What changed in this filing

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Item 1. Business

2023-12-01 compared with 2022-12-12 · 573 added, 327 removed, 287 unchanged (76% of the section changed)

Founded in 1965, with more than 250,000 graduates in its history, Universal Technical Institute, Inc.

(“we,” “us” or “our”) is a leading provider of transportation and technical training programs.

As of September 30, 2022, we offered certificate, diploma or degree programs at 16 campuses across the United States under the banner of several well-known brands, including Universal Technical Institute (“UTI”), Motorcycle Mechanics Institute and Marine Mechanics Institute (collectively, “MMI”), NASCAR Technical Institute (“NASCAR Tech”), and MIAT College of Technology (“MIAT”).

Additionally, we offer manufacturer specific advanced training (“MSAT”) programs, including student-paid electives, at our campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers.

Universal Technical Institute, Inc., which together with its subsidiaries is referred to as the “Company,” “we,” “us” or “our,” was founded in 1965 and is a leading workforce solutions provider of transportation, skilled trades and healthcare education programs, whose mission is to serve students, partners, and communities by providing quality education and support services for in-demand careers across a number of highly-skilled fields.

We offer the majority of our programs in a blended learning model that combines instructor-facilitated online teaching and demonstrations with hands-on labs.

All of our campuses are nationally accredited and are eligible for federal student financial assistance funds under the Higher Education Act of 1965, as amended (“HEA”), commonly referred to as Title IV Programs, which are administered by the U.S.

In conjunction with the Concorde Career Colleges, Inc.

acquisition on December 1, 2022 (the “Concorde Acquisition”), we redefined our reporting structure into two reportable segments (also referred to as “divisions”) as follows:

Universal Technical Institute (“UTI”):

UTI operates 16 campuses located in nine states and offers a wide range of degree and non-degree transportation and skilled trades technical training programs under brands such as Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute (collectively, “MMI”), NASCAR Technical Institute (“NASCAR Tech”), and MIAT College of Technology (“MIAT”).

UTI also offers manufacturer specific advanced training programs, which include student-paid electives, at our campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers.

Lastly, UTI provides dealer technician training or instructor staffing services to manufacturers.

Concorde Career Colleges (“Concorde”):

Concorde operates 17 campuses located in eight states and online, offering degree, non-degree, and continuing education programs in the allied health, dental, nursing, patient care and diagnostic fields.

The Company has designated campuses that offer degree granting programs “Concorde Career College;” where allowed by State regulation.

The remaining campuses are designated as “Concorde Career Institute.” Concorde believes in preparing students for their healthcare careers with practical, hands-on experiences including opportunities to learn while providing care to real patients.

Prior to graduation, students will complete a number of hours in a clinical setting or externship, depending upon their program of study.

We acquired Concorde on December 1, 2022.

“ Corporate ” includes corporate related expenses that are not allocated to the UTI or Concorde reportable segments.

In prior years, these costs were allocated across our former “Postsecondary Education” reportable segment and “Other” category based upon compensation expense.

All of our campuses are institutionally accredited and are eligible for federal student financial assistance funds under the Higher Education Act of 1965, as amended (“HEA”), commonly referred to as Title IV Programs, which are administered by the U.S.

Department of Education (“ED”).

Our programs are also eligible for financial aid from federal sources other than Title IV Programs, such as the programs administered by the U.S.

Many of our programs also are eligible for financial aid from federal sources other than Title IV Programs, such as the programs administered by the U.S.

Department of Veterans Affairs (“VA”) and under the Workforce Innovation and Opportunity Act.

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We continue to evolve our business model to provide our students with accessible, affordable training with a focus on bringing education to the students at convenient locations.

The market for qualified service technicians across the programs that we offer is large and growing.

Market served by UTI

The market for qualified transportation or skilled trades technicians across the programs that UTI offers is large and growing.

The United States Department of Labor Bureau of Labor Statistics (“U.S.

DOL BLS”) estimates that an average of approximately 105,400 new job openings, due to growth and net replacements, will exist annually for newly trained technicians in the automotive, diesel, and collision fields through 2031.

Additionally, the U.S.

Additionally, for skilled trades and other transportation programs, the U.S.

DOL BLS estimates that an average of 39,200 new jobs openings for industrial machinery mechanics, 42,600 new job openings for welders, 37,700 new job openings in the HVAC industry, 14,300 new job openings for computer-controlled machine tool operators, 12,800 new job openings for avionic technicians, 5,700 new job openings for robotics, 4,800 new job openings for marine and motorcycle technicians and 1,800 new job openings for wind turbine service technicians will exist annually for new entrants through 2032 in these fields.

Market served by Concorde

The market for qualified healthcare support occupations across the programs that Concorde offers is growing even faster, with the U.S.

DOL BLS estimating an annual average of 1,211,000 new jobs annually through 2032.

Specifically, the U.S.

DOL BLS estimates that an average of 193,100 new job openings for registered nurses, 114,600 new job openings for medical assistants, 55,100 new job openings for dental assistants, 44,900 new job openings for pharmacy technicians, 32,900 new job openings for occupational therapy and physical therapist assistants and aides, 26,300 new job openings for diagnostic related technologists and technicians, 24,000 new job openings for clinical laboratory technologists and technicians, 22,000 new job openings for massage therapists and 19,500 new job openings for phlebotomists will exist annually for new entrants through 2032 in these fields.

Our student recruitment efforts begin with our commitment to positive outcomes, both for our students and our industry relationships.

We use a multi-touch media approach for our three primary admissions channels (high school, adult, and military) to enroll and start students, which involves national and local outreach to generate a high quality and quantity of prospective students.

We use a multi-touch media approach across our admissions channels.

For UTI, there are three primary admissions channels (high school, adult, and military) to enroll and start students, which involves national and local outreach to generate a high quality and quantity of prospective students.

For Concorde, adults are the primary admissions channel, with an emphasis on those prospective adult students within the local proximity to a Concorde campus.

To maximize the likelihood of student retention and graduation, our admissions process is intended to identify students who have the desire and ability to succeed in their chosen program.

Prior to enrolling, many potential Concorde students complete a test which helps determine their expected success rate in a given program.

In addition, we have established processes to identify students who may be in need of assistance to succeed in and complete their chosen program.

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Additionally, as our campus locations do not offer housing for students, we have service professionals who leverage third-party relationships and assist our students in finding affordable housing near our campuses.

To ensure our programs provide students with the necessary hard and soft skills needed upon graduation, we have relationships with over 35 original equipment manufacturers (“OEMs”) and industry brand partners across the country to understand their needs for qualified service professionals.

Through our industry relationships, we are able to continuously refine and expand our programs and curricula.

We believe our industry-focused educational model and national presence have enabled us to develop valuable industry relationships, which provide us with significant competitive advantages and supports our market leadership, along with enabling us to provide highly specialized education to our students, resulting in enhanced employment opportunities and the potential for higher wages for our graduates.

Our industry relationships also extend to thousands of local employers, after-market retailers, fleet service providers and enthusiast organizations.

Other target groups for relationship-building, such as parts and tools suppliers, provide us with a variety of strategic and financial benefits that include equipment sponsorship, new product support, licensing and branding opportunities and financial sponsorship for our campuses and students.

Industry Partnerships

To ensure the UTI programs provide students with the necessary hard and soft skills needed upon graduation, UTI has relationships with multiple original equipment manufacturers (“OEMs”) and industry brand partners across the country to understand their needs for qualified service professionals.

Through these industry relationships, UTI is able to continuously refine and expand its programs and curricula.

We believe the UTI industry-focused educational model and national presence has enabled the UTI division to develop valuable industry relationships, which provide it with significant competitive advantages and supports its market leadership, along with enabling the division to provide highly specialized education to its students, resulting in enhanced employment opportunities and the potential for higher wages for its graduates.

The industry relationships for the UTI division also extend to thousands of local employers, after-market retailers, fleet service providers and enthusiast organizations.

Other target groups for relationship-building, such as parts and tools suppliers, provide UTI with a variety of strategic and financial benefits that include equipment sponsorship, new product support, licensing and branding opportunities and financial sponsorship for the UTI campuses and students.

Concorde partners with dental and medical offices, clinics, and hospitals to provide technical and professional skills through quality clinical experiences.

These clinical externship experiences are embedded in the program coursework to provide hands-on, real-world healthcare experiences and connect students with potential employers.

Concorde has relationships with thousands of clinical affiliate partners nationwide that provide robust and varied exposure to patient populations and healthcare models.

Many of these clinical affiliate partners participate in program advisory councils and contribute to Concorde’s efforts to continuously improve its program curriculum and resources.

These partnerships provide early employment and graduate employment opportunities and have resulted in customized curricula to assist in upskilling partners' employees.

Business Strategy

Our core business strategies are aligned with our mission to serve students, partners and communities by providing quality education and training for in-demand careers.

Additionally, as we evolve our business model, we are focused on growth and diversification achieved through acquisitions, opening new campus locations, expanding program offerings, and new funding and business operating models.

Recruit, Train and Identify Employment Opportunities for More Students

Our student recruitment efforts begin with our commitment to positive outcomes for our students and our industry relationships.

Our responsibility to present job-ready graduates to employers requires that we recruit, enroll and train prospective students who have the drive and potential to successfully pursue a career in their field of training.

Our student recruitment efforts for prospective students are conducted through three admissions channels:

• High School:

Field-based representatives develop and maintain relationships with high school guidance counselors, teachers and administrators as well as local employers.

These representatives generate student interest in pursuing a professional technician career path and our training programs through career presentations and workshops at high schools and career fairs and inviting students and their influencers on field trips and tours of our campuses and local employers’ businesses.

Campus-based representatives serve adult career-seeking or career changing students who typically inquire with our schools as a result of our advertising campaigns.

Our military representatives are strategically located throughout the country.

These representatives focus on building relationships with military installations in order to serve the needs of those transitioning from military service.

We collaborate with employers to help prospective students and their families understand the potential career opportunities that may be available during and after completing one of our programs.

As competition for the graduates we train grows, employers are increasingly partnering with us to raise awareness of the benefits of a technician career path for prospective students.

Our business strategy has three key tenets:

to grow the business by more deeply penetrating existing target markets and adding new markets;

to diversify the business by adding new locations, programs, and offerings that maximize the lifetime value of our students;

and to continually optimize the business by constantly enhancing operational efficiency.

Company Growth, Diversification and Optimization

Our organization has a number of key levers to grow, diversify, and optimize the business.

Organically, we have been successful by adding new locations and new programs.

In 2022, UTI launched new transportation & skilled trades campuses in Austin, Texas and Miramar, Florida, further expanding its geographical footprint and opening access to highly populated locations in growing economies.

Inorganically, in November 2021, we acquired MIAT College of Technology which has served both as a growth strategy by adding two new locations and a diversification strategy by adding additional program areas in rapidly expanding skilled trades professions.

This acquisition also has allowed us to extrapolate these in-demand programs from MIAT and imbue them into existing UTI campuses which increases the offerings and addressable markets at existing locations.

Continually optimizing program offerings and operations serves to further enhance overall operating margins and is a foundational element of our strategy.

In December 2022, we continued to diversify by expanding into healthcare education through the acquisition of Concorde.

This acquisition enabled us to expand our program offerings into the high-growth and high-demand healthcare education market.

Integration of core functions across education groups allows us to continue to optimize from an operational perspective.

Return on Education

We provide an excellent return on our students’ education investment by working with our industry partners to offer manufacturer-specific training that is tailored to industry standards and requirements, that improves students’ opportunities to find employment and maximizes their earnings potential.

We actively engage transportation industry partners in defining our core curriculum and improving and expanding our MSAT courses.

We provide an excellent return on our students’ education investment by working with corporate partners and local communities to offer educational programs that are tailored to professional and industry standards.

With a high focus on offering programs for in-demand careers, our graduates are well prepared to enter or re-enter the workforce in high demand areas that offer well-paying jobs.

