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): December 12, 2022
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 December 12, 2022, Universal Technical Institute, Inc. (the "Company") issued a press release reporting fourth quarter and full year results for fiscal 2022. 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 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 is attached hereto as Exhibit 99.2, which is incorporated herein 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 Form 8-K and the exhibits attached hereto are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as may 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 December 12, 2022 |
| 99.2 | Investor Presentation dated December 12, 2022 |
| 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. | ||
|---|---|---|
| December 12, 2022 | 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 2022 Fourth Quarter and Year-End Results
PHOENIX, ARIZ. - December 12, 2022 - 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 2022 full year and fourth quarter ended September 30, 2022.
•Full year revenue of $418.8 million in 2022, an increase of 25.0% compared to the prior year, and $110.6 million in the fourth quarter, up 13.5% compared to the prior year quarter.
•Full year net income was $25.8 million compared to $14.6 million in the prior year, while net income for the fourth quarter was $2.8 million, down 76.5% from prior year period. Adjusted net income(1) for the full year was $35.5 million, while fourth quarter adjusted net income(1) was $8.0 million.
•Full year adjusted EBITDA(1) was $55.9 million, an increase of 71.8% versus the prior year, while fourth quarter adjusted EBITDA(1) was $14.0 million, a decrease of 23.1% versus the prior year period.
•New student starts in the full year increased 2.7% from the prior year, while average active students increased 11.7%.
•Met or surpassed fiscal year 2022 guidance range for all key financial metrics.
•Provided fiscal 2023 guidance, including revenue of $595 - $610 million and adjusted EBITDA(1) of $58 - $62 million, including the ten month impact in fiscal 2023 of the Concorde Career Colleges, Inc. (Concorde) acquisition.
“We delivered strong financial results for the fiscal year that were inline or at the high-end of the guidance we provided at the beginning of the year. This was an important year for the growth of the Company, as we expanded our UTI business through new program offerings and new campuses to reach more students, enhanced our relationships with our employer and industry partners, and made significant progress against our long-term growth and diversification strategy with the acquisition of Concorde Career Colleges,” said Jerome Grant, CEO of Universal Technical Institute. “Overall, I am proud of what our team accomplished in 2022, as we progressed and grew as a Company and continued to enhance the experiences and outcomes for our students.”
Grant continued, “As we move into 2023, we are strategically positioned to not only execute on our previously established longer-term targets for our growth and diversification strategy, but also expand the scope of this strategy going forward. The addition of Concorde is a transformational move in our evolution as a workforce solutions provider and drastically increases our future growth prospects. With our plan in place for 2023, we expect to have great momentum heading into 2024 and beyond, and we are excited about the opportunities that we have in front of us.”
Financial Results for the Three-Month Period Ended September 30, 2022 Compared to 2021
•Revenues increased 13.5% to $110.6 million, compared to $97.5 million. The increase is primarily due to the increase in average undergraduate full-time active students driven by the addition of MIAT, and higher revenue earned per student.
•Operating expenses increased 26.5% to $107.2 million, compared to $84.7 million. The increase was primarily driven by the incremental cost of delivery associated with growth in the average student population, including the addition of MIAT. The increase was also due to start up costs for our new campuses, acquisition related costs, integration related costs and an increase in advertising costs.
•Operating income was $3.5 million compared to $12.8 million.
•Net income was $2.8 million compared to $12.0 million. Adjusted net income(1) was $8.0 million compared to $13.9 million.
•Basic and diluted earnings per share (EPS) were $0.03 compared to $0.20.
•Adjusted EBITDA(1) was $14.0 million compared to $18.3 million.
•New student starts decreased 3.2%.
Balance Sheet and Liquidity
At September 30, 2022, UTI’s total available liquidity was $95.4 million consisting of cash and cash equivalents and held-to-maturity investments. On December 1, 2022, the company completed the Concorde acquisition for a purchase price of $50 million. Preceding the close of the acquisition, the company drew $90 million from the new revolving credit facility established in November of 2022.
For fiscal 2022, the company incurred $79.5 million of cash capital expenditures (capex) largely driven by strategic investments such as $28.7 million for the purchase of the Lisle, IL campus and $28.6 million for the initial build out and set up of the two new campuses in Austin, TX and Miramar, FL. Approximately $19.0 million of capex spend was for other major projects during the year including the facility consolidations in Avondale, AZ and Orlando, FL and the new welding program launches in Mooresville, NC, and Exton, PA. The remaining capex spend supported the initial stages of the MIAT program expansions along with other smaller initiatives and maintenance capex needs.
“Our flexible and diverse business model enabled us to deliver strong financial and operational performance for the fiscal year that met or surpassed our financial guidance across all key measures,” said Troy Anderson, CFO of Universal Technical Institute. As we move into the new fiscal year, we are starting off with the completion of two major milestones, the closing of the Concorde acquisition and our recently established revolving credit facility, the latter serving as a critical component of our long-term capital structure planning that allows us to yield the benefits of our growth and efficiency initiatives and enables us to be opportunistic as we enter our next phase of growth. We are entering fiscal 2023 as a more nimble and stronger company with achievable growth initiatives that are well underway, a healthy balance sheet and industry-leading offerings for our students.”
Financial Results for the Year Ended September 30, 2022 Compared to 2021
•Revenues increased 25.0% to $418.8 million, which was at the higher end of the full year guidance range of $410 - $420 million, compared to $335.1 million, due to an increase in average undergraduate full-time active students and higher revenue earned per student, as well as the addition of MIAT.
•Operating expenses increased 23.8% to $396.4 million, compared to $320.1 million. Similar to the three months ended, the increase was primarily due to the incremental cost of delivery associated with growth in the average student population, the inclusion of MIAT, increased marketing expenses, and ongoing investments in support of our growth and diversification strategy.
•Operating income was $22.4 million compared to $14.9 million.
•Net income was $25.8 million compared to $14.6 million and includes an income tax benefit of approximately $5.4 million largely due to the valuation allowance reversal during the year. Adjusted net income(1) was $35.5 million, above the high-end of the full year guidance range of $32 - $35 million, compared to $17.5 million.
•Basic EPS was $0.39 compared to $0.17. Diluted EPS was $0.38 compared to $0.17.
•Adjusted EBITDA(1) was $55.9 million, above the high-end of the full year guidance range, compared to $32.5 million.
•Cash flow provided by operating activities was $46.0 million compared to $55.2 million.
•Adjusted free cash flow(1) was $34.9 million, slightly below the full year guidance range of $35 - $40 million.
•New student starts increased 2.7% which was within the updated full year guidance range.
