Lincoln Educational Services Corp
NASDAQ:LINC
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
8.95
16.78
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Lincoln Educational Services Corp
Earnings Call Analysis
Q4-2023 Analysis
Lincoln Educational Services Corp
Looking into 2024, the company is charting a course for notable expansion and solid financial footing. With ambitious plans to open new campuses and programs expected to add considerable value, management is focused on providing in-demand career paths that contrast the rising skepticism around traditional four-year degrees. These strategic moves aim to generate significant average EBITDA gains — $1 million annually for new programs and at least $6 million for each campus after 36 months of operation. The company's robust working capital, in excess of $60 million, as well as a fresh $40 million credit facility, provides flexibility for future investments.
The company is poised to maintain solid financial ratios, projecting a financial responsibility composite score of 3.0, the highest possible, and improving its 90/10 ratio to approximately 81%, up from 75% the previous year. Revenue forecasts for 2024 are set between $410 million and $420 million, with the adjusted EBITDA expected to be between $35 million and $40 million, and an adjusted net income projected between $10 million and $15 million. Student stock growth is anticipated to range between 7% and 12%, with capital expenditures forecasted to be between $65 million and $70 million.
Significant capital investments in 2024 will be allocated to the build-out of the Houston, Texas campus, and relocations for the Nashville and Philadelphia campuses, totaling around $50 million across all three projects. These investments align with the company's top growth initiatives, including expanding to new locations like East Point, Georgia, and bolstering existing program offerings to drive organic growth.
In a year marked by impressive performance, the company saw its revenue surge by 13.6%, a $12.3 million increase to $102.5 million due to both an uptick in student population by 7.8% and a rise in average revenue per student of 5.4% compared to the previous year. The new student starts outperformed expectations with a 16% increase, setting the stage for strong revenue growth in 2024 as the company begins the new year with 1,000 more students than the year before.
The narrative of 2023 depicts a company that has not only reached but surpassed its financial objectives, with significant starts and revenue increases alongside exceeding EBITDA guidance. The opening of a greenfield campus, improved graduate placement rates, and sustained high demand from employers demonstrate the company's emphasis on educational excellence. These accomplishments underline the strength of the balance sheet and position the company for enduring benefits to stakeholders, forecasting the opening of more campuses such as the one in Houston, penciled in for early 2026.
You don't have any saved screeners yet
Good day, and thank you for standing by. Welcome to the Lincoln Educational Services Fourth Quarter and Full Year 2023 Earnings and Full Year Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Michael Polyviou, Investor Relations. Please go ahead.
Thank you, Daniel. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued its news release reporting financial results for the fourth quarter and full year ended December 31, 2023, the release is available on the Investor Relations portion of the company's corporate website at www.lincolntech.edu.
Joining us today on the call are Scott Shaw, President and CEO; and Brian Meyers, Chief Financial Officer. Today's call is being recorded and is being broadcast live on the company's website, and a replay of the call will be archived also on the company's website.
Statements made by Lincoln's management on today's call regarding the company's business that are not historical facts may be forward-looking statements and terms identified in federal securities laws. The words may, will, expect, believe, anticipate, project, plan, intend, estimate and continue as well as similar expressions are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results.
The company cautions you that these statements reflect current expectations about the company's future performance or events and are subject to a number of uncertainties and risks and other influences, many of which are beyond the company's control that may influence the accuracy of the statements and the projections upon which the segment and statements are based. Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the Risk Factors section of the annual report on Form 10-K and the quarterly report on Form 10-Q filed with the Securities and Exchange Commission.
Forward-looking statements are based on the information available at the time those statements are made and management's good faith belief as of the time with respect to future events. All forward-looking statements are qualified in the entirety by this cautionary statement, and Lincoln undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise after the date thereof.
Now I would like to hand the call over to Scott Shaw, President and CEO of Lincoln Educational Services. Scott, please go ahead.
Thanks, Michael, and good morning, everyone. This morning, we released our financial results for the fourth quarter and full year that reflect the strong operating and financial performance of our company. Our team is successfully executing our transformative growth strategies, which has led to increased student starts, retention, graduation and placement rates. At the same time, we are benefiting from the building interest in skilled trade careers despite continued record low unemployment as well as the ever present skills gap impacting corporate America's ability to grow.
As a result of these dynamics, we achieved all of our objectives during 2023, and our momentum has carried over into the first 2 months of 2024.
For the full year, we achieved 10.3% same-campus revenue growth and 11.4% same campus student start growth, which we believe exceeds our peer group's organic growth rate.
