Good day, ladies and gentlemen and welcome to the Third 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 for replay purposes. I would now 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 third quarter 2015 financial results. The release is available on the Investor Relations portion of the company's corporate Web site at www.lincolnedu.com. Today's call is being broadcast live on the company's Web site and a replay of this call will also be archived on the company's Web site. 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 indicators 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 -- actual performance or results that 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.

Thanks, Doug. Good morning, everyone, and thank you for listening in on today's call. Joining me today is Brian Meyers, our Chief Financial Officer. I will begin by discussing our recently announced plans to focus the company's resources on our transportation and skilled trade segment and divest our healthcare and other professions operations. I will then briefly cover the quarter's operational and financial performance before handing off the call to Brian for a more detailed review of the results as well as an update, our guidance for the remainder of 2015. Last night, after the market closed, we announced that our Board of Directors has approved a plan for Lincoln to divest its healthcare and other professions business segment and focus solely on our transportation and skilled trade segment. We fully believe that this is the best strategy for the company, its employees, our students and our shareholders. There is no doubt that the education industry is changing and we will continue to evolve as technology advances, students and their parents seek a greater return on investment on their educational dollar and as industries demand for skilled workers increases. By focusing on transportation and skilled trades, Lincoln is uniquely positioned to capitalize on its 70 years of hands-on training to better serve industry, our students and the communities in which we operate and indeed our pivot towards our transportation and skilled trade segment is an essential part of our plan to return the company to profitability and maximize shareholder value. I want to emphasize our decision does not reflect in anyway a negative outlook for our healthcare and other profession segment. On the contrary, the company is confident that our healthcare and other professions operations will provide a positive contribution to a company that is focused on this segment 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 third quarter as well as our divestment plan and lastly our additional financial guidance for 2015. As mentioned on November 3, 2015, our Board of Directors approved the plans for the company to divest its healthcare and other profession business segment. Due to this decision beginning in the fourth quarter of 2015, this segment is anticipated to be classified as discontinued operation on the statement of operation and as held-for-sale on the balance sheet. This decision will trigger an impairment test at the segment level, which may result in a non-cash impairment charge. On a consolidated basis, we report operating income of $4.8 million compared to an operating $0.2 million the prior year third quarter excluding goodwill and long-lived asset impairments. This improvement was primarily a result of our ongoing efforts to align quest with our student population. Accordingly, our segments demonstrated better financing results for the third quarter compared to prior year. Our transportation and skilled trade segment, realize significant and operating income improvement over the previous year. Revenues decreased modestly to $45.7 million compared to the previous year primarily due to a 8.2% decline in average student population. The revenue decline from the lower population was slightly offset by a 5.3% increase in average revenue per student due to improved student retention and a shift in program mix. Operating income improved by $4.4 million to $10.6 million driven by expense reductions to educational services and facilities as well as SG&A. Our healthcare and other professional segment continue to be impacted by a lower student numbers and a lower student population resulting in revenue decline of $2.8 million or 8.7%. Operating loss in this segment excluding…

Thank you. [Operator Instructions] And please standby for your first question, which comes from the line of Jeff Silber at BMO Capital Markets. Please go ahead.

Thank you so much. Typically when you look at the seasonality of the business, I know it tends to be backhand loaded, but usually your fourth quarter is a little bit better than your third quarter. By maintaining your guidance despite the sizeable improvement in the third quarter, it looks like you're looking for a down quarter sequentially both in revenues and operating income? First of all, is that correct? And if so, what's going on this year that's different than others? Thanks.

It is correct, Jeff. Revenues are expected to be slightly down and also net income is expected to be slightly flat with the third quarter. Historically, when you look at 2014, was up slightly that was due to our carrying population. But if you look back historically, it does tend to go down from third quarter to fourth quarter because third quarter does have our prime starts and then the two attrition, we lose some of that and through graduations. But with that said, we do have a lot of graduations in the fourth quarter which you drive in to decrease in both population and revenue.

Okay. So what type of starts growth are you embedding in your guidance for the full year, at least starts about for the fourth quarter?

