Good to go? Awesome. All right, welcome everyone to this next session at the 19th Annual Needham Technology and Media Conference. Thanks for joining us. I'm Ryan MacDonald. I lead Needham's education research efforts. In this presentation, I'm pleased to be joined by Universal Technical Institute, and we have the CEO, Jerome Grant, and CFO, Troy Anderson, joining us. Gentlemen, thanks for being here.
Great to be here.
Thank you.
Thank you so much.
Yeah. So the format's gonna be a presentation, and then we'll have them present for about 30 minutes, and then save the last 10 minutes or so for audience Q&A. So with that, I'll let you guys get started.
Thanks.
Great.
Sounds great. Just a brief safe harbor statement in our materials of the forward-looking statements. All of our SEC filings, press releases, et cetera, are all available online and just refer to those before making any decisions or do not rely on any forward-looking statements we make as part of this presentation.
Hi again, I'm Jerome Grant. I'm the CEO of Universal Technical Institute. Thought we'd give you sort of a high-level overview of who we are, what we're about, and Troy will go into some more details with you as well. So UTI is a leading workforce solutions provider. We're we have 33 campuses in two high-demand segments, one segment being healthcare. Think of everyone who surrounds a doctor, radiology tech, nurse, et cetera, and dental on that campus. And then you've got the UTI division, which is 16 campuses focused in transportation, skilled trades, and energy. We offer over 35 programs, and over 20,000 students now, moving significantly past 25.
Four out of five of our graduates find jobs in the market within one year, which these are statistics that are very, very important in the education business. How many of your students graduate? How many find jobs within market? It's part of what the overall regulatory environment looks like for to judge your success. These are very, very, very high success rates. We just put out a very strong financial outlook. The second quarter was very, very strong, and Troy will go through those details. Raised our guidance for the year, $720 million-$730 million, and net income between $37 million and $41 million, and EBITDA between $102 million and $104 million.
We also put out some projections. These are not guidance, but projections for 2025 that we'll achieve nearly $800 million in revenue and a 15% margin, which is over 100 basis points margin improvement in 2025.
Okay. As Jerome mentioned, we did just report last week our Q2 earnings. The materials here are mostly focused on a bigger picture, but just a brief recap on our second quarter. $184 million in revenue, $22.6 million adjusted EBITDA, earnings per share of $0.14. And as Jerome mentioned, we beat and raised on most of our metrics. The starts, we raised our guidance there by 1,000 starts. Revenue, as Jerome ran through the numbers there, and we'll go through our actual guidance a little bit later as well, a little bit further on the guidance side. But for the quarter, really strong student start metrics across both divisions.
Revenue growth was 12.4%, and we saw good growth out of both divisions. Then, the student start growth was 18.5%, with, with again, good growth, high teens growth out of both divisions. An important point about the second quarter relative to prior quarters, if you do look at some of our, more recent financial reports, this is the first full quarter that we had Concorde in our numbers. We acquired them, the deal closed on December 1st of 2022. So last quarter was a partial quarter on a year-over-year. This is the first full quarter.
So let's learn a little bit about Universal Technical Institute. As I said, we're in two segments, healthcare and transportation, trades and energy. You know, we pride ourselves on a couple of things. Number one, extreme focus on industry alignment. OEM or manufacturer programs are a cornerstone of what we do, and we really work to integrate our employment community into everything we do. We'd like to show you pictures of where we are because we have, you know, quite state-of-the-art facilities. If you're in and around any of them, we love when the investor community does tours on our campuses. Our campus presidents love for people to come and look at it. One of the things you'll see is that they look very different.
Now, the healthcare areas don't look very different. They look like hospitals. But, in transportation, trades, and energy, our campuses are designed and equipped to mirror what you would see in, say, a Porsche dealership or a BMW dealership. We wanna put the students in the position that they're going to be working for professionalism reasons and also from the technology standpoint. Our investment thesis, you know, we pride ourselves on consistently meeting or exceeding our expectations. We have been executing quite well over the last years.
