UTI - Earnings call 2 2021 | Universal Technical Institute, Inc.

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Operator

Hello, and welcome to the Universal Technical Institute Fiscal Second Quarter 2021 Earnings Conference Call. With us today are Jerome Grant, Chief Executive Officer; Tony Anderson (sic) [ Troy Anderson ], Chief Financial Officer.

Please note, today's event is being recorded. I would now like to turn the conference over to Matt Kempton, Vice President of Corporate Finance. Mr. go please may you ahead. Kempton,

Matthew Kempton

Thank you, operator.

Securities begin, call will we the review harbor U.S. today's to we Please they for of the want today's that safe Private the of about in of everyone inherent to press remind provisions Reform contain uncertainties, are carefully of Act and XXXX. to changes meaning Before Litigation additional disclosures forward-looking Because our release statements within subject forward-looking information control. and many relate are forward-looking that predict are outside of difficult circumstances statements. which important to statements and the future, risks

Our actual statements. Therefore, those statements. you from results should not materially any and forward-looking condition differ rely in these forward-looking may indicated the on financial of

forward-looking the today's everything a in to applies section press during also As this call. discussed entitled statements conference release reminder,

loss performance tax refer loss income adjusted not from trends financial operations, the today's year-to-year and effect adjusted or adjustments effective adjusted income free During income flow, loss, rate. underlying utilizing and including measures. on which are normal cash recurring to we'll are the considered affect and non-GAAP or is adjusted net items for EBITDA call, income net net the tax Adjusted or that

operations. is considered the recurring company's operating or normal for items income, before and of free interest considered of expenditures, activities adjusted as recurring Adjusted amortization EBITDA is operations. net part the less income cash taxes, company's flow income or not cash part loss net by as depreciation, interest not used normal expense, capital adjustments items Adjusted provided for in

today's adjusted discussed as cash those measures, internally figures will uses performance loss, on EBITDA adjusted and free adjusted flow Management income operating and be call. or

carefully have our call GAAP measurements to Grant. a provided CEO, the we those directly now my turn non-GAAP today's most of the reconciliations. to comparable to to pleasure encourage is in press financial you and review It reconciliations reminder, these release, measurements we As Jerome

Jerome Grant

Matt. like you, this Good applaud of thank all afternoon, efforts tremendous and you begin, joining quarter and again I'd all our to their everyone, faculty our for To students. during the for Thank thank work and us today. of staff

we're while a on announce we some had As of executing that a diversification important quarter our steps growth successful the very to proud first company, strategy. and in

the All were nearly of increase and our prior campuses which operational, the started second represents in students we X,XXX over quarter, quarter. fully year XX%

supporting outcomes. strong we the our Importantly, teachers we families employment as from students, and on educational emerge and maintain maining while and our our focus their pandemic,

better performed on outlined confident you few up give will expected quarter the exceptionally beyond thoughts us minutes. into our and go and we as which guidance in performance just for quarterly more as remain detail during will well 'XX We XXXX. initial than for and in XXXX fiscal previously XXXX well Troy some set our guidance, a

year. targeted inquiries student growing far into continue for the QX We're strong we tangible that QX our critical in also fueled As our both we start interest provides advertising the and growth with demand, in prospective balance quarter, the our from as which student insight results strategy performance discussed XX% programs, projected double-digit seeing media last to more year-over-year. of see

fruit is next which Mind will fiscal from this year, relocate announced I'm entirely heading the resources to a reducing to campaigns campuses. our strategic towards additional momentum within potential far, our strategy of we by of to, and reminder, begun begin of allocate This XXXX. number must towards who students in their have studies. the to we've and our more additive efficiency the living distance the bear you, separate As actions referring thus drives commuting advertising students effectiveness to further

in XXXX learning Arizona. financial oriented blended benefit opening Avondale, Florida; early and as MIAT in These Miami, and as real in California; More XXXX state-of-the-industry estate Florida, include represents produce the 'XX. Orlando, projects of and actions Sacramento, our diversification rationalization should that an be projects in in Austin, significantly, new Texas; campuses well College These growth fiscal step recently substantial Technology strategy. our agreement announced important for and to acquire beyond, will

