Good day, ladies and gentlemen, and welcome to the Quarter 1 2013 Lincoln Educational Services Earnings Conference Call. My name is Angela, and I will be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to hand the call over to Mr. Shaun McAlmont, Chief Executive Officer. Please proceed, sir.

Thank you, Angela, and good morning, everyone. Joining me here in the room is Cesar Ribeiro, our Chief Financial Officer. Let me begin this morning by reading the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. Statements in this presentation concerning Lincoln Educational Services Corporation's future prospects are forward-looking statements that involve risks and uncertainties. There can be no assurance that future results will be achieved and actual results may differ materially from forecasts, estimates and summary information contained in this earnings release. Important factors that could cause actual results to differ materially are included, but not limited to those listed in Lincoln's annual report on Form 10-K for the year ended December 31, 2012, and other periodic reports filed with the SEC. All forward-looking statements are qualified in their entirety by this cautionary statement. This morning, I'll provide an overview of our company's operations, and Cesar will review our first quarter and provide our outlook for the second quarter of 2013, and we'll then take your questions. As stated in our press release this morning, early 2013 results show the continued stabilization of our operations. Our regulatory record also remains strong, our student outcomes are improving, and our Lincoln Edge program is delivering financial literacy and maintaining impressive student persistence rates. But to fully understand Lincoln's first quarter performance, we also have to look closely at the trends affecting the majority of the sector. One of the analysts covering our sector concisely summarized the factors contributing to performances, which have most sector stocks showing similar trends. First, the weak economy is putting pressure on the value proposition of education. New student starts are down across our industry after years of increases. We look at this in terms of consumer confidence and affordability issues. In the…

Thank you, Shaun. Good morning, everyone. As we disclosed in our press release earlier this morning, student starts decreased 25.7% for the quarter. Excluding online operations and ATB students, which we stopped enrolling in 2012, student starts were down 13.4% for the quarter. Although new student starts were still down for the quarter, we believe that we have a positive momentum and expect student starts, excluding online and ATB students, to turn positive in the second quarter. The deteriorating start numbers we experienced during 2012 resulted in us commencing the first quarter of 2013 with approximately 2,400 less students than we had on January 1, 2012. This led to a decline in our average population for the first quarter 2013 of 13.6%, which resulted in revenue declining by 10.9% or approximately $11.1 million as compared to first quarter of 2012. The decrease in revenue for the quarter was somewhat offset as a result of annual tuition increases, which averaged about 3%. The decrease in student starts also impacted our capacity utilization which decreased to 35% from 40% in the first quarter of 2012. This decrease in capacity utilization produced significant negative leverage as our operating margin decreased to a negative 12.3% for the quarter from a negative 2.6% for the first quarter of 2012. Other key highlights of the quarter included a loss per share from continuing operations was $0.33 for the first quarter of 2013 as compared to a loss per share from continuing operations of $0.10 for the first quarter of 2012. Loss per share for the first quarter of 2013 includes long-lived asset, noncash impairment charges of $0.05. Free cash flow for the first quarter of 2013 was a negative $4.8 million, down from free cash flow of $3 million during the first quarter of 2012. We…

[Operator Instructions] And the first question comes from Scott Schneeberger from Oppenheimer. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: Kind of, I know you guys have not provided specific quarterly guidance for the second half of the year, but could you give us a feel for how you think the trend in starts will build, I don't know how much I want to quantify it, but will we see a big lumpiness in the fourth quarter? Do you think it'll be fairly balanced third and fourth?

Well, Scott, this is Cesar. As far starts are concerned, obviously, the third quarter is a crucial quarter, so where we hope to recover a lot of those starts are in the third quarter. We also hope to see positive improvement in the fourth quarter, which was very soft last year, as far as starts are concerned. As you know, due to the seasonality of the business, the stronger quarter from a revenue and earnings perspective is always the fourth quarter, where we enjoy all the benefits of the third quarter and we get the full 3 months of students in-house. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: That's helpful. Could you guys comment a little bit more on -- obviously, the strength of the retention and persistence sounds good. Could you talk about maybe some of the things you're doing or what you're hearing from students with regard to the persistence rates?

