8-K
UNIVERSAL TECHNICAL INSTITUTE INC (UTI)
____________________________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 15, 2023
UNIVERSAL TECHNICAL INSTITUTE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-31923 | 86-0226984 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) | 4225 E. Windrose Drive, Suite 200<br><br>Phoenix, AZ<br><br>(Address of principal executive offices) | 85032<br><br>(Zip Code) | |
| --- | --- |
(623) 445-9500
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.0001 par value per share | UTI | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
☐ Emerging growth company
☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On November 15, 2023, Universal Technical Institute, Inc. (the "Company") issued a press release reporting fourth quarter and full year results for fiscal 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 2.02 by reference.
The information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure.
UTI is furnishing with this report an investor presentation that will be used by UTI during meetings with investors and analysts. This information may be amended or updated at any time and from time to time through another Form 8-K, a later company filing, or other means. The presentation furnished as Exhibit 99.2 to this Current Report on Form 8-K and incorporated into this Item 7.01, by reference and will also be posted on its website at https://investor.uti.edu, although we reserve the right to discontinue that availability at any time.
The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release of Universal Technical Institute, Inc., dated November 15, 2023 |
| 99.2 | Investor Presentation dated November 15, 2023 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UNIVERSAL TECHNICAL INSTITUTE, INC. | ||
|---|---|---|
| November 15, 2023 | By: | /s/ Troy R. Anderson |
| Name: | Troy R. Anderson | |
| Title: | Executive Vice President and Chief Financial Officer |
Document
Exhibit 99.1
Universal Technical Institute Reports Fiscal Year 2023 Fourth Quarter and Year-End Results
PHOENIX, ARIZ. - November 15, 2023 - 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 full year and fourth quarter ended September 30, 2023(2). 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.”
•Surpassed fiscal year 2023 guidance ranges for all key financial metrics.
•Full year revenue of $607.4 million in 2023 with UTI contributing $429.3 million and Concorde contributing $178.1 million.
•Full year net income was $12.3 million while full year adjusted net income(1) was $22.3 million.
•Full year adjusted EBITDA(1) was $64.2 million.
•Full year total new student starts of 22,613, with UTI contributing 14,181 representing 6.0% year-over-year growth, and Concorde contributing 8,432.
•Established fiscal 2024 full year guidance ranges including revenue of $705 to $715 million, and adjusted EBITDA of $98 to $102 million.
“Our fiscal 2023 results are a testament to our continued execution on our growth and diversification strategy,” said Jerome Grant, CEO of Universal Technical Institute. “We met or exceeded our full year guidance across all key metrics, which includes the benefit of three full quarters of contribution from Concorde. During the year, we completed key public company requirements within Concorde’s integration process, launched 13 new programs across eight UTI division campuses and two new programs at Concorde campuses. Demand for our programs has remained strong across both divisions, and we are carrying this momentum into the first quarter of fiscal year 2024.
“The foundation we laid in 2023 forms much of the groundwork needed to achieve our growth expectations in the year ahead. Our revenue guidance for fiscal 2024, which exceeds $700 million, is consistent with the expectations we set last year, while our adjusted EBITDA guidance of approximately $100 million reflects the improvements we carry forward from 2023. As we move further into 2024, we expect to see the ramp from our new and forthcoming programs across both divisions, continue scaling the two newest UTI division campuses, and drive additional operating efficiencies across our business model. We are entering fiscal 2024 in a position of strength, and we expect to continue deepening and expanding our diversified platform.”
Financial Results for the Three-Month Period Ended September 30, 2023 Compared to 2022
•Revenues increased 53.9% to $170.3 million, compared to $110.6 million primarily due to the acquired Concorde segment contributing $55.0 million.
•Operating expenses increased 49.3% to $160.0 million, compared to $107.2 million primarily due to the acquired Concorde segment contributing $51.8 million.
•Operating income was $10.3 million compared to $3.5 million.
•Net income was $6.7 million compared to $2.8 million. Adjusted net income(1) was $8.4 million compared to $8.0 million.
•Basic and diluted earnings per share (EPS) were $0.10 compared to $0.03.
•Adjusted EBITDA(1) was $19.2 million compared to $15.1 million.
•New student starts of 10,392.
UTI
•UTI had revenues of $115.3 million, a 4.2% increase from the prior year quarter revenues of $110.6 million.
•Operating expenses for UTI were $97.4 million, compared to $96.4 million. Expenses remained nearly flat despite expenses incurred during the current year for the new program launches.
•Adjusted EBITDA(1) was $24.9 million compared to $24.2 million, reflecting a year-over-year increase of 3.2%.
•New student starts of 6,500 increased from prior year by 9.0%, while average undergraduate full-time active students increased 1.4%.
Concorde
•Revenues of $55.0 million.
•Operating expenses were $51.8 million.
•Adjusted EBITDA(1) was $4.0 million.
•New student starts of 3,892 and 8,008 average undergraduate full-time active students.
Balance Sheet and Liquidity
At September 30, 2023, our total available liquidity was $159.7 million, which includes $8.2 million available from the revolving credit facility. Total debt at September 30, 2023 was $162.1 million, while net debt was $10.6 million. For fiscal 2023, the Company incurred $56.7 million of cash capital expenditures (capex) including 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 the remaining capex for the year were the completion of the UTI Austin and Miramar campus buildouts and the UTI and Concorde program expansions, along with maintenance capex associated with equipment, facilities, curriculum and other items.
Financial Results for the Year Ended September 30, 2023 Compared to 2022
•Revenues increased 45.0% to $607.4 million, which exceeded the full year guidance range of $602-605 million, compared to $418.8 million primarily due to $178.1 million from the acquired Concorde segment.
•Operating expenses increased 47.8% to $586.0 million, compared to $396.4 million. The acquired Concorde segment contributed $167.6 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 $21.4 million compared to $22.4 million.
•Net income was $12.3 million compared to $25.8 million. Adjusted net income(1) was $22.3 million, exceeding the high-end of the full year guidance range of $17 - 20 million, compared to $35.5 million.
•Basic and diluted EPS were $0.13 compared to $0.39 and $0.38, respectively.
•Adjusted EBITDA(1) was $64.2 million, exceeding the high-end of the full year guidance range of $62 - 64 million, compared to $60.2 million.
•Cash flow provided by operating activities was $49.1 million compared to $46.0 million.
•Adjusted free cash flow(1) was $49.1 million, exceeding the full year guidance range of $44 - 46 million.
•New student starts of 22,613, which was within the full year guidance range of 22,000 - 23,500.
UTI
•UTI had revenues of $429.3 million, a 2.5% increase from the prior year revenues of $418.8 million driven primarily by the new campuses opened in the prior year, new programs launched in both the current and prior year, and overall higher revenue per student, partially offset by lower average undergraduate full-time active students.
•Operating expenses for UTI were $373.6 million, compared to $354.4 million. The increase was primarily due to higher compensation related and other expenses incurred during the current year for the new program launches during the current and prior year and the new campuses launched in the prior year.
•Adjusted EBITDA(1) was $84.5 million compared to $95.0 million, reflecting a year-over-year decrease of 11.0%.
•New student starts of 14,181 increased 6.0% compared to the prior year, while average undergraduate full-time active students decreased 1.7%.
Concorde (for the ten-month period beginning December 2022 and ended September 2023)
•Revenues of $178.1 million.
•Operating expenses were $167.6 million.
•Adjusted EBITDA(1) was $16.3 million.
•New student starts of 8,432 and 7,654 average undergraduate full-time active students.
