LINCOLN EDUCATIONAL SERVICES CORP Q3 FY2024 earnings call

• Lincoln 10.0 hybrid teaching model: Near completion of first phase rollout, with plan to deploy at nursing programs by mid-2026, aiming to serve ~80% of student population. Enhanced student experience, instructor ability, and operating efficiencies. • Campus developments: East Point campus performed strongly, with Nashville and Philadelphia relocations, Houston campus opening in 2025, and Long Island campus in final lease negotiations. • Program replications: Expanding automotive programs using Electude curriculum, replicating successful programs at existing campuses, expecting $1M each in profitability by third year. • Corporate partnerships: New agreements with Hyundai, Genesis, Tesla, and Container Maintenance Corporation, with potential new partners in discussions.

In the third quarter, total revenue was $114.4 million, an increase of nearly 15% or $15 million. Adjusted EBITDA was $10.2 million, a 67% increase from the prior year. Student starts grew 21.1%, with same-campus start growth at over 15%. The new East Point, Georgia campus contributed $3.4 million to Q3 revenue. Average student population increased by 10.6%, driven by double-digit start growth over four consecutive quarters.

• Raised full-year 2024 guidance: Revenue $430-435M, adjusted EBITDA $41-43M, adjusted net income $16-18M, student start growth 13-15%, CapEx $50-55M. • Long-term goal: Aim to achieve $550M revenue and ~$90M adjusted EBITDA by 2027.

• Regulatory uncertainties in states like New York for new campus operations. • Potential impacts of macroeconomic factors on student enrollment and program profitability. • Risks related to achieving growth targets and managing capital expenditures for new campus developments.

Q: Can you provide more color on the Long Island campus plans, including regulatory framework in New York State?

A: We're near finalizing the lease for the Long Island campus. We used the same methodology as East Point, identified untapped market need, and have a partnership with the Greater New York Dealers Association. New York is challenging but we have an established relationship there.

Q: What square footage is the Long Island campus expected to be?

A: Around 65,000 square feet, a bit larger than East Point's 56,000 square feet.

Q: Do you foresee changes in regulation with the new administration and how might it affect SG&A outlays?

A: We expect less burdensome regulations, especially regarding borrower defense for repayment. While can't guarantee specific savings, we hope for a more level playing field which would be beneficial on the margin.