Universal Technical Institute Inc

Good day, and welcome to the Universal Technical Institute's first quarter 2024 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. 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 welcome to Universal Technical Institute's fiscal first quarter 2024 earnings call. Joining me today are CEO Jerome Grant and CFO Trey Anderson. Following our prepared remarks, we will open the call for your questions. A replay of this call, its transcript, and our investor presentation will be archived on the investor relations section of our website at investor.uti.edu, along with our earnings release issued earlier today and furnished to the SEC. During this call, we may make comments that contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which, by their nature, address matters that are in the future and are uncertain. These statements reflect management's current beliefs and expectations and are subject to a number of factors that may cause actual results that differ materially from those statements. These factors include, but are not limited to, those discussed in our earnings release and SEC filings. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. We do not intend to update these forward-looking statements as a result of new information or future developments, except as required by law. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of fiscal 2023. This information presented today also includes non-GAAP financial measures. These should be viewed in addition to and not as a substitute for the company's reported results prepared in accordance with U.S. GAAP. All non-GAAP financial measures referenced in today's call are reconciled in our earnings press release to the most directly comparable GAAP measure. For more information regarding definitions of our non-GAAP measures, please see our earnings release and investor presentation. With that, I will turn the call over to Jerome Grant, CEO of Universal Technical Institute, for his prepared remarks. Jerome?

Thank you, Matt. Good afternoon, everyone. Our momentum continued into the first quarter of 2024 as the company's financial performance has continued to exceed expectations. We achieved $174.7 million in revenue and $24.5 million in adjusted EBITDA. Student starts were 43-46, which was right in line with our expectations. Troy will spend some time in just a few minutes going a bit deeper into these impressive numbers. These results underscore the consistency with which we have delivered on our financial promises over the past several years. We have also made rapid progress on our growth and diversification objectives and we have entered this fiscal year as a robust multi divisional company poised for continued growth and with each division priding themselves on maintaining a strong track record of superior student graduation rates and employment outcomes. Our excellent performance is made possible by the dedication of our faculty staff and students across Concord and the UTI division. along with support from our corporate teams. I'd like to thank them for their tireless commitment as we continue executing on our growth objectives and expanding the training and employment opportunities we provide our students across in-demand industries. As a key corporate update, I'd like to highlight that effective December 2023, we satisfied the conditions that allowed us to fully convert our outstanding Series A preferred stock into common stock. In connection with the transaction, Coliseum Capital Management's co-founder and managing partner, Chris Shackleton, was appointed as a Class III director to our board. Troy will review the milestones more fully later in the call, but we would like to thank Chris and Coliseum for their support when we most needed it and their continued investment and partnership. We also have continued to strengthen our corporate and divisional leadership teams. As we announced last month, we recently appointed Carolyn Frank as our first Corporate Chief Human Resource Officer. Carolyn brings tremendous experience in building and managing human resource organizations, including Finance of America and Guild Mortgage Company, both New York Stock Exchange listed companies. I'm confident that she will contribute at a very high level to our mission, and I'm proud to welcome her to the company. I'm also happy to announce that Kevin Prane has been appointed the president of Concord Career Colleges. Since accepting this interim appointment in September, Kevin has made resounding contributions to both the division and our corporate leadership team. With Kevin at the helm, I'm confident that the Concord division will quickly reach its fullest potential. We look forward to our continued work with Kevin and progressing Concord's divisional goals. Let's turn our attention to both the performance and notable highlights for each of our divisions, starting with Concord. In the first quarter, we continued to make progress with new healthcare program rollouts. As we announced in December, we launched a cardiovascular sonography program and a diagnostic medical sonography program in Orlando, and a dental hygiene program in Jacksonville, and another cardiovascular sonography program in San Bernardino. This brings us to five new Concord programs launched in the past six months, as we had previously launched an online respiratory therapy program in late fiscal 2023. Market demand for our healthcare programs remains strong through the first quarter. We also continue to work towards launching two other dental hygiene programs this year, where we have maintained our progress by completing their necessary regulatory approvals. In addition, we're in the process of expanding the capacity of our dental hygiene program in our San Diego campus. We also remain focused on driving additional operational and organizational efficiencies within Concord, along with executing on further integration and synergy opportunities, while optimally supporting our current and incoming healthcare students. Our work to fine-tune