Student Metrics
| Three Months Ended | Twelve Months Ended | |||
|---|---|---|---|---|
| September 30, | September 30, | |||
| 2022 | 2021 | 2022 | 2021 | |
| Total new student starts | 5,965 | 6,165 | 13,374 | 13,028 |
| Average undergraduate full-time active students | 12,709 | 12,167 | 12,838 | 11,489 |
| End of period undergraduate full-time active students | 14,380 | 13,682 | 14,380 | 13,682 |
Fiscal 2023 Financial Outlook
“In 2023, we will be focused on successfully integrating Concorde into the UTI family and ensuring that we are well-positioned to take the next step in our growth and diversification strategy. Our fiscal 2023 guidance reflects the ten months of contribution of the Concorde acquisition, as well as the ramp-up of the new UTI campuses and new program launches, all of which will drive strong revenue growth. Despite the revenue growth, we expect adjusted EBITDA margin will be lower in 2023. There are several factors contributing to this, including low revenue growth in UTI as a result of lower new student starts in 2022, UTI growth investments including new campus and program ramps along with admissions channel investments, and overall inflationary pressures. Also contributing is the overall lower margin profile of Concorde and transitionary investments to operate that business in a public company environment ahead of realizing operating synergies. As we progress through 2023 and into 2024 with our currently announced initiatives including Concorde, we expect to see accelerating organic revenue growth and overall margin expansion. With that, we now see the potential to deliver revenue in excess of $700 million and adjusted EBITDA approaching $100 million in fiscal 2024,” concluded Anderson.
| FY 2022 | FY 2023 | |
|---|---|---|
| ($ in millions) | Actuals(2) | Guidance(2) |
| New student starts | 13,374 | 22,000 - 23,500 |
| Revenue | $418.8 | $595.0 - $610.0 |
| Adjusted net income(1) | $35.5 | $14.0 - $18.0 |
| Adjusted EBITDA(1)(3) | $60.2 | $58.0 - $62.0 |
| Adjusted free cash flow(1)(4) | $34.9 | $40.0 - $45.0 |
(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 2022 reflects UTI reported results, while 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) Reflects the adjustment of stock-based compensation expense beginning with fiscal 2023. Fiscal 2022 is being shown on a comparable basis.
(4) Includes $79.5 million of total capex for FY2022, including approximately $28.7 million for the purchase of the Lisle, IL campus and $28.6 million for the new Austin, TX and Miramar, FL campuses. For FY 2023, assumes $36.0 million to $40.0 million of total capex, including incremental investments for the Austin and Miramar campuses, Concorde and MIAT related program expansions, and a consistent level of annual maintenance capex.
For UTI’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 2022 fourth quarter ended September 30, 2022, on Monday, December 12, 2022, at 8:30 a.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 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 December 26, 2022, by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international) and entering passcode 10161230.
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"), UTI 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. UTI 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, UTI 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, UTI 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, UTI 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.
Adjusted Free Cash Flow
UTI 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.
Adjusted Net Income (Loss)
UTI 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.
UTI discloses 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 Lisle, Illinois and Avondale, Arizona campuses, impairment charges related to intangible assets, start-up costs associated with the Austin, TX and Miramar, FL campus openings, lease accounting adjustments resulting from the purchase of our Lisle, Illinois campus and our campus consolidation efforts, 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 UTI'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 UTI does, 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 UTI’s 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) UTI’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) UTI’s expectation that it will succeed in new campus launches next year; and (4) UTI’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 UTI’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 UTI’s control. UTI’s 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 UTI's 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 UTI offers, increased investment in management and capital resources, failure to comply with the restrictive covenants and UTI’s ability to pay the amounts when due under the Credit Agreement with Fifth Third Bank, National Association, the effectiveness of UTI 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 UTI's 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 UTI in this press release and the related conference call are based only on information currently available to UTI and speak only as of the date on which it is made. UTI expressly disclaims 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 (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: UTI and Concorde Career Colleges. 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 Career Colleges 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 & External Communications
Universal Technical Institute, Inc.
(623) 445-0872
Investor Relations Contact:
Robert Winters
Alpha IR Group
(312) 445-2870
UTI@alpha-ir.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, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| Revenues | $ | 110,638 | $ | 97,481 | $ | 418,765 | $ | 335,083 |
| Operating expenses: | ||||||||
| Educational services and facilities | 56,907 | 44,769 | 207,233 | 166,818 | ||||
| Selling, general and administrative | 50,266 | 39,931 | 189,158 | 153,318 | ||||
| Total operating expenses | 107,173 | 84,700 | 396,391 | 320,136 | ||||
| Income from operations | 3,465 | 12,781 | 22,374 | 14,947 | ||||
| Other (expense) income: | ||||||||
| Interest income | 419 | 10 | 507 | 83 | ||||
| Interest expense | (751) | (232) | (2,002) | (365) | ||||
| Other income | (102) | 10 | (438) | 518 | ||||
| Total other (expense) income, net | (434) | (212) | (1,933) | 236 | ||||
| Income before income taxes | 3,031 | 12,569 | 20,441 | 15,183 | ||||
| Income tax (expense) benefit | (202) | (524) | 5,407 | (602) | ||||
| Net income | 2,829 | 12,045 | 25,848 | 14,581 | ||||
| Preferred stock dividends | (1,246) | (1,312) | (5,159) | (5,250) | ||||
| Income available for distribution | 1,583 | 10,733 | 20,689 | 9,331 | ||||
| Income allocated to participating securities | (594) | (4,190) | (7,847) | (3,647) | ||||
| Net income available to common shareholders | $ | 989 | $ | 6,543 | $ | 12,842 | $ | 5,684 |
| Earnings per share: | ||||||||
| Net income per share - basic | $ | 0.03 | $ | 0.20 | $ | 0.39 | $ | 0.17 |
| Net income per share - diluted | $ | 0.03 | $ | 0.20 | $ | 0.38 | $ | 0.17 |
| Weighted average number of shares outstanding: | ||||||||
| Basic | 33,769 | 32,826 | 33,218 | 32,766 | ||||
| Diluted | 34,279 | 33,370 | 33,743 | 33,123 |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and per share amounts)
(Unaudited)
| September 30, 2022 | September 30, 2021 | |||
|---|---|---|---|---|
| Assets | ||||
| Cash and cash equivalents | $ | 66,452 | $ | 133,721 |
| Restricted cash | 3,544 | 12,256 | ||
| Held-to-maturity investments | 28,918 | — | ||
| Receivables, net | 16,450 | 17,151 | ||
| Notes receivable, current portion | 5,641 | 5,538 | ||
| Prepaid expenses | 6,139 | 6,658 | ||
