Good afternoon, and thank you guys for joining us at the Midwest IDEAS Conference. On behalf of Three Part Advisors, I'm Meryl Gergen. Presenting up next, we have Lincoln Educational Services Corporation, trading under Nasdaq on ticker LINC. With the company today, I have Scott Shaw, President and CEO. Scott?
Great. Thank you. Just quick question: How many of you know who we are versus who don't know who we are? So one, two, three. Okay, so half of you know, and half of you don't know. So all these slides are up on our website, so I'm gonna try to get through them fairly quickly since we have a limited amount of time, and I will try to get some time for questions, or you can always pull me over and ask me questions at another time. Safe Harbor. So who is Lincoln Tech? So Lincoln Tech, we are a leader in the post-secondary education space, and what we're trying to do is fill that skills gap. Employers, you read about all the time, cannot find enough trained employees, especially in the fields that we offer.
We offer hands-on training, so it'd be welders, electricians, HVAC techs, as well as nurses and things of that nature. We are a leader in the space. We've been around for 78 years. As I'll show you, east of the Mississippi, we're the largest provider of people who are graduating with an automotive or skilled trades post-secondary degree or diploma. We're basically a diploma school. We are experiencing growth right now, which is unusual, really, for us at the level of growth that we're experiencing. Typically, we do really well during recessions, but thank goodness, recessions are every 10 years or longer.
But what we're seeing is good, solid growth right now, and that's because of a shift that's taking place whereby more and more people are really questioning the value of college, and we're a faster, cheaper way to get into the workforce, so more people are coming to us, which is good news for us. Profitability is, as more people come to us, we're like an airplane or just like this conference room. If all of a sudden, all these seats were filled up, this conference would be making a lot more money than what they're making, with these seats filled as they are, and that's the same process with us.
As we get more students in each of our campuses, more students in each of the classrooms, our margins go up, so we have good incremental growth in profitability, and that's what we're forecasting over the next three years as we see this growth coming both from organically, more people coming to us, as well as our ability to replicate programs and open up new campuses. It's just that's so small on the screen. And then balance sheet. We have no debt. We have about $60 million of cash, so we're in a really good position in order to execute on our strategic plan to open up more campuses and replicate what we have, as well as to continue to invest in our programs.
I'll talk about it later, but we have much better outcomes than our nonprofit peers, which helps give us a strategic advantage. Then finally, we have moved to a blended learning platform. Obviously, during COVID, everyone was remote. We didn't think that our hands-on learners could do well, but they like a portion of their education being done remotely, and that adds some greater efficiencies for us, greater capacity in our campuses, and better utilization of our faculty, and that's gonna help drive increased profitability as well. I spoke about growth, and this is what's happening. We're 22 campuses today in 13 different states, but we're not like McDonald's. We don't have 22 identical campuses.
Some of them were formed through acquisitions, and what we're going through is a process of standardization so that even if we don't have the same programs in each campus, we have the same processes and trying to create as much efficiencies as possible. So that's gonna help drive increased profitability going forward, as will this our Lincoln 10.0 model or our blended learning. Second of all, it's like a retail. We're trying to drive more sales per sq ft, so we're putting more programs into our existing campuses where there's demand and where there's need, and frankly, where we have space. And so we've been replicating programs. Each program that we replicate, we anticipate in three years, should add about $1 million of EBITDA, and we probably, you know, over a three-year period, have about 12, 13 campuses.
I mean, sorry, programs that we're replicating. Then we're also opening up new campuses, and we haven't opened up a new campus in 18 years. And we opened our first new campus in Atlanta in April. Actually, March was our first class, and already by the end of June, we have as many students in that campus as we had forecasted for the full year. So we've already have about 300 students at that campus. So, luckily, our research and all of our efforts to pick the right location seems to be working, as well as we know that there's this inherent demand and need out there, and so that's in our favor. Our plan is to open up one new campus a year on average over the next five years.
