UNIVERSAL TECHNICAL INSTITUTE INC

Previous wording

Concorde Career Colleges (“Concorde”): Concorde operates across 17 campuses in eight states, offering degree, non-degree, and continuing education programs in the allied health, dental, nursing, patient care and diagnostic fields. Concorde believes in preparing students for their health care careers with practical, hands-on experiences including opportunities to learn while providing care to real patients. Prior to graduation, students will complete a number of hours in a clinical setting or externship, depending upon their program of study.

Current wording

Concorde Career Colleges (“Concorde”): Concorde operates across 17 campuses in eight states, offering degree, non-degree, and continuing education programs in the allied health, dental, nursing, patient care and diagnostic fields. The Company has designated campuses that offer degree granting programs as “Concorde Career College” where allowed by state regulation. The remaining campuses are designated as “Concorde Career Institute.” Concorde believes in preparing students for their health care careers with practical, hands-on experiences including opportunities to learn while providing care to real patients. Prior to graduation, students will complete a number of hours in a clinical setting or externship, depending upon their program of study.

Previous wording

(1) New student starts and average student data for Concorde presented in the six months ended March 31, 2023 column represents the period of UTI’s ownership, or December 1, 2022 through March 31, 2023.

Current wording

(1) New student starts and average student data for Concorde presented in the nine months ended June 30, 2023 column represents the period of UTI’s ownership, or December 1, 2022 through June 30, 2023.

Previous wording

For three and six months ended March 31, 2024, the increase in UTI new student starts, average undergraduate full-time active students and end of period students was primarily due to the successful rollout of 14 new programs across nine campuses during the fiscal 2023 fourth quarter and fiscal 2024 first quarter, and increased student demand at a majority of the remaining UTI campuses. Concorde rolled out four new programs at three campuses during the same time period, and also rolled out new cash pay “short courses” at a number of campuses. These program rollouts, along with high demand for its existing programs resulted in increases in new student starts, average undergraduate full-time active students and end of period students compared to the prior year.

Current wording

For the nine months ended June 30, 2024, the increase in UTI new student starts, average undergraduate full-time active students and end of period students was primarily due to the successful rollout of 14 new programs across nine campuses during the fourth quarter of fiscal 2023 and into fiscal 2024, and increased student demand at a majority of the remaining UTI campuses. Concorde rolled out seven new programs at three campuses during the same time period, and also rolled out new cash pay “short courses” at a number of campuses. These program rollouts, along with high demand for its existing programs resulted in increases in new student starts, average undergraduate full-time active students and end of period students compared to the prior year.

Previous wording

Revenues for the three months ended March 31, 2024 were $184.2 million, an increase of $20.4 million, or 12.4%, from the comparable period in the prior year. UTI revenues increased by approximately $15.8 million, or 14.7%, and Concorde revenues increased by approximately $4.6 million, or 8.2%. Both segment increases were driven by the higher student starts and average undergraduate full-time active students as previously noted.

Current wording

Revenues for the three months ended June 30, 2024 were $177.5 million, an increase of $24.2 million, or 15.8%, from the comparable period in the prior year. UTI revenues increased by approximately $16.3 million, or 16.1%, and Concorde revenues increased by approximately $7.9 million, or 15.0%. Both segment increases were primarily driven by the higher average undergraduate full-time active students as previously noted.

Previous wording

Revenues for the six months ended March 31, 2024 were $358.9 million, an increase of $75.0 million, or 26.4%, from the comparable period in the prior year. UTI revenues increased by approximately $25.6 million, or 12.0%, driven primarily by the higher student starts and average undergraduate full-time active students compared to the prior year. Concorde revenues increased by approximately $49.5 million, or 70.0%, primarily due to the inclusion of two extra months of revenue compared to the prior year period, along with higher student starts and average undergraduate full time active students.

Current wording

Revenues for the nine months ended June 30, 2024 were $536.3 million, an increase of $99.2 million, or 22.7%, from the comparable period in the prior year. UTI revenues increased by approximately $41.8 million, or 13.3%, driven primarily by the higher average undergraduate full-time active students compared to the prior year. Concorde revenues increased by approximately $57.4 million, or 46.6%, primarily due to the inclusion of two extra months of revenue compared to the prior year period, along with higher average undergraduate full-time active students.

Previous wording

The increase for the three-month period was primarily driven by the increased revenues from the larger student population. The increase for the six-month period was due to the inclusion of two additional months of revenue for Concorde as compared to the prior year period. Additionally, productivity improvements and proactive cost actions have been a key part of our operating model for the past several years, and we continue to identify and execute on optimization opportunities throughout our operations in both segments.

