PHOENIX, May 9, 2023
/PRNewswire/ -- Universal Technical
Institute, Inc. (NYSE: UTI), a leading workforce
solutions provider of transportation, skilled trades and healthcare
education programs, reported financial results for the fiscal 2023
second quarter ended March 31, 2023. Universal Technical Institute, Inc. operates in two
reportable segments, Universal Technical
Institute (UTI) and Concorde Career Colleges (Concorde), and
together with its segments and subsidiaries is referred to as the
"Company", "we," "us" or "our."
- Revenue was $163.8 million with
UTI increasing 5.4% versus the prior year period and Concorde
contributing $56.3 million
- Net income of $3.5 million,
adjusted net income* of $6.3 million,
and adjusted EBITDA* of $19.2
million.
- Total new student starts of 4,626 with UTI increasing 4.4%
versus the prior year period and 2,252 contributed by
Concorde.
- The Company reiterates its full year, fiscal 2023 guidance
across all key metrics.
- The Company's current year results include Concorde for the
four months ended March 31, 2023,
reflecting the December 1, 2022
closing date of the acquisition. Total company year-over-year
comparisons are shown on an "as-reported basis," consistent with
the Company's previously provided fiscal 2023 guidance.
"Our second quarter performance reflects our continued execution
on reaching the fullest potential of our growth and diversification
strategy," said Jerome Grant, CEO of
Universal Technical Institute, Inc. "We
delivered top- and bottom-line results that exceeded our
expectations, aided by the first full quarter of financial
contribution from Concorde. Further, we strengthened our divisional
operating model and overall leadership capabilities by appointing
higher education veteran Tracy
Lorenz as President of UTI, and appointing Trinity Health's
President and CEO, Michael
Slubowski, to our board of directors. I am proud of the
progress we have made with building out the infrastructure for our
combined company.
"As we enter the second half of fiscal 2023, we remain focused
on our key growth drivers for the UTI and Concorde segments. Within
UTI, we will continue working to scale enrollment growth at our
newest campuses in Austin, Texas
and Miramar, Florida. We also
remain underway with launching 14 new programs across nine UTI
campuses, with the first new program launches currently on track
for July. For Concorde, we will work to maintain the smooth
progress we have made with integration, initially focusing on
meeting public company requirements while facilitating a seamless
student and staff experience, and also continuing efforts to launch
three new dental hygiene programs in fiscal 2024. We look forward
to further leveraging the benefits of our diversified business
model as we support strong student outcomes across a growing,
in-demand range of fields."
Financial Results for the Three-Month Period Ended
March 31, 2023 Compared to 2022
- Revenues increased 60.5% to $163.8
million compared to $102.1
million primarily due to the $56.3
million addition for the Concorde acquisition.
- Operating expenses rose by 59.9% to $157.9 million, compared to $98.7 million. The acquisition of Concorde
contributed $50.1 million of the
increase. The remainder was driven primarily 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 $5.9 million
compared to $3.4 million.
- Net income was $3.5 million
compared to $7.4 million. Adjusted
net income* was $6.3 million compared
to $6.4 million.
- Basic and diluted earnings per share (EPS) were $0.04 compared to $0.11.
- Adjusted EBITDA* was $19.2
million compared to $12.6
million.
UTI
- UTI had revenues of $107.6
million, a 5.4% increase from the prior year quarter
revenues of $102.1 million driven
primarily by the new campuses and programs launched in the prior
year, and overall higher revenue per student, partially offset by
lower average undergraduate full-time active students.
- Operating expenses for UTI were $94.5
million, compared to $86.5
million. The increase was primarily due to higher
compensation related and other expenses incurred during the current
year due to the new campuses and welding programs launched in the
prior year, along with costs for incremental advertising and
admissions resources to support growth objectives for the
segment.
- Adjusted EBITDA* was $20.7
million compared to $21.5
million.
- New student starts increased from prior year by 4.4%, while
average undergraduate full-time active students decreased
3.0%.
Concorde
- Revenues of $56.3 million.
- Operating expenses were $50.1
million.
- Adjusted EBITDA* was $8.4
million.
- New student starts of 2,252 and 7,808 average undergraduate
full-time active students.
*See "Use of Non-GAAP Financial Information" below.
"With our financial and operational execution during the
quarter, we are entering the second half of fiscal 2023 on solid
footing," said Troy Anderson, CFO of
Universal Technical Institute. "Our
second quarter revenue and profitability performance reflect the
benefits of Concorde's contribution and the UTI fiscal 2022 new
campus and program launches. We continue to reiterate our fiscal
2023 guidance, however, the anticipated phasing of our revenue and
profitability throughout the year has shifted favorably relative to
our initial expectations as a result of our strong first half
results. Additionally, while we expect overall new student starts
will be within our previous guidance range, we now see UTI starts
at the lower end of their previously expected range, or
approximately 8% year over year growth, and Concorde starts at the
higher of their previously expected range. We continue to focus on
execution across both segments of our business, along with further
development of their respective strategic roadmaps."
