Raised and adjusted fiscal 2023 financial guidance, including
revenue guidance tightened to a range of $602 million to $605
million and adjusted EBITDA guidance raised to a range of
$62 million to $64 million.
PHOENIX, Aug. 8, 2023
/PRNewswire/ -- Universal Technical
Institute, Inc. (NYSE: UTI), a leading workforce
solutions provider of transportation, skilled trades and healthcare
education programs, reported financial results for the fiscal 2023
third quarter ended June 30, 2023. Universal Technical Institute, Inc. operates in two
reportable segments, Universal Technical
Institute (UTI) and Concorde Career Colleges (Concorde), and
together with its segments and subsidiaries is referred to as the
"Company," "we," "us" or "our."
- Revenue was $153.3 million with
UTI contributing $100.9 million and
Concorde contributing $52.4
million.
- Net loss of $0.5 million,
adjusted net income* of $2.0 million,
and adjusted EBITDA* of $11.4
million.
- Total new student starts of 5,300 with UTI increasing 5.3%
versus the prior year period and 1,967 contributed by
Concorde.
- The Company is raising its adjusted EBITDA*, adjusted net
income* and adjusted free cash flow* guidance, and tightening its
revenue guidance range.
- The Company's current year results include Concorde for the
seven months ended June 30, 2023,
reflecting the December 1, 2022
closing date of the acquisition. Total company year-over-year
comparisons are shown on an "as-reported basis," consistent with
the Company's previously provided fiscal 2023 guidance.
"We continued to execute on our growth and diversification
initiatives in the third quarter, performing above our expectations
for both revenue and profitability," said Jerome Grant, CEO of Universal Technical Institute. "We drove strong
Concorde student start performance through the quarter and into
July. Within the UTI division, we achieved our first quarter of
same-store start growth since the third quarter of 2022, a
milestone that reflects improving start trends among both local and
relocating students. UTI has also launched the first tranche of new
programs out of the fourteen planned launches during the fiscal
year."
"Both the Concorde and UTI divisions are continuing to execute
on their respective growth drivers for the year. We are planning to
launch six new Concorde programs into 2024, with the first programs
expected to launch as early as September
2023, and maintain progress with integration. For UTI, we
will continue to launch the planned new programs, as well as
accelerate enrollment growth across the national campus footprint.
As we enter the fourth quarter, we believe we are strongly
positioned to execute on our strategic roadmap."
Financial Results for the Three-Month Period Ended
June 30, 2023 Compared to 2022
- Revenues increased 51.8% to $153.3
million compared to $101.0
million primarily due to the $52.4
million addition for the Concorde acquisition.
- Operating expenses rose by 54.1% to $152.6 million, compared to $99.0 million primarily due to the Concorde
acquisition.
- Operating income was $0.7 million
compared to $2.0 million.
- Net loss was $0.5 million
compared to net income of $0.8
million. Adjusted net income* was $2.0 million compared to $5.7 million.
- Basic and diluted loss per share were $(0.05) compared to $(0.01).
- Adjusted EBITDA* was $11.4
million compared to $12.0
million.
UTI
- UTI had revenues of $100.9
million, a 0.1% decrease from the prior year quarter
revenues of $101.0 million.
- Operating expenses for UTI were $92.7
million, compared to $89.6
million. The increase was primarily due to expenses incurred
during the current year for the pending new program launches
planned for the fourth quarter of fiscal 2023, and the new campuses
and programs launched in the prior year.
- Adjusted EBITDA* was $15.6
million compared to $20.6
million.
- New student starts increased from prior year by 5.3%, while
average undergraduate full-time active students decreased
4.0%.
Concorde
- Revenues of $52.4 million.
- Operating expenses were $50.5
million.
- Adjusted EBITDA* was $4.0
million.
- New student starts of 1,967 and 7,050 average undergraduate
full-time active students.
*See "Use of Non-GAAP Financial Information" below.
"Our third quarter results reflect the benefits of Concorde's
second full quarter of contribution and solid start performance in
both the UTI and Concorde segments," said Troy Anderson, CFO of Universal Technical Institute. "With our current
visibility and the strength of our performance year-to-date, we are
tightening our annual revenue guidance and raising our adjusted
EBITDA, adjusted net income and adjusted free cash flow guidance
for this fiscal year. In conjunction, we are reiterating our
previously stated expectations for total new student starts for
fiscal year 2023, and we remain confident with our projections of
reaching over $700 million in revenue
and approaching $100 million in
adjusted EBITDA for fiscal year 2024. Across the organization, we
are working hard to ensure we continue executing and building
momentum, while also facilitating and maintaining our strong
student outcomes in the high demand industry segments we
serve."
Balance Sheet and Liquidity
At June 30, 2023, the Company's total available cash
liquidity was $110.5 million, with an
additional $8.2 million available
from its revolving credit facility. Capital expenditures ("capex")
for the quarter and year total $10.2
million and $22.7 million,
respectively, excluding the $26.2
million paid for the purchase of the three primary buildings
and associated land at the Orlando,
FL campus in March 2023. The
primary drivers of capex for the year being the completion of the
UTI Austin and Miramar campus
buildouts, as well as UTI and Concorde program expansions.
Financial Results for the Nine-Month Period Ended
June 30, 2023 Compared to 2022
- Revenues increased 41.9% to $437.1
million compared to $308.1
million primarily due to the $123.1
million addition for the Concorde acquisition.
- Operating expenses rose by 47.3% to $426.1 million, compared to $289.2 million. The acquisition of Concorde
contributed $115.7 million. The
remainder of the increase was primarily driven by the incremental
cost of delivery associated with UTI new campus and program
rollouts in the prior year, and both one-time and ongoing
investments in support of our growth and diversification
strategy.