| Other current assets | 8,809 | 8,068 | ||
| Total current assets | 135,953 | 183,392 | ||
| Property and equipment, net | 214,292 | 122,051 | ||
| Goodwill | 16,859 | 8,222 | ||
| Intangible assets, net | 14,215 | 124 | ||
| Right-of-use assets for operating leases | 132,038 | 159,075 | ||
| Notes receivable, less current portion | 30,231 | 30,586 | ||
| Deferred tax assets, net | 3,365 | — | ||
| Other assets | 5,958 | 9,120 | ||
| Total assets | $ | 552,911 | $ | 512,570 |
| Liabilities and Shareholders’ Equity | ||||
| Accounts payable and accrued expenses | $ | 63,504 | $ | 54,397 |
| Deferred revenue | 54,223 | 57,648 | ||
| Accrued tool sets | 3,176 | 3,292 | ||
| Operating lease liability, current portion | 12,959 | 14,075 | ||
| Long-term debt, current portion | 1,115 | 876 | ||
| Other current liabilities | 2,745 | 2,430 | ||
| Total current liabilities | 137,722 | 132,718 | ||
| Operating lease liability | 129,302 | 153,228 | ||
| Long-term debt | 66,423 | 29,850 | ||
| Deferred tax liabilities, net | — | 674 | ||
| Other liabilities | 4,067 | 7,570 | ||
| Total liabilities | 337,514 | 324,040 | ||
| Commitments and contingencies | ||||
| Shareholders’ equity: | ||||
| Common stock, $0.0001 par value, 100,000 shares authorized, 33,857 and 32,915 shares issued, and 33,775 and 32,833 shares outstanding as of September 30, 2022 and 2021, respectively | 3 | 3 | ||
| Preferred stock, $0.0001 par value, 10,000 shares authorized; 676 and 700 shares of Series A Convertible Preferred Stock issued and outstanding as of September 30, 2022 and 2021, liquidation preference of $100 per share | — | — | ||
| Paid-in capital - common | 148,372 | 142,314 | ||
| Paid-in capital - preferred | 66,481 | 68,853 | ||
| Treasury stock, at cost, 82 shares as of September 30, 2022 and 2021, respectively | (365) | (365) | ||
| Retained deficit | (1,307) | (21,996) | ||
| Accumulated other comprehensive income (loss) | 2,213 | (279) | ||
| Total shareholders’ equity | 215,397 | 188,530 | ||
| Total liabilities and shareholders’ equity | $ | 552,911 | $ | 512,570 |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
| Year Ended September 30, | |||||
|---|---|---|---|---|---|
| 2022 | 2021 | ||||
| (In thousands) | |||||
| Cash flows from operating activities: | |||||
| Net income | $ | 25,848 | $ | 14,581 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation and amortization | 16,884 | 14,027 | |||
| Amortization of right-of-use assets for operating leases | 15,893 | 15,605 | |||
| Intangible asset impairment expense | 2,000 | — | |||
| Bad debt expense | 2,510 | 1,718 | |||
| Stock-based compensation | 4,337 | 1,733 | |||
| Deferred income taxes | (6,014) | — | |||
| Unrealized gain (loss) on derivative contract | 2,492 | (279) | |||
| Other, net | 843 | 351 | |||
| Changes in assets and liabilities: | |||||
| Accounts and notes receivables | 816 | 6,796 | |||
| Prepaid expenses and other current assets | (1,737) | (4,391) | |||
| Accounts payable and accrued expenses | 7,337 | 3,815 | |||
| Deferred revenue | (5,268) | 16,954 | |||
| Income tax receivable | — | 7,145 | |||
| Operating lease liability | (13,952) | (20,469) | |||
| All other assets and liabilities | (5,958) | (2,401) | |||
| Net cash provided by operating activities | 46,031 | 55,185 | |||
| Cash flows from investing activities: | |||||
| Purchase of property and equipment | (79,457) | (61,586) | |||
| Purchase of held-to-maturity investments | (28,821) | — | |||
| Proceeds received upon maturity of investments | — | 37,651 | |||
| Cash paid for acquisitions, net of cash acquired | ui | (26,514) | — | ||
| Return of capital contribution from unconsolidated affiliate | 188 | 277 | |||
| Other investing activities | 7 | 707 | |||
| Net cash used in investing activities | (134,597) | (22,951) | |||
| Cash flows from financing activities: | |||||
| Proceeds from term loan, net of issuance costs | 37,622 | 30,878 | |||
| Payment of preferred stock cash dividend | (5,159) | (5,250) | |||
| Payment of term loans and finance leases | (19,227) | (383) | |||
| Payment of payroll taxes on stock-based compensation through shares withheld | (651) | (421) | |||
| Net cash provided by financing activities | 12,585 | 24,824 | |||
| Change in cash, cash equivalents and restricted cash | $ | (75,981) | $ | 57,058 | |
| Cash and cash equivalents, beginning of period | $ | 133,721 | $ | 76,803 | |
| Restricted cash, beginning of period | 12,256 | 12,116 | |||
| Cash, cash equivalents and restricted cash, beginning of period | $ | 145,977 | $ | 88,919 | |
| Cash and cash equivalents, end of period | $ | 66,452 | $ | 133,721 | |
| Restricted cash, end of period | 3,544 | 12,256 | |||
| Cash, cash equivalents and restricted cash, end of period | $ | 69,996 | $ | 145,977 |
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 | Twelve Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| Net income, as reported | $ | 2,829 | $ | 12,045 | $ | 25,848 | $ | 14,581 |
| Interest expense, net | 332 | 222 | 1,495 | 282 | ||||
| Income tax expense (benefit) | 202 | 524 | (5,407) | 602 | ||||
| Depreciation and amortization | 4,759 | 3,558 | 16,883 | 14,028 | ||||
| EBITDA | $ | 8,122 | $ | 16,349 | $ | 38,819 | $ | 29,493 |
| Acquisition related costs | 1,016 | 1,482 | 4,239 | 2,522 | ||||
| MIAT integration costs | 788 | — | 1,691 | — | ||||
| Intangible asset impairment | 2,000 | — | 2,000 | — | ||||
| Facility lease accounting adjustments | 397 | — | (64) | — | ||||
| Start-up costs for Austin, TX and Miramar, FL campus opening | 1,711 | 423 | 9,177 | 502 | ||||
| Adjusted EBITDA, non-GAAP | $ | 14,034 | $ | 18,254 | $ | 55,862 | $ | 32,517 |
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow
| Twelve Months Ended September 30, | ||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| Net cash provided by operating activities, as reported | $ | 46,031 | $ | 55,185 |
| Purchase of property and equipment | (79,457) | (61,586) | ||
| Free cash flow, non-GAAP | (33,426) | (6,401) | ||
| Adjustments: | ||||
| Purchase of Lisle, IL campus | 28,680 | — | ||
| Purchase of Avondale, AZ campus | — | 45,240 | ||
| Income tax refund received from CARES tax benefit | — | (7,030) | ||
| Acquisition related costs paid | 3,923 | 2,026 | ||
| MIAT integration costs paid | 1,436 | — | ||
| Facility lease accounting adjustments | 575 | — | ||
| Cash outflow for Austin, TX and Miramar, FL start-up costs | 5,136 | 1,806 | ||
| Cash outflow for Austin, TX and Miramar, FL purchase of property and equipment | 28,579 | 1,489 | ||
| Severance payment due to CEO transition | 32 | 280 | ||
| Adjusted free cash flow, non-GAAP | $ | 34,935 | $ | 37,410 |
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, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Net income | $ | 2,829 | $ | 12,045 | $ | 25,848 | $ | 14,581 | ||||
| Add back: Income tax expense (benefit) | 202 | 524 | (5,407) | 602 | ||||||||
| Income before income taxes | 3,031 | 12,569 | 20,441 | 15,183 | ||||||||
| Adjustments: | ||||||||||||
| Acquisition related costs | 1,016 | 1,482 | 4,239 | 2,522 | ||||||||
| MIAT integration costs | 788 | — | 1,691 | — | ||||||||
| Intangible asset impairment | 2,000 | — | 2,000 | — | ||||||||
| Facility lease accounting adjustments | 397 | — | (64) | — | ||||||||
| Start-up costs associated with Austin, TX and Miramar, FL campus openings | 1,711 | 423 | 9,177 | 502 | ||||||||
| Adjusted income before income taxes | 8,943 | 14,474 | 37,484 | 18,207 | ||||||||
| Income tax effect: (expense)(1) | (935) | (603) | (1,983) | (722) | ||||||||
| Adjusted net income, non-GAAP | $ | 8,008 | $ | 13,871 | $ | 35,501 | $ | 17,485 | ||||
| GAAP effective income tax rate(1) | 10.5 | % | 4.2 | % | 5.3 | % | 4.0 | % |
(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.