Yes, Scott, this is Shaun. I'll just say that the way we have look at persistence over the last couple of years relates to some of the earlier initiatives. When we saw our outcomes a couple of years ago start decreasing in some areas, we lowered the number of challenged students. So that was the first effort we had to make in order to have the overall persistence rates for the company improve. For those students who started school, we put them through a more challenging orientation program, and then also enrolled them in our Early Student Engagement program. And both of those were components of what we call our Lincoln Edge, which is really just a focus on students that is related to making sure that they successfully graduate from the programs, and also are placed in a job in a short period of time. That Lincoln Edge program really provides mentorship for students who may not have been successful in other educational experiences in their life. And so as a company, there was just a more direct focus on ensuring that we assess the students upfront, oriented them well, and then gave them academic and other types of life mentoring programs throughout their time with us. I think that those efforts, as they have become more institutionalized over the last couple of years, have just put us at a pretty successful plateau in terms of student retention. We've had some great improvement again, anywhere between 200 and 300 basis points year-over-year for the last couple of years. And we've gotten to a point that is holding steady at a very successful clip, we feel, for the company. And we think that, that will continue with this level of focus. I think what it also does is it prepares us for what we feel to be higher numbers of high school students coming in, and also students coming into new programs that will add at the end of the year. And again just a methodology that focuses on the student no matter where they come from, but just anticipating that we'll see success in graduation rates. Last point on this, all of our retention efforts are not merely just to have the students retain, but also graduate, placed and, more importantly, repay their loans on the tail end. We just see a direct correlation between persistence rates and loan repayment. And so we feel that our cohort default rates will benefit down the road. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: Okay. One more, but actually kind of a 2-parter. With regard to capacity and the size of -- with your footprint of campuses, does it feel about right, inclined to expand or contract at this point? And then also, just a follow-on would be view on short program strategy, looking to increase that, looking to still do tuck-ins there?

Obviously, capacity is at an all-time low for the company at 35% in the first quarter. That capacity will increase over the rest of the year, especially as we get the third quarter starts. But we are introducing new programs to a lot of these campuses that we have to try to increase capacity to those campuses. I think Shaun mentioned, we're rolling out manufacturing programs, dialysis programs, [indiscernible] programs in some of our campuses. We also are looking to replicate some of the programs that we have acquired as part of the FMTI acquisition to some of our other campuses this year and next year to further strengthen those campuses from a 90/10 perspective. So those are all things that we're looking to do for the remainder of 2013 as we head into 2014, to not only diversify the campuses from a financial aid perspective, but to increase capacity at the campuses.

Yes, and then just to add one more point to Cesar's comments. The FMTI programs, we feel, can be replicated at other sites. In addition to the contract framing that we are currently doing and looking to expand, to train, essentially, employees of certain industry companies that relate to the programs we offer, and then also looking at suites of new programs that are related to our existing programs that are shorter in nature and also non-TITLE IV. So at some point down the road, Scott, the shorter programs will become a bigger part of our population. Of course, they have different price dynamics, but we'll probably expand upon that a little more in future calls.

Next question comes from Jeff Lee from Wells Fargo.

Can you just expand on how the average revenue per student compares for your short programs versus your regular programs?

It doesn't compare. That's why we separate the 2 in our press releases, so that you can see the average revenue per student for the short programs is considerably less. Those are programs that can run anywhere from 100 to, say, 300 hours, et cetera. And so the revenue per student is significantly less than it would be for a traditional certificate program. And that's why we do not consider those students in our population as far as starts and we disclose them separately, so that you can model out separately with the models are.

Okay. And then can you give us some color on what your expense lines, both educational services and SG&A should look like for the rest of the year?

Well, as far as -- I mean, I would think that as percentages, they ought to be -- follow the same trend as in prior year. Obviously, there's not a lot of leverage to be taken out of instructional services and facilities to more decreases in population just because we still have to teach those classes. So I would expect that the percentages, as far as the overall percentage that you saw on prior year, will mirror this year, the same pattern. So if you just take a look at last year's quarterly numbers, that's -- you should see the same pattern you foresee for 2013.

Okay, great. And then one last one. What are your expectations for revenue per student growth for the rest of the year?

I'm sorry. Can you repeat the question?

What are your expectations for revenue per student growth for the rest of the year?

We would expect revenue per student growth just to remain at around the 3% level year-over-year, 3% to 3.5%.

[Operator Instructions] Ladies and gentlemen, I'd now like to hand the call back. Please go ahead, Shaun.

Thank you. As you can see, we're focused and have been very busy executing on initiatives, which we feel will better position us in this continued time of uncertainty. We continue to manage an important 90/10 and cohort default risk factors, but we've also sharpened the strategy that we feel will allow us to compete in a very unique segment of education and training in the country. And we have a long-term strategy to ultimately position Lincoln as a market leader in this segment. But we believe strongly in vocational education, as you can see, and in the viability of skilled trades careers. And we feel that our Careers that Build America campaign will ultimately drive our company's strategy long term. I thank you all for joining us today, and we look forward to updating you on our second quarter results down the road. Thank you very much.

Ladies and gentlemen, that concludes your call for today. You may now disconnect. Thank you for joining, and have a good day.