- Operating income was $11.1
million compared to $18.9
million.
- Net income was $5.6 million
compared to $23.0 million. Adjusted
net income* was $13.7 million
compared to $27.3 million.
- Basic earnings per share was $0.03 compared to $0.36 and diluted earnings per share was
$0.03 compared to $0.35.
- Adjusted EBITDA* was $45.1
million compared to $45.2
million.
- Adjusted free cash flow* used cash of $1.6 million compared to $3.0 million.
UTI
- UTI had revenues of $314.0
million, a 1.9% increase from the prior year revenues of
$308.1 million driven primarily by
the new campuses and programs launched in the prior year and
overall higher revenue per student, partially offset by lower
average undergraduate full-time active students.
- Operating expenses for UTI were $276.2
million, compared to $258.0
million. The increase was primarily due to higher
compensation related and other expenses incurred during the current
year for the pending new program launches planned for the fourth
quarter of fiscal 2023, and the new campuses and programs launched
in the prior year.
- Adjusted EBITDA* was $59.6
million compared to $70.8
million.
- New student starts increased 3.7% compared to the prior year,
while average undergraduate full-time active students decreased
2.8%.
Concorde (for the seven-month period beginning
December 2022 and ended June 2023)
- Revenues of $123.1 million.
- Operating expenses were $115.7
million.
- Adjusted EBITDA* was $12.3
million.
- New student starts of 4,540 and 7,536 average undergraduate
full-time active students.
*See "Use of Non-GAAP Financial Information" below.
Student
Metrics
|
|
|
Three Months Ended
June 30, 2023
|
|
|
Three Months Ended
June 30, 2022
|
|
UTI
|
|
Concorde
|
|
Total
|
|
|
UTI
|
|
Concorde
|
|
Total
|
Total new student
starts
|
3,333
|
|
1,967
|
|
5,300
|
|
|
3,166
|
|
—
|
|
3,166
|
Average undergraduate
full-time active students
|
11,544
|
|
7,050
|
|
18,594
|
|
|
12,025
|
|
—
|
|
12,025
|
End of period
undergraduate full-time active students
|
11,908
|
|
6,581
|
|
18,489
|
|
|
12,077
|
|
—
|
|
12,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2023
|
|
|
Nine Months Ended
June 30, 2022
|
|
UTI
|
|
Concorde
|
|
Total
|
|
|
UTI
|
|
Concorde
|
|
Total
|
Total new student
starts
|
7,681
|
|
4,540
|
|
12,221
|
|
|
7,409
|
|
—
|
|
7,409
|
Average undergraduate
full-time active students
|
12,524
|
|
7,536
|
|
20,060
|
|
|
12,881
|
|
—
|
|
12,881
|
End of period
undergraduate full-time active students
|
11,908
|
|
6,581
|
|
18,489
|
|
|
12,077
|
|
—
|
|
12,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Company's most recent investor presentation and
quarterly financial supplement, please see its investor relations
website at https://investor.uti.edu.
Updated Fiscal 2023
Financial Outlook
|
|
|
|
Updated
|
|
|
FY
2023
|
($ in
millions)
|
|
Guidance(2)
|
New student start
growth
|
No
change
|
22,000 -
23,500
|
Revenue
|
Narrowed range and
raised midpoint
|
$602.0 -
$605.0
|
Adjusted net
income(1)
|
Raised range and
midpoint
|
$17.0 -
$20.0
|
Adjusted
EBITDA(1)
|
Raised range and
midpoint
|
$62.0 -
$64.0
|
Adjusted free cash
flow(1)(3)
|
Raised range and
midpoint
|
$44.0 -
$46.0
|
|
|
(1)
|
See the "Use of
Non-GAAP Financial Information" below. For a detailed
reconciliation of the non-GAAP measures, see the tables following
the earnings release.
|
(2)
|
Fiscal 2023 reflects
UTI estimated results for the full year and Concorde estimated
results beginning December 1, 2022. Any growth rates shown
are calculated on an "as reported" basis.
|
(3)
|
Fiscal 2023 assumes
$58.0 million to $60.0 million of total capex, including the
purchase of the three buildings and land at the Orlando, FL campus,
incremental investments for the Austin and Miramar campuses,
program expansions, and a consistent level of annual capital
maintenance.
|
|
|
Conference Call
Management will hold a conference call to discuss the financial
results for the fiscal 2023 third quarter ended June 30, 2023,
on Tuesday, August 8, 2023, at 4:30
p.m. ET.
To participate in the live call, investors are invited to dial
(844) 881-0138 (domestic) or (412) 317-6790 (international). A live
webcast of the call will be available via the Universal Technical Institute, Inc. investor
relations website at https://investor.uti.edu. Please go to the
website at least 10 minutes early to register, download and install
any necessary audio software. The conference call webcast will be
archived for fourteen days at https://investor.uti.edu.
Alternatively, the telephone replay can be accessed through
August 22, 2023, by dialing (877)
344-7529 (domestic) or (412) 317-0088 (international) and entering
passcode 6476290.
Use of Non-GAAP Financial Information
In addition to disclosing financial results that are determined
in accordance with U.S. generally accepted accounting principles
("GAAP"), the Company also discloses certain non-GAAP financial
information in this press release and may similarly disclose
non-GAAP financial information on the related conference call.
These financial measures are not recognized measures under GAAP and
are not intended to be and should not be considered in isolation or
as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP. The Company
discloses these non-GAAP financial measures because it believes
that they provide investors an additional analytical tool to
clarify its results of operations and identify underlying trends.