Balance Sheet and Liquidity
At March 31, 2023, the Company's total available cash
liquidity was $120.6 million, with an
additional $8.2 million available
from its revolving credit facility. In March
2023, the Company purchased the three primary buildings and
associated land at its Orlando,
Florida campus for $26.2
million. The purchase was completed using proceeds from its
revolving credit facility that were drawn down in the previous
quarter. Excluding the Orlando
campus purchase, capital expenditures for the quarter and year
total $4.2 million and $11.0 million, respectively, with the primary
drivers being the completion of the UTI Austin and Miramar campus buildouts, as well as UTI and
Concorde program expansions.
Financial Results for the Six-Month Period Ended
March 31, 2023 Compared to 2022
- Revenues increased 37.0% to $283.8
million compared to $207.2
million primarily due to the $70.7
million addition for the Concorde acquisition.
- Operating expenses rose by 43.8% to $273.4 million, compared to $190.2 million. The acquisition of Concorde
contributed $65.2 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 $10.4
million compared to $17.0
million.
- Net income was $6.1 million
compared to $22.2 million. Adjusted
net income* was $11.7 million
compared to $21.8 million.
- Basic and diluted earnings per share (EPS) were
$0.07 compared to $0.36.
- Adjusted EBITDA* was $33.6
million compared to $33.2
million.
UTI
- UTI had revenues of $213.1
million, a 2.9% increase from the prior year quarter
revenues of $207.2 million driven
primarily by the new campuses and programs launched in the prior
year and overall higher revenue per student, partially offset by
lower average undergraduate full-time active students.
- Operating expenses for UTI were $183.5
million, compared to $168.4
million. The increase was primarily due to higher
compensation related and other expenses incurred during the current
year due to the new campuses and welding programs launched in the
prior year, along with costs for incremental advertising and
admissions resources to support growth objectives for the
segment.
- Adjusted EBITDA* was $44.0
million compared to $50.2
million.
- New student starts increased 2.4% compared to the prior year,
while average undergraduate full-time active students decreased
2.3%.
Concorde (for the four-month period beginning December 2022 and ended March 2023)
- Revenues of $70.7 million. Of
note, due to seasonality and phasing of clinical programs, December
is one of the lowest revenue months of the year.
- Operating expenses were $65.2
million.
- Adjusted EBITDA* was $8.3
million.
- New student starts of 2,573 and 7,773 average undergraduate
full-time active students.
*See "Use of Non-GAAP Financial Information" below.
Student
Metrics
|
|
|
Three Months Ended
March 31, 2023
|
|
|
Three Months Ended
March 31, 2022
|
|
UTI
|
|
Concorde
|
|
Total
|
|
|
UTI
|
|
Concorde
|
|
Total
|
Total new student
starts
|
2,374
|
|
2,252
|
|
4,626
|
|
|
2,275
|
|
—
|
|
2,275
|
Average undergraduate
full-time active students
|
12,516
|
|
7,808
|
|
20,324
|
|
|
12,903
|
|
—
|
|
12,903
|
End of period
undergraduate full-time active students
|
12,104
|
|
7,708
|
|
19,812
|
|
|
12,466
|
|
—
|
|
12,466
|
|
Six Months Ended
March 31, 2023
|
|
|
Six Months Ended
March 31, 2022
|
|
UTI
|
|
Concorde
|
|
Total
|
|
|
UTI
|
|
Concorde
|
|
Total
|
Total new student
starts
|
4,348
|
|
2,573
|
|
6,921
|
|
|
4,247
|
|
—
|
|
4,247
|
Average undergraduate
full-time active students
|
13,014
|
|
7,773
|
|
20,787
|
|
|
13,316
|
|
—
|
|
13,316
|
End of period
undergraduate full-time active students
|
12,104
|
|
7,708
|
|
19,812
|
|
|
12,466
|
|
—
|
|
12,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 second quarter ended March 31,
2023, on Tuesday, May 9, 2023, at 4:30
p.m. ET.
To participate in the live call, investors are invited to dial
(844) 881-0138 (domestic) or (412) 317-6790 (international). A live
webcast of the call will be available via the Universal Technical Institute, Inc. investor
relations website at https://investor.uti.edu. Please go to the
website at least 10 minutes early to register, download and install
any necessary audio software. The conference call webcast will be
archived for fourteen days at https://investor.uti.edu.
Alternatively, the telephone replay can be accessed through
May 22, 2023, by dialing (877)
344-7529 (domestic) or (412) 317-0088 (international) and entering
passcode 3024812.