The to MIAT minutes are an sure spend excellent this the I that our strategic want these UTI to actions understands how our number family outlining for a reasons. fit in and merely we detail beginning more of steps make of everyone into quarter that took addition few strategy. of these fit a represents the vision,

strong UTI's financial First, already stand-alone MIAT a position. acquisition, as improves

and robust graduation credentials to gain respect both area will and we Upon in The school's demand that their and UTI, focus. technicians Like closure the and of immediate Michigan; the Canton, in is in MIAT campuses robotics rates. renewable maintenance, as have fields a at successful with EBITDA currently starts, high and outcomes such nearly aligned revenue, and of employment terms student MIAT Houston, acquisition, aviation programs accredited Texas, well-respected energy, industry are HVAC, a of in offered not provider to and certified X of UTI. growth profile outstanding access

launch the introduce welding addition our if UTI programs to expect To MIAT at We program us. Canton be program that plan expansion to believe the will of X across at we MIAT the the diesel as, not possibly at with programs more, the campus. campuses than of the from least you've start network MIAT and successful footprint UTI end, typical come within

that I not anticipate closing as this preparing regulatory diligently scheduled. we would soon challenges make deal roll as We note are get proper of regulatory to ahead closing do any to we currently out these sure the we can approval. as

to network, footprint. beyond It do to highly proper we experience with and transportation, and an adds new new programs within will clear investors programs in ability launching are into with existing be the have our we broadly, skilled successful geographic value more goes To As execution. to MIAT trades. array the our proposition quickly other allow adding extensive important acquisition respect to new simply transaction, underscore X of this well confident beyond our to entire so to high-demand move us campuses that

Our more business within after few close. plans years than this should just double a

Turning in to new diversification to advance steps took and the X and announced Austin campuses quarter our launch growth of we strategy, key Miami other this we recently in XXXX.

MIAT organic opportunities certainly accrue footprint campuses. in more to financial locations, important. returns derive into Although they rapidly. us we'll launching addition we nature, adding are provide This to new from no And will less benefits these our already enhance in these the X proven the impressive bring most programs for from

learning to proprietary model, for employer be long-term will program our the Miami, XXXX grow evaluation growth based XX%. These EBITDA first compound which for not student the for up our successful metro to provide set purely demand. margins allow X additional expand location and adjusted top additional These X We chose and our these the using only higher to X alone will locations, campuses Austin us announcements campus, and flexibility programs. than XX% rate the and line model, utilize blended launched on be through of but space over excess with annual will margin also us in to

and tied revenues by to it nearly to clear first merely could these to to as XXXX. want diversification steps lead growth that make XXXX compared strategy, in goals our doubling I the baseline although are the first steps But these company

inorganic and additional on growth. solid generation student, exploring to actively are financial position our And pursue EBITDA announced. will us organic strong cash and avenues we as to already revenue additional opportunities, those progress for enable even and continue We we

fields. provide industry-aligned expanding demand with UTI's education about really is and expand certified core and addressable areas great its where diversifying our offerings, workers. outstrips By for able students in students our value program in high at demand strategy high-quality, in our market and This trained we're of of geographically the highly training supply more the significantly both proposition to careers

could Filling case. and This industry our graduates In most them focus that pursue a it some different more a requires good enabled the and hasn't middle-class wage our for of for a jobs credentials. often types the a that's lifestyle. not, is training mission longer acute paid era, But And skills no obtain gap, part, to these just high than them been company. that time. afford school as today's and

lead says San high at action An after Diego. graduating San from Angeles. Cucamonga UTI native, excellent to came skills she of. of could and money." school, a course, maintain and to She XX-week mission job Diego completing from Stephanie directly Rancho says important at I job "Easily in Stephanie program quote, in because build would of example country. protect to recently Stephanie she and doing NASSCO interested she and our UTI, the UTI loves graduated reason good to ships in to, welding Dynamics making Stephanie General something focused proud is went that be technology upon work Diego our education Morales. is of her campus something chose her Los in she the wanted doing shipyard And just outside a Dynamics' uses military she was She the for for welding also San because help keenly U.S. getting General she's Harbor.

