Thank you all for joining us for the Q1 2020 Lincoln Educational Services Earnings Conference Call. I will now turn the call over to Mr. Michael Polyviou. Please proceed.

Thank you, Jimmy and good morning everyone. Before the market opened today Lincoln Educational Services issued its release reporting financial results for the first quarter ended March 31, 2020, 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, President and CEO; and Brian Meyers, Chief Financial Officer. Today's call is being broadcast live on the company's website and 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 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 or results. 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 the projections upon which the segments and 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 at that 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 statements, whether as a result of new information, future events or otherwise after the date thereof. Now I'd like to turn the call over to Scott Shaw, President and CEO of Lincoln Educational Services. Scott, please go ahead.

Thank you, Michael, and good morning everyone. In light of what is an extremely challenging period in our country, we appreciate you taking the time to join our call this morning. We have our entire Board of Directors. We hope the impact of the COVID-19 pandemic on you and your families has been as limited as possible especially from a health perspective. I'd also like to acknowledge the innumerable contributions being made by Lincoln graduates serving on the front lines in an effort to contain the virus. We thank them as well as all the frontline responders in the communities where we operate for their service. While many of you know the history of Lincoln Tech, I'd like to take a moment to describe who we are as a company. In 1946, our founder Warren Davies had a clear vision to serve our returning World War II servicemen and women by providing them with hands-on skills to support their families and build a better post-war world. From our beginning, we possessed a spirit of optimism, dedication and service. And over the years, we've added resiliency, adaptability and courage. It is the sum of these qualities that has enabled us to effectively respond to the COVID-19 pandemic. Furthermore, we have always believed that our graduates are the nation's unsung heroes making significant contributions to the economy and their communities. But now it's official; approximately 90% of our students are pursuing careers that the U.S. Department of Homeland Security deems as essential critical infrastructure workers. From our licensed practical nurses and allied healthcare graduates who are testing people for the virus or helping them recover to our auto and diesel technicians keeping the delivery trucks running, our graduates are following their passion while serving our society. I encourage you to visit our website lincolntech.edu and click on our Media Gallery to watch a two-minute video saluting our healthcare graduates who sent us images of themselves on the front lines along with words of encouragement and thanks. I will later discuss our successful transition from on-ground to distance learning. But first, I want to share with you our robust first quarter results which reaffirm the power of our actions to solve the skills gap. Despite the disruption from the COVID-19 containment efforts, where Lincoln rapidly executed a distance curriculum delivery format across 22 campuses, we had an exceptional quarter. We grew revenue by a healthy 10.7%. Our transportation and skilled trades segment and our healthcare and other professions segment each grew at nearly identical rates for the period. Our average student population ended up by 6.6%. This increased growth substantially improved operating margins, as we began to realize the planned operating leverage from various operating expense reductions and margin enhancement strategies over the last several years. Both our transportation and skilled trade segment and our healthcare and other professions segment each generated operating income that was more than double prior year results. As we've highlighted in the past, our business model achieves high operating leverage as evidenced by our more than 70% improvement in profitability for the quarter. In addition, we achieved growth in both key outcome metrics for retention and placement rates, which improved 2.3% and 1.7% respectively for the quarter, all in all an excellent start to the year. Now I'd like to discuss how we have successfully responded to the COVID-19 pandemic and our positive outlook on the future of Lincoln Tech. In the latter half of March, we implemented a plan to comply with federal, state, and local requirements to successfully move all of our programs to a distance education format. Our actions were two-pronged: first, to take action for the safety and security of all students and employees, and second, to rapidly transition from on-ground to distance education. On March 17, we announced our plans to switch to distance education, and within 10 days, we moved all programs online. More remarkably, out of over 11,300 students, only seven hundred opted not to make the switch. This is a huge