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
stock-based compensation expense.
Adjusted Free Cash Flow
The Company defines adjusted free cash flow as net cash provided
by (used in) operating activities less capital expenditures,
adjusted for items not considered normal recurring operations.
Adjusted Net Income (Loss)
The Company defines adjusted net income (loss) as net income
(loss), adjusted for items that affect trends in underlying
performance from year to year and are not considered normal
recurring operations, including the income tax effect on the
adjustments utilizing the effective tax
rate.
We disclose any campus adjustments as direct costs (net of any
corporate allocations). Management utilizes adjusted figures as
performance measures internally for operating decisions, strategic
planning, annual budgeting and forecasting. For the periods
presented, this includes acquisition-related costs for both
announced and potential acquisitions, integration costs for
completed acquisitions, costs related to the purchase of our
campuses, 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 our performance,
these measures should be examined in connection with net income
(loss) and net cash provided by (used in) operating activities,
determined in accordance with GAAP, as presented in the financial
statements and notes thereto included in the annual and quarterly
filings with the Securities and Exchange Commission ("SEC").
Because the items excluded from these non-GAAP measures are
significant components in understanding and assessing our financial
performance under GAAP, these measures should not be considered to
be an alternative to net income (loss) or net cash provided by
(used in) operating activities as a measure of our operating
performance or liquidity. Exclusion of items in the non-GAAP
presentation should not be construed as an inference that these
items are unusual, infrequent or non-recurring. Other companies,
including other companies in the education industry, may define and
calculate non-GAAP financial measures differently than we do,
limiting their usefulness as a comparative measure across similarly
titled performance measures presented by other companies. A
reconciliation of the historical non-GAAP financial measures to the
most directly comparable GAAP measures is provided below and
investors are encouraged to review the reconciliations.
Forward Looking Statements
All statements contained in this press release and the related
conference call, other than statements of historical fact, are
"forward-looking" statements within the meaning of the safe harbor
from civil liability provided for such statements by the Private
Securities Litigation Reform Act of 1995 (set forth in Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended). These forward-looking
statements which address our expected future business and financial
performance, may contain words such as "goal," "target," "future,"
"estimate," "expect," "anticipate," "intend," "plan," "believe,"
"seek," "project," "may," "should," "will," the negative form of
these expressions or similar expressions. Examples of
forward-looking statements include, among others, statements
regarding (1) the Company's expectation that it will meet its
fiscal year 2023 guidance for new student start growth (decline),
revenue growth, Adjusted net income, Adjusted EBITDA and Adjusted
Free Cash Flow; (2) expectation that it will continue to expand its
value proposition and build a business that can grow in low-to-mid
single digits with potential upside, regardless of the economic
environment; (3) the Company's expectation that it will succeed in
new campus launches next year; and (4) the Company's expectation of
the successful integration of the Concorde acquisition.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
the Company's current beliefs, expectations and assumptions
regarding the future of its business, future plans and strategies,
projections, anticipated events and trends, the economy and other
future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
affect our actual results include, among other things, impacts
related to the COVID-19 pandemic, changes to federal and state
educational funding, changes to regulations or agency
interpretation of such regulations affecting the for-profit
education industry, possible failure or inability to obtain
regulatory consents and certifications for new or modified campuses
or instruction, potential increased competition, changes in demand
for the programs we offer, increased investment in management and
capital resources, failure to comply with the restrictive covenants
and our ability to pay the amounts when due under the Credit
Agreement with Fifth Third Bank, National Association, the
effectiveness of our student recruiting, advertising and
promotional efforts, changes to interest rates and unemployment,
general economic and political conditions, the adoption of new
accounting standards, and other risks that are described from time
to time in our public filings. Further information on these and
other potential factors that could affect the financial results or
condition may be found in the company's filings with the SEC.
Any forward-looking statements made by us in this press release and
the related conference call are based only on information currently
available to us and speak only as of the date on which it is
made. We expressly disclaim any obligation to publicly update
any forward-looking statements, whether written or oral, that may
be made from time to time, whether as a result of new information,
future developments, changes in expectations, any changes in
events, conditions or circumstances, or otherwise.
Social Media Disclosure
Universal Technical Institute,
Inc uses its websites (https://www.uti.edu/,
https://concorde.edu, and https://investor.uti.edu/) and LinkedIn
pages
(https://www.linkedin.com/school/universal-technical-institute/ and
https://www.linkedin.com/school/concorde-career-colleges/) as
channels of distribution of information about its programs, its
planned financial and other announcements, its attendance at
upcoming investor and industry conferences, and other matters. Such
information may be deemed material information, and the Company may
use these channels to comply with its disclosure obligations under
Regulation FD. Therefore, investors should monitor the company's
website and its social media accounts in addition to following the
company's press releases, SEC filings, public conference calls, and
webcasts.