the divisional infrastructure gives our healthcare offerings an even greater platform for growth. In the UTI division, we've continued to accelerate our year-over-year start growth in Q1 and ramp our newest programs. Significantly, we have now launched the aviation program in UTI's Miramar campus, which was the final launch from our 14 planned new programs last year. Demand for these newest programs has remained strong with almost 400 combined student starts across the 14 programs over the last two quarters. We're encouraged by the early returns from these programs and we're making good progress growing the enrollments and pipeline. We anticipate at least 1,000 new student starts with these programs this fiscal year. The division's most recent program launches are just our first steps towards expanding the MIT source aviation, skill trades, and energy programs more broadly across the UTI campus footprint. We continue to evaluate additional program expansion opportunities in the UTI division. In fact, We've already started the second phase of the program expansions, and at present we're on track to launch three additional heating, ventilation, and air conditioning programs this year, with a fourth APAC program expected to launch in early fiscal 2025. In another strategic step related to the MIT acquisition, we recently announced our plans to consolidate the UTI Division's Houston operations into a single campus. Through this transition, the MIAT Houston campus will start operating under the UTI brand and implementing a phase transition beginning this May. The consolidation is meant to streamline operations and standardize our educational delivery model in Houston through aligning our campus's curriculum, student-facing systems, and their educational and career support services to better serve students seeking careers in in-demand fields. This process will also help future students complete certain programs more quickly and strengthen UTI's position as a dominant provider of career and technical education solutions in the Houston market, a market in which we've operated for over 40 years. We're working to ensure that the current MIT students have a seamless and positive experience through the transition, and we expect the transition process to be fully completed in early fiscal 2025. Our division-level initiatives all support our core commitment to driving superior student outcomes across diversified in-demand fields. We deliver on this commitment not only through expanding our program offerings and optimizing our campuses, but also through prioritizing top-quality industry partnerships and instruction. In both divisions, our industry partners continue to invest in our programs and students. For example, Standard Motor Products, or SMP, is a longtime UTI division partner that manufactures and distributes premium automotive and truck parts. SMP's products are deeply integrated into the hands-on portion of our automotive and diesel programs. SMP recently extended its partnership with UTI to provide a product allowance at our UTI campuses, an investment of up to $80,000 per year. In addition, we recently secured a partnership with the United Service Organizations, commonly known as the USO. This partnership will offer specialized training programs and resources to help military personnel with their transition to civilian life and careers in transportation, motorsports, renewable energy, and aviation industries. In terms of our healthcare partnerships, we announced last week that our partners at Jefferson Dental and Orthodontics, recently donated two cutting-edge ITERO interoral 3D scanners to Concord's Dallas and San Antonio campuses. ITERO 3D scanners use a handheld wand to capture thousands of images of patients' mouth in just seconds, and this enhanced visualization enables higher quality dental services and patient experiences. Through using the scanners in their clinical work, our dental students will access innovative, state-of-the-industry technology that prepares them for the future of dentistry. We extend deep gratitude to our partners at Jefferson Dental for their generous donation and dedication to our students. Also at Concord, Heartland Dental, one of the top dental service organizations in the nation, with more than 1,700 supported practices nationwide, recently extended their commitment to provide scholarship offerings to students in our dental hygiene program. This is the third year that Heartland has invested in our dental hygiene students. Now looking ahead to 2024, we continue to have high confidence in the trajectory of our student starts and the guidance we set in November of 24,500 to 25,500 starts. That said, with the strength of our first quarter results, and continued progress on our growth, diversification, and optimization strategy, we are raising our full-year revenue and profitability guidance for fiscal 2024. Notably, we now expect to generate annual revenue between $710 million and $720 million and adjusted EBITDA of between $100 million and $103 million. Troy will cover these updates in more detail in just a few moments. To support our broader revenue and profitability and cash generation objectives, we also continue to drive on our key operational focus areas for 2024, which include increasing enrollment revenue and profit growth from our fiscal 23 and 24 program launches, ramping the yield of our marketing and admissions investments to further optimize lead generation and inquiry conversion in both divisions, and continuing to optimize our workforce strategies, hiring practices, and facility utilization to drive greater capital and operating cost efficiencies, both of which propel our program and margin expansion. Our focus in these areas will also give us an even greater foundation from which to drive strong student outcomes. We've already laid much of the foundation over the past two years, and we expect to make additional progress throughout fiscal 2024. I'd now like to turn the call over to Troy to review our first quarter financial results. Troy?