The second part is acquisitions. We haven't made any acquisitions in almost as long a time as opening up a new campus. I'll talk a little bit more about that, but as an opportunity for us to accelerate our growth, we look at a lot of things, but we really have a high threshold to accept what an acquisition, frankly, what we'll pay for something. Also, with an acquisition, there's always some risk, regulatory risk that comes with it, and so we always put that into the equation as well. This is what we believe we can achieve over the next three years. We started this plan last year, and we're already, frankly, a bit ahead of where we said we would be this year.
But through all the various things that I just announced, we believe that by twenty twenty-seven, we'll have Adjusted EBITDA of around $90 million based off of growing our existing campuses and our existing programs, based off of the 12-13 program replications that will be in place by the end of next year, based off of opening up our new Atlanta campus, which has happened, as well as our new campus in Houston, which will open up at the end of next year, as well as the relocation of our Philadelphia campus and our Nashville campus. So based off of those assumptions, which all, you know, are in place or actively happening now, we believe by twenty twenty-seven, we'll be up to about $90 million of Adjusted EBITDA. On top of that, again, we'll continue to open up new campuses.
We should be announcing another new campus that will open up in 2026 by the time we have our next earnings call. So we just see lots of opportunity for continued growth. So I mentioned we learned during COVID that we could move to this hybrid model. What we've done is, instead of having students come to our campuses five days a week, about six hours a day, they're now gonna come four days a week, so they have a Monday through Thursday schedule. They come for about four hours in the day, and then sometime in that week, they have about eight hours of education that they need to complete all online. While we're a hands-on institution, there's always theory and other things that you can learn in the classroom or by lecture.
And what we're trying to do is deliver that lecture in a more engaging way online, with videos and other forms, so that when the students come to our campuses, they're doing the fun stuff, which is in the shops and in the labs and touching things, fixing things, building things. That, that's what really drives them. And this model will enable us to have greater efficiencies. It helps us better utilize our faculty. It also frees up more space within our schools since the students aren't, frankly, in the school as many hours a day. And that's one reason why we're able to start replicating some of our programs into campuses that previously we thought were full from a capacity standpoint. This is just a sample of what our new schools do.
It does take us a long time to open up a campus, but we have to go through permitting, we have to go through state regulations, we have to go through accrediting regulations, and we have to go through the Department of Education regulations. So it takes about two months, sorry, two months, I wish. Two years in total by the time we announce something and the first students are in that class. And then we anticipate, frankly, within 24 months or so to be generating positive cash flow at those new campuses. Each new campus does cost us somewhere between $15-$20 million, but each new campus we anticipate should be generating about $6 million of EBITDA in about 36 to 40 months after opening up. As I mentioned, we also...
I probably look at at least ten companies a year from an acquisition standpoint. Again, we haven't made any acquisitions, but we look at them very carefully. They're gonna be either to help us get into a new field of study that is very related to what we do today, such as, let's say, aircraft maintenance or maybe an RN program or, or something of that nature. We're not gonna go into something that's not hands-on, so we're not gonna become an accounting training institution or, or something of that nature. Also, we're looking at acquisitions from the standpoint of, does it accelerate our presence in a market that we plan on getting into anyway? And/or there are opportunities out there that, frankly, could be, I'll say, slightly underutilized or mismanaged assets.
And given our strong balance sheet, we believe we could maybe turn those around and apply our effective marketing strategy, as well as put in some of our more successful programs. So it could be an acceleration of our real estate play. So we look at everything, but as of yet, we haven't bought anything. The good news is, I mentioned that there is greater demand for what we do. During COVID, the government came up with the definition of essential workers. Most of our students who were employed were working throughout COVID because they were in essential jobs. You need to keep the lights on, you need to keep the HVAC systems running, you need to keep electricity and computer networks up, you need to have Amazon delivery trucks or trucks delivering food to supermarkets and whatnot, all up and running.