About Universal Technical
Institute, Inc.
Universal Technical Institute, Inc.
(NYSE: UTI) was founded in 1965 and is a leading workforce
solutions provider of transportation, skilled trades and healthcare
education programs, whose mission is to serve students, partners,
and communities by providing quality education and support services
for in-demand careers across a number of highly-skilled fields. The
Company is comprised of two divisions: Universal Technical Institute ("UTI") and Concorde
Career Colleges ("Concorde"). UTI operates 16 campuses located in 9
states and offers a wide range of transportation and skilled trades
technical training programs under brands such as UTI, MIAT College
of Technology, Motorcycle Mechanics Institute, Marine Mechanics
Institute and NASCAR Technical Institute. Concorde operates across
17 campuses in 8 states, offering programs in the Allied Health,
Dental, Nursing, Patient Care and Diagnostic fields. For more
information, visit www.uti.edu or www.concorde.edu, or visit us on
LinkedIn at @UniversalTechnicalInstitute and @Concorde Career
Colleges or on Twitter @news_UTI or @ConcordeCareer.
Company Contact:
Troy R.
Anderson
Chief Financial Officer
Universal Technical Institute, Inc.
(623) 445-9365
Media Contact:
Mark
Brenner
Vice President, Corporate Affairs & Communications
Universal Technical Institute, Inc.
(623) 445-0872
Investor Relations Contact:
Matt Glover or Jackie
Keshner
Gateway Group, Inc.
(949) 574-3860
UTI@gatewayir.com
(Tables Follow)
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except
per share amounts)
|
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
Six Months Ended
March 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues
|
$
163,820
|
|
$
102,086
|
|
$
283,824
|
|
$
207,161
|
Operating
expenses:
|
|
|
|
|
|
|
|
Educational services
and facilities
|
86,930
|
|
49,209
|
|
148,338
|
|
97,110
|
Selling, general and
administrative
|
70,941
|
|
49,500
|
|
125,089
|
|
93,096
|
Total
operating expenses
|
157,871
|
|
98,709
|
|
273,427
|
|
190,206
|
Income from
operations
|
5,949
|
|
3,377
|
|
10,397
|
|
16,955
|
Other (expense)
income:
|
|
|
|
|
|
|
|
Interest
income
|
1,805
|
|
8
|
|
2,628
|
|
20
|
Interest
expense
|
(2,637)
|
|
(466)
|
|
(4,060)
|
|
(699)
|
Other income,
net
|
126
|
|
(163)
|
|
451
|
|
(45)
|
Total other
expense, net
|
(706)
|
|
(621)
|
|
(981)
|
|
(724)
|
Income before income
taxes
|
5,243
|
|
2,756
|
|
9,416
|
|
16,231
|
Income tax (expense)
benefit
|
(1,763)
|
|
4,598
|
|
(3,288)
|
|
5,945
|
Net
income
|
3,480
|
|
7,354
|
|
$
6,128
|
|
$
22,176
|
Preferred stock
dividends
|
(1,251)
|
|
(1,294)
|
|
(2,528)
|
|
(2,617)
|
Income available for
distribution
|
2,229
|
|
6,060
|
|
$
3,600
|
|
$
19,559
|
Income allocated to
participating securities
|
(833)
|
|
(2,359)
|
|
$
(1,348)
|
|
$
(7,622)
|
Net income available
to common shareholders
|
$
1,396
|
|
$
3,701
|
|
$
2,252
|
|
$
11,937
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Net income per share -
basic
|
$
0.04
|
|
$
0.11
|
|
$
0.07
|
|
$
0.36
|
Net income per share -
diluted
|
$
0.04
|
|
$
0.11
|
|
$
0.07
|
|
$
0.36
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
Basic
|
33,999
|
|
32,992
|
|
33,901
|
|
32,920
|
Diluted
|
34,553
|
|
33,436
|
|
34,477
|
|
33,393
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands, except
par value and per share amounts)
|
(Unaudited)
|
|
|
March 31,
2023
|
|
September 30,
2022
|
Assets
|
|
Cash and cash
equivalents
|
$
120,579
|
|
$
66,452
|
Restricted
cash
|
4,013
|
|
3,544
|
Held-to-maturity
investments
|
—
|
|
28,918
