What changed in this filing

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Item 9A. Controls and Procedures

2024-12-05 compared with 2023-12-01 · 384 added, 508 removed, 1355 unchanged (40% of the section changed)

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Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2023.

Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, 2023, the Company’s disclosure controls and procedures were effective in ensuring that (i) information required to be disclosed by the

Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Principal Executive Officer and our Principal Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2024.

Based upon that evaluation, our Principal Executive Officer and our Principal Financial Officer concluded that, as of September 30, 2024, the Company’s disclosure controls and procedures were effective in ensuring that (i) information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

On December 1, 2022, we completed the acquisition of Concorde Career Colleges, Inc.

We have excluded the acquired business from our assessment and report on internal control over financial reporting for the year ended September 30, 2023, as permitted under SEC rules.

Other than the foregoing, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Exchange Act Rules 13a-15(d) or 15d-15(d) that occurred during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Exchange Act Rules 13a-15(d) or 15d-15(d) that occurred during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Report of Management on Internal Control Over Financial Reporting and Attestation Report of Independent Registered Public Accounting Firm

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Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud.

Our management, including our Principal Executive Officer and our Principal Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

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Management’s Certifications

The Company has filed as exhibits to its Annual Report on Form 10-K for the year ended September 30, 2023, filed with the SEC, the certifications of the Chief Executive Officer and the Chief Financial Officer of the Company required by Section 302 of the Sarbanes-Oxley Act of 2002.

The Company has filed as exhibits to its Annual Report on Form 10-K for the year ended September 30, 2024, filed with the SEC, the certifications of the Principal Executive Officer and the Principal Financial Officer of the Company required by Section 302 of the Sarbanes-Oxley Act of 2002.

The Company has submitted to the NYSE the most recent Annual Chief Executive Officer Certification as required by Section 303A.12(a) of the NYSE Listed Company Manual.

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Below is a list of our Executive Officers and Board of Directors as of September 30, 2023:

Executive Officer Position

Below is a list of our Executive Officers and Board of Directors as of the filing of this report:

Name Position

Grant Chief Executive Officer

Anderson Executive Vice President and Chief Financial Officer

Smith Executive Vice President, Campus Operations & Services

Hitchcock Senior Vice President, Chief Strategy and Transformation Officer

Christine C.S.

Kline Interim Chief Financial Officer and Chief Accounting Officer

Smith Executive Vice President, Chief Academic Officer

Christopher E.

Kevane Senior Vice President, Chief Legal Officer

Lorenz Senior Vice President, UTI Division President

Kevane Executive Vice President, Chief Legal Officer

Hitchcock Executive Vice President, Chief Strategy and Transformation Officer

Carolyn Frank Senior Vice President, Chief Human Resources Officer

Smith Senior Vice President, Chief Information Officer

Director Position

DeVincenzi Chairman of the Board, Universal Technical Institute, Inc.;

Principal Partner, Lupine Venture Group

Blaszkiewicz President and Chief Executive Officer, Invest Detroit

Brochick Executive Vice President - Strategic Development, Penske Automotive Group, Inc.

Grant Chief Executive Officer, Universal Technical Institute, Inc.

Lorenz Senior Vice President, UTI Division President

Kevin Prehn Senior Vice President, Concorde Division President

Name Position

DeVincenzi Chairman of the Board

Brochick Director

Grant Chief Executive Officer

LTG (R) William J.

Lennox Former Superintendent of the United States Military Academy at West Point;

Chief Executive Officer, Lennox Strategies, LLC

Okinaka Executive Vice President, Chief Financial Officer and Treasurer of Hawaiian Holdings, Inc.

Sanchez Former U.S.

Congresswoman;

Chief Executive Officer, Datamatica, LLC

Lennox Director

Okinaka Director

Sanchez Director

Christopher S.

Shackelton Managing Partner, Coliseum Capital Management, LLC

Slubowski President, Chief Executive Officer, and Board Member of Trinity Health

Srere Former President, Young and Rubicam Advertising

Trammell Former Executive Vice President and Chief Financial Officer, Tenneco Inc.

The information required by this Item is incorporated by reference from our Proxy Statement to be filed in connection with our 2024 Annual Meeting of Stockholders within 120 days after the end of fiscal year ended September 30, 2023.

Shackelton Director

Slubowski Director

Srere Director

Trammell Director

The remaining information required by this Item is incorporated by reference from our Proxy Statement to be filed in connection with our 2025 Annual Meeting of Stockholders within 120 days after the end of fiscal year ended September 30, 2024.

EXECUTIVE COMPENSATION

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Exhibit Number Description

2.1# Stock Purchase Agreement by and among HCP ED Holdings, LLC, HCP ED Holdings, Inc., Michigan Institute of Aeronautics, Inc.

D/B/A MIAT College of Technology, and Universal Technical Institute, Inc.

dated March 29, 2021.

(Incorporated by reference to Exhibit 2.1 to the Registrant’s Quarterly Report on Form 10-Q dated May 7, 2021.)

2.2 Purchase and Sale Contract dated February 4, 2022, by and among Universal Technical Institute, Inc., Universal Technical Institute Ventures, LLC, and iStar Net Lease I LLC (incorporated by reference to Exhibit 2.1 to the Registrant’s Quarterly Report on Form 10-Q dated May 5, 2022).

2.3 Purchase and Sale Contract dated February 11, 2022, by and among Universal Technical Institute, Inc., Universal Technical Institute Ventures, LLC, and iStar Net Lease Member I LLC (incorporated by reference to Exhibit 2.2 to the Registrant’s Quarterly Report on Form 10-Q dated May 5, 2022).

2.1 Stock Purchase Agreement, dated May 3, 2022, by and among Universal Technical Institute, Inc., Concorde Career Colleges, Inc., Liberty Partners Holdings 28, L.L.C., Liberty Investment IIC, LLC, and Liberty Partners L.P.

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333-109430).)

4.2 Registration Rights Agreement, dated December 16, 2003, between the Registrant and certain stockholders signatory thereto.

(Incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1 dated October 3, 2003, or an amendment thereto (No.

333-109430).)

4.2 Registration Rights Agreement dated June 24, 2016 by and between the Registrant and Coliseum Holdings I, LLC.

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(Incorporated by reference to Exhibit 4.1 to the Form 8-K filed by the Registrant on February 21, 2017.)

Exhibit Number Description

4.5+ Description of Securities.

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333-109430).)

10.3* Form of Severance Agreement between Registrant and certain executive officers.

(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 16, 2008.)

10.4* Universal Technical Institute, Inc.

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(Incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Registrant on September 11, 2013.)

Exhibit Number Description

10.5.2* Form of Restricted Stock Unit Agreement.

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(Incorporated by reference to Exhibit 10.4.6 to the Annual Report on Form 10-K filed by the Registrant on December 1, 2017.)

10.5 Lease Agreement, dated July 2, 2001, as amended February 27, 2015, between Delegates LLC, as landlord, and The Clinton Harley Corporation, as tenant.

(Incorporated by reference to Exhibit 10.14 to the Registrant’s Registration Statement on Form S-1 dated October 3, 2003, or an amendment thereto (No.

333-109430), and Exhibit 10.1 to the Form 10-Q filed by the Registrant on May 1, 2015.)

10.6* Form of Indemnification Agreement by and between the Registrant and its directors and officers.

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10.16 Deed of Trust, Security Agreement and Fixture Filing dated May 12, 2021 (incorporated herein by reference to Exhibit 10.3 to the Form 8-K filed with the SEC on May 12, 2021).

10.17 Universal Technical Institute, Inc.

2021 Equity Incentive Plan.

(Incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Registrant on February 26, 2021).

Exhibit Number Description

10.17 Loan Agreement dated April 14, 2022, by and among 2611 Corporate West Drive Venture LLC and Valley National Bank (incorporated by reference to Exhibit 10.3 to the Form 10-Q dated May 5, 2022).

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10.21 Consent Letter, dated June 26, 2023, by and among Universal Technical Institute, Inc., Fifth Third Bank, National Association, and the other loan parties thereto (incorporated by reference to Exhibit 10.1 to the Form 10-Q dated August 8, 2023).

Exhibit Number Description

10.22 First Amendment to Credit Agreement, dated August 16, 2023, by and among, Universal Technical Institute, Inc., and the other loan parties thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated August 29, 2023).

10.24+* Universal Technical Institute, Inc.

Recovery of Erro neously -Awarded Incentive Compensation Policy, adopted September 20, 2023 .

10.23* Universal Technical Institute, Inc., Amended and Restated 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 12, 2024).

10.24* Form of Restricted Stock Unit Agreement under Amended and Restated 2021 Equity Incentive Plan effective as of March 7, 2024 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 12, 2024).

10.25* Form of Performance Unit Award Agreement under Amended and Restated 2021 Equity Incentive Plan effective as of March 7, 2024 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 12, 2024).

10.26 Second Amendment to Credit Agreement, dated June 28, 2024, by and among Universal Technical Institute, Inc., Fifth Third Bank, National Association and the other loan parties thereto.

(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 10-Q filed with the SEC on August 7, 2024).

10.27+ Third Amendment to Credit Agreement, dated September 26, 2024, by and among Universal Technical Institute, Inc., Fifth Third Bank, National Association and the other loan parties thereto.

19.1+ Insider Trading Policy

21.1+ Subsidiaries of the Registrant.

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§ 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97.1* Universal Technical Institute, Inc.

Recovery of Erroneously-Awarded Incentive Compensation Policy, adopted September 20, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant’s Prior Report on Form 10-K dated December 1, 2023).

101.INS Inline XBRL Instance Document.

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KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jerome A.

Grant and Troy R.

Anderson, or either of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and any documents related to this report and filed pursuant to the Securities Exchange Act of 1934, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Grant and Christine C.S.

Kline, or either of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and any documents related to this report and filed pursuant to the Securities Exchange Act of 1934, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

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Chief Executive Officer (Principal Executive Officer) December 5, 2024

Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) December 1, 2023

/s/ Christine C.S.

Interim Chief Financial Officer and Chief Accounting Officer

(Principal Financial Officer & Principal Accounting Officer) December 5, 2024

Christine C.S.

/s/ Robert T.

Chairman of the Board November 30, 2023

Director November 30, 2023

Chairman of the Board December 5, 2024

/s/ George W.

Brochick Director November 30, 2023

Brochick Director December 5, 2024

/s/ William J.

Director November 30, 2023

Director December 5, 2024

/s/ Shannon L.

Director November 30, 2023

Director December 5, 2024

/s/ Loretta L.

Sanchez Director November 30, 2023

Sanchez Director December 5, 2024

/s/ Christopher S.

Director November 30, 2023

Director December 5, 2024

Christopher S.

/s/ Michael A.

Slubowski Director November 30, 2023

Director November 30, 2023

Slubowski Director December 5, 2024

Director December 5, 2024

/s/ Kenneth R.

Director November 30, 2023

Director December 5, 2024

UNIVERSAL TECHNICAL INSTITUTE, INC.

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Also, projections of any evaluation of effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

As discussed in Note 4 to the Consolidated Financial Statements, the Company completed the acquisition of Concorde Career Colleges, Inc.

(“Concorde”) on December 1, 2022.

Management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Concorde, which represented approximately 18% of total assets as of September 30, 2023, and approximately 29% of revenues for the year then ended.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended September 30, 2024, of the Company and our report dated December 5, 2024, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Concorde Career Colleges, Inc.

(“Concorde”), which was acquired on December 1, 2022, and whose financial statements constitute 18% of total assets and 29% of revenues of the consolidated financial statement amounts as of and for the year ended September 30, 2023.

Accordingly, our audit did not include the internal control over financial reporting at Concorde.

Basis for Opinion

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• Recalculated the expected collection rate based on the actual collection rates of the loan portfolio for the most recent 10 years.

• Evaluated the reasonableness of the length of historical collection experienced used by comparing it to the weighted average term of the portfolio of loans.

• Evaluated the underlying historical loan data by making selections of loans included in the data population and traced to source documentation, and recalculated the amount of the loan due as of the reporting date.