We are the largest player in this space, and we've been working on sort of a successful transformation growth diversification strategy for the past five years, and that's where you've seen the stock appreciation and also our student starts moving up significantly in that timeframe. And again, what's very, very important to in looking in this segment is outcomes. Maintaining your student outcomes at a very high rate is what keeps the regulators from you know, questioning anything about you, and UTI and Concordee have very, very strong student outcomes. And of course, we've got a very healthy balance sheet. Troy can go through some of those numbers with you as we move forward. Again, two platforms.
This sort of goes a little deeper into what I said about Concorde and UTI. Universal Technical Institute was founded 62 years ago as an auto diesel mechanic training school. We've since diversified into other skilled trade areas, welding, energy technology, we're in wind energy, aviation maintenance, robotics and automation. So what we've been doing on that side of the business is expanding to a stronger set of options for 18-year-olds- 24-year-olds, which tends to be the customer on that side of it. Because we talk to about 500,000 young people a year, and some of them don't wanna fix cars.
You know, having the opportunity in our facilities to be able to also do welding, HVAC, airframe maintenance, et cetera, is something we pride ourselves on. Concorde, which, as Troy said, we acquired in 2022, very, very strong in dental, about 40% of their business. Dental is a very, very strong market. It's also very high-paying jobs. Dental hygienists start somewhere in the neighborhood of $80,000-$85,000 a year, for starting salaries. They are the gateway to making money as a dentist. They are the first person in your mouth, what they have. And then, we specialize in a lot of other areas that surround the doctors, like, medical assistants, practical vocational nursing, respiratory therapy, physical therapy.
Everyone around there is very strong. Just north of 10,000 students in that campus now, and the 20 programs, so.
Okay. So Jerome mentioned the stock price appreciation, and of course, we talked about Concorde, but there really was a transformation that started back in the 2017, 2018 time frame with Universal Technical Institute, which was just the transportation, trades, and energy side, which at the time was really just the transportation. And a multi-year transformation journey that began. Coliseum Capital had put $70 million in a preferred investment in the company in 2016. Jerome joined the company in 2017 and really began the transformation across all aspects of the company, the marketing and admission sides, revamping the sales channels with a particular focus on high school and military. At the time, began expanding the welding program across the campus footprint.
That was really the first big program expansion. Rationalizing real estate took about 500,000 sq ft of real estate out. Started that process. We've done more recently, just in the last few years as well, but began that process to rationalize large, big boxes and multi-building sites to bring them down into a more optimized footprint. We've implemented the Blended Learning Model, so now students, instead of being on campus for six hours a day, are only on campus for three hours a day, and do the other three hours digitally, asynchronously. They have to do it in conjunction with the hands-on learning, but they can do it on their time.
That allows them to stay in the workforce, while they're in school, or we encourage them to be in the workforce while they're in school, particularly in the field of study. And then built new campuses. So, Bloomfield, New Jersey, in 2018. We had built a number of campuses, 2010, 2015, 2018, and then we built Austin, Texas, and Miramar, Florida, in 2022. And again, driving the growth there as we came into 2022 and 2023. And then we also made two acquisitions along the way, MIAT School of Technology, which gave us the aviation program, as well as the HVAC and robotics, some of the pictures you saw on the prior slide.
And that we've now also begun expanding across the UTI footprint. It was a two campus school, but they had eight unique programs that were in the same demographic that Jerome talked about earlier, that we can now offer them, more options, in the UTI footprints. We launched 14 of those programs, across nine campuses just at the end of last year and early part of this year. We have four more HVAC programs already on schedule to launch later this year. And then, of course, Concorde, we mentioned, which was really that big step change that you see here. And through that whole time, taking a company that was losing money and declining, for many years and really more than doubling the company and of course, dramatically increasing the profitability profile.
Anything you wanna add on that item?
No, that's great.