During the fourth quarter, same campus revenue growth was up 13.6%, while student starts grew 16%, we entered the new year with a student population as approximately 1,000 students higher than at the beginning of 2023, which provides us with a platform for further growth in 2024.
While we executed our capital investment strategy during 2023 to complete the build-out of our new East Point campus in Atlanta, to begin the build-out of our new Houston campus to implement the relocation plans of our Nashville and Philadelphia campus as well as program extensions at 4 campuses, we finished the year with more than $80 million in cash and no debt.
In addition, we recently closed on a new expanded credit facility, which can provide up to an additional $60 million of availability. Lincoln is in the best financial condition of the company's recent history and extremely well positioned to execute our future capital investment plans for growth.
Our exceptional fourth quarter top line growth is being driven by our strong student starts, the highest level of student retention in Lincoln's recent history and a 5.4% increase in average revenue per student. Our hybrid instructional platform where Lincoln 10.0 is a key driver of this increase in average revenue per student and has been incorporated into approximately 3/4 of our adaptable programs.
While it will be the first half of 2025 before Lincoln 10.0 is fully implemented, we do expect some bottom line efficiencies emerging during the second half of 2024 in the form of lower instructional costs as a percentage of revenue. The new model combines hands-on learning and campus facilities with a greater component of classroom work delivered through online instruction. The model enables our students to work part-time or manage other commitments while pursuing their Lincoln education and is specifically designed to help a higher percentage of students to graduate.
As I mentioned a few moments ago, during the fourth quarter, Lincoln achieved our highest level of student retention in more than a decade, and we believe the biggest contributing factor to this development is the implementation of Lincoln 10.0. Another key factor behind our student start growth is the continued increase of leads generated by our marketing programs, this lead generation is occurring across the board, both geographically and from a curriculum perspective and is accompanied by a healthy conversion rate of these leads.
In addition, we are achieving some lead generation leverage in markets where we have more than one campus. We recently began marketing for our new East Point, Georgia campus and have not only been pleasantly surprised by the demand for the new campus, but have also experienced an increase in interest in our Marietta campus which is approximately 45 minutes north of East Point depending on Atlanta traffic.
The new East Point campus is the first result of our strategy to open one new campus per year, offering hands-on training in the automotive and skilled trades fields. The campus has 56,000 square feet of training space, including 15 automotive service base and up to 60 welding boots, labs, classrooms and work areas. We are now enrolling students for training in 4 essential skilled career paths, with the first class commencing in March as planned. We are proud of the campus, and we will be showcasing the facility during our in-person Analyst Day on March 19.
We believe that the East Point campus is unique among trade schools. The facility capitalizes on the best ideas from all of our campuses while elevating the experience with its sleek modern design. The labs and shops have the latest technology with lots of opportunities for hands-on learning. We are also excited to be the first school in the nation to incorporate [ ELEC2 ] training aids into our automotive program, we have partnered with [ ELEC2 ] to develop our automotive curriculum since they are the world leader in automotive training education.
The agenda for the Investor Day includes a deep briefing of Lincoln 10.0, and how our transformative growth strategy positions Lincoln for increasing long-term returns. Members of my management team will present an overview of operational -- I'm sorry, of operations and actions to drive growth and even better outcomes. I highly encourage you to attend. We have timed the events so that analysts and institutional investors can fly into Atlanta that morning, attend our event toward the new facility, and fly home in the late afternoon. For those that are unable to attend in person, we do anticipate webcasting some of the presentations, and we'll provide that information as we get closer to the event.
A key component of our growth strategy is to develop one new campus per year, and as we announced last year, our second greenfield site is in Houston, Texas. We remain on schedule to welcome our first classes at this campus, which is our second in Texas in the first quarter of 2026. The campus is located in the heart of one of Houston's busiest commercial corridors and strategically located for both student convenience and maximum graduate exposure to area hiring managers. The new campus will feature an approximately 100,000 square foot training center offering career opportunities in the auto, diesel, welding, HVAC and electrical fields.
Of the 2.4 million jobs that are expected to become available nationwide in these industries by 2032, over 290,000 of those jobs are projected to be in Texas.
In addition to new campuses in Atlanta and Houston, we are relocating existing campuses in Nashville and Philadelphia to new locations that facilitate existing program expansion and our replication strategy. Over the next 2 years, as we layer on new campus openings in the program replication strategy, we consistently expand our opportunities to increase overall student starts while we remain focused on continuing the impressive organic start growth at existing programs.
