Legacy Education Inc.(LGCY) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue increased by 35.1% year-over-year, reaching $14 million, driven by robust student enrollment and a shift towards higher-margin programs [10][18] - Net income for the quarter was$ 2.1 million, a 95% increase from $1.1 million in the prior year quarter, with diluted earnings per share rising to$ 0.21 from $0.11 [12][21] - Operating income increased to$ 2.7 million from $1.4 million, representing a 93% increase and an operating margin of 19.1% compared to 13.3% in the prior year [21] - Active student population grew by 25.4% year-over-year to 2,539, reflecting the success of the company's programs [12] Business Line Data and Key Metrics Changes - New student starts rose by 23.3% year-over-year, totaling 773, marking the largest enrollment quarter in the company's history [11] - Educational services expense rose to$ 7.2 million, but as a percentage of revenue, it declined from 55.3% to 51.4% due to operating efficiencies [19] - General and administrative expenses increased to $4 million, yet also declined as a percentage of revenue from 30.4% to 28.3% [20] Market Data and Key Metrics Changes - The company received approvals for new programs, including Dental Assisting, Sterile Processing, Surgical Technology Associate of Applied Science, and Pharmacy Technicians, to be added at the Central Coast College campus [13] - The company continues to expand healthcare-focused programs, aligning with market demand for skilled professionals in critical industries [15] Company Strategy and Development Direction - The company aims to empower students with the skills needed to thrive in their careers while delivering value to shareholders [14] - Strategic partnerships with industry leaders have been strengthened to create externships and job placement opportunities for graduates [17] - The acquisition of Contra Costa Medical Career College is expected to expand student enrollment and revenue, solidifying the company's presence in key markets [18][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record revenue, starts, student population, and earnings, attributing this to operational excellence and strategic partnerships [23] - The company is well-positioned to capitalize on opportunities both within and outside its current California footprint, with ongoing discussions for potential acquisitions [31][42] Other Important Information - The transition to Blackboard Learn Ultra is set to enhance the student learning experience across all campuses [13][30] - The company has cash in excess of$ 21 million and working capital exceeding $23 million, indicating strong financial health [22] Q&A Session Summary Question: When will Contra Costa close, and what percent will be included in Q2? - The closing date is scheduled for the end of December, and it will not contribute significantly to Q1 results [26] Question: What programs drove the increase in new starts and total enrollment? - The increase was driven by new program offerings, particularly in cardiac, MRI, and RN programs [27] Question: Will the transition to Blackboard be for all campuses? - Yes, the transition will be implemented across all five locations for all programs [30] Question: What are the benefits of the Contra Costa acquisition? - The acquisition will add 14 programs, including high-need programs with limited competition [38] Question: Any challenges faced in the quarter? - Management reported no significant challenges, as all programs were in high demand [40] Question: Is the company ready for another acquisition after Contra Costa? - The company is poised for future acquisitions but will ensure proper execution of the current acquisition first [42]