testament to the quality and capability of our instructors. Even though students do not have the opportunity to work in our hands-on shops and labs or at clinical sites temporarily, they still chose to remain enrolled and continue to gain skills and insights from our real-world trained instructors. And speaking of our instructors, last week was Instructor and Nurse Appreciation Week, and every Lincoln campus celebrated and honored our incredible educators. The team's response as well as the students' engagement was quite heartening. Technology was successfully leveraged to develop online course curriculum to ensure students could continue their studies from the safety of their homes. Our instructors embraced distance education and all of our employees working remotely have been provided with the equipment and technology needed to perform their day-to-day duties. All measures being taken are in compliance with the regulations and guidelines put in place by federal, state, and local authorities across the nation. In addition, all student services including admissions, financial aid, and career services are fully functioning remotely while campuses are closed. In order to execute this transition to the distance curriculum delivery format, the management team developed new methods and processes in an extraordinarily short period of time, and then gained rapid regulatory approval. Many of our accrediting bodies and states are providing temporary solutions that enable students in most programs to graduate on time. The results from this exceptionally coordinated and well-executed effort is that in addition to our average population rising 6.6% as of March 31, 2020, our April 30 level is up 8% from a year ago. So despite all the uncertainty and disruption caused by the COVID-19 pandemic, our population continues to grow. However, we understand that not everything can be taught at a distance and so each week more students, especially those in our healthcare programs reach a stage in their education when they need to be at a clinical site to gain the critical hands-on skills needed for graduation. Up until now, most clinical sites were closed and so each week the number of leave of absence students was increasing. As of May 1, we had 375 students who had suspended their education for this reason. To address this issue, we have received approval from the accreditors and states to use simulations to deliver the required skills, and our education team will be launching the simulations over the coming weeks. In addition, each week new clinical sites are reopening. As a result, we expect our LOAs to stabilize and even decline in the near term. As of May 1, total leaves of absence are still below 10% of our end-of-period population as compared to rates in excess of 20% as reported by other educators in our space. While the COVID-19 pandemic has caused all of us to be more self-reflective, I believe it will be transformational for Lincoln. In a very short period of time, we have learned to deliver education services in a totally different way that provides enhancements to the student experience, while providing the opportunity for our company to drive down costs. These opportunities are currently being examined and evaluated and would improve our ability to execute our longer-term growth strategies, as well as further improve the return on investment for all students. Well, I'm going to let Brian go through the financial dynamics of our first quarter; I'd like to focus on our student start growth, which has been the driving force behind our return to profitability. You may recall that through the fourth quarter of 2019, Lincoln had generated nine consecutive quarters of student start growth. This metric is a primary factor behind our first quarter revenue growth of 10.7%. As we entered March, we were on a roll and it appeared as though we would report the 10th consecutive quarter of student start growth. In fact, starts were up 13.9% through February. Our class calendars are not aligned across all 22 campuses and 15 plus programs. So literally every week, we may have a class start somewhere in our system, but at the same time, we don't have starts in every program every month. Unfortunately, the latter half of March included a fair number of start dates which had to be postponed due to our closing of campuses and the transitioning to distance learning. The good news is that we were able to reschedule most of these students to start over the next three months. Moreover, we successfully transitioned our admissions process from one being heavily focused on bringing students into our facilities to see all the equipment and training aids to one being 100% remote. Our admissions teams have done an outstanding job with this transition as evidenced by April's robust start number of over 850 new students. This is our largest number of starts in April in over 10 years. Approximately 200 of these students were scheduled to start in March, which means that approximately 650 students started with the new remote admissions process and most had never been on a Lincoln campus. While the marketing landscape remains fluid as we all adjust to life while being in lockdown, we are seeing strong responses to our