I'm pleased by all the progress we have made and will continue to make. The need for our programs by employers has been with us for years, and it now appears that student demand is growing to meet this need.
From a new campus and program replication perspective, our biggest obstacle is receiving regulatory approvals in a timely manner. It seems that many governmental agencies, whether at the state or national level were understaffed in the delay from one organization then creates a cascade of delays along the way. We have taken this new reality into our planning, and so let me summarize for you the timing of our growth opportunities.
In 2023, we replicated 4 programs. In 2024, we will replicate 6 programs and open the East Point campus. And in 2025, we will replicate 6 to 8 programs. In the first quarter of 2026, we will open the Houston campus with a possible other new campus by the end of 2026. As other opportunities arise, we will certainly look to take advantage of them. But as of today, these are our program and campus openings.
And just to reiterate, we expect each new program to generate annually on average, $1 million of additional EBITDA, and each new campus on average to generate at least $6 million of EBITDA after being open for 36 months.
During the fourth quarter and during the first 2 months of 2024, we continue to learn of studies and surveys questioning the value of a 4-year degree and the accompanying debt. Many students that eventually graduate from a 4-year degree don't have the marketable or applicable skills that today's employers demand. At Lincoln, we strive to provide strong ROI programs that lead to solid in-demand careers, and we deliver these programs in a supportive environment that focuses on graduating and placing students. Also, the careers we offer will most likely not be replaced by artificial intelligence or moved offshore, adding security to a student's career decision.
We continue to expand our corporate partnerships that play a key role in our graduate placement rate. Most recently, Peterbilt Trucks signed on to expand our partnership at the Nashville campus to our Denver campus, and we are in active negotiations with several existing corporate partners to expand their programs to additional campuses as well. Additionally, we have established a partnership with Hyundai Genesis and we'll be offering students at 6 campuses opportunities for this advanced level training.
Also, to further expand our reach into the HVAC industry, we participated in a panel discussion at the recent AHR Expo, which brings together manufacturers and suppliers of all sizes and specialties to share ideas and showcase the future of HVACR technology. We discuss how Lincoln helps attract and train people for the industry and how we have partnered with major corporations to provide specialized training that meets their specific needs. The AHR Expo is the HVAC industry's largest place for OEMs, engineers, contractors, facility operators, architects, educators and other professionals to experience everything new and build the vital relationships that grow businesses and careers.
We are discussing with several partners ways to build enrollments in their programs through student debt management scholarships based on metric achievements and higher-skilled level programs, we were also talking with institutions outside corporate America to determine the feasibility of applying skilled trade training programs to noncorporate organizations. Any students start to achieve over the long term from these discussions will layer on to the high single-digit organic growth rate we believe we will achieve during 2024.
2023 was an excellent year for Lincoln. We exceeded all of our financial goals. Starts were up double digits. Revenues were up double digits and EBITDA exceeded the top end of our guidance. We readied a new greenfield campus, increased graduate placement rates and continue to have more demand from employers than we have students as our strong graduation and placement rates provide excellent reference points.
Our balance sheet, which has never been stronger as enabling Lincoln to expand our programs and locations, which will create long-lasting benefits to our students, our graduates, our instructors, our corporate partners and increasing returns to our shareholders. We finished the year in excellent financial shape and are very well positioned to continue both our operating and financial momentum in 2024.
Now I'd like to turn the call over to Brian, so he can review some of our recent financial highlights and present our guidance for 2024. Brian?
Thanks, Scott. Good morning, and thank you for joining our fourth quarter earnings call. As Scott mentioned, 2023 was another successful year. We exceeded all guidance metrics, and achieved an impressive double-digit growth in both student starts of 11.4% and revenue of 10.3% year-over-year.
We finished the year with over 1,000 more students than last year, and $80 million in cash with no debt outstanding after investing over $40 million in total capital expenditures. Our momentum has continued into 2024 and current visibility calls for continued growth, which is reflected in our guidance for 2024.
This time, I'd like to recap our top 5 growth initiatives in 2023, which are shaping our operational landscape. While all of these initiatives are significant in that they each entail an investment of over $10 million, we believe that each will deliver a strong ROI and advance our progress toward achieving our long-term strategic goals. We are determined to drive innovation, greater efficiencies and higher financial returns.