|
Receivables,
net
|
25,435
|
|
16,450
|
Notes receivable,
current portion
|
5,954
|
|
5,641
|
Prepaid
expenses
|
9,883
|
|
6,139
|
Other current
assets
|
8,742
|
|
8,809
|
Total
current assets
|
174,606
|
|
135,953
|
Property and equipment,
net
|
262,544
|
|
214,292
|
Goodwill
|
28,459
|
|
16,859
|
Intangible assets,
net
|
19,322
|
|
14,215
|
Notes receivable, less
current portion
|
30,497
|
|
30,231
|
Right-of-use assets for
operating leases
|
182,958
|
|
132,038
|
Deferred tax asset,
net
|
5,345
|
|
3,365
|
Other assets
|
8,984
|
|
5,958
|
Total
assets
|
$
712,715
|
|
$
552,911
|
Liabilities and
Shareholders' Equity
|
|
|
|
Accounts payable and
accrued expenses
|
$
62,435
|
|
$
66,680
|
Deferred
revenue
|
64,814
|
|
54,223
|
Operating lease
liability, current portion
|
21,233
|
|
12,959
|
Long-term debt, current
portion
|
2,319
|
|
1,115
|
Other current
liabilities
|
3,741
|
|
2,745
|
Total
current liabilities
|
154,542
|
|
137,722
|
Operating lease
liability
|
171,704
|
|
129,302
|
Long-term
debt
|
160,825
|
|
66,423
|
Other
liabilities
|
4,777
|
|
4,067
|
Total
liabilities
|
491,848
|
|
337,514
|
Commitments and
contingencies
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common stock, $0.0001
par value, 100,000 shares authorized, 34,149 and 33,857 shares
issued
|
3
|
|
3
|
Preferred stock,
$0.0001 par value, 10,000 shares authorized; 676 shares of Series A
Convertible Preferred Stock issued and outstanding, liquidation
preference of $100 per share
|
—
|
|
—
|
Paid-in capital -
common
|
150,906
|
|
148,372
|
Paid-in capital -
preferred
|
66,481
|
|
66,481
|
Treasury stock, at
cost, 82 shares
|
(365)
|
|
(365)
|
Retained earnings
(deficit)
|
2,293
|
|
(1,307)
|
Accumulated other comprehensive income
|
1,549
|
|
2,213
|
Total
shareholders' equity
|
220,867
|
|
215,397
|
Total
liabilities and shareholders' equity
|
$
712,715
|
|
$
552,91
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
Six Months Ended
March 31,
|
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
6,128
|
|
$
22,176
|
Adjustments to
reconcile net income to net cash (used in) provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
11,994
|
|
7,563
|
Amortization of
right-of-use assets for operating leases
|
|
10,073
|
|
9,123
|
Bad debt
expense
|
|
2,071
|
|
1,355
|
Stock-based
compensation
|
|
3,282
|
|
2,240
|
Deferred income
taxes
|
|
2,479
|
|
(6,556)
|
Training equipment
credits earned, net
|
|
47
|
|
(809)
|
Unrealized (loss) gain
on interest rate swap
|
|
(664)
|
|
1,034
|
Other (gains) losses,
net
|
|
(196)
|
|
112
|
Changes in assets and
liabilities:
|
|
|
|
|
Receivables
|
|
(3,895)
|
|
3,777
|
Prepaid
expenses
|
|
(898)
|
|
(79)
|
Other
assets
|
|
2,709
|
|
(540)
|
Notes
receivable
|
|
(579)
|
|
(159)
|
Accounts payable and
accrued expenses
|
|
(16,446)
|
|
706
|
Deferred
revenue
|
|
(9,554)
|
|
(17,481)
|
Operating lease
liability
|
|
(10,745)
|
|
(8,566)
|
Other
liabilities
|
|
(121)
|
|
(3,496)
|
Net cash (used in)
provided by operating activities
|
|
(4,315)
|
|
10,400
|
Cash flows from
investing activities:
|
|
|
|
|
Cash paid for
acquisitions, net of cash acquired
|
|
(16,973)
|
|
(26,514)
|
Purchase of property
and equipment
|
|
(38,641)
|
|
(53,149)
|
Proceeds from
maturities of held-to-maturity securities
|
|
29,000
|
|
—
|
Return of capital
contribution from unconsolidated affiliate
|
|
—
|
|
188
|
Net cash used in
investing activities
|
|
(26,614)
|
|
(79,475)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
revolving credit facility
|
|
90,000
|
|
—
|
Debt issuance costs
