Good day, ladies and gentlemen and welcome to Lincoln Educational Services Fourth Quarter and Full Year 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Chris Dailey, Head of Investor Relations. You may begin.

Thank you, Nicole and good morning everyone. Before the open of the market today, Lincoln Educational Services issued via press release its fourth quarter and full year 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 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 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 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 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 the 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. Before discussion of such risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements, see “Risk Factors” in Lincoln's Annual Report on Form 10-K. 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. Now, I'd like to turn the call over to Scott Shaw, President and Chief Executive Officer of Lincoln Educational Services. Scott?

Thank you, Chris and good morning, everyone. Thank you for joining our fourth quarter and full year 2015 conference call. With me today is Brian Meyers, Lincoln’s Chief Financial Officer. 2015 was a transformational year for Lincoln Educational Services and we are well positioned to capitalize on several of the initiatives we put into place as 2016 unfolds. This morning, I’m going to provide a brief overview of our accomplishments during the past year and discuss the strategic direction of the company going forward and then turn the call over to Brian who will cover the financial highlights. As we’ve maintained during the past several quarters, our goal is to drive Lincoln towards sustainable profitability while simultaneously delivering a significant ROI for our students. We are committed to right sizing our operations in order to maximize profitability and cash flow and our 2015 results clearly demonstrate our success in eliminating expense as the industry’s landscape has continued to shift during the past few years, it became clear that we needed to focus on our core strength in order to continue to provide exceptional value to our students and our corporate partners while increasing returns to our shareholders. In 2015, we took a number of steps towards that objective. One step was to set in place the leadership team to move the company forward from the board to the sea suite, our regional managers and sales rep, we are focused on becoming a leaner, more nimble organization determined to build on our 70 year legacy of uniquely preparing students for careers in the Transportation and Skilled Trades industries. Most recently we reorganized our sales leadership in order we gained momentum in starts for the continuing operations. These changes have brought us new energy, new ideas, and new confidence. We have promoted…

Thank you, Scott and good morning everyone. Given the information we have provided in our results release this morning and covered by Scott, I will focus my comments on continuing operation performance for the fourth quarter. As a reminder, the healthcare and other professional segment is classified as discontinuing operation on the statement of operation and as assets and liabilities held for sale on the balance sheet. Fourth quarter revenue from continuing operations which included our Transportation and Skilled Trades segments, corporate and our transitional segment declined by approximately 80% compared to the fourth quarter of 2014, primarily due to lower student population and fewer starts. Revenue also decreased due to higher scholarship recognition than last year as we see to compete with an improving job market. While scholarships had negatively impacted revenue, we believe it will provide more students with an opportunity to pursue their educational goals by assisting in their affordability challenge. We were able to offset the decrease in revenue with a slight increase in average revenue per student due to improved student retention. In the fourth quarter we generated operating income from continuing operations of $4.4 million compared to $4.8 million in the prior year fourth quarter. In 2015, operating income includes a $1.6 million in catch up depreciation charge in connection with a reclassification of real estate out of held for sale. This change is a result of our strategic shift to focus on our Transportation and Skilled Trades segment and therefore no longer sell the real estate within this segment. Excluding these charges operating income from continuing operation increased by $1.2 million to $6 million compared to prior year. Operating income for Transportation and Skilled Trades incorporate excluding transitional segment was $5.9 million versus $7.2 million in last year’s fourth quarter. This is our…

Thank you. [Operator Instructions] Our first question comes from the line of Alex Paris of Barrington Research. Your line is now open.

Good morning, guys.

Good morning, Alex. How are you?

Good. How are you?

Good. Thanks.

So, good results versus guidance, good results versus my estimates. I just want to focus in on a couple of things. First of all, with regard to guidance for the coming year, you’re talking about finishing the year with the same number of students that you start the year. And given that we’re currently have new student declines, even though that new student decline was less than we had estimated. That does imply that all of things being equal that new student enrollment should turn up at some point this year. That combined with retention gains which you noted have been improving, should result in that number if all goes well. Just want to follow the logic there, right?

Yes. That is exactly correct. And as we pointed out our fourth quarter declines in our auto segment were around 1.6%, so certainly it got better, but we all know that one quarter does not make a trend, but we believe that we have taken a number of initiatives and as you pointed out we think that later in the year we could see some growth, but we’re also anticipating continued focus on the student experience and getting some improvement from retention as well.

