Universal Technical Institute, Inc. 17th Annual Midwest IDEAS Conference

Thank you. Good afternoon, everyone. Hope you had a good lunch. I've got maybe 15 minutes of comments, then I will leave things open for questions and answers. Usually, when my CFO is accompanying me at these sorts of events, he's the guy who will look at this sheet of paper and in a nutshell say, "You got to take every forward-looking statement with a grain of salt, and they are merely projections," et cetera. We'll move on from there. This presentation's pretty much set up for people who don't know a heck of a lot about Universal Technical Institute, and our two brands, UTI and Concorde Career Colleges. So apologies to those of you that are in deeper on the story. We'll try to get through these materials as quickly as we can so we can get to your questions. So who are we? We're one of the leading workforce solutions providers.

We operate 35 campuses nationwide, with somewhere around 35, 36 programs at any given time being run on those campuses. We average students on our campuses around 25,000 active students at any given time. And then the other statistic is, we graduate in the neighborhood of 70% of our enrolled students, which for those of you who know the difference between community colleges, which who tend to be in the same business we are, and as they graduate somewhere in the neighborhood of 35% of the students that are there. And 80% of our graduates get job in market within a first year. So we pride ourselves on those very high outcome statistics. We're in two sectors. Universal Technical Institute is in transportation, skill trades, and energy, and Concorde Career Colleges is in the healthcare sector.

Think of everybody that surrounds the doctor, whether it's nurses, respiratory techs, pharmacy techs, phlebotomists, medical assistants, et cetera. So, everyone who surrounds a doctor. Our outlook for 2026, and I know people are going to want to talk a bit about the change in our outlook. Still strong outlook of somewhere around $900 million was our guide, $32 million to $36 million in net income and between $100 million to $103 million in EBITDA. We are two years in by the end of 2026 into our phase two of our North Star strategy, and one of the things that we've outlined at the beginning of this phase is that by 2029, we expect to surpass $1.2 billion in annual revenue, and approach $220 million in EBITDA. And we'll talk a little bit about how that happens between now and then.

Investment thesis, proven strategy for driving growth, leading educational background, success and transformation efforts, strong student outcomes. We have a very strong balance sheet and, over the last 10 years, have done a great job of executing on those expectations. There have been hiccups, as you have known, but a great job of executing on those. We are in the space of non-degree programs or non-four-year degree programs, the alternative to going to a four-year school where we all went, et cetera. Examples of those programs would be auto diesel. That is how UTI started 63 years ago as an auto diesel technician training program. But we have diversified that platform into the skilled trades, things like welding, energy, aviation maintenance, electronics, and robotics and automations. Then three years ago, we purchased Concorde Career Colleges, which is, as I said, in the healthcare technician space. UTI's last year's revenue were $542 million.

Concorde's is $294 million. So, basically two thirds of our business is in the skilled trades, transportation and energy, and about one third of our business is in healthcare. By the way, this deck is in our investor profile, so if you ever want to download it and take a look at it is there. A lot of people have said to us, "So UTI was around for a long time. What was the story with buying Concorde three years ago?" The commonality between Concorde and UTI is, we will only focus in areas that have a severe imbalance of jobs, supply and demand. There are a lot of tech trades areas and skilled areas where you need a certificate where that supply and imbalance does not exist. So you look at places like hospitality or beauticians, et cetera like that.

Those are all certificate programs where people need to be licensed to be able to do it, and they are fine trades for people to be in, but they do not have the same supply and demand imbalance characteristics of the programs of which we focus. Healthcare is supply and demand issues are actually more acute than in the trades and et cetera. So in order to participate in that larger piece of the market and diversify our product set, we bought Concorde back in 2023. This really addresses the supply and demand issues and where we will only put pieces into our curriculum where there is significant upside in terms of where that supply and demand is. One point on supply and demand. Right now, there is four or five jobs for every graduate of the programs that we have on the market.

