Legacy Education Inc. is an award-winning, nationally accredited, for-profit post-secondary education company that has been empowering students to achieve their professional goals since 2009. With a focus on healthcare, veterinary, and technology-driven programs, Legacy Education has established itself as a leading provider of career-focused education across California.
Company History and Background
Legacy Education Inc. was formed on October 19, 2009 in the state of California as a limited liability company. The company operates as a career-focused, post-secondary education institution that provides training programs in various fields such as healthcare, veterinary, medical information technology, business management, and green technology. In July 2010, the company acquired High Desert Medical College (HDMC), which was established in 2002 and started offering classes in 2003. HDMC initially had campuses in Lancaster and Bakersfield, California, and later expanded to add a branch campus in Temecula, California. HDMC offers programs in areas like ultrasound technician, medical billing and coding, nursing, and dental assisting.
In January 2019, the company acquired Central Coast College (CCC), which was established in 1983 and is located in Salinas, California. CCC offers programs in business administration, medical assisting, nursing assistant, and veterinary technology, among others. On December 31, 2019, the company entered into a Membership Interest Purchase Agreement to acquire Integrity College of Health, which is located in Pasadena, California. Integrity College offers programs in vocational nursing, medical assisting, medical billing and coding, and diagnostic medical sonography. This acquisition was deemed effective as of December 31, 2019.
Throughout its history, the company has faced various regulatory challenges related to compliance with federal and state requirements for operating post-secondary education institutions. The company has had to navigate changes in applicable laws and regulations, including those related to Title IV funding and the 90/10 revenue rule. The company has also had to manage changes in student enrollment and demands for its educational programs over time.
Robust Financial Performance
Legacy Education has demonstrated strong financial performance in recent years. For the fiscal year ended June 30, 2024, the company reported revenue of $46.0 million, a 29.7% increase compared to the prior year. Net income for the full year 2024 was $5.1 million, or $0.44 per diluted share. The company’s operating cash flow (OCF) for fiscal year 2024 was $1.65 million, with free cash flow (FCF) of $1.23 million.
The company’s quarterly results have also been impressive. For the first quarter of fiscal 2025, which ended on September 30, 2024, Legacy Education reported revenue of $14.0 million, a 35.1% year-over-year increase. Net income for the quarter reached $2.1 million, or $0.21 per diluted share, a 95% improvement from the same period in the prior year. The company’s OCF for Q1 2025 was $3.19 million, with FCF of $2.95 million.
Financials
For the fiscal year ended June 30, 2024:
– Revenue: $46.0 million (29.7% increase year-over-year)
– Net income: $5.1 million ($0.44 per diluted share)
– Operating Cash Flow: $1.65 million
– Free Cash Flow: $1.23 million
For Q1 fiscal 2025 (ended September 30, 2024):
– Revenue: $14.0 million (35.1% increase year-over-year)
– Net income: $2.1 million ($0.21 per diluted share, 95% improvement year-over-year)
– Operating Cash Flow: $3.19 million
– Free Cash Flow: $2.95 million
The strong Q1 2025 performance was driven by a 23.3% increase in new student starts to 773, marking the largest enrollment quarter in the company’s history. The increase in revenue and profitability was also attributed to a favorable program mix toward higher-margin offerings.
Liquidity
Legacy Education’s strong financial position is further evidenced by its healthy balance sheet. As of September 30, 2024, the company had $21.5 million in cash and cash equivalents, with a current ratio of 3.07 and a quick ratio of 3.01, reflecting its ability to meet short-term obligations. The company’s debt-to-equity ratio stands at 0.022, indicating a low level of leverage. It’s worth noting that Legacy Education does not have any available credit lines or facilities.
Operational Highlights and Strategic Initiatives
Legacy Education’s success is underpinned by its focus on expanding its program offerings, particularly in the healthcare sector. In the first quarter of fiscal 2025, the company received approvals for new programs, including Dental Assisting, Sterile Processing, Surgical Technology Associate of Applied Science, and Pharmacy Technicians, which will be added to the curriculum at its Central Coast College campus.
The company has also made significant investments in technology to enhance the student learning experience. During the quarter, Legacy Education began transitioning its learning management system from Canvas to Blackboard Learn Ultra, which will streamline communication and improve scalability.
Moreover, Legacy Education has strengthened its corporate partnerships, particularly with healthcare providers, to create externship and job placement opportunities for its graduates. These partnerships are a crucial part of the company’s strategy to bridge the gap between education and employment.
Academic Institutions and Enrollment
Legacy Education operates through three accredited academic institutions:
Central Coast College (CCC): Founded in 1983, CCC offers certificate or degree programs in business, computer accounting, medical administration, nursing assistant, ultrasound technician, veterinary assistant, and vocational nursing. CCC plans to add programs in surgical technology, dental assisting, and sterile processing technician. As of September 30, 2024, CCC had 485 students enrolled.
Integrity College of Health: Established in 2007, Integrity offers programs in vocational nursing, registered nurse to bachelor of science in nursing, medical assisting, medical billing and coding, veterinary assistant, and diagnostic medical sonography. As of September 30, 2024, Integrity had 169 students enrolled.
As of September 30, 2024, Legacy Education had a total student population of 2,544, representing a 25.4% year-over-year increase.
Regulatory Landscape and Risks
As a post-secondary education provider, Legacy Education operates in a heavily regulated industry. The company’s eligibility to participate in Title IV federal financial aid programs is subject to maintaining certain standards of financial responsibility and administrative capability. Failure to comply with regulatory requirements could result in the loss of Title IV funding, which would have a significant impact on the company’s operations.
Additionally, Legacy Education is subject to accreditation requirements and must comply with the rules and regulations of its accrediting bodies, ACCET and ABHES. Any lapses in accreditation or regulatory compliance could jeopardize the company’s ability to operate.
Outlook and Future Growth Opportunities
Looking ahead, Legacy Education remains optimistic about its growth prospects. The company’s recent acquisitions, such as Contra Costa Medical Career College, are expected to further expand its geographic footprint and program offerings, particularly in the high-demand allied health sector. This acquisition, announced in October 2024, will add 14 new allied health programs, 9 of which are cash-pay, to Legacy Education’s portfolio and is expected to close in mid-to-late December 2024.
The company’s focus on healthcare-related programs, technology advancements, and strategic partnerships positions it well to capitalize on the growing demand for skilled professionals in critical industries. Legacy Education plans to continue expanding its healthcare-focused programs, including Nursing, Medical Assisting, and Diagnostic Medical Sonography, to align with market demand.
While specific numerical guidance for fiscal 2025 was not provided, the company’s management expressed confidence in their ability to achieve their goals for the year. CEO LeeAnn Rohmann stated that the company is “on target to deliver exceptional value to our students and stakeholders,” while CFO Brandon Pope noted that Legacy Education is “coming out very, very strong” and that the positive trend is expected to continue.
Conclusion
Legacy Education’s comprehensive history, robust financial performance, and strategic initiatives demonstrate its commitment to shaping the future of career-focused education. Despite the regulatory challenges inherent in the industry, the company has consistently proven its ability to navigate the landscape and deliver strong results. As Legacy Education continues to expand its program offerings, deepen its corporate partnerships, and integrate new campuses, it is well-positioned to capitalize on the growing demand for skilled professionals in high-growth sectors. With its strong financial position, increasing enrollment numbers, and strategic acquisitions, Legacy Education is poised for continued growth and success in the competitive post-secondary education market.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.