trained welding welding technicians, she wants and fields for like that to be believe they immense become show delivers that us and there's woman welding, to employers women She value is to certified in talent, wants our like education twin can aspire demand the she a We country. where graduates technical especially them XX-year-old told do. inspire a industry, Stephanie, proud that our more strong Stephanie to to them sisters. they hire her for who whatever for industry-aligned in for high-value, achieve

community of many party better we asked needs business often broader what for our to be presume namely our the our think country. across We're or and country, which competition the to Speaking how administration is colleges. about

which indicating approach people need help with bridge While, the more as changes on industry, stay take in is gap all skills we in filling and drastic that as government group less a education realize that effort. We result, increasingly high course, levels. really our requirements or will across education the provided and technical for U.S. regulatory don't specific we employers require technical of power our is efforts on is it other levels the welcome post-secondary stepped-up at the we which or school the between focus to potential party current benefits a

we we have critical to The unique that this community need We they and to in both country. the and believe, we value is colleges to broader our nonpartisan. bring succeed want students, help need because address

global its over business of we next momentum. that will While company and chapter students this we propel are and efforts, with pandemic our commitment fully less-than-favorable to engagement results paired for some strategy, quarters, has amount the into diversification tremendous our the few that past caused aware with the growth feel

in digits any have business noted And on we that confident we executing the at we're an substantial. to the to that in strategy As economy. core now designed believe past, is growth, that a is built build grows opportunity mid-single are upon we've organic low we that

over Troy 'XX performance, I'll and thoughts operating now the discussion on of Troy? beyond. our for call his our in-depth hand fiscal XXXX initial to guidance and

Troy Anderson

Jerome. you, Thank

Jerome that our strategic the road discuss operationally discussing delivered and spend and the this quarter, then results we several a minutes expectations. our As well fiscal map few against XXXX for our next and I'll mentioned, years. our strategy executed and results surpassed quarter guidance

the starts expectations XX.X% continued for strong This growth basis year prior X basis growth, with X,XXX student points, across quarter a all student channels. start but the XX marks effectively of decreased year-over-year. during our with consecutive double-digit versus the quarter We second points interest the converting quarter, by quarter. XXX Show prospective rate exceeded increase new

not quarter, first Year-to-date, the the during through by pandemic. flat is rate impacted half considering of positive a the year-over-year, show the the fiscal second outcome was roughly XXXX rate show very

last year-over-year XX.X% the show expect Scheduled we We starts move consistent increase higher improvement quarter. than prior we student same year saw as were forward. the rate in new quarter,

strength, increased for the starts last third same XX.X% as refine during to all seen the high student access our are second higher the measurably pacing combined and year. half which last quarter impacts build fiscal next year. with Average quarter builds Scheduled in we marketing further growth efforts, will given new quarters active than XXXX quarter the few X our active Momentum year-over-year elevated in quarters. COVID for expectations. the for we've the year-over-year last be front-end compared fourth of confidence school messaging to continues we as currently the our students period of saw Average student the

guidance student well meet growing Our for to XXXX in base us very fiscal and strong fiscal positions organic growth XXXX. our

attributable quarter, quarter, decrease primarily revenue to the second X.X% the total $XX.X For per million, student. revenue was down prior versus with the year

decline where revenue as student last was per were last quarter relative expected, the modestly above more year-over-year, half measurably we see and down Revenue While it reduced by quarters X quarter. we than ago. pleased to relative to to it increased

quarter, focus last that revenue students normalize per are at support completing thus and improving students pace have many enhanced educational discussed to As come our which the inhibited initiatives the This Many student. will since year. us a to a underway achieving driving is have we for outcomes our continue are element curriculum, to key last initially beginning the a be guidance. students pandemic their of our way for coursework long and

last XX% I'm proud compared the of call. number labs our fully the earnings up students to to stood as rotation, the XX% as caught their say most course that of at of with recent time at

million last quarter. student XXXX $XX that in third deferred when we result, the progression. a course the originally fiscal greatest of revenue approximately COVID $XXX,XXX quarter impact saw the million As was quarter $X on deferred Recall we only versus for

campus for quarter, driver $X.X we the with decrease as we purchase. our result in in occupancy expense our acquisition-related Avondale Sacramento to year, approximately incurred our in including decreased $XXX,XXX of past facility, the Note Norwood campus of have the measures. non-GAAP closure, downsizing a the headquarters a costs the we quarter and that being out Operating million, $XX.X the X.X% taken campus the in costs the adjusting of are million and actions largest

cost optimization and to in productivity the our model business our learning Overall, efficiency operating we real rationalization are estate and confident blended other continue efforts, leverage improvements. through creating our across ability of

loss for our in in to due million adjusted in minimal lower quarter highlights $X.X the higher $X.X Operating prior a of million year, the was $X.X adjusted The year XXXX. gaining the while management despite model to and and $X.X effectiveness our was we compared compared decline million loss lower efforts. are efficiencies the operating to QX largely the revenue, EBITDA of cost of EBITDA average prior versus revenue students million

