Good day, ladies and gentlemen and welcome to the Second Quarter 2015 Lincoln Educational Services Earnings Conference Call. My name is Dave and I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. [Operator Instructions] As a reminder, the call is being recorded. And now, I would like to turn the call over to Mr. Doug Sherk. Please proceed, sir.

Thank you, Dave and good morning everyone. Before the open of the market today, Lincoln Educational Services issued a press release announcing its second quarter 2015 financial results. The release is available on the Investor Relations portion of the Company’s corporate website at www.lincolnedu.com. Today’s call is being broadcast live on the Company’s website again www.lincolnedu.com and a replay of this call will also be archived on the Company’s website. Statements during today’s call regarding Lincoln’s business that are not historical facts may be forward-looking statements that involve risks and uncertainties, forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time of those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual results or performance differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to: our failure to comply with the extensive regulatory framework applicable to our industry or our failure to obtain timely regulatory approvals in connection with a change of control of our Company or acquisitions. Our success in updating and expanding the content of existing programs and developing new programs in a cost-effective manner or on a timely basis; risks associated with changes in applicable Federal Laws and Regulations, including final rules that took effect during 2011 and other pending rulemaking by the U.S. Department of Education. Uncertainties regarding our ability to comply with Federal Laws and Regulations regarding the 90/10 rule and cohort default rates. Risks associated with the opening of new campuses; risks associated with integration of acquired schools; industry competition; our ability to execute our growth strategies; conditions and trends in our industry; general economic conditions; and other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2014. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in Lincoln’s Annual Report on Form 10-K for the year ended December 31, 2014. All forward-looking statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes no obligation to revise or update this news release to reflect events or circumstances after the date hereof. And now, I’d like to turn the call over to Scott Shaw, President and Chief Executive Officer of Lincoln Educational Services.

Thank you, Doug. Good morning everyone and thank you for listening on today’s call. Joining me on the call today is Brian Meyers, our Chief Financial Officer. I will begin with a review of our progress so far implementing our 100-day plan and then an overview of the second quarter. Brian will then provide additional color on segment performance as well as update our outlook for the remainder of 2015. On last quarter’s call, we announced that our team would be focused on three key initiatives designed to strengthen Lincoln. Our initiatives included securing a new credit agreement to provide us with the financial flexibility to execute our plans implanting operational efficiencies across our campus incorporate organizations and increasing the awareness of the job opportunities for middle skilled employees amongst respective students. As we close-in on 100-day mark, we have been able to make strong progress toward achieving each objective. The first about the plan was to replace our expiring credit facility, and I am pleased to report that we achieved our objective. As we’ve reported yesterday, we have entered into a term-loan agreement for a total of $45 million, the loan exactly mature in four years and then probably used to pay down our existing debt as of the closing day. Our second initiative was to continue to transform Lincoln in a leaner more nimble organization by implementing companywide efficiencies that lower our cost structure to improve our profitability while slow maintaining our high standards. We have a limited positions consolidated resources, renegotiate leases, removed excess costs and streamlined operations. Our focus on cost reductions in greater efficiency are ongoing as we continue to operate in a challenging environment, we’ve remained focused on our bottom line. Our second quarter results demonstrate that we are successfully managing our expenses and…

Thank you, Scott. Given the information we’ve providing our results release this morning. I’ll focus my comments on the segment performance for the second quarter as well as some key financial metrics and our revised financial guidance for 2015. Our transportation and skilled trades segment showed significant operating income improvement over the previous year. Revenue decreased slightly to $42.4 million when compared to the previous year primarily due to a 3.2% decline in average student population. The revenue declined from the lower population was slightly offset by a 1.4% increase in average revenue per student due to improved student retention. Operating income improved by $1.9 million to $2.8 driven by expense reductions to educational services and facilities as well as SG&A. These results reflected our [indiscernible] efforts as Scott mentioned. Lower Start numbers in the second quarter continued to impact our healthcare and other profession segment. Revenue decreased $2.7 million or 8.4% are primarily attributable to [indiscernible] decrease in average student population. Excluding the merged campuses revenue decreased 6.6% to 29.5 million and average student population declined by 6.3%. Operating loss in this segment improved by 10.7%, to 2 million as a result of efficiencies and expense reductions. Operating loss excluding the merged campuses increased by 800,000 to 2 million versus the prior year. Included in the healthcare and other professional segment is our Hartford, Connecticut campus which is physically our largest facility at approximately 367,000 square feet including classrooms and student dorms. As part of our plan to return the profitability, we are working aggressively with the landlord to find other options for this property and efforts to reduce our building costs at this campus. We are still in the process although we feel we have made some progress towards achieving [indiscernible]. During the second quarter, the Hartford campus…

Thank you. [Operator Instructions] Your first question which comes from Joe Janssen at Barrington Research. Please go ahead.