messaging. The number of students signing enrollment agreements continues to be up over last year. The demand by students for our central career offerings is strong and the productivity of our admissions teams has increased. Also, we are seeing increasing interest in our healthcare programs. There’s so much attention being brought to the dire need for more healthcare workers, both because of the COVID-19 pandemic and the overall need that existed previously. Lincoln is ready and has always been ready to bridge this skills gap with our accelerated programs and real-world experience teachers to rapidly train eager and talented students. Again, through the success of our distance curriculum delivery format, we are actively enrolling, providing financial aid, educating, and placing students into rewarding careers across all of our programs. With the passage of the Coronavirus Aid Relief and Economic Security Act or CARES Act, the federal government and the Department of Education recognized that students are being adversely affected by the disruption caused by COVID-19. Lincoln moved swiftly to apply for appropriate Federal grants. As a result, Lincoln will receive a total of 27.4 million from the CARES Act. The first 50% will go directly to our students and so far, we have received about $10 million of the $13.7 million allocated to students. These funds are being sent to students and as soon as the remaining 3.7 million arrives, we will distribute those funds as well. As prescribed in the act, these student funds are being distributed to eligible students to offset the additional living expenses incurred as a result of COVID-19. Lincoln will receive the second 13.7 million in funding sometime over the coming months and these funds may be used both for students and as reimbursements for some of the expenses incurred to implement our distance delivery format. We are very grateful to the Department of Education for recognizing that students have been adversely affected by this disruption caused by the pandemic and providing these grants through the CARES Act. The Lincoln team has already begun planning to reopen campuses as soon as permitted, and today we are announcing that we expect seven campuses to be opened by June 1. Our primary objective will be to ensure the safety of our students and staff. We will follow local and federal guidelines including but not limited to social distancing, no more than nine students per one instructor, staggered times for different classes, and daily sanitizing of our campuses. With campuses in 14 different states, we expect our return to vary by state. Now I'd like to address our decisions to withdraw our full-year guidance that we provided back in February. For the first two months of the quarter, we were well ahead of our internal budget and as a result of quickly migrating our students and faculty to the distance delivery format. We achieved double-digit revenue growth and sharply improved profitability compared to the year-ago period. As I mentioned earlier, our average student population at the end of the quarter was up 6.6% and advanced 8% at the end of April. However, as we look out at the remainder of the year, the lack of clarity as to when we will be able to reopen our campuses and what limitations will be imposed to ensure the safety of both our students and our staff creates a tremendous challenge in forecasting our financial performance. As a result, at this time, we've withdrawn our previously disclosed full-year 2020 guidance, a decision we will reevaluate when our operating environment becomes clear. Over the longer term given the dramatic rise in the unemployment rate, we anticipate demand for our programs will increase even further as it hasn't past economic downturns at the unemployed seek new paths to a better career. Throughout the nearly 75 years of Lincoln's operations, we've seen increases in leads enrollment and student population during rises in unemployment and economic downturns and early analysis of our lead data from the past two months indicates that they are on the rise. During the last recession between 2007 and 2010, we saw consistent increases in leads enrollments and student population that peaked 2.5 years after the recession started. However, given the dramatic and unprecedented rise in unemployment during the past two months, one could imagine a much faster ramp-up in our student population. Obviously, we have to have campuses open before we can service increased demand. But based on our early analysis, it appears that our marketing programs are working and once campuses are open, we can turn our full attention to satisfying increased demand. Remember, the same 22 campuses that we have today at approximately 18,000 students generated over 80 million of EBITDA back in 2010 at the peak of the last recession. We are ready to serve the needs of any displaced workers looking to secure solid skills that can provide a rewarding essential career with a lifetime of opportunity. Due to the lack of visibility as to when our campuses will reopen and the full extent of what measures we will need to adopt to ensure they can operate safely under social distancing guidelines. That's the end of my remarks. I'll turn it over to Brian.