Okay.
Great.
And then this slide is, we've also gotten. We've really focused hard over the last few years about credibility in the marketplace. So while we've been going through that transformation, making the investments, we deployed over $200 million in capital, raised capital, both equity and debt, to effect that transformation over the last few years in particular. And being consistent in terms of our execution and communication with the investment community, setting guidance, achievable guidance, and setting longer term benchmarks out there.
So when we acquired Concorde, or when we announced Concorde back in the middle of 2022, we put a longer-term guide out there of greater than $700 million in revenue and approaching $100 million in Adjusted EBITDA. And then when we set our guidance by this year, by fiscal 2024, and when we set our guidance this year, we not only met those numbers, but now we're exceeding those numbers with the raises that we've done this year. And that was also some of the impetus for now putting out the $800 and 15% margin for next year to give the market something more to look forward to, as far as where we go next from here.
Of course, the market cap has expanded significantly, and you can see the shares have also expanded significantly. That's a function of the equity raise we did back in February 2020, as well as then we converted the preferred with the stock price appreciation. We were able to force convert the preferred shares. That happened just in December of 2023, and that brings us up to the 54 million shares outstanding. You can also see the liquidity in the stock has increased significantly through that time horizon as well, and particularly more recently, as we have now delivered on some of those longer-term expectations and really shown some of the success with the transformation.
... We exclusively focus within transportation, skilled trades, and energy or healthcare, there are a lot of disciplines. We, we have over 35 programs across them, but this is meant to show you we exclusively focus in the high-demand programs. There's a lot of programs out there that are not in high demand, things like massage therapy or hospitality or other trades areas that don't have the same demand characteristics as what we really focus is in areas that have high and potentially surging demand over the next number of years. And what the slide there on the side tells you is healthcare and some places like renewable energy really are.
That's why we made the move into healthcare, really are the sorta next generation of what's gonna grow and grow, grow rapidly. So, this is what we got out of the acquisition of Concorde was both growth and diversification. Traditionally, the UTI side of the aisle was 18-year-old-24-year-old, primarily male, although we've working very, very hard on bringing more women into skilled trades and transportation. So this expanded our demographic. In healthcare, it tends to be men and women between 24 and 35, so we've got a wider audience that we can appeal to. We're in bigger markets.
You know, overall enrollment in healthcare occupations is supposed to be the fastest growing occupational area in the United States, with over 15% growth between 2022 and 2032, with 2 million jobs being added annually. That gives us a lot of opportunity to bring new programs to new cities, which is part of our growth strategy moving forward. And this sort of lays out the before and after. UTI, about $419 million, 14,000 students. Now we're up, you know, I think our midpoints are around 26,000 this year between the two of them, and $725 million to the midpoint as well. Anything to add there?
No, you hit it good.
I always like this slide because it shows where we are, but it shows where we aren't. And a lot of trade and technical education is very local in terms of students not, you know, migrating beyond their own cities in order to take advantage of the trades. And so, although we have very strong presence in California, Texas, and Florida, like many companies have a strong presence in California, Texas, and Florida, there's, you know, quite a bit of opportunity still out in front of us. There's a lot of people who have said, "Well, you've surged to 23 campuses in these states.
You know, is there, is there any room for expansion or growth of your highly regarded programs?" And this is the slide that says, "Well, there absolutely is." And that's something that you'll be hearing more from us about, over the coming months and years.
Good.
So our playbook is really to do some more of the same of what we've done over the last five years, because there is so much more that can be done. We think strategically about acquisitions. You can see this is really meant to say that there's upside potential. Think strategically about acquisitions. One thing we've been very public about in the market is what we didn't get in healthcare with Concorde is a lot of nurses. Nursing is a lifelong learning environment, where you start as either an LPN or an RN, become a BSN nurse or a licensed practical nurse, excuse me, a VN, vocational nurse, and move on up. This is a way to participate and monetize your students beyond a single credential.