quarter per XX,XXX,XXX Net year prior under net quarter. income Note loss $X.X Basic the was prior outstanding carryback fully result the for quarter. net includes loss to CARES diluted and Act. income share million of net operating tax that the compared with million the $XX.X in million $XX.X income of both shares the was of the revised benefit loss as the common were end regulations of year $X.XX

net of in our adjusted we reporting profitability income as adjusted this our the better forward, non-GAAP income Going strategic our to indicator be we will believe a expected measures, be will as opposed initiatives. impact for our operating performance given business, and

income our For to income of million benefit. net $X.X CARES this quarter, which Act prior adjusted excludes net the period, in $X.X loss was tax the adjusted million compared

matriculation as Cash flow. the year $XX.X which Turning second weighted to and cash of the XX of half million $X.X million, returning flows year. of our $X.X of Year-to-date, cash we securities. the $XX.X Available half and fund sheet and the and million liquidity prior balance unrestricted as the first increased held-to-maturity is flow to to equivalents versus adjusted $XX includes $XX.X in are and to and of by short-term cash from $XX.X more increased been patterns March flow expected strong consistent million free to cash million. cash CapEx was has the operations year million, million student

opportunities topic. to additional update financing the we'll becomes increase for to deployable further capital. information this our And potential note, another we on when continue As explore Avondale available campus you

confidence operating half increased. and Regarding guidance, improving year front-end XXXX only our completed, the performance, continued our fiscal has with strength

reminder, and EBITDA guidance free million pacing adjusted third million to we fourth to From of and revenue delivering adjusted $XX XX%, cash $XX of the $XX student for of growth and million in million, in quarter XXXX, of fiscal new year-over-year start million $XX flow excess a XX% the $XX to As a million. revenue anticipate perspective, $XX in implies quarter. in of the excess revenue

to and prior out will adjusted our $XX investments acquisition-related pivoting million adjust items. income income other of $XX nonrecurring guidance expenses, the impact which of million, net are We to net strategic

map. a few strategic Jerome our mentioned, it's road spend on minutes we important also As

With the end the both the initiatives. our provided expected include base our Austin the program, Miami we The from and the welding close past launch by announcements model, MIAT, initial an regarding over expect we in and ongoing in months definitive our impact, XXXX to XXXX. business steps the growth of of new announced learning to and diversification strategy, expect few fiscal the executing optimized campuses acquire and of announcements our around expansion which blended outline which to in we fiscal the agreement

time over of annual successful average thus $XXX estimate result the these next closing including XX%. the margin XXXX, million the these we XX% exceeding we our several of rate in in revenue growth of with acquisition, company lines assuming annual summary, with over that the positioning execution MIAT aggregate actions announced, an excess would within impact years, of EBITDA base revenue initiatives adjusted deliver the the trajectory In business, had to by fiscal solidly coupled

out XXXX estimate momentum environment. more important be revenue of not includes it XXXX year initiatives. double-digit specific we what growth For operating is into a view conservative believe fiscal of business the we the we fiscal full will base the future note this expansions, welding It's pre-COVID-like guidance business, in down to represents key but these a given components: of to the which see and we of Breaking in the benefit to the carry incorporating expect the that

time horizon. mid-single low countercyclical going base growth forward, throughout any be should EBITDA this the to expect rates then We margin excluding to business the in upsides. digits Adjusted normalize expanding to also

approximately contribution. update, XXXX by launch revenue and programs view million a combined generate reflects and XXXX, in combined, direct in which Austin of financials, welding $XX the that estimated $XX initially and EBITDA these includes only auto, fiscal our should and the in began For fiscal their reach ramping they pro XXXX. approximately in Miami revenue at fiscal forma in diesel and revenue to their this Note Both published strategic plan million we we campuses. campuses,

also expect exceed efficiencies the We will blended reflecting deliver expected model. our learning operating XX% to EBITDA them by with we which XXXX, direct margins, fiscal very associated healthy estimate

in entity, the XXXX $XX as per of XX% million year a approximately $X.X revenue revenue million stand-alone growth over MIAT, years, has and For of EBITDA. last adjusted X averaged generating