Yes, good morning Scott, thanks for taking my question.

Yes, good morning Joe.

Okay, just on the Audi, congratulations I think that’s a nice win. Can you just give the decision on how that gets rolled out for four campuses versus more campuses? And then secondly, just can’t refresh my memory, how many other agreements do you have with others [for your success]?

Well we have the – okay I go in reverse order. We have a BMW step program in our Grande Prairie facility, but we also have a Chrysler Mopar program that is at four facilities I believe as well as we do some GM training another four or five our auto schools. As far as the Audi, we are very excited by this, because obviously Audi is a great brand and we are the first school that they have partnered with this new program. And basically what they are looking for is what audience are looking for, they are looking for diversified platform they could find skilled technicians around the country to meet their local needs and overtime they will be having and I am not quite sure the number of these programs in total but they basically came to us and look to see where their needs were greatest and to be honest with you it started off with one week with one program and within three or four weeks they increased it up to four of our locations with a possible fit location that we are still in discussions with. And this program will begin until January because we are still developing the curriculum with them but it will be a really great add-on program that will help attract students will also give students some enhanced skills which will need the much smaller employable going forward. So we are very pleased with the opportunity.

And how does the student give it, I know that one still kind of up and running just over kind the curriculum, but looking BMW GM other student enrolling caps on those or they are [indiscernible] best of the best of their student population I am just curious how that works?

Yes, they were all different models in the case of BMW those are the students who have graduated who then apply to and based also their grades and attendance and other selection criteria BMW select as individuals. The Audi program will be different, the Audi program will be one in which students will be enrolling from day one into the program and then will follow through and a take a normal program plus some additional courses with Audi and then will be up to their just like any kind of program depends on their grades and attendance as far as which dealers would select which candidates to hire.

Does the Audi subsidize many events in terms of like tuition for student?

Not for the student as far as the subsidies that way but they do provide us with equipment cars and other tools and things of that nature to make the program as robust as possible.

Got you. And then jumping around here, you talked about the multiyear contract, I think 4 million in the potential of 5 years of government [indiscernible] I think those run HVAC.

Yes.

Are you -- is then [indiscernible]?

Yes 100%.

Okay. And then a couple some number questions here. Any color you can give, you kind of given color on previous calls around that, campus footprint any significant changes in terms of one that we start versus negative starts and one for legacy, possibility or [indiscernible] profitable from the best of the numbers?

Here, actually -- yes, [indiscernible] hasn’t changed from last time I think that we’ve shared with you in the past on the automotive side we have 12 campuses of which we are expecting a 11 to be profitable one we had some management changes and expect that to be profitable again next year. On the healthcare side it’s – there is a same 11 that are profitable and 7 that are not, consistent with what we said in the past.

Okay. Okay, and then one last, I’ll jump back in queue, actually I have more but [indiscernible].

Okay.

Healthcare, just kind of update me on your [indiscernible] process there obviously it’s probably performing a little bit and if, your expectations are fast in terms of its you are reinvesting into those platforms, you are selling this shutting it down or just, some general color on that will be helpful? Thanks.

Sure, it’s definitely more challenge in our automotive side we are seeing more strength on the transportation and skilled trades. Over that I mean obviously, different markets do have strength in the healthcare side and that will be a long-term opportunity. And as far as, we are making the investment, we are just getting so much traction right now on the transportation skilled trade side that we are paying more attention to that as we speak. But as I also mentioned, we are funding some additional hospitals and others coming to us looking for training opportunities definitely in the healthcare sector they are looking for higher level certificate it seems across the Board and that will hopefully provide us with a future opportunity there.

Great. Thank you.

If you would like to go ahead with another question Joe, we do have the time.

Sure, let me just follow up one on the -- on the cost take outside of it. I think you had quantify that last quarter I think in ‘14 you said 12 million to 14 million you have taken costs out, you expected obviously to take costs on ‘15 I think you said to a lesser magnitude I am just thinking, we are -- there months passes will -- last talked any thoughts on maybe that number any increase decrease kind of the same commentary any color would be helpful? Thanks.

Yes, I don’t Brian adding different.

Great. I didn’t know really nothing is different we did add some more cost cutting for this year later on top of what we did in 2014, with salaries benefits and travel, it was an excess of for those areas of over $5 million.

I just make a general comment. Maybe obviously, our business is smaller than what it has been in the past. We have to be very mindful at the bottom line and frankly we are looking at added [indiscernible] expense savings across the Board frankly from the very top and above the Directors down the campus level. So we will continue to look at those things and manage the business accordingly.

Okay and then just curious, you’ve -- going to this transition, it’s been going -- ongoing here for number of quarters….

Yes.

In terms of retaining good educators, seem around just curious any color around that what you are seeing and how you are, keeping obviously people motivated and more importantly happy and saying keep in the ones that you want to see keep in the organization?

