Investor Presentation SIDO IDOTI TI FALL LL 2017 2017 CONFER - - PowerPoint PPT Presentation

Investor Presentation

SIDO IDOTI TI FALL LL 2017 2017 CONFER ERENCE

Sep September 28, 2017

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This presentation may contain forward-looking statements regarding events or future financial

• performance. These statements are only

predictions and the actual events or results may differ materially. For important factors that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to the Company’s filings with the Securities and Exchange Commission.

Sa Safe harbor

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COMPANY PROFILE: E:

• Founded in 1965
• 200,000+ techs trained
• 30+ leading manufacturer partners
• 88% of graduates employed1
• Fiscal 2016 revenue: $347.1 million
• $70m financing in 2016
• $84.5m in cash & equivalents/investments2

Universal Technical Institute (NYSE: UTI) is the nation’s leading provider of skilled transportation technicians

STOCK PR PROFILE:

• NYSE:

UTI

• Stock price:

$3.60

• Market capitalization: $91.3

million

• Fiscal year end:
• Sept. 30

1UTI employment rate for 2015 graduates who were employed within one year of graduation was 88%. See UTI’s 10-K for additional information. The employment calculation is based on all

graduates, including those that completed manufacturer-specific advanced training programs from Oct. 1, 2014 to Sept. 30, 2015, excluding graduates not available for employment because of continuing education, military service, health, incarceration, death, or international student status. Graduates are counted as employed based on a verified understanding of the graduates job duties to assess and confirm that the graduates’ primary job responsibilities are in his or her field of study. For 2015, we had approximately 9,700 total graduates, of which approximately 9,100 were available for employment. Of those graduates available for employment, approximately 8,000 were employed within one year of their graduation date, for a total of 88%;

2June 30, 2017

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Management has > 120 years of experience in education

Kimberly McWaters

• 33 years with UTI
• Appointed CEO in

2003

• Education industry

experience: business strategy,

• perations,

marketing, and admissions

President & Chief Executive Officer Bryce Peterson

• Nine years with UTI
• Education industry

experience: finance, accounting, compliance, and information technology

EVP & CFO

• Nine years with

UTI

• Education

industry experience: human capital management

SVP People Services Rhonda Turner EVP & CMO

• 12 years with UTI
• Education industry

experience (23 years): marketing and admissions

Piper Jameson EVP Admissions & Operations

• 28 years with UTI
• Education industry

experience: campus

• perations

including education and admissions

Sherrell Smith EVP & General Counsel

• 14 years with UTI
• Education industry

experience: governance, regulatory/SEC compliance, corporate development, mergers and acquisitions

Chad Freed

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Market leader with national campus network

Smaller campus format

ESTABLISHED FOOTPRINT

• 12 campuses in eight states
• 2,305,700 square footage
• New smaller campus coming Summer/Fall

2018

• Nearly 13% market share and 2.5x

the share of nearest competitor

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First-class campus facilities

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State-of-the-industry training labs

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Targeting strong industry demand

• An estimated 264 million vehicles

were in service by 2016

• Average age of vehicles on the road as
• f 2016: 11.6 years
• Roughly half of all service technicians

eligible to retire between 2013-2028

• 37,100+ new job openings every year

1.3 million service technicians needed between 2014 and 2024

SOURCES: BLS Employment Outlook Summary, December 2013. Includes new job growth and replacements: IHS Market report, 2016; National Institute for Automotive Service Excellence, 2014

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Student focus: UTI’s recruitment model

HIGH HIGH SC SCHO HOOL L STU TUDENTS S MIL MILITARY Y PER ERSONNEL ADU ADULT STU TUDENTS

* STEM = Science, Technology, Engineering and Math

• Traditional and digital advertising
• Campus-based admissions
• Effective inquiry response system
• Presentations to service people
• Relationships with bases and staff
• Leveraging industry partnerships on base
• On-base classes —currently expanding at

Fort Bliss (Texas)

• High school presentations
• Campus and employer events
• Skills competitions
• Third-party endorsements
• STEM* program alignment

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Student focus: delivering a strong value proposition

88% employment rate among 2015 graduates3

1 See Competitive Salary Data in Appendix at Slide 27; 2 See Competitive Salary Data in Appendix at Slide 27; 3 Source: College Scorecard (https://collegescorecard.ed.gov/).