We actively engage corporate partners in defining our program outcomes, program offerings, and ongoing educational requirements to ensure students have the requisite skills to succeed in the workplace of today and have a foundation for tomorrow.

We regularly evaluate program offerings, schedules and locations that are most appealing to students and aligned with employer expectations.

We also update and expand our core and MSAT courses to align our training programs with current industry standards and requirements.

These unique industry-aligned course offerings make our students more valuable to employers by giving them training that is consistent with industry needs and rapidly changing technology and the opportunity to earn a variety of industry-recognized certifications and credentials.

As a result, we believe we are well positioned to better meet the industry’s demand for skilled technicians.

We provide relevant services to assist students with possible tuition financing options, educational and career counseling, opportunities for part-time work while attending school, and ultimately, graduate employment.

Our national career services team develops job opportunities and outreach, while our local career services teams advise active students on employment search and interviewing skills, facilitate employer visits to campuses, provide access to reference materials and assist with the composition of resumes.

Strengthen Industry Relationships

Our relationships with leading manufacturer brand partners and other strategic partners are important to our business.

We deliver value to these partners and employers by functioning as an efficient hiring source and low cost training option for new and existing technicians.

These relationships give us direct input on the latest needs and requirements of employers, which

not only guides our prospective student recruitment, but also strengthens our curricula and our students’ opportunities for employment and higher earnings after graduation.

In addition, our manufacturer brand partners support our students through manufacturer-paid courses, scholarships, tuition reimbursement programs and early employment initiatives.

Growth and Diversification

Our growth strategy is predicated on adding new campuses and expanding program offerings in the transportation and skilled trades fields.

We also have the opportunity to pursue our growth strategy through acquisitions.

With a national higher-education market in transition, we are exploring potential acquisition opportunities that would allow us to enter new markets, expand our presence in existing markets, broaden our program offerings, enter into adjacent markets such as other skilled trades or high demand energy, or that could drive significant cost and operational synergies.

Our diversification strategy is focused on program diversification by adding new disciplines;

evolving our instructional and delivery model to leverage enabling technologies resulting in better usage of campus facilities and instructional costs per student;

executing on new instructional strategies that drive student outcomes and allow the business to more effectively scale;

and identifying and adding new ways for programs to be funded by and for students.

During the year ended September 30, 2022, we executed the following as part of our growth and diversification strategy:

• Entered into a definitive agreement to acquire Concorde Career Colleges, Inc.

(“Concorde”) in May 2022.

Concorde is a leading provider of industry-aligned healthcare education programs in fields such as nursing, dental hygiene and medical diagnostics.

Concorde currently operates 17 campuses across eight states with approximately 8,000 students, and offers its programs in ground, hybrid and online formats.

The acquisition aligns with our growth and diversification strategy, which is focused on offering a broader array of high-quality, in-demand workforce solutions which both prepare students for a variety of careers in fast-growing fields and help close the country's skills gap by leveraging key industry partnerships.

On December 1, 2022, we closed the Concorde acquisition.

• Completed the acquisition of MIAT College of Technology (“MIAT”) from HCP & Company on November 1, 2021.

MIAT had an average of approximately 950 undergraduate full-time active students during the year ended September 30, 2022 through its campuses in Canton, Michigan and Houston, Texas.

MIAT offers vocational and technical certificates as well as associates degrees in fields with robust and growing demand for skilled technical workers, including aviation maintenance, energy technology, wind power, robotics and automation, non-destructive testing, HVACR, and welding.

The acquisition enables us to further expand our program offerings into growing industry sectors and rapidly expanding fields likely to be bolstered by technological innovation and the country’s focus on sustainable energy.

Campus Openings and Optimization

• Expanded our operations through the opening of our new campuses in Austin, Texas and Miramar, Florida.

Austin is our third school in Texas and Miramar is our second school in Florida.

Both campuses help to broaden the reach of our skilled trade programs to high demand geographies.

• Completed the consolidation and reconfiguration of our UTI and MMI Orlando, Florida campus facilities into one site and the consolidation of the MMI Phoenix campus into our Avondale, Arizona building.

• Purchased the Lisle, Illinois campus in February 2022, for approximately $28.7 million in cash consideration, including closing costs and other fees and assumed debt of $18.3 million.

In April 2022, we completed the financing for the purchase which retired the assumed debt and replenished approximately $20.0 million of the funds used to purchase the campus.

See Notes 9, 12, 13 and 15 of the notes to our consolidated financial statements herein for additional details on the purchase and related debt and interest rate swap.

Program Expansion and New Industry Partnerships

• Executed on the next phase of our growth and diversification strategy by announcing the addition of 15 new programs across our campus footprint, including Aviation, HVACR, Robotics, Industrial Maintenance and Wind Energy Technician training to UTI and NASCAR Tech branded campuses, and initiated efforts to add Auto and

Diesel Essentials to the MIAT Canton, Michigan campus.

Pending all regulatory approvals, the initial planned program additions are projected to begin launching in the second quarter of 2023.

• Launched electric vehicle (“EV”) technician training coursework to meet increasing demand for clean cars and trucks.

This enhanced training is the initial step in our overall EV strategy to prepare future technicians for anticipated increasing EV sales in the coming decades.

▪ As part of this initiative, we rolled out new curriculum in our Ford Accelerated Credential Training program to prepare students for the next generation of vehicles on the road.

This new curriculum will feature blended learning courses on high voltage systems safety, hybrid vehicle components and operation, EV battery components and operation and an introduction to high voltage battery service, as well as a Ford instructor-led class on hybrid and EV operation and diagnosis.

• We have also selected Bosch to support the development of new courseware that helps meet the needs of the growing EV market, which continues to see record sales and a demand for skilled technicians.

• Expanded our welding technology program to our Mooresville, North Carolina and Exton, Pennsylvania campuses in January and July 2022, respectively.

• Launched the BMW Fast Track program at our Avondale, Arizona and Orlando, Florida campuses in January 2022, our Long Beach, California campus in April 2022, our Houston, Texas campus in May 2022 and our Exton, Pennsylvania campus in August 2022.

We expect to launch the program at our Lisle, Illinois campus in Spring 2023 and Miramar, Florida campus in Summer 2023.

• Formed a new strategic alliance with Napa Auto Parts (“NAPA”).

NAPA will supply essential parts for hands-on labs, including brake kits, rotors, bulbs, bearing kits, wheel weights and more.

The initial stage of the partnership will impact UTI, MMI and NASCAR Tech campuses and may be expanded to MIAT-branded campuses in the future.

Schools and Programs

We offer certificate, diploma or degree programs at campuses across the United States under the banner of several well-known brands.

The majority of our UTI programs are designed to be completed in 36 to 90 weeks while our MIAT programs are completed in 28 to 96 weeks.

Our advanced training programs range from 12 to 23 weeks in durations.

For our Concorde offerings, where appropriate, we ensure that our courses are aligned with licensure requirements to ensure our students are provided the greatest opportunity for success.

Where appropriate, these professionally aligned programs enable our students to gain licensure, certification, and credentials in high-demand healthcare professions.

As a result, we believe we are well positioned to better meet the market’s demand for skilled technicians and healthcare workers.

In addition, we provide relevant services to assist students with possible tuition financing options, educational and career counseling, opportunities for part-time work while attending school, and ultimately graduate employment.

Our career services teams develop job opportunities and outreach, advise active students on employment search and interviewing skills, facilitate employer visits to campuses, provide access to reference materials, assist with the composition of resumes, and help students prepare for applicable certification or licensure exams.

Shared Success Model

Overall, our strategy and business model are built around the key principle of, “If you succeed, we succeed.” While operationally the Company has developed core competencies in marketing and enrollment management, the success of the business is not based solely on recruiting students, but rather retaining students through the program to graduation and facilitating their transition to employment in their field of study.

Providing high-quality instruction in engaging curriculum aligned to industry and professional standards and delivering exemplary student support services to ensure students have everything they need to be successful serves as the foundation of our model.

Retaining our students through to graduation and supporting them through to employment is the key principle of our business.

UTI Schools and Programs

UTI offers certificate, diploma or degree programs at campuses across the United States under the banner of several well-known brands.

The majority of the UTI programs are designed to be completed in 30 to 100 weeks.

The UTI advanced training programs range from 8 to 26 weeks in duration and are completed subsequent to satisfying the core UTI program requirements.

These programs culminate in a certificate, diploma, associate of occupational studies degree, or associate of applied science degree depending on the program and campus.

Tuition rates vary by type and length of our programs and the program level, such as core or advanced training.

The table below sets forth our current locations that operate under the UTI, MMI, NASCAR Tech, and MIAT brands, the year the campus opened, and the principal programs taught at each location.

Location Brand Year Campus Opened Principal Programs

Arizona (Avondale) UTI 1965 Automotive;

Arizona (Avondale) (1)

MMI 1973 Motorcycle

California (Long Beach) UTI 2015 Automotive;

The table below sets forth the current locations that operate under the UTI division, the year the campus opened, and the principal programs taught at each location.

UTI Location Brand Year Campus Opened Current Principal Programs

Arizona (Avondale) UTI 1965 Airframe & Powerplant;

Arizona (Avondale) MMI 1973 Motorcycle

California (Long Beach) UTI 2015 Airframe & Powerplant;

Collision Repair and Refinishing;

California (Rancho Cucamonga) UTI 1998 Automotive;

Industrial Maintenance;

Robotics & Automation;

California (Sacramento) UTI 2005 Automotive;

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Illinois (Lisle) UTI 1988 Automotive;

Industrial Maintenance;

Robotics & Automation;

Michigan (Canton) MIAT 1969 Airframe and Powerplant;

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CNC Machining;

Robotics & Automation;

Pennsylvania (Exton) UTI 2004 Automotive;

Location Brand Year Campus Opened Principal Programs

Robotics & Automation;

Texas (Austin) UTI 2022 Automotive;

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Robotics & Automation;

(1) As previously noted, the MMI Phoenix, Arizona campus was consolidated into our Avondale, Arizona building during fiscal 2022.

While the MMI program shares the same building as UTI in Avondale, it is considered a separate campus for our reporting requirements to the ED.

Description of Current Programs Offered

Many of our students receive their training in a blended training model that combines instructor-facilitated online teaching and demonstrations with hands-on labs.

Description of Current UTI Programs Offered

Many of the UTI students receive their training in a blended learning model that combines instructor-facilitated online teaching and demonstrations with hands-on labs.

The blended learning model not only increases access for students, but better prepares them to be life-long learners as technicians today perform many day-to-day tasks and continuing education courses online or on a digital device.

The table below provides an overview of the programs taught by UTI owned and operated institutions, including the year a program was first offered at one of our campuses, the focus of the program, and the type of employment the program was designed to prepare graduates to obtain.

Program Year Established Program Focus Target Job Placement (1)

The table below provides an overview of the programs taught by UTI owned and operated institutions, including the year a program was first offered at one of the campuses, the focus of the program, and the type of employment the program is designed to prepare graduates to obtain.

UTI Program Year Established Program Focus Target Job Placement (1)

Automotive 1965 Diagnose, service and repair automobiles Entry-level service technicians in automotive dealer service departments or automotive repair facilities

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Airframe and Powerplant 1969 Aircraft troubleshooting, hydraulics and pneumatics, powerplant lubrication systems and turbine engine operation Entry-level opportunities in various areas of the aviation industry

UTI Program Year Established Program Focus Target Job Placement (1)

Automotive/Diesel 1970 Diagnose, service and repair automobiles and diesel systems Entry-level service technicians in automotive repair facilities, automotive dealer service departments, diesel engine repair facilities, medium and heavy truck facilities, truck dealerships, or in service and repair facilities

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Entry-level technicians at OEM dealerships and independent repair facilities

Program Year Established Program Focus Target Job Placement (1)

NASCAR 2002 Automotive training along with additional NASCAR-specific elective courses

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Non-Destructive Testing 2019 Training in the discipline focused on the quality and serviceability of materials and structures Entry-level technicians in a variety of industries, from oil and gas and manufacturing to power generation and aviation

(1) Target job placement describes the type of employment the program was designed to prepare graduates to obtain.

