42 slides from Universal Technical Institute's investor presentation, Aug 2, 2021
Slide 1: Universal Technical Institute Investor Presentation
Universal Technical Institute Investor Presentation August 2, 2021 2021 Universal Technical Institute, Inc. All rights reserved.
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Se
Slide 3: Introduction
, Introduction
Slide 4: Leading Provider of Skilled Transportation Technicians
Leading Provider of Skilled Transportation Technicians 1965 225K+ FOUNDED TOTAL GRADUATES 35+ ~11K MANUFACTURING CURRENT STUDENTS1 BRAND PARTNERS 4,700+ INCENTIVE & TUITION 84% EMPLOYMENT RATE2 REIMBURSEMENT EMPLOYER LOCATIONS $313.9M $103.1M TTM REVENUE3 CASH AND INVESTMENTS1 NYSE: UTI 1 As of June
Slide 5: State-of-the-Industry Technology and Training
State-of-the-Industry Technology and Training PAGE 5
Slide 6: Impressive Training Facilities Nationwide
Impressive Training Facilities Nationwide PAGE 6 Notes: Excludes the Norwood, MA campus which was closed on July 31, 2020; Orlando campus currently consists of the 3 buildings shown
Slide 7: Investment Thesis Highlights
Investment Thesis Highlights Executing on strategic and transformation plans, and building momentum toward ever stronger results Attractive student value Evolved post-COVID proposition which includes strategy will fuel EBITDA blended learning model and student start growth Optimized for any macro St
Slide 8: Growth & Diversification Strategy
Growth & Diversification Strategy
Slide 9: Near-Term Capital Allocation Priorities
Near-Term Capital Allocation Priorities Management and Board are prudently allocating capital in support of the Company’s growth and diversification strategy while also evaluating opportunities to return capital to shareholders NEW PROGRAM CAMPUSES EXPANSIONS Two planned for FY2022, Two new welding
Slide 10: Double-Digit Revenue & Adjusted EBITDA Margin Growth
Double-Digit Revenue & Adjusted EBITDA Margin Growth Current initiatives expected to drive >10% Revenue CAGR and Adjusted EBITDA margin expansion; Actively evaluating additional opportunities to drive incremental growth and shareholder value 5-Year Outlook Including Announced Initiatives • Expanding
Slide 11: New Campuses Leverage Blended Learning Model
New Campuses Leverage Blended Learning Model Proven new campus model further enhanced by fully integrating blended learning curriculum delivery, providing value for both the student and the Company Benefits to the Student Benefits to the Company • Increased Program & Scheduling Flexibility • Higher
Slide 12: MIAT College of Technology Overview
MIAT College of Technology Overview ACCSC-accredited vocational and technical school offering a variety of programs complementary to UTI offerings accelerates realization of UTI’s growth and diversification strategy SUMMARY FOUNDED: 1969 2019 METRICS: • COMPOSITE SCORE: 2.4 (of 3.0) FY20 REV1: ~$25M
Slide 13: MIAT College of Technology Key Metrics
MIAT College of Technology Key Metrics Strong growth and margin improvement trajectory supported by a diversified program mix $30 Financials 16% Student Starts 16% 20% 14% CAGR $25 CAGR 12% $20 10% $15 8% 6% $10 4% $5 2% $0 0% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Revenue ($M) Adj EBITDA
Slide 14: Optimizing Real Estate Footprint for Efficiency
Optimizing Real Estate Footprint for Efficiency Transformation across UTI’s Real Estate portfolio yielding significant cost and utilization improvements Completed In Process Evaluation Total Sq. Ft Keys to Real Estate AUSTIN, TX* Target Opening Q2 FY22 107,000 MIAMI, FL* Target Opening Q4 FY22 103,0
Slide 15: FY 2021 Guidance
FY 2021 Guidance FY 2021 performance projected to drive double-digit expansion on both top and bottom line New Student Start Growth (Decline)1 Revenue Growth (Decline) Adjusted EBITDA2 ($M) 10%-15% 10%-15% $30 - $35 11.5% 4.6% $17.0 $14.0 (9.3)% (2.4)% 2019 2020 2021 2019 2020 2021 2019 2020 2021 Ad