Current wording

Total income from operations was $7.4 million and $32.9 million during the three and nine months ended June 30, 2024, respectively, compared to $0.7 million and $11.1 million for the three and nine months ended June 30, 2023, respectively. The increase for the three-month period was primarily driven by the increased revenues from the larger student population. The increase for the nine-month period was due to the inclusion of two additional months of revenue for Concorde as compared to the prior year period. Additionally, productivity improvements and proactive cost actions have been a key part of our operating model for the past several years, and we continue to identify and execute on optimization opportunities throughout our operations in both segments.

Previous wording

During the six months ended March 31, 2024, we executed the following as part of our business strategy:

Current wording

During the nine months ended June 30, 2024, we executed the following as part of our business strategy:

Previous wording

•Concorde announced the launch of additional program offerings in dental hygiene in Jacksonville, Florida and sonography in Orlando, Florida and San Bernardino, California. Two additional dental hygiene programs are planned to launch later in 2024, pending final regulatory approval.

Current wording

•Concorde announced the launch of additional program offerings in dental hygiene in Jacksonville, Florida, Miramar, Florida, and Portland, Oregon and sonography in Orlando, Florida and San Bernardino, California.

Previous wording

•UTI announced additional program expansions of Heating Ventilation Air Conditioning and Refrigeration in Avondale, Arizona, Bloomfield, New Jersey, Long Beach, California and Sacramento, California. The programs are expected to launch in late fiscal 2024 and early fiscal 2025.

Current wording

•UTI announced additional program expansions of Heating Ventilation Air Conditioning and Refrigeration in Avondale, Arizona, Bloomfield, New Jersey, Long Beach, California and Sacramento, California. These programs have begun launching in the third quarter of 2024 and will continue through early fiscal 2025.

Previous wording

•UTI announced plans to consolidate our two Houston, Texas campuses to align the curriculum, student facing systems, and support services to better serve students seeking careers in in-demand fields. As part of the transition, the MIAT Houston campus, acquired in November 2021, will begin operating under the UTI brand and implement a phased teach-out agreement starting in May 2024. Both facilities will remain in use post-consolidation. See Note 15 of the notes to our condensed consolidated financial statements herein for further details on the restructuring.

Current wording

•UTI announced plans to consolidate our two Houston, Texas campuses to align the curriculum, student facing systems, and support services to better serve students seeking careers in in-demand fields. As part of the transition, the MIAT Houston campus, acquired in November 2021, began operating under the UTI brand and implement a phased teach-out agreement starting in May 2024. Both facilities will remain in use post-consolidation. See Note 15 of the notes to our condensed consolidated financial statements herein for further details on the restructuring.

Previous wording

•UTI announced new partnerships with United Service Organization, Hawaiian Airlines, iRacing, and several other companies for early employment programs. These partnerships will provide additional career transition and placement opportunities for UTI students.

Current wording

•UTI announced new partnerships with United Service Organization, Hawaiian Airlines, iRacing, Crown Equipment and several other companies for early employment programs. These partnerships will provide additional career transition and placement opportunities for UTI students.

Previous wording

Revenues for the three months ended March 31, 2024 were $184.2 million, an increase of $20.4 million, or 12.4%, as compared to revenues of $163.8 million for the three months ended March 31, 2023.

Current wording

Revenues for the three months ended June 30, 2024 were $177.5 million, an increase of $24.2 million, or 15.8%, as compared to revenues of $153.3 million for the three months ended June 30, 2023.

Previous wording

Revenues for UTI for the three months ended March 31, 2024 were $123.3 million compared to $107.6 million in the prior period. Revenue increased primarily due to a 10.3% increase in average undergraduate full-time active students during the quarter and 19.6% increase in new student starts from the prior year.

Current wording

Revenues for UTI for the three months ended June 30, 2024 were $117.1 million compared to $100.9 million in the prior period. Revenue increased primarily due to a 13.0% increase in average undergraduate full-time active students during the quarter.

Previous wording

Revenues for Concorde for the three months ended March 31, 2024 were $60.9 million compared to $56.3 million in the prior period. Revenues increased primarily due to an 8.9% increase in average undergraduate full-time active students during the quarter and 17.2% increase in new student starts from the prior year.

Current wording

Revenues for Concorde for the three months ended June 30, 2024 were $60.3 million compared to $52.4 million in the prior period. Revenues increased primarily due to a 14.0% increase in average undergraduate full-time active students during the quarter.