Given and believe we through realizable by growth than and the there. stream cost more expect we can the this and cross-selling double program highly We XXXX business, adjusted existing synergy also given operating leverage growing this EBITDA margins would more than expansion, fiscal synergies. and opportunities from trajectory double revenue for continue a

rate to also combination EBITDA synergies of campuses the margin fiscal with end revenue and we the we acquisition the business in the MIAT would closing in the further XXXX, strength, by Fiscal to get With launching mid-XXs fiscal growth low revenue MIAT. the the overall of campuses growth teens. new the should the XXXX and be margin of base show fiscal benefit ramping XXXX year and expect the adjusted as expansion double-digit new XXXX the in a and low growth see

and making, MIAT provide quarter monitoring pending in the the earnings this acquisition are later initiatives XXXX guidance investments the continue The we business year. growth Xth and foundational strategy. diversification expect to along our will base various formal pillars overall We and to performance XXXX our growth are with organic FY our call progress FY of

further path. Jerome to move further initial us engaged steps, Importantly, opportunities in emphasized, these and on we and to remain as are execute this down actively evaluating

strong over for in this turn UTI results delivered outcomes education a for and thank closing their to Jerome dedication they remarks. With focus that, want the quarter. I students team back the financial and now call for quality to our and I'll operational the delivering strong and for

Jerome Grant

Thank you, Troy.

she to we to discuss May Board. which the your address of the California former Southern She's democratic a That something terms. excited our brings Loretta Congresswoman appointing and to XX county creativity Before tenacity, passion, approach innovative effective very welcome Loretta, should represented in X. Board quickly Republican questions, became to her our congresswoman alone Loretta to about that tell achievement majority announcement recent I'd work. for a like you We're Sanchez Directors, consecutive

quality member a also the Congress, Joint House member She and for and X important served held Committee. passionate students House prepare assignments for senior their Armed available as to the Labor advocate to Committee, adults. higher including future of and during the founding be member that choices of committee Committee. a years is years her Education Services She a Economic in opportunities. higher House ensure is Loretta working able of of believes as Homeland to job access education, Committee, need all to people that She returning education the types for numerous Security

look Loretta to efforts help firsthand auto family skills value and as the to and the needs. programs, has working in partners who address of growing this part business excited schools UTI. with deficit the She's country in we such also opportunities educators, had our company to face We seen that of Loretta. to critical the and to members as meet and work providing multiple you, our engage others be important work forward in play technicians has

the fiscal pleased year more this In closing, delivered the we're of quarter and are taking even into and with the beyond. half excited about solid back we're results we momentum the

job goals. their making progress good a fine navigating career of doing are normal students Our towards the and new reaching

their resiliency. We are dedication proud of and

But Our growth X just most to XXXX. MIAT taken we're so is diversification and getting flight with regarding strategy we've taken campuses of need important pending the steps message that now the and new has of started. in announcement acquisition you strategy our the the far understand and

for now to turn call to Operator? I'd the over like the operator Q&A.

Operator

Colliers. first from Frankel Our comes Instructions] Steven [Operator question with

Steven Frankel

had keeping I And here. up. unpack trouble to lot A

you guidance, feel repeat for but of not So terms know in overall margin 'XX fiscal the growth start be what and on rate should I the 'XX? again, profile? comments with could it's

Troy Anderson

we for a the the overall. we carry metrics operating with full performance this the Steve, thanks year benefit get a year, my think out The our our and in about of through 'XX improving lot momentum is And more, -- pre-COVID-like Troy, Yes. start in environment. words, question. 'XX, of when of we

that, combined preliminary MIAT by in margins launches on a and the low of we low but the that's growth see the And to year, year. next shaking believe in end basis, successfully and again out how for we the so the rates campus And so teens should the closing we see mid-XXs with it that's acquisition that's far.

Steven Frankel

Great. you good. sounds what look And MIAT? EBITDA That like could Okay. remind pretty the us margins at

Troy Anderson

Yes.

calendar on XX%. For 'XX, just was calendar had for the of $X.X again, million adjusted EBITDA -- clarification, And million $XX they margin referencing company, adjusted a way, they're our year by of about the revenue, it's too, I EBITDA. was number was

Steven Frankel

Okay. different And in were their margins 'XX? materially

Troy Anderson

well been been they've driven growth program efforts. as -- marketing, their as Well, expansion by both marketing improved has

so the some implement. with to programs And cost come

So in they've last and as the over their conjunction the years launched have margins growth several the programs been last over expanding their with they've years trajectory few matured.

