Good day and welcome to the Legacy Education Incorporated fourth quarter and fiscal year 2026 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 turn it over to Nicole Joseph, Senior Vice President of Marketing for Legacy Education Incorporated.

Thank you and hello everyone. Legacy Education has issued a news release reporting its financial results and corporate developments for the fourth quarter and fiscal year ended June 30th, 2026. 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 Legacies 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, Intent, 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 projection 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 factor section of the annual report on Form 10-K 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.

Thank you, Nicole, and good afternoon, everyone. Fiscal 2026 was a record year for Legacy Education. It was also a year in which our results, operating execution, and balance sheet gave us greater capacity to pursue the next stage of growth. The central message for today's call is straightforward. Fiscal 2026 demonstrated the strength and scalability of our operating platform. We produced strong organic revenue growth across our pre-existing brands, successfully integrated Contra Costa Medical Career College, and finished the year with clear operating leverage. We entered fiscal of 2027. We have a meaningful growth already embedded in the existing platform. Additional capacity and programs coming online. A new geographic market under development and acquisition opportunities under active evaluation. We crossed 80 million in annual revenue. and revenue from our pre-existing brands grew 16.5%. We ended the year with a larger student population, expanded our program portfolio and campus capacity, advanced Houston, strengthened our operating infrastructure and finished the year with the financial resources to continue investing in growth. We also finished the year with a strong fourth quarter. Revenue increased 12% and adjusted EBITDA increased more than 30%. Adjusted EBITDA margin expanded 220 basis points. That combination of growth and margin expansion is an important proof point of the scalability of the platform. I will organize my remarks around four themes, the strength of fiscal 2026, the operating leverage we demonstrated in the fourth quarter, the growth opportunities we see entering fiscal 2027, and the financial strength supporting our plans. Our fiscal 2026 revenue increased 24.8% to 80.1 million from 64.2 million. Of the 15.9 million increase in annual revenue, 9.9 million came from Legacy's pre-existing brands, which grew 16.5% year over year. Six million reflected the comparison between a full year of Contra Costa Medical Career College in fiscal 2026 and six months in fiscal 2025. Put differently, roughly 62% of the year over year revenue increased came from the pre-existing platform. That is an important proof point. Fiscal 2026 growth was supported by both successful integration and meaningful organic revenue growth. New student starts increased 9% to 3,483. We ended the year with 3,377 students, an increase of 8.9%. from fiscal 2025. Importantly, ending active population across our pre-existing brands increased 8.1% to 2,869 students. We view that active population growth together with the revenue performance of the existing platform as a stronger indicator of the underlying operating momentum entering fiscal 2027. Earnings increased across the operating income, net income, EBITDA, adjusted EBITDA, and diluted earnings per share. The breadth of that performance matters because it shows that growth in the platform translated into growth and earnings while we continued investing for the future. Adjusted EBITDA margin was 17%. even as we invested in new programs, expanded facilities, strengthened staffing and infrastructure, and prepared for future growth. That is the operating balance we intend to maintain as legacy scales. These results reflected broad execution across a larger classroom. We integrated a full year of Contra Costa Medical Career College, supported a larger student population, expanded program offerings, and continued building the academic and operating capabilities required of a growing public company. They also reinforced the relevance of our focus. Legacy prepares students for careers in nursing and allied health fields where employers continue to need skilled, job-ready professionals. Our programs are practical, career-focused, and aligned with essential healthcare roles. That alignment remains a durable source of student interest and employer demand. The fourth quarter provided the clearest evidence of operating leverage while we continued funding growth. Revenue increased 12% to 20.1 million. Pre-existing brands grew 11.3% and the operating margin expanded 190 basis points. The quarter demonstrated that the core platform continued to grow while producing greater operating leverage. Adjusted EBITDA increased 30.6% to 3.1 million and adjusted EBITDA margin reached 15.5%. Those results show the earnings power of a larger platform as revenue scales across our existing infrastructure. The key point is that the fourth quarter combined double-digit