Graduates may also secure positions outside of the Target Job Placement, including, for example, parts associate, service technician, fabricator, paint and preparation, and shop owner or operator, among others.

Manufacturer Specific Advanced Training (“MSAT”) Programs

In addition to the program offerings noted above, we also offer advanced training programs in the form of manufacturer-paid post-graduate MSAT programs and in the form of student-paid MSAT courses, which may be added as electives to a student’s core automotive, diesel or motorcycle program.

Manufacturer-Paid MSATs

A select number of students are offered manufacturer-paid MSATs, which are paid for by the manufacturer and/or its dealers in return for a commitment by the student to work for a dealer of that manufacturer for a certain period of time upon completion of the program.

Students who are high performing graduates of an automotive or diesel program may apply to be selected for these programs.

(1) Target job placement describes the type of employment the program is designed to prepare graduates to obtain.

UTI graduates may also secure positions outside of the target job placement, including, for example, parts associate, service technician, fabricator, paint and preparation, and shop owner or operator, among others.

UTI Manufacturer Specific Advanced Training (“MSAT”) Programs

In addition to the program offerings noted above, UTI also offers advanced training programs in the form of manufacturer-paid post-graduate MSAT programs and in the form of student-paid MSAT courses, which may be added as electives to a student’s core automotive, diesel or motorcycle program.

UTI Manufacturer-Paid MSATs

A select number of UTI students are offered manufacturer-paid MSATs, which are paid for by the manufacturer and/or its dealers in return for a commitment by the student to work for a dealer of that manufacturer for a certain period of time upon completion of the program.

UTI students who are high performing graduates of an automotive or diesel program may apply to be selected for these programs.

The programs range from 8 to 26 weeks in duration.

Our manufacturer-paid MSATs are

intended to offer in-depth instruction on specific manufacturers’ products, qualifying a graduate for employment with a dealer seeking highly specialized, entry-level technicians with brand-specific skills.

We currently offer the following manufacturer-paid MSAT programs using vehicles, equipment, specialty tools and curricula provided by our manufacturer brand partners:

Manufacturer-Paid MSAT Programs Offered Location

Fendt Technician Academy by AGCO Lisle

Mercedes-Benz DRIVE Mercedes-Benz facilities in Long Beach, California, Jacksonville, Florida, Robbinsville, New Jersey and Grapevine, Texas

Peterbilt Technician Institute Lisle, Dallas/Ft.

Porsche Technician Apprenticeship Program (PTAP) Porsche facilities in Eastvale, California, Atlanta, Georgia, and Easton, Pennsylvania

Volvo Tekniker Apprenticeship Program (1)

Avondale, Volvo facility in Ridgeville, South Carolina

(1) The Volvo South Carolina training facility launched in June 2022.

Student-Paid MSATs

We currently offer the following student-paid MSAT programs using vehicles, equipment, specialty tools and curricula provided by and/or developed in collaboration with our manufacturer brand partners:

Student-Paid MSAT Programs Offered Location

UTI and NASCAR Tech Campuses

BMW FastTrack (1)

Avondale, Exton, Houston, Long Beach, Orlando

UTI’s manufacturer-paid MSATs are intended to offer in-depth instruction on specific manufacturers’ products, qualifying a graduate for employment with a dealer seeking highly specialized, entry-level technicians with brand-specific skills.

UTI currently offers the following manufacturer-paid MSAT programs using vehicles, equipment, specialty tools and curricula provided by its manufacturer brand partners:

UTI Manufacturer-Paid MSAT Programs Offered Location

Fendt Technician Academy by AGCO Lisle, Illinois

Mercedes-Benz DRIVE Mercedes-Benz facilities in Long Beach, California;

Jacksonville, Florida;

Carol Stream, Illinois;

Robbinsville, New Jersey;

and Grapevine, Texas

Peterbilt Technician Institute Lisle, Illinois;

Porsche Technician Apprenticeship Program (PTAP) Porsche facilities in Eastvale, California;

Atlanta, Georgia;

and Easton, Pennsylvania

Volvo Tekniker Apprenticeship Program Avondale, Arizona and Volvo facility in Ridgeville, South Carolina

UTI Student-Paid MSATs

UTI students may participate in student-paid MSAT programs upon successfully completing the necessary core curriculum prerequisites.

UTI currently offers the following student-paid MSAT programs using vehicles, equipment, specialty tools and curricula provided by and/or developed in collaboration with its manufacturer brand partners:

UTI Student-Paid MSAT Programs Offered Location

UTI and NASCAR Tech Brand Campuses

BMW FastTrack Avondale, Exton, Houston, Long Beach, Orlando, Lisle, Miramar

Cummins Engines Avondale, Exton, Houston

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Toyota Professional Automotive Technician (TPAT) Lisle, Rancho Cucamonga

UTI Student-Paid MSAT Programs Offered Location

MMI Brand Campuses

American Honda Motor Company, Inc.

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Yamaha Motor Corporation, USA Avondale, Orlando

(1) The BMW STEP program was replaced in fiscal 2022 with the BMW FastTrack Program, a student-paid MSAT program.

The FastTrack program is targeted to expand the BMW footprint to seven UTI campuses, with Avondale and Orlando launched in January 2022, Long Beach launched in April 2022, Houston launched in May 2022 and Exton launched in August 2022.

It is also expected to launch at Lisle in Spring 2023 and Miramar in Summer 2023.

Military Base Programs

In addition to the MSATs noted above, in partnership with the military and select industry partners, we have been developing and implementing advanced training programs at select military base locations.

Military base programs differ from our traditional MSATs in that the students do not complete our traditional core programs at a UTI campus before entering these advanced training programs.

UTI Military Base Programs

In addition to the MSATs noted above, in partnership with the military and select industry partners, UTI has been developing and implementing advanced training programs for transitioning veterans at select military base locations.

Military base programs differ from UTI’s traditional MSATs in that the students do not complete the traditional core programs at a UTI campus before entering these advanced training programs.

These programs range from 12 to 16 weeks and are available to all men and women transitioning out of the military.

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There is no tuition cost to the participating service members.

We currently offer the following military base programs using vehicles, equipment, specialty tools and curricula provided by and/or developed in collaboration with certain manufacturer brand partners:

Military Base Programs Offered Location

UTI currently offers the following military base programs using vehicles, equipment, specialty tools and curricula provided by and/or developed in collaboration with certain manufacturer brand partners:

UTI Military Base Programs Offered Location

BMW Military Service Technician Education Program Marine Corps Base Camp Pendleton in California

Army Base Fort Bragg in North Carolina

Army Base Fort Liberty in North Carolina

Penske Premier Truck Group Technician Skills Program Fort Bliss in El Paso, Texas

Affordability and Accessibility

During the year ended September 30, 2022, tuition at our UTI, MMI and NASCAR Tech campuses ranged from approximately $20,000 for our CNC program (lasting 36 weeks) to $60,000 for our Automotive and Diesel program with one specialized elective program (lasting 90 weeks).

During fiscal 2022, tuition at our MIAT campuses ranged from approximately $20,000 for our Industrial Maintenance Technician program (lasting 28 weeks) to $50,000 for our Aviation Maintenance Technology program (lasting 96 weeks).

During the year ended September 30, 2022, the average annual revenue per student was approximately $32,600, net of scholarships or grants funded by the institution.

We are focused on making our training more affordable and accessible through financing options, proprietary loans, institutional and relocation grants, scholarships based on need and merit, and employer sponsored training and tuition reimbursement.

During the year ended September 30, 2022, approximately 42% of our active students received a UTI-funded scholarship or grant and approximately 22% of active students received funding from the proprietary loan program.

To maximize student affordability and speed to completion, we are working with high schools across the nation to increase our Technical Education Institutional Grant (“TEIG”) agreements.

UTI Affordability and Accessibility

During the year ended September 30, 2023, tuition for UTI programs ranged from approximately $19,000 for the Industrial Maintenance Technician or Wind Turbine Technician programs (lasting 30 weeks) to $65,000 for the Automotive and Diesel program with one specialized elective program (lasting 90 weeks).

During the year ended September 30, 2023, the average annual revenue per UTI student was approximately $33,000, net of scholarships or grants funded by the institution.

We are focused on making our training more affordable and accessible for the UTI students through financing options, proprietary loans, institutional and relocation grants, scholarships based on need and merit, and employer sponsored training and tuition reimbursement.

During the year ended September 30, 2023, approximately 40% of active UTI students received a UTI-funded scholarship or grant, approximately 45% of active UTI students participated in an “in school” cash payment plan, and approximately 15% of active UTI students received funding from UTI’s proprietary loan program.

To maximize student affordability and speed to completion, UTI works with high schools across the nation to implement Technical Education Institutional Grant (“TEIG”) agreements.

The TEIG agreements allow students who have completed course(s) related to their selected program of study to receive a corresponding tuition credit for up to six courses.

Our students may opt out of the courses provided they pass an Advanced Placement Opportunities Test for each selected course.

We have approximately 5,200 curriculum-specific TEIG agreements in place across the country.

This represents approximately 6% of the high schools covered by our admissions teams.

We continue to identify new opportunities to expand the volume of these curriculum-specific TEIG agreements.

In response to growing demand for trained technicians, our industry partners and employers are increasingly willing to participate in our students’ cost of education by providing them with scholarship money and relocation assistance to attend school and by offering our graduates tuition reimbursement plans and competitive compensation and benefit packages, including signing bonuses, relocation grants and tool incentives.

There are over 5,700 employer location incentive opportunities, which when made available make our training programs more affordable for students and may provide them with valuable relationships or employment opportunities following graduation.

UTI students may opt out of the courses provided they pass an Advanced Placement Opportunities Test for each selected course.

UTI has approximately 4,300 curriculum-specific TEIG agreements in place across the country.

This represents approximately 9% of the high schools covered by the UTI admissions teams.

UTI continues to identify new opportunities to expand the volume of these curriculum specific TEIG agreements.

In response to growing demand for trained technicians, UTI industry partners and employers are increasingly willing to participate in the UTI students’ cost of education by providing them with scholarship money and relocation assistance to attend school and by offering UTI graduates tuition reimbursement plans and competitive compensation and benefit packages, including signing bonuses, relocation grants and tool incentives.

There are nearly 7,400 employer location incentive opportunities for UTI students, which when made available make the UTI training programs more affordable for students and may provide them with valuable relationships or employment opportunities following graduation.

Concorde Schools and Programs

Concorde offers certificate, diploma or degree programs in the healthcare field at campuses across the United States under the Concorde Career Colleges or Concorde Career Institute brands.

The majority of Concorde’s core programs are eight to ten months in duration.

Clinical programs are 12 to 24 month programs.

Clinical programs may have up to nine academic terms that last two to three months.

The programs offered culminate in a diploma, associate of applied science degree or associate of science degree depending on the program and campus.

Tuition rates vary by type and length of our programs and the program level, such as core or advanced training.

The table below sets forth the current locations that operate under the Concorde brand, the year the campus opened, and the principal programs taught at each location.

