walk you through our financial results. Matt?

Thanks, LeeAnn. I'm pleased to report another quarter of strong financial performance. Here's a summary of our key metrics: For Q2 2025, revenue was $13.6 million, reflecting 29.2% growth year-over-year. Net income was $1.4 million, an 8.5% increase year-over-year. EBITDA was $1.8 million, representing a 3.6% growth year-over-year. Adjusted EBITDA was $1.9 million, marking a 10.1% growth year-over-year. Cash and liquidity stand at $16.9 million in cash reserves, ensuring financial flexibility. For the six months ended December 31st, 2024, revenue totaled $27.6 million, a 32.1% growth year-over-year. Net income was $3.5 million, reflecting a 47.9% growth year-over-year. EBITDA was $4.5 million, a 43.8% growth year-over-year, and adjusted EBITDA was $4.7 million, showing a 49.5% growth year-over-year. Our financial position remains strong, and we are well-positioned to sustain profitable growth. I will now turn it back over to LeeAnn Rohmann, CEO, for our strategic outlook and closing remarks.

Thanks, Matt. As we look at our strategic outlook, our focus remains on enrollment growth, expanding our marketing reach and partnerships to drive new student starts. We are continuously looking at program expansions by launching additional healthcare and technical programs that are aligned with industry demand. In terms of operational efficiency, we will optimize costs while investing in growth initiatives, and we continue to explore selective acquisitions to enhance our educational portfolio. Regarding regulatory aspects, we have confidence that despite ongoing scrutiny of the for-profit education sector, Legacy Education remains well-positioned due to our focus on high-need healthcare careers. Employers in allied health fields continue to express urgent demand for our graduates, reinforcing the stability of our business model. In closing, as we move forward, Legacy Education is well-positioned to continue its growth trajectory. We're committed to empowering students, driving shareholder value, and expanding our market presence. I sincerely thank our Legacy Education family for their resilience and support during the Los Angeles fires; the way our team rallied together is a testament to our mission and values. I want to thank you for your continued support and confidence in our vision. With that, I'll open the floor for Q&A.

Thank you. We will now begin our question-and-answer session. Our first question comes from Jeff Cohen with Ladenburg Thalmann. Please go ahead with your question.

Hi LeeAnn and best regards to Brandon. Congratulations on the great quarter. A couple of questions for you. Firstly, could you hypothesize or talk about the current administration and maybe some of the effects that it may have upon support and funding for current students and future students, any anticipated changes in processes in place?

Hi Jeff, it's great to hear from you, and thank you for your question. We continue to monitor what is being discussed with regard to the Department of Education. We actually don't see any challenges or issues related to funding for the current programs that we are teaching. We do see that this current administration seems to be looking at some of the regulations around gainful employment and borrower defense. We believe that they may be lightening the requirements and/or ensuring that the type of reporting that has been in place in the past will be more streamlined and effective instead of just becoming a burden for us as schools. However, I'm not concerned in any way regarding the discussions happening in the Department because of the programs that we are teaching and the academic rigor of our delivery, which helps people get trained and into the workforce more quickly.

Okay. Fantastic, that's good to hear. Could you mention Surgical Technology? Is that a new program? Is it an associate program? What's the length of that?

It is an associate degree program. It is a new program that we received approval for in the first quarter, and we have rolled out that program in our Salinas campus. It was one of the offerings that we acquired with the Contra Costa Medical Career College.

Okay, great. And just one more, if I may. Could you talk a little bit about M&A, not so much any anticipatory comments, but more about the environment, pricing, and the mindset of some of the buyers and sellers that changed or remain the same recently? Thank you.

Absolutely. The M&A pipeline continues to be strong, with many single-owner institutions, mom-and-pop schools that have been in business for quite some time. There are many quality institutions out there that are accretive and are looking for opportunities to exit. So, our pipeline continues to build, and we are assessing our strategic approach to potentially move outside of California and into the right programs that are critical needs where we believe our model can easily fit.

Wonderful. LeeAnn, thanks for taking our questions.

Thanks Jeff. Good to hear from you.

Your next question comes from Mike Grondahl with Northland Securities. Please state your question.

Hey LeeAnn, thank you. In the December quarter, any programs stick out that were maybe stronger than anticipated in terms of enrollment?

Hi Mike, great to hear from you. As we look back at December and the closing of that quarter, the programs that truly stood out to us were our Cardiac Sonography, our MRI program, and then our Nursing programs, including vocational nursing and our additional starts for RN.

Great. And in terms of CCMCC, the integration, it sounds like that's going well. But you also mentioned something about 14 more programs or just new markets and 14 programs. Can you expand on that a little? I just want to make sure I understand what you meant by that?

Sure. With the acquisition of Contra Costa, that added 14 programs, which they were currently offering. So, we integrated those into our existing 33 programs. Some of the new programs, such as Sterile Processing and Surgical Technology, we got approval for before we closed the acquisition and are excited about the way this school has integrated into our current Legacy Education institutions. We're looking forward to utilizing their programs effectively within our existing structure.

Got it. And then kind of a follow-up question on the acquisition pipeline. With the new administration in November, did you see any change in the pipeline? Did anything move in your favor with the new administration as far as admissions go?

We have actually seen a change in terms of interest. Some people that were sitting on the fence regarding their decisions to stay in or exit are now viewing this as an opportunistic time to get out, which has led to an increased pipeline since that time.

Got it. And then maybe lastly, any trends to call out for January and February, just in terms of enrollment or anything you saw as we started calendar 2025?

The trends I would highlight are positive. The leads look good, and we are performing according to the projections that we have set forth. I can tell you that we're seeing more and more people interested in the programs we are currently offering, and we are very optimistic about the two weeks we were able to provide on the Contra Costa. We are confident that Q3 will bring a strong performance, and we look forward to the next earnings call.

Got it. In other words, demand has stayed pretty robust?

Yes, very robust.

Got it, great. Thanks a lot.

Thanks, Mike. Good to hear from you.

Thank you. And ladies and gentlemen, this concludes today's call. Thank you for joining us and have a great day.