related to the revolving credit facility
|
|
(484)
|
|
—
|
Payment of preferred
stock cash dividend
|
|
(2,528)
|
|
(2,617)
|
Payments on term loans
and finance leases
|
|
(715)
|
|
(678)
|
Payment of payroll
taxes on stock-based compensation through shares
withheld
|
|
(748)
|
|
(628)
|
Net cash provided by
(used in) financing activities
|
|
85,525
|
|
(3,923)
|
Change in cash, cash
equivalents and restricted cash
|
|
54,596
|
|
(72,998)
|
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
|
|
120,579
|
|
61,498
|
Restricted cash, end of
period
|
|
4,013
|
|
11,481
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
124,592
|
|
$
72,979
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
SELECTED
SUPPLEMENTAL FINANCIAL INFORMATION BY SEGMENT
|
(In
thousands)
|
(Unaudited)
|
|
Financial Summary by
Segment and Consolidated
|
|
|
|
Three Months Ended
March 31, 2023
|
|
|
Three Months Ended
March 31, 2022
|
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Revenue
|
|
$ 107,560
|
|
$ 56,260
|
|
$
—
|
|
$
163,820
|
|
|
$ 102,086
|
|
$
—
|
|
$
—
|
|
$
102,086
|
Total operating
expenses
|
|
94,458
|
|
50,071
|
|
13,342
|
|
157,871
|
|
|
86,512
|
|
—
|
|
12,197
|
|
98,709
|
Net income
|
|
12,135
|
|
6,237
|
|
(14,892)
|
|
3,480
|
|
|
15,132
|
|
—
|
|
(7,778)
|
|
7,354
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2023
|
|
|
Six Months Ended
March 31, 2022
|
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Revenue
|
|
$ 213,133
|
|
$ 70,691
|
|
$
—
|
|
$
283,824
|
|
|
$ 207,161
|
|
$
—
|
|
$
—
|
|
$
207,161
|
Total operating
expenses
|
|
183,516
|
|
65,228
|
|
24,683
|
|
273,427
|
|
|
168,420
|
|
—
|
|
21,786
|
|
190,206
|
Net income
|
|
27,960
|
|
5,503
|
|
(27,335)
|
|
6,128
|
|
|
38,091
|
|
—
|
|
(15,915)
|
|
22,176
|
Major Expense
Categories by Segment and Consolidated
|
|
|
Three Months Ended
March 31, 2023
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Salaries, benefits and
tax expense
|
$
46,065
|
|
$
26,503
|
|
$
5,164
|
|
$
77,732
|
Bonus
expense
|
3,991
|
|
480
|
|
984
|
|
5,455
|
Stock-based
compensation
|
644
|
|
—
|
|
1,469
|
|
2,113
|
Total compensation and
related costs
|
$
50,700
|
|
$
26,983
|
|
$
7,617
|
|
$
85,300
|
|
|
|
|
|
|
|
|
Advertising
expense
|
$
14,179
|
|
$
6,502
|
|
$
—
|
|
$
20,681
|
Occupancy expense, net
of subleases
|
8,071
|
|
5,946
|
|
158
|
|
14,175
|
Depreciation and
amortization
|
5,096
|
|
1,649
|
|
3
|
|
6,748
|
Professional and
contract services expense
|
2,918
|
|
175
|
|
3,051
|
|
6,144
|
|
|
|
Three Months Ended
March 31, 2022
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Salaries, benefits and
tax expense
|
$
40,549
|
|
$
—
|
|
$
4,412
|
|
$
44,961
|
Bonus
expense
|
3,246
|
|
—
|
|
1,126
|
|
4,372
|
Stock-based
compensation
|
205
|
|
—
|
|
1,404
|
|
1,609
|
Total compensation and
related costs
|
$
44,000
|
|
$
—
|
|
$
6,942
|
|
$
50,942
|
|
|
|
|
|
|
|
|
Advertising
expense
|
$
14,469
|
|
$
—
|
|
$
—
|
|
$
14,469
|
Occupancy expense, net
of subleases
|
9,674
|
|
—
|
|
173
|
|
9,847
|
Depreciation and
amortization
|
3,869
|
|
—
|
|
15
|
|
3,884
|
Professional and
contract services expense
|
1,947
|
|
—
|
|
3,918
|
|
5,865
|
UNIVERSAL TECHNICAL
INSTITUTE, INC. AND SUBSIDIARIES
|
SELECTED
SUPPLEMENTAL FINANCIAL INFORMATION BY SEGMENT
|
(In
thousands)
|
(Unaudited)
|
|
Major Expense
Categories by Segment and Consolidated
|
|
|
Six Months Ended
March 31, 2023
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Salaries, benefits and
tax expense
|
$
88,321
|
|
$
34,979
|
|
$
10,265
|
|
$
133,565
|
Bonus
expense
|
7,534
|
|
668
|
|
2,118
|
|
10,320
|