So, if you end the year where you start the year and there’s a little bit of a hole in the first part of the year, your average population will be down and that’s what translates -- that end revenue for student is what translates into the lower revenue expectation for the full year?

Yes. That is correct. I mean, we typically, when we’re able to build the population it does usually happen in the later part of the third and beginning of the fourth quarter, so it is certainly much more weighted to the back end of the year.

Okay. And then you say, that said, you expect a slight positive net income excluding transition. But that does include a $6 million gain that runs through the P&L. So, just to be clear that would mean, if I excluded that gain you’d have slight loss from -- on the net income line excluding transition?

That is correct, due to what you mentioned about our average population being down and revenue being down slightly.

Okay. And then, but obviously that does not have a negative impact on cash flow, because it’s a non-cash?

Correct.

With regard to transition I think you said, Brian that Fern Park will be taught out by the end of March and Hartford taught out by the end of the year?

That is correct.

Okay. And transition as a segment was responsible for a loss in 2015 of $6.9 million. So, we would expect that loss to diminish in 2016 as that occurs?

Correct. And one thing I want to highlight that $6.9 million included as we mentioned $3 million gain from the termination of Hartford lease, so their losses were in excess of $9 million. But it will diminish in 2016.

Okay. Then with regard to the sales process the sales process began when? And where are we…?

It began in earnest in the middle of January and we anticipate, starting to get indications of interest over the next couple of weeks. So, we’ll have a clearer picture at that point.

And I think you had said previously when you announced the plans to divest these operations that you expected to conclude it by mid-year. Is that still is the thought process?

Well, I think that we expected to conclude it by year end. We’re optimistic that something definitive will be there by mid-year, because of regulatory and everything else, I would imagine its not going to fully close until year end.

Okay. And any thoughts about potential proceeds from those divestitures that you’re willing to share?

No, not this time.

Okay. The composite score, your financial responsibility score, 1.5, I think that was a positive development. I had been just assuming that you would be on Heightened Cash Monitoring after the end of the year. But then, again, thinking that is no matter because you’ve historically taken your disbursements on a delayed basis, so you managed to produce a composite score above 1.5?

That is correct. Even though it really don’t have effect on the financials but it’s nice to get out of that, Heightened Cash Monitoring

Yes, absolutely. Okay. Thank you. Appreciate it. And I’ll go back in the queue.

Okay. Thanks Alex.

Thank you. [Operator Instructions] Our next question comes from the line of Justin Putman of Tellena [ph] Investment. Your line is now open.

Good morning. I just had a question about CapEx and depreciation and amortization for next year. What are your expectations for those?

We’re anticipating it would be around $6 million for our capital expenditures. And as far as depreciation its similar to the same levels as this year for corporate and transitional, we’re looking at approximately $11 million.

In transportation.

In transportation, yes. From continuing operations, about $11 million.

Thank you. [Operator Instructions]. And now I’m showing no further questions at this time. I’d like to hand the call back over to Scott Shaw for any closing remarks.

Thank you, Nicole. Thank you all for joining us today. In summary, I’m very pleased with our 2015 results. We exceeded our guidance and improved our profitability while continuing improving our outcomes in student experience. Excluding impairments and other one time charges all 12 of our Transportation and Skilled Trades schools have positive four-wall EBITDA. Moreover eight of the 12 schools improved their profitability year-over-year. To various cost saving initiatives and other actions we increase our cash balances which strengthens our balance sheet and enables us to continue to make strategic investments in our student services and experience. By continuing to focus on strong outcomes and quality education, we’ve continued to lower our cohort default rates and based of the most recent draft released by the DOE this week, we expect to be under 15%. Similarly our financial responsibility ratio should be over 1.5 which means that we are no longer in the zone once the final numbers are released in the fall. And our 90/10 remained safely around 80%. We’re encouraged that more and more companies continues to join with us to create programs that will enable our students to have advanced skills which will better position them for higher paying careers. In 2016 we will launch several new programs to meet local employers needs and coupled with increased retention efforts will help us achieve our population goal for 2016. Finally, our sale of Healthcare is moving forward and the closure of Hartford and Fern Park will strengthen our balance sheet and free our financial and human resources to concentrate on our long term goal of being America’s technical institute. 2016 marks Lincoln’s 78th year and I look forward to updating you on our progress throughout the year. Thank you all again for joining us.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You may all disconnect. Have a great day everyone.