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Restricted cash 5,572 5,377

Held-to-maturity investments — 28,918

Receivables, net 31,096 25,161

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Preferred stock, $ 0.0001 par value, 10,000 shares authorized;

676 shares of Series A Convertible Preferred Stock issued and outstanding as of September 30, 2023 and 2022, liquidation preference of $ 100 per share

0 and 676 shares of Series A Convertible Preferred Stock issued and outstanding, liquidation preference of $ 100 per share as of September 30, 2024 and 2023, respectively

Paid-in capital - common 220,976 151,439

Paid-in capital - preferred — 66,481

Treasury stock, at cost, 82 shares as of September 30, 2023 and 2022, respectively

Treasury stock, at cost, 82 shares as of September 30, 2024 and 2023

( 365 ) ( 365 )

Retained earnings (deficit) 5,946 ( 1,307 )

Retained earnings 38,509 5,946

Accumulated other comprehensive income 1,106 2,463

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Net income $ 42,001 $ 12,322 $ 25,848

Other comprehensive income (loss):

Unrealized gain (loss) on interest rate swaps, net of taxes 250 2,492 ( 279 )

Other comprehensive (loss) income:

Unrealized (loss) gain on interest rate swaps, net of taxes ( 1,357 ) 250 2,492

Comprehensive income $ 40,644 $ 12,572 $ 28,340

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Net income — — — — — — — — 25,848 — 25,848

Cumulative effect from adoption of ASC 326 — — — — — — — — 1,644 — 1,644

Issuance of common stock under stock-based compensation plans 300 — — — — — — — — — —

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Stock-based compensation — — — — 4,337 — — — — — 4,337

Preferred stock conversion 724 — ( 24 ) — 2,372 ( 2,372 ) — — — — —

Preferred stock cash dividends declared — — — — — — — — ( 5,159 ) — ( 5,159 )

Unrealized loss on interest rate swap — — — — — — — — — ( 279 ) ( 279 )

Unrealized gain on interest rate swap, net of taxes — — — — — — — — — 2,492 2,492

Balance as of September 30, 2022 33,857 $ 3 676 $ — $ 148,372 $ 66,481 ( 82 ) $ ( 365 ) $ ( 1,307 ) $ 2,213 $ 215,397

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Stock-based compensation — — — — 3,848 — — — — — 3,848

Preferred stock conversion 724 — ( 24 ) — 2,372 ( 2,372 ) — — — — —

Preferred stock cash dividends declared — — — — — — — — ( 5,069 ) — ( 5,069 )

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Net income — — — — — — — — 42,001 — 42,001

Issuance of common stock under stock-based compensation plans 410 — — — — — — — — — —

Issuance of common stock under employee plans 634 — — — — — — — — — —

Shares withheld for payroll taxes ( 189 ) — — — ( 2,227 ) — — — — — ( 2,227 )

Preferred stock conversion 19,297 2 ( 643 ) — 63,204 ( 63,206 ) — — — — —

Stock-based compensation — — — — 8,560 — — — — — 8,560

Preferred stock cash dividends declared — — — — — — — — ( 5,069 ) — ( 5,069 )

Unrealized gain on interest rate swap, net of taxes — — — — — — — — — 250 250

Balance as of September 30, 2023 34,157 $ 3 676 $ — $ 151,439 $ 66,481 ( 82 ) $ ( 365 ) $ 5,946 $ 2,463 $ 225,967

Preferred stock dividends — — — — — — — — ( 1,097 ) — ( 1,097 )

Preferred share repurchase — — ( 33 ) — — ( 3,275 ) — — ( 8,341 ) — ( 11,616 )

Unrealized loss on interest rate swap, net of taxes — — — — — — — — — ( 1,357 ) ( 1,357 )

Balance at September 30, 2024 53,899 $ 5 — $ — $ 220,976 $ — ( 82 ) $ ( 365 ) $ 38,509 $ 1,106 $ 260,231

The accompanying notes are an integral part of these consolidated financial statements.

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Intangible asset impairment expense — — 2,000

Bad debt expense 3,319 2,510 1,718

Provision for credit losses 7,547 3,319 2,510

Stock-based compensation 8,560 3,848 4,337

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Training equipment credits earned, net 1,371 1,375 180

Unrealized gain (loss) on interest rate swaps, net of taxes 250 2,492 ( 279 )

Other losses (gains), net 276 663 ( 13 )

Unrealized (loss) gain on interest rate swaps, net of taxes ( 1,357 ) 250 2,492

Other losses, net 431 276 663

Changes in assets and liabilities:

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Deferred revenue 6,800 11,370 ( 5,268 )

Income tax receivable — — 7,145

Income tax payable/receivable ( 2,066 ) ( 908 ) 222

Operating lease liability ( 22,449 ) ( 20,474 ) ( 13,952 )

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Debt issuance costs related to long-term debt — ( 516 ) ( 378 )

Payment of preferred stock cash dividend ( 5,069 ) ( 5,159 ) ( 5,250 )

Payment of term loans and finance leases ( 2,518 ) ( 1,788 ) ( 19,227 )

Payments on revolving credit facility ( 75,000 ) — —

Payment of preferred stock cash dividend ( 1,097 ) ( 5,069 ) ( 5,159 )

Preferred share repurchase ( 11,503 ) — —

Payment of payroll taxes on stock-based compensation through shares withheld ( 2,227 ) ( 781 ) ( 651 )

Net cash provided by financing activities 81,846 12,585 24,824

Net cash (used in) provided by financing activities ( 51,345 ) 81,846 12,585

Change in cash, cash equivalents and restricted cash 10,548 86,928 ( 75,981 )

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Supplemental disclosure of cash flow information:

Taxes paid (refunded) $ 658 $ 859 $ ( 6,712 )

Income taxes paid, net of refunds $ 10,683 $ 658 $ 859

Interest paid 10,391 9,069 1,937

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Change in accrued capital expenditures during the period ( 2,479 ) 3,621 ( 2,592 )

Conversion of Series A Preferred Stock 63,206 — —

CARES Act funds received for student emergency grants (See Note 24) — — 6,689

CARES Act funds disbursed for student emergency grants (See Note 24) — — ( 6,919 )

CARES Act funds received for institutional costs (See Note 24) — — 2,677

The accompanying notes are an integral part of these consolidated financial statements.

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

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 as follows:

Our reporting structure has two reportable segments (also referred to as “divisions”) as follows:

Universal Technical Institute (“UTI”):

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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.

Concorde operates 17 campuses located in eight states and online, offering degree, non-degree, certificate 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.

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“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.

Additional information about our reportable segments is presented in Note 22.

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The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All significant intercompany accounts and transactions have been eliminated.

All intercompany accounts and transactions have been eliminated.

Use of Estimates

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Such estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, the proprietary loan program, allowance for uncollectible accounts, investments, property and equipment, goodwill recoverability, self-insurance claim liabilities, income taxes, contingencies and stock-based compensation.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, the proprietary loan program, allowance for credit losses, investments, property and equipment, goodwill recoverability, self-insurance claim liabilities, income taxes, contingencies and stock-based compensation.

We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances.

The results of our analysis form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions, and the impact of such differences may be material to our consolidated financial statements.

UNIVERSAL TECHNICAL INSTITUTE, INC.

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(In thousands, except per share amounts)

Actual results may differ from these estimates under different assumptions or conditions, and the impact of such differences may be material to our consolidated financial statements.

Fair Value of Financial Instruments

The carrying value of cash equivalents, restricted cash, held-to-maturity investments (when outstanding), accounts receivable, accounts payable, accrued liabilities, deferred tuition, and debt approximates their respective fair value as of September 30, 2023 and 2022 due to the short-term nature of these instruments or variable interest rates which approximate market rates.

The carrying value of cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, deferred tuition, and debt approximates their respective fair value as of September 30, 2024 and 2023 due to the short-term nature of these instruments or variable interest rates which approximate market rates.

Restricted Cash

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In order to provide funding for students who are not able to fully finance the cost of their education under traditional governmental financial aid programs, commercial loan programs or other alternative sources, we established a private loan program with a bank.

This program is currently offered to students at our UTI and MMI branded schools.

This program is currently offered to students at our UTI schools.

Through the proprietary loan program, the bank originates the loans to the students who participate in this program for a portion of their tuition.

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Under the terms of the proprietary loan program, the bank originates loans for our selected UTI and MMI students who meet specific criteria with the related proceeds used exclusively to fund a portion of their tuition.

Under the terms of the proprietary loan program, the bank originates loans for our selected UTI students who meet specific criteria with the related proceeds used exclusively to fund a portion of their tuition.

We then purchase all such loans from the bank at least monthly and assume all of the related credit risk.

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After the deferral period, monthly principal and interest payments are required over the related term of the loan.

The repayment term is up to 10 years.

Current repayment terms are generally up to 10 years.

The bank provides these services in exchange for a fee at a percentage of the principal balance of each loan and related fees.

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Estimating the collection rate requires significant management judgment.

Upon adoption of ASU 2016-13, Financial Instruments-Credit Losses:

Measurement of Credit Losses on Financial Instruments (Topic 326) as of October 1, 2020, we revised our estimated collection rate to only include historical collections from the past ten years as we determined that such population better represents our current expected collections and aligns with the typical term of the loan.

Our estimated collection rate includes historical collections from the past ten years as we determined that such population best represents our current expected collections and aligns with the typical term of the loan.

The estimated amount is determined at the inception of the contract, and we recognize the related revenue as the student progresses through school.

As the loan is repaid, after graduation typically, the amount reserved based on the collection rate is reduced and additional revenue could be recognized.

Each reporting period, we update our assessment of the variable collection rate associated with the proprietary loan program.

Retail Installment Contract Receivables

Both Concorde and UTI offer certain students retail installment contracts as a payment vehicle for the portion of the tuition that is not covered by federal student financial aid or other funding sources.

The retail installment contracts are due from current and former students, are generally due over a period of up to five years , and bear interest at market rates ranging from

UNIVERSAL TECHNICAL INSTITUTE, INC.

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(In thousands, except per share amounts)

Retail Installment Contract Receivables

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

The retail installment contracts are due to Concorde from current and former students, are generally due over a period of up to five years , and bear interest at market rates ranging from 0 percent to 15 percent.

0 percent to 15 percent.

Starting in fiscal year 2023, retail installment contracts are being issued at interest rates between 0 percent to 9 percent.

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The short-term portion of the retail installment contract receivable and related allowance for credit losses are included in “Receivables, net” while the long-term portion of the retail installment contract receivable and related allowance for credit losses is presented in “Other assets” on our consolidated balance sheets.

Allowance for Uncollectible Accounts

We maintain an allowance for uncollectible accounts for estimated losses resulting from the inability, failure or refusal of our students to make required payments.

Allowance for Credit Losses

We maintain an allowance for credit losses for expected credit losses resulting from the inability, failure or refusal of our students to make required payments.

As previously noted, we offer a variety of payment plans to help students pay the portion of their education expenses not covered by financial aid programs or alternate fund sources, which are unsecured and not guaranteed.

Management analyzes accounts receivable, historical percentages of uncollectible accounts, customer credit worthiness and changes in payment history when evaluating the adequacy of the allowance for uncollectible accounts.

We use an internal group of collectors, augmented by third party collectors as deemed appropriate, in our collection efforts.

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Goodwill represents the excess of the cost of an acquired business over the estimated fair values of the assets acquired and liabilities assumed.

We also have definite-lived intangible assets, which primarily consist of purchased intangibles and capitalized curriculum development costs.

We also have both indefinite and definite-lived intangible assets, which primarily consist of purchased intangibles such as accreditations and regulatory approvals, trademarks and trade names, and curriculum.

The definite-lived intangible assets are recognized at cost less accumulated amortization.

Amortization is computed using the straight-line method based on estimated useful lives of the related assets.

We test goodwill and indefinite-lived intangible assets for impairment annually as of August 1, or more frequently if events and circumstances warrant.

Under ASC Topic 350, Intangibles - Goodwill and Other , to evaluate the impairment of goodwill, we first assess qualitative factors, such as deterioration in the operating performance of the acquired business, adverse market conditions, adverse changes in the applicable laws or regulations and a variety of other circumstances, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount.

If we conclude that it is more

UNIVERSAL TECHNICAL INSTITUTE, INC.

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We test goodwill and indefinite-lived intangible assets for impairment annually as of August 1, or more frequently if events and circumstances warrant.

If we conclude that it is more likely than not that the fair value is less than the carrying amount based on our qualitative assessment, or that a qualitative assessment should not be performed, we proceed with the quantitative impairment tests for goodwill to compare the estimated fair value of the reporting unit to the carrying value of its net assets.

likely than not that the fair value is less than the carrying amount based on our qualitative assessment, or that a qualitative assessment should not be performed, we proceed with the quantitative impairment tests for goodwill to compare the estimated fair value of the reporting unit to the carrying value of its net assets.