Obviously, the hospitals were staffed up to their gills with people. So we serve all those markets. All of our students, or 90% of them, are deemed essential workers, and the ones that aren't, we'll probably be getting out of those disciplines, such as we have one cosmetology school that's not critical to what we do. We have two culinary programs that aren't critical to what we do. Both of those are not deemed essential workers, and so we'll eventually transition out of those over time. So as I mentioned, we have 22 campuses in 13 states, about 14,500 students. I'll just give you an aside. Back in 2010, post the big Great Recession, these same 22 campuses had 18,000 students in them.
So that just is give you a sense of the capacity that we have already for continued growth without putting in a lot of new money. And obviously, that additional capacity drives a lot of profitability because, again, you're not investing in any more infrastructure. One of the things that we do pride ourselves on is very important, and it's why we've been around for 78 years, is that we do have strong student outcomes. Those are measured by our graduation rate. It's around right under 70%, which is the target I've set for the company. Our placement rate is around 82%. We have a goal of 85%, and if you were to compare us to our best comparable company or organization, that'd be your community college.
In the United States, community college graduation rates are about 33% over a three-year period. So our graduation rates are more than twice those at the traditional community college, which is one reason why I feel good about what we do. This is another reason why I think that we have such a good, strong relationship with the Department of Ed, and have a strong regulatory record as well. This just gives you a picture geographically of where our campuses are. We started. Our organization was founded in nineteen forty-six in Newark, New Jersey, so we have a strong presence in the Northeast. And we will continue to have that strong presence, and frankly, could continue to add campuses in that area. But we're also not in a lot of the big growth areas. We're not in the South.
We have nothing in Florida, nothing else in the South, besides in Georgia. We have the one campus in Texas. We're opening a second one in Dallas. You know, we could probably have five campuses in Texas, given the size of the state and the growth in the state. We're not on the West Coast. California's a big market, but it's a regulatory nightmare of a state to be in, so that probably won't come till later. But there's lots of ripe areas for us to grow, and also the growth is all taking place, from a population standpoint, in the South and the West, and so that is where we're focused more, as far as new campus openings. We serve the largest segment of the workforce, which is that middle skills area.
So the lower skills, these are jobs that are just people out of high school. These are jobs that are more susceptible to robots. Just like you go into your supermarket or your Home Depot, you're doing a lot more of your own self-checkout, because they can't find enough people to do it, or they find it cheaper to make us do it. So those are the types of jobs that are there and are more likely to kinda go away. And the higher end jobs, those are jobs that require a bachelor's degree or higher. We obviously need probably more of those in the future to keep the economy growing. But also, those are many of the jobs that people are fearful that AI will take away, because AI is designed to take away the mind.
But for me, luckily, AI doesn't take away the hands, so we are hands-on skills, and most of our jobs won't go away. I can't really even imagine, certainly in the next decade, how any of our jobs would go away from AI. In fact, AI will help them. So the auto mechanic will get a better diagnosis, probably, because AI will tell them how to fix it, but you'll still need someone to physically fix that, that problem. AI will probably help healthcare, but again, you'll still need a person to provide certain services. So I think that the fields that we offer are really quite, certainly in the near term, very AI-proof, which I think also makes them very attractive. So that bigger group within the workforce is the middle skills. So that's someone that's more than a high school, less than a bachelor's degree.
With technology invading everything, with everything becoming more specialized, everyone kinda needs some form of training, whether it's three months or three years, but they all don't need a four-year degree, that's for sure. And there is this big imbalance, and the imbalance in there, and why there is this skills gap, is because basically, starting back in the eighties, was a big push by the government to really grow the number of people going into college. And in order to do that, like in many government programs, it's very much focused on one thing, and they basically excluded vocational training. So in order to help more people go to college, many high schools got rid of their shop classes and things of that nature, to help drive more people into more academic programs, to hopefully make them more successful in college.