63.1% rate represents College Scorecard’s methodology for the UTI-Avondale campus; 4 For information on employment rate calculation, see Slide 3, Footnote 1.; 5 The earnings data shown in the College Scorecard for UTI of Arizona represent earnings for the four campuses that were operating in 2001-2003 (Arizona, Rancho Cucamonga, NASCAR Technical Institute and Illinois).

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Growth objectives: executing the smaller campus strategy

• $10 million to $15 million investment
• Accretive to earnings in 18 months
• Cash flow breakeven in fourth year of
• peration
• Next campus in Summer/Fall 2018

LONG BEACH DALLAS/FT. WORTH

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200 250 300 350 400 450 500 550 600 650

UTI Lincoln

200 400 600 800 1000 1200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016-Prelim UTI Lincoln

Growth objectives: executing in new markets

PHILADELPHIA MARKET ENTRY(a) DALLAS/FORT WORTH MARKET ENTRY(b)

(a) Total completions for UTI-Exton versus Lincoln-Philadelphia. Includes all certificates below the baccalaureate level and associate’s degrees for automotive and diesel programs. Source is IPEDS . (b) Total completions for UTI-Dallas versus Lincoln-Grand Prairie. Includes all certificates below the baccalaureate level and associate’s degrees for automotive , collision and diesel

• programs. Source is IPEDS. UTI’s Dallas campus opened in 2010.

Completions Completions

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Growth objectives: expanding educational offerings

WELDING TECHNOLOGY CNC MACHINING Increasing the pool of potential students and improving capacity utilization at existing facilities

• CNC machinists in high demand
• 36-week program at NASCAR Technical Institute
• Only CNC machinist school affiliated with Roush Yates &

NASCAR

• Techs in high demand
• 36-week program -- Rancho Cucamonga & Avondale
• Expanding to additional campuses in 2018 - 2019

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Growth objectives: growing new student enrollment

MARKETING:

• Create awareness
• Efficiently and effectively target

prospective students

• Build the brand
• Create powerful tools and messaging
• Create a great student experience
• Align programs with industry standards
• Communicate value and ROI of

advanced training

ADMISSIONS:

• Utilize powerful tools and messaging
• Train the team
• Employ graduate-based compensation
• Leverage industry and employer partners

to validate value and ROI

STUDENT SUPPORT SERVICES:

• Deliver excellent customer service
• Help students stay in school
• Offer financial aid
• Provide employment services

INSTRUCTORS:

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Growth objectives: leveraging partnerships to deliver value

* Based on comparison with graduates from core programs between October 1, 2007, and September 30, 2014.

PAR ARTNERS

• Efficient hiring source
• Lowers costs
• Techs who are ready to work

UTI TI

• Current technology and tools
• Increased marketing impact
• Lower expenses and Capex
• Value for students

STU TUDENTS

• Pipeline to jobs
• Better jobs and higher starting wages*
• Tuition support
• Certifications and credentials

4,800+ graduates since 1995 33,000+ graduates since 1987 330+ graduates since 2013 26,000+ graduates since 2000 3,200+ graduates since 2006

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Cost savings: financial improvement plan

$87.7 $92.1 $82.8 $81.8 $79.0 $70 $75 $80 $85 $90 $95 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17

• 1. As of UTI’s fiscal second quarter earnings release on August 3, 2017

REDUCING EXPENSES

AND IMPROVING OPERATING EFFICIENCIES

($ in thousands)

FINANCIAL IMPROVEMENT PLAN

• Goal: deliver $25 million to $30

million in annualized savings in 2017

• As of Q3, UTI is on track to drive

savings at the higher end of between $30 million and $40 million in 20171

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Cost savings: rationalizing our operating footprint

STRATEGY TO OPTIMIZE CAPACITY UTILIZATION

• Enhance utilization of existing space with new programs
• Review opportunities to divest real estate and/or not renew leases
• Consolidate corporate functions
• Explore subleasing options for existing capacity

RECENT PROGRESS

• Opened Welding at Rancho Cucamonga and CNC Machining at NASCAR Tech. Will expand

