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

Thank you, and hello, everyone. Legacy Education has issued a news release reporting its financial results and corporate developments for the fourth quarter and full fiscal year ended June 30, 2025. 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 Brandon Pope, Chief Financial Officer. 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 the 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 of those statements being 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. Welcome to Legacy Education's Fourth Quarter and Fiscal Year 2025 Earnings Call. I'm joined by Brandon Pope, our Chief Financial Officer. Fiscal 2025 has been a pivotal year for Legacy Education, reinforcing our leadership in the essential healthcare education sector by delivering outstanding financial results and advancing initiatives that profoundly impact our students, employers, and communities. The sector is grappling with over 1.8 million annual job openings through 2032 as projected by the Bureau of Labor Statistics. Legacy is at the vanguard, equipping individuals with the skills to thrive in high-demand healthcare roles. Our commitment to excellence in education not only drives personal success for our students but also bolsters the nation's healthcare infrastructure, addressing acute workforce shortages with urgency and innovation. Starting with the fourth quarter, we delivered revenue of $17.9 million, up 40.8% year-over-year fueled by a 15.7% increase in new student starts. This performance capped a transformative fiscal year where revenue climbed 39.5% to $64.2 million, propelled by a 41.8% surge in enrollment to 3,101 students at a 26.9% rise in new student starts to 3,194. These achievements represent our 12th consecutive quarter of double-digit revenue growth, demonstrating our team's exceptional execution and the enduring demand for our programs. Our graduate success stories underscore our impact with an 81.8% NCLEX pass rate in nursing and placement rates averaging 74.3% through that and 74.6% through ABHES, our accrediting agencies. We're producing job-ready professionals in fields like nursing, diagnostic medical sonography, and surgical technology, just to name a few. The seamless integration of the Contra Costa Medical Career College has amplified our reach, adding 468 students and diversifying our offerings. We are energized by our strategic developments this year, which are accelerating our momentum. We've secured approvals for three new degree programs and two certificate programs, expanding our curriculum to meet evolving market needs. Achieving initial accreditation from the National League for Nursing Commission for Nursing Education Accreditation, otherwise known as NLN CNEA, for our RN to BSN track is a game changer. It's enhancing our nursing education portfolio and opening doors for more students to advance their careers. Additionally, I'm excited that we have strengthened our governance by appointing two new Board members and establishing an advisory board, bringing fresh expertise to guide our expansion and innovation efforts. These milestones are propelling us forward with renewed vigor. Our six California campuses located in Lancaster, Bakersfield, Temecula, Salinas, Pasadena, and Antioch are ideally positioned and thriving healthcare hubs, supported by our cutting-edge hybrid learning model that blends advanced simulation technology with hands-on training for optimal accessibility and outcomes. We're actively exploring additional branches and acquisitions to extend our transformative education even further. Financially, Q4 net income reached $1.2 million, up 27.6%. On expenses, I want to directly address one item. In Q4, we increased our AR reserve by approximately $700,000. This was to address the fact that we saw a softness in student payments related to our graduate students only. This $700,000 G&A expense charge is tied to graduated borrowers who fell behind in payments. I want to be clear, we're not writing this off; instead, we're taking an increased reserve to be proactive and conservative by addressing this in the fourth quarter. We want to demonstrate our commitment to transparency, discipline, and protecting long-term shareholder value. Brandon will cover this further in his remarks. Even with this charge in Q4, we capped off a year of record growth and momentum. For the full year, net income grew to $7.5 million or $0.59 per diluted share, and adjusted EBITDA increased 31.3% to $11 million. Our robust balance sheet featuring $20.3 million in cash and negligible debt empowers us to invest boldly and grow. I am immensely proud of our dedicated team for their role in these accomplishments, which extend beyond numbers to real world change. With that, I want to pass this over to Brandon for a deeper dive into our financials. Brandon?

