Acquisition and Regulatory Approvals - Legacy Education Inc. acquired Contra Costa Medical Career College for a total consideration of $6,133,079 in cash, a $400,000 promissory note, and 118,906 shares of common stock[157]. - The acquisition of Contra Costa Medical Career College is subject to regulatory approvals, including a temporary provisional program participation agreement allowing it to continue participating in Title IV Programs[160]. - Legacy Education submitted an application for a change of business organization to the California Bureau for Private Postsecondary Education on January 16, 2025, which was approved on January 31, 2025[162]. - Legacy Education is undergoing a change of ownership review by the Department of Education, which may affect its eligibility for Title IV Programs[161]. - Legacy Education's acquisition of Contra Costa Medical Career College was completed on December 18, 2024, following a previously announced asset purchase agreement[156]. - The company is subject to conditions imposed by the Department of Education due to the change of ownership, including restrictions on growth and financial reporting requirements[160]. - Future regulatory actions by the Department of Education may require changes to business practices and incur compliance costs[164]. Enrollment and Program Development - As of December 31, 2024, High Desert Medical College had 1,774 students enrolled, while Central Coast College had 448 students, and Integrity College of Health had 157 students[150][152][154]. - The company plans to introduce new programs, including an emergency medical technician (EMT) program at both High Desert Medical College and Integrity College of Health starting in October 2024[150][154]. - The company is in the process of obtaining approvals for additional programs at Central Coast College, including surgical technology and dental assisting, expected to begin in October 2024[152]. Financial Performance - Revenue for the three months ended December 31, 2024, was approximately $13.7 million, an increase of approximately $3.2 million or 29.2% compared to $10.5 million for the same period in 2023[190]. - Ending enrollment increased by 44.8% from 1,912 to 2,768, supported by a 3.0% increase in starts from 337 to 347 in the quarter compared to the prior year, along with the acquisition of CCMCC adding 389 students[190]. - Educational services expense was approximately $7.5 million for the three months ended December 31, 2024, an increase of approximately $2.0 million or 35.3% compared to $5.5 million for the same period in 2023[191]. - General and administrative expense was approximately $4.3 million for the three months ended December 31, 2024, an increase of approximately $1.1 million or 32.5% compared to $3.2 million for the same period in 2023[192]. - Net income for the three months ended December 31, 2024, was approximately $1.4 million, an increase of approximately $0.1 million or 8.5% compared to $1.3 million for the same period in 2023[194]. - Total costs and expenses for the three months ended December 31, 2024, were 87.8% of revenue, an increase of 3.3% compared to 84.5% for the same period in 2023[190]. - Operating income decreased to 12.2% for the three months ended December 31, 2024, down from 15.5% for the same period in 2023[190]. - Interest income increased to 2.1% for the three months ended December 31, 2024, compared to 1.7% for the same period in 2023[190]. - Income tax expense remained stable at approximately $0.5 million for both the three months ended December 31, 2024, and 2023[194]. - Revenue increased to approximately $27.6 million for the six months ended December 31, 2024, up by approximately $6.7 million or 32.1% from $20.9 million in the same period of 2023, driven by a 44.8% increase in ending enrollment[195]. - Educational services expense rose to approximately $14.7 million, an increase of approximately $3.5 million or 30.4% compared to $11.3 million in the prior year, primarily due to increased instructional and staffing costs[196]. - General and administrative expense increased to approximately $8.3 million, up by approximately $1.9 million or 29.2% from $6.4 million in the previous year, mainly due to higher marketing expenses and professional fees[197]. - Net income for the six months ended December 31, 2024, was approximately $3.5 million, reflecting an increase of approximately $1.1 million or 47.9% from $2.4 million in the same period of 2023[200]. Cash Flow and Expenditures - Cash and cash equivalents were approximately $16.9 million as of December 31, 2024, compared to $10.4 million as of June 30, 2024[201]. - Net cash provided by operating activities was approximately $3.8 million for the six months ended December 31, 2024, an increase of approximately $0.9 million from $2.9 million in the prior year[206]. - Net cash used in investing activities increased to approximately $6.6 million, primarily due to the acquisition of CCMCC for $6.1 million[207]. - Net cash provided by financing activities was approximately $9.2 million for the six months ended December 31, 2024, a significant increase from net cash used of approximately $0.3 million in the same period of 2023, attributed to proceeds from the initial public offering[208]. - Income tax expense increased to approximately $1.3 million, up by approximately $0.4 million or 45.9% from $0.9 million in the previous year, primarily due to increased income[199]. - Capital expenditures were approximately $0.4 million for the six months ended December 31, 2024, compared to $0.3 million in the same period of 2023[203].
Legacy Education Inc.(LGCY) - 2025 Q2 - Quarterly Report