Thanks, Scott, and good morning everyone. As Scott indicated, our first-quarter results were strong. Despite the challenges created by the COVID-19 pandemic in March, we are very pleased that we achieved positive EBITDA for the quarter for the first time in over five years. We entered 2020 with positive momentum, as our beginning population was higher by approximately 760 more students than the prior year. Then during the pre-COVID period through February, this momentum continued as student starts finished 14% ahead of last year. However, in March the impact from COVID-19 forced class starts scheduled for the latter part of the month to be postponed. As a result, we ended the quarter with 2,716 starts down about 150 or 5% compared to the prior year. Subsequently in April, we more than made up for the first-quarter shortfall achieving a 30% start growth over April 2018. We finished the quarter with 10,947 active students, 267 more or 2.5% higher than last year. This population increased growth to 591 students, or 5.5% when we include students on leave of absence due to COVID-19 circumstances, which I will discuss shortly in more detail. Now turning to the financial highlights for the quarter. First, revenue increased by 6.7 million or 10.7%, driven by a 6.6% increase in average student population and a 3.7% increase in average revenue per student. The largest increase in average student population occurred in our healthcare and other professional segments, which were up 12.5%, while our transportation and skilled trade segment increased 3.7%. In March, we anticipated that COVID-19 would have an impact on our first-quarter results as we incurred additional COVID-19 related expenses and experienced a small revenue decline. As a result, we implemented measures to reduce expenses in order to mitigate the losses of revenue in subsequent quarters. Second, operating loss was reduced by 3.5 million or 72.3%, primarily driven by revenue growth. We generated an overall operating leverage of approximately 50% on our 6.7 million increase in revenue. We leveraged our large amounts of fixed costs as population or revenue growth with minimum related incremental expenditures, resulting in more revenue contributing to operating income. On a segment level, the operating leverage was approximately 60% and 50% for the transportation skilled trade segment and our healthcare and other professional segment, respectively. Third, as mentioned, we had positive EBITDA of 500,000 compared to negative EBITDA of 2.8 million in the prior year. The first quarter is historically our weakest quarter of the year in terms of EBITDA profitability. So this performance is especially encouraging. Now turning to operating expenses, there was an increase of 3.3 million or 4.8% to 71.4 million. The main contributing factors were bad debt expense and instructional expenses resulting from a larger student population. Bad debt expense for the quarter was higher as accounts receivable grew primarily due to our revenue growth, coupled with a delay in disbursements and the decline in collections in the second half of March due to financial hardships related to the COVID-19 pandemic. As a result, we are working with our students to provide financial relief and support during the healthcare crisis. Most recently, as the environment began to stabilize we have seen an improvement in collections towards normalized levels. In regard to corporate expenses and other costs, we had expenses of 8.2 million or 500,000 over the prior year quarter. The increase is primarily due to increases in salaries and benefit expenses and approximately 700,000 of expenses incurred as a result of COVID-19, partially offsetting these, of course, were non-recurring strategic initiative expenses incurred in the prior year. Now, in terms of liquidity, as of March 31, we had approximately 30.7 million of liquidity comprised of cash on hand of 9.7 million and the 21 million in availability on our credit agreement. The CARES Act will provide significant additional liquidity in 2020 through the following provisions: first, we've elected to defer the employer FICA payroll tax through the end of 2020 equating to an estimated 3 million. The deferred amount will be paid by December 31, 2021, and the remaining 50% will be paid by December 31, 2022. Second, we are following current guidelines which waive our obligation to return title IV funds for any student that which was during a payment period, or a period of remote enrollment due to COVID-19. We estimate saving over 1 million per month throughout at least June 30, 2020. As mentioned, we anticipate receiving a total of 27.4 million from the CARES Act Higher Education Emergency Relief Fund. The majority of these funds will be used to provide financial support to our students. In addition, per guidance from the Department of Education, we anticipate a portion of these funds to be used towards offsetting costs incurred as a result of COVID-19 including costs associated with transitioning to and from our online platform. And finally, we are currently evaluating the mainstream lending program for midsize companies affected by COVID-19 as a potential source of additional liquidity if needed. Also, we're pleased to announce that we have been given some rent relief in the second quarter thanks to certain landlords who have worked with Lincoln to support us during the COVID-19 pandemic. Now expanding on the revenue impact from COVID-19. First, as Scott mentioned, as of the quarter end 97% of our student population was active and about 325 students were under leave of absence due to COVID-19. All this number increased to around 1000 students since March, we expect this number to decline in the coming weeks. As a reminder, revenue recognition is suspended on leave of absence students until they are able to resume their education. Second, as noted earlier, programs such as Welding and Cosmetology, which require a majority of hands-on training have been decelerated while online. As such these programs are being extended to allow students more time to complete their hands-on labs. Accordingly, their revenues daily rate on these students were adjusted downward to reflect the longer period. For the most part, we anticipate this revenue to be recovered during 2020. During the quarter, we continue to focus on plans to grow our business. As we completed the build on of one welding program and made significant progress on a second. However, certain program expansions were delayed due to COVID-19 circumstances. Additionally, we decided to postpone other capital expenditure projects to the second half of the year in order to preserve cash and gain greater clarity on our financials and our business landscape. Keep in mind as we continue to grow our business, additional offering costs will be incurred, which will temporarily cause operating leverage to go down slightly. However, as new programs are launched, and we grow our ability to leverage our growing revenue into higher margins will return. And lastly, a reminder about our 2020 guidance; due to the lack of visibility as when our campus will reopen, and the full extent of what will be needed to adopt to ensure they operate safely under social distancing guidelines, we are withdrawing our 2020 guidance. Thank you for your time today. And with that, I'll turn the call back over to the operator so we can take your questions.

