Legacy Education Inc.(LGCY) - 2025 Q4 - Annual Report

Part I Business Overview Legacy Education Inc. provides career-focused post-secondary education in healthcare across California through accredited institutions, focusing on workforce needs and strategic growth - Legacy Education Inc. operates four accredited academic institutions: High Desert Medical College (acquired July 2010), Central Coast College (acquired January 2019), Integrity College of Health (acquired September 2020), and Contra Costa Medical Career College (acquired December 2024)[24][30] - The company's institutions primarily offer career-focused post-secondary education services in healthcare and related fields, with a strong presence in California[24][34] - As of June 30, 2025, total student enrollment across all programs was 3,101, a 42% increase from 2,187 students as of June 30, 2024[52] - The company reported an average program retention rate of 86% and an average placement rate of 74.5% as of June 30, 2025[54][55] Student Enrollment and Starts (Quarterly) | | September 30, 2023 | December 31, 2023 | March 31, 2024 | June 30, 2024 | September 30, 2024 | December 31, 2024 | March 31, 2025 | June 30, 2025 | |:---|:---|:---|:---|:---|:---|:---|:---|:---| | Consolidated Starts | 760 | 415 | 719 | 623 | 849 | 397 | 1,227 | 721 | | Ending Enrollment | 2,024 | 1,912 | 2,166 | 2,187 | 2,539 | 2,768 | 3,245 | 3,101 | | Starts YoY (%) | 52% | 52% | 43% | 59% | 12% | -4% | 71% | 16% | | Ending Enrollment YoY (%) | 17% | 16% | 20% | 28% | 25% | 45% | 50% | 42% | Overview Legacy Education Inc. delivers career-focused post-secondary education through its accredited institutions, primarily in healthcare fields - Legacy Education Inc. provides career-focused, post-secondary education services to students through its accredited academic institutions: High Desert Medical College, Central Coast College, Integrity College of Health, and Contra Costa Medical Career College[24] High Desert Medical College (HDMC) HDMC offers diverse healthcare programs across three California campuses, serving 1,956 students as of June 30, 2025 - HDMC, established in California in 2002, offers a wide range of programs including ultrasound tech, vocational nursing, and medical assisting across its Lancaster, Bakersfield, and Temecula campuses. As of June 30, 2025, HDMC had 1,956 students[25] Central Coast College (CCC) CCC, located in Salinas, California, offers certificate and degree programs to 495 students as of June 30, 2025 - CCC, established in California in 1983 and located in Salinas, offers certificate and degree programs such as medical assisting, veterinary technology, and vocational nursing. As of June 30, 2025, CCC had 495 students[26][27] Integrity College of Health (Integrity) Integrity, based in Pasadena, California, offers various healthcare programs and achieved initial RN-BSN accreditation in June 2025, serving 202 students - Integrity, established in California in 2007 with a campus in Pasadena, offers programs including vocational nursing, medical assisting, and Diagnostic Medical Sonography. It earned initial accreditation for its Bachelor of Science in Nursing RN-BSN Track in June 2025. As of June 30, 2025, Integrity had 202 students[28] Contra Costa Medical Career College (CCMCC) CCMCC provides certificate and degree programs in healthcare, enrolling 448 students as of June 30, 2025 - CCMCC offers certificate and degree programs such as surgical technology, sterile processing technician, and vocational nursing. As of June 30, 2025, CCMCC had 448 students enrolled[29] Our History The company's history involves strategic acquisitions and accreditations, expanding its educational offerings and institutional footprint - The company's history includes the founding of HDMC in 2002, its acquisition in 2010, and subsequent acquisitions of CCC in 2019, Integrity in 2020, and CCMCC in 2024. Key milestones include obtaining various accreditations and approvals, and launching new programs[30] - In June 2025, Integrity College of Health earned initial accreditation from the National League for Nursing Commission for Nursing Education Accreditation (NLN CNEA) for its Bachelor of Science in Nursing RN-BSN Track[30] Industry Background The U.S. post-secondary education market is competitive and growing, with increasing demand for skilled workers, especially in healthcare - The U.S. post-secondary education market is large, fragmented, and competitive, with proprietary colleges serving approximately 8.0% of undergraduates in 2022-23. Total enrollments in higher education increased by 2.4% and 3.2% in Spring 2024 and 2025, respectively, with proprietary colleges seeing increases of 5.1% and 3.7%[31] - Demand for post-secondary education is expected to increase due to demographic, economic, and social trends, including a significant number of adults without college degrees and increasing demand for skilled workers, particularly in the healthcare sector[32][36][37] Our Market Opportunity California's unmet workforce needs, particularly in healthcare, present a significant opportunity for the company's career-focused programs - The company believes California's community college system is not meeting current educational and workforce needs, creating an opportunity for its focused, high-quality programs, especially in the healthcare sector[33][34] - The target demographic is early to mid-20-year-olds seeking strong job opportunities, primarily within a 100-mile radius of each campus, with a focus on quick entry into the workforce[35] - Employment in the healthcare and social assistance industry is projected to grow 8.4% from 2024 to 2034, adding over 1.9 million new jobs, driven by an aging population and chronic conditions[36] Our Growth Strategies Growth strategies include expanding existing programs, launching new offerings, opening new campuses, and pursuing acquisitions, while enhancing curriculum and student success - Growth strategies include moderate growth in existing programs, approval of registered nursing programs, adding Associate of Applied Sciences degrees, launching new program offerings (including online), and expanding through new branch campuses and acquisitions outside California (e.g., Nevada, Colorado, New Mexico)[38][41][43] - Operational priorities focus on refining curriculum for learner success and employer needs, improving student retention and graduate success, expanding relationship-based marketing, and investing in innovation and diversification[38][39][40][42][43] Competition The post-secondary education industry is highly competitive, with various institutions vying for students based on program quality, reputation, and cost - The post-secondary education industry is highly competitive and fragmented, with competition from public and private institutions, other proprietary schools, and non-traditional programs. Key competitive factors include program quality, reputation, cost, graduate employment rates, and faculty quality[44][45] - Public institutions often have greater financial resources and brand recognition due to government subsidies, posing a challenge for for-profit schools[46] Marketing and Recruiting The company employs an integrated marketing approach, combining traditional and digital channels, with a significant portion of new enrollments from referrals - The company uses an integrated marketing approach, including traditional media (radio, billboards, direct mail) and digital marketing (paid search, SEO, online video, social media), which drives the majority of new student leads[48] - Referrals from current students, high school counselors, and satisfied graduates/employers historically account for approximately 25% of new enrollments[