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
SELECTED SUPPLEMENTAL INFORMATION
(In thousands)
(Unaudited)
Selected Supplemental Financial Information
| Three Months Ended | Twelve Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| Salaries expense | $ | 40,302 | $ | 33,721 | $ | 151,951 | $ | 132,205 |
| Employee benefits and tax | 7,791 | 5,916 | 29,118 | 22,654 | ||||
| Bonus expense | 3,681 | 4,112 | 16,664 | 16,656 | ||||
| Stock-based compensation | 1,064 | 547 | 4,412 | 1,808 | ||||
| Total compensation and related costs | $ | 52,838 | $ | 44,296 | $ | 202,145 | $ | 173,323 |
| Advertising expense | $ | 13,271 | $ | 8,738 | $ | 51,546 | $ | 38,748 |
| Occupancy expense, net of subleases | 8,492 | 8,295 | 36,723 | 32,481 | ||||
| Depreciation and amortization expense | 4,759 | 3,558 | 16,883 | 14,028 | ||||
| Contract service expense | 2,897 | 1,942 | 10,579 | 8,025 |
Graduate Employment Rate
| Twelve Months Ended Sept. 30, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Graduate employment rate | 82 | % | 80 | % |
| Graduates | 7,308 | 6,832 | ||
| Graduates available for employment | 6,914 | 6,476 | ||
| Graduates employed | 5,692 | 5,176 |
The graduate employment rate calculation is based on all graduates from campuses owned and operated by UTI during the below reporting periods, including those who completed manufacturer specific advanced training programs, from October 1, 2020, to September 30, 2021, and October 1, 2019, to September 30, 2020, respectively. The calculation excludes graduates not available for employment because of continuing education, military service, health, incarceration, death or international student status. Graduates are counted as employed based on a verified understanding of the graduate’s job duties to assess and confirm that the graduate’s primary job responsibilities are in his or her field of study. We verify employment by sending written verification requests to the graduate and/or the employer or collecting written information with all required elements. Verifications must include employer name, job duties, job title, hire date and employer contact information. Once we receive written verification from either source, the graduate is classified as employed in field as long as all verification requirements are met. If any information provided in a written format requires clarification, a call is made to clarify certain elements with notes documented in our student database. In instances where we are unable to obtain written verification, we also classify graduates as employed in field if we are able to obtain verbal verification, collecting the same information as noted above, from both the graduate and the employer. We periodically review a sample of employment verifications to ensure accuracy.
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
| Twelve Months Ended | |
|---|---|
| September 30, | |
| 2023 | |
| Net income | |
| Interest (income) expense, net | 4,500 |
| Income tax expense | 3,000 |
| Depreciation and amortization | 27,900 |
| EBITDA | |
| Acquisition related costs | 2,300 |
| Concorde integration and program expansion costs | 5,050 |
| MIAT integration and program expansion costs | 2,000 |
| Stock-based compensation expense | 6,250 |
| Adjusted EBITDA, non-GAAP | |
| FY 2023 Guidance Range | 58,000 - 62,000 |
All values are in US Dollars.
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow for Fiscal 2023 Guidance
| Twelve Months Ended | |
|---|---|
| September 30, | |
| 2023 | |
| Net cash provided by operating activities | |
| Purchase of property and equipment | (38,000) |
| Free cash flow, non-GAAP | 13,750 |
| Adjustments: | |
| Acquisition related costs paid | 2,300 |
| Concorde integration and program expansion costs paid | 5,050 |
| Cash outflow for Concorde related program expansion purchase of property and equipment | 2,600 |
| MIAT integration and program expansion costs paid | 2,000 |
| Cash outflow for MIAT related program expansion purchase of property and equipment | 12,000 |
| Cash outflow for Austin, TX and Miramar, FL purchase of property and equipment | 4,800 |
| Adjusted free cash flow, non-GAAP | |
| FY 2023 Guidance Range | 40,000 - 45,000 |
All values are in US Dollars.
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
| Twelve Months Ended | |
|---|---|
| September 30, | |
| 2023 | |
| Net income | |
| Add back: Income tax expense(1) | 3,000 |
| Income before income taxes | 12,000 |
| Adjustments: | |
| Acquisition related costs | 2,300 |
| Concorde integration and program expansion costs | 5,050 |
| MIAT integration and program expansion costs | 2,000 |
| Adjusted income before income taxes | 21,350 |
| Income tax effect: (expense)(1) | (5,350) |
| Adjusted net income, non-GAAP | |
| FY 2023 Guidance Range | 14,000 - 18,000 |
All values are in US Dollars.
(1) An estimated GAAP effective tax rate of 25.0% has been used to compute the adjusted net income for fiscal 2023.
14
q4fy22investorpresentati
For additional information please see Company public filings and the Financials section of our investor website Universal Technical Institute Investor Presentation December 12, 2022 2022 Universal Technical Institute, Inc. All rights reserved.
Forward-Looking Statements PAGE 2 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; continued Congressional examination of the for-profit education sector; a disruption in our ability to process student loans under the Federal Direct Loan Program; regulatory investigations of, or actions commenced against, us or other companies in our industry; the effect of public health pandemics, epidemics or outbreak, including COVID-19; changes in the state regulatory environment or budgetary constraints; our failure to realize the expected benefits of our acquisitions; our failure to successfully integrate our acquisitions’ offerings into our current program offerings; 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 with our industry customers; 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; our failure to effectively identify, establish and operate additional schools, programs or campuses; 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; loss of our senior management or other key employees; 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.