And so we've been active looking in the M&A markets to see if there's a strategic fit for nursing in it. New campuses, we opened two in 2022. I think what you'll be hearing from us going forward is more of a regular cadence of opening new campuses in both of the divisions moving forward. Yet, you look at the opportunity and say: Well, why don't you just open 15 more campuses? That - grab a hold of it. Well, the most important thing, I'll say it one last time, is outcomes. And what you've seen, I think, in some of the acquisitions and some of the growth trajectory of some people in this market is, you move too fast, your outcomes can fall, right? You've got to be careful about that.
Whether we open one or two campuses a year on either side, we know we can now do it in a way where we can maintain the high quality, industry-aligned outcomes through it. We'll continue with program expansions. MIAT gave us eight programs that were not at UTI. We're working diligently to optimize the footprint of the UTI campuses. Our aim would be to get three to four of each of those on every campus that we can in UTI, which means there's still a lot more runway for putting the MIAT programs on the campus. Beginning in 2026 and 2027, when you acquire a business in this market, you get growth restrictions by the Department of Ed.
They wanna make sure you don't mess it up. And so for the first two years, until you give them two years of audited financials, you can't open new campuses or start new programs on, in those properties. And so in mid-2026, we'll be capable of opening new programs or starting new programs and opening new campuses on the healthcare side, and we intend to do just that. And then, what we've done for the last year and a half, we paused on...
A lot of program expansion and new campuses since 2022, and what we've done for that time period is really make sure that the company's set up for scale, so that acquisitions aren't, aren't all, you know, all the effort that the company has, that we have scalable systems, that these tend to be bringing private companies into public company standards, and that we have systems for doing that in a, in an efficient manner. And Troy and his team have done a great job of building a platform for that growth moving forward.
Okay. And then just briefly, we touched on this before, but this frames up the guidance and some of the trends across the guidance metrics. You saw the revenue growth on the transformation slide we talked about previously, and again, the guide at $720-$730, the net income side. You see a little bit more movement on the net income. This is GAAP net income, not adjusted net income. We did have an adjusted net income metric previously, and we moved to GAAP net income this year as we got past some of those growth investments, and that's really what drove the variability there over the past few years as we were building out those campuses and doing the program expansions and the acquisitions, et cetera.
And with that, the EPS again moving positively and very significantly this year. The other thing about the conversion of the preferred shares no longer have the dividend. So that was about $0.10 of improvement in our EPS on a full year basis, just by eliminating the preferred dividend. And it significantly uncomplicates our EPS calculation, which we had to do with the two different share classes. The student starts, again, very positive trends there. Again, the step function changed because of the Concorde acquisition and good growth this year, even when you take into account the partial year last year from Concorde. Again, adjusted EBITDA expanding and then cash flow also significantly expanding.
This is an adjusted free cash flow, and again, adjusted EBITDA. So we do have, we predominantly adjust out the growth investments, as well as any acquisition-related costs, and on adjusted EBITDA, we do adjust stock-based compensation. But, that adjusted EBITDA free cash flow number this year is translates to about $50 million-$55 million of unadjusted free cash flow or, you know, cash ops less CapEx. In all those prior years, it was negative. So it's very significant cash flow, this year and going forward, as we move into 2025 and beyond.
I think one other comment, these indicators, some of you who haven't been in this market and looked at this, is that you may hear during calls that people are really obsessed with enrollment and start growth, right? That is the key leading indicator. And you know, you see that kind of start growth in 2024, you're wondering why 2024 revenue didn't go off the chart, because it's a leading indicator. Most of those starts are actually monetized. The way we do revenue recognition is every week while a kid's in school, so most of those, the start growth get monetized the next year. So what you saw in 2022 or 2023 is why we jumped from $600 million- $725 million there.
What you're seeing in terms of the impressive start growth this year is why we're so comfortable in saying that we'll be nearly $800 million, and then the 1,000 basis point margin growth, at least 15%, so.