revenue growth with faster growth in earnings and meaningful margin expansion while we continue to invest in future capacity. The quality of the quarter We did not achieve growth by pulling back from the future. Educational services expense included the faculty instructional resources, the books, the supplies, externships, facilities, and program support required for a larger platform and for capacity that can generate future revenue. Disciplined spending, marketing efficiency, and active management of the receivables, also supported the quarter's operating leverage. The objective is not simply to become larger. It is to become larger while strengthening the economics of the platform. That is the operating model we are pursuing. Support students in academic quality, invest deliberately in future capacity, and create greater operating leverage as the platform scales. We entered fiscal 2027 with multiple tangible growth engines already underway. We think about those opportunities in three pillars, expanding the existing platform, adding new capacity and geography, and pursuing strategic expansion supported by our stronger operating infrastructure. Pillar one, expanding the existing platform. We continue to see meaningful runway in programs and campuses we already operate and understand well. Surgical technology is currently operating at two of our three High Desert Medical College campuses, with the third campus expected to begin the program by the end of the first quarter of fiscal 2027, subject to final operational readiness. This represents additional growth within an existing program and an existing campus footprint. Serial Processing Technician Program also continues to ramp. This has been an important contributor to our program mix and continued cohort development and broader use of existing capacity provide additional enrollment and revenue opportunity as the program matures across the platform. In vocational nursing, we've advanced the entrance requirements across our campuses with a greater focus on student readiness and fit at the application stage. These changes are designed to strengthen student readiness and support retention, progression, and graduation. We view that as an important opportunity to improve the quality and durability of enrollment within an established program. Pillar two, add capacity, programs and geography. We are expanding where legacy can serve students and where existing demand can support additional scale. After the end of the fiscal year, we executed a lease for 28,000 square feet in Houston, Texas for a planned Central Coast College branch. CCC currently projects to open the Houston branch in November 2026, subject to receipt of the required regulatory and accreditation approvals. This move is intended to establish Legacy's first campus outside of California. and it represents an important step in accelerating our geographic expansion. We also expanded capacity at High Desert Medical College. Lancaster added 6,000 square feet and we're phasing additional capacity in Temecula so that growth can be aligned with program and enrollment demand. At Contra Costa Medical Career College, we received approvals for three additional programs, Associate of Applied Science in Magnetic Resonance Imaging and Associate of Applied Science in Cardiac Sonography and Veterinary Assistance Certificate. These approvals expand the future program pipeline with launch timing based on operational readiness and applicable requirements. Pillar three, strategic expansion and operating infrastructure. We are actively evaluating acquisition opportunities that can expand Legacy's geographic reach, program portfolio, student base, and long-term earnings capacity. We apply clear academic, strategic, regulatory, cultural, and financial criteria to each opportunity. At the same time, we're continuing to build Legacies Business Intelligence to give leadership more consistent visibility into enrollment, retention, academic execution, registrar activity, career services, and other key operating measures. As the organization grows, better visibility and accountability to support more consistent execution across the platform. Our growth platform is also supported by strong institutional accreditation. Integrity College of Health received a six-year grant from APHIS, and Contra Costa Medical Career College received a five-year grant from APHIS, the maximum terms granted by the respective accreditors. all four legacy institutions maintain current institutional accreditation. Taken together, these three pillars give us multiple avenues for growth. More opportunity inside the existing platform, new capacity and geography, and strategic expansion through acquisitions and stronger operating infrastructure. Importantly, these are parallel growth paths rather than a strategy dependent on any single initiative. Now, our ability to make these investments is supported by a strong financial position. At June 30th, 2026, cash and cash equivalents were 22.7 million compared to 20.3 million one year earlier. Excuse me.

Working capital was 33.4 million.

Stockholders' equity was 52.8 million, and debt remained minimal.

We have no revolving line of credit or other debt facility.