Maybe sounds all good and probably might have been the right thing to do, but I think it was the wrong approach, because it shouldn't have been that they just excluded vocational training, because I think, as they found out, we now have this shortage because they've taken people away from being exposed to vocational training. So today, there have been for 40 years, many students who have no idea if they have an inclination or an aptitude for the trades and could really benefit from the trades. All at the same time, where the number of people needed for the trades has increased, and that's what's driving this skills gap, along with the whole Baby Boomers retiring. People aren't able to move up because there just aren't a lot of people at the entry level.
Everything, as I mentioned, is becoming more technologically advanced. We know we have to invest in our infrastructure in this country, and billions of dollars have been set aside for that, but there aren't the people, frankly, to do the work. So there's this huge need and demand out there, and not enough people, which is great from my perspective, for me, because that means that our students are in demand, and those that go into the program are, I think, have a leg up. Which is why they can, within a year, start earning $50,000-$60,000, compared to their peers that have gone to college, that might be earning that, if they're lucky, three years or four years later, and our students will come out with half the debt.
The average debt of our students is around $14,000, so a lot less and easier to tackle. Our marketplace is big. This, so this is looking at BLS data for the fields that we offer training in, and this is how many people, on an annual basis, need to go into these fields, and then I just put on top of that, how many of our students, how many students do we have graduating each year in these fields? Obviously, there's a huge opportunity. We have about 2.6% of the market for skilled trades, and less than that in the healthcare and other professions.
Now, this is across the country, and obviously, the you know, in certain markets, we could have a much larger market share, but it just gives you the potential for how we can grow as we expand and open up new programs... I'm sorry, new campuses in new markets out there to better serve the employers. And our approach is different than a community college. Basically, as a for-profit institution, our students are our customer. We want our customers to be happy. We want our customers to be successful. The more successful they are, the more people they'll tell, and the better it is, obviously, for us. So it helps us from a business standpoint, it also helps us from a regulatory standpoint.
Our programs are accelerated, so in one year or 12 months at Lincoln Tech, would be the equivalent of going to college for two years. Because a typical semester is 15 weeks. At most, depending on how you pick your classes, you're maybe in front of a teacher 15 hours a week. So that's 225 hours of instructional time in a semester. Most of us, when we went to school, only went for two semesters, which had lots of breaks, vacations. So that's 450 hours of instructional time in one year at a traditional college. In one year at Lincoln Tech, you'll get 1,000 hours of training with an instructor, so it's equivalent to two years. Again, our students wanna get in and get out as quickly as possible. Also, all of our faculty members are from industry. They're not academics.
They're not people that have never done the task and only read about it in a book. Instead, it's quite the opposite. They've done the task, and they're now sharing with the student: "Here, the book tells you this. Let me tell you how you really make money in HVAC. You gotta do this, do that." And they give their students the practical needs and practical skills that they need. Also, if you go to our campuses, it's gonna be a much more robust learning environment. A lot of the community colleges, some of them don't even offer what we have because it's expensive.
It's a lot easier to have a lot of classrooms like this, where you're teaching marketing or something else with a person standing up in front of you, giving you information, than building out a welding lab or having 50 cars in an auto shop or having electrical trainers and things of this nature. It's much more expensive, but we're willing to make that investment because we do get a good return ourselves. But community colleges, you know, they're, they're more like a department store. They're there to serve the broader community, and therefore, you know, we're more like a specialty store. We're very much focused, so the experience naturally is gonna be more robust at our institution than at theirs. As I mentioned, we are the largest...
This is a group of states just west of the Mississippi, but when you look at graduates who are coming out with an automotive and a skilled trades diploma or a degree, associate's degree, we provide the most of any other post-secondary institution in the United States. We also partner with industry, and we find this to be very valuable. It helps give our students an edge, especially with these employers. It gives them greater skill sets, which makes them, frankly, more highly paid. These employers many times give us donations, which helps lower our costs. They also build our reputation. You know, Tesla came to us, and we're now probably the largest trainer of Tesla technicians, 'cause they went to the community colleges, but they couldn't meet their needs.