Concorde Location Year Campus Opened Current Principal Programs

California (Garden Grove) 1968 Dental Assistant;

Medical Assistant;

Pharmacy Technician;

Vocational Nursing;

Dental Hygiene;

Physical Therapist Assistant;

Respiratory Therapy

California (North Hollywood) 1968 Dental Assistant;

Medical Assistant;

Vocational Nursing;

Physical Therapist Assistant;

Respiratory Therapy;

Surgical Technology

California (San Bernardino) 1968 Dental Assistant;

Medical Assistant;

Vocational Nursing;

Polysomnographic Technology;

Dental Hygiene;

Respiratory Therapy;

Surgical Technology;

Neurodiagnostic Technology

California (San Diego) 1968 Dental Assistant;

Medical Assistant;

Vocational Nursing;

Cardiovascular Sonography;

Dental Hygiene;

Diagnostic Medical Sonography;

Physical Therapist Assistant;

Surgical Technology

Colorado (Aurora) 1969 Dental Assistant;

Medical Assistant;

Practical Nursing;

Cardiovascular Sonography;

Dental Hygiene;

Diagnostic Medical Sonography;

Physical Therapist Assistant;

Radiologic Technology;

Respiratory Therapy;

Surgical Technology;

Bachelor of Science in Nursing

Florida (Jacksonville) 1978 Dental Assistant;

Medical Assistant;

Phlebotomy Technician;

Practical Nursing;

Sterile Processing Technician;

Cardiovascular Sonography;

Dental Hygiene;

Diagnostic Medical Sonography;

Physical Therapist Assistant;

Respiratory Therapy;

Surgical Technology

Florida (Miramar) 1987 Dental Assistant;

Medical Assistant;

Pharmacy Technician;

Phlebotomy Technician;

Sterile Processing Technician;

Occupational Therapist Assistant;

Physical Therapist Assistant;

Respiratory Therapy;

Surgical Technology

Florida (Orlando) 2010 Dental Assistant;

Medical Assistant;

Pharmacy Technician;

Phlebotomy Technician;

Sterile Processing Technician;

Dental Hygiene;

Surgical Technology

Florida (Tampa) 1987 Dental Assistant;

Medical Assistant;

Pharmacy Technician;

Phlebotomy Technician;

Sterile Processing Technician;

Cardiovascular Sonography;

Dental Hygiene;

Diagnostic Medical Sonography;

Respiratory Therapy;

Surgical Technology

Mississippi (Southaven) 2013 Dental Assisting;

Massage Therapy;

Medical Assistant;

Medical Office Professional;

Dental Assisting;

Medical Assisting;

Medical Office Professional

Missouri (Kansas City) 1986 Dental Assistant;

Medical Assistant;

Medical Office Administration;

Phlebotomy Technician;

Practical Nursing;

Sterile Processing Technician;

Cardiovascular Sonography;

Dental Hygiene;

Diagnostic Medical Sonography;

Physical Therapist Assistant;

Respiratory Therapy;

Surgical Technology;

Bachelor of Science in Nursing

Oregon (Portland) 1969 Dental Assistant;

Medical Assistant;

Practical Nursing;

Polysomnographic Technology;

Cardiovascular Sonography;

Diagnostic Medical Sonography;

Respiratory Therapy;

Surgical Technology

Tennessee (Memphis) 1981 Dental Assisting;

Massage Therapy;

Medical Assistant;

Medical Office Professional;

Pharmacy Technician;

Phlebotomy Technician;

Polysomnographic Technology;

Cardiovascular Sonography;

Dental Hygiene;

Diagnostic Medical Sonography;

Neurodiagnostic Technology;

Nursing Practice;

Occupational Therapy Assistant;

Physical Therapist Assistant;

Radiologic Technology;

Respiratory Therapy;

Surgical Technology

Concorde Location Year Campus Opened Current Principal Programs

Texas (Dallas) 2010 Dental Assistant;

Medical Assistant;

Vocational Nursing;

Cardiovascular Sonography;

Dental Hygiene;

Diagnostic Medical Sonography;

Physical Therapist Assistant;

Respiratory Therapy;

Surgical Technology

Texas (Grand Prairie) 2001 Dental Assistant;

Medical Assistant;

Phlebotomy Technician;

Polysomnographic Technology;

Sterile Processing Technician;

Vocational Nursing;

Dental Hygiene;

Surgical Technology;

Neurodiagnostic Technology

Texas (San Antonio) 2010 Dental Assistant;

Medical Assistant;

Cardiovascular Sonography;

Dental Hygiene;

Diagnostic Medical Sonography;

Physical Therapist Assistant;

Respiratory Therapy;

Surgical Technology

Online 2013 Dental Assistant;

Medical Office Administration;

Nursing Practice;

Surgical Technology;

Bachelor of Science in Nursing

Description of Current Concorde Programs Offered

Many of Concorde’s students receive their training in a blended training model that combines instructor-facilitated online teaching and demonstrations with hands-on labs.

The blended learning model not only increases access for students, but better prepares them to be life-long learners as students today perform many day-to-day tasks and continuing education courses online or on a digital device.

The table below provides an overview of the programs taught by Concorde institutions, including the year a program was first offered at one of the campuses, the focus of the program, and the type of employment the program is designed to prepare graduates to obtain.

Concorde Program Year Established Program Focus Target Job Placement (1)

Core Programs

Dental Assistant 1995 Overall operations of a dental office Entry-level dental assistant

Massage Therapy 2002 Massage techniques and manipulations designed to enhance the physical health of patients Entry-level massage therapist in massage clinics, hospital rehabilitation departments, public practice, wellness centers, and chiropractic offices

Medical Assistant, Medical Assisting or Medical Office Professional 1995 Basic knowledge of a medical practice and the operations of a medical office Entry-level medical assistant in a clinic or physician’s office, long-term care facility, hospital or medical insurance company

Pharmacy Technician 1999 Pharmacy Technician acts as an intermediary between the doctor and the pharmacist and between the pharmacist and the patient Entry-level pharmacy technician in hospital, home healthcare, and retail environments

Phlebotomy Technician 2021 The Phlebotomy Tech facilitates the collection and transportation of laboratory specimens Entry-level phlebotomy technician in hospitals, laboratories, blood centers, or other healthcare facilities

Clinical Programs

Cardiovascular Sonography 2021 Use special imaging equipment that directs sound waves into a patient’s body to assess and diagnose various medical conditions Entry-level cardiovascular sonographers

Dental Hygiene 2011 Qualifications for licensure as a Registered Dental Hygienist Entry-level dental hygienist

Diagnostic Medical Sonography 2021 Use special imaging equipment that directs sound waves into a patient’s body to assess and diagnose various medical conditions Entry-level obstetrics and gynecology sonographer or entry-level abdominal sonographer

Concorde Program Year Established Program Focus Target Job Placement (1)

Neurodiagnostic Technology 2012 Advanced diagnostic procedures including EEGs, PSGs and others.

Upon completion of the program, professional certifications may be required Entry-level neurodiagnostic technician in neurology-related departments of hospitals, clinics and the private offices of neurologists and neurosurgeons

Nursing Practice 2016 Qualifications for licensure as a registered nurse Entry-level registered nurse positions after passing the state board licensure exam

Occupational Therapy Assistant 2012 To provide quality occupational therapy services to assigned individuals under the supervision of a registered Occupational Therapist Entry-level occupational therapy assistants in hospitals, clinics, schools, client homes, and community settings

Physical Therapist Assistant 2011 Physical Therapist Assistants provide physical therapy services under the direction and supervision of a licensed Physical Therapist Entry-level physical therapist assistant in a variety of settings, including hospitals, inpatient rehabilitation facilities, private practices, outpatient clinics, home health, skilled nursing facilities, schools, sports facilities, and more

Polysomnographic Technology 2012 Perform sleep tests and work with physicians to provide information needed for the diagnosis of sleep disorders Entry-level positions as Polysomnographic Technologists

Practical/Vocational Nursing 1996 Perform as entry-level nursing staff in an acute-care hospital, extended-care facility, physician’s office, or other healthcare agency Entry-level positions as a licensed practical/vocational nurse

Radiologic Technology 2012 Perform diagnostic imaging examinations on patients Entry-level diagnostic radiographer positions

Respiratory Therapy 2011 Assess, treat, and care for patients with breathing disorders.

Prepare students for licensure as a registered respiratory therapist Respiratory therapists may serve as asthma educators, patient educators, case managers, hyperbaric oxygen specialists, extra corporeal membrane oxygenation specialists and sleep specialists.

Respiratory therapists work in hospitals, clinics, skilled nursing facilities, home care, and diagnostic labs

Surgical Technology 2012 Surgical technologist is a highly skilled and knowledgeable allied health professional who, as an essential member of the surgical team, works with surgeons, anesthesia providers, operating room nurses, and other professionals in providing safe care to the surgical patient Entry-level surgical technologist in acute-care hospitals, outpatient surgery centers, surgical clinics, central sterile processing departments, birthing centers, and other healthcare settings

(1) Target job placement describes the type of employment the program is designed to prepare graduates to obtain.

Concorde graduates may also secure positions outside of the target job placement, including various other healthcare related positions.

Concorde Affordability and Accessibility

During the year ended September 30, 2023, tuition for Concorde programs ranged from approximately $14,000 for the Pharmacy Technician program (lasting 24 weeks) to $96,000 for the Dental Hygiene program in California (lasting 90 weeks).

During the year ended September 30, 2023, the average annual revenue per Concorde student was approximately

$23,000, net of scholarships or grants funded by the institution.

We are focused on making the Concorde training more affordable and accessible through financing options, institutional and relocation grants, and scholarships based on need and merit.

Concorde currently and historically offers certain students retail installment contracts for payment of their tuition that is not covered by federal student financial aid or other funding sources.

During the year ended September 30, 2023, approximately 11% of Concorde’s active students received a Concorde-funded scholarship or grant and approximately 64% of Concorde active students received funding through Concorde sponsored retail installment contracts.

Student Enrollment

We enroll students throughout the year, and courses typically start every three to six weeks.

For the year ended September 30, 2022, our average number of undergraduate full-time active students was 12,838, representing an increase of approximately 11.7% as compared to 11,489 for the year ended September 30, 2021.

A portion of this increase was due to our acquisition of MIAT which for the year ended September 30, 2022, had an average number of undergraduate full-time active students of 950.

At September 30, 2022, our end of period number of undergraduate full-time active students was 14,380, an increase of 5.1% from our ending full-time enrollment of 13,682 at September 30, 2021.

Currently, our student body is geographically diverse.

While our campus locations attract local students that live within 50 miles, we estimate that approximately 50% of our students elect to relocate to attend our programs, with this percentage varying across campuses and programs.

UTI enrolls students throughout the year with courses typically starting every three to six weeks.

Concorde enrolls students throughout the year with core terms starting every month and clinical terms starting every ten weeks.

The table below outlines our new student starts, average undergraduate full-time students, and end of period undergraduate full-time students for both UTI and Concorde.

Year Ended September 30, %

2023 2022 Change

Total new student starts 14,181 13,374 6.0 %

Average undergraduate full-time active students 12,614 12,838 (1.7) %

End of period undergraduate full-time active students 14,833 14,380 3.2 %

Total new student starts 8,432 — 100.0 %

Average undergraduate full-time active students 7,654 — 100.0 %

End of period undergraduate full-time active students 8,369 — 100.0 %

Total new student starts 22,613 13,374 69.1 %

Average undergraduate full-time active students 20,268 12,838 57.9 %

End of period undergraduate full-time active students 23,202 14,380 61.3 %

(1) Student data for Concorde presented in the year ended September 30, 2023 column represents the period of UTI’s ownership, or December 1, 2022 through September 30, 2023.

Due to the seasonality of our business and normal fluctuations in student populations, we expect variability in our quarterly results.

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Identifying employment opportunities and preparing our graduates for their future careers is critical to our ability to deliver value to our graduates from their education.

Additionally, we are required to meet certain graduate placement standards by location and program by both our national and programmatic accreditors.

Accordingly, we dedicate significant resources to maintaining an effective career services team.

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Finally, we place emphasis on and devote significant time to assisting students with part-time and graduate job searches.

We also have a centralized department whose focus is to build and maintain relationships with potential and existing national employers and develop graduate job opportunities and, where possible, relocation assistance, sign-on bonuses, tool packages and tuition reimbursement plans with our manufacturer brand partners and other industry employers.

Together, the campuses and centralized department coordinate and host career fairs, industry awareness presentations, interview days and employer visits to our campus locations.