Welding program to Avondale in January 2018

• Additional Welding programs in 2018 and 2019
• Relocated staff from Scottsdale headquarters to MMI Phoenix campus, subleasing a portion
• f the corporate office
• Vacating properties in Arizona and Houston and eliminating leases

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Financial performance snapshot

3 Months Ended Q3‘17 Q2‘17 Q1‘17 Q4’16 Q3‘16 New student starts Y/Y growth/(decline) 1,800 12.5% 1,900 (17.4)% 1,400 (22.2)% 5,600 (6.7)% 1,600 (15.8)% Average enrollment Y/Y growth/(decline) 10,000 (9.9)% 10,900 (10.7)% 12,000 (9.8)% 11,700 (8.6)% 11,100 (8.3)% Revenues Y/Y growth/(decline) $76.3 (7.3)% $82.5 (6.5)% $84.2 (6.2)% $86.9 (4.1)% $82.3 (3.3)% Operating income (loss) Margin $(2.8) (3.7)% $0.7 0.8% $1.4 1.6% $(5.2) (6.0)% $(5.5) (6.6)% Revenue per student $7,600 $7,600 $7,000 $7,500 $7,400 EBITDA1 $2.1 $5.6 $6.3 $(0.9) $(0.6) Diluted EPS $(0.21) $(0.12) $(0.12) $(0.42) $(0.21) Cash, cash equivalents & investments $84.5 $98.7 $103.8 $120.7 $108.1

($ in millions, except for enrollment data and EPS)

(1) A reconciling table for EBITDA is available in the Appendix of this presentation

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Fiscal 2017 financial outlook

• Annual new student starts down mid-to-high-single digits
• Start growth in the second half of fiscal 2017
• Low-double digit decrease in average student population
• Revenue decrease in mid-to-high single digits
• Annualized cost savings at the higher end of $30 million - $40 million
• Operating income to range between $1 million and -$1 million
• Changes to institutional grant program and success-based marketing/show

rate improvement initiatives could positively or negatively impact year-end

• perating income.
• Significantly improved year-over-year EBITDA
• Capital expenditures between $10.5 million and $11.5 million

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Addr ddressin ing mark arket de demand Del eliv iverin ing an an attr tractiv ive val alue pr prop

• posit

itio ion Ex Executin ing str trategy to

• driv

drive pr prof

• fit

itable growth th

Investment highlights

Appendix

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Highly qualified Board of Directors

Robert DeVincenzi Non-Executive Chairman, Universal Technical Institute; Principal, Lupine Ventures; Former President and CEO of Redflex Holdings Ltd. William J. Lennox, Jr. Former Superintendent of the United States Military Academy at West Point; President, Saint Leo University Conrad A. Conrad Former Executive Vice President and Chief Financial Officer, The Dial Corporation Chris Shackelton Managing Partner, Coliseum Capital Management David Blaszkiewicz President and Chief Executive Officer, Invest Detroit Kenneth R. Trammell Chief Financial Officer, Tenneco Inc. Former President, Young and Rubicam Advertising Linda J. Srere Roger S. Penske Chairman, Penske Automotive Group, Inc. Kimberly McWaters President and Chief Executive Officer, Universal Technical Institute Roderick Paige Former U.S. Secretary of Education; Interim President, Jackson State University John C. White Former Chairman, Universal Technical Institute, Inc.; Founder, Motorcycle Mechanics Institute

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3 Mos. 6/30/17 3 Mos. 6/30/16 9 Mos. 6/30/17 9 Mos. 6/30/16 Revenues $ 76,258 $ 82,266 $ 242,934 $ 260,231 Operating expenses: Educational services & facilities 44,120 47,044 136,108 146,466 SG&A 34,922 40,672 107,536 127,178 Total operating expenses 79,042 87,716 243,644 273,644 Loss from operations (2,784) (5,450) (710) (13,413) Total other expense, net (166) (674) (939) (1,671) Income tax expense (benefit) 967 (1,055) 5,722 23,667 Net loss $ (3,917) $ (5,069) $ (7,371) $ (38,751) Preferred stock dividends 1,309 101 3,927 101 Loss available for distribution $ (5,226) $ (5,170) $ (11,298) $ (38,852) Net loss per share, basic & diluted $ (0.21) $ (0.21) $ (0.46) $ (1.60) EBITDA(1) $ 2,146 $ (577) $ 14,069 $ 1,702