Slide 16: Disciplined Execution Driving Strategic Growth
Disciplined Execution Driving Strategic Growth UTI has taken the initial definitive steps to meaningfully and rapidly advance its growth & diversification strategy, and will continue to evaluate all opportunities available to drive additional expansion and shareholder value Announced Targeted Increm
Slide 17: Student Value Proposition
Student Value Proposition
Slide 18: Demand for Our Technicians Far Exceeds Industry Supply
Demand for Our Technicians Far Exceeds Industry Supply 100,000 ~1.2M ~0.6M TOTAL EMPLOYED TRANSPORTATION TOTAL EMPLOYED WELDING & TECHNICIANS BY 20291 CNC MACHINISTS BY 20291 44,000 275M+ 1.3B+ VEHICLES IN THE VEHICLES ON THE UNITED STATES2 ROAD WORLDWIDE3 Auto/Diesel/CRRT technicians 2020 Graduates
Slide 19: Marketing Approach to Address the Skills Gap in the Labor Force
Marketing Approach to Address the Skills Gap in the Labor Force Targeted, multi-faceted outreach generating more quality leads and optimizing advertising spend Direct Response Drive-to-Campus Direct Mail Manifesto Testimonials Events Landing Page Event Profile Page Bookings Page Focused localized m
Slide 20: UTI Student Lifecycle
UTI Student Lifecycle By continually refining our approach to student outreach and constantly improving our educational delivery model and the overall student experience, UTI produces outstanding success rates for the students we exist to serve ~7K Employed* Field Leads ~8K Media Workable Graduates*
Slide 21: Evolving Strategy to Better Reach and Engage Students
Evolving Strategy to Better Reach and Engage Students ADULT LEARNERS FY20 Starts by Channel Optimizing traditional and digital advertising to generate inquiries motivated HIGH SCHOOL GRADS 32% by robust opportunities in the job market Adult Learners HIGH SCHOOL GRADUATES 52% High Adding reps and enh
Slide 22: Learning Experience Evolution
Learning Experience Evolution Improving engagement, best practices, and alignment to industry and lifelong learning while also driving efficiencies in our operating model and campus real estate footprint Traditional Model Interim Blended Model Future Blended Model On-campus, in-person, On-line async
Slide 23: Well-Positioned National Campus Network
Well-Positioned National Campus Network Available capacity to increase students plus additional market opportunities to add rapidly accretive campuses Overview: • 12 Campuses in 8 States • Total of ~2.1M square feet • Located in high-demand job markets • Easy access to major populations Welding Prog
Slide 24: Industry Partnerships that Deliver Value
Industry Partnerships that Deliver Value UTI’s relationships with more than 35 leading brands and other industry partners provide a unique value proposition and competitive differentiation for the school and its students PARTNERS STUDENTS UTI • Efficient hiring source • Opportunity for better • Curr
Slide 25: Industry Leader with a Strong Value Proposition
Industry Leader with a Strong Value Proposition UTI’s position as an industry leader in technical education, cutting-edge campuses & curriculum, and progress in its growth and diversification strategy benefit its students, shareholders, and employees alike PAGE 25
Slide 26: Appendix
APPENDIX
Slide 27: Talented Management Team with New Leadership
Talented Management Team with New Leadership Jerome Grant, CEO Troy Anderson, EVP & CFO Sherrell Smith, EVP Campus Operations & Services Eric Severson, Lori Smith, Todd Hitchcock, SVP Chief Strategy SVP Admissions SVP Chief Information Officer & Transformation Officer Chris Kevane, Sonia Mason, SVP
Slide 28: Highly Qualified Board of Directors
