Universal Technical Institute Inc

Good day and welcome to the Universal Technical Institute second quarter fiscal year 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Matt Kempton, Vice President of Corporate Finance. Please go ahead.

Hello, and thank you for joining us. With me today are our CEO, Jerome Grant, and CFO, Troy Anderson. During the call today, we'll update you on our second quarter fiscal year 2022 business highlights, financial results, and visions for the future. Then we will open the call for your questions. Before we begin, we want to remind everyone that today's call will contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Please carefully review today's press release for additional information and important disclosures about forward-looking statements. Because forward-looking statements relate to the future, they're subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. As a reminder, relevant factors that could cause actual results to differ materially filings, and the section entitled Forward-Looking Statements in today's press release also applies to everything discussed during this conference call. During today's call, we will refer to adjusted net income or loss, adjusted EBITDA, and adjusted free cash flow, which are non-GAAP financial measures. Adjusted net income or loss is net income or loss adjusted for items that affect trends and underlying performance from year to year and are not considered normal recurring operations. including the income tax effect on the adjustments utilizing the effective tax rate. Adjusted EBITDA is net income or loss before interest expense, interest income, income taxes, depreciation, amortization, and adjusted for items not considered as part of the company's normal recurring operations. Adjusted free cash flow is net cash provided by or used in operating activities, less capital expenditures, adjusted for items not considered as part of the company's normal recurring operations. Management internally uses adjusted net income or loss, adjusted EBITDA, and adjusted free cash flow as performance measures, and those figures will be discussed on today's call. As a reminder, we have provided reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements in today's press release, and we encourage you to carefully review those reconciliations. It is now my pleasure to turn the call to our CEO, Jerome Grin.