This balance sheet gives us flexibility to invest in programs, facilities, technology, faculty, student support, regulatory readiness, and selective expansion without depending on significant financial leverage. Our capital allocation framework remains disciplined and growth oriented. Our financial strength supports both the organic opportunities already underway and the acquisition opportunities we are actively evaluating. We intend to deploy capital where we see clear relationship among Student Opportunity, Employer Demand, Academic Quality, Scalable Capacity, and Long-Term Financial Returns. In short, fiscal 2026 strengthened both our operating platform and our capacity to invest. We enter fiscal 2027 with growth opportunities inside existing business, additional programs, and capacity coming online. Geographic Expansion Underway, an Active Acquisition Strategy, and the Financial Resources to Execute with Discipline. With that, I'll turn the call over to Brandon Pope for a detailed review of our fourth quarter and full year financial results. Brandon?

Thank you, LeeAnn, and good afternoon, everyone. Legacy delivered a strong finish to a record fiscal year. LeeAnn outlined the strategic growth opportunities ahead, and I will focus in on the financial evidence supporting that strategy, fourth quarter operating leverage, full year earnings growth, cash flow, and our year-end financial position. Beginning with our fourth quarter fiscal 2026 results, revenue for the three months ended June 30, 2026 increased 12% to $20.1 million from $17.9 million in the prior year quarter. Operating income increased 31.3% to $2.6 million from $2 million. Operating margin improved 190 basis points to 13% from 11.1%. Net income increased 53.3% to $1.9 million from $1.2 million. Diluted earnings per share increased 44.4% to $0.13 from $0.09. EBITDA increased 32.6% to $2.8 million from $2.1 million. Adjusted EBITDA increased 30.6% to $3.1 million from $2.4 million and adjusted EBITDA margin improved 220 basis points to 15.5% from 13.3%. The effective tax rate for the quarter was 27.3% compared to 45.6% prior year. The reduction is primarily due to tax benefits related to stock option exercises and beneficial tax treatment of stock option grants. Fourth quarter expenses, educational services expense was $11.3 million or 56% of revenue compared with $9.4 million or 52.6% of revenue in the prior quarter. The increase primarily reflected instructional payroll and staffing, books and supplies, and others. These expenses supported a larger student population and the academic capacity required for expanding and developing programs. Their timing can precede enrollment, and revenue because personnel, labs, equipment, curriculum and operating readiness must be in place before a regulated program or branch can launch. General and administrative expense was $5.9 million or 29.4% of revenue. This level of G&A spending supporting the infrastructure of a larger public company while contributing to the quarter's operating leverage. Marketing and advertising expense was $1.2 million and Baghdad Expense was $1 million or 5% of revenue. These levels reflect continued discipline and student acquisition and receivables management. Overall, total cost and expenses increased 9.6% while revenue increased 12%. This operating leverage supported the quarter's higher operating margin and adjusted EBITDA margin. Now turning to the fiscal year ended June 30, 2026. revenue increased 24.8% to 80.1 million from 64.2 million. Of the 15.9 million year-over-year revenue increase, 9.9 came from our pre-existing brands representing growth of 16.5%. Six million reflected the comparison between full year of Contra Costa Medical Career College in fiscal 2026 and six months of fiscal 2025. As a result, roughly 62% of the incremental revenue came from pre-existing legacy platforms. Operating income increased 18.3% to $11.8 million from $10 million. Operating margin was 14.8%. Fiscal 2026 included investments in staffing, facilities, programs, technology, professional services, and Public Company Infrastructure designed to support a larger operating platform and future growth. Net income increased 21.3% to 9.1 million from 7.5 million. Diluted earnings per share increased 11.9% to 66 cents from 59 cents. EBITDA increased 19.4% to 12.5 million from 10.4 million. adjusted EBITDA increased 24.1% to $13.6 million from $11 million. Adjusted EBITDA margin was 17% for fiscal 2026. Turning to expenses, educational services expense for the year was $42.9 million or 53.6% of revenue compared to $34.2 million or 53.4% of revenue. The increase was generally in line with revenue growth and reflected instructional staffing, books and supplies, extra fees, facilities and investments supporting new programs and additional capacity. The increase also included 600,000 additional share based compensation and non-cash expense. General and administrative expense was 24.2 million or 30.2% of revenue compared with 19.1 million or 29.8% of revenue. The increase included infrastructure required for a larger organization, a full year of Contra Costa Medical Career College, professional and consulting services, technology, and public company cost, and growth preparation. Marketing expense represented 7.4% of revenue, and bad debt expense was 4 million, or 5% of revenue. We continued to manage student acquisition, collections, and Credit Exposure while supporting a larger business. Full year results demonstrated that revenue and adjusted EBITDA scaled together while we continued investing in future enrollment and capacity. Combined with 16.5% revenue growth across our pre-existing brands in the fourth quarter margin expansion, fiscal 2026 provides a strong financial proof point for the scalability of the platform. Now turning to the cash flow and balance sheet, Cash flow provided by operating activities was $4 million for fiscal 2026. Operating cash flow reflected working capital timing, including growth in accounts receivable as the company and student population expanded. Net accounts receivable was $19.9 million at year end. We continue to monitor collection, payment plans, aging, and bad debt closely. Capital expenditures were $1.3 million compared to $844,000 in fiscal 2025. the increased reflective equipment, technology, labs, and facility investment associated with our growing program portfolio and campus capacity. The year ended with 22.7 million in cash and cash equivalents, providing flexibility to support planned growth in ongoing operations. Current assets were 45.8 million, current liabilities were 12.4 million, and working capital was 33.4 million. Tull assets were $78.5 million. Stockholders' equity was $52.8 million, and total liabilities were $25.8 million. Debt remained minimal at year end, and we had no revolving credit line or other debt facility. This financial position allows us to fund planning growth while maintaining flexibility. We will continue to manage the pace of investment against approval timing, enrollment opportunity, operating readiness, and expected long-term returns. To summarize, Q4 produced double-digit revenue growth, faster growth in earnings and adjusted EBITDA and meaningful margin expansion. For the full year, we delivered record revenue, strong organic growth across the pre-existing platform, higher earnings and adjusted EBITDA. A larger student population in a balance sheet position to support continued investment. The financial foundation is in pace to support the growth opportunities LeeAnn described. I will now turn the call back to LeeAnn. LeeAnn?