Excellent. Thanks, Jerome and Troy, for that presentation.
Thank you.
Any questions from the audience? Go ahead, John.
So, revenue growth in 2024 is about $118 million, and EBITDA growth is $40 million. This is very impressive flow through. Is that indicative of what the business can do?
Yeah, so, about half of that revenue growth was the two months we picked up of Concorde this year that we didn't have last year. And, and the one month we did have them, they were basically break even on EBITDA, so we really didn't make money on, on them. So the full year, and we're expanding margin about, two hundred basis points on Concorde this year versus last year, on a, on a full year basis. So, it's good flow through overall. We generally say an incremental margin on a student is can be between 60% and 70%. It's, it's really a much bigger range than that. So as we grow students, by far, filling existing classes is the most profitable way we can expand, margins.
So that student growth is bringing a lot of profitability with it. We also have the new campuses that we launched in 2022. It takes about three to four years to get to full ramp, but that first year is a negative carry on those campuses for the most part. And so they became profitable during the year. We also launched the, the program expansion. So all of that together, we had some drag from the investments, plus we have the growth, bringing in the, the high margin, and then, the foundational investments Jerome talked about on that one slide. You know, we've been, been doing that over the last few years as well. So we should see pretty good margin. We'll continue expanding margins, 100 basis points next year, at least, is what we said.
And we'll see Concorde margins move more up to, say, the mid-teens, from, say, 10% this year to mid-teens over the next few years. UTI is already operating about, the division is already operating at about a 20% margin, and we'll continue to expand that as we get more growth and optimization, but, but not as significantly as we'll see in, in Concorde.
Is there a level, or a measure of capacity utilization? You know, how many students can you-
Yeah. We used to say on the UTI side that we're about 50% full. And the way you can create capacity is different tracks, right? There's a morning track, an afternoon track, evening track. Well, when we migrated as part of our strategy to blended learning, and we went to three hours a day in the building rather than six hours a day, it creates the ability to go maybe four or five track. So generally, now, you're never gonna get up to 100% capacity, because that means everybody's gonna go to school exactly when you want them to go to school. And you know, nine to midnight is probably not gonna fill up, right?
It gives us the ability to have four or five tracks on campus now, rather than just two or three. Because it's not each six hours a day of each. So now we say we're maybe 35%-40% of capacity?
On a full capacity basis.
Right.
Yeah.
So there's plenty of room for us. You know, one of the things we're working on is optimizing the campuses, so we can be more fungible with our space. If you think about an auto diesel lab, you've got bays screwed into the ground, you've got a whole bunch of things that are fixed, et cetera. And the ability to get more mobile with the education would allow us to, you know, do auto in here in the morning, and in the same space, do HVAC in the afternoon. Right? And so we're working on a lot of modularization of our floor plan, and a lot of portability of the machinery that we use, in order to be able to even get more capacity into those same tracks.
Concorde does have a little bit more of a fixed. On about half their students are on the clinical side, so the nursing and radiology tech and dental hygienist, et cetera. And those tend to run pretty much full. There's a few programs that are not. They have a set number of seats, and they can only enroll students. In some cases, they're actually restricted to just those seats, even if they had more capacity, by the accreditor. The accreditor, programmatic accreditor has to grant you more capacity, essentially, even if you can create it yourself. And we're working with them to fill the programs that aren't quite full yet.
So about half theirs is fairly fixed capacity, and the other half, they have more flexibility around the core programs, like medical assisting or dental assisting, things along those lines.
How does the pricing for your programs get set, and how has it evolved over time?
Yeah, I mean, we, we've, we essentially are on a every year few points of price increase. So, you know, we look at the market. We understand what competitive offerings might be. We, we understand, you know, there's the ROI, just the value calculation of what the student will make when they graduate school, and versus what they pay for the curriculum. We do have Department of Ed has some gainful employment measures that were initially proposed during the Obama administration, paused, and now have been reinvigorated and will go into effect over the next two years or so.