Thank you, LeeAnn. Fiscal 2025 marked a year of exceptional financial and operational progress, highlighting our disciplined approach and scalable model. I'll begin with Q4 results followed by a full year comparison to fiscal 2024, drawing from our press release and Form 10-K. Our fourth quarter 2025 financial highlights begin with revenue, which rose 40.8% to $17.9 million from $12.8 million, driven by increased enrollment. Net income increased to $1.2 million from $1 million last year, and EBITDA was $2.1 million, up 133% from $0.9 million last year. In expenses, Educational Services is $9.4 million versus $8.5 million due to our increased staffing required to support increased enrollment, increased rents, increased externship fees, and our investment into our new programs. General and administrative was $6.3 million versus $3.3 million in the prior year, reflecting our investment in marketing, professional fees, as well as the increased AR reserve LeeAnn mentioned earlier. We increased our AR reserve from 5.0% to 9.8% due to our annual AR reserve analysis that indicated a slowness in graduate student payments. Although we have improved efficiencies in financial aid processing and active student payments while in school, we took a very conservative reserve to address this analysis. For fiscal year 2025, financial operating results included revenue growth of 39.5% to $64.2 million from $46 million in the prior year, supported by a 41.8% enrollment increase to 3,101 students and a 26.9% rise in new student starts to 3,194. Net income is up 47.3% to $7.5 million or $0.59 per diluted share from $5.1 million or $0.53 per diluted share last year. EBITDA is up 61% to $10.4 million from $6.5 million, and adjusted EBITDA is up 31.3% to $11 million from $8.4 million last year. In expenses, educational expenses were $34.2 million versus $26.4 million due to our increased staff being required to support increased enrollment, increased rent, externships, and again, our investment into our new programs. General and administrative was $19.3 million versus $13.0 million, again, due to increased marketing, professional fees, and the aforementioned bad debt expense. Our balance sheet shows cash and cash equivalents exceeding $20 million, reaching $20.3 million. Working capital was $23.9 million, total assets were $69.2 million, and stockholders' equity was $41 million. Cash flow was $7.8 million generated from operating activities with minimal debt. Our solid financial position fuels strategic initiatives like program expansion and acquisitions. I'll now turn it over to LeeAnn, CEO, for our strategic outlook and closing remarks.

Thank you, Brandon. As you can see, Legacy Education is energized and ideally positioned to harness the vibrant opportunities in the healthcare education sector, which is indispensable for tackling workforce gaps and enhancing community health. Our strategic roadmap is geared towards amplifying our influence and achieving enduring growth. We're going to continue the enrollment momentum through sophisticated digital marketing and robust employer collaborations, capitalizing on our 26.9% student starts growth, focusing on our high-potential regions. We're going to continue with our curriculum expansion. We're thrilled to roll out our newly approved three degree programs and two certificate programs alongside the prestigious NLN CNEA accreditation for our RN to BSN track. These breakthroughs are supercharging our nursing offerings and attracting top talent. We will continue to add new programs that are needed for the areas that we serve. In our operational innovation, we continue with our hybrid model, enriching it with state-of-the-art simulation and EdTech to improve efficiency and student success while scaling seamlessly. With our governance and expansion, I can't tell you how excited I am about the two new dynamic Board members and our freshly formed advisory board, which will infuse expert insights to propel branching and M&A, targeting accretive opportunities to widen our footprint, all backed by our strong balance sheet. In this resilient sector, our adherence to Title IV funding requirements, strong compliance culture, a focus on superior outcomes, and market-aligned programs equip us to thrive amid regulatory shifts. Compliance is not just a requirement for us; it's a competitive advantage. As Washington advances the comprehensive legislation aimed at expanding access, workforce development, and funding pathways, we believe Legacy Education is uniquely positioned to benefit. With our scale, compliance record, and proven ability to deliver job-ready graduates, we stand at the intersection of policy support and market demand. The combination of operational execution, compliance strength, human impact, and policy tailwinds gives us confidence that as we've moved into 2026, we will fuel our optimism for continued excellence. I'll turn the call over to the operator for some Q&As at this time.

Our first question comes from Mike Grondahl with Northland Securities.

What was the starts number in the quarter? I got the ending enrollment of 3,101, but what was the starts number just for the quarter?

723.

723, Mike, and it's great to hear from you out there.

Okay. And the new programs, the three new degree programs and the two certification programs, when do those start? And is there a rough range of revenue that cohort might deliver in '26 or '27? How do we think about those?

So Mike, we don't give forward projections, but what I can tell you is that we did indicate in the press release that we anticipate starting these programs in October. And we have built a pro forma budget around those.

Got it. I don't want forward guidance or anything, but could those programs start with 100 students next year, or maybe a couple hundred? It would be helpful to know the size or capacity you've created.

We generally have the capacity to enroll up to 30 students for each of our degree programs at the campuses where we start. When we launch a class, we can accommodate that number in each of our degree programs, and we can implement a similar setup for our certificate programs.

Got it. And how many starting dates throughout the year? Is there just one? Or would these have a second start date?

Those typically, and this information, our starts are located on our website and part of where the public can see, we typically start our degree programs a couple of times a year. So about every 4 to 6 months, we start our degree programs, and we start our certificate programs roughly about every 8 weeks.