Overview
PAGE 3 A Leading Provider of Transportation and Skilled Trades Technical Training Programs, and Healthcare Education PAGE 4 1965 Founded ~250K Total Graduates ~13K Active Students1 35+ Manufacturing Brand Partners $60.2M TTM Adj EBITDA1,2 $418.8M TTM Revenue1 $95.4M Cash & Investments1 NYSE: UTI UTI + Concorde 1 As of September 30, 2022 2 Beginning in fiscal 2023 Company reports Adjusted EBITDA excluding stock-based compensation; fiscal 2022 has been adjusted accordingly 3 Unaudited results as per Concorde Career Colleges, Inc. reporting as of September 30, 2022 ~$200M TTM Revenue3 ~$17M TTM Adj EBITDA3 Acquired December 2022 1968 Founded ~8,000 Active Students3
UTI Enters Healthcare Education with Concorde Career Colleges PAGE 5 Universal Technical Institute Expands Platform of Workforce Solutions Offerings with Completion of Concorde Career Colleges, Inc. Acquisition PHOENIX, Dec. 1, 2022 -- Universal Technical Institute, Inc. (NYSE: UTI), a leading workforce solutions provider of transportation and skilled trades education programs, today announced the close of its acquisition of Concorde Career Colleges, Inc. ("Concorde"), which offers more than 20 programs across the Allied Health, Dental, Nursing, Patient Care, and Diagnostic fields. The acquisition expands Universal Technical Institute's portfolio of offerings into the higher-growth healthcare arena and creates the opportunity to bring workforce educational solutions to a broader array of students and employers. TRANSACTION DETAILS Closed December 1, 2022 Cash Purchase Price of $50M TTM revenue of ~$200M1 and Adj EBITDA of ~$17M1 Previously held by Liberty Partners L.P. (PE firm) Why Healthcare: Expands UTI’s addressable market in high-growth disciplines Healthcare occupations expected to grow 13% from 2021 to 20312, due to an aging population and greater demand for healthcare services Further diversifying product offerings provides more career opportunities for prospective students and strengthens foundation for steady growth Strong program pathways provide opportunity to drive greater student/customer value 1 Unaudited results as per Concorde Career Colleges, Inc. reporting as of September 30, 2022 2 U.S. Bureau of Labor Statistics https://www.bls.gov/ooh/healthcare/home.htm, viewed 12/07/2022. Figure includes some specialties not currently offered by Concorde.
A Leading Workforce Solutions Provider of Transportation, Energy, Skilled Trades, and Healthcare Education PAGE 6 Practical/Vocational/Registered Nursing Dental Hygienist/Assistant Healthcare Administration Medical Assistant Ex am pl e Pr og ra m O ffe rin gs Ex am pl e Pr og ra m O ffe rin gs Robotics and Automation Welding Auto/Diesel/Motorcycle/Marine Technician • ~13k Students • 15+ programs across Transportation, Energy, & Skilled Trades • 16 Campuses in 9 States • In-person and Hybrid/Blended formats • ~8k Students • 20+ programs across Dental, Allied Health, Nursing, Patient Care and Diagnostics • 17 Campuses in 8 States • In-person, Hybrid/Blended, and Fully Online formats Aviation Maintenance, Airframe and Powerplant Respiratory Therapy Energy Technology and Wind Power
$317.0 $331.5 $300.8 $335.1 $418.8 $602.5 ($6.0) $18.4 $16.0 $34.2 $60.2 $60.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 $500.0 $550.0 $600.0 2018 2019 2020 2021 2022 2023 Revenue and Adjusted EBITDA2 Revenue ($) Adj EBITDA* Transformation since 2017 Acquisitions Concorde Closed Dec.2022 MIAT Closed Nov.2021 Marketing and Admissions Optimization Increased High School/Local Emphasis New Programs & Curriculum MIAT/welding expansions, MSATs, On-Base Military Programs, Electric VehicleReal Estate Rationalization $15M+ Run-Rate EBITDA Benefit Blended Learning Acceleration & Enhancement New Campuses Bloomfield, NJ 2018 Austin, TX 2022 Miramar, FL 2022 Multi-Year Company Transformation PAGE 7 1 TTM revenue through 9/30/22 for Concorde and 9/30/2021 for MIAT; Figures unaudited and as reported pre-acquisition by each Company respectively 2 Adjusted EBITDA now excludes stock-based compensation, and prior years have been updated to reflect this change. Refer to definition and reconciliation outlined in the appendix as a Non-GAAP measure Note: FY23 outlook aligns to midpoint of Company’s guidance; Includes 10 months of Concorde RESULTS Purchase Price: $26M TTM Revenue: $29M1 Purchase Price: $50M TTM Revenue: $200M1
Investment Thesis 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 defined capital allocation plan to support inorganic and organic investments, take advantage of growing addressable markets and drive shareholder value Deep and experienced leadership team poised to capitalize on growth opportunities PAGE 8 A leading platform of 35+ education programs in critical, in-demand transportation, skilled trade and healthcare markets delivered through in-person, hybrid, and online formats 1 Per recent years’ accreditor reporting results, including MIAT in the most recent period, and pre-acquisition accreditor reporting results as reported by MIAT and Concorde. See 10-K filings for additional UTI information.
Growth & Diversification Strategy
Focused Growth Drivers PAGE 10 Healthcare Diversification Skilled Trade Adjacencies Additional Opportunities Baseline Business Growth • Continued go-to-market and business model optimization • Pursuing additional B2B and non-Title- IV diversification Program Expansions • Launching at least 15 programs at UTI & MIAT campuses in FY2023/20241 • 4 welding launches over FY2021/2022 • Executing on and exploring others (e.g. EV) • MIAT acquisition expands into aviation and energy markets, broadens, skilled trades offerings • Substantial growth synergies with existing trade platform • Accelerated program and geographic diversification • Concorde acquisition provides diversified healthcare platform • Opportunity for future expansion into other high-demand healthcare programs and expanded geographic footprint • Disciplined capital allocation program allows for being opportunistic in pursuing other assets • $100M revolving credit facility allows flexibility while maintaining strength New Campus Development • Austin, TX and Miramar, FL opened in FY 2022 • New geographies and locations being evaluated • Leverage blended learning efficiencies Organic Investments Inorganic Growth Opportunities 1 Pending regulatory approval
Impressive Growth Trajectory Current initiatives along with the addition of Concorde significantly accelerate growth leading to estimated FY2024 revenue in excess of $700 million and estimated adjusted EBITDA* approaching $100 million, with opportunity for further growth in both measures in subsequent years 1 Beginning with fiscal 2023, adjusted EBITDA excludes stock-based compensation. Prior years have been revised for comparison. Refer to definition and reconciliation outlined in the appendix as a Non-GAAP measure..PAGE 11 23%+ Revenue CAGR $700M+ Base New Campuses MIAT Base + MIAT New Campuses $301M $419M $16M1 $60M1 Approaching $100M1 MIAT Program Expansions
Addition of In-Demand Healthcare Offerings Further Enhances UTI’s Future Growth Opportunities PAGE 12 Projections as per the U.S. Bureau of Labor Statistics www.bls.gov, viewed December 2022. Job openings include those due to net employment changes and net replacements. 0% 5% 10% 15% 20% 25% 30% JO B G R O W TH 2 02 1- 20 31 ANNUAL JOB OPENINGS 2021-2031 Nursing Dental Hygienists & Assistants Physical and Occupational Therapy Assistants Healthcare Administration Medical Assistants C on co rd e Pr og ra m O ffe rin gs U TI P ro gr am O ffe rin gs Wind Turbine Service Technicians Aircraft Mechanics & Technicians Welding HVACR Mechanics & Installers Auto Body Repairers Auto/Diesel Technicians 50%