Additionally, the Company believes that these measures may also
help investors compare its performance on a consistent basis across
time periods. Additional details on our non-GAAP measures and the
tables reconciling these measures to the most directly comparable
GAAP measure are provided below.
Adjusted EBITDA
For fiscal 2022, the Company defined adjusted EBITDA as net
income (loss) before interest expense, interest income, income
taxes, depreciation and amortization, adjusted for items not
considered as part of the Company's normal recurring operations.
Starting in fiscal 2023, the Company defines adjusted EBITDA as net
income (loss) before interest expense, interest income, income
taxes, depreciation and amortization, adjusted for stock-based
compensation expense and items not considered normal recurring
operations. Prior year amounts have been restated to include
an adjustment for stock-based compensation expense.
Adjusted Free Cash Flow
The Company defines adjusted free cash flow as net cash provided
by (used in) operating activities less capital expenditures,
adjusted for items not considered normal recurring operations.
Adjusted Net Income (Loss)
The Company defines adjusted net income (loss) as net income
(loss), adjusted for items that affect trends in underlying
performance from year to year and are not considered normal
recurring operations, including the income tax effect on the
adjustments utilizing the effective tax
rate.
We disclose any campus adjustments as direct costs (net of any
corporate allocations). Management utilizes adjusted figures as
performance measures internally for operating decisions, strategic
planning, annual budgeting and forecasting. For the periods
presented, this includes acquisition-related costs for both
announced and potential acquisitions, integration costs for
completed acquisitions, costs related to the purchase of our
campuses, start-up costs associated with the Austin, TX and Miramar, FL campus openings and other program
expansions, lease accounting adjustments resulting from the
purchase of our Lisle, Illinois
campus and our campus consolidation efforts, impairment charges
related to intangible assets, the income tax benefit recorded as a
result of the CARES Act, and severance expenses due to the CEO
transition. To obtain a complete understanding of our performance,
these measures should be examined in connection with net income
(loss) and net cash provided by (used in) operating activities,
determined in accordance with GAAP, as presented in the financial
statements and notes thereto included in the annual and quarterly
filings with the Securities and Exchange Commission ("SEC").
Because the items excluded from these non-GAAP measures are
significant components in understanding and assessing our financial
performance under GAAP, these measures should not be considered to
be an alternative to net income (loss) or net cash provided by
(used in) operating activities as a measure of our operating
performance or liquidity. Exclusion of items in the non-GAAP
presentation should not be construed as an inference that these
items are unusual, infrequent or non-recurring. Other companies,
including other companies in the education industry, may define and
calculate non-GAAP financial measures differently than we do,
limiting their usefulness as a comparative measure across similarly
titled performance measures presented by other companies. A
reconciliation of the historical non-GAAP financial measures to the
most directly comparable GAAP measures is provided below and
investors are encouraged to review the reconciliations.
Forward Looking Statements
All statements contained in this press release and the related
conference call, other than statements of historical fact, are
"forward-looking" statements within the meaning of the safe harbor
from civil liability provided for such statements by the Private
Securities Litigation Reform Act of 1995 (set forth in Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended). These forward-looking
statements which address our expected future business and financial
performance, may contain words such as "goal," "target," "future,"
"estimate," "expect," "anticipate," "intend," "plan," "believe,"
"seek," "project," "may," "should," "will," the negative form of
these expressions or similar expressions. Examples of
forward-looking statements include, among others, statements
regarding (1) the Company's expectation that it will meet its
fiscal year 2023 guidance for new student start growth (decline),
revenue growth, Adjusted net income, Adjusted EBITDA and Adjusted
Free Cash Flow; (2) expectation that it will continue to expand its
value proposition and build a business that can grow in low-to-mid
single digits with potential upside, regardless of the economic
environment; (3) the Company's expectation that it will succeed in
new campus launches next year; and (4) the Company's expectation of
the successful integration of the Concorde acquisition.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
the Company's current beliefs, expectations and assumptions
regarding the future of its business, future plans and strategies,
projections, anticipated events and trends, the economy and other
future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
affect our actual results include, among other things, impacts
related to the COVID-19 pandemic, changes to federal and state
educational funding, changes to regulations or agency
interpretation of such regulations affecting the for-profit
education industry, possible failure or inability to obtain
regulatory consents and certifications for new or modified campuses
or instruction, potential increased competition, changes in demand
for the programs we offer, increased investment in management and
capital resources, failure to comply with the restrictive covenants
and our ability to pay the amounts when due under the Credit
Agreement with Fifth Third Bank, National Association, the
effectiveness of our student recruiting, advertising and
promotional efforts, changes to interest rates and unemployment,
general economic and political conditions, the adoption of new
accounting standards, and other risks that are described from time
to time in our public filings. Further information on these and
other potential factors that could affect the financial results or
condition may be found in the company's filings with the SEC.
Any forward-looking statements made by us in this press release and
the related conference call are based only on information currently
available to us and speak only as of the date on which it is
made. We expressly disclaim any obligation to publicly update
any forward-looking statements, whether written or oral, that may
be made from time to time, whether as a result of new information,
future developments, changes in expectations, any changes in
events, conditions or circumstances, or otherwise.
Social Media Disclosure
Universal Technical Institute,
Inc uses its websites (https://www.uti.edu/,
https://concorde.edu, and https://investor.uti.edu/) and LinkedIn
pages
(https://www.linkedin.com/school/universal-technical-institute/ and
https://www.linkedin.com/school/concorde-career-colleges/) as
channels of distribution of information about its programs, its
planned financial and other announcements, its attendance at
upcoming investor and industry conferences, and other matters. Such
information may be deemed material information, and the Company may
use these channels to comply with its disclosure obligations under
Regulation FD. Therefore, investors should monitor the company's
website and its social media accounts in addition to following the
company's press releases, SEC filings, public conference calls, and
webcasts.