Steven Frankel

to do starts that been Okay. then material would we have year, by your seeing the didn't going show in rates? thought imply last over on and think we on when rates, a And the that improvement in you seem now have What's would normalize? And to show you comments.

Troy Anderson

Yes. 'XX of half 'XX. and Sure. -- 'XX we we this at looked projected originally, -- we first started When year

show not The first was of a affected perspective, COVID. not rate by from 'XX half affected was

for we at and and year. looked back had we off 'XX of surprised. from for looked latter we the are 'XX we year And at And 'XX then to more pleasantly part the jumping were how front well, the with, year, so the of last But start this half the of we half year. when

was QX we stronger much expected. than

talked about, it I XXX better. think was points we basis

so by down And still points quarter we while our XX on actually expectation, were year-over-year. better basis this

the the in we QX out of continued because who rates the trajectory, off strong year. year. but the show on we're right better was started would think positive assumption see gradually QX, students the momentum throughout Our of deferred and get through of carryover We of we rest

Steven Frankel

you How And not being and Perfect. of their issues being have their last back, mentoring had you these passing students failing Okay. but behind, students up coursework. just done quarter brought in getting courses? one the them was

Troy Anderson

in seeing the blackboard spike to quarter X-day referenced of way And that through gives we more engagement were conversion the student those in about some well. model the seeing labs, where We've We've this many those talked COVID delivery our students, and curriculum from monitoring with heightening them and I've we that. underway. frankly, different of initiatives, for the much leave us manage our had we XX/XX. of And we're talked We of bringing We're lot Yes. in context on mentoring, integrated the we're initiatives the the going the churn about the quarter have to withdrawals. as yield, ended student performance, lower student our benefits seeing really curriculum. a of in lower the had absence. base, initiatives much

guidance. year of and challenges that of lot a of So year And confidence the latter gives of half look we us think part first part this back again, we're we coming the the last of the definitely of the and on at the other some our side out as of year. achieving

Steven Frankel

make are gap? a regional many airline Great. MIAT airplane close filling your or to And Okay. last campus difference skills one projected could that where or -- current hub a locations of reasonably one. How in

Jerome Grant

think Good I it this Well, from -- to is Steve. could here. Jerome hear you,

First of the areas. MIAT organization in all, it's other understand and X/X skilled airline important mechanics about as that is an X/X to

a name skills of understand, family. on, to they on have to proud towards that engage being part the have aside, broad them they Just heading And their campus. we're of set

as what technicians because, high. mind private both aviation where in, -- well locations for work close of airports is both in number is turbine on isn't airport course, it, they're demand which city necessarily of a have has aviation, And how kind. they airports it We are of an as in commercial to

major also there have understand robust -- MIAT group a great cities opportunity aviation, also that be number the to of would but So other demand high it's quite in important skills our skills. in

moving can the their technicians heard the and and of You've wind see a that They're very, as HVAC, infrastructure our well, in demand. that very there's areas off the government in to we large number we're very plan, our Florida talk adding coast of X Robotics, on high footprint. supplier about into wind high the a California. farms campuses, demand quickly across bring areas campuses of especially keen

Operator

Our question with from Riley. B. next comes Sharma Raj

Rajiv Sharma

to seem wanted the -- talked about, exciting. just seem numbers just that very 'XX hit they I fiscal you they

So glad lot Steve I earlier. But there. it, there's of missed interest I some guess I'm those a and repeated of that

-- low MAIT across rate include and cross-selling do 'XX, XXs any fiscal to [ programs to low are MIAT -- don't (sic) ] of And these your campuses? looking margins. So -- you're mid then these growth teens XX they these

Troy Anderson

In subject we appropriate we're that we'll fiscal of for our of not year. this 'XX, again, let by fiscal the to is things don't would -- And assume of approval. baseline MIAT Ed Department 'XX, of if close there, would like that. we then -- and be most assumption, start me probably end getting all doing approvals the be 'XX, And is and -- implementations

So -- and primarily from it beyond. the some starts 'XX but yield there cross-sell really, minimal yield, be in may

Rajiv Sharma

Right.

exclusive X talking right? losses gives and you EBITDA and the that those so are of confidence EBITDA -- low-teens that on in margins? for 'XX, the And Is about new operational campuses, they're -- so any you're what just margins,

Troy Anderson

additional schedules. EBITDA. clarification We adjusted It's you non-GAAP guidance the will in -- to, point some provided we I did the Correct. on

out, So you we've the campus 'XX adjusted costs, acquisition costs, that that. can of like FY see the things implementation impact

roll we format see 'XX would once that you out. similar So for a

Rajiv Sharma

Got it.

million guidance losses excludes and operational so And new... million $XX from -- any also $XX to of this year's

Troy Anderson

is That correct.

