Universal Technical (UTI) Q4 Earnings Miss, '24 View Solid
Universal Technical Institute, Inc. UTI reported mixed fourth-quarter fiscal 2023 results. Its earnings missed the Zacks Consensus Estimate, but revenues beat the same. On a year-over-year basis, both the top and bottom lines increased impressively.
The stock rose 4.75% in the after-hours trading session on Nov 14 as the company met or exceeded its full-year guidance across all the key metrics, mainly backed by three full quarters’ contributions from Concorde.
The company sees strong demand across both divisions in first-quarter fiscal 2024.
Inside the Numbers
Adjusted earnings of 10 cents per share lagged the consensus mark of 12 cents by 16.7% but rose significantly from the year-ago level of 3 cents.
Quarterly revenues of $170.3 million topped the consensus mark of $167 million by 2.3% and increased 53.9% from the prior-year quarter. The upside was mainly attributable to the acquisition of the Concorde business.
Universal Technical Institute Inc Price, Consensus and EPS Surprise
Universal Technical Institute Inc price-consensus-eps-surprise-chart | Universal Technical Institute Inc Quote
Total new student starts totaled 10,392, up 74.2% from 5,965 students reported a year ago.
Adjusted EBITDA was $19.2 million, up from $15.1 million reported a year ago.
Segment Highlights
UTI: Revenues from the segment grew 4.2% to $115.3 million year over year. New student starts totaled 6,500, up 9% from a year ago. Adjusted EBITDA was $24.9 million, up from $24.2 million reported a year ago.
Concorde: Revenues from the segment were $55 million during the reported period. New student starts came in at 3,892. Adjusted EBITDA for the segment totaled $3.99 million.
Fiscal 2023 Highlights
Universal Technical reported revenues of $607.4 million, which increased 45% year over year, backed by a $178.1 million contribution from the acquired Concorde business. The reported figure exceeded the company’s provided guidance of $602-605 million.
Earnings came in at 13 cents per share, down from 38 cents generated in fiscal 2022. Adjusted EBITDA in the fiscal year was $64.3 million compared with $60.2 million a year ago. Adjusted EBITDA came slightly ahead of the guided range of $62-$64 million.
New student starts increased to 22,613 from the prior-year level of 13,374.
Financial Highlights
At the end of fiscal 2023, the company had cash and cash equivalents of $151.5 million compared with $66.5 million on Sep 30, 2022.
Long-term debt is now $159.6 million, up from $66.4 million a year ago.
Net cash used in operations came in at $49.1 million in fiscal 2023 compared with $46 million recorded a year ago.
Adjusted free cash flow at fiscal 2023-end was $49.1 million versus $34.9 million at fiscal 2022-end.
Fiscal 2024 Outlook
Universal Technical expects new student starts in the 24,500-25,500 range, up 11% from fiscal 2023. Fiscal 2024 revenues are expected in the range of $705-$715 million, up 17% from the previous year.
Adjusted net income is projected in the range of $34-$38 million, reflecting growth of 193% year over year. It expects adjusted EBITDA in the range of $98-$102 million (up 56%) and adjusted free cash flow between $62 million and $66 million (up 30%).
Zacks Rank
UTI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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