About Universal Technical
Institute, Inc.
Universal Technical Institute, Inc.
(NYSE: UTI) was founded in 1965 and is a leading workforce
solutions provider of transportation, skilled trades and healthcare
education programs, whose mission is to serve students, partners,
and communities by providing quality education and support services
for in-demand careers across a number of highly-skilled fields. The
Company is comprised of two divisions: Universal Technical Institute ("UTI") and Concorde
Career Colleges ("Concorde"). UTI operates 16 campuses located in 9
states and offers a wide range of transportation and skilled trades
technical training programs under brands such as UTI, MIAT College
of Technology, Motorcycle Mechanics Institute, Marine Mechanics
Institute and NASCAR Technical Institute. Concorde operates across
17 campuses in 8 states, offering programs in the Allied Health,
Dental, Nursing, Patient Care and Diagnostic fields. For more
information, visit www.uti.edu or www.concorde.edu, or visit us on
LinkedIn at @UniversalTechnicalInstitute and @Concorde Career
Colleges or on Twitter @news_UTI or @ConcordeCareer.
Company Contact:
Troy R.
Anderson
Chief Financial Officer
Universal Technical Institute, Inc.
(623) 445-9365
Media Contact:
Mark
Brenner
Vice President, Corporate Affairs & Communications
Universal Technical Institute, Inc.
(623) 445-0872
Investor Relations Contact:
Matt Glover or Jackie
Keshner
Gateway Group, Inc.
(949) 574-3860
UTI@gatewayir.com
(Tables Follow)
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except
per share amounts)
|
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Nine Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues
|
$
153,286
|
|
$
100,966
|
|
$
437,110
|
|
$
308,127
|
Operating
expenses:
|
|
|
|
|
|
|
|
Educational services
and facilities
|
88,377
|
|
53,216
|
|
236,715
|
|
150,326
|
Selling, general and
administrative
|
64,246
|
|
45,796
|
|
189,335
|
|
138,892
|
Total operating
expenses
|
152,623
|
|
99,012
|
|
426,050
|
|
289,218
|
Income from
operations
|
663
|
|
1,954
|
|
11,060
|
|
18,909
|
Other (expense)
income:
|
|
|
|
|
|
|
|
Interest
income
|
1,632
|
|
68
|
|
4,260
|
|
88
|
Interest
expense
|
(2,957)
|
|
(552)
|
|
(7,017)
|
|
(1,251)
|
Other income
(expense), net
|
89
|
|
(291)
|
|
540
|
|
(336)
|
Total other
expense, net
|
(1,236)
|
|
(775)
|
|
(2,217)
|
|
(1,499)
|
(Loss) income before
income taxes
|
(573)
|
|
1,179
|
|
8,843
|
|
17,410
|
Income tax benefit
(expense)
|
64
|
|
(336)
|
|
(3,224)
|
|
5,609
|
Net (loss)
income
|
$
(509)
|
|
$
843
|
|
$
5,619
|
|
$
23,019
|
Preferred stock
dividends
|
(1,263)
|
|
(1,296)
|
|
(3,791)
|
|
(3,913)
|
(Loss) income available
for distribution
|
(1,772)
|
|
(453)
|
|
1,828
|
|
19,106
|
Income allocated to
participating securities
|
—
|
|
—
|
|
(684)
|
|
(7,272)
|
Net (loss) income
available to common shareholders
|
$
(1,772)
|
|
$
(453)
|
|
$
1,144
|
|
$
11,834
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Net (loss) income per
share - basic
|
$
(0.05)
|
|
$
(0.01)
|
|
$
0.03
|
|
$
0.36
|
Net (loss) income per
share - diluted
|
$
(0.05)
|
|
$
(0.01)
|
|
$
0.03
|
|
$
0.35
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
Basic
|
34,067
|
|
33,257
|
|
33,956
|
|
33,032
|
Diluted
|
34,067
|
|
33,257
|
|
34,402
|
|
33,550
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands, except
par value and per share amounts)
|
(Unaudited)
|
|
|
June 30,
2023
|
|
September 30,
2022
|
Assets
|
|
Cash and cash
equivalents
|
$
110,511
|
|
$
66,452
|
Restricted
cash
|
3,572
|
|
3,544
|
Held-to-maturity
investments
|
—
|
|
28,918
|
Receivables,
net
|
25,156
|
|
16,450
|
Notes receivable,
current portion
|
5,964
|
|
5,641
|
Prepaid
expenses
|
11,153
|
|
6,139
|
Other current
assets
|
8,123
|
|
8,809
|
Total current
assets
|
164,479
|
|
135,953
|
Property and equipment,
net
|
266,238
|
|
214,292
|
Goodwill
|
28,459
|
|
16,859
|
Intangible assets,
net
|
19,148
|
|
14,215
|
Notes receivable, less
current portion
|
29,930
|
|
30,231
|
Right-of-use assets for
operating leases
|
182,111
|
|
132,038
|
Deferred tax asset,
net
|
5,231
|
|
3,365
|
Other assets
|
11,140
|
|
5,958
|
Total
assets
|
$
706,736
|
|
$
552,911
|
Liabilities and
Shareholders' Equity
|
|
|
|
Accounts payable and
accrued expenses
|
$
64,898
|
|
$
66,680
|
Dividends
payable
|
1,263
|
|
—
|
Deferred
revenue
|
57,484
|
|
54,223
|
Operating lease