Like we said in the guidance, we are expecting to be down about approximately 10%. So we are roughly for the year still slight improvement but roughly at that level.

Okay. We can back into that. I appreciate it. Just moving on to the health and other professions divestiture, you mentioned that you're going to be able to reduce your campus footprint, can you remind us what percentage of your campus you think as you will be able to close or divest?

Sure, Jeff. It's Scott. We have 12 automotive campuses to our transportation and skilled trade campuses and 18 campuses are in healthcare and other segment. So we would be looking to divest the -- 18 are in that healthcare and other segment.

And then the 12 auto campuses, do you teach any healthcare other professions classes, are they completely separate?

We in -- one campus in our Chicago campus, we do teach a medical assisting program but that's the only campus that as that curriculum.

Okay. Great. Just one more question, one of your competitors announced this morning with one of their planned divestitures that are actually going to have to pay a cash payment to the buyer. Is that something that might occur with your divestiture as well?

I really can't say at this time, we are just starting the process, I mean, we have some very attractive assets and some very attractive schools. So while that might be possible that's not what our expectation is.

Okay, great. Thanks so much.

Today you have no further questions at this time. [Operator Instructions]

Without any further questions, then operator, I'm just going to have some closing remarks. To conclude call, I'd like to summarize just kind of the key highlights. We made substantial progress in repositioning and realigning our company's financial and operating model through the implementation of our 100-day plan. For the quarter, after excluding all impairment charges and despite our revenue being down, we increased our income before taxes by 127%. We continue to be cash flow positive and our total cash exceeds our bank debt by $10 million. Industry demand remains robust, our efforts to make new partners aware of our training capabilities and our pipeline, our ready to work graduates are reaping rewards. Each quarter, we expand our list of employee partnerships and we believe that we have just [got] [ph] service in this area. Our decision to focus the company on our transportation and skilled trade segment, positions us to leverage our 70-year heritage as a leader in hands-on skills training and it will better position us to capitalize on the growing skills gap facing these industries. For the third quarter, all of our transportation and skilled trade schools were profitable on a full -- for a while basis and all are projected to be profitable for the full year. As always, we remain committed to our students to providing them with the strong return on their educational investment, all whilst driving to be 100% regulatory compliant. We thank you all for your time and interest in Lincoln and we look forward to updating you on our continued progress to become America's technical institute.

We do have one question. Operator, why don't we take that question, still there?

Certainly. This question comes from the line of Doug Ruth at Lenox Financial Services. Please go ahead.

Hi. How are things progressing without Audi, Miele and F.W. Webb?

Oh, sure. Thanks for the question. They are all proceeding as planned. Just kind of going backwards, Miele, we have that up and running in our Mahwah Campus and our students get free additional training which positions them into good careers with Miele, they have become a great partner up there. F.W. Webb that classroom and all the equipment has been in place and students are going through that program and so that partnership is moving forward. And as I mentioned, we have solidified now with Audi six campuses that will be offering the programs and for those six campuses, we are waiting for approval on the curriculum and building out the space but that will start rolling out in the first quarter of next year.

Okay. What is happening with HVAC training contract with the U.S. Government?

That's continuing to move forward as well. That program again is waiting for some regulatory approvals but that should be starting in the near term. So there is no -- that's moving forward.

Okay. How is the live chat feature on the Web site working?

It's working great. I mean we find that not everyone wants to use a live chat but for those students that are interested in it, our call center is able to answer their questions and frankly able to redirect them to the campuses to have more specific questions answered on a much more timely basis. So it's working well for us.

Okay. And one final question, would you consider buying some stock?

Something that has always been reviewed and considered.

Okay. Thank you very much.

Sure, no problem. End of Q&A:

There are no further questions. So I would like to turn the call back to Mr. Scott Shaw.

No problem. Again, in my concluding remarks, I think everyone can see that we are making good progress on all the initiatives that we have laid out, the opportunities for our company remain very strong. And we look forward to continue to execute and delivering for our shareholders. So thank you all for your time and attention.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.