UNIVERSAL TECHNICAL INSTITUTE INC [UTI] Filings

10-Q 1 uti-20240630.htm 10-Q uti-20240630

__________________________________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ______

Commission File Number: 1-31923

UNIVERSAL TECHNICAL INSTITUTE, INC.

(Exact name of registrant as specified in its charter)

Delaware

86-0226984

(State or other jurisdiction of
incorporation or organization)

(IRS Employer Identification No.)

4225 East Windrose Drive, Suite 200

Phoenix, Arizona 85032

(Address of principal executive offices, including zip code)

(623) 445-9500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.0001 par value	UTI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ¨			Accelerated filer þ
Non-accelerated filer ¨			Smaller reporting company ☐
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

At August 1, 2024, there were 53,811,817 shares outstanding of the registrant's common stock.

UNIVERSAL TECHNICAL INSTITUTE, INC.

INDEX TO FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2024


		Page
		Number
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		ii

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets at June 30 , 2024 and September 30, 2023 (Unaudited)	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended June 30 , 2024 and 2023 (Unaudited)	2
	Condensed Consolidated Statements of Other Comprehensive Income for the Three and Nine Months Ended June 30 , 2024 and 2023 (Unaudited)	3
	Condensed Consolidated Statements of Shareholders’ Equity as of June 30 , 2024 and 2023 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30 , 2024 and 2023 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45

SIGNATURES		46

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain forward-looking statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and Section 27A of the Securities Act of 1933, as amended (“Securities Act”), which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. From time to time, we also provide forward-looking statements in other materials we release to the public as well as verbal forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions (including the negative form of such expressions) intended to identify forward-looking statements, although not all forward looking statements contain these identifying words. Forward-looking statements are based on our current expectations and assumptions, do not strictly relate to historical or current facts, any of which may not prove to be accurate. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Important factors that could cause actual results to differ from those in our forward-looking statements include, without limitation:

•failure of our schools to comply with the extensive regulatory requirements for school operations;

•our failure to maintain eligibility for federal student financial assistance funds;

•the effect of current and future Title IV Program regulations arising out of negotiated rulemakings, including any potential reductions in funding or restrictions on the use of funds received through Title IV Programs;

•the effect of future legislative or regulatory initiatives related to veterans’ benefit programs;

•continued Congressional examination of the for-profit education sector;

•our failure to maintain eligibility for or the ability to process federal student financial assistance;

•regulatory investigations of, or actions commenced against, us or other companies in our industry;

•changes in the state regulatory environment or budgetary constraints;

•our failure to execute on our growth and diversification strategy, including effectively identifying, establishing and operating additional schools, programs or campuses;

•our failure to realize the expected benefits of our acquisitions, or our failure to successfully integrate our acquisitions;

•our failure to improve underutilized capacity at certain of our campuses;

•enrollment declines or challenges in our students’ ability to find employment as a result of macroeconomic conditions;

•our failure to maintain and expand existing industry relationships and develop new industry relationships;

•our ability to update and expand the content of existing programs and develop and integrate new programs in a timely and cost-effective manner while maintaining positive student outcomes;

•a loss of our senior management or other key employees;

•failure to comply with the restrictive covenants and our ability to pay the amounts when due under the Credit Agreement;

•the effect of our principal stockholder owning a significant percentage of our capital stock, and thus being able to influence certain corporate matters and the potential in the future to gain substantial control over our company;

•the effect of public health pandemics, epidemics or outbreak, including COVID-19; and

•risks related to other factors discussed in our 2023 Annual Report on Form 10-K filed with the SEC on December 1, 2023 (the “2023 Annual Report on Form 10-K”).

The factors above are not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that could impact our business. We cannot guarantee that any forward-looking statement will be realized. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions. Many events beyond our control may determine whether results we anticipate will be achieved. Should known or unknown risks or uncertainties materialize, or should

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underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. Among the factors that could cause actual results to differ materially are the factors discussed under Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should bear this in mind as you consider forward-looking statements.