Our first 2 initiatives expand our footprint to 23 locations. First, in our new East Point, Georgia -- East Point campus in Georgia, which is set to welcome its first class in the coming weeks. In 2023, we incurred capital expenditures in excess of $10 million to build a new state-of-the-art facility, providing students a superior education experience and training. This campus, as in all our new location, was designed from the ground up to take advantage of the efficiencies of our new hybrid learning model. This allows us to deliver 4 of our [ board ] programs at over 56,000 square foot facility. We will incur losses as the population ramps up in this first year, but expect the campus will be approved to earnings in 2025 in second year of operations.
Second, in our new Houston, Texas campus, which is in the beginning preconstruction phase and likely to open the students in early 2026, offering career opportunities in auto, welding, HVAC and electrical. We estimate that we'll incur capital expenditures of approximately $15 million in 2024 for the build-out of this 100,000 square foot campus.
Our third initiative is our national campus relocation to a newer, more efficient facility. The new 120,000 square-foot facility will enable us to add 2 new programs, electrical and HVAC, while also expanding our industry partnerships. In 2024, we expect to invest around $20 million in capital expenditures to build out this new location, which is expected to open in late 2025.
The fourth initiative is our Philadelphia campus relocation to nearby Livertown, Pennsylvania. As discussed, we purchased this facility in September of last year and subsequently entered into a sale-leaseback agreement announced in February this year. The sale and purchase transactions were essentially [ course ] neutral. Our new campus will significantly expand our market presence from our only single-program campus of 30,000 square feet, to a 90,000 square foot modern, multi-program campus. Accordingly, we expect to invest approximately $15 million of capital expenditures to prepare this new location to open during the second half of 2025.
Lastly, the fifth initiative is the expansion of our program offerings at our existing campuses to drive organic growth. In 2023, we initiated the build-out of segment program replication, mostly in with -- mostly within the skilled trades, and we expanded the capacity of 2 of our welding programs. While a couple of programs have been rolled out with a small number of stocks in 2023, we continue to see progress with the remaining programs. Accordingly, we expect to see a benefit in student starts in the second half of 2024, and see the new programs take a positive contribution to our bottom line in 2025.
In total, during 2023, we invested close to $10 million in capital expenditures to implement these new programs, and we'll continue to expand new programs in the current year.
In summary, we are well into executing our growth strategies and have set out aggressive goals. Our team is working efficiently to execute on these projects simultaneously. Thank you to everyone for your hard work and commitment.
Now turning to our fourth quarter performance. Please keep in mind, the discussed financial results exclude preopening costs of our new East Point campus, our campus pre-relocation expenses and nonrecurring expenses in the Transitional segment. The Transitional segment is made up of a single campus in Somerville, Massachusetts, which was successfully turned out at the end of October and will no longer be part of our financial results going forward.
Starting with the top line, revenue grew an impressive 13.6% or $12.3 million to $102.5 million. The increase was due to growth in both average student population up 7.8%, and average revenue per student up 5.4% compared to prior year. We are very pleased with our organic new student stock growth for the quarter, which increased an impressive 16% and outperforming our initial expectations.
Our students starts last year has positioned us to deliver strong revenue growth in 2024, we are entering the new year with 1,000 more students than we had in the prior year, which will continue to the revenue acceleration in 2024. Operating expenses were $89 million after adjusting for nonrecurring items detailed in our adjusted EBITDA calculation reflected in our Q4 earnings release.
While expenses came in above our internal plan, the overage was mainly driven by instructional expenses resulting from population growth. In addition, performance-based incentives increased based on our improved financial results. In terms of EBITDA, we ended the fourth quarter with adjusted EBITDA of approximately $16 million after addressing nonrecurring items detailed in our Q4 earnings release.
Now turning to our balance sheet and cash flow. We continue to have a very strong balance sheet, which benefited from our business generating more than $22 million in cash flow from operations during the fourth quarter. As mentioned earlier, our year-end cash balance was over $80 million compared to $65 million in the prior year. Moreover at year-end, we had working capital in excess of $60 million.
Capital expenses for the full year were $41 million, including the purchase of Levittown, Pennsylvania facility for $10 million, a net total of $31 million, excluding Levittown is consistent with our guidance, approximately 75% of the net $31 million CapEx related to growth initiatives.
In terms of liquidity, we now have more flexibility as we recently entered into a new 3-year $40 million credit facility with Fifth Third Bank. In addition, the agreement includes a $20 million [indiscernible] option, which provides greater financial flexibility and funding to the company decide to pursue a sizable inorganic growth transaction. While we do not anticipate any reason to draw on the credit facility in the near term, access to the credit facility further enhances the company's financial strength, the ability and ability to execute on growth opportunities.