Somewhere in the neighborhood of only 20%-25% of the jobs in these areas ever get filled, and the openings are acute and beyond them. When this phase of our North Star strategy is complete in 2029, the problem will be worse. There will be more jobs available and the supply and demand problem will even be bigger. Our aim is to try to blunt that with our growth strategy and our building into it right now, and we will go through what that means as we move forward. UTI is known as a very industry-aligned, high quality. We like to put pictures in here so you can see what our campuses look like. We have built our reputation in the marketplace and with our employers on high outcomes. That is where people thrive, and that is where people really break down.

That 70% graduation rate, 85% employment rate are our employer satisfaction. Our product is a skilled worker. Our employer satisfaction is around 96%, 97%, which we are very proud of that as a company. This North Star strategy, and take it back to sort of the beginning of where we think. In 2018, we were a $317 million company with basically no EBITDA, $6 million in EBITDA. Transformation efforts started in 2018, where we basically changed the way we market, changed the way our product line is delivered, to come in line with sort of a modern view of how people are looking at the trades. For example, if everybody can find a $20 an hour job when they leave high school, the concept of going into the trades wasn't as popular for people who had already left high school.

At the time, we had about 90 high school reps. Now, this year, we are launching with 180. There are 25,000 high schools, 25 million high school students, and if you want to get your message in front of them, you want to put more people in the schools talking to them about it. We changed the way we market. Marketing for this space used to be very much about there is a group of cool people that like sparks and like cars and are the kind of people that in parking lots on a Saturday have their hoods open and are looking at engines. That is great, that affinity marketing is really great, but we are really about jobs. We have angled very much what we do to really be able to talk to people about this is where the jobs are.

They are high paying, they are consistent, they are vital, and the jobs are really there. We altered our curriculum to go to a hybrid learning model so that working adults could come to work with us. Traditionally, the UTI curriculum was six hours a day, five days a week for a year to a year and a half, which basically meant you weren't going to be able to keep your job during that time frame. There wasn't the flexibility. Now that we have gone to hybrid learning, the blended learning model, students are in our building three hours a day. They do the rest of it online at their leisure. They can keep their jobs, they can keep their family life, and that opened up a whole new opportunity for people to come to UTI. This is the journey that has come from that. Excuse me. North Star phase 2 is an organic strategy.

In the phase 1 of this plan, we acquired two other institutions. We acquired MIAT College of Technology. We acquired their two campuses, one in Detroit, one in Houston. We acquired them to acquire seven programs that UTI did not have. UTI didn't have aviation or the skilled trades. What it really only had was auto diesel, motorcycle, and marine, and a little bit of welding on a couple of campuses. We acquired MIAT in order to have the skilled trades programs that would appeal to a broader number of young people who were looking to move into the trades. Program expansions, which is in one of the carts of phase 2, is really taking the fruits of that MIAT acquisition and putting it onto the legacy 12 UTI campuses where they only had auto diesel.

We talked to somewhere in the neighborhood of 600,000 young people a year who have no intention of going on to college. Frankly, a lot of them just didn't want to fix cars. They were thinking about going into other areas, whether it had to be welders or electricians or HVAC techs or aviation or wind energy, et cetera. By broadening the products that we're able to talk to more students that were looking on going into the industry. Then geographic reach. We've moved from building one campus every three or four years to building now we'll build four campuses a year for the next five years, two on the UTI side and two on the Concorde side. This is all in an effort to bring the education closer to where people live, where the people work, and where the jobs are.

Program expansions and new campuses are really at the heart of the phase 2 of the strategy. This is really meant to show you that there's a lot of greenfield. If you take a look at where our campuses and programs are very much clustered, California, Texas, and Florida, which the demographic proves. As a matter of fact, we've got seven campuses now in Texas. We could have 12 and still not meet the demand of what's going on in Texas. But what this really shows you is there's a lot of greenfield in the United States to try to help solve this problem. Most of what we're doing in terms of campus expansions are in greenfield states. A lot of people have asked us, how do you figure out where you're going to go?