Fiscal 2024 Financial Outlook
“Our revenue and profitability performance, which exceeded expectations for the fourth quarter and fiscal year, was underpinned by continued strong performance from Concorde and the momentum that has been building within the UTI division throughout the year, and overall reflects the strength of our diversified business model,” said Troy Anderson, CFO of Universal Technical Institute. “The fourth quarter seasonal strength across the business, new program launches in both divisions, and continued benefits from our enhanced efforts to support incoming students that we implemented throughout the year all contributed to our success in the quarter.
“Based on our current visibility and the strategic progress we have made over the past year we are confidently announcing our formal guidance ranges for fiscal 2024 which are consistent overall with our prior projections and demonstrate strong growth in revenue, profitability, and cash flow. For fiscal 2024 we have replaced adjusted net income with net income and fully diluted earnings per share, as we believe these metrics are a better reflection of our expanding profitability. Our confidence stems from the foundation we have built with our growth and diversification strategy over the past several years and reflects the yield from our new program launches and investments in marketing and admissions, along with continued efficiencies in our operational infrastructure. We have established an ongoing cycle of driving growth and optimization across our business, which we believe will further solidify our position as a leading workforce solutions provider.”
| FY 2023 | FY 2024 | Year-Over-Year | ||
|---|---|---|---|---|
| ($ in millions excluding new student starts and EPS) | Actuals(2) | Guidance(3) | Growth(4) | |
| New student starts | 22,613 | 24,500 - 25,500 | 11 | % |
| Revenue | $607.4 | $705 - 715 | 17 | % |
| Net Income | $12.3 | $34 - 38 | 193 | % |
| Diluted EPS | $0.13 | $0.53 - 0.58 | 323 | % |
| Adjusted EBITDA(1) | $64.2 | $98 - 102 | 56 | % |
| Adjusted free cash flow(1)(3) | $49.1 | $62 - 66 | 30 | % |
(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 results for the full year and Concorde results beginning December 1, 2022. Total company year-over-year comparisons are shown on an "as-reported basis."
(3) Includes $56.7 million of total capex for FY2023, including the purchase of three buildings and land at the Orlando, FL campus, incremental investments for the Austin, TX and Miramar, FL campuses, program expansions, and a consistent level of annual maintenance capex. For FY 2024, assumes $28 million to $31 million of total capex, including incremental investments for program expansions and maintenance capex equal to approximately 2% of revenue.
(4) Year-over-year growth percentages are calculated using the fiscal 2024 guidance midpoint.
For the Company's most recent investor presentation and quarterly financial supplement, please see its investor relations website at https://investor.uti.edu.
Conference Call
Management will hold a conference call to discuss the financial results for the fiscal 2023 fourth quarter ended September 30, 2023, on Wednesday, November 15, 2023 at 4:30 pm EST.
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 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 or the telephone replay can be accessed through November 29, 2023, by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international) and entering passcode 7467464.
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, without limitation, acquisition-related costs for both announced and potential acquisitions, integration costs for completed acquisitions, start-up costs associated with new campus openings and other program expansion, stock-based compensation expense, costs related to the purchase of our campuses, lease accounting adjustments resulting from the purchase of our campuses and our campus consolidation efforts, intangible asset impairment charges, and payments of severance expense for 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 2024 guidance for new student start growth (decline), revenue growth, net income, diluted earnings per share, Adjusted EBITDA and Adjusted Free Cash Flow; (2) the Company’s 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; and (3) the Company’s expectation that it will succeed in new program launches next year. 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, failure of our schools to comply with the extensive regulatory requirements for school operations; our failure to maintain eligibility for federal student financial assistance funds; the effect of current and future Title IV Program regulations arising out of negotiated rulemakings, including any potential reductions in funding or restrictions on the use of funds received through Title IV Programs; the effect of future legislative or regulatory initiatives related to veterans’ benefit programs; continued Congressional examination of the for-profit education sector; our failure to maintain eligibility for or the ability to process federal student financial assistance; regulatory investigations of, or actions commenced against, us or other companies in our industry; changes in the state regulatory environment or budgetary constraints; our failure to execute on our growth and diversification strategy; our failure to realize the expected benefits of our acquisitions, or our failure to successfully integrate our acquisitions, including, without limitation, Concorde Career Colleges, Inc.; our failure to improve underutilized capacity at certain of our campuses; enrollment declines or challenges in our students’ ability to find employment as a result of macroeconomic conditions; our failure to maintain and expand existing industry relationships and develop new industry relationships; our ability to update and expand the content of existing programs and develop and integrate new programs in a timely and cost-effective manner while maintaining positive student outcomes; a loss of our senior management or other key employees; failure to comply with the restrictive covenants and our ability to pay the amounts when due under the Credit Agreement; the effect of our principal stockholder owning a significant percentage of our capital stock, and thus being able to influence certain corporate matters and the potential in the future to gain substantial control over our company; the impact of certain holders of our Series A Preferred Stock owning a significant percentage of our capital stock, their ability to influence and control certain corporate matters and the potential for future dilution to holders of our common stock; the effect of public health pandemics, epidemics or outbreak, including COVID-19, 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 (UTI) uses its websites (https://www.uti.edu/ and https://investor.uti.edu/) and LinkedIn page (https://www.linkedin.com/school/universal-technical-institute/) 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 UTI 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
Executive Vice President & Chief Financial Officer
Universal Technical Institute, Inc.
(623) 445-9365
Media Contact:
Susan Aspey
Vice President, Corporate Affairs & External Communications
Universal Technical Institute, Inc.