liability, current portion
|
21,290
|
|
12,959
|
Long-term debt, current
portion
|
2,478
|
|
1,115
|
Other current
liabilities
|
3,522
|
|
2,745
|
Total current
liabilities
|
150,935
|
|
137,722
|
Operating lease
liability
|
170,886
|
|
129,302
|
Long-term
debt
|
160,225
|
|
66,423
|
Other
liabilities
|
4,562
|
|
4,067
|
Total
liabilities
|
486,608
|
|
337,514
|
Commitments and
contingencies
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common stock, $0.0001
par value, 100,000 shares authorized, 34,151 and 33,857 shares
issued
|
3
|
|
3
|
Preferred stock,
$0.0001 par value, 10,000 shares authorized; 676 shares of Series A
Convertible Preferred Stock issued and outstanding, liquidation
preference of $100 per share
|
—
|
|
—
|
Paid-in capital -
common
|
151,426
|
|
148,372
|
Paid-in capital -
preferred
|
66,481
|
|
66,481
|
Treasury stock, at
cost, 82 shares
|
(365)
|
|
(365)
|
Retained earnings
(deficit)
|
521
|
|
(1,307)
|
Accumulated other
comprehensive income
|
2,062
|
|
2,213
|
Total shareholders'
equity
|
220,128
|
|
215,397
|
Total liabilities and
shareholders' equity
|
$
706,736
|
|
$
552,911
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
Nine Months Ended
June 30,
|
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
5,619
|
|
$
23,019
|
Adjustments to
reconcile net income to net cash (used in) provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
18,649
|
|
12,124
|
Amortization of
right-of-use assets for operating leases
|
|
15,439
|
|
12,636
|
Bad debt
expense
|
|
1,447
|
|
2,077
|
Stock-based
compensation
|
|
3,815
|
|
3,273
|
Deferred income
taxes
|
|
2,594
|
|
(6,283)
|
Training equipment
credits earned, net
|
|
1,299
|
|
(921)
|
Unrealized (loss) gain
on interest rate swap
|
|
(151)
|
|
1,368
|
Other (gains) losses,
net
|
|
(197)
|
|
537
|
Changes in assets and
liabilities:
|
|
|
|
|
Receivables
|
|
(2,869)
|
|
(8,234)
|
Prepaid
expenses
|
|
(3,293)
|
|
(1,439)
|
Other
assets
|
|
623
|
|
(621)
|
Notes
receivable
|
|
(22)
|
|
956
|
Accounts payable,
accrued expenses and other current liabilities
|
|
(13,949)
|
|
1,275
|
Deferred
revenue
|
|
(16,884)
|
|
(16,809)
|
Operating lease
liability
|
|
(16,094)
|
|
(10,778)
|
Other
liabilities
|
|
(759)
|
|
(4,274)
|
Net cash (used in)
provided by operating activities
|
|
(4,733)
|
|
7,906
|
Cash flows from
investing activities:
|
|
|
|
|
Cash paid for
acquisitions, net of cash acquired
|
|
(16,381)
|
|
(26,514)
|
Purchase of property
and equipment
|
|
(48,847)
|
|
(69,608)
|
Proceeds from
maturities of held-to-maturity securities
|
|
29,000
|
|
—
|
Return of capital
contribution from unconsolidated affiliate
|
|
—
|
|
188
|
Net cash used in
investing activities
|
|
(36,228)
|
|
(95,934)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
revolving credit facility
|
|
90,000
|
|
—
|
Proceeds from term
loan
|
|
—
|
|
38,000
|
Debt issuance costs
for long-term debt
|
|
(484)
|
|
(355)
|
Payment of preferred
stock cash dividend
|
|
(2,528)
|
|
(2,617)
|
Payments on term loans
and finance leases
|
|
(1,179)
|
|
(19,004)
|
Payment of payroll
taxes on stock-based compensation through shares
withheld
|
|
(761)
|
|
(633)
|
Net cash provided by
financing activities
|
|
85,048
|
|
15,391
|
Change in cash, cash
equivalents and restricted cash
|
|
44,087
|
|
(72,637)
|
Cash and cash
equivalents, beginning of period
|
|
66,452
|
|
133,721
|
Restricted cash,
beginning of period
|
|
3,544
|
|
12,256
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
69,996
|
|
145,977
|
Cash and cash
equivalents, end of period
|
|
110,511
|
|
70,713
|
Restricted cash, end of
period
|
|
3,572
|
|
2,627
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
114,083
|
|
$
73,340
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
SELECTED
SUPPLEMENTAL FINANCIAL INFORMATION BY SEGMENT
|
(In
thousands)
|
(Unaudited)
|
|
|
Financial Summary by
Segment and Consolidated
|
|
|
|
Three Months Ended
June 30, 2023
|
|
|
Three Months Ended
June 30, 2022
|
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Revenue
|
|
$ 100,852
|
|
$ 52,434
|
|
$
—
|
|
$
153,286
|
|
|
$ 100,966
|
|
$
—
|
|
$
—
|
|
$
100,966
|
Total operating
expenses
|
|
92,716
|
|
50,493
|
|
9,414
|
|
152,623
|
|
|
89,577
|
|
—
|
|
9,435
|
|
99,012
|
Net income
(loss)
|
|
6,795
|
|
2,028
|
|
(9,332)
|
|
(509)
|
|
|
10,859
|
|
—
|
|
(10,016)
|
|
843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2023
|
|
|
Nine Months Ended