Previous wording

Educational services and facilities expenses were $97.5 million for the three months ended March 31, 2024, as compared to $86.9 million for the three months ended March 31, 2023. This increase was primarily due to the increased student volumes during the period and costs associated with our business strategies.

Current wording

Educational services and facilities expenses were $95.3 million for the three months ended June 30, 2024, as compared to $88.4 million for the three months ended June 30, 2023. This increase was primarily due to the increased student volumes during the period and costs associated with execution of our business strategies.

Previous wording

Compensation and related costs increased by $1.7 million for the six months ended March 31, 2024 primarily due to instructors and other personnel hired to support the additional programs added at the end of fiscal 2023 and in early fiscal 2024.

Current wording

Compensation and related costs increased by $3.1 million for the three months ended June 30, 2024, primarily due to instructors and other personnel hired to support the additional programs added at the end of fiscal 2023 and in early fiscal 2024 and overall growth in the student population. Additionally, during the three months ended June 30, 2023, there were downward adjustments to accrued bonuses and stock-based compensation expense for expected achievement against performance targets which did not reoccur during the current year period.

Previous wording

Compensation and related costs increased by $4.4 million for the three months ended March 31, 2024, primarily due to instructors and other personnel hired to support overall student growth and the launch of additional programs during the current year.

Current wording

Compensation and related costs increased by $2.7 million for the three months ended June 30, 2024, primarily due to instructors and other personnel hired to support overall student growth and the launch of additional programs during the current year.

Previous wording

Selling, general and administrative expenses for the three months ended March 31, 2024 were $75.5 million, as compared to $70.9 million for the three months ended March 31, 2023. This increase was primarily due to costs associated with our business strategies.

Current wording

Selling, general and administrative expenses for the three months ended June 30, 2024 were $74.7 million, as compared to $64.2 million for the three months ended June 30, 2023. This increase was primarily due to costs associated with our business strategies.

Previous wording

Advertising and marketing expense remained relatively flat year over year. UTI continues to target cost-efficient marketing with an increased focus on digital media. UTI advertising and marketing expense as a percentage of revenues decreased to 11.3% for the three months ended March 31, 2024 as compared to 13.2% in the prior year.

Current wording

Advertising and marketing expense remained relatively flat year over year. UTI advertising and marketing expense as a percentage of revenues decreased to 11.2% for the three months ended June 30, 2024 as compared to 13.2% in the prior year.

Previous wording

Compensation and related costs increased by $0.5 million for the three months ended March 31, 2024 primarily due to additional headcount hired to support the Concorde segment and our business strategies.

Current wording

Compensation and related costs increased by $0.5 million for the three months ended June 30, 2024 primarily due to additional headcount hired to support the Concorde segment and our business strategies, offset by a timing difference in accrued bonus expense.

Previous wording

Concorde advertising and marketing increased year over year by $0.5 million. Concorde advertising and marketing expense as a percentage of revenues for the three months ended March 31, 2024 and 2023 remained consistent at 11.6%.

Current wording

Advertising and marketing increased year over year by $0.3 million. Concorde advertising and marketing expense as a percentage of revenues for the three months ended June 30, 2024 and 2023 was 10.1% and 11.0%, respectively.

Previous wording

Concorde other selling, general and administrative expenses increased by $1.9 million for the three months ended March 31, 2024 primarily due to an increase of $1.3 million in bad debt expense. The prior year benefited from a favorable adjustment due to aligning accounting policies post acquisition. The allowance for doubtful accounts as a percent of accounts receivable has improved since acquisition.

Current wording

Other selling, general and administrative expenses increased by $1.2 million for the three months ended June 30, 2024 primarily due to an increase of $1.2 million in bad debt expense. The prior year benefited from a favorable adjustment due to aligning accounting policies post-acquisition. The allowance for doubtful accounts as a percent of accounts receivable has improved since acquisition.

Previous wording

Selling, general and administrative expenses for Corporate increased slightly for the three months ended March 31, 2024 primarily due to a $0.7 million increase in compensation related costs, largely offset by a decrease in other selling, general and administrative expenses.

Current wording

Selling, general and administrative expenses for Corporate increased by $4.0 million for the three months ended June 30, 2024 primarily due to an increase in compensation related costs. This increase was due to additional headcount hired to support execution of our business strategies.

Previous wording

Income tax expense for the three months ended March 31, 2024 was $2.8 million, or 26.2% of pre-tax income, compared to $1.8 million, or 33.6% of pre-tax income, for the three months ended March 31, 2023. The effective income tax rate for the three months ended March 31, 2024 differed from the federal statutory rate of 21% primarily due to non-deductible executive compensation, federal research and development tax credits and state and local income and franchise taxes. The effective income tax rate for the three months ended March 31, 2023 differed from the federal statutory rate of 21% primarily due to non-deductible executive compensation, transaction costs and state and local income and franchise taxes. See Note 14 of the notes to the condensed consolidated financial statements herein for additional details.