Thank you, Brandon. Fiscal 2026 was a year of strong execution and measurable progress. More importantly, it strengthened the platform we're carrying into fiscal 2027. We enter fiscal 2027 with growth already embedded in our existing platform, additional programs and capacity coming online, new geographic market under development, acquisition opportunities under active evaluation, and the financial strength to pursue these opportunities with discipline. Our priorities are clear. Execute well for students. Support our faculty and employees. maintain academic and regulatory discipline, and convert the opportunities already in front of us into sustainable growth. Our strategy is not dependent on a single program, campus, market, or transaction. We have multiple growth paths across the existing platforms, new capacity, geography, program expansion, and strategic acquisitions. Fiscal 2026, demonstrated the strength of the model fiscal 2027 is about deploying that strength, expanding what is already working, opening new avenues for growth, and doing so from a position of financial and operational strength. I want to thank our students, our graduates, our faculty, our employees, and clinical partners and shareholders. Operator, we are ready to take questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment while we pull for questions. Your first question comes from Mike Grundahl with Northland Securities. Please proceed with your question.

Hey, thank you. LeeAnn, could you talk a little bit about what you're seeing the trends around starts? You know, 3Q, you were down 12% year over year. This quarter was better, but you were still down 4% year over year. kind of talk about when you see that returning to year-over-year growth and what will drive it?