Also, these forward-looking statements represent our estimates and assumptions only as of the date of the document containing the applicable statement. Except as required by law, we undertake no obligation to update or revise forward looking statements, whether as a result of new information, future events or otherwise. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. We qualify all of the forward-looking statements in this Quarterly Report on Form 10-Q, including the documents that we incorporate by reference herein, by these cautionary statements. You are advised, however, to consult any further disclosures we make on related subjects in our reports and filings with the Securities and Exchange Commission (“SEC”).

iii

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PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and per share amounts)

(Unaudited)


	June 30, 2024		September 30, 2023
Assets
Cash and cash equivalents	$	115,505	$	151,547
Restricted cash	3,611		5,377

Receivables, net	30,024		25,161
Notes receivable, current portion	6,194		5,991
Prepaid expenses	13,650		9,412
Other current assets	7,581		7,497
Total current assets	176,565		204,985
Property and equipment, net	263,252		266,346
Goodwill	28,459		28,459
Intangible assets, net	18,453		18,975
Notes receivable, less current portion	35,164		30,672
Right-of-use assets for operating leases	164,170		176,657
Deferred tax asset, net	6,577		3,768
Other assets	13,401		10,823
Total assets	$	706,041	$	740,685
Liabilities and Shareholders’ Equity
Accounts payable and accrued expenses	$	79,846	$	69,941

Deferred revenue	65,977		85,738
Operating lease liability, current portion	22,275		22,481
Long-term debt, current portion	2,656		2,517
Other current liabilities	3,007		4,023
Total current liabilities	173,761		184,700
Deferred tax liabilities, net	663		663
Operating lease liability	153,267		165,026
Long-term debt	134,671		159,600
Other liabilities	4,296		4,729
Total liabilities	466,658		514,718
Commitments and contingencies (Note 16)
Shareholders’ equity:
Common stock, $0.0001 par value, 100,000 shares authorized, 53,894 and 34,157 shares issued, 53,812 and 34,075 shares outstanding.	5		3
Preferred stock, $0.0001 par value, 10,000 shares authorized; 0 and 676 shares of Series A Convertible Preferred Stock issued and outstanding, liquidation preference of $100 per share	—		—
Paid-in capital - common	218,150		151,439
Paid-in capital - preferred	—		66,481
Treasury stock, at cost, 82 shares	(365)		(365)
Retained earnings	19,669		5,946
Accumulated other comprehensive income	1,924		2,463
Total shareholders’ equity	239,383		225,967
Total liabilities and shareholders’ equity	$	706,041	$	740,685

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

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenues	$	177,458	$	153,286	$	536,329	$	437,110
Operating expenses:
Educational services and facilities	95,277		88,377		285,174		236,715
Selling, general and administrative	74,735		64,246		218,286		189,335
Total operating expenses	170,012		152,623		503,460		426,050
Income from operations	7,446		663		32,869		11,060
Other (expense) income:
Interest income	1,440		1,632		4,842		4,260
Interest expense	(2,149)		(2,957)		(7,204)		(7,017)

Other income (expense), net	20		89		353		540
Total other expense, net	(689)		(1,236)		(2,009)		(2,217)
Income (loss) before income taxes	6,757		(573)		30,860		8,843
Income tax (expense) benefit (Note 14)	(1,772)		64		(7,699)		(3,224)
Net income (loss)	$	4,985	$	(509)	$	23,161	$	5,619
Preferred stock dividends	—		(1,263)		(1,097)		(3,791)
Income (loss) available for distribution	$	4,985	$	(1,772)	$	22,064	$	1,828
Income allocated to participating securities	—		—		(2,855)		(684)
Net income (loss) available to common shareholders	$	4,985	$	(1,772)	$	19,209	$	1,144

Earnings per share (Note 18):
Net income (loss) per share - basic	$	0.09	$	(0.05)	$	0.40	$	0.03
Net income (loss) per share - diluted	$	0.09	$	(0.05)	$	0.39	$	0.03

Weighted average number of shares outstanding (Note 18):
Basic	53,805		34,067		47,956		33,956
Diluted	54,951		34,067		49,041		34,402

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

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net income (loss)	$	4,985	$	(509)	$	23,161	$	5,619
Other comprehensive income (loss):
Unrealized (loss) gain on interest rate swaps, net of taxes	(6)		513		(539)		(151)
Comprehensive income	$	4,979	$	4	$	22,622	$	5,468

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

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands) (Unaudited)


	Common Stock			Preferred Stock			Paid-in Capital - Common		Paid-in Capital - Preferred		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Shareholders’ Equity
	Shares	Amount		Shares	Amount						Shares	Amount
Balance as of September 30, 2023	34,157	$	3	676	$	—	$	151,439	$	66,481	(82)	$	(365)	$	5,946	$	2,463	$	225,967
Net income	—	—		—	—		—		—		—	—		10,389		—		10,389


Issuance of common stock under stock-based compensation plans	538	—		—	—		—		—		—	—		—		—		—
Shares withheld for payroll taxes	(178)	—		—	—		(2,054)		—		—	—		—		—		(2,054)

