Universal Technical Institute(UTI)2024-08-07 03:37Financial Data and Key Metrics Changes - Revenue grew nearly 16% year-over-year to 5 million, with diluted earnings per share of 18.4 million, reflecting strong operational performance [7][23] - Total average undergraduate full-time active students increased by 13% year-over-year [20][21] Business Line Data and Key Metrics Changes - Concorde division saw a 14% increase in average undergraduate full-time active students and a 34.8% increase in new student starts [20][21] - Clinical starts in the Concorde division grew 64% year-over-year, while core and short programs grew 20.6% [21] - UTI division experienced a 13% increase in average undergraduate full-time active students, but a 12.5% decrease in new student starts due to timing shifts [21][22] Market Data and Key Metrics Changes - Demand for skilled labor in transportation, skilled trades, and healthcare remains robust, with anticipated job growth over the next decade [6][8] - The company expects to achieve double-digit start growth for UTI in the fourth quarter and approximately 10% growth for the fiscal year [7][21] Company Strategy and Development Direction - The company is entering Phase 2 of its North Star Strategy, focusing on addressing the need for skilled workers in America [17][19] - Plans to launch a minimum of six new programs annually and open at least two new campuses each year starting in fiscal 2026 [18][19] - The company aims for a compound annual revenue growth rate of approximately 10% between fiscal 2024 and fiscal 2029 [18][19] Management's Comments on Operating Environment and Future Outlook - Management noted a weaker economy with fewer jobs being added, but demand for skilled labor remains strong [5][6] - The company is optimistic about its growth trajectory, expecting to hit the upper end of revenue guidance for fiscal 2024 [19][27] - Management emphasized the importance of strategic partnerships and program expansions to enhance growth [10][16] Other Important Information - The company anticipates significant year-over-year growth in profitability metrics for the fourth quarter [24] - Total available liquidity was 33 million from the revolving credit facility [25] - The company plans to pay down an additional 15 million on the revolver by the end of the fourth quarter [25] Q&A Session Questions and Answers Question: Can you provide insights on the North Star Strategy and the 20% target for '29? - Management indicated that segment-level details are not yet available, but growth initiatives will initially focus on UTI due to current restrictions on Concorde [34] Question: How are you thinking about capacity as part of the North Star plan? - Management stated that capacity is not finite and they are continuously refining educational delivery and space utilization to increase capacity [35][36] Question: What has been the experience with FAFSA issues and their impact on enrollment? - Management acknowledged ongoing challenges with FAFSA but noted that it did not significantly affect overall enrollment for the year [37][38] Question: Can you provide an update on marketing channels? - Management reported strong results in both divisions, with effective lead generation strategies contributing to growth [40][41] Question: What is the timeline for new campuses and program expansions? - Management is not ready to announce specific details but anticipates being able to share information soon [42][43] Question: Can you clarify the growth restrictions on Concorde? - Management explained that growth restrictions will be lifted in mid to late 2026, allowing for new campuses and program expansions [46][47] Question: How does the Heartland partnership affect economics? - Management clarified that they will retain the economics of the campus while Heartland provides financial assistance to students [48][49] Question: Is M&A part of the growth plan? - Management emphasized that M&A is not included in the current organic growth plan but remains open to strategic opportunities [65][66]