Universal Technical Institute(UTI)2023-11-16 00:16Financial Data and Key Metrics Changes - For fiscal year 2023, the company reported revenue of $607.4 million, exceeding the high-end of guidance, and adjusted EBITDA of $64.2 million, also above expectations [11][36] - Consolidated revenue for Q4 increased by 53.9% to $170.3 million, driven by a $55 million contribution from Concorde and a 4.2% year-over-year growth for the UTI division [36] - Consolidated net income for Q4 was $6.7 million, or $0.10 per diluted share, while for the full year, it was $12.3 million, or $0.13 per diluted share [37] Business Line Data and Key Metrics Changes - The UTI division contributed $429.3 million in revenue with a 2.5% year-over-year growth, while Concorde contributed $178.1 million for the 10 months post-acquisition [36] - UTI experienced a 9% growth in new student starts in Q4, with a total of 22,613 new student starts for the year [11][34] - Concorde launched three new programs in November 2023, including Diagnostic Medical Sonography and Cardiovascular Sonography [15] Market Data and Key Metrics Changes - The company reported strong demand for Concorde's programs, with new student starts in a Cardiovascular Sonography program in Florida and an online Respiratory Therapy program [22] - The Austin and Miramar campuses, launched in 2022, now have nearly 1,100 students combined, indicating a positive trajectory [18] Company Strategy and Development Direction - The company is focused on a multi-year growth and diversification strategy, including expanding into healthcare through the acquisition of Concorde [13][55] - Key focus areas for 2024 include ramping up new campuses, driving enrollment growth, and optimizing marketing and admissions investments [29][51] - The company aims to achieve adjusted EBITDA margins approaching double digits for Concorde in fiscal 2024 [46] Management's Comments on Operating Environment and Future Outlook - Management indicated that while there are no significant macroeconomic tailwinds, they are not facing strong headwinds either, suggesting a stable operating environment [66] - The company expects revenue for fiscal 2024 to be between $705 million and $715 million, representing a growth rate of 16% to 18% year-over-year [43] - Management expressed confidence in achieving fiscal 2024 guidance, which would more than double revenue from fiscal 2021 [55] Other Important Information - Total available liquidity at the end of the quarter was $159.7 million, with total debt approximately $162 million [39] - The company plans to replace adjusted net income with GAAP net income as a guidance metric for fiscal 2024 [47] Q&A Session Summary Question: What are the growth drivers for 2024? - Management identified four key drivers: full year of Concorde, program expansions, UTI organic growth, and Concorde organic growth [63][64] Question: How does the macro environment affect the company? - Management noted that while the macro environment is not providing significant tailwinds, they are not experiencing strong headwinds either, indicating a stable growth outlook [66] Question: What is the expected performance of high school versus young adult student starts? - Management expects continued strong performance in high school starts, supported by investments made in that area [77] Question: What is the status of the 90/10 rule and gainful employment updates? - The company is in the high 60% range for the 90/10 rule and does not foresee any material risk from gainful employment updates [80][81] Question: How is inflation impacting the company? - Management indicated that inflationary pressures are subsiding, and they are not experiencing significant staffing issues [93][100] Question: What is the status of the Series A preferred stock conversion? - Management expressed optimism about achieving the conversion trigger based on recent trading momentum [96]