Lastly, in terms of the key regulatory compliance metrics, we project to be in very good standing with both our financial responsibility ratio and our 90/10 ratio. We project our 2023 financial responsibility [ composite's worth ] to be 3.0, the maximum achievable score and projected 90/10 ratio to be approximately 81% compared to 75% the prior year. The increase is the result of the new calculation rules, which became effective for 2023. The main rule change relates to Veteran Affairs benefits, which are now treated as federal funds and counted in the 90-side along with Title IV. While the change in the calculation methodology resulted in our ratio increasing by several percentage points, we expect to continue to be well under the 90% threshold.
Now as we turn to 2024, the positive momentum generated during 2023 is carried over into the first 2 months of the new year. Our full year guidance for adjusted EBITDA and adjusted net income will exclude the impact from one new campus and campus relocation costs, 2 program expansions and three, noncash stock-based compensation.
We are forecasting 2024 revenue to range between $410 million and $420 million. Adjusted EBITDA range of between $35 million and $40 million, adjusted net income ranging between $10 million and $15 million, student stock growth ranging between 7% and 12%, and capital expenditures ranging between $65 million and $70 million.
Our capital expenditures plan underscores the confidence we have in our growth initiatives. The largest components of the CapEx plans are the build-out of the Houston, Texas campus and the relocation for Nashville and Philadelphia, which total around $50 million for all 3 projects. We expect to fund these significant capital investments through the combination of our cash liquidity of $80 million; cash flow from operations generated in 2024; and $10 million of proceeds associated with Levittown, Pennsylvania facility sell at leaseback completed in February.
In terms of net interest expense, while we do not expect to have interest expense associated with borrowings, we project net interest expense of approximately $700,000. Total interest expense is projected to be $2.7 million. Lincoln, similar to others, measure all new leases to determine the appropriate accounting treatment. As such, we have 2 new finance leases in 2024, resulting in $2.2 million of interest expense. The remainder relates to fees associated with our new credit facility. This expense will be largely offset by approximately $2 million of interest income.
With that, I'll conclude my remarks by thanking our entire team, including our faculty and students for their outstanding efforts during 2023. We look forward to communicating our progress throughout 2024, and now I'll turn the call back over to the operator so we can take your questions. Operator?
[Operator Instructions] Our first question comes from Alex Paris with Barrington Research.
Congratulations on the big beat and the guidance above consensus expectations for 2024.
Thanks, Alex.
I wanted to dive into the starts momentum a little bit because that was a significant outperformance in the quarter. I think starts were up 16% year-over-year, excluding the Transition segment, came out at close to 3,200 new students versus our estimate of 2,850. And then if you look at it by field of study, transportation and skilled trades led it up about 21%, where healthcare and other professions were up 10%, 11%. You did a pretty good job in my opinion, covering it in your prepared comments, but what other color could you offer us in terms of that, just great momentum that leads us to above average guidance in 2024.
Sure. Thanks, Alex. Well, we constantly daily are monitoring our leads that are coming in, and we did strategically invest more in marketing in the fourth quarter, because we constantly are just managing what's the cost for start. And whenever we see opportunity to invest more, then we take advantage of that. And so we did spend more in marketing in the fourth quarter than the prior year. And I think that, that, frankly, benefited us in the fourth quarter and frankly, seems to be also generating increased demand in the first quarter.
So that's one thing that we're doing, and we're constantly refining our marketing. We're constantly looking at getting out of lower return investments in marketing areas so that we can hopefully get the best returning leads as possible. And we have a new partner that we started with last year which has certainly helped us achieve those objectives. And we anticipate, frankly, even more efficiencies in 2024, now that we've been working with them for a year. And then as we've mentioned, it does seem as if the world is waking up to the fact that these are great careers and where there certainly is a lot more anecdotal evidence to suggest that.
With that said, though, we led all of our starts in any number of ways. And I can't say that the younger people are coming to us in any greater number than, I'll say, the older people. The average age of our student is around 25, 26 years old. And if I look at the makeup of our starts over the last 12 months, the percentage of each, I'll say, age from 18, 19, 20 to 21 hasn't changed year-over-year. So while we know that high school students and parents are talking a lot more about, oh, maybe I don't need to go to college, we're kind of seeing that benefit across the board, frankly.