(1) A reconciling table for EBITDA is available in the Appendix of this presentation

Statement of operations

($ in thousands, except per share amounts)

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Balance sheet summary

At: 6/30/17 09/30/16 Cash & cash equivalents/investments $84,516 $120,736 Restricted cash* 13,598 5,956 Current assets 127,572 161,949 Total assets $256,772 $297,159 Current liabilities 66,605 94,560 Total liabilities 129,457 160,545 Stockholders’ equity 127,315 136,614 Total liabilities & stockholders’ equity $256,772 $297,159

($ in thousands)

• On June 24, 2016, UTI raised $70 million through

the sale of Series A Convertible Preferred Stock to Coliseum Holdings

• The proceeds are being used to fund strategic long-

term growth initiatives, including the smaller campus strategy and the introduction of new programs in existing markets with under-utilized campus facilities, such as the Welding and CNC Machining programs.

*Restricted cash includes the funds transferred in advance of loan purchases under UTI’s proprietary loan program, funds held for students from Title IV financial aid program funds that result in credit balances on a student’s account and funds held as collateral for certain of the surety bonds that UTI’s insurers issue on behalf of UTI campuses and admissions representatives with multiple states, which are required to maintain authorization to conduct UTI’s business. The increase in restricted cash of $11.1 million was primarily related to the collateralization of surety bonds.

Use of Non-GAAP financial information

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This presentation contains non-GAAP (Generally Accepted Accounting Principles) financial measures, which are intended to supplement, but not substitute for, the most directly comparable GAAP measures. Management chooses to disclose to investors, these non-GAAP financial measures because they provide an additional analytical tool to clarify the results from

• perations and helps to identify underlying trends. Additionally, such measures help compare the Company's performance on a

consistent basis across time periods. Management also utilizes EBITDA as a performance measure internally. To obtain a complete understanding of the Company's performance, these measures should be examined in connection with net income (loss), determined in accordance with GAAP, as presented in the financial statements and notes thereto included in the annual and quarterly filings with the Securities and Exchange Commission. Since the items excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be an alternative to net income as a measure of the Company's operating performance or profitability. Exclusion

• f items in the non-GAAP presentation should not be construed as an inference that these items are unusual, infrequent or

non-recurring. Other companies, including other companies in the education industry, may calculate non-GAAP financial measures differently than UTI does, limiting their usefulness as a comparative measure across companies. Investors are encouraged to use GAAP measures when evaluating our financial performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is included in the following slide.

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EBITDA reconciliation

($ in thousands)

3 Mos. 6/30/17 3 Mos. 6/30/16 9 Mos. 6/30/17 9 Mos. 6/30/16 Net loss $ (3,917) $ (5,069) $ (7,371) $ (38,751) Interest expense, net 559 802 2,020 2,416 Income tax expense (benefit) 967 (1,055) 5,722 23,667 Depreciation and amortization 4,537 4,745 13,698 14,370 EBITDA $2,146 $ (577) $ 14,069 $ 1,702

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Competitive salary data – Additional data for student value proposition (slide 11)

Type of institution Number of institutions Description Carnegie Classification Codes

Two-year Public College 898 Associate’s College-Public 1-9 Four-Year Liberal Arts College 243 Bachelor's College-Arts and Sciences 21 Doctoral University 331 Doctoral Universities 15-17 The data for the different institutions was gathered using College Scorecard information for schools in the following categories. Ten-year median earnings are calculated by determining the median earnings of former students, who received federal financial aid and regardless of whether they graduated, at 10 years after entering the school. Earnings are defined in the College Scorecard as the sum of wages and deferred compensation from all W-2 forms received for each individual plus self- employment earnings.

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uti.edu facebook.com/uti @UTITweet

COMPANY CONTACT

Bryce Peterson Chief Financial Officer Universal Technical Institute, Inc. (623) 445-0993

INVESTOR RELATIONS CONTACT

Becky Herrick/Kirsten Chapman LHA Investor Relations (415) 433-3777 UTI@lhai.com