(202) 549-0534
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 | Twelve Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||
| 2023 | 2022 | 2023 | 2022 | |||||
| Revenues | $ | 170,298 | $ | 110,638 | $ | 607,408 | $ | 418,765 |
| Operating expenses: | ||||||||
| Educational services and facilities | 93,155 | 56,907 | 329,870 | 207,233 | ||||
| Selling, general and administrative | 66,804 | 50,266 | 256,139 | 189,158 | ||||
| Total operating expenses | 159,959 | 107,173 | 586,009 | 396,391 | ||||
| Income from operations | 10,339 | 3,465 | 21,399 | 22,374 | ||||
| Other (expense) income: | ||||||||
| Interest income | 1,601 | 419 | 5,861 | 507 | ||||
| Interest expense | (2,639) | (751) | (9,656) | (2,002) | ||||
| Other income | (57) | (102) | 483 | (438) | ||||
| Total other (expense) income, net | (1,095) | (434) | (3,312) | (1,933) | ||||
| Income before income taxes | 9,244 | 3,031 | 18,087 | 20,441 | ||||
| Income tax (expense) benefit | (2,541) | (202) | (5,765) | 5,407 | ||||
| Net income | 6,703 | 2,829 | 12,322 | 25,848 | ||||
| Preferred stock dividends | (1,278) | (1,246) | (5,069) | (5,159) | ||||
| Income available for distribution | 5,425 | 1,583 | 7,253 | 20,689 | ||||
| Income allocated to participating securities | (2,025) | (594) | (2,712) | (7,847) | ||||
| Net income available to common shareholders | $ | 3,400 | $ | 989 | $ | 4,541 | $ | 12,842 |
| Earnings per share: | ||||||||
| Net income per share - basic | $ | 0.10 | $ | 0.03 | $ | 0.13 | $ | 0.39 |
| Net income per share - diluted | $ | 0.10 | $ | 0.03 | $ | 0.13 | $ | 0.38 |
| Weighted average number of shares outstanding: | ||||||||
| Basic | 34,070 | 33,769 | 33,985 | 33,218 | ||||
| Diluted | 34,824 | 34,279 | 34,479 | 33,743 |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and per share amounts)
(Unaudited)
| September 30, 2023 | September 30, 2022 | |||
|---|---|---|---|---|
| Assets | ||||
| Cash and cash equivalents | $ | 151,547 | $ | 66,452 |
| Restricted cash | 5,377 | 3,544 | ||
| Held-to-maturity investments | — | 28,918 | ||
| Receivables, net | 25,161 | 16,450 | ||
| Notes receivable, current portion | 5,991 | 5,641 | ||
| Prepaid expenses | 9,412 | 6,139 | ||
| Other current assets | 7,497 | 8,809 | ||
| Total current assets | 204,985 | 135,953 | ||
| Property and equipment, net | 266,346 | 214,292 | ||
| Goodwill | 28,459 | 16,859 | ||
| Intangible assets, net | 18,975 | 14,215 | ||
| Right-of-use assets for operating leases | 176,657 | 132,038 | ||
| Notes receivable, less current portion | 30,672 | 30,231 | ||
| Deferred tax assets | 3,768 | 3,365 | ||
| Other assets | 10,823 | 5,958 | ||
| Total assets | $ | 740,685 | $ | 552,911 |
| Liabilities and Shareholders’ Equity | ||||
| Accounts payable and accrued expenses | $ | 69,941 | $ | 66,680 |
| Deferred revenue | 85,738 | 54,223 | ||
| Operating lease liability, current portion | 22,481 | 12,959 | ||
| Long-term debt, current portion | 2,517 | 1,115 | ||
| Other current liabilities | 4,023 | 2,745 | ||
| Total current liabilities | 184,700 | 137,722 | ||
| Operating lease liability | 165,026 | 129,302 | ||
| Long-term debt | 159,600 | 66,423 | ||
| Deferred tax liabilities | 663 | — | ||
| Other liabilities | 4,729 | 4,067 | ||
| Total liabilities | 514,718 | 337,514 | ||
| Commitments and contingencies | ||||
| Shareholders’ equity: | ||||
| Common stock, $0.0001 par value, 100,000 shares authorized, 34,157 and 33,857 shares issued, and 34,075 and 33,775 shares outstanding as of September 30, 2023 and 2022, respectively | 3 | 3 | ||
| Preferred stock, $0.0001 par value, 10,000 shares authorized; 676 shares of Series A Convertible Preferred Stock issued and outstanding as of September 30, 2023 and 2022, liquidation preference of $100 per share | — | — | ||
| Paid-in capital - common | 151,439 | 148,372 | ||
| Paid-in capital - preferred | 66,481 | 66,481 | ||
| Treasury stock, at cost, 82 shares as of September 30, 2023 and 2022, respectively | (365) | (365) | ||
| Retained earnings (deficit) | 5,946 | (1,307) | ||
| Accumulated other comprehensive income | 2,463 | 2,213 | ||
| Total shareholders’ equity | 225,967 | 215,397 | ||
| Total liabilities and shareholders’ equity | $ | 740,685 | $ | 552,911 |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
| Year Ended September 30, | ||||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 12,322 | $ | 25,848 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 25,215 | 16,884 | ||
| Amortization of right-of-use assets for operating leases | 20,604 | 15,893 | ||
| Intangible asset impairment expense | — | 2,000 | ||
| Bad debt expense | 3,319 | 2,510 | ||
| Stock-based compensation | 3,848 | 4,337 | ||
| Deferred income taxes | 4,636 | (6,014) | ||
| Unrealized gain (loss) on interest rate swap, net of taxes | 250 | 2,492 | ||
| Other, net | 1,651 | 843 | ||
| Changes in assets and liabilities: | ||||
| Accounts and notes receivables | (5,726) | 816 | ||
| Prepaid expenses and other current assets | (2,013) | (1,737) | ||
| Accounts payable, accrued expenses and other current liabilities | (5,885) | 7,337 | ||
| Deferred revenue | 11,370 | (5,268) | ||
| Operating lease liability | (20,474) | (13,952) | ||
| All other assets and liabilities | 31 | (5,958) | ||
| Net cash provided by operating activities | 49,148 | 46,031 | ||
| Cash flows from investing activities: | ||||
| Purchase of property and equipment | (56,685) | (79,450) | ||
| Purchase of held-to-maturity investments | — | (28,821) | ||
| Proceeds received upon maturity of investments | 29,000 | — | ||
| Cash paid for acquisitions, net of cash acquired | (16,381) | (26,514) | ||
| Return of capital contribution from unconsolidated affiliate | — | 188 | ||
| Net cash used in investing activities | (44,066) | (134,597) | ||
| Cash flows from financing activities: | ||||
| Proceeds from long-term debt, net of issuance costs | 89,484 | 37,622 | ||
| Payment of preferred stock cash dividend | (5,069) | (5,159) | ||
| Payment of term loans and finance leases | (1,788) | (19,227) | ||
| Payment of payroll taxes on stock-based compensation through shares withheld | (781) | (651) | ||
| Net cash provided by financing activities | 81,846 | 12,585 | ||
| Change in cash, cash equivalents and restricted cash | $ | 86,928 | $ | (75,981) |
| 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 | $ | 151,547 | $ | 66,452 |
| Restricted cash, end of period | 5,377 | 3,544 | ||
| Cash, cash equivalents and restricted cash, end of period | $ | 156,924 | $ | 69,996 |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
SELECTED SUPPLEMENTAL NON-FINANCIAL AND FINANCIAL INFORMATION BY SEGMENT
(In thousands, except for Student Metrics)
(Unaudited)
Student Metrics
| Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| UTI | Concorde | Total | UTI | Concorde | Total | ||||||
| Total new student starts | 6,500 | 3,892 | 10,392 | 5,965 | — | 5,965 | |||||
| Year-over-year growth (decline) | 9.0 | % | — | % | 74.2 | % | (3.2) | % | (3.2) | % | |
| Average undergraduate full-time active students | 12,883 | 8,008 | 20,891 | 12,709 | — | 12,709 | |||||
| Year-over-year growth (decline) | 1.4 | % | — | % | 64.4 | % | 4.5 | % | 4.5 | % | |
| End of period undergraduate full-time active students | 14,833 | 8,369 | 23,202 | 14,380 | — | 14,380 | |||||
| Year-over-year growth (decline) | 3.2 | % | — | % | 61.3 | % | 5.1 | % | 5.1 | % | |
| Year Ended September 30, 2023 | Year Ended September 30, 2022 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| UTI | Concorde | Total | UTI | Concorde | Total | ||||||
| Total new student starts | 14,181 | 8,432 | 22,613 | 13,374 | — | 13,374 | |||||
| Year-over-year growth (decline) | 6.0 | % | — | % | 69.1 | % | 2.7 | % | 2.7 | % | |
| Average undergraduate full-time active students | 12,614 | 7,654 | 20,268 | 12,838 | — | 12,838 | |||||
| Year-over-year growth (decline) | (1.7) | % | — | % | 57.9 | % | 11.7 | % | 11.7 | % | |
| End of period undergraduate full-time active students | 14,833 | 8,369 | 23,202 | 14,380 | — | 14,380 | |||||
| Year-over-year growth (decline) | 3.2 | % | — | % | 61.3 | % | 5.1 | % | 5.1 | % |
Financial Summary by Segment and Consolidated
| Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| UTI | Concorde | Corporate | Consolidated | UTI | Concorde | Corporate | Consolidated | |||||||||
| Revenue | $ | 115,332 | $ | 54,966 | $ | — | $ | 170,298 | $ | 110,638 | $ | — | $ | — | $ | 110,638 |