Thank you. Our first question comes from Alex Paris with Barrington Research. Your line is now open.

Congratulations on a really strong quarter. I think you topped my expectations, all met with the exception of starts, and despite incurring those additional costs related to COVID. I guess I'll begin with starts, starts were very strong 13.6% through February. Obviously, for the quarter, it was down 5%. So you took a hit in the month of March. My expectation is, I thought you would grow starts 3.2% for the quarter, so the delta is really about 200 students. Now you say April, you're up 30% to 850. Just a point of clarification. Those 200 that didn't start in late March started in April, I'm assuming and, but you still had 650 new starts, right?

That's correct.

Have you made any changes to your marketing? It seems like a really good number? Perhaps it's influenced by COVID and the rise in unemployment, but are you changing your marketing message or changing your marketing mediums? I think, some competitors said on their call the other day that some of the typical places they had advertised live sports and things and they're not getting played, they've had to shift their marketing to elsewhere.

Yes. I wouldn't say that ours have been as dramatic as that. But certainly, with marketing in general, we're constantly reevaluating. It's a very fluid marketplace. And certainly one seeing more and more social media coming into play a bigger part. So our team is constantly reevaluating and constantly looking for those channels that are going to be the most productive. So that's just an ongoing thing. I would say that one of the things that has changed though is that people are at home, so when they express an interest, frankly, they're not as distracted by other things and have more time to spend with our admissions people. And I think as a result of that, our admissions people are able to convey what we do and how we do it. And the students seem to be very responsive to that. So I would say a lot of it's due to the improvement that we're seeing just in the conversations that we're having with the interested parties. But marketing is always constantly evolving.

And then, this is also sort of a remarkable start number in the month of April, given all those uncertainties related to COVID, I'm assuming these new starts because campuses are closed, had to start online, and that didn't really deter these students from starting.

Yes. That's something really one of the most exciting aspects of all this and not only are they starting online, but for the first time we have students who have never been on one of our campuses. You know as a reference, our typical process would be to encourage students to come to our campuses so they can see how robust the facilities are. And these are students who aren't visiting our campuses live; we obviously have videos and images up on our website, so they get exposed to it. But again, it's very encouraging news, both for this period and as we look to the future to figure out ways to further enhance how we reach students.

Okay, great. And then moving to LOAs. As I think you said in the press release, you had 324 leaves of absence, as of March 31. And now you have about 1000. So it looks like you're adding about 150 a week or so. Yes. And why is that? I'm assuming in some cases, there's no online classes available for these students that are enrolled in their program, so they have no choice but to stop out. And then I would assume to others that say, what, I'll just wait for your campuses to open again, I'll take a leave of absence.

Yes. So it's happening because certainly on the healthcare side, externships and being in clinical sites is a part of the curriculum and required for them to reach graduation. In those instances, we've been able to work with the states and the accreditors to replace the on-ground with simulation. And that's being rolled out over the next couple of weeks. And so students that aren't able to go to a clinical site will be able to do the simulation to get the hands-on skills and knowledge that they need. At the same time, though, we are seeing every week, even in certain states like here in New Jersey that is very much in lockdown mode for COVID-19. Even more doctors' offices and hospitals are opening up and each day frankly, more of our students are able to get back inside one of these facilities to do their clinical work. And so that's very reassuring as why we think it'll decrease going forward the number of people in LOAs.

So, that thousand number is based on what we currently know and the gradual reopening of the academy. Is that LOA number kind of a peak or very close?

Yes. I would say that maybe it goes up another 300. But then I believe it's going to start dropping as well by that month, certainly by June 1.

And then they'll come off LOA, if they can do simulation, if they could get into the clinic, and then if they could get into the campus, right? So as those things come on, we'll start to see those LOAs come off. And not only did the students get to continue their education, but you get to resume recognizing the revenue associated with their enrollment.