June 30, 2022
|
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Revenue
|
|
$ 313,985
|
|
$
123,125
|
|
$
—
|
|
$
437,110
|
|
|
$ 308,127
|
|
$
—
|
|
$
—
|
|
$
308,127
|
Total operating
expenses
|
|
276,232
|
|
115,721
|
|
34,097
|
|
426,050
|
|
|
257,997
|
|
—
|
|
31,221
|
|
289,218
|
Net income
(loss)
|
|
34,755
|
|
7,531
|
|
(36,667)
|
|
5,619
|
|
|
48,950
|
|
—
|
|
(25,931)
|
|
23,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Major Expense
Categories by Segment and Consolidated
|
|
|
Three Months Ended
June 30, 2023
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Salaries, benefits and
tax expense
|
$
45,819
|
|
$
27,153
|
|
$
4,442
|
|
$
77,414
|
Bonus
expense
|
1,320
|
|
1,184
|
|
690
|
|
3,194
|
Stock-based
compensation
|
280
|
|
—
|
|
253
|
|
533
|
Total compensation and
related costs
|
$
47,419
|
|
$
28,337
|
|
$
5,385
|
|
$
81,141
|
|
|
|
|
|
|
|
|
Advertising
expense
|
$
13,346
|
|
$
5,790
|
|
$
—
|
|
$
19,136
|
Occupancy expense, net
of subleases
|
7,380
|
|
5,816
|
|
153
|
|
13,349
|
Depreciation and
amortization
|
5,119
|
|
1,531
|
|
3
|
|
6,653
|
Professional and
contract services expense
|
2,951
|
|
368
|
|
1,854
|
|
5,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2022
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Salaries, benefits and
tax expense
|
$
40,796
|
|
$
—
|
|
$
4,411
|
|
$
45,207
|
Bonus
expense
|
3,278
|
|
—
|
|
840
|
|
4,118
|
Stock-based
compensation
|
253
|
|
—
|
|
780
|
|
1,033
|
Total compensation and
related costs
|
$
44,327
|
|
$
—
|
|
$
6,031
|
|
$
50,358
|
|
|
|
|
|
|
|
|
Advertising
expense
|
$
13,925
|
|
$
—
|
|
$
—
|
|
$
13,925
|
Occupancy expense, net
of subleases
|
8,977
|
|
—
|
|
173
|
|
9,150
|
Depreciation and
amortization
|
4,545
|
|
—
|
|
16
|
|
4,561
|
Professional and
contract services expense
|
2,744
|
|
—
|
|
1,935
|
|
4,679
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
SELECTED
SUPPLEMENTAL FINANCIAL INFORMATION BY SEGMENT
|
(In
thousands)
|
(Unaudited)
|
|
|
Major Expense
Categories by Segment and Consolidated
|
|
|
Nine Months Ended
June 30, 2023
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Salaries, benefits and
tax expense
|
$
134,140
|
|
$
62,132
|
|
$
14,707
|
|
$
210,979
|
Bonus
expense
|
8,854
|
|
1,852
|
|
2,808
|
|
13,514
|
Stock-based
compensation
|
1,176
|
|
—
|
|
2,639
|
|
3,815
|
Total compensation and
related costs
|
$
144,170
|
|
$
63,984
|
|
$
20,154
|
|
$
228,308
|
|
|
|
|
|
|
|
|
Advertising
expense
|
$
40,874
|
|
$
13,572
|
|
$
—
|
|
$
54,446
|
Occupancy expense, net
of subleases
|
23,352
|
|
13,644
|
|
436
|
|
37,432
|
Depreciation and
amortization
|
14,990
|
|
3,637
|
|
22
|
|
18,649
|
Professional and
contract services expense
|
8,934
|
|
640
|
|
7,080
|
|
16,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2022
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Salaries, benefits and
tax expense
|
$
119,264
|
|
$
—
|
|
$
13,712
|
|
$
132,976
|
Bonus
expense
|
10,031
|
|
—
|
|
2,952
|
|
12,983
|
Stock-based
compensation
|
627
|
|
—
|
|
2,721
|
|
3,348
|
Total compensation and
related costs
|
$
129,922
|
|
$
—
|
|
$
19,385
|
|
$
149,307
|
|
|
|
|
|
|
|
|
Advertising
expense
|
$
40,353
|
|
$
—
|
|
$
—
|
|
$
40,353
|
Occupancy expense, net
of subleases
|
27,720
|
|
—
|
|
511
|
|
28,231
|
Depreciation and
amortization
|
12,077
|
|
—
|
|
47
|
|
12,124
|
Professional and
contract services expense
|
6,675
|
|
—
|
|
7,935
|
|
14,610
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL
INFORMATION
|
(In
thousands)
|
(Unaudited)
|
|
|
Reconciliation of
Net Income (Loss) to EBITDA and Adjusted EBITDA
|
|
|
Three Months Ended
June 30, 2023
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Net income
(loss)
|
$
6,795
|
|
$
2,028
|
|
$
(9,332)
|
|
$
(509)
|
Interest
income
|
(2)
|
|
(176)
|
|
(1,454)
|
|
(1,632)
|
Interest
expense
|
1,363
|
|
89
|
|
1,505
|
|
2,957
|
Income tax
benefit
|
—
|
|
—
|
|
(64)
|
|
(64)
|
Depreciation and
amortization
|
5,121
|
|
1,531
|
|
3
|
|
6,655
|
EBITDA
|
13,277
|
|
3,472
|
|
(9,342)
|
|
7,407
|
Acquisition related
costs
|
—
|
|
—
|
|
221
|
|
221
|
Integration related
costs for acquisitions
|
166
|
|
319
|
|
712
|
|
1,197
|
Stock-based
compensation expense
|
280
|
|
—
|
|
253
|
|
533
|
Start-up costs for new
campuses and program expansion
|
1,890
|
|
198
|
|
—
|
|
2,088
|
Adjusted EBITDA,
non-GAAP
|
$
15,613
|
|
$
3,989
|
|
$
(8,156)
|
|
$
11,446
|
|
|
|
Three Months Ended