Again, we're much more business-focused, and we're much more customer service-focused, and we're able to meet their needs better than the community college. Also, for a lot of these employers, and why we also want to add more campuses, is we create a network. So for some of these larger employers, like Johnson Controls or Hussmann or others, they can come to one Lincoln Tech and know that when they're gonna hire our electrical students across our campuses, no matter what state we're in, they're gonna have the same skill level. So they can work with one Lincoln Tech instead of working for, let's say, 12 different community colleges. Much more effective from a hiring basis, and we're gonna continue to build that network. As I mentioned, we are highly regulated, and one reason why we're around is because we pay a lot of attention to this.
We wanna make sure that we're around for the next 78 years, so we're very much focused on our graduation rate, which I mentioned, close to 70%, placement rate, we're at low 80%. And also, just on that placement rate, that's placed in the field for which you studied. If you came to Lincoln Tech to be an auto mechanic, and you're working in an Amazon warehouse, that's not a placement. That's not a job, so this is placed in the field for which you studied. Compliance, there are regulations. There's a rule called 90/10. Not more than 90% of our revenue can come through government funding sources, and we're at 81%, safely under that 90/10.
Cohort default rates was a measure that everyone had, but during COVID, the government said, "Hey, no one needs to pay back their loans." So COVID, you know, it's no longer a relevant measure. Now, starting next month, students will have to start paying back their loans, so this will come around again. But even when students had to pay back their loans pre-COVID, our rates were in the 9% level, which is very comparable to what any kind of traditional college would have. And then composite score is a measure that the federal government has to determine your financial strength. It's like being a, you know, A-rated bond. And the highest score you can have is three point oh, and that is what our score is, a three point oh. You can't get any higher than that.
I'm fortunate to have a very experienced management team. The average tenure with Lincoln is around nineteen years. Very unusual, to say the least, in today's work environment, but it's very helpful in a highly regulated industry that we are to have people that understand what those rules and regs are, as well as we've all gone through various cycles of the industry. So I feel we're very well-positioned. Chad Nyce is my youngest, as far as a Lincoln Tech person goes, at joining our company, and I do have a new chief marketing officer, who starts on Monday, because my prior marketing officer retired.
Susan English, who's on this list, has been with the company 40 years, and she's retiring in December, so I'll get a new person in that position in a couple months. I also have a very effective board and, frankly, have been able to revitalize my board. Everyone on this list has only been on the board for less than, except for myself and Jim Burke, less than 5 years. We've added greater diversity of skill sets, greater diversity in people. Our board is far more reflective of who our students are. Many of our board members have stories very similar to what our students are. Let's say Anna Cabral, who just joined. If you look at your dollar bills back during the Bush administration, you'll see her signature.
She came from a very disadvantaged family, and obviously rose up to very high stature. Same thing with Marta. Both of them are Hispanic. 30% of my students are Hispanic. Carlton Rose is on that list. He graduated from our campus in Indianapolis 40 years ago. Started putting boxes in the back of the UPS truck, and when he left UPS, he was in charge of every piece of their equipment in their entire fleet around the world, whether it was an airplane or a package truck. So again, someone who took a Lincoln Tech education and went full board. Also, we'll say, the CEO of Intel came to us, and we gave him a scholarship, Pat Gelsinger, and he went on to do great things.
He went on to Stanford after Lincoln Tech and, you know, some other places, but anyway, he got his start at our organization, for which we're very appreciative of. Oh, did I skip? So this is a quick review of our finances. We had another strong quarter. The last quarter grew our starts by about 12%. All of our metrics are going in the right direction. All of them are slightly better than what our original guidance was for the year, and we slightly raised our... At least we raised the lower end of our guidance and tweaked some of our higher-end guidance, but things are all moving in the right direction for us. And I'm not gonna go through anything. Oh, there.