Thank you, Matt. Good afternoon, everyone, and thank you all for joining us today. To start, I'd like to thank our students and staff for their continued commitment and hard work during the quarter as we continue to navigate COVID obstacles with resilience and effectiveness to ensure our campuses continue to operate as seamlessly as possible. I'd also like to take a moment to express my appreciation to both our long-time investors, as well as a fair number of new investors joining us today. As always, we appreciate your support. Today, I'll provide a few highlights from the quarter, cover our recently announced agreement to acquire Concord Career Colleges, and provide an update on our key strategic initiatives before turning the call over to Troy, who will take you through our financial results and guidance in detail. As far as results, I'm pleased to report that we have delivered another strong top and bottom line performance this quarter, driven by higher average student population, as well as higher overall revenue for students on a year-over-year basis. Revenue was $102.1 million, which is a 31% growth rate for the quarter compared to the year-ago period, and adjusted EBITDA of $10.9 million represents a growth rate of approximately versus the comparable period a year ago. This past quarter, solid revenue for student results represented a stronger than expected bounce back from the COVID-19-related revenue for student persistence issues we experienced a year ago. Results from our recent acquisition of MIT are also included in this quarter's results for the full period and have contributed in no small part to our performance. While the effects on our business of COVID-19 and the ongoing set of variants have continued to recede this quarter, the most recent variant did have some impact on our start growth for the period relative to our expectation. New student starts trailed last year by 5.4% for the quarter. Therefore, we will be modestly adjusting our start guidance for the fiscal year relative to our high expectations, though we still expect to see strong overall growth for the year. As far as our financial guidance is concerned, based on the better-than-expected performance we delivered for this period and through the first half of the fiscal 2022, we will be taking positive steps on our revenue and EBITDA guidance. Troy will provide more detail on these changes. I'd like to remind everyone that in our last quarterly update, in terms of expectations and risk, we indicated that the main risk that was outside of our control would likely be COVID-19-related, and that view has not changed. I would now like to briefly review the important announcement we made this week as the next step towards continued advancement of our growth and diversification strategy. Yesterday, we announced that we have entered into a definitive agreement to acquire Concord Career Colleges. We are incredibly excited about this announcement, as we will soon be able to address the unemployment gap in the critical and growing healthcare I would like to begin by providing some background on Concord, as well as clarifying Concord's fit within our growth and diversification strategy. Concord Career Colleges is a leading provider of industry-aligned healthcare education programs focused on preparing students for successful professions in a sector which is expected to add about 2.6 million new jobs over the next decade. Across the U.S., our aging population, along with attrition in the workforce, is expected to drive continued increased demand for health care services for the foreseeable future. Currently, Concord operates 17 campuses across eight states with a total of 7,400 students. Its on-ground, hybrid, and online program offerings include nursing, dental hygiene, health care diagnostics, and a variety of other critical health care roles. Similar to UTI, Concord is highly focused on positive student outcomes, as evidenced by their most recently reported graduation rate, over 70%, and aggregate employment rate over 80%. This acquisition will further elevate, strengthen, and diversify our short- and long-term financial output, which Troy will touch on shortly. The addition of Concord to the Universal Technical Institute's family of highly regarded education brands marks our first significant move to diversify our business beyond transportation, the skilled trades, and energy. The addition of healthcare allows us to reach a completely new demographic of students who are seeking industry-leading outcomes and meaningful, career-oriented jobs that pay well. And we're excited to provide them with these solutions, as we have for others throughout our long history. This expansion of our company into healthcare significantly increases our total addressable student base while diversifying our business. Though Concord's course offerings differ from those of the current UTI brands, we do believe that we'll be able to recognize various operating synergies over time. We want to be clear on the strategic fit of this important step. We view this acquisition as adding a new branch to our overall strategy as Concord's educational offerings will allow us to provide solutions to the industry that has the highest expected job growth rate through 2030. It opens doors to new adjacent opportunities to leverage industry relationships in innovative and diverse ways beyond operating schools. We'll share more on that as our plans evolve. In summary, this acquisition takes us one step further towards accepting the responsibility to become the nation's single largest provider of skilled workers into high demand careers, as we will have over 20,000 students on our campuses and online. It opens doors to considerable adjacent opportunities in the large and dynamic healthcare arena. It moves the needle significantly in enhancing shareholder value by 2025 and beyond. I'd also like to give you an update on our other important strategic initiatives that we're moving forward on as part of our growth and diversification strategy. 2021 and 2022 represent a watershed period for Universal Technical Institute as we've made many advancements towards reaching our fullest potential. We closed on the acquisition of MIAT College of Technology last November. Our teams are working diligently to integrate the MIAT campuses into the UTI system. We're working to realize both growth and cost synergies between the two companies by making progress on our stated plans to roll out MIAT programs across the UTI campus footprint, including our two new campuses. Those rollouts are scheduled to begin in 2023. With supply chain related delays behind us, we are set to welcome our first cohort of students in Austin in the next few weeks. Moving forward, just like the rest of our system, a new cohort will begin their coursework every three weeks. We're also making great progress on our new campus in Miramar, Florida, which is on schedule to open in the fourth quarter of this year. And finally, we continue to successfully expand our welding programs with two new additional programs launched in fiscal 21, In the current fiscal year, a new program launched at our NASCAR Tech Mooresville, North Carolina campus in January, and the latest expansion of our welding program is scheduled to launch at our Exton, Pennsylvania campus in the fourth quarter, bringing the total number of welding programs offered at the legacy UTI campuses to nine. As we move forward and look to the future of growth opportunities, our consistent guiding principle will be our ability to have extraordinary outcomes in terms of student performance and employment, while focusing in areas that have major imbalances in supply and demand in the workforce. Our growth and diversification strategy is focused on preparing more students for in-demand careers that require highly trained professionals. We are continuing to put more and more students in positions to succeed by expanding our program offerings, as well as growing our campus footprint. We remain confident by consistently achieving high-quality outcomes for our students. Paired with training them for in-demand jobs, we will continue to drive growth moving forward. Year to date, we've graduated 4,400 students, and we're on track to have another year with very strong overall in-field employment rates. It is our mission to provide individuals with and we are addressing a substantial gap in the labor market. I will now hand the call over to Troy for an in-depth discussion of our operating performance and outlook into the second half of the fiscal year.