We also have centralized departments for each segment whose focus is to build and maintain relationships with potential and existing national employers and develop graduate job opportunities and, where possible, relocation assistance, sign-on bonuses, tool packages and tuition reimbursement plans with our manufacturer brand partners and other industry employers.

Together, the campuses and centralized departments coordinate and host career fairs, industry awareness presentations, interview days and employer visits to our campus locations.

We believe that our graduate career services provide our students with a compelling value proposition and enhance the employment opportunities for our graduates and are a competitive differentiator from other education institutions.

Our employment rate for 2021 and 2020 graduates who were employed within one year of graduation was 82% and 80%, respectively.

The employment calculation is based on all graduates, including those that completed MSAT programs, from October 1, 2020 to September 30, 2021 and October 1, 2019 to September 30, 2020, respectively, excluding graduates not available for employment because of continuing education, military service, medical reasons, incarceration, death or international student status.

We count a graduate as employed based on a verified understanding of the graduate’s job duties to assess and confirm that the graduate’s primary job responsibilities are in his or her field of study.

We verify employment by sending written verification requests to the graduate and/or the employer or collecting written information with all required elements.

Verifications must include employer name, job duties, job title, hire date and employer contact information.

Once we receive written verification from either source, the graduate is classified as employed in field as long as all verification requirements are met.

If any information provided in a written format requires clarification, a call is made to clarify certain elements with notes documented in our student database.

In instances where we are unable to obtain written verification, we also classify graduates as employed in field if we are able to obtain verbal verification, collecting the same information as noted above, from both the graduate and the employer.

We periodically review a sample of employment verifications to ensure accuracy.

The table below summarizes the graduate employment rate data (1) :

Year Ended September 30,

Graduate employment rate 82 % 80 %

Graduates 7,308 6,832

Graduates available for employment 6,914 6,476

Graduates employed 5,692 5,176

(1) We completed the acquisition of MIAT on November 1, 2021.

As such, this table does not include the graduate employment rate data for MIAT graduates.

The for-profit, postsecondary education industry is highly competitive and highly fragmented, with no one provider controlling significant market share.

We compete with other institutions that are eligible to receive Title IV funding, including not-for-profit public and private schools, community colleges and for-profit institutions which offer automotive, diesel, collision repair, motorcycle, marine, welding, CNC machining, aviation, HVACR, robotics, and closely related skilled

trades training programs.

Our competition differs in each market depending on the curriculum we offer and the availability of other choices, including job prospects.

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rather, the sector as a whole provides competition.

Within the for-profit career-oriented and technical school sector, some of our national and regional competitors are Lincoln Technical Institute and Tulsa Welding School.

We also consider other single location institutions with a larger local presence near one of our campuses to be competitors.

Within the for-profit education sector, some of our public company competitors are Adtalem Global Education, Inc., American Public Education, Inc., Lincoln Educational Services Corporation, Perdoceo Education Corporation, and Strategic Education, Inc.

We also consider other regional or single location institutions with a larger local presence near one of our campuses to be competitors.

Competition is generally based on location, tuition rates, the type of programs offered, the quality of instruction and instructional facilities, graduate employment rates, reputation and recruiting.

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We believe that diversity, equity, and inclusion (“DE&I”) among our employees is essential in this process, as a truly innovative educational institution relies on a wealth of backgrounds and experiences to enhance student outcomes.

We have a Director of Diversity, Equity, and Inclusion who is responsible for setting the DE&I strategy and roadmap to ensure that we meet our objectives both internally, of creating a company where everyone feels they belong, and externally, by working closely with our marketing and talent acquisition function to attract diverse talent.

To attract a truly diverse workforce, we strive to instill a culture where employees are encouraged to draw upon their own unique skills and perspectives when engaging with our growing and diverse student population.

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We provide intensive instructional training and continuing education to our faculty members to maintain the quality of instruction in all fields of study.

A majority of our existing instructors have a minimum of five years’ experience in the industry and an average of seven years of experience teaching at UTI.

A majority of our existing instructors have a minimum of five years’ experience in the industry and an average of seven years of experience teaching at UTI and four years of experience teaching at Concorde.

We employ field, military and campus-based admissions representatives who work directly with prospective students to facilitate the enrollment process.

Additionally, each school has a support team that typically includes a campus president, an education director, a financial aid director, a student services director, and an career services director.

We believe our management team has the experience necessary to effectively implement our growth and diversification strategy and continue to drive positive educational and employment outcomes for our students.

Additionally, each campus has a support team that typically includes a campus president, an education director, a financial aid director, a student services director, and a career services director.

We believe our corporate and divisional management teams have the experience necessary to effectively implement our growth and diversification strategy and continue to drive positive educational and employment outcomes for our students.

For discussion of the risks relating to the attraction and retention of management and executive management employees, see Item 1A.

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Environmental Matters

We use hazardous materials at our training facilities and campuses and generate small quantities of regulated waste, including, but not limited to, used oil, antifreeze, transmission fluid, paint, solvents, car batteries and aircraft batteries.

As a result, our facilities and operations are subject to a variety of environmental laws and regulations governing, among other things, the use, storage and disposal of solid and hazardous substances and waste, and the clean-up of contamination at our

facilities or off-site locations to which we send or have sent waste for disposal.

Certain of our campuses are required to obtain permits for our air emissions.

In the event we do not maintain compliance with any of these laws and regulations, or if we are responsible for a spill or release of hazardous materials, we could incur significant costs for clean-up, damages, and fines or penalties.

UTI uses hazardous materials at its training facilities and campuses and generates small quantities of regulated waste, including, but not limited to, used oil, antifreeze, transmission fluid, paint, solvents, car batteries and aircraft batteries.

As a result, the UTI facilities and operations are subject to a variety of environmental laws and regulations governing, among other things, the use, storage and disposal of solid and hazardous substances and waste, and the clean-up of contamination at UTI facilities or off-site locations to which UTI sends or has sent waste for disposal.

Certain of the UTI campuses are required to obtain permits for air emissions.

In the event UTI does not maintain compliance with any of these laws and regulations, or if UTI is responsible for a spill or release of hazardous materials, UTI could incur significant costs for clean-up, damages, and fines or penalties.

Concorde monitors and follows all regulatory guidelines for any bloodborne pathogens, chemicals, or gases that the school purchases and uses.

Concorde has biohazardous waste that is produced in many of its programs including, but not limited to, disposables contaminated with blood and body fluids and contaminated sharps such as needles.

Where applicable, the programs use appropriate decontamination, cleaning, and sterilizing methods and processes on all required reusable products or equipment.

Concorde programs also purchase and use many different chemicals and substances for skills practice and cleaning.

These chemicals and substances are handled per the manufacturer guidelines, and the MSDS lists are maintained at the campus per regulations in the event of any adverse reaction.

Concorde contracts with several vendors for approved and appropriate disposal of any chemical products or contaminated bloodborne pathogen items.

Some of Concorde’s programs utilize gases including, but not limited to, Oxygen and Nitrous Oxide.

These gases are purchased from commercial vendors and are stored, maintained, and disposed of per the manufacturer and regulatory guidelines.

Regulatory Environment

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The approvals granted by these entities permit our schools to operate and to participate in a variety of government-sponsored financial aid programs that assist students in paying for their education.

The most significant of these is the federal student aid programs administered by the ED pursuant to HEA Title IV Programs.

The most significant of these is the federal student aid programs administered by ED pursuant to HEA Title IV Programs.

Generally, to participate in Title IV Programs, an institution must be licensed or otherwise legally authorized to operate in the state where it is physically located, be accredited by an accreditor recognized by ED, be certified as an eligible institution by ED, offer at least one eligible program of education, and comply with other statutory and regulatory requirements.

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Below, we discuss certain elements of this regulatory environment.

State and Accreditor Approvals

State Authorization

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States can and often do revisit, revise, and expand their regulations governing postsecondary education and recruiting.

Our institutions are also authorized to participate in the State Authorization Reciprocity Agreement (“SARA”).

SARA is an agreement among member states, districts and territories that establishes comparable national standards for interstate offering of post-secondary distance education courses and programs.

Institutions that offer instruction outside of their Home State must comply with federal regulations governing state authorization for distance education in order to participate in the Title IV student financial aid programs.

All UTI institutions and the Concorde Kansas City and Memphis institutions are authorized to participate in the State Authorization Reciprocity Agreement (“SARA”).

SARA is an agreement among member states, districts and territories of the United States of America that establishes comparable national standards for interstate offering of post-secondary distance education courses and programs.

SARA is overseen by a national council (“NC-SARA”) and administered by four regional education compacts.

As of September 2022, 49 states (all but California), the District of Columbia, Puerto Rico and the U.S.

Forty-nine states (all but California), the District of Columbia, Puerto Rico and the U.S.

Virgin Islands have joined SARA.

Each of our institutions holds the state and/or SARA authorizations required to operate and offer postsecondary education programs, and to recruit in the states in which it engages in recruiting activities.

Accreditation

Accreditation is a non-governmental process through which an institution voluntarily submits to ongoing qualitative reviews by an organization of peer institutions.

Each of our institutions holds the state or SARA authorizations required to operate and offer postsecondary education programs, and to recruit in the states in which it engages in recruiting activities.

We also have received approval from the Accrediting Commission of Career Schools and Colleges (“ACCSC”) and the Council on Occupational Education (“COE”) to permanently offer blended format programs that utilize both distance and on-ground education.

Additionally, we have received permanent approvals from all state education authorizing agencies to offer blended format programs.

We continue to work to ensure that we comply with applicable distance education rules and standards.

We also will closely monitor any new rulemakings that concern state authorization or distance education.

State Licensing Boards

Many educational programs leading to professional licensure in a regulated profession require approval from, and are subject to, ongoing oversight by state agencies or boards.

For example, certain Concorde healthcare programs, such as the Vocational Nursing, Practical Nursing, Dental Assistant, Massage Therapy, and Nursing Practice (RN) programs, require and have obtained state licensure.

Such programs are required to meet the standards of the state licensure agency or board and Concorde must periodically renew these licenses by completing a comprehensive license renewal process.

Institutional Accreditation

Institutional accreditation is a non-governmental process through which an institution voluntarily submits to ongoing qualitative reviews by an organization of peer institutions.

Institutional accreditation by an ED-recognized accreditor is required for an institution to be certified to participate in Title IV Programs.

All of our institutions are accredited by the Accrediting Commission of Career Schools and Colleges (“ACCSC”), which is an accrediting agency recognized by ED.

ACCSC reviews the academic quality of each institution’s instructional programs, as well as the administrative and financial operations of the institution to ensure that it has the resources necessary to perform its educational mission, implement continuous improvement processes, and support student success.

Our institutions must submit annual reports, and at times, supplemental reports, to demonstrate ongoing compliance and improvement.

ACCSC requires institutions to disclose certain institutional information to current and prospective students, as well as to the public, and requires that our schools and programs meet various performance standards as a condition of continued accreditation.

ACCSC often revisits, revises, and expands its standards and policies.

All of the UTI institutions and 14 of the Concorde institutions are accredited by the ACCSC.

The remaining two Concorde institutions are accredited by the COE.

Both ACCSC and COE are accrediting agencies recognized by ED.

ACCSC and COE review the academic quality of each institution’s instructional programs, as well as the administrative and financial operations of the institution to ensure that it has the resources necessary to perform its educational mission, implement continuous improvement processes, and support student success.

Our institutions are subject to periodic review to confirm accreditation standards are met, and must submit annual reports, and at times, supplemental reports, to demonstrate ongoing compliance and improvement.

ACCSC and COE require institutions to disclose certain institutional information to current and prospective students, as well as to the public, and require that our schools and programs meet various performance standards as a condition of continued accreditation.

ACCSC and COE often revisit, revise, and expand their standards and policies.

Institutions must periodically renew their accreditation by completing a comprehensive renewal of accreditation process.

Due to scheduling and resource limitations, an institution’s grant of accreditation at times may expire on its face prior to the completion of a renewal cycle.