Stock-based compensation	—	—		—	—		1,482		—		—	—		—		—		1,482
Preferred stock dividends	—	—		—	—		—		—		—	—		(1,097)		—		(1,097)
Preferred share repurchase	—	—		(33)	—		—		(3,275)		—	—		(8,341)		—		(11,616)
Preferred stock conversion	19,297	2		(643)	—		63,204		(63,206)		—	—		—		—		—
Unrealized loss on interest rate swaps, net of taxes	—	—		—	—		—		—		—	—		—		(886)		(886)
Balance as of December 31, 2023	53,814	$	5	—	$	—	$	214,071	$	—	(82)	$	(365)	$	6,897	$	1,577	$	222,185
Net income	—	—		—	—		—		—		—	—		7,787		—		7,787
Issuance of common stock under stock-based compensation plans	74	—		—	—		—		—		—	—		—		—		—
Shares withheld for payroll taxes	(4)	—		—	—		(65)		—		—	—		—		—		(65)

Stock-based compensation	—	—		—	—		2,353		—		—	—		—		—		2,353


Unrealized gain on interest rate swaps, net of taxes	—	—		—	—		—		—		—	—		—		353		353
Balance as of March 31, 2024	53,884	$	5	—	$	—	$	216,359	$	—	(82)	$	(365)	$	14,684	$	1,930	$	232,613
Net income	—	—		—	—		—		—		—	—		4,985		—		4,985
Issuance of common stock under employee plans	15	—		—	—		—		—		—	—		—		—		—
Shares withheld for payroll taxes	(5)	—		—	—		(72)		—		—	—		—		—		(72)


Stock-based compensation	—	—		—	—		1,863		—		—	—		—		—		1,863


Unrealized loss on interest rate swap, net of taxes	—	—		—	—		—		—		—	—		—		(6)		(6)
Balance as of June 30, 2024	53,894	$	5	—	$	—	$	218,150	$	—	(82)	$	(365)	$	19,669	$	1,924	$	239,383

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (CONTINUED)

(In thousands) (Unaudited)


	Common Stock			Preferred Stock			Paid-in Capital - Common		Paid-in Capital - Preferred		Treasury Stock			Retained (Deficit) Earnings		Accumulated Other Comprehensive Income		Total Shareholders’ Equity
	Shares	Amount		Shares	Amount						Shares	Amount
Balance as of September 30, 2022	33,857	$	3	676	$	—	$	148,372	$	66,481	(82)	$	(365)	$	(1,307)	$	2,213	$	215,397
Net income	—	—		—	—		—		—		—	—		2,648		—		2,648


Issuance of common stock under stock-based compensation plans	223	—		—	—		—		—		—	—		—		—		—
Shares withheld for payroll taxes	(73)	—		—	—		(525)		—		—	—		—		—		(525)

Stock-based compensation	—	—		—	—		1,169		—		—	—		—		—		1,169


Preferred stock dividends	—	—		—	—		—		—		—	—		(1,277)		—		(1,277)
Unrealized loss on interest rate swap, net of taxes	—	—		—	—		—		—		—	—		—		(126)		(126)
Balance as of December 31, 2022	34,007	$	3	676	$	—	$	149,016	$	66,481	(82)	$	(365)	$	64	$	2,087	$	217,286
Net Income	—	—		—	—		—		—		—	—		3,480		—		3,480
Issuance of common stock under stock-based compensation plans	175	—		—	—		—		—		—	—		—		—		—
Shares withheld for payroll taxes	(33)	—		—	—		(223)		—		—	—		—		—		(223)

Stock-based compensation	—	—		—	—		2,113		—		—	—		—		—		2,113

Preferred stock dividends	—	—		—	—		—		—		—	—		(1,251)		—		(1,251)
Unrealized loss on interest rate swap, net of taxes	—	—		—	—		—		—		—	—		—		(538)		(538)
Balance as of March 31, 2023	34,149	$	3	676	$	—	$	150,906	$	66,481	(82)	$	(365)	$	2,293	$	1,549	$	220,867
Net loss	—	—		—	—		—		—		—	—		(509)		—		(509)
Issuance of common stock under employee plans	4	—		—	—		—		—		—	—		—		—		—
Shares withheld for payroll taxes	(2)	—		—	—		(13)		—		—	—		—		—		(13)