Rajiv Sharma

it. Got Campuses/programs.

Troy Anderson

The we just We're roll adjusting are that's the The campuses. significant. not adjusting really It's is what absorbed and programs out EBITDA out. Yes. in our that those campuses results. out, welding we're not

Rajiv Sharma

year, half remaining Right. the you're And this maintaining clearly, on of guidance. then

had looking again? those, Are repeat $XX QX and mentioned -- at. were you the greater you million? what could than numbers QX You you're You thinking

Troy Anderson

Correct. and $XX Greater million get to range. $XX than you greater low the end Those of than the million.

will with obviously, and fourth be quarter and so But start million. range. third have a X above And we an a X quarter would with start $XX

Rajiv Sharma

last just then And it. Got question. one

the about where kind do to? the improving. you I could you high that And expect student. at around average has talk look sequentially, go to If Can per it's when -- quarterly -- was you number improving it this Because the high tuition the know half this been -- you you expect quarter made quarter to pre-COVID the that? hasn't you the it to year back caught totally of fourth back up? up XXXX, in level, been this quite that have When expect the trend definitely clearly. is second looking Do and of do of

Troy Anderson

Yes.

in our then was we modest tied basis. changes then I be be, think you what QX again, fully single-digit year, to pre-COVID much per like normalized point student level, see setback, 'XX each -- our -- more a year, a each revenue pretty look year-to-year just pricing tuition would more And we we'd levels. pre-COVID low and increase will a increase basically, the on at some at would lot of to expect that absent major pre-COVID

would so at And quarter. $X,XXX, we off we -- left $X,XXX a

I think by be year close to if in then we'll this 'XX. get quarter probably fourth and there, pretty and that, not there beyond

Rajiv Sharma

you mentioned had share the And it. that update you Got buyback it. any might implement? Got on

Troy Anderson

back a as get December, Well, we for Board capital authorization, million. certainly the $XX authorization from did option we we We the if did yes, our -- that's -- allocation go-forward plans. evaluate you will, refreshed in

we've prioritizing announcements think about talked months we've it's I something authorization the and what last from for is continue been there, investments, to few but diversification considering. an out us there clearly, growth today, and and over the

Rajiv Sharma

Right.

could line is you if And higher projects mean how whatever So with I buyback decisions? it fit? in IRR. a are this the implement making But otherwise, you're share that's saw you

Troy Anderson

shareholder Series subject preferred is to A It consent. could. We the

that any yes, So through go But we buyback. have execute to would we is one still step could. to

Operator

comes next with Markets. Street Lake Jacob Our Stephan from Capital question

Jacob Stephan

Jacob is Eric for This Martinuzzi. on

kind start welding what are seeing? -- you demand wanted Just of with to that's program the

Troy Anderson

we've we campus results time Long very We program. start start We've consistent them every filled year, in or And last weeks. minus, roughly year. welding launched last given XX we a them date. of quarter, of in after any Lisle in our We just start. or size, launched X pretty August on here May plus launched we near Beach each Houston And in consistently generally seen to this XX%, students February. can built a those specific are filled we XX full at And

demand there. So good we see

Jacob Stephan

closing any What's with MIAT I that? Great. Are over September? challenges you for a believe time seeing guys Switching target of the line, the kind acquisition. to

Troy Anderson

in hurdles finishing line. or roadblocks any anticipate in don't time We No. that

Jacob Stephan

Great. Okay.

-- quarter. guys you color point Are makeup little that student last you more So give labs, of that I a bit can in a you Or the was all have big revenue? recognized know that? just on

Troy Anderson

Yes. million last The end the of $X $XXX,XXX. of deferral as had the quarter was quarter. We

$XX deferral Our original million. was

continued end cleared, certainly the even this we to I the quarter, obviously, would progress away the the have of expect, the the likely on the that we So of would and of by since make go quarter, end we've end here majority based that, at of see vast year.