An impairment charge is recorded in an amount equal to the excess of the carrying amount over its estimated fair value, limited to the total amount of goodwill allocated to the reporting unit.

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Our claim liabilities are based on estimates, and while we believe the amounts accrued are adequate, the ultimate losses may differ from the amounts provided.

Our recorded net liability related to self-insurance plans was $ 4.9 million as of September 30, 2023.

Our recorded liability related to self-insurance plans was $ 4.8 million as of September 30, 2024 and are included in accrued compensation and benefits within “Accounts payable and accrued expenses”.

We lease the majority of our administrative and educational facilities under operating lease agreements.

ASC Topic 842, Leases (“ASC 842”) requires lessees to recognize a right-of-use (“ROU”) asset and a lease liability on the balance sheet for substantially all leases, with the exception of short-term leases.

Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income.

To determine if a contract is or contains a lease, we considered whether (1) explicitly or implicitly identified assets have been deployed in the contract and (2) we obtain substantially all of the economic benefits from the use of that underlying asset and direct how and for what purpose the asset is used during the term of the contract.

Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the statements of operations.

To determine if a contract is or contains a lease, we consider whether (1) explicitly or implicitly identified assets have been deployed in the contract and (2) we obtain substantially all of the economic benefits from the use of that underlying asset and direct how and for what purpose the asset is used during the term of the contract.

If we determine a contract is, or contains, a lease, we assess whether the contract contains multiple lease components.

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We have elected to account for the lease and non-lease components as a single lease component.

Some of the facility leases are subject to annual changes in the Consumer Price Index (“CPI”).

While lease liabilities are not remeasured as a result of changes to the CPI, changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.

Many of our lease agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised.

There are no early termination with penalties, residual value guarantees, restrictions or covenants imposed by our facility leases.

The components of lease expense are included in “Educational services and facilities” and “Selling, general and administrative” on the consolidated statements of operations, with the exception of interest on finance lease liabilities, which is included in “Interest expense.”

For all our leases the discount rate implicit in the lease is not readily determinable.

Therefore, we use our incremental borrowing rate for each lease to determine the present value of the lease.

We calculate the incremental borrowing rate applicable to each lease through a model that represents the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The incremental borrowing rate applied to each lease is based on the remaining term of the lease.

See Note 12 for additional disclosures on our leases.

We calculate the incremental borrowing rate

UNIVERSAL TECHNICAL INSTITUTE, INC.

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applicable to each lease through a model that represents the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The incremental borrowing rate applied to each lease is based on the remaining term of the lease.

See Note 11 for additional disclosures on our leases.

Derivative Financial Instruments

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Stock-Based Compensation

We granted restricted stock units with service only conditions (“RSUs”) and restricted stock units with both service and performance conditions (“PSUs”) during the years ended September 30, 2023, 2022 and 2021.

We did not grant any stock options during the years ended September 30, 2023, 2022 and 2021.

We issue stock-based compensation awards to certain members of management as well as our non-employee directors.

We granted restricted stock units with service only conditions (“RSUs”) and restricted stock units with both service and performance conditions (“Performance PSUs”) during the year ended September 30, 2024.

We granted RSUs and restricted stock units with service, performance, and market conditions (“Market PSUs”) during the years ended September 30, 2023 and 2022.

We did not grant any stock options during the years ended September 30, 2024, 2023 or 2022.

Shares issued under our equity compensation plans are new shares.

Compensation expense associated with RSUs is measured based on the grant date fair value of our common stock and recognized on straight-line basis over the requisite service period, which is generally the vesting period.

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We estimate the fair value of PSUs using a Monte Carlo simulation which requires assumptions for expected volatility, risk-free rates of return, and dividend yields.

The fair value of Performance PSUs is measured based on the grant date fair value of our common stock.

We estimate the fair value of Market PSUs using a Monte Carlo simulation which requires assumptions for expected volatility, risk-free rates of return, and dividend yields.

Expected volatilities are derived using a method that calculates historical volatility over a period equal to the length of the measurement period.

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Treasury bill that is commensurate with each measurement period, and we assume that any dividends paid were reinvested.

Actual results against the performance condition are measured at the end of the performance period, which typically coincides with the vesting period.

For Performance PSUs and Market PSUs (collectively “PSUs”), actual results against the performance condition are measured at the end of the performance period, which typically coincides with the vesting period.

The fair value of the PSUs is amortized on a straight-line basis over the requisite service period based upon the fair market value on the date of grant, adjusted on a quarterly basis for the anticipated or actual achievement against the established performance condition.

We issue stock-based compensation awards to certain members of management as well as our non-employee directors.

We estimate the fair value of each stock option grant on the date of grant using the Black-Scholes option-pricing model.

The estimated fair value is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables, including, but not limited to, our expected stock price volatility, the expected term of the awards and actual and projected employee stock exercise behaviors.

We evaluate our assumptions on the date of each grant.

Stock-based compensation expense of $ 8.6 million, $ 3.8 million and $ 4.4 million was recorded for the years ended September 30, 2024, 2023 and 2022, respectively.

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We do also on occasion invest in short-term held-to-maturity investments.

We place our cash and cash equivalents, restricted cash, and short-term held-to-maturity investments with high quality financial institutions and limit the amount of credit exposure with any one financial institution.

We mitigate the concentration risk of our investments by limiting the amount invested in any one issuer.

We mitigate the risk associated with our investment in corporate bonds by requiring a minimum credit rating of A.

We have the ability and intention to hold our short-term investments until maturity and therefore have classified these investments as held-to-maturity and recorded them at amortized cost.

We place our cash and cash equivalents and restricted cash with high quality financial institutions and limit the amount of credit exposure with any one financial institution.

As of September 30, 2024, we held cash and cash equivalents of $ 161.9 million and restricted cash of $ 5.6 million.

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Department of Education (“ED”) requirements.

Approximately 67 % of our revenues, on a cash basis, were collected from funds distributed under Title IV Programs for the year ended September 30, 2023 as calculated under the 90/10 rule.

Additionally, approximately 10 % of our revenues, on a cash basis, were collected from funds distributed under various veterans’ benefits programs for the year ended September 30, 2023.

Approximately 78 % of our revenues, on a cash basis, were collected from funds distributed under Title IV Programs and various veterans’ benefits programs for the year ended September 30, 2024 as calculated under the 90/10 rule.

The financial aid and veterans’ benefits programs are subject to political and budgetary considerations.

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Our administration of these programs is periodically reviewed by various regulatory agencies.

Any regulatory violation could be the basis for the initiation of potential adverse actions, including a suspension, limitation, placement on reimbursement status or termination proceeding, which could have a material adverse

ED and other regulators have increased the frequency and severity of their enforcement actions against postsecondary schools which have resulted in the imposition of material liabilities, sanctions, letter of credit requirements and other restrictions and, in some cases, resulted in the loss of schools’ eligibility to receive Title IV funds or in closure of the schools.

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effect on our business.

If any of our institutions were to lose its eligibility to participate in federal student financial aid programs, the students at that institution would lose access to funds derived from those programs and would have to seek alternative sources of funds to pay their tuition and fees.

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Reclassifications

As previously noted, as a result of the Concorde Acquisition, beginning with the year ended September 30, 2023, we have two reportable segments:

UTI and Concorde.

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

The segment disclosures presented in Note 22 for the years ended September 30, 2021 and 2022 have been revised from the prior year presentation to reflect the new reportable segments.

Additionally, starting with the year ended September 30, 2023, we have reclassified “Accrued tool sets” into “Accounts payable and other accrued expenses” on our consolidated balance sheets for reporting purposes.

As of September 30, 2022, $ 3.2 million was reclassified from “Accrued tool sets” to “Accounts payable and other accrued expenses” on the consolidated balance sheets for comparable presentation.

The breakout of accrued tool sets is now disclosed in Note 13.

Further, the activity related to the accrued tool sets balance is now reported in the “Accounts payable and other accrued expenses” line on the consolidated statement of cash flows for the year ended September 30, 2023.

We reclassified $ 1.7 million and $ 2.0 million from “Accrued tool sets and other current liabilities” to “Accounts payable, accrued expenses and other current liabilities” on the consolidated statement of cash flow for the years ended September 30, 2022 and 2021, respectively, for comparable presentation.

During fiscal 2023, in coordination with the integration of Concorde, we began to reassess our operating model to determine the optimal structure to achieve future growth goals and support the business.

In furtherance of the foregoing, we executed an internal reorganization of our operations to fully transition our operating and reporting model to support a multi-divisional business.

Each of the reportable segments now has dedicated accounting, finance, information technology, and human resources teams.

Additionally, certain human resources and information technology costs that benefit the entire organization are now allocated across the UTI, Concorde and Corporate segments each period based upon relative headcount.

As a result, additional costs have moved from the Corporate segment into the UTI segment and to a lesser extent the Concorde segment, as resources were redirected to support each segment’s objectives.

Due to these changes in allocation methodology, the segment disclosures in Note 22 for the and year ended September 30, 2023 and 2022 have been recast from the prior years presentation for comparability to the current year presentation.

Note 3 - Recent Accounting Pronouncements

Accounting Pronouncements Effective in Fiscal 2023

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions affected by reference rate reform, if certain criteria are met.

This new guidance only applies to contracts and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform.

An entity may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued.

The amendments in ASU 2020-04 do not apply to contract modifications made after December 31, 2022.

On April 3, 2023, we executed an amendment for our Avondale Term Loan (as defined in Note 14) to convert the stated rate from LIBOR to Term Secured Overnight Financing Rate (“SOFR”) (which is further described in Note 14).

Additionally, on March 31, 2023, we terminated our existing interest rate swap and entered into a new interest rate swap agreement, effective April 3, 2023, with the Avondale Lender that effectively fixes the interest rate we pay on 50 % of the principal amount of the Avondale Term Loan at 1.45 % for the entire loan term (which is further described in Note 15).

In executing the amendment, we adopted several of the practical expedients allowed under ASU 2020-04, including updating the designated hedged risk in our outstanding cash flow hedging relationship to match the risk presented in the modified interest payments and to continue our hedging relationship that falls within the scope of ASU 2020-04.

The adoption of the new guidance in ASU 2020-04 did not have a material impact on our consolidated financial statements.

The Financial Accounting Standards Board (“FASB”) and the SEC periodically issue new accounting standards or disclosure requirements in a continuing effort to improve standards of financial accounting and reporting.

We have reviewed the recently issued pronouncements and concluded the following new accounting standard updates (“ASU”) or SEC rules apply to us.

Effective in Fiscal 2025

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others.

The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted, and the amendments should be applied retrospectively.

This ASU will be effective for our Form 10-K for fiscal 2025 and our Form 10-Q for the first quarter of fiscal 2026.

We are currently evaluating the impact this ASU may have on our financial statement disclosures.

Effective in Fiscal 2026

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid.

The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied prospectively;

however, retrospective application is also permitted.

This ASU will be effective for our Form 10-K for fiscal 2026.

We are currently evaluating the impact this ASU may have on our financial statement disclosures.

Effective in Fiscal 2027

In March 2024, the SEC issued final rules to enhance public company disclosures related to the risks and impacts of climate-related matters.

In April 2024, the SEC voluntarily stayed the new rules as a result of pending legal challenges.

The new rules, if adopted, include requirements to disclose Scope 1 and Scope 2 greenhouse gas emissions and other climate-related

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topics in annual reports and registration statements, when material.

Disclosure requirements will begin phasing in for our Form 10-K for fiscal 2027.

We are currently evaluating the impact this rule may have on our financial statement disclosures.

Effective in Fiscal 2028

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic 220):

Disaggregation of Income Statement Expenses , which requires additional disclosure of certain amounts included in the expense captions presented on the statement of operations, as well as disclosures about selling expenses.

The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted for annual financial statements that have not yet been issued.

We are currently evaluating the impact this ASU may have on our financial statement disclosures.

Note 4 - Acquisitions

Concorde Career Colleges

On December 1, 2022, we completed the Concorde Acquisition.

Concorde operates 17 campuses located in eight states with approximately 7,600 students, and offers its programs via in-person, hybrid and online formats.

On December 1, 2022, we completed the acquisition of Concorde.

Concorde operates 17 campuses across eight states with approximately 7,600 students, and offers its programs via in-person, hybrid and online formats.

Concorde offers more than 20 programs across the allied health, dental, nursing, patient care, and diagnostic fields.

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As a result of the transactions contemplated by the Purchase Agreement, Concorde is now a wholly-owned subsidiary of the Company.