And so they look at debt-to-income ratios, and they look to comparable income, somebody who graduates from our program versus graduates and or doesn't go to a post-secondary education. And so there's a number of different measures we triangulate to say, "Are we at the right price point?" And, you know, the programs have been around for quite some time, and, you know, so we. There's not likely any major dramatic change. It's more of this gradual change or, you know, plus or minus a few points in any given program, just given competitive dynamics.
I think, one other thing is, we can't outrun the student's ability to pay with financial aid.
Mm.
Is that about 70% of the students are fully Pell eligible, which means they get somewhere around $12,000 a year in free money. Then on top of that, for the given program, say, auto, which is a $35,000 program, they'll have to do loans for the rest of it, right? And so unless the administration moves on Pell, you're all you're doing is creating a bigger gap for your students in terms of their loan balances. So we watch very much how much that happens during inflation. People say, "Why not just raise your prices 8% or 10% if inflation's on that?" Well, all we're really doing is adding the gap financing for a student-
Mm
... because, during that time period, the administration just raised Pell by, like, $250.
Mm.
So the kids only add up another $500 of the free money. Now, you know, Biden administration said they wanted to double Pell. We would've loved that. That would've given us some pricing power. But that's not in the cards, you know, to do that. And but that's one other thing that goes into our calculations.
Yeah. I think there was another question out there. Mm-hmm?
Hi.
Hi.
A question about, I'm familiar with ... Not so much with your field, although you seem to change to hybrid model now. So do you-- Does AI playing a role in what you're thinking about in transformation, will it play any role? I thought about it by your-
Yeah.
-product.
A couple different facets. There's really three, and one is in the marketing side of our business. Our marketing is becoming significantly more efficient because of the AI tools being used by our partners, you know, whether it's Google or Microsoft, et cetera, and the ability to better identify people who are likely to convert into this area, you know? Used to be, we would say, within 20 miles of our campus, we want, you know, all the 18-year-old- 24-year-old eyeballs, right? And now, what the AI tools can do through the search histories they have is say, "We want all the 18-year-old- 25-year-olds who didn't take their SATs, who are graduating within the next...
six months, whose parents didn't go to college. We can do all of that, and that gives you a decision-making factor on the front end. We're using AI tools both in implementing chats with our, with our, to get faster answers on some of the work they're doing. But we're also using AI tools in the creation of our content. You know, the expression of the content and what people learn better from is something that's important to us. So because our content is now very, very digital, especially the online stuff, we can change the curriculum rather quickly if people aren't understanding. So there are specific AI tools we can use there.
And finally, a lot of the machinery we teach people to use now in diagnostics, whether it's in healthcare or in uses AI to it to actually do the diagnostic work on the patients and on the cars, and what that's doing is speeding up the process and getting people working faster. And so, you know, and what the last thing I say is, "You know, AI's not going to fix your air conditioner-
Mm-hmm.
and it's not gonna put a needle in your arm." And so, so the hands-on skills that we have are, you know, we don't see those being disintermediated, but we see that AI is a great enabler of all the facets of what we do.
Do you think... It seems like a lot of the AI use cases you talked about on the front end there were sort of things to make you run more efficiently on the marketing side-
Mm.
On content, adjustments and maintenance of content. As we think about, you talked about, I think, 20%ish EBITDA margins on UTI core, and then, I think, low to mid-teens on Concorde, and that should improve over time. Is there enough or that, have you seen enough yet in terms of on the marketing, on the content side, for you to structurally bump up EBITDA margins?
Yeah
In the business, how you think about it longer term?
I mean, we've confidently said-
Mm
... in the past, we don't think the UTI side of the business goes above 20%.
Mm-hmm.
It's above 20%.
Yeah.
Right? And we've confidently said that from scanning the healthcare market, that even the most healthy people out there are about 15%-16%.
Yeah
... 'cause we did a lot of research looking into buying Concorde. You know, I'm confident that this will be an enabler.