Concorde Acquisition Accelerates Diversification Across Multiple Dimensions PAGE 13 The acquisition of Concorde diversifies UTI across key dimensions supporting a steady growth trajectory and expanding future growth and diversification opportunities Revenue by Product Offering Student Demographics UTI UTI + Concorde UTI is currently predominantly 18-to-24-year-old males, recent high school grads, military and working adults. Concorde adds a majority female population, largely working professionals or career changers with an average age of 28 years old. UTI UTI + Concorde Based upon 2022 reported results for UTI and Concorde1. Does not contemplate additional revenue mix benefits from UTI’s planned MIAT program expansions, or future Concorde growth. 1 TTM revenue through 9/30/22 for Concorde
$700M+ Base New Campuses $301M MIAT & Program Expansions Acquisitions New Campus Additions Expansion of Current Programs New Program Offerings Business Model Transformation Announced Initiatives Disciplined Execution Driving Strategic Growth Future Incremental Opportunities With the acquisition of Concorde, UTI is strategically positioned to not only execute on its previously established longer-term targets for the growth and diversification strategy, but also expand the scope of the strategy going forward. 1 Adjusted EBITDA now excludes stock-based compensation, prior years have been updated to reflect this change. Refer to definition and reconciliation outlined in the appendix as a Non-GAAP measurePAGE 14 ~23% Revenue CAGR
Fiscal 2023 Guidance
Expected Segment** Contributions FY23 Starts • UTI 14,500 - 15,500 • Concorde 7,500 - 8,000 Revenue • UTI Low single digit YoY growth • Concorde $170M - $175M FY2023 Guidance 1 FY23 Adj EBITDA excludes stock-based compensation; prior years updated for comparison. See bridge on subsequent page for more details on YoY performance.. 2 FY23 Adj NI impacted by a significant effective tax rate increase (5% to 25%) due to the valuation allowance reversal, increased interest expense, and higher D&A.. 3 FY23 Adj Free Cash Flow reflects $36M-$40M of capital expenditures before adjustments. FY23 capex includes residual investments for the Austin and Miramar campuses, UTI and Concorde planned program expansions, and a consistent level of annual maintenance capex. Company expects to adjust out ~50% of the projected 2023 capex as one-time growth investments. PAGE 16 11,283 13,028 13,374 22k-23.5k 2020 2021 2022 2023* New Student Starts $300.8 $335.1 $418.8 $595-$610 2020 2021 2022 2023* Revenue Growth $16.0 $34.2 $60.2 $58-$62 2020 2021 2022 2023* Adjusted EBITDA1 $2.5 $17.5 $35.5 $14-$18 2020 2021 2022 2023* Adjusted Net Income2 $0.1 $37.4 $34.9 $40-$45 2020 2021 2022 2023* Adjusted Free Cash Flow3 * FY 2023 includes 10 months of projected Concorde performance Note: For detailed reconciliations of Non-GAAP measures, see the Appendix ($ millions) **Beginning in 2023 we expect to report in two segments: UTI, which will include the current transportation, skilled trades, and energy offerings, and Concorde, which will be the acquired Concorde healthcare education business.
FY2022 - FY2023* Performance Bridges Note: Bridges are intended to provide indicative year- over-year impacts only; Charts are not presented at full scale in order to highlight the relative impacts of year-over-year performance drivers * Fiscal 2023 represents the midpoint of the Company’s guidance ranges and includes 10 months of projected Concorde performance For detailed reconciliations of Non-GAAP measures, see the AppendixPAGE 17 Base & MIAT (net) includes the revenue impact of FY22 new student starts shortfall, partially offset by growth in FY23, largely in 2nd half of the year driven primarily by the high school channel, and net benefit from MIAT growth and synergies. Growth Investments (net) represent investments in the admissions channels, to scale company infrastructure, and other growth drivers, along with inflationary impacts; partially offset by real estate optimization benefits and other cost efficiencies MIAT Program Expansions New Campuses Base & MIAT (net) Growth Investments (net) MIAT Program Expansions New Campuses Base & MIAT (net) MIAT Program Expansions New Campuses Base & MIAT (net) Base & MIAT (net) Adjusted EBITDA
APPENDIX
Talented and Deeply Experienced Management Team Driving Company’s Pivot to Growth EVP & Chief Financial Officer Troy Anderson joined 2019 Chief Executive Officer Jerome Grant joined 2017 EVP Campus Operations & Services Sherrell Smith joined 1986 SVP Admissions Eric Severson joined 2018 SVP Chief Information Officer Lori Smith joined 1993 SVP Chief of Strategy & Transformation Todd Hitchcock joined 2020 SVP Chief Legal Officer Chris Kevane joined 2020 SVP Chief Human Resources Officer Sonia Mason joined 2020 SVP Chief Commercial Officer Bart Fesperman joined 2020 PAGE 19 SVP Healthcare Division President Jami Frazier joined 2022
Highly Qualified Board of Directors Jerome Grant Chief Executive Officer, Universal Technical Institute Chris Shackelton Managing Partner, Coliseum Capital Management David Blaszkiewicz President and Chief Executive Officer, Invest Detroit Kenneth R. Trammell Former Chief Financial Officer, Tenneco Inc. Linda J. Srere Former President, Young and Rubicam Advertising William J. Lennox, Jr. Former Superintendent of the United States Military Academy at West Point George Brochick Executive Vice President of Strategic Development, Penske Automotive Group Hon. Loretta L. Sanchez Former Democratic Congresswoman from California PAGE 20 Shannon Okinaka Executive Vice President Chief Financial Officer, Hawaiian Airlines Robert DeVincenzi Non-Executive Chairman Principal, Lupine Ventures; Former President and CEO of Redflex Holdings Ltd.
UTI Overview 1 As of September 30, 2022; Beginning in fiscal 2023 Company reports Adjusted EBITDA excluding stock-based compensation; fiscal 2022 has been adjusted accordingly. 2 Based on most recent reporting periods for UTI. CDR and 90/10 ratios represent approximate averages across UTI’s 4 OPEIDs, and individual programs whose individual results may vary significantly from the mean. 90/10 Title IV metric ranges from 64% to 70%, with a Cohort Default Rate range of 1.9% to 3.7%. 3 Represents overall aggregated average of all campuses and programs as reported in most recent regulatory reporting period results, inclusive of MIAT 4 Based on all graduates from UTI owned & operated campuses excluding MIAT, including those who completed MSAT programs, from 10/1/20-9/30/21, & 10/1/19-9/30/120, respectively, and excludes graduates not available for employment because of continuing education, military service, health, incarceration, death or international student status. See 10-K filing for additional information 5 Pending regulatory approval Leading provider of transportation and energy and skilled trades technical training, driven to change the world one life at a time by helping people achieve their dreams. PAGE 21 SUMMARY STATISTICS KEY METRICS2: • Composite Score: 2.3 (of 3.0) • Cohort Default Rate: ~3% • 90/10 Ratio: ~69% • Graduation Rate3: ~60% • Employment Rate4: ~82% FOUNDED: 1965 REVENUE1: $419M Adj. EBITDA1: $60M LOCATIONS: 16 Campuses in 9 States ENROLLMENT1: ~13,000 students BUSINESS OVERVIEW 15+ programs for in-demand fields such as transportation and other skilled trades Program Mix (2022 Revenue): Auto/Diesel 74%, Other Transportation 13%, Welding 6%, Other Skilled Trades 3%, Industry Training 4% Expanding 15 programs5 to UTI and MIAT campuses over FY23 and FY24 including Aviation, Robotics, HVACR, Welding and Auto/Diesel. Mission Statement To serve our students, partners, and communities by providing quality education and support services for in-demand careers.