| Total operating expenses | 97,405 | 51,837 | 10,717 | 159,959 | 96,397 | — | 10,776 | 107,173 | ||||||||
| Net income (loss) | 16,486 | 3,169 | (12,952) | 6,703 | 13,511 | — | (10,682) | 2,829 | ||||||||
| Twelve Months Ended September 30, 2023 | Twelve Months Ended September 30, 2022 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| UTI | Concorde | Corporate | Consolidated | UTI | Concorde | Corporate | Consolidated | |||||||||
| Revenue | $ | 429,317 | $ | 178,091 | $ | — | $ | 607,408 | $ | 418,765 | $ | — | $ | — | $ | 418,765 |
| Total operating expenses | 373,638 | 167,558 | 44,813 | 586,009 | 354,394 | — | 41,997 | 396,391 | ||||||||
| Net income (loss) | 51,241 | 10,700 | (49,619) | 12,322 | 62,460 | — | (36,612) | 25,848 |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
SELECTED SUPPLEMENTAL NON-FINANCIAL AND FINANCIAL INFORMATION BY SEGMENT
(In thousands, except for Student Metrics)
(Unaudited)
Major Expense Categories by Segment and Consolidated
| Three Months Ended September 30, 2023 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| UTI | Concorde | Corporate | Consolidated | |||||||||||||||
| Salaries, benefits and tax expense | $ | 44,375 | $ | 27,507 | $ | 4,162 | $ | 76,044 | ||||||||||
| Bonus expense | 4,430 | 742 | 2,333 | 7,505 | ||||||||||||||
| Stock-based compensation | (107) | — | 140 | 33 | ||||||||||||||
| Total compensation and related costs | $ | 48,698 | $ | 28,249 | $ | 6,635 | $ | 83,582 | ||||||||||
| Advertising and marketing expense | $ | 11,935 | $ | 5,786 | $ | — | $ | 17,721 | ||||||||||
| Occupancy expense, net of subleases | 8,090 | 5,982 | 157 | 14,229 | ||||||||||||||
| Depreciation and amortization | 6,124 | 439 | 3 | 6,566 | ||||||||||||||
| Professional and contract services expense | 2,922 | 399 | 2,030 | 5,351 | Three Months Ended September 30, 2022 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| UTI | Concorde | Corporate | Consolidated | |||||||||||||||
| Salaries, benefits and tax expense | $ | 43,178 | $ | — | $ | 4,915 | $ | 48,093 | ||||||||||
| Bonus expense | 2,988 | — | 693 | 3,681 | ||||||||||||||
| Stock-based compensation | 261 | — | 803 | 1,064 | ||||||||||||||
| Total compensation and related costs | $ | 46,427 | $ | — | $ | 6,411 | $ | 52,838 | ||||||||||
| Advertising and marketing expense | $ | 14,148 | $ | — | $ | — | $ | 14,148 | ||||||||||
| Occupancy expense, net of subleases | 8,340 | — | 152 | 8,492 | ||||||||||||||
| Depreciation and amortization | 4,743 | — | 16 | 4,759 | ||||||||||||||
| Professional and contract services expense | 2,502 | — | 2,222 | 4,724 |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
SELECTED SUPPLEMENTAL NON-FINANCIAL AND FINANCIAL INFORMATION BY SEGMENT
(In thousands, except for Student Metrics)
(Unaudited)
Major Expense Categories by Segment and Consolidated
| Twelve Months Ended September 30, 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| UTI | Concorde | Corporate | Consolidated | |||||
| Salaries, benefits and tax expense | $ | 178,515 | $ | 89,639 | $ | 18,869 | $ | 287,023 |
| Bonus expense | 13,284 | 2,594 | 5,141 | 21,019 | ||||
| Stock-based compensation | 1,069 | — | 2,779 | 3,848 | ||||
| Total compensation and related costs | $ | 192,868 | $ | 92,233 | $ | 26,789 | $ | 311,890 |
| Advertising and marketing expense | $ | 52,809 | $ | 19,358 | $ | — | $ | 72,167 |
| Occupancy expense, net of subleases | 31,442 | 19,626 | 593 | 51,661 | ||||
| Depreciation and amortization | 21,113 | 4,077 | 25 | 25,215 | ||||
| Professional and contract services expense | 11,856 | 1,039 | 9,110 | 22,005 | ||||
| Twelve Months Ended September 30, 2022 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| UTI | Concorde | Corporate | Consolidated | |||||
| Salaries, benefits and tax expense | $ | 162,537 | $ | — | $ | 18,532 | $ | 181,069 |
| Bonus expense | 13,020 | — | 3,644 | 16,664 | ||||
| Stock-based compensation | 888 | — | 3,524 | 4,412 | ||||
| Total compensation and related costs | $ | 176,445 | $ | — | $ | 25,700 | $ | 202,145 |
| Advertising and marketing expense | $ | 54,501 | $ | — | $ | — | $ | 54,501 |
| Occupancy expense, net of subleases | 36,059 | — | 663 | 36,722 | ||||
| Depreciation and amortization | 16,822 | — | 62 | 16,884 | ||||
| Professional and contract services expense | 9,176 | — | 10,157 | 19,333 |
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
| Three Months Ended September 30, 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| UTI | Concorde | Corporate | Consolidated | |||||
| Net income (loss) | $ | 16,486 | $ | 3,169 | $ | (12,952) | $ | 6,703 |
| Interest expense (income), net | 1,468 | (40) | (390) | 1,038 | ||||
| Income tax expense | — | — | 2,541 | 2,541 | ||||
| Depreciation and amortization | 6,124 | 439 | 3 | 6,566 | ||||
| EBITDA | 24,078 | 3,568 | (10,798) | 16,848 | ||||
| Acquisition related costs | — | — | 56 | 56 | ||||
| Integration related costs for acquisitions | 110 | 241 | 858 | 1,209 | ||||
| Stock-based compensation expense | (107) | — | 140 | 33 | ||||
| Start-up costs for new campuses and program expansion | 845 | 178 | — | 1,023 | ||||
| Adjusted EBITDA, non-GAAP | $ | 24,926 | $ | 3,987 | $ | (9,744) | $ | 19,169 |
| Three Months Ended September 30, 2022 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| UTI | Concorde | Corporate | Consolidated | |||||
| Net income (loss) | $ | 13,511 | $ | — | $ | (10,682) | $ | 2,829 |
| Interest expense (income), net | 749 | — | (418) | 331 | ||||
| Income tax expense | — | — | 202 | 202 | ||||
| Depreciation and amortization | 4,743 | — | 16 | 4,759 | ||||
| EBITDA | 19,003 | — | (10,882) | 8,121 | ||||
| Acquisition related costs | — | — | 1,016 | 1,016 | ||||
| Integration related costs for acquisitions | 788 | — | — | 788 | ||||
| Stock-based compensation expense | 261 | — | 803 | 1,064 | ||||
| Start-up costs for new campuses and program expansion | 1,711 | — | — | 1,711 | ||||
| Facility lease accounting adjustments | 397 | — | — | 397 | ||||
| Intangible asset impairment | 2,000 | — | — | 2,000 | ||||
| Adjusted EBITDA, non-GAAP | $ | 24,160 | $ | — | $ | (9,063) | $ | 15,097 |
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
| Twelve Months Ended September 30, 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| UTI | Concorde | Corporate | Consolidated | |||||
| Net income (loss) | $ | 51,241 | $ | 10,700 | $ | (49,619) | $ | 12,322 |
| Interest expense (income), net | 4,682 | (167) | (720) | 3,795 | ||||
| Income tax expense | — | — | 5,765 | 5,765 | ||||
| Depreciation and amortization | 21,113 | 4,077 | 25 | 25,215 | ||||
| EBITDA | 77,036 | 14,610 | (44,549) | 47,097 | ||||
| Acquisition related costs | — | — | 2,374 | 2,374 | ||||
| Integration related costs for acquisitions | 592 | 1,084 | 2,838 | 4,514 | ||||
| Stock-based compensation expense | 1,069 | — | 2,779 | 3,848 | ||||
| Start-up costs for new campuses and program expansion | 5,810 | 602 | — | 6,412 | ||||
| Adjusted EBITDA, non-GAAP | $ | 84,507 | $ | 16,296 | $ | (36,558) | $ | 64,245 |
| Twelve Months Ended September 30, 2022 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| UTI | Concorde | Corporate | Consolidated | |||||
| Net income (loss) | $ | 62,460 | $ | — | $ | (36,612) | $ | 25,848 |
| Interest expense (income), net | 1,995 | — | (500) | 1,495 | ||||
| Income tax benefit | — | — | (5,407) | (5,407) | ||||
| Depreciation and amortization | 16,822 | — | 62 | 16,884 | ||||
| EBITDA | 81,277 | — | (42,457) | 38,820 | ||||
| Acquisition related costs | — | — | 4,239 | 4,239 | ||||
| Integration related costs for acquisitions | 1,691 | — | — | 1,691 | ||||
| Stock-based compensation expense | 888 | — | 3,449 | 4,337 | ||||
| Start-up costs for new campuses and program expansion | 9,177 | — | — | 9,177 | ||||
| Facility lease accounting adjustments | (64) | — | — | (64) | ||||
| Intangible asset impairment | 2,000 | — | — | 2,000 | ||||
| Adjusted EBITDA, non-GAAP | $ | 94,969 | $ | — | $ | (34,769) | $ | 60,200 |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
Reconciliation of Net Income to Adjusted Net Income
| Three Months Ended | Twelve Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Net income | $ | 6,703 | $ | 2,829 | $ | 12,322 | $ | 25,848 | ||||
| Add back: Income tax expense (benefit) | 2,541 | 202 | 5,765 | (5,407) | ||||||||
| Income before income taxes | 9,244 | 3,031 | 18,087 | 20,441 | ||||||||
| Adjustments: | ||||||||||||
| Acquisition related costs | 56 | 1,016 | 2,374 | 4,239 | ||||||||
| Integration costs | 1,209 | 788 | 4,514 | 1,691 | ||||||||