Yeah
... of further breakthroughs.
Mm-hmm.
You know, the AI tools being used in virtualization for things we're now doing on our campuses-
Mm-hmm
... right? I've said to some people, we've got these clip cars on our campuses that have computers in the back of 'em, that in the morning, the instructor goes and trips them different ways, and the students have to go and diagnose it and fix it, right?
Mm-hmm.
We've seen virtual technology that uses artificial intelligence that would allow me to actually get rid of the 3,000 sq ft of clip cars.
Mm-hmm.
Now I could put HVAC in that spot-
Yeah
... right? Now, HVAC in the same building is a higher margin than me having to build an annex or move along that side. Plus, I'm taking advantage of the marketing money I'm already spending on that same population of 500,000 18-24-year-olds.
Mm-hmm.
So we can see levers that will likely move the margins beyond that.
Mm-hmm.
It's really interesting. You're learning something every day about this-
Yeah
... right? And what we're really focused on is efficiency and effectiveness, efficiency in our footprint and how long it takes someone to get into market. One of the value propositions of a school like us versus a community college is if, at a community college, you're gonna go to school for two years to become an auto mechanic because of all the gen ed stuff and the things along those lines. At UTI, you'll be out in the market in 51 weeks working-
Mm
... because of the way we stack our hours and the way the students buy a program, and they go through that program for 51 weeks. And so we think that we'll get more efficiency by using some virtualization tools that may get people out in the market faster.
Mm-hmm.
and then, it more efficiency by us being able to put more things on our campuses.
Mm
... without increasing the square footage. Yeah.
Interesting. You mentioned that, I think you said 70% of your students are Pell-eligible. We've obviously had quite a few problems with the FAFSA forms-
Yeah
... this year and the federal government, and issues with, you know, accurately reporting on information. And it seems to have really put a cog in the machine of, in terms of identifying or telling students, you know, what their financial information or aid information-
Yeah
... is gonna be.
Yeah.
Are you seeing any impact on that in terms of starts or, or being able to get students started?
It's cadence of starts-
Yeah
... not in terms of number of starts.
Okay.
Yes. Anybody who is in the education business that says this is not slowing down the student's ability to start in school is lying. Our system is not like a regular university system, where you have semesters, where you start here and there. They're - the universities are panicked right now because they're fearing that the students aren't gonna get packaged before the semester start-
Yeah
... which means you've gotta wait six months to start again.
Mm-hmm.
We have starts every three weeks.
Oh, wow.
Our three-week courses. So what we're seeing is, yes, you know, 6-7-week delays in getting the-
Mm-hmm
... the packets back from the Fed to be able to show someone what their aid is, so they can make their final decision. But that really only gives you that you could start right away then-
Yeah
... after that. And so, our, and at Concorde, half of our programs start every month.
Mm-hmm.
It may be a four-week delay. It's also costing us a little more money. We've had to hire people because, you know, these things, they're late, and they're coming in in giant packages.
Mm-hmm.
We have to process them quickly to move the students, move the students forward. So, it is having an effect. They say it's starting to catch up-
Mm-hmm
... but we'll see.
Yeah. We'll see.
What it could affect is the cadence of the year. We've built that into, you know, we don't give quarterly guidance, but we've built that into sort of the quarterly contouring that we've done with our analysts, which-
Mm
... which is, you know, we have a big start for high school students the last day of June-
Mm-hmm
... which ends up having the last day of a quarter.
Yeah.
I don't think we're gonna hit that start number.
Mm-hmm.
I think it's gonna, maybe a few hundred kids are gonna push into July.
Yeah.
But they're not going anywhere.
Mm-hmm.
It's just their aid wasn't processed fast enough. So, it may just change the contours a bit.
Interesting. Excellent. Any other questions from the audience before we let them go? All right, awesome.
Thanks, Ron. Thank you.
Troy, thanks very much. Thanks for the-