We funded the consideration paid for the Concorde Acquisition by the revolving credit facility entered into on November 18, 2022.

We funded the consideration paid for Concorde by the Revolving Credit Facility entered into on November 18, 2022.

See Note 13 for further details on the Revolving Credit Facility.

In connection with the Concorde Acquisition, we incurred total transaction costs of $ 5.3 million, of which $ 3.0 million was incurred during the year ended September 30, 2022 and $ 2.3 million was incurred during the year ended September 30, 2023.

In connection with the acquisition, we incurred total transaction costs of $ 5.3 million, of which $ 3.0 million was incurred during the year ended September 30, 2022 and $ 2.3 million was incurred during the year ended September 30, 2023.

These costs are included in “Selling, general and administrative” expenses in the consolidated statements of operations for the applicable period.

Allocation of the purchase price

Under the acquisition method of accounting, the total purchase price was allocated to the identifiable assets acquired and the liabilities assumed based on our preliminary valuation estimates of the fair values as of the acquisition date.

The fair value and allocation of the business combination are preliminary, are based upon management’s best estimates and assumptions, and are subject to future revision.

We will continue our analysis under the provisions of ASC Topic 805, Business Combinations , which allows companies one year to complete acquisition related adjustments which may result in potential adjustments to the carrying value of the respective recorded assets and liabilities.

The preliminary allocation of the purchase price at December 1, 2022 is summarized as follows:

Under the acquisition method of accounting, the total purchase price was allocated to the identifiable assets acquired and the liabilities assumed based on our valuation estimates of the fair values as of the acquisition date.

As of December 1, 2023, the fair value and the purchase price allocation are considered final.

The final allocation of the purchase price at December 1, 2022 is summarized as follows:

Assets acquired:

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Right-of-use assets for operating leases 71,153

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Goodwill 11,600

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Total assets acquired $ 163,837

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Liabilities assumed

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(1) Long-term debt consists of one lease classified as a finance lease under ASC 842.

Due to the timing of the acquisition, the amounts for income tax liabilities, including deferred income taxes, pending finalization of estimates and assumptions in respect of certain tax aspects of the transaction, are considered preliminary and subject to change.

Any changes in the amounts for income tax liabilities could cause further changes to intangible assets and property and equipment.

The Company will finalize these amounts no later than one year from the acquisition date once it obtains the information necessary to complete the measurement process.

Any changes resulting from facts and circumstances that existed as of the acquisition date may result in adjustments to the preliminary amounts disclosed above which may impact the reported results in the period those adjustments are identified.

Since the initial purchase price allocation reported at December 31, 2022, we have adjusted the purchase price allocation for operating and finance lease assets and liabilities due to changes in the incremental borrowing rates.

Additionally, we identified further adjustments required for accounts receivable, prepaid expenses, deferred income taxes, deferred revenue, and accounts payable and accrued expenses.

The adjustments noted resulted in further changes to both intangible assets and goodwill.

Other than an $ 8.9 million adjustment to operating lease liabilities, the noted adjustments did not have a material impact on the financial statements since the date of acquisition.

Since September 30, 2023, we further adjusted the purchase price allocation by approximately $ 0.1 million for income taxes receivable and approximately $ 0.6 million for deferred income taxes due to completing and filing the final stub period income tax return for Concorde, which results in a $ 0.7 million adjustment to property and equipment.

These adjustments did not have a material impact on the financial statements since the date of acquisition.

The amount allocated to goodwill of $ 11.6 million represents the acquired assembled workforce.

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The fair value of the property and equipment was estimated using the cost and market approaches as of the valuation date.

The fair value of the leases was estimated using the income and market approaches to determine if there was any favorable or unfavorable terms in place.

The fair value of the leases were estimated using the income and market approaches to determine if there was any favorable or unfavorable terms in place.

The intangible assets acquired, which primarily consist of the accreditations and regulatory approvals, trademarks and trade names, and curriculum, were valued using different valuation techniques depending upon the nature of the intangible asset acquired, all of which are considered level 3 as defined in Note 7.

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The table below presents the summary of the intangible assets acquired and the useful lives of these assets based upon the current preliminary purchase price allocation:

The table below presents the final summary of the intangible assets acquired and the useful lives of these assets:

Intangible Asset Useful life Amount

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Twelve Months Ended

September 30, 2023 September 30, 2022 September 30, 2021

September 30, 2023 September 30, 2022

Revenue $ 643,429 $ 618,949

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We determined the fair value of intangible asset to be $ 1.0 million as of September 30, 2022 using the relief from royalty method and recorded an intangible asset impairment charge of $ 2.0 million during the year ended September 30, 2022.

During the fourth quarter of 2024, we determined it would be appropriate to further shorten the remaining useful life by one year of this trade name given the Company’s rebranding plans.

Pro forma financial information is not presented as revenues and earnings of MIAT were not material to our consolidated statements of operations.

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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.

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

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

Revenues are recognized as transfer of the services occurs.

The majority of Concorde’s core programs are nine to ten months in duration and are billed in full at the start of the program.

Clinical programs are 12 to 24 month programs that are billed by academic term.

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

Revenues are recognized as transfer of the services occurs.

The majority of Concorde’s short and core programs are 8 to 36 weeks in duration and are billed in full at the start of the program.

Clinical programs are 60 to 90 week programs that are billed by academic term.

Revenues for both divisions are recognized as transfer of the services occurs.

In addition to revenue from tuition and fees, UTI and Concorde derive supplemental revenues from sales of textbooks and program supplies and other revenues, which are recognized as the transfer of goods or services occurs.

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Based on historical collection rates, we believe at least a portion of these loans are collectible.

Accordingly, we recognize tuition and loan origination fees financed by the loan and any related interest revenue under the effective interest method required under the loan based on the amount we expect to collect, and we recognize these revenues ratably over the term of the course or program offered.

Accordingly, we recognize tuition and loan origination fees financed by the loan and any related interest revenue as variable consideration under the effective interest method required by the loan based on the amount we expect to collect, and we recognize these revenues ratably over the term of the course or program offered.

Contract Balances

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The contract assets are transferred to the receivables when the rights become unconditional.

Currently, we do not have any contract assets that have not transferred to a receivable.

We do not have any contract assets that have not transferred to a receivable for either of the reporting periods.

Our deferred revenue is considered a contract liability and primarily relates to our enrollment agreements where we received payments for tuition, but we have not yet delivered the related training programs to satisfying the related performance obligations.

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(1) Receivables, net of allowances, includes tuition receivables, retail installment contract receivables and notes receivable, both current and long term.

During the year ended September 30, 2023, the deferred revenue balance included decreases for revenues recognized during the period, increases related to new students who started their training programs during the period, and the addition of

deferred revenue from the Concorde Acquisition.

During the year ended September 30, 2024, the deferred revenue balance included decreases for revenues recognized during the period, offset by increases related to new students who started their training programs during the period.

Note 6 - Receivables, net

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Total receivables 41,472 34,214

allowance for uncollectible accounts ( 9,053 ) ( 5,634 )

allowance for credit losses ( 10,376 ) ( 9,053 )

Receivables, net $ 31,096 $ 25,161

The allowance for uncollectible accounts is estimated using our historical write-off experience applied to the receivable balances for students who are no longer attending school due to graduation or withdrawal or who are in school and have receivable balances in excess of financial aid available to them.

We write off receivable balances against the allowance for uncollectible accounts at the time we transfer the balance to a third-party collection agency.

The following table summarizes the activity for our allowance for uncollectible accounts for the years ended September 30, 2023, 2022 and 2021:

The allowance for credit losses is estimated using our expected uncollectible loss rate applied to the receivable balances for students who are no longer attending school due to graduation or withdrawal or who are in school and have receivable balances in excess of financial aid available to them.

We write off receivable balances against the allowance for credit losses at the time we transfer the balance to a third-party collection agency.

The following table summarizes the activity for our allowance for credit losses for the years ended September 30, 2024, 2023 and 2022:

Year Ended September 30,

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Additions due to opening balance of MIAT acquisition — — 1,682

Additions to bad debt expense 3,319 2,510 1,718

Write-offs of uncollectible accounts ( 6,640 ) ( 1,345 ) ( 724 )

Provision for credit losses 7,547 3,319 2,510

Write-offs of credit losses, net of recoveries ( 6,224 ) ( 6,640 ) ( 1,345 )

Balance at end of period $ 10,376 $ 9,053 $ 5,634

Note 7 - Investments

In July 2022, we invested a portion of our cash and cash equivalents in short-term investments which primarily consist of corporate and municipal bonds with a minimum credit rating of A.

We had the ability and intention to hold these investments until maturity and therefore classified these investments as held-to-maturity and recorded them at amortized cost and presented them in “Held-to-maturity investments” on our consolidated balance sheet as of September 30, 2022.

As of September 30, 2023, there were no outstanding held-to-maturity investments as all of the securities matured by December 31, 2022 and there were no new purchases of held-to-maturity investments during the year ended September 30, 2023.

The long-term portion of the retail installment contract receivables and related allowance for credit losses is presented in “Other assets” on our consolidated balance sheets and consists of the following:

September 30,

Long-term receivables $ 8,461 $ 5,927

allowance for credit losses ( 1,956 ) ( 1,445 )

Long-term receivables, net $ 6,505 $ 4,482

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The amortized cost, gross unrealized gains or losses, and fair value of held-to-maturity investments at September 30, 2022 were as follows:

September 30, 2022

Gross Unrealized Estimated Fair

Due in less than 1 year:

Amortized Cost Gains Losses Market Value

Corporate, municipal bonds and other $ 28,918 $ — $ ( 19 ) $ 28,899

Investments are exposed to various risks, including interest rate, market and credit risk.

As a result, it is possible that changes in the values of these investments may occur and that such changes could affect the amounts reported in the consolidated financial statements.

Note 7 - Fair Value Measurements

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Total liabilities at fair value on a recurring basis $ 121,319 $ — $ 121,319 $ —

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Fair Value Measurements Using

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36,663 — — 36,663

Corporate and government bonds (3)

28,899 28,899 — —

Total assets at fair value on a recurring basis $ 66,350 $ 29,687 $ — $ 36,663

Term loans (4)

Revolving credit facility and term loans (3)

156,991 — 156,991 —

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See Note 2 for further discussion over the proprietary loan program.

(3) Corporate and government bonds are reflected as “Held-to-maturity investments” on our consolidated balance sheet as of September 30, 2022.

(3) The revolving credit facility and term loans bear interest at rates commensurate with market rates, and therefore, the respective carrying values approximate fair value (Level 2).

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Note 8 - Property and Equipment, net

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Depreciation expense related to property and equipment was $ 28.6 million and $ 24.6 million for years ended September 30, 2024 and 2023, respectively.

In March 2023, we purchased the three primary buildings and the associated land at our UTI Orlando, Florida campus which was previously leased.

The purchase resulted in an increase in our buildings of $ 15.2 million, an increase in land of $ 9.0 million and the reclassification of assets from leasehold improvements to building improvements of $ 19.1 million.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Note 9 - Goodwill

Our goodwill balance of $ 28.5 million as of September 30, 2023 represents the excess of the cost of an acquired business over the estimated fair values of the assets acquired and liabilities assumed.

Our goodwill balance of $ 28.5 million as of September 30, 2024 and 2023 represents the excess of the cost of an acquired business over the estimated fair values of the assets acquired and liabilities assumed.

The changes in the carrying value of goodwill for the years ended September 30, 2024 and 2023 are presented in the table below.

1 unchanged sentence

Balance at beginning of period $ 28,459 $ 16,859

Additions to goodwill for acquisition of MIAT — 8,637

Additions to goodwill for acquisition of Concorde $ — $ 11,600

Balance at end of period $ 28,459 $ 28,459

The table below summarizes the goodwill balance by reportable segment:

September 30, 2023 September 30, 2022

UTI $ 16,859 $ 16,859

Concorde 11,600 —

Total goodwill $ 28,459 $ 16,859

Note 11 - Intangible Assets, net

Of the $ 28.5 million recorded as goodwill as of September 30, 2024 and 2023, $ 16.9 million relates to the UTI reporting unit and $ 11.6 million relates to the Concorde reporting unit.