June 30, 2022
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Net income
(loss)
|
$
10,859
|
|
$
—
|
|
$
(10,016)
|
|
$
843
|
Interest
income
|
(1)
|
|
—
|
|
(67)
|
|
(68)
|
Interest
expense
|
552
|
|
—
|
|
—
|
|
552
|
Income tax
expense
|
—
|
|
—
|
|
336
|
|
336
|
Depreciation and
amortization
|
4,545
|
|
—
|
|
16
|
|
4,561
|
EBITDA
|
15,955
|
|
—
|
|
(9,731)
|
|
6,224
|
Acquisition related
costs
|
—
|
|
—
|
|
314
|
|
314
|
Integration related
costs for acquisitions
|
702
|
|
—
|
|
—
|
|
702
|
Stock-based
compensation expense
|
253
|
|
—
|
|
780
|
|
1,033
|
Start-up costs for new
campuses and program expansion
|
3,169
|
|
—
|
|
—
|
|
3,169
|
Facility lease
accounting adjustments
|
547
|
|
—
|
|
—
|
|
547
|
Adjusted EBITDA,
non-GAAP
|
$
20,626
|
|
$
—
|
|
$
(8,637)
|
|
$
11,989
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL
INFORMATION
|
(In
thousands)
|
(Unaudited)
|
|
|
Reconciliation of
Net Income to EBITDA and Adjusted EBITDA
|
|
|
Nine Months Ended
June 30, 2023
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Net income
(loss)
|
$
34,755
|
|
$
7,531
|
|
$
(36,667)
|
|
$
5,619
|
Interest
income
|
(9)
|
|
(340)
|
|
(3,911)
|
|
(4,260)
|
Interest
expense
|
3,223
|
|
212
|
|
3,582
|
|
7,017
|
Income tax
expense
|
—
|
|
—
|
|
3,224
|
|
3,224
|
Depreciation and
amortization
|
14,990
|
|
3,637
|
|
22
|
|
18,649
|
EBITDA
|
52,959
|
|
11,040
|
|
(33,750)
|
|
30,249
|
Acquisition related
costs
|
—
|
|
—
|
|
2,318
|
|
2,318
|
Integration related
costs for acquisitions
|
482
|
|
843
|
|
1,980
|
|
3,305
|
Stock-based
compensation expense
|
1,176
|
|
—
|
|
2,639
|
|
3,815
|
Start-up costs for new
campuses and program expansion
|
4,965
|
|
424
|
|
—
|
|
5,389
|
Adjusted EBITDA,
non-GAAP
|
$
59,582
|
|
$
12,307
|
|
$
(26,813)
|
|
$
45,076
|
|
|
Nine Months Ended
June 30, 2022
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Net income
(loss)
|
$
48,950
|
|
$
—
|
|
$
(25,931)
|
|
$
23,019
|
Interest
income
|
(6)
|
|
—
|
|
(82)
|
|
(88)
|
Interest
expense
|
1,251
|
|
—
|
|
—
|
|
1,251
|
Income tax
benefit
|
—
|
|
—
|
|
(5,609)
|
|
(5,609)
|
Depreciation and
amortization
|
12,077
|
|
—
|
|
47
|
|
12,124
|
EBITDA
|
62,272
|
|
—
|
|
(31,575)
|
|
30,697
|
Acquisition related
costs
|
—
|
|
—
|
|
3,223
|
|
3,223
|
Integration related
costs for acquisitions
|
903
|
|
—
|
|
—
|
|
903
|
Stock-based
compensation expense
|
627
|
|
—
|
|
2,721
|
|
3,348
|
Start-up costs for new
campuses and program expansion
|
7,466
|
|
—
|
|
—
|
|
7,466
|
Facility lease
accounting adjustments
|
(461)
|
|
—
|
|
—
|
|
(461)
|
Adjusted EBITDA,
non-GAAP
|
$
70,807
|
|
$
—
|
|
$
(25,631)
|
|
$
45,176
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL
INFORMATION
|
(In
thousands)
|
(Unaudited)
|
|
Reconciliation of
Net (Loss) Income to Adjusted Net Income
|
|
|
Three Months Ended
June 30,
|
|
Nine Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net (loss)
income
|
$
(509)
|
|
$
843
|
|
$
5,619
|
|
$
23,019
|
Add back: Income tax
(benefit) expense
|
(64)
|
|
336
|
|
3,224
|
|
(5,609)
|
(Loss) income before income taxes
|
(573)
|
|
1,179
|
|
8,843
|
|
17,410
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition related costs
|
221
|
|
314
|
|
2,318
|
|
3,223
|
Integration related
costs for acquisitions
|
1,196
|
|
702
|
|
3,306
|
|
903
|
Start-up costs for new
campuses and program expansion
|
2,088
|
|
3,169
|
|
5,388
|
|
7,466
|
Facility lease
accounting adjustments
|
—
|
|
547
|
|
—
|
|
(461)
|
Adjusted income before
income taxes
|
2,932
|
|
5,911
|
|
19,855
|
|
28,541
|
Income tax effect:
(expense) benefit
|
(947)
|
|
(248)
|
|
(6,155)
|
|
(1,199)
|
Adjusted net income,
non-GAAP
|
$
1,985
|
|
$
5,663
|
|
$
13,700
|
|
$
27,342
|
|
|
|
|
|
|
|
|
GAAP effective income
tax rate (1)
|
32.3 %
|
|
4.2 %
|
|
31.0 %
|
|
4.2 %
|
|
|
(1)
|
The GAAP effective tax
rate for the three and nine months ended June 30, 2023 has been
adjusted to remove the impact of the Concorde acquisition related
costs. The GAAP effective tax rate for the three months ended June
30, 2022 has been adjusted to reflect the normalized annual rate
excluding the items noted in nine month rate. The GAAP effective
tax rate for the nine months ended June 30, 2022 has been adjusted
to remove the impact from the MIAT purchase accounting adjustments
for deferred tax liabilities and the reversal of the valuation
allowance, both of which created a net tax benefit for the
periods.