| Intangible asset impairment | — | 2,000 | — | 2,000 | ||||||||
| Facility lease accounting adjustments | — | 397 | — | (64) | ||||||||
| Start-up costs for new campus and program expansion | 1,023 | 1,711 | 6,412 | 9,177 | ||||||||
| Adjusted income before income taxes | 11,532 | 8,943 | 31,387 | 37,484 | ||||||||
| Income tax effect: (expense)(1) | (3,125) | (935) | (9,102) | (1,983) | ||||||||
| Adjusted net income, non-GAAP | $ | 8,407 | $ | 8,008 | $ | 22,285 | $ | 35,501 | ||||
| GAAP effective income tax rate(1) | 27.1 | % | 10.5 | % | 29.0 | % | 5.3 | % |
(1) The GAAP effective tax rate for the twelve months ended September 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 period. The GAAP effective tax rate for the three months ended September 30, 2022 has been adjusted to reflect the normalized annual rate excluding the items noted in the twelve month rate.
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow
| Twelve Months Ended September 30, | ||||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Net cash provided by operating activities, as reported | $ | 49,148 | $ | 46,031 |
| Purchase of property and equipment | (56,685) | (79,450) | ||
| Free cash flow, non-GAAP | (7,537) | (33,419) | ||
| Adjustments: | ||||
| Purchase of Orlando, FL campus buildings | 26,156 | — | ||
| Purchase of Lisle, IL campus | — | 28,680 | ||
| Acquisition related costs paid | 2,347 | 3,923 | ||
| Integration costs paid | 3,697 | 1,436 | ||
| Cash outflow for acquisition integration property and equipment | 831 | — | ||
| Cash outflow for start-up costs for new campuses and program expansion | 6,412 | 5,136 | ||
| Cash outflow for property and equipment for new campuses and program expansion | 17,183 | 28,579 | ||
| Facility lease accounting adjustments | — | 575 | ||
| Severance payment due to CEO transition | — | 32 | ||
| Adjusted free cash flow, non-GAAP | $ | 49,089 | $ | 34,942 |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL
INFORMATION FOR FISCAL 2024 GUIDANCE
(In thousands)
(Unaudited)
For each of the non-GAAP reconciliations provided for fiscal 2024 guidance, we are reconciling to the midpoint of the guidance range. The adjustments reflected below for fiscal 2024 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 2024 Guidance
| Twelve Months Ended | |
|---|---|
| September 30, | |
| 2024 | |
| Net income | ~$36,000 |
| Interest (income) expense, net | ~4,600 |
| Income tax expense | ~15,400 |
| Depreciation and amortization | ~30,000 |
| EBITDA | ~86,000 |
| Integration related costs for acquisitions | ~5,500 |
| New campus & program expansion start-up costs | ~1,500 |
| Stock-based compensation | ~7,000 |
| Adjusted EBITDA, non-GAAP | ~$100,000 |
| FY 2024 Guidance Range | $98,000 - 102,000 |
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow for Fiscal 2024 Guidance
| Twelve Months Ended | |
|---|---|
| September 30, | |
| 2024 | |
| Net cash provided by operating activities | ~$84,500 |
| Purchase of property and equipment | ~(30,000) |
| Free cash flow, non-GAAP | ~54,500 |
| Adjustments: | |
| Integration related costs for acquisitions | ~5,500 |
| Cash outflow for acquisition integration property and equipment | ~200 |
| New campus & program expansion start-up costs | ~1,500 |
| Cash outflow for new campus & program expansion property and equipment | ~2,300 |
| Adjusted free cash flow, non-GAAP | ~$64,000 |
| FY 2024 Guidance Range | $62,000 - 66,000 |
16
utiq4fy23investorpresent
Universal Technical Institute, Inc. Q4 2023 Investor Presentation November 15, 2023
Investor Presentation 2 Forward-Looking Statements This presentation contains 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). Forward-looking statements 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. These statements are based on our management’s current beliefs, expectations and assumptions about future events, conditions and results and on information currently available to us. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. Discussions containing these forward-looking statements may be found, among other places, in the Sections entitled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated by reference from our most recent Annual Report on Form 10-K, in our subsequent Quarterly Reports on Form 10-Q and certain of our current reports on Form 8-K, as well as any amendments thereto, filed with the Securities and Exchange Commission (the “SEC”). In addition, statements that refer to projections of earnings, revenue, costs or other financial items in future periods; anticipated growth and trends in our business or key markets; cost synergies, growth opportunities and other potential financial and operating benefits; future growth and revenues; future economic conditions and performance; anticipated performance of curriculum; plans, objectives and strategies for future operations; and other characterizations of future events or circumstances, and all other statements that are not statements of historical fact are forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated or implied in our forward-looking statements due to a number of factors, including, but not limited to, those set forth under the section entitled “Risk Factors” in our filings with the SEC. Factors that might cause such a difference include, but are not limited to, failure of our schools to comply with the extensive regulatory requirements for school operations; our failure to maintain eligibility for federal student financial assistance funds; the effect of current and future Title IV Program regulations arising out of negotiated rulemakings, including any potential reductions in funding or restrictions on the use of funds received through Title IV Programs; the effect of future legislative or regulatory initiatives related to veterans’ benefit programs; continued Congressional examination of the for-profit education sector; our failure to maintain eligibility for or the ability to process federal student financial assistance; regulatory investigations of, or actions commenced against, us or other companies in our industry; changes in the state regulatory environment or budgetary constraints; our failure to execute on our growth and diversification strategy; our failure to realize the expected benefits of our acquisitions, or our failure to successfully integrate our acquisitions; our failure to improve underutilized capacity at certain of our campuses; enrollment declines or challenges in our students’ ability to find employment as a result of macroeconomic conditions; our failure to maintain and expand existing industry relationships and develop new industry relationships; our ability to update and expand the content of existing programs and develop and integrate new programs in a timely and cost-effective manner while maintaining positive student outcomes; a loss of our senior management or other key employees; failure to comply with the restrictive covenants and our ability to pay the amounts when due under the Credit Agreement; the effect of our principal stockholder owning a significant percentage of our capital stock, and thus being able to influence certain corporate matters and the potential in the future to gain substantial control over our company; the impact of certain holders of our Series A Preferred Stock owning a significant percentage of our capital stock, their ability to influence and control certain corporate matters and the potential for future dilution to holders of our common stock; the effect of public health pandemics, epidemics or outbreak, including COVID-19, and other risks that are described from time to time in our filings with the SEC. Given these risks, uncertainties and other factors, many of which are beyond our control, you should not place undue reliance on these forward-looking statements. Neither we nor any other person makes any representation as to the accuracy or completeness of these forward-looking statements and, except as required by law, we assume no obligation to update these forward-looking statements publicly, or to revise any forward-looking statements, even if new information becomes available in the future. This presentation also contains estimates and other statistical data made by independent parties, and by us, relating to market size and growth and other data about our industry and our business. This data involves several assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.