In such cases, the institution’s accreditation remains in place until the renewal cycle is complete, and a new grant of accreditation is issued.

We strive to maintain the highest standards.

Currently 16 of our campuses are classified as ACCSC Schools of Excellence or ACCSC Schools of Distinction.

Six of our campuses have achieved this award twice in their history, and one campus has received this award three times in its history.

The table below sets out the renewal cycle for each of our schools:

Campus Accreditation Expiration Renewal Status On-Site Evaluation

Long Beach, California September 2022 In Process November 2022

Exton, Pennsylvania (1)

October 2022 In Process Est FY23

Five of our campuses have achieved this award twice in their history, and two campuses have received this award three times in their history.

The tables below set out the renewal of accreditation cycle for each of our schools:

UTI Campus Accreditation Expiration Renewal Status

Houston, Texas (MIAT) (1)

December 2022 In Process Est FY23

December 2022 In Process

Worth, Texas (2)

March 2023 In Process Est FY23

March 2023 In Process

Sacramento, California (2)

December 2023 Renewed March 2017

December 2023 In Process

Mooresville, North Carolina;

NASCAR Technical Institute (NASCAR Tech) (2)

December 2024 Renewed July 2018

December 2024 Renewed

Avondale, Arizona (2)

February 2025 Renewed February 2019

February 2025 Renewed

Orlando, Florida (2)

February 2025 Renewed August 2018

February 2025 Renewed

Houston, Texas (2)

February 2025 Renewed September 2018

February 2025 Renewed

Lisle, Illinois (2)

February 2025 Renewed December 2018

February 2025 Renewed

Rancho Cucamonga, California (2)

February 2025 Renewed March 2019

February 2025 Renewed

Avondale, Arizona;

Motorcycle Mechanics Institute (MMI) (2)

May 2025 Renewed April 2019

May 2025 Renewed

Bloomfield, New Jersey (1)

May 2025 Renewed December 2019

May 2025 Renewed

Canton, Michigan (MIAT) (1)

July 2026 Renewed October 2021

July 2026 Renewed

Long Beach, California (1)

September 2027 Renewed

Exton, Pennsylvania (2)

October 2028 Renewed

Austin, Texas (3)

May 2024 Approved Est FY25

May 2024 Approved

Miramar, Florida (3)

September 2024 Approved Est FY25

(1) Indicates a school that has achieved School of Excellence status during its most recent renewal of accreditation, which recognizes ACCSC-accredited institutions for their commitment to the expectations and rigors of ACCSC accreditation, as well as the efforts made by the institution in maintaining high levels of achievement among their students.

September 2024 Approved

(1) Indicates a school that has achieved School of Distinction status during its most recent renewal of accreditation, which recognizes accredited member schools that demonstrated a commitment to the expectations and rigors of ACCSC accreditation, as well as a commitment to delivering quality educational programs to students.

(2) Indicates a school that has achieved School of Excellence status during its most recent renewal of accreditation, which recognizes ACCSC-accredited institutions for their commitment to the expectations and rigors of ACCSC accreditation, as well as the efforts made by the institution in maintaining high levels of achievement among their students.

(3) New schools are initially accredited for a two-year term after which they are then eligible to renew for the longer five or six year renewal cycle.

Concorde Campus Accreditor Accreditation Expiration Renewal Status

Portland, Oregon ACCSC February 2017 In Process

North Hollywood, California ACCSC June 2023 In Process

Tampa, Florida ACCSC May 2024 In Process

Jacksonville, Florida ACCSC August 2024 In Process

Garden Grove, California ACCSC May 2025 Renewed

Miramar, Florida ACCSC May 2025 Renewed

San Bernardino, California ACCSC November 2025 Renewed

Grand Prairie, Texas ACCSC December 2025 Renewed

Aurora, Colorado ACCSC February 2026 Renewed

Kansas City, Missouri (including Online) ACCSC November 2026 Renewed

Orlando, Florida (4)

ACCSC December 2026 Renewed

Dallas, Texas ACCSC April 2027 Renewed

San Antonio, Texas (4)

ACCSC April 2027 Renewed

San Diego, California ACCSC May 2027 Renewed

Memphis, Tennessee COE September 2027 Renewed

Southaven, Mississippi COE September 2027 Renewed

(4) Indicates a school that has achieved School of Excellence status during its most recent renewal of accreditation, which recognizes ACCSC-accredited institutions for their commitment to the expectations and rigors of ACCSC accreditation, as well as the efforts made by the institution in maintaining high levels of achievement among their students.

Programmatic Accreditation

In addition to institutional accreditation, programmatic accreditation may be required for particular educational programs.

Programmatic accreditors review specialized and professional programs in a range of fields and disciplines within an institution to ensure the public that an academic program has undergone a rigorous review process and found to meet high standards for educational quality.

Certain Concorde healthcare programs, including the Physical Therapist Assistant, Dental Hygiene, Neurodiagnostic Technology, Polysomnographic Technology, Respiratory Therapy, Surgical Technology, Radiologic Technology, Diagnostic Medical Sonography, Cardiovascular Sonography, Occupational Therapy Assistant, Pharmacy Technician, and Occupational Therapy Assistant programs, have obtained programmatic accreditation.

Such programs are required to meet the standards of their programmatic accreditor and Concorde must periodically renew these accreditations by completing a comprehensive programmatic accreditation renewal process.

Title IV Programs

The federal government provides a substantial part of its support for postsecondary education through Title IV Programs in the form of grants and loans to students who can use those funds at any institution that has been certified as eligible to participate by ED.

Title IV grants include Federal Pell Grants (the “Pell Grants”) and Federal Supplemental Education Opportunity Grants (“FSEOG”).

Pell Grants are available to eligible undergraduate students who demonstrate financial need and who have not already received a baccalaureate degree and do not need to be repaid.

FSEOG grants are designed to supplement Pell Grants for students with the greatest financial need.

Institutions must provide matching funding equal to 25% of all awards made under the FSEOG program.

Title IV loans include Direct Subsidized loans, Direct Unsubsidized loans, and Direct Parent PLUS loans.

Direct Subsidized loans and Direct Unsubsidized loans are federal student loans offered to help eligible students cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school.

Direct Subsidized loans are available to undergraduate students with financial need.

Direct Unsubsidized loans are available to undergraduate and graduate students, and there is no requirement to demonstrate financial need.

Direct Parent PLUS loans are federal loans that parents of dependent undergraduate students can use to help pay for schools that participate in the Direct Loan program.

All of our institutions are certified to participate in Title IV Programs.

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In addition to HEA reauthorization, policies directly related to Title IV Programs and funding for those programs may be impacted by the annual budget and appropriations process as well as by other legislation.

time, we cannot predict all or any of the changes that Congress may ultimately make, and any of those changes could potentially have a material adverse effect on our business and operations.

In fiscal year 2022, we derived approximately 67% of our revenues, on a cash basis as defined by ED, from Title IV Programs.

At this time, we cannot predict all or any of the changes that Congress may ultimately make, and any of those changes could potentially have a material adverse effect on our business and operations.

Overall, in fiscal year 2023, across our institutions, we derived approximately 67% of our revenues, on a cash basis as defined by ED, from Title IV Programs.

We derived approximately 46% of our revenues, on a cash basis, from the Direct Loan program, pursuant to which ED makes loans to students or their parents.

We derived approximately 18% of our revenues, on a cash basis, from the Pell program, pursuant to which ED makes grants to students who demonstrate financial need.

And we derived less than 1% of our revenues, on a cash basis, from the Federal Supplemental Educational Opportunity Grant (“FSEOG”) program.

FSEOG grants are designed to supplement Pell grants for students with the greatest financial need.

Institutions must provide matching funding equal to 25% of all awards made under this program.

We derived approximately 20% of our revenues, on a cash basis, from the Pell Program.

And we derived less than 1% of our revenues, on a cash basis, from FSEOG.

The Title IV Program statutes and regulations are applied primarily on an institutional basis.

The HEA defines an “institution” as a main campus and its additional locations.

Pursuant to this definition, ED recognizes UTI as owning and operating four institutions (“OPE IDs”), organized as follows:

Universal Technical Institute of Arizona

Universal Technical Institute, Avondale, Arizona

Additional campuses:

Universal Technical Institute, Lisle, Illinois

Pursuant to this definition, ED recognizes the Company as owning and operating sixteen institutions (“OPE IDs”), organized as follows:

Institution Main Campus Additional Campuses (if any)

Universal Technical Institute of Arizona Universal Technical Institute, Avondale, Arizona Universal Technical Institute, Lisle, Illinois;

Universal Technical Institute, Long Beach, California;

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NASCAR Technical Institute, Mooresville, North Carolina

Universal Technical Institute of Phoenix

Universal Technical Institute DBA Motorcycle Mechanics Institute, Motorcycle & Marine Mechanics Institute, Avondale, Arizona

Additional campuses:

Universal Technical Institute, Sacramento, California

Universal Technical Institute of Phoenix Universal Technical Institute DBA Motorcycle Mechanics Institute, Motorcycle & Marine Mechanics Institute, Avondale, Arizona Universal Technical Institute, Sacramento, California;

Universal Technical Institute, Orlando, Florida for the following divisions:

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Automotive, Orlando, Florida

Universal Technical Institute of Texas

Universal Technical Institute, Houston, Texas

Additional campuses:

Universal Technical Institute, Exton, Pennsylvania

Universal Technical Institute of Texas Universal Technical Institute, Houston, Texas Universal Technical Institute, Exton, Pennsylvania;

Universal Technical Institute, Dallas/Ft.

Worth, Texas;

Universal Technical Institute, Bloomfield, New Jersey;

Universal Technical Institute, Austin, Texas

MIAT College of Technology

MIAT College of Technology, Canton, Michigan

Additional campuses:

MIAT College of Technology, Houston, Texas

To obtain and maintain certification, institutions also must demonstrate ongoing compliance with the HEA and its extensive and complex implementing regulations;

Michigan Institute of Aeronautics MIAT College of Technology, Canton, Michigan MIAT College of Technology, Houston, Texas

Concorde Career College, North Hollywood, California Concorde Career College, North Hollywood, California

Concorde Career College, San Diego, California Concorde Career College, San Diego, California

Concorde Career College, Garden Grove, California Concorde Career College, Garden Grove, California

Concorde Career College, San Bernardino, California Concorde Career College, San Bernardino, California

Concorde Career College, Aurora, Colorado and Dallas, Texas Concorde Career College, Aurora, Colorado Concorde Career College, Dallas, Texas

Concorde Career College, Portland, Oregon Concorde Career College, Portland, Oregon

Concorde Career Institute, Jacksonville, Florida Concorde Career Institute, Jacksonville, Florida Concorde Career Institute, Orlando, Florida

Concorde Career College, Memphis, Tennessee and Southaven, Mississippi Concorde Career College, Memphis, Tennessee Concorde Career College, Southaven, Mississippi

Concorde Career Institute, Tampa, Florida Concorde Career Institute, Tampa, Florida

Concorde Career Institute, Miramar, Florida Concorde Career Institute, Miramar, Florida

Concorde Career College, Kansas City, Missouri and San Antonio, Texas Concorde Career College, Kansas City, Missouri Concorde Career College, San Antonio, Texas

Concorde Career College, Grand Prairie, Texas Concorde Career College, Grand Prairie, Texas

To obtain and maintain certification as eligible to participate in Title IV Programs, institutions must demonstrate ongoing compliance with the HEA and its extensive and complex implementing regulations;

regulations that ED frequently revisits, revises, and expands.

Because all of our institutions are certified to participate in Title IV Programs, they must all comply with this complex framework of statutes,

regulations, and guidance, and undergo detailed oversight and review.

Because all of our institutions are certified to participate in Title IV Programs, they must all comply with this complex framework of statutes, regulations, and guidance, and undergo detailed oversight and review.