Current wording

Income tax expense for the three months ended June 30, 2024 was $1.8 million, or 26.2% of pre-tax income, compared to an income tax benefit of $0.1 million, or 11.2% of pre-tax loss, for the three months ended June 30, 2023. The effective income tax rate for the three months ended June 30, 2024 differed from the federal statutory rate of 21% primarily due to non-deductible executive compensation, federal research and development tax credits and state and local income and franchise taxes. The effective income tax rate for the three months ended June 30, 2023 differed from the federal statutory rate of 21% primarily due to non-deductible executive compensation, transaction costs and state and local income and franchise taxes. See Note 14 of the notes to the condensed consolidated financial statements herein for additional details.

Previous wording

As of March 31, 2024, no shares of Series A Convertible Preferred Stock, the (“Series A Preferred Stock”) remain outstanding and all rights of the holders to receive future dividends have been terminated due to the combination of the repurchase and conversion of all outstanding preferred shares as of December 18, 2023. See Note 17 of the notes to the condensed consolidated financial statements herein for additional details on the conversion of our Series A Preferred Stock.

Current wording

As of June 30, 2024, no shares of Series A Convertible Preferred Stock, (the “Series A Preferred Stock”) remained outstanding and all rights of the holders to receive future dividends have been terminated due to the combination of the repurchase and conversion of all outstanding preferred shares as of December 18, 2023. See Note 17 of the notes to the condensed consolidated financial statements herein for additional details on the conversion of our Series A Preferred Stock.

Previous wording

Income available for distribution refers to net income reduced by dividends on our Series A Preferred Stock. As a result of the foregoing, we reported income available for distribution of $17.1 million and $3.6 million for the six months ended March 31, 2024 and 2023, respectively.

Current wording

Income (loss) available for distribution refers to net income (loss) reduced by dividends on our Series A Preferred Stock. As a result of the foregoing, we reported income available for distribution of $5.0 million for the three months ended June 30, 2024 and a loss available for distribution of $1.8 million for three months ended June 30, 2023.

Previous wording

As noted above, no shares of the Series A Preferred Stock remain outstanding and all rights of the holders to receive future dividends have been terminated as of the December 18, 2023 conversion date. As such, there is no income allocated to participating securities for the three months ended March 31, 2024. The income allocated to participating securities for the three months ended March 31, 2023 was $0.8 million.

Current wording

As noted above, no shares of the Series A Preferred Stock remain outstanding and all rights of the holders to receive future dividends have been terminated as of the December 18, 2023 conversion date. As such, there is no income allocated to participating securities for the three months ended June 30, 2024. For the three months ended June 30, 2023, there was a net loss and therefore no income was allocated to participating securities for this period.

Previous wording

We had $7.8 million and $1.4 million of net income available to common shareholders for the three months ended March 31, 2024 and 2023, respectively.

Current wording

We had net income of $5.0 million and a net loss of $1.8 million available to common shareholders for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

Revenues for the six months ended March 31, 2024 were $358.9 million, an increase of $75.0 million, or 26.4%, as compared to revenues of $283.8 million for the six months ended March 31, 2023.

Current wording

Revenues for the nine months ended June 30, 2024 were $536.3 million, an increase of $99.2 million, or 22.7%, as compared to revenues of $437.1 million for the nine months ended June 30, 2023.

Previous wording

Revenues for UTI for the six months ended March 31, 2024 were $238.7 million compared to $213.1 million in the prior year period. Revenue increased primarily due to an overall increase in average revenue per student and an 8.1% increase in overall average undergraduate full-time active students.

Current wording

Revenues for UTI for the nine months ended June 30, 2024 were $355.8 million compared to $314.0 million in the prior year period. Revenue increased primarily due to a 9.6% increase in overall average undergraduate full-time active students and an overall increase in average revenue per student.

Previous wording

Revenues for Concorde for the six months ended March 31, 2024 were $120.2 million compared to $70.7 million in the prior year period. The primary drivers of the increase for Concorde were the inclusion of two additional months of revenue during the current year and an increase in overall average undergraduate full-time active students. Concorde programs are offered year-round, however, there can be fluctuations in the student population due to the timing and size of class starts which are dictated by the accrediting bodies governing the clinical and core programs.