Concorde Career Colleges Overview 1 Unaudited results as per Concorde Career Colleges, Inc. TTM reported as of September 30, 2022. 2 Based on most recent reporting periods for Concorde and represent approximate averages across Concorde’s 12 OPEIDs and individual programs whose individual results may vary significantly from the mean. 90/10 Title IV metric ranges from 63% to 87%, with a Cohort Default Rate range of 2.9% to 6.7%.. Composite Score for calendar 2021. 3 Aggregated rates for the 14 campuses accredited by ACCSC, based on their 2022 reporting, and excludes campuses not accredited by ACCSC. Each of the ACCSC program outcomes is evaluated individually. 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 PAGE 22 SUMMARY STATISTICS KEY METRICS2: • Composite Score: 2.0 (of 3.0) • Cohort Default Rate: ~4% • 90/10 Ratio: ~75% • Graduation Rate3: ~72% • Employment Rate3: ~83% FOUNDED: 1968 REVENUE1: ~$200M Adj. EBITDA1: ~$17M LOCATIONS: 17 Campuses in 8 States ENROLLMENT1: ~8,000 students BUSINESS OVERVIEW 20+ programs for in-demand healthcare professional degrees and certifications Program Mix (2022 Revenue): Dental 27%, Allied Health 26%, Patient Care 22%, Nursing 18%, Diagnostic 7% Expansion of dental hygiene and nursing into new campuses currently in process 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.
Transportation Industry Partnerships that Deliver Value UTI’s relationships with more than 35 leading brands and other industry and employer partners provide a unique value proposition and competitive differentiation for the school and its students Partners • Efficient hiring source • Known and trusted educator in UTI • Lowers costs • Techs who are ready to work Students • Opportunity for better jobs and higher starting wages • Tuition support for certain programs • Certifications and credentials UTI • Current technology and tools • Increased marketing impact • Lower expenses and capex • Value proposition recognized by students • Enhances alignment to industry Established Relationships New and Expanded Relationships 5,700+ Graduates since 1995 27,800+ Graduates since 2000 22,500+ Graduates since 1987 3,750+ Graduates since 2006 870+ Graduates since 2013 Lisle, IL Ridgeville, SCFort Bragg Army Base FastTrack: Avondale, AZ Orlando, FL Long Beach, CA Houston, TX Exton, PA +2 to be announced Select MIAT Airline Partnerships PAGE 23 2,400+ Graduates since 2018
Optimizing Real Estate Footprint for Efficiency (1) UTI-owned facilities. All other facilities are leased under operatingleases. (2) On December 29, 2020 UTI announced plans to consolidate the Phoenix MMI campus into the Avondale campus and to optimize the Orlando campus. Phoenix MMI campus consolidation was completed in Q3 FY2022, downsizing by ~164,000 sq ft. Orlando campus was downsized by ~75,000 sq ft and consolidated to one site in Q2 FY2022. (3) In September 2022, Company executed an amendment for its home office which reduced the leased space by approximately 8,000 square feet and extended the lease term to February 2027. * Metro Campus ** Blended Learning Campus Transformation across UTI’s Real Estate portfolio yielding significant cost and utilization improvements Campus In Process Complete In Process Complete In Process Complete Total Sq. Ft BLOOMFIELD, NJ* 102,000 LONG BEACH, CA* 137,000 DALLAS, TX* 1 95,000 RANCHO CUCAMONGA, CA 148,000 MOORESVILLE, NC 146,000 LISLE, IL¹ 187,000 SACRAMENTO, CA 117,000 Optimize real estate AVONDALE, AZ 1,2 283,000 • Lease expirations HOUSTON, TX 1 172,000 • Own versus Rent EXTON, PA 129,000 • Sublease ORLANDO, FL 2 188,000 • Other reductions CANTON, MI 125,000 HOUSTON, TX 54,000 AUSTIN, TX** 107,000 MIRAMAR, FL** 103,000 HOME OFFICE (AZ) ³ 21,000 Keys to Real Estate Transformation Enhance utilization of existing space with growth and new programs Corporate Headquarters and Operational Support Rationalize Welding Other Programs MIAT acquisition completed November 2021 MIAT acquisition completed November 2021 PAGE 24
Overview of UTI Preferred Shares • June 2016: Sold Coliseum Holdings 700,000* shares of Series A Convertible Preferred Stock for $70 million • Shares are 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 Sep. 30 and Mar. 31 • 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 caps Conversion PAGE 25 *As of September 30, 2022, preferred shares outstanding totaled 676,885 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
Overview of UTI Leverage and Debt Obligations PAGE 26 Note: In Q1 2023, UTI entered into a new revolving line of credit agreement with Fifth Third Bank which provides $100M of total capacity. On 11/28/22, $90M was drawn down from this revolver in advance of the Concorde acquisition. Proforma leverage ratios are computed using the FY23 Adjusted EBITDA guidance midpoint. *Rates: - Avondale loan rate is 50% fixed at 3.50% + 50% floating @ LIBOR+2% - Lisle loan rate is 50% fixed at 4.69% + 50% floating @ SOFR+2% - Revolver tranche rate is SOFR + 1.75%-2.25% based on UTI total leverage ** Valley National Bank loan is interest only in year 1 and begins amortizing in year 2 As of 9/30/2022 Debt Term Loan: Fifth Third Bank Collateral: Avondale Campus Original Note Amount $31.2M Inception Date 5/12/2021 Rate* Fixed/Float Maturity 7 years Current Note Balance $30.1M Term Loan: Valley National Bank Collateral: Lisle Campus Original Note Amount $38.0M Inception Date 4/14/2022 Rate* Fixed/Float Maturity 7 years Current Note Balance** $38.0M Gross Leverage Ratio 1.13x Net Leverage Ratio -0.45x Proforma 9/30/2023 Debt Term Loans Original Note Amounts $69.2M LTM Mandatory Amortization on Loans $1.1M Projected Note Balances $67.0M Revolver: Fifth Third Bank Total Capacity $100.0M Inception Date 11/21/2022 Rate* Fixed/Float Maturity 3 years Projected Balance $90.0M Gross Leverage Ratio 2.62x Net Leverage Ratio -0.73x
Non-GAAP Information
Use of Non-GAAP Financial Information This presentation contains non-GAAP (Generally Accepted Accounting Principles) financial measures, which are intended to supplement, but not substitute 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, amortization. Management defines adjusted EBITDA as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization and adjusted for items not considered as part of the company’s normal recurring operations. 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 acquisition-related costs for both announced and potential acquisitions, integration costs for completed acquisitions, program expansion costs, new campus build-out and start-up costs, stock-based compensation, costs related to the purchase of our Lisle, Illinois and Avondale, Arizona campuses, lease accounting adjustments resulting from the purchase of our Lisle, Illinois campus and our campus consolidation efforts, intangible asset impairment expense, 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 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. Since the items excluded from these measures are significant components in understanding and assessing 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 the company'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 calculate non-GAAP financial measures differently than UTI does, limiting their usefulness as a comparative measure across 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 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 adjusted EBITDA, adjusted net 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. PAGE 28