Correct. Seven schools that are coming through to come back on June 1. As soon as they come back, we'll start recognizing the revenue for that and they'll start coming off of the LOAs. Well, although recognized revenue for the ones doing the simulations is going to clinical sites besides the seven that are reopening.

Got you. And then speaking of reopening, I think you said in the press release, Dallas is reopening this week, which I assume is the Grand Prairie campus. And you'll have seven in total opened by June 1. What's next after Grand Prairie?

We have Nashville, Denver, East Windsor, New Britain, Shelton, and our Indianapolis campus. So again, that's based off of what we know today; some days these local officials tweak what they think. But based off of what we know today, that's the starting date we anticipate with probably Nashville and Grand Prairie starting next Monday.

And then what are your thoughts for the rest of the campuses? So that'll be seven of your 22? What about the other 15? Based on what you know today, what would be next after that? And when should we have all these campuses open? I know it's difficult to say.

What’s probably easier to say is what will be last. I'm guessing, unfortunately, New Jersey and New York, where we have seven campuses, would probably be last just given the severity. But with that said, we are looking to see what we can do to accelerate that because in New Jersey, 100% of our students or 98% of them are in programs that are deemed to be essential infrastructure workers according to Homeland Security. And if you go on our website, you'll see pictures of our students. We have lots of LPNs and people in allied health fields who are frankly truly on the front lines, testing people for the COVID virus. And so in a state that's looking for more support in the healthcare field, we believe that we provide a very important resource to the state. So we're trying to accelerate that process, but nothing is guaranteed. But I would think that New Jersey, New York would be last. And then the other states should come online, and we're hoping over the following 30 days, so by July 1, we anticipate or hope that if not every campus, the vast majority of our campuses are reopened. It's just hard to know at this time.

Okay. So, not only are you near the peak in LOAs, and I know you've withdrawn guidance, but I suspect Q2 would also be the bottom in terms of its impact on your financials driven by the LOAs, right, because you're going to have those starting to come back and with most campuses open by July, I would think we're kind of back to somewhat normal operations. I realize it's going to be some inefficiencies, like nine to one student teacher ratios and things like that. But is it reasonable to assume that the second quarter would kind of be the trough?

I would say so; it's typically our trough and just given the scenario that you just laid out is, I think that's very logical.

Yes. For our revenue compared to prior year. Yes, I would definitely agree. Expenses might drag along a little bit longer than that, making up for some overtime and the nine to one teacher ratio that you mentioned. So it could be additional expenses. And when we get more clarity on the other portion of the CARES Act that the company can use, maybe we can offset some of those costs as well for transitioning students from online.

Got you. And then, I guess lastly, given that it looks like based on what we know now, Q2 being the trough, the ample liquidity that you have looking over the valley to the other side, you should not only get back to normal, but you should derive the benefit from the rise in unemployment. And I would assume, given your success with these online programs, should we expect a different approach to business going forward, maybe blended programs and more use of online in the curriculum?

Definitely going forward, we're looking at that and creating and valuing that as we speak. Obviously, it takes a long time to get the approvals and to get it fully designed. But certainly, this experience has proven to us that our students are very receptive to it and many are looking forward to a blended program. It'll help us in our planning for the future, create greater capacity for us, which means we could frankly have potentially smaller campuses and be more efficient as well. Just the fact that everyone within Lincoln is working remotely and working just as effectively as they were before, can cause other opportunities for us to look for ways of delivering services to our students in a more effective way. So this is a really, needless to say, knows how traumatic this whole thing has been. But for us as an organization, what we're going to take away from it will be very powerful, I believe, and help us going forward.

And then lastly, I guess based on everything that you know now, and things kind of roll out as you expected, there's no resurgence in COVID, is it your intent to restore, providing guidance when you report next time?

Gladly. As soon as we have some greater clarity, we will gladly provide guidance.

Thank you. Our next question comes from Raj Sharma with B. Riley FBR. Your line is now open.

I wanted to continue along the same line of thinking; are starts happening more in one program than another, and how do you account for the success in starts?

Sure. It is happening across the board. There are always programs that may be stronger in one month compared to another, but nothing particularly stands out. However, we are seeing increased demand for our healthcare offerings. This area is gaining a lot of attention, especially with the current news trends. Certain programs continue to be very strong; welding remains popular, and our skilled trades programs are also well-received. Overall, there isn't a single factor driving our growth; it's quite diversified.