That's very helpful. And then let me just ask a quick question about guidance, too, before I get back in the queue. Guidance was better than expected versus consensus expectations. It looks like in that guidance, if you use the midpoint of guidance, we're expecting revenue acceleration and adjusted EBITDA margin expansion. But even at that, the adjusted EBITDA margin guidance is about 9% versus 7% in 2023, 200 basis points. But haven't you said in the past that you thought mid-teens is a good target for adjusted EBITDA. And when do you think you'd get there?
Yes. Absolutely. We should be able to get to that 15% EBITDA level, and we anticipate, as you're seeing some acceleration in some of that expansion of our profitability, and we think that as these new programs roll out as we get the benefit of Lincoln 10.0, as we continue to refine our marketing, you will see hopefully an acceleration of that increase. So to get to 15%, it's not going to be in 2024, 2025, but I would anticipate shortly thereafter.
Great. That's helpful. And congratulations again, I'll get back into the queue.
Thanks, Alex.
Our next question comes from Steven Frankel with Rosenblatt Securities.
Very impressive metrics all the way around. Could you detail for us what the graduation and placement rates were in 2023?
Sure. So placement rates were around, let's say, 82% and our graduation rates as we track them cross the 70% threshold, or just around 70%, as we look at how we are managing that. Our actual ACCSC graduation rates could be slightly less because they look at a different time frame than what we're looking at. But anyway, we ended up at the 70% number, which is, as you may recall, a goal that I've set out for our company is to get 85% placement rate and 70% graduation rate.
Okay. That's great. And the starts are very impressive. What do you think you're doing differently from a marketing perspective that's enabling you to gain this efficiently?
Sure. Well, we know that, as I said, with this new partner, where it seem to be -- not seem, we are achieving better, I'll say, purchasing of keywords, and we're also kind of narrowed down the scope of the number of keywords that we're buying which is creating some efficiency. So we're in constant dialogue with our partner on this, and we're looking at metrics all the time. And we're also testing, that's kind of the beauty of the Internet marketing, you can test different words or different styles of presenting things in one market to see if it's creating a difference and then what it does, then we look to replicate that in other markets. So it's working with a strong vendor and constantly being on top of things.
[Operator Instructions] Our next question comes from Eric Martinuzzi with Lake Street Capital Markets.
Yes. I know we're not disclosing kind of a forecast on the new student starts by trade group, whether it's transportation, skilled trades or healthcare, but just curious to know if you're seeing the same demand trends, the 2 historic sides of the business, I think it's been about a 70-30 mix between transportation and skilled trades versus healthcare and other.
Yes. I would say that transportation, skilled trades still tend to be slightly stronger for us than healthcare. And I mean, one of the exciting parts is, I'll just throw this out, our automotive business grew by 11%, and we haven't opened any new auto programs. So that kind of shows you the underlying strength in these core careers that we're offering. But overall, to your point, automotive and skilled trades is definitely slightly better than the healthcare sector at this point.
Okay. All right. And then the -- your forecast for 2024, what's kind of the macroeconomic assumptions built in? Because historically, we've -- we faced headwinds around interest rates, inflation, unemployment. Is it an assumption that the status quo persists for the rest of the year?
Yes. We're basically based off of what we're seeing already in the first quarter. And yes, we assume that the economy will be the same. Obviously, I think many people have been surprised at the strength of the economy. Unemployment still remains very low. So if that were to change, I could see that only benefiting us, meaning if unemployment increases, but again, what's so exciting is the fact that we're able to get this type of growth in this low unemployment market, which, to me, suggests there's been a fundamental shift to our benefit taking place out there.
Got it. Congrats on the quarter and the outlook.
Thanks.
[Operator Instructions] I'm showing no questions at this time. I would now like to turn it back to Scott Shaw, CEO, for closing remarks.
Thank you all for joining us today to listen to our strong performance and progress to date. At Lincoln, we all could not be more excited about all of our opportunities and our leadership position to continue to eliminate the skills gap. This most exciting could be what I will refer to as a renaissance of skilled trades. After decades of societal pressure to only go to college, we are seeing and hearing that more and more people are becoming aware of the robust and enduring careers available by working with your hands.
For more than 75 years, Lincoln has been solely focused on providing the best hands-on training possible, and it's increasingly feeling that America is getting on board. I want to thank all of our instructors and staff for their steadfast commitment to our students and to our mission of changing lives. And I hope that you will join us on March 19 at our East Point, Georgia campus for our first ever Investor Day. I'm confident that you will walk away from the event with as much excitement as we have for Lincoln's future. Thank you all, and have a great day.
This concludes today's conference call. Thank you for participating. You may now disconnect.