Stock-based
compensation
|
896
|
|
—
|
|
2,386
|
|
3,282
|
Total compensation and
related costs
|
$
96,751
|
|
$
35,647
|
|
$
14,769
|
|
$
147,167
|
|
|
|
|
|
|
|
|
Advertising
expense
|
$
27,528
|
|
$
7,782
|
|
$
—
|
|
$
35,310
|
Occupancy expense, net
of subleases
|
16,097
|
|
7,828
|
|
283
|
|
24,208
|
Depreciation and
amortization
|
9,871
|
|
2,106
|
|
19
|
|
11,996
|
Professional and
contract services expense
|
5,983
|
|
272
|
|
5,226
|
|
11,481
|
|
|
|
Six Months Ended
March 31, 2022
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Salaries, benefits and
tax expense
|
$
78,468
|
|
$
—
|
|
$
9,301
|
|
$
87,769
|
Bonus
expense
|
6,753
|
|
—
|
|
2,112
|
|
8,865
|
Stock-based
compensation
|
374
|
|
—
|
|
1,941
|
|
2,315
|
Total compensation and
related costs
|
$
85,595
|
|
$
—
|
|
$
13,354
|
|
$
98,949
|
|
|
|
|
|
|
|
|
Advertising
expense
|
$
26,428
|
|
$
—
|
|
$
—
|
|
$
26,428
|
Occupancy expense, net
of subleases
|
18,908
|
|
—
|
|
338
|
|
19,246
|
Depreciation and
amortization
|
7,532
|
|
—
|
|
31
|
|
7,563
|
Professional and
contract services expense
|
3,931
|
|
—
|
|
6,000
|
|
9,931
|
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
March 31, 2023
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Net income
(loss)
|
$
12,135
|
|
$
6,237
|
|
$
(14,892)
|
|
$
3,480
|
Interest
income
|
(4)
|
|
(128)
|
|
(1,673)
|
|
(1,805)
|
Interest
expense
|
979
|
|
79
|
|
1,579
|
|
2,637
|
Income tax
expense
|
—
|
|
—
|
|
1,763
|
|
1,763
|
Depreciation and
amortization
|
5,094
|
|
1,649
|
|
3
|
|
6,746
|
EBITDA
|
18,204
|
|
7,837
|
|
(13,220)
|
|
12,821
|
Acquisition related
costs
|
—
|
|
—
|
|
1,322
|
|
1,322
|
Integration related
costs for acquisitions
|
97
|
|
374
|
|
543
|
|
1,014
|
Stock-based
compensation expense
|
644
|
|
—
|
|
1,469
|
|
2,113
|
Start-up costs for new
campuses and program expansion
|
1,751
|
|
170
|
|
—
|
|
1,921
|
Adjusted EBITDA,
non-GAAP
|
$
20,696
|
|
$
8,381
|
|
$
(9,886)
|
|
$
19,191
|
|
|
|
Three Months Ended
March 31, 2022
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Net income
(loss)
|
$
15,132
|
|
$
—
|
|
$
(7,778)
|
|
$
7,354
|
Interest
income
|
(1)
|
|
—
|
|
(7)
|
|
(8)
|
Interest
expense
|
466
|
|
—
|
|
—
|
|
466
|
Income tax
benefit
|
—
|
|
—
|
|
(4,598)
|
|
(4,598)
|
Depreciation and
amortization
|
3,869
|
|
—
|
|
15
|
|
3,884
|
EBITDA
|
19,466
|
|
—
|
|
(12,368)
|
|
7,098
|
Acquisition related
costs
|
—
|
|
—
|
|
2,023
|
|
2,023
|
Integration related
costs for acquisitions
|
126
|
|
—
|
|
—
|
|
126
|
Stock-based
compensation expense
|
205
|
|
—
|
|
1,404
|
|
1,609
|
Start-up costs for new
campuses and program expansion
|
2,704
|
|
—
|
|
—
|
|
2,704
|
Facility lease
accounting adjustments
|
(1,008)
|
|
—
|
|
—
|
|
(1,008)
|
Adjusted EBITDA,
non-GAAP
|
$
21,493
|
|
$
—
|
|
$
(8,941)
|
|
$
12,552
|
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
|
|
|
Six Months Ended
March 31, 2023
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Net income
(loss)
|
$
27,960
|
|
$
5,503
|
|
$
(27,335)
|
|
$
6,128
|
Interest
income
|
(7)
|
|
(164)
|
|
(2,457)
|
|
(2,628)
|
Interest
expense
|
1,860
|
|
123
|
|
2,077
|
|
4,060
|
Income tax
expense
|
—
|
|
—
|
|
3,288
|
|
3,288
|
Depreciation and
amortization
|
9,869
|
|
2,106
|
|
19
|
|
11,994
|
EBITDA
|
39,682
|
|
7,568
|
|
(24,408)
|
|
22,842
|
Acquisition related
costs
|
—
|
|
—
|
|
2,097
|
|
2,097
|
Integration related
costs for acquisitions
|
316
|
|
524
|
|
1,269
|
|
2,109
|
Stock-based
compensation expense
|
896
|
|
—
|
|
2,386
|
|
3,282
|
Start-up costs for new
campuses and program expansion
|
3,075
|
|
225
|
|