Note 10 - Intangible Assets

The following table provides the gross carrying value, accumulated amortization, net book value and remaining useful life for intangible assets subject to amortization as of September 30, 2024:

4 unchanged sentences

Total $ 20,042 $ ( 1,813 ) $ 18,229 3.60

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

The following table provides the gross carrying value, accumulated amortization, net book value and remaining useful life for those intangible assets that were subject to amortization as of September 30, 2023:

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Total $ 20,042 $ ( 1,067 ) $ 18,975 4.54

Amortization expense for the year ended September 30, 2023, 2022, and 2021 was $ 0.6 million, $ 108.8 thousand, and $ 35.5 thousand, respectively.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Amortization expense for the year ended September 30, 2024, 2023, and 2022 was $ 0.7 million, $ 0.6 million, and $ 0.1 million, respectively.

Intangible assets subject to amortization as of September 30, 2024, will be amortized as follows:

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Estimated future amortization expense $ 877 $ 410 $ 337 $ 97 $ 50 $ 158

Of the $ 20.0 million gross carrying value recorded as intangible assets as of September 30, 2023, $ 5.4 million relates to the Concorde asset group and $ 14.6 million relates to the UTI asset group.

The remaining weighted average useful lives shown are calculated based on the net book value and remaining amortization period of each respective intangible asset.

Amortization is computed using the straight-line method based on estimated useful lives of the related assets.

Our indefinite-lived intangible assets are reviewed at least annually for impairment as of August 1, or more frequently if there are indicators of impairment.

There were no indicators of impairment for our indefinite-lived intangible assets as of the year ended September 30, 2023.

As discussed in Note 4, during the year ended September 30, 2022, we determined the fair value of our MIAT trademarks and trade names intangible asset to be $ 1.0 million and recorded an intangible asset impairment charge of $ 2.0 million within “Selling, general and administrative” on the consolidated statement of operations during the year ended September 30, 2022.

Of the $ 18.2 million net book value recorded as intangible assets as of September 30, 2024, $ 4.8 million relates to the Concorde asset group and $ 13.4 million relates to the UTI asset group.

The weighted average remaining useful lives are calculated based on the net book value and the remaining amortization period of each respective intangible asset.

Note 11 - Leases

As of September 30, 2023, we lease 29 of our 33 campuses and three other locations under non-cancelable operating leases, some of which contain escalation clauses and requirements to pay other fees associated with the leases.

As of September 30, 2024, we have facility leases at 29 of our 33 campuses and two non-campus locations under non-cancelable operating or finance leases, some of which contain escalation clauses and requirements to pay other fees associated with the leases.

Our facility leases have original lease terms ranging from 5 to 20 years and expire at various dates through 2036.

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All of the leases, other than those that may qualify for the short-term scope exception of 12 months or less, are recorded on our consolidated balance sheets.

Some of the facility leases are subject to annual changes in the Consumer Price Index (“CPI”).

Many of our lease agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised.

There are no early termination with penalties, residual value guarantees, restrictions or covenants imposed by our facility leases.

The components of lease expense are included in “Educational services and facilities” and “Selling, general and administrative” on the consolidated statements of operations, with the exception of interest on lease liabilities, which is included in “Interest expense.”

The components of lease expense during the years ended September 30, 2024, 2023, and 2022 are presented below.

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Operating lease assets Right-of-use assets for operating leases $ 158,778 $ 176,657

$ 176,657 $ 132,038

Finance lease assets Property and equipment, net (1)

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Operating lease liabilities Operating lease liability, current portion $ 22,210 $ 22,481

$ 22,481 $ 12,959

Finance lease liabilities Long-term debt, current portion 934 844

Operating lease liabilities Operating lease liability 146,831 165,026

165,026 129,302

Finance lease liabilities Long-term debt 3,834 4,757

Total lease liabilities $ 173,809 $ 193,108

(1) As noted in Note 4, during the year ended September 30, 2023, our right-of-use assets and operating lease liabilities increased due to the acquisition of Concorde.

This increase was partially offset in March 2023, with the purchase of the three primary buildings and associated land that we previously leased at the UTI Orlando, Florida campus, as discussed in Note 9.

This purchase reduced our right-of-use assets balance by approximately $ 10.5 million and our operating lease liabilities by approximately $ 12.4 million.

(2) The finance lease assets and liabilities as of September 30, 2023 consisted of one campus lease, and as of September 30, 2022 were made up of three equipment leases.

(1) The finance lease assets and liabilities as of September 30, 2024 consisted of one facility lease.

Finance lease assets are recorded net of accumulated amortization of $ 1.7 million and $ 0.8 million as of September 30, 2024 and 2023, respectively.

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Finance leases 6.02 % 6.02 %

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Year ended September 30,

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Lease assets obtained in exchange for new operating lease liabilities $ 3,982 $ 4,568 $ 3,313

$ 4,568 $ 3,313 $ 30,017

(1) Excludes the operating leases recorded for the Concorde and MIAT acquisitions discussed in Note 4.

During the year ended September 30, 2023, Concorde renewed the campus lease for their Orlando, Florida campus and signed a new lease for a smaller corporate office in Kansas City, Kansas.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Maturities of lease liabilities were as follows:

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Accrued compensation and benefits 35,660 36,332

Other accrued expenses 15,075 13,328

Accrued tool sets 4,807 4,096

Other accrued expenses 17,126 15,075

Accounts payable and accrued expenses $ 83,866 $ 69,941

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Note 13 - Debt

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Finance lease (4)

6.02 % Various 5,601 23

6.02 % Jan 2029 4,768 5,601

Total debt 126,087 162,592

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Long-term debt $ 123,007 $ 159,600

(1) Interest on the Revolving Credit Facility (as defined below) accrues at annual rate equal to Term SOFR plus a margin of 2.0 % and a lender specific spread of 0.15 %.

(1) Interest on the Revolving Credit Facility (as defined below) accrues at annual rate equal to Term SOFR plus a margin of 1.85 %.

(2) Interest on the Avondale Term Loan (as defined below) accrues at annual rate equal to Term SOFR plus 2.0 % and a tranche adjustment of 0.046 %.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(3) Interest on the Lisle Term Loan (as defined below) accrues at annual rate equal to the Term SOFR plus 2.0 %.

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Revolving Credit Facility

On November 18, 2022, we entered into a $ 100.0 million senior secured revolving credit facility with Fifth Third Bank, a national banking association (the “Credit Facility” or “Revolving Credit Facility”), which includes a $ 20.0 million sub facility that is available for letters of credit.

The Credit Facility has a term of three years , unless earlier terminated pursuant to the terms and conditions set forth in the credit agreement.

On November 18, 2022, we entered into a $ 100.0 million senior secured revolving credit facility with Fifth Third Bank (the “Credit Facility” or “Revolving Credit Facility”), which includes a $ 20.0 million sub facility that is available for letters of credit, for a term of three years .

This agreement provides that borrowings under the Credit Facility will amortize on an interest-only basis during its term with principal able to be borrowed, re-paid and re-borrowed throughout the term of the Credit Facility and with the outstanding principal due and payable at maturity.

Advances made under the Credit Facility bear interest at a floating rate equal to, at our option, either (a) a variable rate equal to the greater of:

(i) 3.50 %, or (ii) the rate that the lender publicly announces, publishes or designates from time to time as its index rate or prime rate, or any successor rate thereto, in effect at its principal office, or (b) a variable rate equal to the greater of (i) 0 %, or (ii) Term SOFR relating to quotations for one (1) or three (3) months, as selected by us or as otherwise set pursuant to the terms of the credit agreement, as applicable, plus, in the case of any Term SOFR loan, an adjustment equal to 0.10 % if the interest period is one (1) month and 0.15 % if the interest period is three (3) months.

Interest in the case of tranche rate loans will be increased by an applicable margin that varies from 1.75 % up to 2.25 % based on our then-current total leverage ratio.

Borrowings under the Credit Facility can bear interest at a variable rate of either (a) the greater of 3.50 % or the lender’s Prime rate or (b) either one-month or three-month Term SOFR plus an adjustment of 0.10 - 0.15 %.

Any borrowings will also have an applicable margin that varies from 1.75 % up to 2.25 % based on our total leverage ratio at the time of the borrowing.

In executing the Credit Facility, we incurred $ 0.5 million in debt issuance costs which have been recorded in “Other assets” on the consolidated balance sheets as of September 30, 2024.

On November 28, 2022, we drew $ 90.0 million from the Credit Facility in support of the closing of the Concorde Acquisition.

In December 2022, a $ 1.8 million letter of credit was issued on the Credit Facility.

In December 2022, a $ 1.8 million letter of credit was issued on the Credit Facility, which expired in March 2024.

On September 26, 2024, the Credit Facility was amended to increase the commitment amount to $ 125.0 million and extend the maturity date to November 30, 2027.

We also have the option to request an increase of up to an additional $ 25.0 million, subject to the lender’s discretion to grant such increase.

Under the amended agreement, advances made under the Credit Facility bear interest at per annum rate equal to (i) the Tranche Rate (Term SOFR), (ii) the Daily Simple SOFR rate, or (iii) the Base Rate.

In each case a SOFR rate is selected, an applicable margin that varies from 1.85 % up to 2.35 %, based on our then-current total leverage ratio, is applied.

In executing the amendment, we incurred $ 0.3 million in debt issuance costs which have been recorded in “Other assets” on the consolidated balance sheets as of September 30, 2024.

During the year ended September 30, 2024, we made payments on the Credit Facility of $ 75.0 million and we received proceeds of $ 41.0 million at a base interest rate of 8.0 %.

The remaining availability under the Credit Facility as of September 30, 2024 was $ 69.0 million.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

We are also subject to certain customary affirmative and negative covenants under the credit agreement, including financial covenants such as total leverage ratio, a fixed charge coverage ratio, and a quick ratio.

In addition, we are required to maintain a financial responsibility composite score of at least 1.4 as of the end of the fiscal year ending September 30, 2023 and of at least 1.5 as of the end of any fiscal year thereafter.

On August 23, 2023 the Credit Facility was amended to remove the “clean off” provision, under which the amount outstanding on the Credit Facility was not to exceed $ 20.0 million for a single 30 consecutive day period from our initial draw and ending on December 31, 2024.

As of September 30, 2023, we were in compliance with all covenants under our Credit Facility.

In October 2024, we used cash on hand to pay $ 5.0 million on the Credit Facility, which increased the availability under the Credit Facility to $ 74.0 million.

It is likely that we will borrow from the Credit Facility in future periods based on future working capital or other needs.

Avondale Term Loan

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See Note 14 below for further discussion on the interest rate swap.

We are subject to customary affirmative and negative covenants under the Credit Agreement, including, without limitation, certain reporting obligations and certain limitations on restricted payments, and limitations on liens, encumbrances and indebtedness.

The Term Loan is also subject to certain financial maintenance covenants.

The debt service coverage ratio shall not be less than 1.25 to 1.00 and is defined as the ratio of the sum of consolidated income (loss) for the year, to the extent deducted in determining income for such period, before income taxes, interest expense, amortization, depreciation and other non-cash charges including net stock-based compensation, fees and expenses related to potential acquisitions and expansion of operations and certain non-recurring charges, including relating to restructuring, business optimization and diversification strategy, less any extraordinary non-recurring gains, interest income and non-cash gains (“Consolidated EBITDA”) (less dividends payable on our Series A Preferred Stock) and other extraordinary items to the current portion of long-term debt and interest paid during the period being measured.

The funded debt to Consolidated EBITDA ratio is required to be no greater than 3.50 to 1.00.

Beginning on May 12, 2024, the Lender may request new appraisals of the Avondale property in order to maintain the ratio of the amortized loan balance to the value of the location at 70 %, the approximate ratio that existed at May 12, 2021.

Events of default under the Credit Agreement include, among others, the failure to make payments when due, breach of covenants (including certain financial maintenance covenants) and breach of representations or warranties.

If we fail to meet the minimum debt service coverage ratio, loan-to-value or debt yield and fail to cure such non-compliance within a time period acceptable to the Lender, we will be in default.

As of September 30, 2023, we were in compliance with the debt covenants for the Avondale Term Loan.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Lisle Term Loan

4 unchanged sentences

See Note 14 below for further discussion on the interest rate swap.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

As guarantor, the Company is subject to certain customary affirmative and negative covenants under the Lisle Loan Agreement - VN, including, without limitation, reporting and notice obligations and certain financial maintenance covenants.

The Company’s fixed charge coverage ratio is required to be not less than 1.25 to 1.00 during the period being measured and is defined as the ratio of (a) the sum of consolidated net income (loss) for the year, before interest expense, income taxes, depreciation and amortization, and other extraordinary non-recurring items (“Adjusted EBITDA”) plus rent paid to Borrower and less cash taxes paid, distributions, and unfinanced capital expenditures to (b) principal and interest expenses plus rent paid to Borrower.

