Universal Technical Institute(UTI) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed consolidated financial statements, detailing significant revenue and net income growth driven by UTI and Concorde segments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $95,998 | $161,900 | | Total current assets | $198,452 | $221,951 | | Total assets | $720,443 | $744,575 | | Total current liabilities | $185,100 | $204,963 | | Long-term debt | $91,642 | $123,007 | | Total liabilities | $426,530 | $484,344 | | Total shareholders' equity | $293,913 | $260,231 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $207,447 | $184,176 | $408,876 | $358,871 | | Income from operations | $16,853 | $11,192 | $44,331 | $25,423 | | Net income | $11,446 | $7,787 | $33,599 | $18,176 | | Diluted EPS | $0.21 | $0.14 | $0.61 | $0.31 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,173 | $8,345 | | Net cash used in investing activities | ($53,983) | ($9,759) | | Net cash used in financing activities | ($35,149) | ($34,965) | | Change in cash, cash equivalents and restricted cash | ($66,959) | ($36,379) | - The company operates in two reportable segments: Universal Technical Institute (UTI), focused on transportation and skilled trades, and Concorde Career Colleges (Concorde), focused on healthcare education programs[30][31] - In December 2023, all remaining outstanding shares of Series A Preferred Stock were converted into Common Stock, and all rights of preferred holders to receive future dividends were terminated[87] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, highlighting significant revenue and student growth, 'North Star' strategy execution, and strong liquidity Overview of Operations The company experienced robust growth in student metrics and revenue for the three and six months ended March 31, 2025, driven by new program rollouts and strong demand Consolidated Student Metrics (% Change YoY) | Metric | Q2 2025 vs Q2 2024 | Six Months 2025 vs Six Months 2024 | | :--- | :--- | :--- | | Total new student starts | +21.4% | +21.7% | | Average full-time active students | +10.3% | +10.7% | | End of period full-time active students | +12.6% | +12.6% | - Revenue for Q2 2025 increased 12.6% to $207.4 million, and for the six months ended March 31, 2025, revenue increased 13.9% to $408.9 million compared to the prior year periods[110][111] - The increase in student population was driven by the launch of new HVAC and refrigeration programs in the UTI segment and five new programs along with new cash-pay 'short programs' in the Concorde segment[108] Business Strategy The company is actively executing its 'North Star' strategy, focusing on growth, diversification, and optimization through new campus announcements and program expansions - Announced plans for new UTI division campuses in Atlanta, GA, and San Antonio, TX, both expected to open in 2026, pending regulatory approvals[116] - Signed a new facility lease for a co-branded Concorde and Heartland Dental campus in Fort Myers, Florida, expected to open in early fiscal 2026[116] - Expanded program offerings by adding Tesla's START Collision Repair program at the Long Beach campus and launching new Battery Hybrid Electric Vehicle (EV) courses across multiple campuses[116] Results of Operations Revenues grew significantly for both the quarter and six-month period, driven by higher student volumes across UTI and Concorde segments, leading to improved operating margins Revenue by Segment (in thousands) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | UTI | $134,228 | $123,323 | 8.8% | | Concorde | $73,219 | $60,853 | 20.3% | | Total | $207,447 | $184,176 | 12.6% | Revenue by Segment - Six Months (in thousands) | Segment | Six Months 2025 Revenue | Six Months 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | UTI | $265,706 | $238,697 | 11.3% | | Concorde | $143,170 | $120,174 | 19.1% | | Total | $408,876 | $358,871 | 13.9% | - For Q2 2025, educational services and facilities expenses decreased as a percentage of revenue to 49.4% from 52.9% in the prior year, despite a dollar increase, indicating improved efficiency[118][122] - For the six months ended March 31, 2025, selling, general and administrative (SG&A) expenses increased by $18.4 million, primarily due to higher compensation, advertising, and provision for credit losses to support strategic growth initiatives[155][156] Liquidity and Capital Resources The company maintains a strong liquidity position with substantial cash and credit availability, sufficient to fund operations and strategic initiatives, and significantly increased operating cash flow - As of March 31, 2025, the company had $96.0 million in cash and cash equivalents and $99.0 million available under its Revolving Credit Facility[174] - Net cash provided by operating activities for the six months ended March 31, 2025, was $22.2 million, a substantial increase from $8.3 million in the prior-year period[181] - Significant cash outflows included $39.7 million for the purchase of held-to-maturity investments, $14.3 million for property and equipment, and $30.0 million in payments on the Revolving Credit Facility[184][186] Non-GAAP Financial Measures The company utilizes EBITDA as a non-GAAP measure to analyze operational results, showing significant increases for both the three and six-month periods EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $11,446 | $7,787 | $33,599 | $18,176 | | EBITDA | $25,000 | $18,513 | $60,442 | $39,942 | Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes in its market risk exposure during the six months ended March 31, 2025, compared to prior disclosures - There have been no material changes in the company's market risk exposure during the six months ended March 31, 2025[193] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025[194] - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[195] PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings, though it is periodically subject to various claims in the ordinary course of business - The company is not currently a party to any material legal proceedings[84][198] Risk Factors There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K[199] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None reported for the period[200] Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[203] Exhibits This section lists the exhibits filed with the Form 10-Q report, including an offer letter, CEO and CFO certifications, and XBRL data files - Exhibits filed include an offer letter with Bruce Schuman, CEO/CFO certifications (302 and 906), and XBRL data files[204]