It’s a very good question. Actually the whole industry is challenged at this time. And it’s really just trying to reinforce what the message is and what we are doing I mean the good news about our business is that people that are -- in our business are doing it because they enjoy the excitement of helping the students and so that excitement still exists at the same time they obviously see challenges out there and maybe populations are well then do would like them to, so its constant communication with the feel and making them aware for the successes we are having as well as being realistic about what are our challenges are. So it’s something that we pay a lot of attention to.

Great. Thanks for taking my questions.

Appreciate Joe.

Yes, thank you. Then next question is from the line of Doug Ruth of Lenox Financial Services. Please go ahead.

Hi, thank you for hosting the call and answering questions. Could you give us some color about what happens when you have the corporate sponsored events how the interaction seems to work between the faculty and the people that are coming to visit the schools?

Good morning Doug. We have a lot of different models out there, we have some models frankly where we host events at the corporate side itself for example it’s an auto dealership where we might host inspiring high school students and their families to come and learn more about Lincoln as well as learn more about the automotive industry. So that’s one way that we do it. Other times let’s say we have events we have the CMC program up in Mahwah and there we constantly are having industry people come in either just to meet our students or to interact with our faculty understand what we are teaching as well as having Advisory Board meetings to find out what help them in that local markets to have successful students. The Caterpillar example that I gave is kind of a different one but the same idea two days are dedicated whereby no one else was invited on to our campus besides this Caterpillar dealerships and we have banners, we have events going on and it really gives the dealerships a great opportunity to interact with our students as well as with our faculty and see what we do and see the shops and here what’s going on. So it’s really a broader way of opportunities that we have with industry and we are opened frankly to all their ideas and as we’ve said earlier, the first [indiscernible] parties who are getting more and more interest from our employers to help them. The challenges that we have in the challenge base is that, there is challenges in attracting more people into their respective industries. But given this need and demand I am very confident that will work other way to make people aware of what the opportunities are which will hopefully benefit us as well as our employers.

It sounds like this experience say you are getting much [indiscernible] doing that when you are doing it, it just seems like possibly there is more interest and there is more people coming to each of the events is that true?

I certainly hope, I certainly believe that we have a much greater focus on this type of event we have realized that the old days of being able to run TV ads and attract your audience, they’ve gone away and so we definitely need to have more local presence, more interaction with our local communities and more involvement by our employers and we see that as a great strength and something that frankly differentiates us from some of our competition but also enables us to serve our students and our employers a lot better. So here we will continue to put focus on this and I think as usual said every time we do we come up with new ideas and we get better ad. So that’s always a plus.

I think that’s impressive. Is there -- do you feel like there is any pockets of strength in the transportation and skilled trade segment anything where you feel like you are maybe gaining some traction?

No, I really don’t see anything that’s really standing out above all others to be honest with you.

Okay, how about you mentioned it possibly you felt like something you were moving forward with the Hartford campus as their -- you feel like is a resolution in site to the situation?

I can say that we are getting to closer to the resolution I feel more of confident about where it’s going and the owner of the property has two initiatives underway which he is very confident and that will end up in a positive outcome for us. So certainly, the light at the end of the tunnel is getting bigger but that’s about all the spasticity [indiscernible] give to it but its under his control what will happens.

The other thing that you’ve commented on little bit in the past but what about any kind of pending asset sales is there anything new on ad -- on ad initiative?

Well, there is nothing new to report on that I mean again we continue to look at our portfolio we continue to look at opportunities to create greater liquidity to rationalize our business and so we will continue to pursue those initiatives but nothing new to report on that.

Okay and how do you think the nursing program and the medical assistance program how are those two programs performing into -- according to your expectations?

Well, according to our expectations they are performing below our expectations both were down and that’s unfortunate and somewhat low perplexing to asset times given all the talk everyone has about the demand for healthcare but I think that we are looking at putting in some different plans in place increasing a scholarship here in New Jersey for nursing that will help drive more demand. So I think that we can address the situation but it is kind of our given all the talk about the huge growth in healthcare allowed us program to not being performing better.

Do you feel like you have your arms wrapped around, what the challenges are in recruiting people for these programs?

Yes, I think that we do have our understanding of what’s required for each of these programs such as that in each market there are different constraints coming into play but I think we definitely have an idea of how to address that.

And I think that you focus your [indiscernible] doing good things for the students and you are making good decisions for the shareholders?

Well, thank you Doug, I appreciate that.

Thank you. [Operator Instructions] as we do have no further questions, so I’d now like to turn the call back to Mr. Scott Shaw for closing remarks.

Thank you, Dave. Thank you all for participating in our call today. And we look forward to keeping you informed on our progress. In addition, we will be at the BMO Back to School conference in September and look forward to seeing some of you there. Have a great day.

Ladies and gentlemen, you may now disconnect. Thank you for your participation in today’s presentation. Good day.