The ratio of total indebtedness to Adjusted EBITDA is required to be no greater than 3.50 to 1.00.

In addition, the Borrower’s debt service coverage ratio is required to equal or exceed 1.20 to 1.00 during the period being measured and is defined as the ratio of (a) net operating income of the Lisle Campus to (b) actual annual debt service due under the Loan Agreement.

Events of default under the Loan Agreement include, among others, the failure to make payments when due, breach of covenants (including certain financial maintenance covenants) and breach of representations or warranties.

If the Company fails to meet the minimum fixed charge coverage ratio or ratio of total indebtedness to Adjusted EBITDA and fails to cure such non-compliance within a time period acceptable to the Lender, the Company will be in default.

As of September 30, 2023, we were in compliance with the debt covenants for the Lisle Term Loan.

Debt Covenants

We are subject to certain customary affirmative and negative covenants under the Revolving Credit Facility, the Avondale Term Loan and the Lisle Term Loan.

As of September 30, 2024, we were in compliance with all debt covenants.

Debt Maturities

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2029 33,200 435 33,635

Thereafter 33,200 433 33,633

2030 and thereafter — — —

Subtotal 121,319 4,768 126,087

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On April 14, 2022, the Lisle Swap was designated as an effective cash flow hedge for accounting and tax purposes.

Of the net amount of the existing gains that are reported in “Accumulated other comprehensive income (loss)” as of September 30, 2023, we estimate that $ 1.0 million will be reclassified to “Interest expense” within the next twelve months.

Of the net amount of the existing gains that are reported in “Accumulated other comprehensive income” as of September 30, 2024, we estimate that $ 0.5 million will be reclassified to “Interest expense” within the next twelve months.

As of September 30, 2024, the notional amounts of the Avondale Swap and Lisle Swap were approximately $ 14.2 million and $ 18.5 million, respectively.

6 unchanged sentences

Total fair value of assets designated as hedging instruments $ 1,223 $ 3,032

Effect of Cash Flow Hedge Accounting on the Consolidated Statement of Operations and Accumulated Other Comprehensive Income (Loss)

Effect of Cash Flow Hedge Accounting on the Consolidated Statement of Operations and Accumulated Other Comprehensive Income

The table below presents the effect of cash flow hedge accounting for our Avondale Swap and Lisle Swap on the consolidated statements of operations and accumulated other comprehensive income for the years ended September 30, 2024, 2023 and 2022:

5 unchanged sentences

Year Ended September 30, 2022

Avondale Swap $ ( 365 ) $ ( 86 )

Avondale and Lisle Swaps $ 2,787 $ ( 192 )

UNIVERSAL TECHNICAL INSTITUTE, INC.

28 unchanged sentences

Total income tax (expense) benefit $ ( 14,229 ) $ ( 5,765 ) $ 5,407

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

The components of the deferred tax assets (liabilities) recorded in the accompanying consolidated balance sheets were as follows:

10 unchanged sentences

Capitalized R&D costs 3,085 3,109

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

September 30,

Charitable contribution carryovers 628 1,223

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Total gross deferred tax liabilities ( 64,944 ) ( 69,094 )

Net deferred tax assets $ 3,105 $ 3,365

Net deferred tax (liabilities) assets $ ( 1,133 ) $ 3,105

The following table summarizes the activity for the valuation allowance for the years ended September 30, 2024, 2023 and 2022:

6 unchanged sentences

Balance at end of period $ 2,012 $ 3,192 $ 1,200

(1) The fiscal year 2023 balance primarily relates to purchase accounting for the Concorde acquisition.

(1) The fiscal year 2024 balance primarily relates to finalizing the purchase accounting for the Concorde acquisition.

We had a valuation allowance of $ 2.0 million and $ 3.2 million against the deferred tax assets as of September 30, 2024 and 2023, respectively, based on our assessment of the ability to utilize the deferred tax assets.

2 unchanged sentences

In assessing whether a valuation allowance was required, we considered the weight of all available positive and negative evidence.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

As of September 30, 2024, we had approximately $ 13.5 million and $ 70.8 million in net operating losses for federal and state tax purposes, respectively.

The federal net operating losses can be carried forward indefinitely, while the state net operating losses will expire at various dates beginning 2023 through 2043 if not utilized or carried forward indefinitely.

Additionally, we had $ 0.4 million of federal research and development tax credits under Internal Revenue Code §41 and other general business tax credits.

If unused, these credits begin to expire in 2038.

The federal net operating losses can be carried forward indefinitely, while the state net operating losses will expire at various dates through 2044 if not utilized or carried forward indefinitely.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities.

1 unchanged sentence

Although we believe the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

The following table summarizes the activity related to the gross unrecognized tax benefits for the fiscal years ended September 30, 2024 and 2023:

2 unchanged sentences

Increases relates to current year tax positions 100 109

Increases related to acquisitions — 387

Balance at end of period $ 596 $ 496

6 unchanged sentences

Our tax filings remain subject to examination by applicable tax authorities for certain length of time, generally three to four years, following the tax year to which these filings relate.

In 2020, we filed returns to carried back federal and certain state net operating losses to prior years.

The statute of limitations for adjustment of the net operating losses utilized on these tax returns remains open an additional three to four years, depending on jurisdiction, from the date these returns were filed.

Note 16 - Restructuring

On December 5, 2023, UTI announced plans to consolidate the two Houston, Texas campus locations to align the curriculum, student facing systems, and support services to better serve students seeking careers in in-demand fields.

As part of the transition, the MIAT Houston campus, acquired in November 2021, began a phased teach-out in May 2024, and such campus began operating under the UTI brand.

Both facilities will remain in use post-consolidation.

The total costs of the restructuring plan are estimated to be approximately $ 2.1 million and relate to the UTI segment.

Approximately $ 0.2 million of expenses, primarily related to employee termination costs and tools, were incurred during the twelve months ended September 30, 2024.

Of the $ 0.2 million recorded during the twelve months ended September 30, 2024, approximately $ 0.1 million was reported in “Educational services and facilities” while approximately $ 0.1 million was reported in “Selling, general and administrative” in the consolidated statements of operations.

Additional estimated costs of $ 1.9 million are expected to be recorded during fiscal 2025 and beyond as incurred.

Note 17 - Commitments and Contingencies

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Snap-on Tools Product Support Agreement

In February 2023, UTI entered into a new agreement with Snap-on Industrial (“Snap-on Tools”), as a result of the expiration of the previous agreement, that allows UTI to purchase promotional tool kits for its students at a discount from the list price (see below paragraph).

We have an agreement with Snap-on Industrial (“Snap-on Tools”) that allows UTI to purchase promotional tool kits for its students at a discount from the list price.

In addition, UTI earns credits that are redeemable for Snap-on Tools equipment that is utilized in UTI training programs.

Credits are earned on UTI’s purchases as well as purchases made by students enrolled in the UTI programs.

As part of the agreement, UTI has agreed to grant Snap-on Tools exclusive access to its campuses, to display

As part of the agreement, UTI has agreed to grant Snap-on Tools exclusive access to its campuses, to display advertising and primarily use their tools to train UTI students.

Additionally, per the agreement, UTI receives a quarterly product donation allowance towards the purchase of tools and equipment which are to be utilized in the UTI training programs at its campuses.

The credits and allowances under this agreement may be redeemed in multiple ways.

This agreement will expire in December 2027.

A net prepaid expense with Snap-on Tools has resulted from an excess of credits

UNIVERSAL TECHNICAL INSTITUTE, INC.

2 unchanged sentences

(In thousands, except per share amounts)

advertising and primarily use their tools to train UTI students.

Additionally, per the new agreement, UTI receives a quarterly product donation allowance towards the purchase of tools and equipment which are to be utilized in the UTI training programs at its campuses.

The credits and allowances under this agreement may be redeemed in multiple ways.

This agreement will expire in December 2027.

A net prepaid expense with Snap-on Tools has resulted from an excess of credits earned over credits used of $ 1.9 million and $ 4.0 million as of September 30, 2023 and 2022, respectively, included in “Other current assets” on our consolidated balance sheets.

earned over credits used of $ 0.3 million and $ 1.9 million as of September 30, 2024 and 2023, respectively, included in “Other current assets” on our consolidated balance sheets.

UTI students are provided a Career Starter Tool Set Voucher which can be redeemed for a tool set near graduation.

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On June 9, 2016, our board of directors voted to eliminate the quarterly cash dividend on our common stock.

Any future common stock dividends require the approval of a majority of the voting power of the Series A Preferred Stock.

Preferred Stock

Preferred Stock consists of 10,000,000 authorized preferred shares of $ 0.0001 par value each.

On June 24, 2016, we entered into a Securities Purchase Agreement (“Purchase Agreement”) with Coliseum Holdings I, LLC (“Purchaser”) to sell to the Purchaser 700,000 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) for a total purchase price of $ 70.0 million.

The Series A Preferred Stock is perpetual, and therefore does not have a maturity date.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

As of September 30, 2023 and 2022, 675,885 shares of Series A Preferred Stock were issued and outstanding.

The liquidation preference associated with the Series A Preferred Stock was $ 100 per share at September 30, 2023 and 2022.

The description below provides a summary of certain material terms of the Certificate of Designations of the Series A Preferred Stock.

The Series A Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank senior to our common stock and each other junior class or series of shares that we may issue in the future.

The Series A Preferred Stock will also rank junior to any future indebtedness.

We may pay a cash dividend on each share of the Series A Preferred Stock at a rate of 7.5 % per year on the liquidation preference then in effect (“Cash Dividend”).

The Cash Dividend is payable before any dividends would be declared or paid to common stockholders or other junior stockholders.

If we do not pay a Cash Dividend, the liquidation preference shall be increased to an amount equal to the current liquidation preference in effect plus an amount reflecting that liquidation preference multiplied by the Cash Dividend rate then in effect plus 2.0 % per year (“Accrued Dividend”).

Cash Dividends are payable semi-annually in arrears on September 30 and March 31 of each year, and will begin to accrue on the first day of the applicable dividend period.

We paid Cash Dividends of $ 5.1 million and $ 5.2 million during the years ended September 30, 2023 and 2022 .

The Series A Preferred Stock includes participation rights such that, in the event that we pay a dividend or make a distribution on the outstanding common stock, we shall also pay to each holder of the Series A Preferred Stock a dividend on an as converted basis.

If we are required to or elect to obtain stockholder and regulatory approval and if such approval is not obtained within the time periods set forth in the Certificate, the dividend rates with respect to the Cash Dividend and Accrued Dividend will be increased by 5.0 % per year, not to exceed a maximum of 14.5 % per year, subject to downward adjustment on obtaining the foregoing approvals.

Liquidation Preference

In the event of voluntary or involuntary liquidation, dissolution or winding up of our company, holders of the Series A Preferred Stock are entitled to receive, before any distribution or payment to the holders of any common or junior stock, an amount per share of Series A Preferred Stock equal to the liquidation preference then in effect, which would include any Accrued Dividends.

Alternatively, the holder may choose to receive the amount that would be payable per share of common stock issued upon conversion of the Series A Preferred Stock immediately prior to such liquidation event.

Mergers (regardless of whether we remain the surviving entity), sale of substantially all of our assets or any other recapitalization, reclassification or other transaction in which substantially all of our common stock is exchanged or converted into cash or other property are considered “Deemed Liquidation Events.” The Certificate of Designations provides that, in the case of a Deemed Liquidation Event, each holder of Series A Preferred Stock shall be entitled to receive the liquidation amount they would receive under a normal liquidation event;

however, the liquidation amount must be in the same form of consideration as is payable to the holders of our common stock.

The liquidation preference associated with the Series A Preferred Stock was $ 100 per share at September 30, 2023 and 2022.

Holders of Series A Preferred Stock are entitled to vote with the holders of shares of common stock on an as converted basis, subject to the Continuing Caps as discussed below.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

A majority of the voting power of the Series A Preferred Stock must approve certain significant actions, including, without limitation, the issuance of certain equity securities;

the repurchase, redemption or acquisition of our common stock;

the incurrence of debt;

the consummation of certain acquisitions, mergers or other such transactions;

and the sale of material assets.

The Certificate of Designations includes a Conversion Cap and an Investor Voting Cap (each as defined in the Certificate of Designations), which generally prohibit:

(i) the conversion of Series A Preferred Stock into common stock;

and (ii) the voting of common stock issuable upon conversion of the Series A Preferred Stock, to the extent that such conversion results in the issuance of a number of shares of common stock exceeding 4.99 % of our outstanding shares of common stock as of June 24, 2016 or that has voting power that exceeds 4.99 % of the voting power of our outstanding shares of common stock as of June 24, 2016.