|
Reconciliation of
Net Cash (Used in) Provided by Operating Activities to Adjusted
Free Cash Flow
|
|
|
Nine Months Ended
June 30,
|
|
2023
|
|
2022
|
Net cash (used in)
provided by operating activities, as reported
|
$
(4,733)
|
|
$
7,906
|
Purchase of property
and equipment
|
(48,847)
|
|
(69,608)
|
Free cash flow,
non-GAAP
|
(53,580)
|
|
(61,702)
|
Adjustments:
|
|
|
|
Purchase of Lisle,
Illinois campus
|
—
|
|
28,479
|
Purchase of Orlando,
Florida campus
|
26,156
|
|
—
|
Acquisition related
costs paid
|
2,286
|
|
3,517
|
Integration related
costs paid
|
2,682
|
|
744
|
Cash outflow for
acquisition integration property and equipment
|
612
|
|
—
|
Cash outflow for
start-up costs for new campuses and program expansion
|
5,388
|
|
4,415
|
Cash outflow for
property and equipment for new campuses and program
expansion
|
14,881
|
|
20,930
|
Facility lease
accounting adjustments
|
—
|
|
575
|
Severance payment due
to CEO transition
|
—
|
|
32
|
Adjusted free cash
flow, non-GAAP
|
$
(1,575)
|
|
$
(3,010)
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL
|
INFORMATION FOR
FISCAL 2023 GUIDANCE
|
(In
thousands)
|
(Unaudited)
|
|
For each of the
non-GAAP reconciliations provided for fiscal 2023 guidance, we are
reconciling to the midpoint of the guidance range. The
adjustments reflected below for fiscal 2023 are illustrative only
and may change throughout the year, both in amount or the
adjustments themselves.
|
|
Reconciliation of
Net Income to EBITDA and Adjusted EBITDA for Fiscal 2023
Guidance
|
|
|
Updated
|
|
Twelve Months Ended
|
|
September 30,
|
|
2023
|
Net income
|
~ $10,500
|
Interest (income)
expense, net
|
~ 4,250
|
Income tax (benefit)
expense
|
~ 5,600
|
Depreciation and
amortization
|
~ 25,400
|
EBITDA
|
~ $45,750
|
Acquisition related
costs
|
~ $2,750
|
Integration related
costs for acquisitions
|
~ 4,250
|
New campus &
program expansion start-up costs
|
~ 5,900
|
Stock-based
compensation
|
~ 4,350
|
Adjusted EBITDA,
non-GAAP
|
~ $63,000
|
FY 2023 Guidance Range
|
$62,000 - $64,000
|
Reconciliation of
Net Cash Provided by Operating Activities to Adjusted Free Cash
Flow for Fiscal 2023 Guidance
|
|
|
Updated
|
|
Twelve Months
Ended
|
|
September
30,
|
|
2023
|
Net cash provided by
operating activities
|
~ $45,100
|
Purchase of property
and equipment
|
~ (59,000)
|
Free cash flow,
non-GAAP
|
~ $(13,900)
|
Adjustments:
|
|
Campus
purchase
|
~ 26,200
|
Acquisition related
costs paid
|
~ 2,750
|
Integration related
costs for acquisitions
|
~ 4,250
|
Cash outflow for
acquisition integration property and equipment
|
~ 800
|
New campus &
program expansion start-up costs
|
~ 5,900
|
Cash outflow for new
campus & program expansion property and equipment
|
~ 19,000
|
Adjusted free cash
flow, non-GAAP
|
~ $45,000
|
FY 2023 Guidance
Range
|
$44,000 -
$46,000
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL
|
INFORMATION FOR
FISCAL 2023 GUIDANCE
|
(In
thousands)
|
(Unaudited)
|
|
|
Reconciliation of
Net Income to Adjusted Net Income for Fiscal 2023
Guidance
|
|
|
Updated
|
|
Twelve Months
Ended
|
|
September
30,
|
|
2023
|
Net income
|
~ $10,500
|
Add back: Income tax
expense(1)
|
~ 5,600
|
Income before income
taxes
|
~ 16,100
|
Adjustments:
|
|
Acquisition related
costs
|
~ $2,750
|
Integration related
costs for acquisitions
|
~ 4,250
|
New campus &
program expansion start-up costs
|
~ 5,900
|
Adjusted income before
income taxes
|
~ $29,000
|
Income tax effect:
(expense)(1)
|
~ (10,500)
|
Adjusted net income,
non-GAAP
|
~ $18,500
|
FY 2022 Guidance
Range
|
$17,000 -
$20,000
|
|
|
(1)
|
An estimated GAAP
effective tax rate of 35.0% has been used to compute the adjusted
net income for fiscal 2023 which removes the impact of the Concorde
acquisition related costs.
|
|
|
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SOURCE Universal Technical
Institute, Inc.