Right. And specifically, the start increases in April of 2020 over 2019 were split 50:50 between transportation and half evenly the number of starts. Any indications or early indications, I know it's early for fall quarter starts to get us on a prediction. That's your biggest quarter. Anything indicating now today that your fall quarter starts are intact or would probably show, because of the weaker economy and higher unemployment and any sort of indications on that today?

Yes. What I can share is that indications are good right now. So it's still preliminary, but certainly things are on the positive side. Definitely not on the negative side as far as interest coming in enrollments and things of that nature. We still have a long ways to go between now and August, September, October, but as of right now, things are definitely on the positive side.

Got it. Regarding the LOAs, it's impressive considering that some competitors have reported higher LOAs. How are the LOAs divided? Is one specific program performing better than the others, or are they distributed evenly across the programs?

It's about evenly divided between hops and our auto and skilled trade programs. On the hop side, the medical programs are driving these externships, while on the auto side, it’s more varied across all programs where externships or additional hands-on training were required. The welding students have been affected, but they still belong to our population. We're generating less revenue from them during this time. Additionally, there are students, including cosmetology students, whom we are eager to welcome back to our campuses. The positive aspect is that the seven campuses we are set to open contain most of our significant welding programs, which will benefit these students. They will be able to return to their studies, allowing us to increase revenue and help them graduate sooner.

Got it. Thank you. My question is regarding the variability in your expense levels. Considering that you are unable to recognize revenue in the last quarter and some this quarter due to the LOAs, do you have measures in place to manage expenses? Can you elaborate on that?

Yes. In March, we lost less than half a dollar in revenue due to starts we didn't secure at the end of the month and because people went on leaves of absence. We did incur some costs associated with the decrease in starts. Our consumables expenses have decreased significantly, largely due to timing; while students are online, they aren't generating revenue, so we don't incur those costs, but that aspect is time-dependent. Marketing expenses have also decreased; our pay-per-click costs have gone down, and we managed to extend some of our production to the later half of the year, leading to some savings in marketing as well. Additionally, I mentioned that we expect to see considerable rent savings of nearly half a dollar in the second quarter due to our landlords cooperating with us, choosing not to charge rent for two months, which many landlords did not do. This will result in significant savings. We also saved on travel costs, particularly with our buses, which usually cost over $100,000 a month, as we have shifted to an online format and are not operating physical campuses. Unfortunately, we did have to furlough about 100 employees. Overall, in April, our expenses came in favorably compared to our internal budget and last year.

So, I know that you pulled guidance, is it fair? Is it your understanding that you should be able to make back this missed revenue displaced revenue within this year? I mean, given where, what you think is the schedule right now, of the campuses reopening? I mean, is that a fair assumption?

Yes. That's our assumption now, obviously, with the social distancing that’s going to play a role into that, but we definitely believe at least the people on the LOAs today will make up all that revenue this year. And we got to see how the social distancing and our facilities won't be open longer, trying to get the students in there to complete their clinicals as well as their labs.

Thank you. And I'm showing no further questions in the queue at this time. I'd like to turn the call back to Scott Shaw for any closing remarks.

Thank you, operator. In closing, I would like to say that in my over 18 years with Lincoln, I have never seen our organization more aligned and motivated to serve our students. We entered 2020 with tremendous momentum. Our student population had been growing for nine consecutive quarters and continued to grow, increased population, and cost controls enabled Lincoln to dramatically increase profitability in the first quarter, despite the negative impact of closing down campuses due to COVID-19. The organization rapidly rallied to move all programs and operations to a distance delivery model, which enabled us to continue to grow our population over the prior year even through April. We are now implementing plans to reopen campuses as soon as permitted with seven campuses representing about 40% of our students expected to open by June 1. And as we look to the fall and beyond, we expect our population will grow as more and more displaced workers seek a better opportunity through our Lincoln Tech Education. While the COVID-19 pandemic continues to create uncertainty in the near term, Lincoln's future remains bright. And we will be sharing our story with investors through virtual non-deal roadshows over the coming weeks. We look forward to updating you on our progress in August; until then, stay safe. Have a great day.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude your program and you may now disconnect.