Below, we discuss the core components of the Title IV Programs’ regulatory framework.

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All institutions participating in the Title IV Programs must first establish their eligibility to do so.

The Program Participation Agreement (“PPA”) document serves as ED’s formal recognition that an institution and its associated additional locations have satisfied this requirement, and are authorized to participate in Title IV Programs for a specified period of time.

The Program Participation Agreement (“PPA”) document serves as ED’s formal recognition that an institution and its associated additional locations

have satisfied this requirement and are authorized to participate in Title IV Programs for a specified period of time.

An institution seeking to expand its activities in certain ways, such as opening an additional location or raising the highest academic credential it offers, must obtain approval from ED.

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Terms of certification are typically six years but can be three years or shorter.

We received fully recertified PPAs for Universal Technical Institute of Texas, Universal Technical Institute of Arizona and Universal Technical Institute of Phoenix in June 2022, which will expire June 30, 2024.

Each of our institutions participates in the Title IV Programs through a PPA.

Those institutions that recently have been acquired (MIAT and Concorde) participate pursuant to a provisional PPA, which is standard for institutions that have recently undergone a change in ownership or control.

A provisional PPA attaches additional requirements and limitations to participation for the duration of the provisional period, which typically is three years.

The 90/10 Rule

As a condition of participation in Title IV Programs, proprietary institutions must agree when they sign their PPA to comply with the 90/10 rule.

Under the current 90/10 rule, to remain eligible to participate in the federal student aid programs, a proprietary institution cannot derive more than 90% of its revenues for each fiscal year from Title IV Program funds.

A proprietary institution is subject to sanctions if it exceeds the 90% level for a single year, and loses its eligibility to participate in Title IV Programs if it derives more than 90% of its revenue from Title IV Programs, as applicable, for two consecutive fiscal years.

In 2021, President Biden signed into law the American Rescue Plan Act of 2021 (“ARPA”), which amended the 90/10 rule.

Section 2013 of the ARPA amended the rule to require covered institutions to derive at least 10% of their revenue from sources other than “Federal education assistance funds.” The phrase “Federal education assistance funds” was broadly defined as “federal funds that are disbursed or delivered to or on behalf of a student to be used to attend such institution.” Congress directed ED to clarify the impact of this change with new regulations.

ED published a new proposed 90/10 rule on July 28, 2022 and a final rule on October 28, 2022.

This rule takes effect July 1, 2023 and applies to any annual audit submission for a proprietary institutional fiscal year beginning on or after January 1, 2023.

Significantly, pursuant to this proposed rule, “Federal education assistance funds” would include most educational assistance funds provided by a Federal agency to an institution or a student to cover tuition, fees and other institutional charges, including funds provided by the VA or DOD.

Under the 90/10 rule, to remain eligible to participate in the federal student aid programs, a proprietary institution must derive at least 10% of their revenue from sources other than “Federal education assistance funds.” “Federal education assistance funds” are defined as “federal funds that are disbursed or delivered to or on behalf of a student to be used to attend such institution.”

We regularly monitor compliance with the 90/10 requirement to minimize the risk that any of our institutions would derive more than the allowable maximum percentage of its revenue from Title IV Programs for any fiscal year.

As of September 30, 2022, our institutions’ annual Title IV percentages as calculated under the current 90/10 rule ranged from approximately 64% to 70% between our institution’s four OPE IDs.

Based on our review of the final 90/10 rule, including the scope of the phrase “Federal education assistance funds” we do not believe our ability to comply with 90/10 requirements will be materially impacted once the new rule takes effect.

As of September 30, 2023, our institutions’ annual Title IV percentages as calculated under the current 90/10 rule ranged from approximately 57% to approximately 86%.

Administrative Capability

To continue its participation in Title IV Programs, an institution must demonstrate that it remains administratively capable of providing the education it promises and of properly managing the Title IV Programs.

ED assesses the administrative capability of each institution that participates in Title IV Programs under a series of standards listed in the regulations, which cover a wide range of operational and administrative topics, including the designation of capable and qualified individuals, the quality and scope of written procedures, the adequacy of institutional communication and processes, the timely resolution of issues, the sufficiency of recordkeeping, and the frequency of findings of noncompliance, to name a few.

ED’s administrative capability standards also include thresholds and expectations for federal student loan cohort default rates (discussed below), satisfactory academic progress, and loan counseling.

Failure to satisfy any of the standards may lead ED to find the institution ineligible to participate in Title IV Programs, require the institution to repay Title IV Program funds, change the method of payment of Title IV Program funds, place the institution on provisional certification as a condition of its continued participation or take other actions against the institution.

Three-Year Student Loan Default Rates

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0% 1.9% 15.4%

Concorde Career College - North Hollywood, California 0% 3.6% 8.8%

Concorde Career College - San Diego, California 0% 3.7% 11.2%

Concorde Career College - Garden Grove, California 0% 3.7% 10.6%

Concorde Career College - San Bernardino, California 0% 4.9% 12.2%

Concorde Career College - Aurora, Colorado and Dallas, Texas 0% 2.9% 14.2%

Concorde Career College - Grand Prairie, Texas (3)

0% 6.7% 17.2%

Concorde Career College - Kansas City, Missouri and San Antonio, Texas (3)

0% 4.2% 19.2%

Concorde Career College - Memphis, Tennessee and Southaven, Mississippi (3)

0% 4.7% 16.8%

Concorde Career Institute - Jacksonville, Florida and Orlando, Florida 0% 4.0% 13.6%

Concorde Career Institute - Miramar, Florida (3)

0% 5.3% 18.0%

Concorde Career Institute - Tampa, Florida 0% 3.7% 13.4%

Concorde Career College - Portland, Oregon 0% 2.9% 9.3%

All proprietary postsecondary institutions (5)

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(1) Based on information published by ED.

(2) Due to the COVID-19 pandemic, ED paused all loan payments from March 13, 2020 through December 31, 2022.

This has significantly decreased the default rates starting with the 2019 Cohort.

(3) We completed the acquisition of MIAT on November 1, 2021.

(2) Due to the COVID-19 pandemic, ED paused all loan payments from March 13, 2020 through October 1, 2023.

This has significantly decreased the default rates starting with the 2019 Cohort and resulted in 0% for the 2020 Cohort.

(3) As of September 30, 2023, these institutions were subject to a 30-day delay in receiving the first disbursement on federal student loans for first-time borrowers due to a three-year cohort default rate that was 15% or greater for one of the three most recent years.

(4) We completed the acquisition of MIAT on November 1, 2021 and Concorde on December 1, 2022.

As a result, the cohort default rates presented here relate to periods prior to our ownership.

However, since these rates affect our current collection timing on disbursements of federal student loans, we have included the rates within the table.

(4) Includes other proprietary institutions beyond UTI.

However, because these rates affect our current collection timing on disbursements of federal student loans, we have included the rates within the table.

(5) Includes other proprietary institutions beyond the Company.

An institution whose cohort default rate exceeds 30% in consecutive fiscal years may be subject to conditions and restrictions and will lose eligibility if the rate remains above 30% three years in a row.

An institution also will lose eligibility if its rate exceeds 40% for any fiscal year.

As demonstrated in the table above, none of our institutions had a three-year cohort default rate of 30% or greater for 2019, 2018 or 2017, for the three most recent FFYs with published rates.

As demonstrated in the table above, none of our institutions had a three-year cohort default rate of 30% or greater for 2020, 2019, or 2018, which are the three most recent FFYs with published rates.

An institution whose three-year cohort default rate is 15% or greater for any one of the three preceding years is subject to a 30-day delay in receiving the first disbursement on federal student loans for first-time borrowers.

As of September 30, 2022, Universal Technical Institute of Texas and MIAT College of Technology were subject to a 30-day delay in receiving the first disbursement on federal student loans for first-time borrowers due to a three-year cohort default rate that was 15% or greater for one of the three most recent years.

Financial Responsibility

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Among other things, an institution must meet all of its financial obligations, including required refunds to students and any Title IV Program liabilities and debts, be current in its debt payments, comply with certain past performance requirements, and not receive an adverse, qualified, or disclaimed opinion by its accountants in its audited financial statements.

Each year, ED also evaluates institutions’ financial responsibility by calculating a “composite score,” which utilizes information provided in the institutions’ annual audited financial statements.

The composite score is based on three ratios:

(1) the equity ratio which measures the institution’s capital resources, ability to borrow and financial viability;

Each year, ED also evaluates institutions’ financial responsibility by calculating a “composite score,” which measures an institution’s overall financial health.

The composite score utilizes information provided in the institutions’ annual audited financial statements and is based on three ratios:

(1) the equity ratio which measures the institution’s capital resources, ability to borrow and financial

(2) the primary reserve ratio which measures the institution’s ability to support current operations from expendable resources;

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If an institution’s composite score is above 1.5, and it meets all other requirements, it is deemed financially responsible.

composite score is below 1.5, but at least 1.0, the institution is still considered to be financially responsible, but must agree to additional oversight by ED in the form of cash monitoring and other participation requirements.

If its composite score is below 1.5, but at least 1.0, the institution is still considered to be financially responsible, but must agree to additional oversight by ED in the form of cash monitoring and other participation requirements.

If an institution’s composite score is below 1.0, the institution is considered by ED to lack financial responsibility.

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ED’s regulations permit ED to examine the financial statements of Universal Technical Institute, Inc., the financial statements of each institution and the financial statements of any related party.

ED has not required us currently to post a letter of credit on behalf of any of our schools.

ED has required us to provide certain information on a regular basis following our issuance of preferred stock on July 15, 2016, and we continue to provide monthly reports to ED pursuant to such direction.

ED has required us to provide certain information on a regular basis following our issuance of preferred stock on June 24, 2016, and we continue to provide monthly reports to ED pursuant to such direction.

For our year ended September 30, 2023, we calculated our composite score to be 1.6.

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Between composite score calculations, ED also will reevaluate the financial responsibility of an institution following the occurrence of certain “triggering events,” which must be timely reported to the agency.

Specifically, ED may determine that an institution is not able to meet its financial or administrative obligations if one of the following events occurs:

• The institution incurs a liability from a settlement, final judgment or final determination arising from an administrative or judicial action or proceeding initiated by a federal or state entity and, as a result of that liability, the institution’s recalculated composite score is less than 1.0 as determined by ED under procedures described in the regulations;

• For a proprietary institution whose composite score is less than 1.5, there is a withdrawal of owner’s equity from the institution by any means (as defined by the regulations) and, as a result of that withdrawal, the institution’s recalculated composite score is less than 1.0 as determined by ED under procedures described in the regulations;

• The SEC issues an order suspending or revoking the registration of the institution’s securities or suspends trading of the institution’s securities on any national securities exchange;

• The national securities exchange on which the institution’s securities are traded notifies the institution that it is not in compliance with the exchange’s listing requirements and, as a result, the institution’s securities are delisted;

• The SEC is not in timely receipt of a required report and did not issue an extension to file the report;

• If two or more “discretionary” triggering events (as described below) take place within a certain time period unless a triggering event is resolved before any subsequent event(s) occurs.

ED may also determine that an institution is not able to meet its financial or administrative obligations if one of the following discretionary triggering events occurs and is likely to have a material adverse effect on the financial condition of the institution:

• The accrediting agency for the institution issued an order, such as a show cause order or similar action, that, if not satisfied, could result in the withdrawal, revocation or suspension of institutional accreditation;

• The institution violated a provision or requirement in a security or loan agreement and a default, delinquency or other event occurs that triggers or enables the creditor to require or impose on the institution an increase in collateral, a change in contractual obligations, an increase in interest rates or payments, or other sanctions, penalties, or fees;

• The institution’s state licensing agency notifies the institution of an intent to withdraw or terminate the institution’s state licensure if the institution does not take the steps necessary to come into compliance with a state licensing agency requirement;

• The institution did not receive at least 10% of its revenue in compliance with the 90/10 rule for its most recently completed fiscal year as calculated by ED;

• The institution has high annual drop-out rates as calculated by ED;

• The institution’s two most recent official cohort default rates are 30% or greater, as determined under the regulations and unless the institution has a pending or successful appeal that sufficiently reduces at least one of the rates.