Investor Presentation 3 Leading Workplace Solutions Education Provider 20k+ Active Students 4 / 5 Grads Employed Within 1 Year1 35+ Program Offerings HealthcareTransportation and Skilled Trades $705-715M 2024 Revenue guidance* $98-102M 2024 Adj. EBITDA guidance* Addressing Skills Gaps Through 2 In-Demand Industry Segments 33 Campuses Nationwide Strong Financial Outlook 1 On average, across 35+ programs and 33 campuses nationwide. Employment rates may vary significantly by program and by campus. See slides 17 and 18 of this presentation as well as UTI.edu/disclosures and the individual campus pages on Concorde.edu for additional information. * See slide 14 for additional details.
Investor Presentation 4 High-quality, state-of-the- industry technical and healthcare training facilities supporting successful student outcomes
Investor Presentation 5 Diversified Platform of In-Demand Programs Practical/Vocational/Registered Nursing Dental Hygienist/Assistant Healthcare Administration Medical Assistant Respiratory TherapyRobotics and Automation Welding Auto/Diesel/Motorcycle/Marine Technician Aviation Maintenance, Airframe and Powerplant Energy Technology and Wind Power • Fiscal 2023 Revenue = $429M • ~15k Students • 15+ programs across Transportation, Energy, & Skilled Trades • 16 Campuses in 9 States • In-person and Hybrid/Blended formats • Fiscal 2023 Revenue1 = $178M • ~8k Students • 20+ programs in Dental, Allied Health, Nursing, Patient Care and Diagnostics • 17 Campuses in 8 States • In-person, Hybrid/Blended, and Fully Online formats Ex am pl e Pr og ra m s Ex am pl e Pr og ra m s Note: Data as of 9/30/2023; See appendix for more details by segment 1 Concorde revenue is for the 10-month post-acquisition period of 12/1/22-09/30/23
Investor Presentation 6 Proven education and employment model reflected in consistently strong graduation and in-field employment rates1, and deep partnerships with leading industry participants and employers Successful transformation efforts driving diversified revenue growth, enhanced margin profile and strong organic cashflow Healthy balance sheet and disciplined investment plan to support inorganic and organic investments, take advantage of growing addressable markets, and drive shareholder value A leading platform in critical, in-demand markets delivered through in-person, hybrid, and online formats Compelling Long-Term Investment Thesis 1 Per recent years’ accreditor reporting results. See slides 17-18 in this presentation as well as UTI.edu/disclosures and the individual campus pages on Concorde.edu for additional information.
Investor Presentation 7 Marketing and Admissions Optimization Increased high school and local emphasis New Programs and Curriculum Multiple program expansions, MSATs, On-Base Military Programs, Electric Vehicle Curriculum Real Estate Rationalization $15M+ run-rate EBITDA benefit Blended Learning Acceleration and enhancement New Campuses Bloomfield, NJ 2018; Austin, TX 2022; Miramar, FL 2022 Universal Technical Institute’s Transformation Journey Note: FY24 outlook aligns to midpoints of Company guidance 1 Beginning with fiscal 2023, adjusted EBITDA excluded stock-based compensation. Prior years have been revised for comparison. Refer to definition and reconciliation outlined in the appendix as a Non-GAAP measure Revenue ($M) Adj. EBITDA1 ($M) Acquisitions MIAT (FY2022), Concorde (FY2023) $317.0 $331.5 $300.8 $335.1 $418.8 $607.4 $710.0 ($6.0) $18.4 $16.0 $34.2 $60.2 $64.2 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 2018 2019 2020 2021 2022 2023 2024
Investor Presentation 8 0% 5% 10% 15% 20% 25% 30% JO B G R O W TH 2 02 2- 20 32 ANNUAL JOB OPENINGS 2022-2032 In-Demand Offerings Across Transportation, Skilled Trades, and Healthcare 50% Nursing Dental Hygienists & Assistants Physical and Occupational Therapy Assistants Healthcare Administration Medical Assistants H ea lth ca re P ro gr am O ffe rin gs Tr an sp or ta tio n, E ne rg y, & Sk ille d Tr ad e Pr og ra m O ffe rin gs Wind Turbine Service Technicians Aircraft Mechanics & Technicians Welding HVACR Mechanics & Installers Auto Body Repairers Auto/Diesel Technicians Note: Projections as per the Occupational Outlook Handbook published by the U.S. Bureau of Labor Statistics www.bls.gov, September 2023. Job openings include those due to net employment changes and net replacements.