—
|
|
3,300
|
Adjusted EBITDA,
non-GAAP
|
$
43,969
|
|
$
8,317
|
|
$
(18,656)
|
|
$
33,630
|
|
|
|
Six Months Ended
March 31, 2022
|
|
UTI
|
|
Concorde
|
|
Corporate
|
|
Consolidated
|
Net income
|
$
38,091
|
|
$
—
|
|
$
(15,915)
|
|
$
22,176
|
Interest
income
|
(5)
|
|
—
|
|
(15)
|
|
(20)
|
Interest
expense
|
699
|
|
—
|
|
—
|
|
699
|
Income tax
benefit
|
—
|
|
—
|
|
(5,945)
|
|
(5,945)
|
Depreciation and
amortization
|
7,532
|
|
—
|
|
31
|
|
7,563
|
EBITDA
|
46,317
|
|
—
|
|
(21,844)
|
|
24,473
|
Acquisition related
costs
|
—
|
|
—
|
|
2,909
|
|
2,909
|
Integration related
costs for acquisitions
|
201
|
|
—
|
|
—
|
|
201
|
Stock-based
compensation expense
|
374
|
|
—
|
|
1,941
|
|
2,315
|
Start-up costs for new
campuses and program expansion
|
4,297
|
|
—
|
|
—
|
|
4,297
|
Facility lease
accounting adjustments
|
(1,008)
|
|
—
|
|
—
|
|
(1,008)
|
Adjusted EBITDA,
non-GAAP
|
$
50,181
|
|
$
—
|
|
$
(16,994)
|
|
$
33,187
|
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
March 31,
|
|
Six Months Ended
March 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
|
$
3,480
|
|
$
7,354
|
|
$
6,128
|
|
$
22,176
|
Add back: Income tax
expense (benefit)
|
1,763
|
|
(4,598)
|
|
3,288
|
|
(5,945)
|
Income before income
taxes
|
5,243
|
|
2,756
|
|
9,416
|
|
16,231
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition
related costs
|
1,322
|
|
2,023
|
|
2,097
|
|
2,909
|
Integration related
costs for acquisitions
|
1,014
|
|
126
|
|
2,109
|
|
201
|
Start-up costs for new
campuses and program expansion
|
1,921
|
|
2,704
|
|
3,300
|
|
4,297
|
Facility lease
accounting adjustments
|
—
|
|
(1,008)
|
|
—
|
|
(1,008)
|
Adjusted income
before income taxes
|
9,500
|
|
6,601
|
|
16,922
|
|
22,630
|
Income tax effect:
(expense) benefit
|
(3,192)
|
|
(238)
|
|
(5,263)
|
|
(815)
|
Adjusted net income,
non-GAAP
|
$
6,308
|
|
$
6,363
|
|
$
11,659
|
|
$
21,815
|
|
|
|
|
|
|
|
|
GAAP effective income
tax rate (1)
|
33.6 %
|
|
3.6 %
|
|
31.1 %
|
|
3.6 %
|
|
|
(1)
|
The GAAP effective tax
rate for the three and six months ended March 31, 2023 has been
adjusted to remove the impact of the Concorde acquisition related
costs. The GAAP effective tax rate for the three and six months
ended March 31, 2022 has been adjusted to remove the impact from
the MIAT purchase accounting adjustments for deferred tax
liabilities and the reversal of the valuation allowance, both of
which created a net tax benefit for the periods.
|
Reconciliation of
Net Cash (Used in) Provided by Operating Activities to Adjusted
Free Cash Flow
|
|
|
Six Months Ended
March 31,
|
|
2023
|
|
2022
|
Net cash (used in)
provided by operating activities, as reported
|
$
(4,315)
|
|
$
10,400
|
Purchase of property
and equipment
|
(38,641)
|
|
(53,149)
|
Free cash flow,
non-GAAP
|
(42,956)
|
|
(42,749)
|
Adjustments:
|
|
|
|
Purchase of Lisle,
Illinois campus
|
—
|
|
28,378
|
Purchase of Orlando,
Florida campus
|
26,156
|
|
—
|
Acquisition related
costs paid
|
1,367
|
|
1,872
|
Integration related
costs paid
|
1,850
|
|
143
|
Cash outflow for
start-up costs for new campuses and program expansion
|
3,300
|
|
2,987
|
Cash outflow for
property and equipment for new campuses and program
expansion
|
8,271
|
|
8,572
|
Facility lease
accounting adjustments
|
—
|
|
575
|
Severance payment due
to CEO transition
|
—
|
|
32
|
Adjusted free
cash flow, non-GAAP
|
$
(2,012)
|
|
$
(190)
|
View original
content:https://www.prnewswire.com/news-releases/universal-technical-institute-reports-fiscal-year-2023-second-quarter-results-301820052.html
SOURCE Universal Technical
Institute, Inc.