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