Universal Technical Institute, Inc. (UTI) is a leading workforce solutions provider of transportation, skilled trades, and healthcare education programs. The company operates two reportable segments: Universal Technical Institute (UTI) and Concorde Career Colleges (Concorde).
Business Overview
UTI operates 16 campuses located in nine states, offering a wide range of degree and non-degree transportation and skilled trades technical training programs. Concorde operates across 17 campuses in eight states and online, offering degree, non-degree, and continuing education programs in the allied health, dental, nursing, patient care, and diagnostic fields.
Financials
In fiscal 2023, UTI generated annual revenue of $607,408,000 and net income of $12,322,000. The company reported annual operating cash flow of $49,148,000 and free cash flow of -$7,537,000. For the latest quarter ended March 31, 2024, UTI reported revenue of $184,176,000, a 12.4% increase from the prior year period. Net income for the quarter was $7,787,000, more than doubling from the $3,480,000 reported in the same quarter last year.
Recent Developments
The company's growth, diversification, and optimization strategy is driving its strong performance. UTI has continued to expand its program offerings, with 14 new programs launched primarily in late fiscal 2023 and early fiscal 2024. These new programs contributed over 550 combined new student starts between the fourth quarter of fiscal 2023 and the second quarter of fiscal 2024. The company expects at least 1,000 new student starts in these programs for the full fiscal year 2024.
On the Concorde side, the company has seen strong momentum, with new student starts growing 17.2% and revenue increasing 8.2% in the latest quarter. Concorde's newest program rollouts, including two new dental hygiene programs, have come in ahead of schedule. The company continues to make progress on the expansion of its San Diego dental hygiene program, which remains on track to launch later this year.
UTI has also made progress on its operational optimization initiatives, including the consolidation of its two Houston, Texas campus locations. This project is designed to align the curriculum, student-facing systems, and support services to better serve students seeking careers in in-demand fields. 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.
The company's focus on growth, diversification, and optimization has enhanced its capabilities as a leading workforce solutions provider. UTI has continued to deepen its industry partnerships, announcing new alliances with organizations like Hawaiian Airlines and Interstate Batteries during the latest quarter.
Outlook
Looking ahead, UTI has provided positive adjustments to its fiscal 2024 guidance. The company now expects total new student starts between 25,500 and 26,500, up from the previous range of 24,500 to 25,500. Revenue is expected to be in the range of $720 million to $730 million, and adjusted EBITDA is projected to be between $102 million and $104 million.
For fiscal 2025, the company is currently estimating revenue of nearly $800 million, representing approximately 10% year-over-year growth, and an adjusted EBITDA margin of approximately 15%, which would represent at least 100 basis points of margin expansion compared to fiscal 2024.
Conclusion
UTI's robust and proven multi-divisional model, combined with its focus on growth, diversification, and optimization, positions the company well for continued success. The company's strong performance, strategic initiatives, and positive outlook suggest that UTI is poised to capitalize on the rising demand for technical training and healthcare education programs.