The Certificate of Designations provides that the Conversion Cap and the Investor Voting Cap may only be removed upon our receipt of:

(i) certain stockholder approvals required by Section 312.03 of the New York Stock Exchange Listed Company Manual (“NYSE Rule 312”);

and (ii) either (A) Education Regulatory Approval (as defined in the Certificate of Designations), or (B) a good faith determination by our board of directors that Education Regulatory Approval is not required.

Our stockholders approved a proposal at the annual meeting of stockholders on February 27, 2020 , in accordance with the listing standards of the NYSE, that satisfied NYSE Rule 312.

In August 2020, the Purchaser notified us that it intended to distribute all 700,000 Series A Preferred Stock to its members, and that certain of its members would subsequently distribute their Series A Preferred Stock to (i) limited partners affiliated with the Purchaser and certain other entities for whom Coliseum Capital Management, LLC (an affiliate of the Purchaser) holds voting and dispositive power with respect to the Series A Preferred Stock (the “Affiliated Holders”), which six Affiliated Holders, following such distribution, will own Series A Preferred Stock that would represent, on an as converted basis, approximately 24.9 % of our outstanding shares of common stock and voting power, and (ii) limited partners unaffiliated with the Purchaser (the “Unaffiliated Holders”), which 12 Unaffiliated Holders, following such distribution, each will own Series A Preferred Stock that would represent, on an as converted basis, 9.9 % or less of our outstanding shares of common stock and voting power (collectively, the “Distributions”).

In connection with the Distributions, our board of directors, based on advice of legal counsel, determined that:

(i) no Education Regulatory Approval would be required for the Unaffiliated Holders to remove the Conversion Cap and the Investor Voting Cap with respect to the Series A Preferred Stock acquired in the Distributions;

and (ii) as to the Series A Preferred Stock held by the Affiliated Holders, no Education Regulatory Approval is required prior to the Affiliated Holders (A) converting a number of Series A Preferred Stock into common stock provided that the number of shares of common stock issued pursuant to such conversion, in the aggregate, is less than or equal to 9.9 % of the number of shares of common stock outstanding on an as converted basis as of the date of the Distributions, and (B) voting a number of Series A Preferred Stock provided that the voting power of such Series A Preferred Stock and any shares of common stock issued upon conversion of such Series A Preferred Stock is less than or equal to 9.9 % of the voting power of the common stock outstanding as of the date of the Distributions (the foregoing limitations, the “Continuing Caps”).

The removal of the Conversion Cap and Voting Cap became effective as of the date of the Distributions, subject to the Continuing Caps remaining in place with respect to the Series A Preferred Stock distributed to the Affiliated Holders.

Education Regulatory Approval continue to be required for, and the Continuing Caps will remain in place with respect to, the Series A Preferred Stock acquired by the Affiliated Holders in the Distributions to the extent such shares, on an as converted basis, represent in excess of 9.9 % of our common stock and voting power as of the date of the Distributions.

The Affiliated Holders may, at any time, request that we seek Education Regulatory Approval or make a good faith determination that such approval is not required.

Optional Conversion by Purchaser

The Series A Preferred Stock are convertible to common stock at any time at the option of the holder.

Following the Distributions, the Conversion Cap currently applies to the Affiliated Holders.

UNIVERSAL TECHNICAL INSTITUTE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

Optional Conversion by Our Company

If at any time following the third anniversary of the issuance of the Series A Preferred Stock, the volume weighted average price of our common stock equals or exceeds 2.5 times the conversion price of the Series A Preferred Stock, or $ 8.33 as of September 30, 2023, for a period of 20 consecutive trading days during an open trading window (“Conversion Trigger”), we may, at our option and subject to obtaining any required stockholder and regulatory approvals, require that any or all of the then outstanding Series A Preferred Stock be automatically converted into our common stock at the conversion rate.

We may not elect such conversion during the closed trading window periods in which any director or executive officer of our company is prohibited by us to, directly or indirectly, purchase, sell or otherwise acquire or transfer any equity security of our company.

If we are unable to obtain the necessary regulatory approvals to remove the Conversion Cap within 120 days of giving our notice of intent to convert, we will have the option to redeem all of the Series A Preferred Stock at a premium.

Conversion Rate and Conversion Price

The conversion rate for the Series A Preferred Stock will be calculated by dividing the current liquidation preference by the conversion price then in effect.

The initial and current conversion price for the Series A Preferred Stock is $ 3.33 per share.

The conversion price is subject to adjustment upon the occurrence of certain common stock events, as defined in the Purchase Agreement, including stock splits, reverse stock splits or the issuance of common stock dividends.

Optional Special Dividend and Conversion on Certain Change of Control

Upon a change of control, at the written election by holders of a majority of the then outstanding shares of Series A Preferred Stock, we shall declare and pay a special cash dividend in the amount equal to either 1.5 or 2.0 times the Cash Dividend rate, depending on the type of change in control, multiplied by the liquidation preference per share then in effect.

Redemption at the Option of Our Company

We have the ability to redeem the Series A Preferred Stock at any time after the third anniversary of the issue date, provided that the Conversion Trigger has not been met on the date of the redemption notice.

Holders of the Series A Preferred Stock will be able to convert their shares into common stock if neither the Investor Voting Cap nor Conversion Cap is in effect.

If they do not provide notice of conversion within 10 days of receipt of the redemption notice, the redemption will proceed at a price per share equal to the product of the current conversion rate and 2.5 times the conversion price.

If either the Investor Voting Cap or Conversion Cap is in effect at the date of the notice of redemption, the holder may request that we obtain the necessary regulatory approval for its removal.

After the tenth anniversary of the issue date, we have the ability to redeem the Series A Preferred Stock in whole or in part at any time.

Holders of the Series A Preferred Stock will then be able to convert their shares into common stock if neither the Investor Voting Cap nor Conversion Cap is in effect.

If they do not provide notice of conversion within 10 days of receipt of the redemption notice, the redemption will proceed at a price per share equal to the current liquidation preference.

If either the Investor Voting Cap or Conversion Cap is in effect at the date of the notice of redemption, the holder may request that we obtain the necessary regulatory approval for its removal.

Anti-dilution

The conversion price of the Series A Preferred Stock is subject to certain customary anti-dilution protections should we effect certain common stock events, such as stock splits, stock dividends or subdivisions, reclassifications or combinations of our common stock.

In such events, the conversion price will be adjusted in a proportionate manner to the change in outstanding share of common stock immediately preceding and immediately after the event.

Reservation of Shares Issuable upon Conversion

We are required, at all times, to reserve and keep available out of our authorized and unissued shares of common stock the number of shares that would be issuable upon conversion of all Series A Preferred Stock, assuming that the Conversion Cap does not apply.

If this reserve is not sufficient at any point to allow for full conversion, we shall be required to take action to increase our pool of authorized but unissued shares.

As of September 30, 2024, no shares of the Series A Convertible Preferred Stock with a $ 0.0001 par value each (“Series A Preferred Stock”) remain outstanding and all right of the holders to receive future dividends have been terminated.

Under the terms of the Certificate of Designations for the Series A Preferred Stock, we had the right to convert the outstanding shares of Series A Preferred Stock to common stock when our common stock achieved a stated volume weighted average price per share for a period of 20 consecutive trading days.

On December 18, 2023, upon satisfying the stock price condition, we entered into a preferred stock repurchase agreement with Coliseum Capital Partners, L.P.

and Blackwell Partners LLC – Series A (collectively the “Selling Stockholders”), pursuant to which we repurchased, directly from the Selling Stockholders, 33,300 shares of Series A Preferred Stock for an aggregate purchase price of $ 11.3 million.

Additionally, we incurred approximately $ 0.3 million in fees related to excise taxes and other professional services related to the repurchase, which are recorded in equity.

Following the repurchase of those shares of Series A Preferred Stock, we issued a notice of conversion causing all remaining outstanding shares of Series A Preferred Stock to be converted into Common

UNIVERSAL TECHNICAL INSTITUTE, INC.

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Under the Securities Act, we were not required to register the offer or sale of the Series A Preferred Stock to the Purchaser.

In conjunction with the Purchase Agreement, the parties entered into a Registration Rights Agreement in order to grant the Purchaser certain demand and piggyback registration rights covering the purchased shares.

In the event that the Purchaser requests such registration of the Series A Preferred Stock, the Registration Rights agreement provides that we shall bear all expenses associated with the registration, with the exception of underwriting discounts and commissions and brokerage fees.

On October 18, 2019, we filed a Form S-3 with the Securities and Exchange Commission to register shares of common stock currently held by selling stockholders as well as shares of common stock issuable upon the optional conversion of Series A Convertible Preferred Stock held by the selling stockholders.

That registration statement became effective on October 30, 2019.

In connection with the conversion, each share of Series A Preferred Stock was cancelled and converted into the right to receive 30.03003 shares of our Common Stock, no par value per share, and we made a final dividend payment of $ 1.1 million to the Series A Preferred Stock holders of record as of December 18, 2023.

As a result of the conversion, the aggregate 642,585 remaining shares of Series A Preferred Stock outstanding were converted into 19,296,843 shares of Common Stock.

Following the repurchase and subsequent conversion, the Selling Stockholders held less than 25 % of our outstanding shares of common stock (a threshold above which we would have been required to seek regulatory approval for the conversion).

As of September 30, 2023, 675,885 shares of Series A Preferred Stock were issued and outstanding.

The liquidation preference associated with the Series A Preferred Stock was $ 100 per share at September 30, 2023.

Dividends on the Series A Preferred Stock, accrue at a rate of 7.5 % per year, and are to be paid semi-annually in arrears on September 30 and March 31 of each year.

We paid cash dividends of $ 1.1 million, $ 5.1 million, and $ 5.2 million during the years ended September 30, 2024, 2023, and 2022, respectively.

With the Series A Preferred Stock repurchase and subsequent conversion of remaining shares to common stock, there will be no further dividend payments related to the Series A Preferred Stock going forward.

Share Repurchase Program

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repurchase plan replaced the previously authorized plan from fiscal 2012.

Any repurchases under this new stock repurchase program require the approval of a majority of the voting power of our Series A Preferred Stock.

We did not repurchase any

shares during the years ended September 30, 2023, 2022 and 2021.

We have not repurchased any

shares under this plan during the years ended September 30, 2024, 2023 and 2022.

Note 19 - Stock-Based Compensation

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The 2021 Plan replaced the Management 2002 Stock Option Program and the 2003 Incentive Compensation Plan, as amended (the “Former Plans”).

Under the 2021 Plan, we are authorized to issue incentive compensation convertible into up to 2.0 million shares of common stock, increased by 0.7 million shares that remained available for future grants of awards under the Former Plans immediately prior to termination.

Additionally, subject to and in accordance with the 2021 Plan, 1.5 million shares that are subject to outstanding awards under the Former Plans that are subsequently expired, forfeited, or are otherwise terminated will also become available for awards under the 2021 Plan.

The 2021 Plan was amended on March 7, 2024, increasing the maximum aggregate number of shares of stock that may be issued to 5.3 million shares of common stock.

Additionally, subject to and in accordance with the 2021 Plan, any shares for outstanding awards that are subsequently expired, forfeited, or are otherwise terminated will also become available for new awards under the 2021 Plan.

As of September 30, 2024, 4.0 million shares remained available for future grants under the 2021 Plan.

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The fair value of the PSUs is amortized on a straight-line basis over the requisite service period based upon the fair market value on the date of grant, adjusted quarterly for the anticipated or actual achievement against the established performance condition.

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For all stock-based compensation expense, we account for forfeitures as they occur.

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Income tax benefit $ 2,140 $ 962 $ 1,103

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Stock Options

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Outstanding as of September 30, 2022

210 $ 3.14 3.18 $ 483

Outstanding as of September 30, 2023

210 $ 3.14 2.18 $ 1,100

Outstanding as of September 30, 2024

210 $ 3.14 1.18 $ 2,755

Stock options exercisable as of September 30, 2024

Restricted Stock Units and Performance Units

210 $ 3.14 1.18 $ 2,755

Restricted Stock Units and Performance Share Units

Restricted Stock Units

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Performance Share Units

Our outstanding PSUs vest over a three-year service period from the date of the grant and are based upon a mix of certain pre-established targets for revenue, compounded annual total shareholder return for the measurement period and net income.