Current wording

Revenues for Concorde for the nine months ended June 30, 2024 were $180.5 million compared to $123.1 million in the prior year period. The primary drivers of the increase for Concorde were the inclusion of two additional months of revenue during the current year and an increase in overall average undergraduate full-time active students. Concorde programs are offered year-round; however, there can be fluctuations in the student population due to the timing and size of class starts which are dictated by the accrediting bodies governing the clinical and core programs.

Previous wording

Educational services and facilities expenses were $189.9 million for the six months ended March 31, 2024, as compared to $148.3 million for the six months ended March 31, 2023, which is primarily due to the increase in student volumes during the current period and the inclusion of Concorde results for two additional months in the current year.

Current wording

Educational services and facilities expenses were $285.2 million for the nine months ended June 30, 2024, as compared to $236.7 million for the nine months ended June 30, 2023, which is primarily due to the increase in student volumes during the current period and the inclusion of Concorde results for two additional months in the current year.

Previous wording

Compensation and related costs increased by $1.6 million for the three months ended March 31, 2024, primarily due to instructors and other personnel hired to support the additional programs added at the end of fiscal 2023 and in early fiscal 2024.

Current wording

Compensation and related costs increased by $4.8 million for the nine months ended June 30, 2024 primarily due to instructors and other personnel hired to support the additional programs added at the end of fiscal 2023 and in fiscal 2024. Additionally, during the three months ended June 30, 2023, there were downward adjustments to accrued bonuses and stock-based compensation expense for expected achievement against performance targets which did not reoccur during the current year period.

Previous wording

Depreciation and amortization expense increased by $1.8 million for the six months ended March 31, 2024 primarily due to the purchase of the three primary buildings at the Orlando, Florida campus in March 2023 and increased capital expenditures related to the new program launches.

Current wording

Depreciation and amortization expense increased by $2.7 million for the nine months ended June 30, 2024 primarily due to the purchase of the three primary buildings at the Orlando, Florida campus in March 2023 and increased capital expenditures related to the new program launches.

Previous wording

Supplies, maintenance and student expense increased by $3.0 million primarily due to the increased cost of student housing in support of relocating students.

Current wording

Supplies, maintenance and student expense increased by $8.6 million for the nine months ended June 30, 2024 primarily due to the increased cost of student housing in support of relocating students.

Previous wording

Compensation and related costs increased by $19.8 million for the six months ended March 31, 2024 primarily due to the inclusion of two additional months of expenses in the current year in addition to increased instructors and other personnel hired to support the new program expansions.

Current wording

Compensation and related costs increased by $22.5 million for the nine months ended June 30, 2024 primarily due to the inclusion of two additional months of expenses in the current year in addition to increased instructors and other personnel hired to support overall growth in the student population and new program expansions.

Previous wording

The other expense increases for the six months ended March 31, 2024 were all primarily driven by the additional two months of activity included in the current year.

Current wording

The other expense increases for the nine months ended June 30, 2024 were all primarily driven by the additional two months of activity included in the current year.

Previous wording

Selling, general and administrative expenses for the six months ended March 31, 2024 were $143.6 million. This represents an increase of $18.5 million, as compared to $125.1 million for the six months ended March 31, 2023, which is primarily due to the inclusion of two additional months of results for Concorde in the current year and costs associated with our growth and diversification strategy.

Current wording

Selling, general and administrative expenses for the nine months ended June 30, 2024 were $218.3 million. This represents an increase of $29.0 million, as compared to $189.3 million for the nine months ended June 30, 2023, which is primarily due to the inclusion of two additional months of results for Concorde in the current year and costs associated with execution of our business strategies.

Previous wording

Compensation and related costs increased by $2.8 million for the six months ended March 31, 2024 primarily due to an increase in headcount to support the UTI segment and our growth and diversification initiatives as compared to the prior year.

Current wording

Compensation and related costs increased by $5.9 million for the nine months ended June 30, 2024 primarily due to an increase in headcount to support the UTI segment and execution of our growth and diversification initiatives as compared to the prior year.

Previous wording

Advertising and marketing expense decreased by $0.3 million for the six months ended March 31, 2024, primarily due to timing of spend along with incremental investment to support our growth objectives. We continue to target cost-efficient marketing with an increased focus on digital media. Advertising and marketing expense as a percentage of revenues decreased to 11.4% for the six months ended March 31, 2024 as compared to 12.9% in the prior year.

Current wording

Advertising and marketing expense decreased by $0.5 million for the nine months ended June 30, 2024. UTI continues to target cost-efficient marketing options. Advertising and marketing expense as a percentage of revenues decreased to 11.4% for the nine months ended June 30, 2024 as compared to 13.0% in the prior year.