Operator

Our next Austin Instructions] from comes [Operator Canaccord. Moldow question with

Austin Moldow

rate growth can scheduled very QX, those trajectory scheduled starts high, was just to throughout you of even impressively Given though the flat that quarter? the from the talk was it start

Troy Anderson

you the year? the could Within clarify? the you I'm quarter, of mean? remainder sorry, Or over

Austin Moldow

in within Yes, quarter. the

Troy Anderson

quarter. the within Trajectory

Jerome Grant

clarify need to little going We're that bit just a to you more.

Austin. Sorry,

Austin Moldow

said Well, pacing from ahead last quarter, you was that I QX think of QX.

just little that a from And was QX, now month, -- from what flat so looking I happened the color fact on to it's for the guess. month over I

Troy Anderson

it. Got

Okay. Yes.

mechanism had the that right? that and of of the it's of number on pacing, February. pipeline based enrollments was a a remainder have pacing number. we quarter we at the beginning postpones, it internally. arrives And time, have standard also we out -- then the at had -- historical we So It's extrapolate through reporting So we a

quarter the faster. off started we So

this the in to contributed by do that quarter. so adjustments way, we pacing. favorable And And then more price a implement, typically

can seeing, time. a back at point, And bit we're so and a slowed but contribute it bit only that to this that And again, after to XX%. down that little point even of stronger, in some pacing,

be we've guess, by transparent last I that given some the leading baked noise Austin. indicator, near the all at been not on over leading it's nowhere It's a -- point. but trying of It's indicators directional. the to fairly few it's quarters,

Austin Moldow

within in how to contracts? your you high channels Got factors the speak little then you. school bit a particularly Can that? And outlook different

Troy Anderson

strength all... we're mean I across Yes. seeing

Austin Moldow

I guess what you are seeing for high school.

Troy Anderson

Yes. in half across the all the strong Yes. been year. We're school the has -- I mean, surprisingly first of High we're strength channels. seeing

Some of year. of last was that out carryover

adult, delayed and would good that military, not dramatically we're in say, overall different. strength decisions. good Some expecting our in seeing of is just I strength mix, We're

some more again, of it's We seeing our that we are of wouldn't current maybe we're delayed that dramatically assuming add I would, some would given to say changed. you out a than behavior But that? anything trends. adult bit Jerome, of And little normally just high school.

Jerome Grant

No.

right think I on. you're

Austin Moldow

that is of on last you sort how a terms be given Okay. per really little your if was some MIAT. marketing little their Can augmented. able in a cost acquisition just they're spend looks high-growth what like of of what talk you kind curious to MIAT your to And start, start fields roof? attractive about advertising once in more achieve be complete or I'm anticipated then will even question total And cost under per

Troy Anderson

get They on Yes. a details program. it I basis. on have going into would metrics I locally more an mean, speaking, They not some accommodate we're underlying just of the too relocation campuses. to to more broadly market exception do many their MIAT. on really yet of say, don't they

programs broader to, as, from to access of our to that's we campus. about, putting -- marketing relative points our in we're Michigan our diesel bringing Michigan the right, opportunities will that into their the strategy continue marketing driving so overall And we'll perspective, -- footprint the we And into access Canton, more all of channels excited have one is campuses, have as have to as fold Jerome price them. given we for bring that about talked a well we as them students go campuses, in into that And broader forward. scale those potentially marketing into us their the

Jerome Grant

about we robotics, olds schools XX XX to renewable that and car nondestructive across I high programs be, that footprint. demographic of year is X.XX more those people, though the is HVAC. testing as their as leads campuses even we're more accentuate make or collecting and of they nearly on I've with a X programs would their significantly the as footprint million talked a we a campuses, skilled just ours. -- high what student in more want aren't to may also well an developed gives lot those but in past, take the opportunity just of interested bring channel I do then it energy, And have school one us same as bring one their the our comment mean, we leads their said when as trades would that acquisitions would be to convert potentially from our they also, And year of could into

see we So there. upside some

Operator

the over closing any to turn back to [Operator I Instructions] conference concludes like would This question-and-answer session. the remarks. for Grant Jerome

Jerome Grant

forward and with appreciate this call. I everyone, operator. thank you, you, execute into your the And to our on We, for continue Thank investment to team, as dialing today. progress quarter's strategy a earnings share help our management look community.

from. evening, you. I call. So have for this joining. wherever calling in or you're afternoon our And thanks hope again great concludes a Thank you

Operator

now you conference today's for presentation. The has attending concluded. Thank

now may disconnect. You

Universal Technical Institute (UTI) 6 May 212021 Q2 Earnings call transcript