Absolutely. Thank you for bringing that question, Mike, and good to hear from you. What I would tell you, and I tried to really demonstrate this in terms of, you know, our leads are not an issue. It really is coming down to from our programs of the surge tech, the sterile processing ramping up, and the changes that we've made in our VN program. We've been able to see the realization of where there was that dip of the 12% in the prior quarter to we are seeing it coming back as these programs are maturing. And it was really, you know, our hopes and intentions that we were going to have surge tech rolled out at all three high desert locations. but for us to have the lab readiness the equipment and the things that we're ready for you know we're just now rolling out surge tech in the first quarter for 2027 and sterile processing ramping up our nursing classes are getting engaged into the timing of this new of the new entrance requirements that we required that we're confident that as we continue to build the pipeline for these programs maturing that we're going to see that balance out.

Got it. So September could look a little bit like June and then an improvement from there. Is that about the right way to think of it?

You're spot on in how you're thinking of it because it really is coming down to two.

the timing of when these starts are occurring you know based off the calendars and then the program readiness absolutely got it and then secondly you know I think what you're doing in Houston um you know with that branch campus how should we think about the potential for that opening and then ramping sure great great question there because it's a branch

We will go into Houston upon the approvals that we are optimistic that we'll see by November is that we will already have all of the programs that we are currently approved for in Central Coast outside of nursing and the certified nurse assistant program. We will be launching multiple programs at the same time in Houston. were there already building our presence and you know we're in a good market strong area that needs our programs that were optimistic to see how we can roll out multiple programs at one time when we open our doors in Houston.

Okay and then just lastly you said acquisitions kind of actively under review does that mean you're getting closer to I guess just expand on that a little bit.

I mean, I've expanded as much as I can in the talking points, but I would just tell you that as you look at Legacies, you know, really model and, you know, our experience and what we're doing, you know that we are active in acquisitions and we're engaged in it and We are actively under review and look forward to the opportunity to announce something once we know that it meets our criteria, it's accretive, and that it would be a good fit for us.

Fair enough. Well, best of luck. Thank you.

Thank you, Mike.

Thank you, Mike.

Your next question comes from Jeffrey Cohen with Landenberg Salmon. Please proceed with your question.

Hello, LeeAnn and Brandon. Thanks for typing our questions, and congrats on the strong Q4 and full year. So I wanted to jump back on Mike's area of questioning and talk about Concert Coast in Houston. Could you give us a sense of student population over the coming one or two years where you could get to with the footprint there, both in-house and virtual?

Jeff, first of all, great to hear from you. Thank you for the compliments. And, yes, like what I would tell you is that given the fact that the market that we're going into and the number of programs that we already see that we have approved, that we are going to multiply these roles out, that, you know, we're comfortable in saying that, you know, after a one- to two-year period, you're going to see between 400 and 600 students. and the Houston location.

Got it. And then, as you thought about Houston specifically and that location, is it Houston that's the target of interest and there'll be other targets, or is it Texas overall speaking that could be statewide a target of interest and one such target?

Well, what we are learning about Texas is that, you know, we do see that Texas as a state could be an opportunity for a target that we could expand beyond what we've started . Not making any sense, but the state .

Okay, and then one more Friday. Brandon, any commentary on off-ex, generally speaking? Overall, you remain quite disciplined throughout for your 26 and what we anticipate in 27 as your overall business continues to grow.

Yeah, yeah, we expect, if you're referring to margin, we expect margin to continue to increase and grow accretively. And you would probably mostly see that in the second half of the year, but that is our expectation.

Okay, perfect. Thanks for taking our questions.

Thank you.

This now concludes our question and answer session. I would like to turn the floor back over to LeeAnn Rohmann for closing comments.

Thank you, operator. And thank you everyone for joining us today. As we close, I want to leave you with one message. Legacy enters fiscal 2027 from a position of strength with multiple avenues for growth. We have a strong existing platform expanding programs, additional capacity coming online, Houston under development, acquisition opportunities under active evaluation, and the financial flexibility to execute. Our focus is on converting those opportunities into durable results while maintaining the academic quality, student outcomes, and disciplined execution that define how we intend to grow legacy. Again, thank you, thank you, thank you to the students, to the graduates, the faculty, employees, shareholders for your continued support and we look forward to updating you on our progress next quarter. Back to you, operator.

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