Again, these are just some of the trends that our business is going. Our revenue's been growing nicely. We are seeing now, finally, growth in our EBITDA, which is we've been making investments over the last couple of years, as we've transitioned into this hybrid learning model. We're starting to see benefits of that hybrid model and increased efficiencies and increased profitability. And then similarly, if you look at starts, you know, the way to judge our business is our starts, and needless to say, our average population. So as long as both of those are growing, things are gonna go well for us financially. And right now, we're seeing really strong growth and continued growth for this year and next year.
And in those numbers that I shared with you earlier, is implicit in that is about a 10% growth in our top line over the next three years. And, you know, this year, you know, we're guiding higher than that. So, I feel good about what we've shared with the streets, as well as our ability to achieve that. And then, these are just our guidance, which I laid out before or mentioned, and then I'll just go to this last point here, just because I think it's important. We are a seasonal business. We make 80% of our profit starting now until the end of the year, and that is because, and we've always been in that cycle, because we have high school students. About 20% of our students are coming out of high school.
Our average age is twenty-five, so we definitely serve the adult learners. But when those high school students come in, and our programs last about a year or so, we have an overlap. So our population peaks end of September, beginning of October. You have all that additional revenue. Again, you have the fixed costs, so you make most of your profits at that point. And as we continue to grow our population, then each quarter incrementally becomes more and more profitable, but we definitely make the bulk of our money at the end of the year. And with that, I think I have, I guess it's counting down here, seven minutes. I have a couple more slides, but if there are any questions, I'm happy to take any questions. Yes, in the back.
Thanks. Great presentation. Actually, so your main growth, you know, does it come from marketing services or a combination of that and increased markets?
Yes.
So, would you say that your growth means one tool or the other or a combination of both?
It's a combination of both. I mean, the sad point is, I say it's sad, you know, people think that if you just make education free, it's all gonna work out wonderfully for everyone. Every gap we have is somehow gonna miraculously fill up, and it's not the case. I mean, I have a program called CNC Machining, which is probably one of my better programs, frankly. It's shorter, cheaper, and the highest wage program besides nursing that I have out there, and we're probably gonna close it because we cannot attract enough students into that program.
We have to market, and even though there are lots of great job opportunities out there, and even though everyone knows what an electrician is, and everyone knows what a nurse is, you still need to somehow spark them to take action and to move forward. We do market heavily, and we follow that closely, so I track our cost per start. Good news is, over the last five years, you know, cost per start's been relatively flat, up and down 1% to 3% a year, but basically flat. As long as that remains the case, I'm gonna continue to put more money into that area. Yes, sir.
So your area of trades has got a lot of press in the last year in the Wall Street Journal.
Yes.
Certain articles.
Yes.
So are you starting to see the community colleges start to respond to the program? Do they just not have the capital, and how does that change the competitive dynamics for you?
Yeah, well, A, first of all, they need to get better... and then we need more people, so I think there's plenty of room, frankly, for competition. But I'm not worried about the community colleges because, you know, they're just, I mean, the good news, bad news about education, it moves slowly, and so even when the government throws money at it, it doesn't solve the problem. For example, just like my own CNC problem, local community college, five years ago, launched a program, and all the local politicians went, and we're gonna help all of our manufacturers, well, four years later, they shut down the program because, again, you have to be out there marketing. You have to, and here we are spending lots of money marketing it, and we still can't attract students.
So, long story short, I'm hoping, and I'm seeing more of it. I hope they bring back vocational training in high schools because you really have to start getting them at the younger age, as well as getting parents more comfortable. Because by the time they're a senior, people have already kind of made up their mind. But I want more competition. I want more of the government to put more money in it because the more people that are exposed to working with their hands, frankly, I believe, the more opportunity I have because we do offer, I believe, a better product. Anything else? Yes, sir.
The stock for many, many years was at the same price.