Okay. That's helpful. And then the $700,000 reserve you talked about, can you give us a little bit of color on what is the outstanding balance that you took that against? Is that multiple millions of dollars, like you took a $700,000 reserve, what was the balance, roughly how many students in that cohort? A little more color there would be helpful.

Yes. We do an analysis annually and new analysis of all of our students, whether they're active or inactive, and we actually do it sometimes even at a program level. And we'd also do it on a grad level. Our experience is that grad students pay pretty timely, and so we don't really focus our efforts on that collection rate too much. We focus it on active students within our financial processing and payments while they're in school. But we did this analysis, and we determined that there is a significant or not significant amount of graduate students who are still making payments. Part of that is reflected in our balance sheet in the long-term area, which increased about $600,000 to basically $1.9 million, I believe. And that is what that's based on. Total, all grad students is about $2 million to $2.5 million we reserved some of that regarding these things that are slowing in their payments. So that's about what that reserve analysis indicated for us. Again, it is something that we look at. We'll probably look at every quarter now versus annually and see if we see any trends like that. It's a very conservative reserve estimate; that's why we didn't write it off. We just reserved for it. We have internal expectations of having a process within us to address this particular thing. And like anything we do, we'll attack that vigorously. And we believe that we will at least get enough to recover that reserve, if not more. But we thought it would be important to take a conservative approach to that reserve.

Okay. And then one more, the tax rate came in at about 45%. I think we were at 28%. Any reason for the tax rate being so high? And how does it look going forward?

The tax rate was not 45%; it was between 31% and 32%. This was due to a return to provision adjustment from last year, which was approximately 28%. As we adjusted the return to provision, it should have been closer to 30%. Therefore, the increase this year reflects that change. For this fiscal year, the tax rate will be around 30%.

Our next question comes from Jeffrey Cohen from Ladenburg Thalmann.

So a few questions. Firstly, I was hoping I would hear the word cardiac or neuro, any commentary there at all?

They are active programs, which you know that we've already been enrolling in, and we have added to our additional campuses. So cardiac is really doing well for us.

Got it. So with now your 7 facilities, are you capacity constrained at any point? I mean, the growth rate is the growth rate, but are you shy on square footage? Do you need more buildings or square footage to accommodate the organic growth?

So we have gotten the approvals in the Central Coast campus, and remember, we added 25,000 square feet to that. And so we are definitely well positioned there. As you saw where Brandon talked about the increase in expenses, some of that was due to rent; that is where we have taken our existing Lancaster and Temecula locations, and we have added additional square footage to support the lab additions that we are putting into for these new program approvals. The way that we're delivering the education in the hybrid model, we've taken on additional square footage for the labs, but we've got things very well under control as it relates to the students learning online and just coming into the labs.

I understand the AR of $700,000 for Q4, but were there any one-time factors that contributed to the G&A number being higher than we expected? Were there any one-time or seasonal considerations to mention?

Yes. There's some seasonality in that in professional fees that relates to legal, regulatory, audit, and we also had some enhancements in our SIS system, things of that nature that are somewhat onetime or seasonal in nature that reflect in our margin.

Got it. And I know I'm going to get no forward-looking statements out of you as far as revenues go, but maybe, Brandon, you could remind us of the seasonality of your business and how that relates to each quarter and particularly the upcoming Q1, which is the September quarter.

Yes. As you know, we can't really do that, but there's certainly seasonality involved when it comes to our first and second quarters. Our first quarter generally is a pretty solid quarter. Our second quarter, which is in December, is very seasonal because of the holidays. Generally, that's a depressed quarter, and then we have a pretty robust Q3 with a middle road Q4. So that seasonality will still continue. But again, you can kind of assume a continued growth rate within the seasonality.

As there are no further questions, I will now turn the call back to LeeAnn Rohmann for closing remarks.

Thank you, operator, and thank you all for joining us. Fiscal 2025 was a landmark year for Legacy Education with strong financials and the strategic leads that affirm our commitment and a crucial sector beyond the metrics for catalyzing change, empowering thousands of students for fulfilling healthcare careers and fortifying essential services nationwide. I'd like to thank our passionate team, our students, and our stakeholders. They are the driving force behind the success and to our investors. Your confidence inspires us. We're poised to innovate, expand, and deliver exceptional value, shaping a brighter future in healthcare education. I want to thank you again for being part of the Legacy Education journey and wish you a great rest of the day.

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