Investor Presentation 9 Healthcare Platform & Program Expansions Accelerating Growth and Diversification 9 Diversified Revenue Mix UTI UTI + Concorde Expanded Student Demographics UTI UTI + Concorde 14,380 25,000 $710M$419M Transportation Skilled Trades B2B Healthcare Male Female Healthcare support occupations are projected to grow the fastest of all occupational groups, at 15.4% from 2022 to 20322 Overall employment in healthcare occupations is expected to result in almost 2 million new jobs annually from 2022- 20321, driven by an aging workforce and an increasing demand for healthcare services 1 U.S. Bureau of Labor Statistics “Occupational Outlook Handbook” September 6, 2023 2 U.S. Bureau of Labor Statistics “Employment Projections: 2022-2032 Summary” September 6, 2023 3 “Demand is high for healthcare workers while labor numbers stagnate” Healthcare Finance, May 12, 2021 Demand is much greater for all healthcare occupations than the number of people available to fill the positions3 FY2022 FY2024 Outlook FY2022 FY2024 Outlook Healthcare Value Proposition Note: FY24 outlook aligns to midpoint of Company’s guidance
Investor Presentation 10 Maximizing Program Expansion Opportunities Leveraging recent acquisitions and optimized real estate footprint to drive growth through new program offerings within existing campuses. UTI Campuses Concorde Campuses UTI & Concorde Campuses * Program not yet open at this location; some still pending regulatory approvals Announced UTI Program Expansions Program Campus Avondale, AZ Long Beach, CA Miramar, FL* Austin, TX Avondale, AZ* Bloomfield, NJ* Long Beach, CA* Mooresville, NC Sacramento, CA* Lisle, IL Rancho Cucamonga, CA Exton, PA Lisle, IL Mooresville, NC Rancho Cucamonga, CA Welding Sacramento, CA Lisle, IL Rancho Cucamonga, CA Announced Concorde Program Expansions Program Campus Orlando, FL San Bernadino, CA* Jacksonville, FL* Miramar, FL* Portland, OR* Diagnostic Medical Sonography Orlando, FL* Respiratory Therapy Online Dental Hygiene Cardiovascular Sonography Aviation Industrial Maintenance Robotics & Automation Wind Energy HVACR
Investor Presentation 11 Disciplined Execution Driving Sustainable Growth 1 Adjusted EBITDA, which excludes stock-based compensation beginning with fiscal 2023; FY2022 has been updated above to reflect this change. Refer to definition and reconciliation outlined in the appendix as a Non-GAAP measure. 30% Revenue CAGR Note: FY24 outlook aligns to midpoint of Company’s guidance New Campuses & Program Expansions Concorde Full Year UTI Organic UTI Organic Concorde Organic New Campuses & Program Expansions
$710M FY 2024 FY 2025+ Future Strategic Initiatives Provide Opportunity For Continued Accelerated Growth Investor Presentation 12 Acquisitions Strategic and disciplined opportunities New Campus Additions Leverage blended learning and refined program mix formats to expand geographic footprint Program Expansions Acquired MIAT and Concorde programs provide more expansion opportunities New Program Offerings Acquisitions and new program development efforts provide future opportunities Baseline Business Growth Continued go-to-market and business model optimization to drive organic growth Future Incremental Opportunities1 Note: FY24 revenue outlook aligns to midpoint of Company’s guidance 1 Represents yet-to-be-determined future potential growth opportunities. No definitive plans have been announced at this time.
13 Business Outlook Fiscal 2024 Guidance
Investor Presentation 14 Fiscal 2024 Guidance $ millions except EPS 1 Beginning in FY23 Adj EBITDA excludes stock-based compensation; prior years updated for comparison 2 Beginning in FY23, Net Income and EPS impacted by a significant effective tax rate increase due to the valuation allowance reversal in FY2022, increased interest expense, and higher D&A * Based on current outlook; Note for detailed reconciliations of Non-GAAP measures see the Appendix
Investor Presentation 15 FY2023 - FY2024* Performance Bridges Note: Bridges are intended to provide indicative year-over-year impacts only and are not necessarily to scale * Fiscal 2024 figures represent the mid-points of the Company’s guidance ranges For detailed reconciliations of Non-GAAP measures, see the Appendix
16 Appendix
Investor Presentation 17 Business Overview • 15+ programs for in-demand fields across transportation and skilled trades • Program Mix (2023 Revenue): – Auto/Diesel 73%, Other Transportation 12%, Welding 8%, Other Skilled Trades 3%, and Industry Training 4% • Current expansion plans for 18 programs4 into existing campuses beginning FY23 including Aviation, Wind Energy, Robotics, HVACR, Welding, and Industrial Maintenance. More may follow. Mission Statement To serve our students, partners, and communities by providing quality education and support services for in-demand careers. Universal Technical Institute Overview A leading provider of transportation, energy and skilled trades technical training, driven to change the world one life at a time by helping people achieve their dreams. 1 As of September 30, 2023; Beginning in fiscal 2023 Company reports Adjusted EBITDA excluding stock-based compensation. 2 Based on most recent reporting periods. Ratios represent averages across UTI’s 4 OPEIDs, though individual program results may vary significantly from the mean. Note that due to the COVID-19 pandemic, ED paused all loan payments from March 13, 2020, through September 30, 2023. This has significantly decreased the default rates starting with the 2019 Cohort and resulted in 0% for the 2020 Cohort. 3 Aggregated rates based on reporting in the ACCSC 2023 annual reports. Each of the ACCSC program outcomes is evaluated individually. The ACCSC reports exclude graduates from the employment rate calculation who were not available for employment because of continuing education, military service, health, incarceration, death or international student status. See UTI.edu/disclosures for further information. 4 Some still pending regulatory approval Summary Statistics Founded 1965 Revenue1 $429M Adj. EBITDA1 $85M Adj. EBITDA Margin1 19.7% Locations 16 Campuses in 9 States Key Metrics Enrollment ~15K Students Cohort Default Rate2 0% 90/10 Ratio2 ~64% Graduation Rate3 ~65% Employment Rate3 ~80% Composite Score: Calculated and reported only at an enterprise level. Projected score as of 9/30/23 is 1.6.
Investor Presentation 18 Business Overview • 20+ programs for in-demand healthcare professional degrees and certifications • Program Mix (2023 Revenue): – Dental 29%, Allied Health 26%, Patient Care 21%, Nursing 17%, and Diagnostic 8% • Expanding new programs into existing campuses in Fiscal 2024 including Dental Hygiene, Cardiovascular Sonography, & Diagnostic Medical Sonography, in addition to launching select online programs. Healthcare education provider focused on preparing America’s next generation of healthcare professionals for rewarding careers in areas such as nursing, dental, patient care, and allied health. 1 As of September 30, 2023, for the 10-month post-acquisition period of 12/1/22-09/30/23 2 Based on most recent reporting periods and represent approximate averages across Concorde’s 12 OPEIDs, though individual program results may vary significantly from the mean. 90/10 Title IV metric ranges from 63% to 86%. Note that due to the COVID-19 pandemic, ED paused all loan payments from March 13, 2020, through September 30, 2023. This has significantly decreased the default rates starting with the 2019 Cohort and resulted in 0% for the 2020 Cohort. 3 Aggregated rates for the 14 campuses accredited by ACCSC based on reporting in the ACCSC 2023 annual reports and excludes the two campuses not accredited by ACCSC. Each of the ACCSC program outcomes is evaluated individually. The ACCSC reports exclude graduates from the employment rate calculation who were not available for employment because of continuing education, military service, health, incarceration, death or international student status. See disclosures on the individual campus pages on Concorde.edu for additional information. Mission Statement To prepare committed students for successful employment in a rewarding health care profession through high-caliber training, real world experience and student-centered support. . Summary Statistics Founded 1968 Revenue1 $178M Adj. EBITDA1 $16M Adj. EBITDA Margin1 $9.1% Locations 17 Campuses in 8 States Key Metrics Enrollment ~8K Students Cohort Default Rate2 0% 90/10 Ratio2 ~72% Graduation Rate3 ~71% Employment Rate3 ~86% Concorde Career Colleges Overview Composite Score: Calculated and reported only at an enterprise level. Projected score as of 9/30/23 is 1.6.
Investor Presentation 19 Industry Partnerships That Deliver Value UTI’s relationships with more than 35 leading brands, and other industry and employer partners for both UTI and Concorde, provide unique value propositions and competitive differentiation for our schools and students.