On the settlement date for each measurement period, participants will receive shares of our common stock equal to 0 % to 187.5 % of the PSUs originally granted depending on the actual achievement against the performance metrics for that measurement period.

The PSUs vest subject to a market condition and on the settlement date which is expected to be no later than two and a half months after the end of each measurement period.

As of September 30, 2023, unrecognized stock compensation expense related to PSUs was $ 3.0 million, which is expected to be recognized over a weighted average period of 2.0 years.

Our outstanding Performance PSUs vest over a three-year service period from the date of the grant and are based upon a mix of certain pre-established targets for revenue and adjusted EBITDA.

On the settlement date for each measurement period, participants will receive shares of our common stock equal to 0 % to 187.5 % of the Performance PSUs originally granted depending on the actual achievement against the performance metrics for that measurement period.

Our outstanding Market PSUs vest over a three-year service period from the date of the grant and are based upon a mix of certain pre-established targets for revenue, compounded annual total shareholder return for the measurement period and net income.

On the settlement date for each measurement period, participants will receive shares of our common stock equal to 0 % to 187.5 % of the Market PSUs originally granted depending on the actual achievement against the performance metrics

UNIVERSAL TECHNICAL INSTITUTE, INC.

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for that measurement period.

The Market PSUs vest subject to a market condition and on the settlement date which is expected to be no later than two and a half months after the end of each measurement period.

As of September 30, 2024, unrecognized stock compensation expense related to all PSUs was $ 4.2 million, which is expected to be recognized over a weighted average period of 1.7 years.

The following table summarizes the activity for RSUs and PSUs granted under the Former Plans and 2021 Plan for the years ended September 30, 2024, 2023 and 2022:

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Under this method, all earnings, distributed and undistributed, are allocated to common shares and participating securities based on their respective rights to receive dividends.

The Series A Preferred Stock is not included in the computation of basic EPS in periods in which we have a net loss, as the Series A Preferred Stock is not contractually obligated to share in our net losses.

Diluted earnings per common share is calculated using the more dilutive of the two-class method or as-converted method.

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The as-converted method uses net income and assumes conversion of all potential shares including the participating securities.

Dilutive potential common shares include outstanding stock options, unvested restricted stock units, unvested performance units and convertible preferred stock.

Dilutive potential common shares include outstanding stock options, unvested restricted share units and convertible preferred stock.

As noted above in Note 18, no shares of the Series A Preferred Stock remain outstanding and all rights of the holders to receive future dividends have been terminated as of the December 18, 2023 conversion date.

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Total anti-dilutive shares excluded 4 20,477 20,306

Dilutive shares under the as-converted method (1)

54,776 54,040 54,144

(1) The dilutive shares under the as-converted method assume conversion of the Series A Preferred Stock and are presented here merely for reference.

In a net income position, diluted earnings per share is determined by the more dilutive of the two-class method or the as-converted method.

Note 21 - Employee Benefit Plans

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Additionally, we have a legacy deferred compensation plan into which certain members of management were eligible to defer a maximum of 75 % of their regular compensation and a maximum of 100 % of their incentive compensation.

No new members have been added to the deferred compensation plan in the past three years.

We are not obligated to fund the deferred compensation plan;

however, we have purchased life insurance policies on the participants in order to fund the related benefits and such policies have been placed into a rabbi trust.

Our obligations under the deferred compensation plan totaled $ 2.4 million and $ 2.2 million as of September 30, 2024 and 2023, respectively, and are included in “Other liabilities” while the cash surrender value of the life insurance policies totaled $ 3.3 million and $ 2.8 million as of September 30, 2024 and 2023, respectively, and are included in “Other assets” on our consolidated balance sheets.

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members have been added to the deferred compensation plan in the past three years.

We are not obligated to fund the deferred compensation plan;

however, we have purchased life insurance policies on the participants in order to fund the related benefits and such policies have been placed into a rabbi trust.

Our obligations under the deferred compensation plan totaled $ 2.2 million and $ 2.2 million as of September 30, 2023 and 2022, respectively, and are included in “Other liabilities” while the cash surrender value of the life insurance policies totaled $ 2.8 million and $ 2.6 million as of September 30, 2023 and 2022, respectively, and are included in “Other assets” on our consolidated balance sheets.

Note 22 - Segment Information

During the three months ended December 31, 2022, and in conjunction with the Concorde Acquisition, we revised our reportable segments to reflect the manner in which Jerome Grant, our CEO and the chief operating decision-maker, evaluates performance and allocates resources.

These segments are organized by key market segments to enhance operational alignment within each segment to more effectively execute our strategic plan.

We have two reportable segments as follows:

UTI operates 16 campuses located in 9 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, Marine Mechanics Institute, NASCAR Technical Institute, and 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 operates 17 campuses located in 8 states and online, offering degree, non-degree and continuing education programs in the allied health, dental, nursing, patient care and diagnostic fields.

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 operate our business in two reportable segments:

(i) the UTI segment, and (ii) the Concorde segment.

Our reportable segments reflect the manner in which Jerome Grant, our CEO and the chief operating decision-maker, evaluates performance and allocates resources.

These segments are organized by key market segments to enhance operational alignment to more effectively execute our strategic plan.

Each reportable segment represents a group of post-secondary education providers that offer a variety of degree and non-degree academic programs.

“Corporate” includes corporate related expenses that are not allocated to the UTI or Concorde reportable segments and is included to reconcile segment results to the consolidated financial statements.

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

Prior periods have been updated to conform to the revised presentation.

As previously discussed in Note 2, the segment disclosures for the years ended September 30, 2023 and 2022 have been recast from prior years presentation for comparability to the current year presentation.

Summary information by reportable segment is as follows:

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Net income (loss) 38,324 10,700 ( 36,702 ) 12,322

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UTI Concorde Corporate Consolidated

Year Ended September 30, 2022

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These requirements, which are frequently being revisited, revised, and expanded, cover virtually every aspect of our schools’ operations, and our institutions are subject to periodic audits and program compliance reviews by various external agencies for compliance with these requirements.

Each of our institutions’ administration of the federal programs of student financial assistance under Title IV of the HEA (“Title IV Programs”) also must be audited annually by independent accountants and the resulting audit report submitted to ED for review.

Each of our institutions’ administration of the federal programs of student financial assistance under Title IV of the HEA (“Title IV Programs”) also

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must be audited annually by independent accountants and the resulting audit report submitted to ED for review.

The approvals granted by these regulatory entities permit our schools to operate and to participate in a variety of government-sponsored financial aid programs, including Title IV Programs.

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

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.

Institutions that offer distance education 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”).

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Virgin Islands have joined SARA.

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

Additionally, we have received approvals from all required 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.

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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.

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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.

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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.

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 been 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, Practical Nursing, Pharmacy Technician, and Occupational Therapy Assistant programs, have obtained programmatic accreditation.

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

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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 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.”

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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 its 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.”

• 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 its 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.

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.

ED’s administrative capability standards also include thresholds and expectations for federal student loan cohort default rates, satisfactory academic progress, clinical and externship opportunities, gainful employment programs, 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 in Title IV Programs, or take other actions against the institution.

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

None of our institutions had a three-year cohort default rate of 30% or greater for 2020, 2019 and 2018, for the three most recent FFYs with published rates.

None of our institutions had a three-year cohort default rate of 30% or greater for 2021, 2020 and 2019, 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, 2023, MIAT and Concorde campuses in Grand Prairie, Texas, Kansas City, Missouri, Memphis, Tennessee, and Miramar, Florida 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.

None of our institutions had a three-year cohort default rate of 7% or greater for 2021, 2020, or 2019, which are the three most recent FFYs with published rates.

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• Financial Responsibility.

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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.

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

While this case is decided, the previous versions of the borrower defense and closed school provisions are in effect.

• 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.

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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Therefore, it is possible that a statement made by an 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.

• Incentive Compensation .

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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:

(1) borrower defense to repayment, (2) closed school loan discharges, (3) total and permanent disability discharges, (4) false certification discharges, (5) income-driven loan repayment plans, (6) interest capitalization on Federal student loans, (7) pre-dispute arbitration and class action waiver clauses, (8) Pell Grants for prison education programs, and (9) Public Service Loan Forgiveness.

Shortly thereafter, between January and March 2022, the Institutional and Programmatic Eligibility committee considered new rules relating to seven issue areas:

(1) the 90/10 rule, (2) ability to benefit, (3) certification procedures for participation in Title IV Programs, (4) change of ownership and control, (5) financial responsibility, (6) gainful employment, and (7) standards of administrative capability.

◦ 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.

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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;

◦ ED established a Student Loan Relief Committee to consider revisions to sections of 34 C.F.R.

Parts 30, 682 and 685 addressing provisions related to the modification, waiver, release or compromise of Federal student loans.

The Student Loan Relief Committee completed four negotiating sessions in October, November and

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December 2023 and February 2024.

On April 17, 2024, ED issued a Notice of Proposed Rulemaking announcing proposed regulatory changes addressing the Secretary’s discretionary authority to waive loan repayment obligations.

ED has collected comments on the proposed regulatory changes but has not yet issued final regulatory updates.

◦ ED established a Program Integrity and Institutional Quality Committee to consider proposed changes to regulations addressing (1) the Secretary’s recognition of accrediting agencies;

(2) institutional eligibility, including State authorization;

(3) third-party servicers and related issues;

(4) distance learning;

(3) distance education;

(4) return of Title IV funds;

(5) cash management;

(7) the use of deferments and forbearances;

(8) the Federal TRIO programs;

and (9) student loan debt relief.

and (6) the Federal TRIO Programs.

ED also announced a Federal TRIO Programs Subcommittee to include additional expertise and to make recommendations to the full committee on the subject.

The full Committee met for three negotiating sessions in January, February and March 2024, and the Subcommittee met twice in January and February 2024.

On July 24, 2024, ED issued a Notice of Proposed Rulemaking announcing proposed regulatory changes addressing (a) distance education;

(b) return of Title IV funds;

and (c) the Federal TRIO Programs.

ED has collected comments on the proposed regulatory changes but has not yet issued final regulatory updates.

ED also has not yet announced any proposed regulatory changes addressing (x) the Secretary’s recognition of accrediting agencies;

(y) institutional eligibility, including State authorization;

and (z) cash management.

• Non-Discrimination Rulemakings .

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

The regulated community is awaiting a final Title IX rule, which is expected in late 2023.

On April 29, 2024, ED published a final rule amending the regulations implementing Title IX of the Education Amendments of 1972, effective August 1, 2024.

This rule represents a significant revision of the Title IX rules.

As of September 30, 2024, pursuant to various Federal court orders, ED was enjoined from enforcing the 2024 Title IX rule in 26 states, including Florida, Missouri, Mississippi, Tennessee, and Texas, and at a list of institutions identified by a federal district court in Kansas, including Universal Technical Institute of Arizona Inc.

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

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To continue participation in veterans’ benefits programs, an institution must comply with certain requirements established by the VA.

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

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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.

Such laws and regulations are enforced by federal agencies, including the Federal Trade Commission (“FTC”) and the Consumer Financial Protection Bureau (“CFPB”) and by 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 UTI students;

generally explained the source and scope of the CFPB’s regulatory authority;

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.

and advised that, after it reviewed the requested materials, the CFPB “anticipates providing guidance regarding whether UTI is

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subject to CFPB’s supervisory authority.” We have provided the requested information and are awaiting further guidance, if any, from the CFPB.

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.

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HEERF II and HEERF III grants were only to be used to provide financial aid grants to students for proprietary institutions.

As of September 30, 2020, UTI had awarded all funds designated for students under the HEERF I program.

During the years ended September 30, 2020 and 2021, UTI drew down and utilized the HEERF I institutional funds granted as previously noted in the Supplemental Cash Flow disclosures.

In accordance with the ED’s allocation schedule, during the year ended September 30, 2021, UTI institutions were granted approximately $ 16.8 million for purposes of funding HEERF II student grants and $ 9.9 million for purposes of funding HEERF III student grants.

During the years ended September 30, 2022 and 2021, UTI awarded approximately $ 7.0 million and $ 19.7 million, respectively, in HEERF II and HEERF III grants to over 15,500 students.

During the year ended September 30, 2022, UTI awarded approximately $ 7.0 million, in HEERF II and HEERF III grants to over 15,500 students.

The HEERF II and HEERF III funds were drawn down as student grants were distributed.

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 9A. Controls and Procedures