Universal Technical Institute(US:UTI)2022-08-05 01:16Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $101 million, reflecting a growth rate of 21% compared to the prior year [12][30] - Adjusted EBITDA was $11 million, representing a growth of 53% year-over-year [12][31] - Net income for the quarter was $0.8 million compared to $3 million in the prior year, while adjusted net income was $5.7 million compared to $3.3 million [32] Business Line Data and Key Metrics Changes - New student starts grew 25% year-over-year, with high school channel growth at 78% year-over-year for UTI only [13][14] - The adult job changer segment saw a 10% year-over-year decline in the quarter, with expectations for a double-digit decline for the year [18][39] Market Data and Key Metrics Changes - The high school channel performed consistently regardless of economic conditions, while the adult channel faced challenges due to macroeconomic factors [20] - Inquiry performance remained strong, indicating a conversion challenge rather than a decrease in interest [18] Company Strategy and Development Direction - The company is focused on growth and diversification, with the acquisition of Concorde Career Colleges expected to close in early 2023 [24][28] - Plans to expand MIAT programs across UTI campuses are underway, with expectations to double the size of the acquired MIAT business over the next three years [25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment, including inflation and tight job markets, impacting the adult channel [19][23] - There is optimism about the performance for the year and confidence in achieving previously issued financial guidance [23][47] Other Important Information - The company expects to achieve at least $700 million in revenue and approximately 20% EBITDA margin by 2025 [28][46] - Total available liquidity at the end of the quarter was $70.7 million [35] Q&A Session Summary Question: Insights on new student starts and adult channel pressures - Management attributed the reset in growth expectations to challenges in the adult channel, while the high school side performed as expected [54][56] Question: Military recruitment status - Military recruitment numbers are down slightly, but growth is expected in the fourth quarter [57] Question: Strategies to improve adult conversion rates - The company is optimizing lead routing and focusing on local students to improve conversion rates [59][66] Question: Impact of inflationary pressures - Wage pressures and supply chain issues, particularly in materials like welding supplies, are being felt, but the company is managing these impacts effectively [60][62] Question: Future of adult recruiting strategy - The company plans to refine adult recruiting while focusing more on high school recruitment, which is less affected by economic pressures [66][67] Question: MIAT program rollout - The first MIAT programs are expected to open in Q2 of fiscal 2023, with preparations underway [71][72]