Yes.
And then, boom, it went higher.
Yes.
I'm wondering, what do you attribute that to?
Well, we weren't making money for a number of years, so it's tough to get excited and invest in something that's not making money. And then, all of a sudden, we were able to start getting growth again, even though unemployment was at fifty-year lows pre-COVID. And then, we freed up some capital with getting out of some of our real estate. So now we have money to reinvest in our business to accelerate that growth. And as we grow more, again, the incremental dollars fall to the bottom line. So the trajectory that we're on is much different than where it was five years ago, and frankly, the marketplace is frankly much different. I mean, five years ago, again, we were growing with unemployment at you know, fifty-year lows, which typically doesn't happen.
But we're growing now at several, you know, hundred basis points higher, because of this shift that I really do feel is happening. Certainly, I read in The Wall Street Journal, the Toolb elt Generation, and, you know, every other month, there's another article, or every other week, there's an article about it. So I have to believe that's real. But with that said, it's not like I'm seeing my high school population grow faster than my adult population. My adult population for us is still growing at a higher rate. But just having more people talking about it, having it at cocktail parties, my peers being, "Boy, my son or daughter should have gone there instead of going to college." Just that mindset, the more that that happens, the better it is for us.
Sorry, have you given guidance for earnings or?
No. No, we haven't. We're gonna get there, but you know, right now, we're still on that growth mode right now. Yes, sir.
What, like what percentage of the classes are full or at capacity?
Well, I would argue that none of them are, because I can always create more capacity. Because back in 2010, for whatever reason, collision was really exciting, and I had a midnight to 5:00 A.M. shift. So hard to do, but, you know, I don't have anything on the weekends, so I believe I can create more capacity if I ever got in that position. But as I mentioned, we had 18,000 students in these same campuses, and that was pre-going to a blended learning model, so I think I have plenty of runway for now.
Yeah, I was wondering, when you go from, like, a six hour per day in the classroom to four-
Yep.
You go from, like, an 8:00 A.M. to 2:00 P.M. to maybe an 8:00 to 12:00, and then a 1:00 to 5:00 something like that.
Yes, yeah. Uh-huh, exactly. So yeah, 8 to 12, 1 to 5, and then 6 to 10.
Yeah.
Yep. Yes, sir.
Just curious if there's an opportunity to partner with community colleges to build out their own or even?
High school programs t hat have neglected their shops.
Yes.
Any opportunities there you can exploit or things like that?
Yeah, there are both. I'll just tell you, they're very difficult to deal with. So we have a number of... I'd say, the Newark Board of Education came to us, and we're doing a program for them in automotive. But it's only about 26 of their students that they're sending to us to be trained at our campus in the afternoons, as a high school student. But it's a great model, because if they come in their junior year, and they stick to the program, by the time they finish in their senior year, all they have to do is take seven of our 13 courses in automotive. So then they could then come to us, graduate sooner at even less debt, and have a really great outcome.
But trying to work with, let's say, high schools, I mean, everything, especially like in our home state, New Jersey, every township has their own board of education. It's just a nightmare to deal with, and you have people that are on your side one cycle, and then they're against you the next cycle. So the answer is, there's opportunity, but I haven't put a lot of resources there, just because there are more productive things for us to be focused on right now.
Thank you.
Yeah. Did you have another question? Anything else? Yes, sir.
Just quickly, do you own any type of real estate?
No.
Or does that full value of your requirements?
Oh, our capital. We don't own any real estate anymore, so we did all sale leasebacks on the few remaining buildings that we have. So all of our capital is in the renovation of the spaces. So for example, we've just taken over two Amazon distribution centers, which they have nice high ceilings, which makes it conducive for automotive bays or diesel truck bays. And then, but it costs us a lot of money to put in classrooms into those spaces and buy the equipment. So that's what all of our PP&E is. There's no land. Anything else? Great, thank you all. Appreciate your interest.