Investor Presentation 20 • June 2016: Coliseum Holdings purchased 700,000* shares of Series A Convertible Preferred Stock for $70 million – Initial 700,000 shares were convertible into 21,021,021 shares of common stock (~30:1) – Subject to NYSE voting and conversion caps, and certain education regulatory approval limitations • February 2020: Stockholders approve removal of NYSE voting and conversion caps • September 2020: Coliseum distributed all 700,000 shares to affiliates (incl. Coliseum entities) and non-affiliates – Affiliates received 24.9% (from 39.2%) of outstanding shares on an as-converted basis > Education regulatory limitation remains; voting and conversion cap of 9.99% of outstanding shares – Non-Affiliates received remaining 14.3% of outstanding shares on an as-converted basis; no voting or conversion caps on an individual basis History Dividends • 7.5% annual dividend: Currently $5.1 million paid in cash in semi-annual installments on March 31 and September 30 • By Preferred Holders: Convertible to common at any time at the option of the holder, subject to any caps – Coliseum & Affiliates subject to education regulatory approval cap of 9.99%, must request removal by UTI • By UTI: When the daily VWAP of UTI common stock is ≥$8.33 for 20 consecutive trading days (excluding trading windows closed to insiders), UTI may require conversion of any/all outstanding preferred stock into common, subject to removal of any capsConversion Overview of Preferred Shares * As of September 30,2023, preferred shares outstanding totaled 675,885 following conversion by one of the preferred holders in June 2022 Note: Above is intended as a summary only and is subject in its entirety to the actual terms contained in our filings with the SEC. Additional details may be found in the Company’s public filings including its 10-Ks, 8-Ks, proxy statements and the 2016 Certificate of Designations
21 Non-GAAP Information
Investor Presentation 22 Use of Non-GAAP Financial Information This presentation contains non-GAAP (Generally Accepted Accounting Principles) financial measures, which are intended for supplemental informational purposes only, and should not be considered substitutes for the most directly comparable GAAP measures. Management chooses to disclose to investors these non-GAAP financial measures because they provide an additional analytical tool to clarify the results from operations and help to identify underlying trends. Additionally, such measures help compare the company's performance on a consistent basis across time periods. Management defines EBITDA as net income (loss) before interest expense, interest income, income taxes, depreciation, and amortization. Management 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 as part of the company’s normal recurring operations. Prior year amounts have been restated to include stock-based compensation expense. Management 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. Management defines adjusted free cash flow as net cash provided by (used in) operating activities less capital expenditures, adjusted for items not considered as part of the company’s normal recurring operations. Management chooses to 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, without limitation, acquisition-related costs for both announced and potential acquisitions, integration costs for completed acquisitions, start-up costs associated with new campus openings and other program expansion, stock-based compensation expense, costs related to the purchase of our campuses, lease accounting adjustments resulting from the purchase of our campuses and our campus consolidation efforts, intangible asset impairment charges, and payments of severance expense for the CEO transition. To obtain a complete understanding of the company's 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 UTI’s 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 UTI's 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 included in the following slides. Information reconciling forward-looking adjusted EBITDA, adjusted net (loss) income and adjusted free cash flow to the most directly comparable GAAP financial measure is unavailable to the company without unreasonable effort. The company is not able to provide a quantitative reconciliation of forward-looking adjusted EBITDA, adjusted net (loss) income or adjusted free cash flow to the most directly comparable GAAP financial measure because certain items required for such reconciliation are uncertain, outside of the company’s control and/or cannot be reasonably predicted, including but not limited to the provision for (benefit from) income taxes. Preparation of such reconciliation would require a forward-looking statement of income and statement of cash flows prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the company without unreasonable effort.
Investor Presentation 23 Adjusted EBITDA Reconciliation ($ in thousands) 1. Costs related to both announced and potential acquisition targets. 2. Estimated one-time expenses for the integration of acquisitions 3. Expenses for start-up costs of the new campuses in Austin, TX and Miramar, FL and the expansion of current programs into additional campuses 4. Lease accounting adjustments from our campus optimization efforts. These are primarily non-cash except for a lease termination payment related to our Orlando campus. 5. During the fourth quarter of 2022, we completed a branding study and determined that the carrying value of the MIAT trademarks and trade name exceeded its fair value and recorded an intangible asset impairment charge of $2.0 million during the year ended September 30, 2022. 6. Beginning in FY2023 UTI includes stock-based compensation in its non-GAAP add-backs to EBITDA; FY2022 has been restated above for comparison Notes: The acquisition of MIAT closed on November 1, 2021, and Concorde closed on December 1, 2022, impacting comparability across periods; Expected adjustments outlined for FY 2024 are illustrative only and may differ from what is realized, either in the amounts &/or the categories shown Net income (loss) ~$36,000 $12,322 $25,848 Interest (income) expense, net ~4,600 3,795 1,495 Income tax (benefit) expense ~15,400 5,765 (5,407) Depreciation and amortization ~30,000 25,215 16,884 EBITDA ~$86,000 $47,097 $38,820 Acquisition-related costs(1) − 2,374 4,239 Integration related costs for acquisitions(2) ~5,500 4,514 1,691 New campus & program expansion start-up costs ~1,500 6,412 9,177 Facility lease accounting adjustments(4) − − (64) Intangible asset impairment(5) − − 2,000 Stock-based compensation(6) ~7,000 3,848 4,337 Adjusted EBITDA, non-GAAP ~$100,000 $64,245 $60,200 FY2024 Guidance Range $98,000-$102,000 Actual Fiscal 2023 Actual Fiscal 2022 Guidance Midpoint Fiscal 2024
Investor Presentation 24 Adjusted Free Cash Flow Reconciliation ($ in thousands) 1. In February 2022 we purchased our Lisle, IL campus, and in March 2023 we purchased the three primary buildings and related land at our Orlando, FL campus. 2. Costs related to both announced and potential acquisition targets. 3. Estimated one-time expenses for the integration of acquisitions. 4. Expenses for implementation of the new campuses in Austin, TX and Miramar, FL as well as one-time expenses for the expansion of current programs into additional campuses. 5. Adjustments reflect the cash paid in accordance with previous CEO Kimberly J. McWaters’s Retirement Agreement and Release of Claims, dated October 31, 2019. 6. Lease accounting adjustments from our campus optimization efforts. These are primarily non-cash except for a lease termination payment related to our Orlando campus. Note: Expected adjustments outlined for FY 2024 are illustrative only and may differ from what is realized, either in the amounts &/or the categories shown Guidance Midpoint Fiscal 2024 Actual Fiscal 2023 Actual Fiscal 2022 Cash flow provided by operating activities, as reported ~$84,500 $49,148 $46,031 Purchase of property and equipment ~(30,000) (56,685) (79,450) Free Cash Flow, non-GAAP $54,500 ($7,537) ($33,419) Campus Purchase(1) − 26,156 28,680 Acquisition-related costs(2) − 2,347 3,923 Integration related costs for acquisitions(3) ~5,500 3,697 1,436 Cash outflow for acquisition integration PP&E(3) ~200 831 − New campus & program expansion start-up costs(4) ~1,500 6,412 5,136 Cash outflow for new campus and program expansion PP&E(4) ~2,300 17,183 28,579 Severance payments due to CEO transition(5) − − 32 Facility lease accounting adjustments(6) − − 575 Adjusted Free Cash Flow, non-GAAP ~$64,000 $49,089 $34,942 FY2024 Guidance Range $62,000-$66,000
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