Adjusted EBITDA Reconciliation ($ in thousands) Guidance Midpoint 12 Mos. 9/30/23 Actual 12 Mos. 9/30/22 Actual 12Mos. 9/30/21 Net income (loss) ~$9,000 $25,848 $14,581 Interest (income) expense, net ~4,500 1,495 282 Income tax (benefit) expense ~3,000 (5,407) 602 Depreciation and amortization ~27,900 16,883 14,028 EBITDA ~$44,400 $38,819 $29,493 Acquisition-related costs(1) ~2,300 4,239 2,522 Concorde integration and program expansion costs(2) ~5,050 − − MIAT integration and program expansion costs(3) ~2,000 1,691 − New campus start-upcosts(4) − 9,177 502 Facility lease accounting adjustments(5) − (64) − Intangible asset impairment(6) − 2,000 − Stock-based compensation(7) ~$6,250 4,337 1,733 Adjusted EBITDA, non-GAAP ~$60,000 $60,199 $34,250 FY2023 Guidance Range $58,000-$62,000 (1) Costs related to both announced and potential acquisition targets. (2) Estimated one-time expenses for the integration of the Concorde acquisition and Concorde program expansions. (3) Estimated one-time expenses for the integration of the MIAT acquisition, and expansion of MIAT programs into other UTI campuses. (4) Expenses for implementation of the new campuses in Austin, TX, which launched in Q3’22 and Miramar, FL which launched in Q4’22. (5) Lease accounting adjustments from our campus optimization efforts. These are primarily non-cash except for a lease termination payment related to our Orlando campus. (6) 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 $2.0 million during the year ended September 30, 2022. (7) Beginning in FY2023 UTI will include stock-based compensation in its non-GAAP add-backs to EBITDA; prior years have been restated above for comparison Notes: The acquisition of MIAT closed on November 1, 2021 and Concorde closed on December 1, 2022, impacting comparability across periods; Expected adjustments outlined for FY 2023 are illustrative only and may differ from what is realized, either in the amounts &/or the categories shown; Adjusted EBITDA margin noted on prior slides is actual or estimated Adjusted EBITDA divided by actual or estimated revenue.PAGE 29
Adjusted Net Income (Loss) Reconciliation ($ in thousands) Guidance Midpoint 9/30/23 Actual 12 Mos. 9/30/22 Actual 12 Mos. 9/30/21 Net income (loss) ~$9,000 $25, 848 $14,581 Income tax (benefit) expense(1) ~3,000 (5,407) 602 Income (Loss) before income taxes ~12,000 20,441 15,183 Acquisition-related costs(2) ~2,300 4,239 2,522 Concorde integration and program expansion costs(3) ~5,050 − − MIAT integration and program expansion costs(4) ~2,000 1,691 − New campus start-upcosts(5) − 9,177 502 Facility lease accounting adjustments(6) − (64) − Intangible asset impairment(7) − 2,000 − Adjusted (loss) income before income taxes ~21,350 37,484 18,207 Income tax effect: benefit (expense)(8) ~(5,350) (1,983) (722) Adjusted Net Income (Loss) from operations,non-GAAP ~$16,000 $35,501 $17,485 GAAP effective income tax rate(1) 25.0% 5.3% 4.0% FY2023 Guidance Range $14,000-$18,000 (1) FY23 rate is projected. The GAAP effective tax rate for FY2022 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. (2) Estimated costs related to both announced and potential acquisitions. (3) Estimated one-time expenses for the integration of the Concorde acquisition, and Concorde program expansions. (4) Estimated one-time expenses for the integration of the MIAT acquisition, and expansion of MIAT programs into other UTI campuses. (5) Expenses for implementation of the new campuses in Austin, TX, which launched in Q3’22 and Miramar, FL which launched in Q4’22. (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. (7) 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 $2.0 million during the year ended September 30, 2022. (8) The calculation of income tax benefit (expense) on adjusted pre-tax income (loss) is based upon the GAAP effective tax rate applicable for the period. Note: Expected adjustments outlined for FY 2023 are illustrative only and may differ from what is realized, either in the amounts and/or the categories shownPAGE 30
Adjusted Free Cash Flow Reconciliation ($ in thousands) PAGE 31 Guidance Midpoint 12 Mos. 9/30/23 Actual 12 Mos. 9/30/22 Actual 12 Mos. 9/30/21 Cash flow provided by (used in) operating activities, as reported ~$51,750 $46,031 $55,185 Purchase of property and equipment ~(38,000) (79,457) (61,586) Free Cash Flow, non-GAAP ~13,750 (33,426) (6,401) Acquisition-related costs paid(1) ~2,300 3,923 2,026 Concorde integration and program expansion costs(2) ~5,050 − − Cash outflow for Concorde-related program expansion purchase of PP&E(2) ~2,600 − − Cash outflow for MIAT integration and program expansion costs(3) ~2,000 1,436 − Cash outflow for MIAT-related program expansion purchase of PP&E(3) ~12,000 − − Cash outflow for Austin, TX and Miramar, FL start-up costs(4) − 5,136 1,806 Cash outflow for Austin, TX and Miramar, FL purchase of PP&E(4) ~4,800 28,579 1,489 Purchase of Avondale, Arizona campus(5) − − 45,240 Purchase of Lisle, IL campus(5) − 28,680 − Income tax refund related to CARES tax benefit(6) − − (7,030) Severance payments due to CEOtransition(7) − 32 280 Facility lease accounting adjustments(8) − 575 − Adjusted Free Cash Flow, non-GAAP ~$42,500 $34,935 $37,410 FY2023 Guidance Range $40,000-$45,000 (1) Costs related to both announced and potential acquisition targets. (2) Estimated one-time expenses for the integration of the Concorde acquisition, and Concorde program expansions. (3) Anticipated costs for integration of MIAT and expansion of MIAT programs into UTI campuses and select UTI programs into MIAT campuses. (4) Expenses for implementation of the new campuses in Austin, TX, which launched in Q3’22, and Miramar, FL which launched in Q4’22. (5) In December 2020, we purchased our Avondale, Arizona campus, and in February 2022 we purchased our Lisle, Illinois campus. (6) Income tax refunds received as a result of recording an income tax benefit from the CARES Act in 2020. (7) Adjustments reflect the cash paid in accordance with previous CEO Kimberly J. McWaters' Retirement Agreement and Release of Claims, dated October 31, 2019. (8) 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 2023 are illustrative only and may differ from what is realized, either in the amounts &/or the categories shown