Highly Qualified Board of Directors Robert DeVincenzi David Blaszkiewicz George Brochick Non-Executive Chairman, President and Chief Executive Vice President Universal Technical Institute; Executive Officer, of Strategic Development, Principal, Lupine Ventures; Former Invest Detroit Penske Automotiv
Slide 29: Unemployment and Recession Trends
Unemployment and Recession Trends
Slide 30: Recessionary Impact – Unemployment Data
Recessionary Impact – Unemployment Data 2019-2021 trends are very different than 2007-2010 Males and Females 16 to 24 years old 30.0% 7,000,000 2020 Unemployment Claims* 2021 Unemployment Claims* 2007 2008 2009 2010 2019 2020 2021 6,000,000 25.0% 5,000,000 16 - 24 Male Unemployment % Rate 20.0% Init
Slide 31: Prior Recessionary Impact – Student Data
Prior Recessionary Impact – Student Data 2008 – 2011 Student Starts Students at Period End Avg # Students Unemployment Rate 21,500 19.0% 20,750 17.0% 20,000 Male 20-24 Annual Unemployment Rate 19,250 15.0% 18,500 13.0% Students 17,750 11.0% 17,000 16,250 9.0% 15,500 7.0% 14,750 14,000 5.0% 2008 2009
Slide 32: Prior Recessionary Impact – Financial Data
Prior Recessionary Impact – Financial Data 2008 – 2011 Revenue EBITDA Margin % $475,000 17.0% 16.0% $450,000 15.0% $425,000 14.0% $400,000 Annual Revenue ($000s) 13.0% EBITDA Margin % $375,000 12.0% $350,000 11.0% 10.0% $325,000 9.0% $300,000 8.0% $275,000 7.0% $250,000 6.0% 2008 2009 2010 2011 PAGE
Slide 33: Compliance Statistics
Compliance Statistics
Slide 34: UTI Department of Education Regulatory Metrics
UTI Department of Education Regulatory Metrics The Department of Education uses the following three regulatory metrics when assessing for-profit school performance: 90/10: Regulation that governs for-profit higher education capping the percentage of revenue that a school can receive from federal fin
Slide 35: Summary of UTI Annual Report Data Submitted to ACCSC
Summary of UTI Annual Report Data Submitted to the Accrediting Commission of Career Schools and Colleges (ACCSC) Total Students Completion Students Available Total Employment Total Grads Avail. For Grad. Percentage for Employment Employed Percentage Avondale, AZ 1,810 1,380 76.2% 1,169 1,013 86.7% R
Slide 36: Department of Education Regulatory Metrics
Department of Education Regulatory Metrics Federal Funding by Classification ($ in millions) Avondale Houston MMI Avondale Houston MMI FY 2020 (10/1/19 – 9/30/20) Consolidated Consolidated OPEID1 OPEID2 OPEID3 OPEID1 OPEID2 OPEID3 Amounts Title IV 73.2 60.6 45.1 178.8 Proportions 82.1% 85.5% 80.1% 8
Slide 37: Non-GAAP Information
Non-GAAP Information
Slide 38: Use of Non-GAAP Financial Information
Use of Non-GAAP Financial Information This presentation contains non-GAAP (Generally Accepted Accounting Principles) financial measures, which are intended to supplement, but not substitute for, the most directly comparable GAAP measures. Management chooses to disclose to investors these non-GAAP fi
Slide 39: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Guidance Actual Actual Midpoint 12 Mos. 12 Mos. 12 Mos. 9/30/20 9/30/19 9/30/21 Net income (loss) ~$13,000 $8,008 ($7,868) Interest (income) expense, net ~(100) (1,142) 1,729 Income tax (benefit) expense ~600 (10,602) 203 Depreciation and amortization
Slide 40: Adjusted Net Income (Loss) Reconciliation
Adjusted Net Income (Loss) Reconciliation ($ in thousands) Guidance Actual Actual Midpoint 12 Mos. 12 Mos. 12 Mos. 9/30/20 9/30/19 9/30/21 Net income (loss) ~$13,000 $8,008 $ (7,868) Income tax (benefit) expense ~600 (10,602) 203 Income (Loss) before income taxes ~13,600 (2,594) (7,665) Acquisition-
Slide 41: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation ($ in thousands) Guidance Actual Actual Midpoint 12 Mos. 12 Mos. 12 Mos. 9/30/20 9/30/19 9/30/21 Cash flow provided by (used in) operating activities, as reported ~$42,500 $ 11,032 $ 21,746 Purchase of property and equipment ~(73,500) (9,262) (6,453) Free Cash
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