ED regulations give the institution an opportunity to provide information to the agency demonstrating that the triggering event is not material to the institution’s financial position in advance of any final determination regarding the institution’s financially responsibility.

ED may determine that an institution is not able to meet its financial or administrative obligations if a triggering event occurs.

Borrower Defense to Repayment

Under the HEA and its implementing regulations, students may file a claim with ED to discharge their federal Direct Loans (or Direct Consolidated Loans) if, generally, their institution misled them or engaged in other misconduct related to the making of their federal loans or the provision of their educational services.

This is referred to as a “borrower defense to repayment” or “BDR” claim.

On November 1, 2022, the Biden administration promulgated a revised version of the BDR rule, which took effect on July 1, 2023.

On August 7, 2023, the U.S.

Court of Appeals for the Fifth Circuit issued a nationwide injunction, postponing the implementation of the borrower defense and closed school provisions of the new rule.

The stay on the borrower defense and closed school provisions will remain in effect at least until the Fifth Circuit issues an order as to the pending motions that are on appeal.

Until that time, the previous versions of the borrower defense and closed school provisions are in effect.

On June 22, 2022, ED reached a settlement in the case titled Sweet v.

For any borrower who attended Concorde, as well as 152 other named schools, and had a BDR claim pending as of June 22, 2022, the borrower will receive “Full Settlement Relief.” Full Settlement Relief means that the federal student loan(s) associated with the borrower’s attendance at the school will be discharged, ED will refund any amounts paid to ED on those loans, and the credit tradeline for those loans will be deleted from the borrower’s credit report.

Concorde’s inclusion as a named institution in the Sweet settlement is not a finding of misconduct and does not constitute evidence that could or would be considered in an action by ED against Concorde.

Substantial Misrepresentation

The regulatory definitions of “misrepresentation” and “substantial misrepresentation” enforced by ED are exceptionally broad and do not require intent by the institution to misrepresent, or actual reliance by the person to whom the alleged misrepresentation was made.

misrepresentation was made.

Therefore, it is possible that a statement made by the institution or one of its service providers or representatives could be construed by ED to constitute a substantial misrepresentation, even if the statement was made in error, without intent to misrepresent, and the person to whom it was made did not actually rely upon it.

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The “incentive compensation” prohibition forbids institutions from providing any commission, bonus, or other incentive payment based in any part, directly or indirectly, on success in securing enrollments or the award of financial aid to any person or entity engaged in any student recruiting or admission activities or in making decisions regarding the awarding of Title IV Program funds.

We have made adjustments to the compensation practices for our admissions representatives which we believe comply with the current regulations and ED’s guidance.

We believe our compensation practices for our admissions representatives comply with the current regulations and ED’s guidance.

We will continue to evaluate other compensation options under these regulations and guidance.

Distance Education

In response to the COVID-19 pandemic, ED provided broad approval for institutions to use distance education without going through the standard ED approval process.

ED also permitted accreditors to waive their distance education review requirements.

Taking advantage of these flexibilities, we transitioned our students into blended program formats, which permitted their non-clinical training to be offered online.

ED’s temporary flexibilities currently remain in place, and will continue through the end of the payment period that begins after the date on which the federally-declared national emergency related to COVID-19 is rescinded.

However, having observed that our blended learning programs offer a range of academic, operational, and financial efficiencies, we have determined to seek the permanent approvals that will permit us to continue offering blended learning programming after the noted temporary flexibilities have expired.

We also continue to work to ensure that our blended learning programming complies with applicable distance education rules and standards, including ED’s new distance education rules, which became effective July 1, 2021.

We intend to offer our Automotive, Diesel, Automotive/Diesel, Motorcycle and Marine programs in a blended learning format on a permanent basis.

Additionally, we intend to continue to invest in our blended learning platform and curriculum to further enhance the student experience and student outcomes.

To date, we have received approval from ACCSC to permanently offer blended format programs that utilize both distance

and on-ground education.

Additionally, we have received permanent approvals from all state education authorizing agencies

to offer blended format programs.

Title IV Program Rulemaking

Title IV Program Rulemakings

ED is almost continuously engaged in one or more negotiated rulemakings, which is the process pursuant to which the agency revisits, revises, and expands the complex and voluminous Title IV Program regulations.

Currently, ED is conducting two significant, negotiated rulemaking efforts to revise rules concerning 16 different issue areas.

We devote significant effort to understanding the effects of ED regulations and rulemakings on our business and to developing compliant solutions that also are congruent with our business, culture, and mission to serve our students and industry relationships.

ED has recently undertaken, or proposed to undertake, rulemakings on the following topics:

• Between October and December of 2021, the Affordability and Student Loans committee negotiated new rules relating to nine issue areas:

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• On October 28, 2022, ED published a final rule amending regulations governing Pell Grants for prison education programs, the 90/10 rule, and changes in ownership and control, effective July 1, 2023.

On November 1, 2022, ED published a final rule governing borrower defense to repayment rule, closed school loan discharges, pre-dispute arbitration and class action waiver clauses, interest capitalization on Federal student loans, Public Student Loan Forgiveness, total and permanent disability discharges, and false certification discharges, also effective July 1, 2023.

The regulated community is awaiting proposed rules on the remaining topics covered by ED’s negotiated rulemakings.

On November 1, 2022, ED published a final rule governing borrower defense to repayment claims, closed school loan discharges, pre-dispute arbitration and class action waiver clauses, interest capitalization on Federal student loans, Public Student Loan Forgiveness, total and permanent disability discharges, and false certification discharges, also effective July 1, 2023.

• On October 10, 2023, ED published a final rule related to financial value transparency and gainful employment, effective July 1, 2024.

On October 31, 2023, ED published final rules relating to (1) financial responsibility, (2) administrative capability, (3) certification procedures;

and (4) ability to benefit, effective July 1, 2024

• ED has announced plans to convene another round of negotiated rulemaking in the coming months.

Potential topics for these rulemaking sessions include:

(1) accreditation and related issues;

(2) institutional eligibility, including State authorization;

(3) third-party servicers and related issues;

(4) distance learning;

(5) return of Title IV funds;

(6) cash management;

(7) the use of deferments and forbearances;

(8) the Federal TRIO programs;

and (9) student loan debt relief.

ED Non-Discrimination Rulemakings

As a condition of receiving federal financial assistance, we are responsible for complying with applicable laws and regulations promulgated by ED regarding non-discrimination.

On July 12, 2022, ED published a proposed rule to amend the regulations implementing Title IX of the Education Amendments of 1972 (“Title IX”).

This proposed rule represents a significant revision of the current rules.

ED also has indicated that it will be proposing a rule to amend regulations related to nondiscrimination on the basis of disability in the Spring of 2023.

We devote significant effort to complying with non-discrimination laws and regulations.

We are monitoring all proposed non-discrimination rules and will carefully review any proposed or final regulations promulgated by ED.

On July 12, 2022, ED published a proposed rule to amend the regulations implementing Title IX of the Education Amendments of 1972.

This proposed rule, which represents a significant revision of the current rules, is expected to arrive in final form in late 2023.

ED also has indicated that it will be proposing a rule to amend regulations related to nondiscrimination on the basis of disability.

Other Benefit or Aid Programs

Some of our students receive financial aid from federal sources other than Title IV or VA Programs, such as from the DOD or under the Workforce Innovation and Opportunity Act.

All of our institutions must comply with the eligibility and participation requirements applicable to each of these funding programs, which vary by funding agency and program.

Department of Veterans Affairs Benefit Programs

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We continue to strengthen and develop relationships with our existing contacts and with new contacts in order to maintain and rebuild our access to military installations.

Other Federal and State Student Aid Programs

Some of our students receive financial aid from federal sources other than Title IV or VA Programs, such as from the DOD or under the Workforce Innovation and Opportunity Act.

Additionally, some states provide financial aid to our students in the form of grants, loans or scholarships.

Our Long Beach, Rancho Cucamonga and Sacramento, California campuses, for example, are currently eligible to participate in the Cal Grant program.

All of our institutions must comply with the eligibility and participation requirements applicable to each of these funding programs, which vary by funding agency and program.

State Financial Aid Programs

Some states provide financial aid to our students in the form of grants, loans or scholarships.

The UTI campuses in Long Beach, Rancho Cucamonga and Sacramento, California, as well as the Concorde campuses in Garden Grove, North Hollywood, and San Diego, California for example, are currently eligible to participate in the Cal Grant program.

All of our institutions must comply with the eligibility and participation requirements applicable to each of these state financial aid programs.

Regulatory Approval of Acquisitions

When we acquire an institution, the acquired school typically experiences a change of control under the standards of applicable federal and state agencies, including its institutional accreditor and ED.

These agencies have varying processes and criteria for evaluating a change of control and may elect to attach conditions to the continued approval of the acquired school following the closing of the transaction.

The approvals granted by ED after completing the acquisition of both MIAT and Concorde, for example, include increased reporting and notification obligations, as well as requirements that neither school group may add new programs or locations, or change existing programs.

Existing program content at each school group may be changed so long as the credit and contact hours reported to ED do not change.

And existing campuses may be moved to new locations in the area.

This allows schools to keep program content current and to relocate to improved facilities.

Such restrictions on new campuses and programs typically remain in place for the time required for ED to review two years of audited financials for the acquired school under the new ownership.

Consumer Protections Laws and Regulations

As a postsecondary educational institution, we are subject to a broad range of consumer protection and other laws, such as recruiting, marketing, the protection of personal information, student financing and payment servicing, enforced by federal agencies such as the FTC and CFPB and various state agencies and state attorneys general.

We devote significant effort to complying with state and federal consumer protection laws.

As a postsecondary educational institution, we are subject to a broad range of consumer protection and other laws, such as those that relate to recruiting, marketing, the protection of personal information, student financing and payment servicing.

Such laws and regulations are enforced by federal agencies including the Federal Trade Commission (“FTC”) and the Consumer Financial Protection Bureau (“CFPB”) and various state agencies and state attorneys general.

We received a January 18, 2022 letter from the CFPB explaining that it was assessing whether UTI “is subject to the CFPB’s supervisory authority based on its activities related to student lending.” The CFPB’s letter then requested certain information about extensions of credit to our students;

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and advised that, after it reviewed the requested materials, the CFPB “anticipates providing guidance regarding whether UTI is subject to CFPB’s supervisory authority.” We have provided the requested information and are awaiting further guidance, if any, from the CFPB.

We, along with 69 other proprietary institutions, received an October 6, 2021 letter from the FTC providing notice that engaging in deceptive or unfair conduct in the education marketplace violates consumer protection laws and could lead to significant civil penalties.

The notice stated that an institutions receipt of the letter “does not reflect any assessment as to whether they have engaged in deceptive or unfair conduct,” and the FTC did not request any information.

Federal Student Loan Forgiveness

On August 24, 2022, the Biden administration announced a student loan relief plan.

Under this plan, the Department will provide up to $20,000 in debt relief to Pell Grant recipients with loans held by the Department and up to $10,000 in debt relief to non-Pell Grant recipients.

Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households.

The plan is currently subject to a number of legal challenges in court.

Should the plan survive judicial scrutiny, we expect many of our alumni and a portion of our current students as of this filing, would qualify for and take advantage of this relief.

Both UTI and Concorde, along with 68 other proprietary institutions, received an October 6, 2021 letter from the FTC providing notice that engaging in deceptive or unfair conduct in the education marketplace violates consumer protection laws and could lead to significant civil penalties.

The notice stated that an institution’s receipt of the letter “does not reflect any assessment as to whether they have engaged in deceptive or unfair conduct,” and the FTC did not request any information.

We devote significant effort to complying with state and federal consumer protection laws.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business