Stock-based compensation	—	—		—	—		533		—		—	—		—		—		533

Preferred stock dividends	—	—		—	—		—		—		—	—		(1,263)		—		(1,263)
Unrealized gain on interest rate swap, net of taxes	—	—		—	—		—		—		—	—		—		513		513
Balance as of June 30, 2023	34,151	$	3	676	$	—	$	151,426	$	66,481	(82)	$	(365)	$	521	$	2,062	$	220,128

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

UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)


	Nine Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net income	$	23,161	$	5,619
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	21,562		18,649

Amortization of right-of-use assets for operating leases	16,468		15,439


Bad debt expense	5,066		1,447
Stock-based compensation	5,698		3,815
Deferred income taxes	(2,336)		2,594


Training equipment credits earned, net	1,309		1,299
Unrealized loss on interest rate swap	(539)		(151)
Other losses (gains), net	137		(197)
Changes in assets and liabilities:
Receivables	(9,736)		(2,869)
Prepaid expenses	(7,316)		(3,293)
Other assets	(2,380)		623
Notes receivable	(4,695)		(22)
Accounts payable, accrued expenses and other current liabilities	8,560		(13,949)
Deferred revenue	(19,761)		(16,884)


Operating lease liability	(15,946)		(16,094)
Other liabilities	(891)		(759)
Net cash provided by (used in) operating activities	18,361		(4,733)
Cash flows from investing activities:
Cash paid for acquisition, net of cash acquired	—		(16,381)
Purchase of property and equipment	(16,769)		(48,847)

Proceeds from maturities of held-to-maturity securities	—		29,000
Proceeds from insurance policy	261		—
Net cash used in investing activities	(16,508)		(36,228)
Cash flows from financing activities:
Proceeds from revolving credit facility	36,000		90,000
Payments on revolving credit facility	(59,000)		—
Debt issuance costs for long-term debt	—		(484)
Payments on term loans and finance leases	(1,870)		(1,179)

Payment of preferred stock cash dividend	(1,097)		(2,528)
Preferred share repurchase	(11,503)		—
Payment of payroll taxes on stock-based compensation through shares withheld	(2,191)		(761)

Net cash (used in) provided by financing activities	(39,661)		85,048
Change in cash, cash equivalents and restricted cash	(37,808)		44,087
Cash and cash equivalents, beginning of period	151,547		66,452
Restricted cash, beginning of period	5,377		3,544
Cash, cash equivalents and restricted cash, beginning of period	156,924		69,996
Cash and cash equivalents, end of period	115,505		110,511
Restricted cash, end of period	3,611		3,572
Cash, cash equivalents and restricted cash, end of period	$	119,116	$	114,083

UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In thousands)

(Unaudited)


	Nine Months Ended June 30,
	2024		2023
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	$	9,968	$	967
Interest paid	8,052		6,442

Supplemental schedule of noncash investing and financing activities:
Training equipment obtained in exchange for services	$	702	$	500
Depreciation of training equipment obtained in exchange for services	412		558
Change in accrued capital expenditures during the period	(1,263)		1,836
Preferred dividends payable	—		1,263
Conversion of Series A Preferred Stock	63,206		—

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

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 1 - Nature of the Business

Universal Technical Institute, Inc., which together with its subsidiaries is referred to as the “Company,” “we,” “us” or “our,” was founded in 1965 and is a leading workforce solutions provider of transportation, skilled trades and healthcare education programs, whose mission is to serve students, partners, and communities by providing quality education and support services for in-demand careers across a number of highly-skilled fields. We offer the majority of our programs in a blended learning model that combines instructor-facilitated online teaching and demonstrations with hands-on labs. We have two reportable segments as follows:

Universal Technical Institute (“UTI”): UTI operates 16 campuses located in nine states and offers a wide range of degree and non-degree transportation and skilled trades technical training programs under brands such as Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute (“MMI”), NASCAR Technical Institute, and MIAT College of Technology (“MIAT”). UTI also offers manufacturer specific advanced training programs, which include student-paid electives, at our campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers. Lastly, UTI provides dealer technician training or instructor staffing services to manufacturers. UTI works closely with multiple original equipment manufacturers and industry brand partners to understand their needs for qualified service professionals.

Concorde Career Colleges (“Concorde”): Concorde operates across 17 campuses in eight states and online, offering degree, non-degree, and continuing education programs in the allied health, dental, nursing, patient care and diagnostic fields. The Company has designated campuses that offer degree granting programs as “Concorde Career College” where allowed by state regulation. The remaining campuses are designated as “Concorde Career Institute.” Concorde believes in preparing students for their healthcare careers with practical, hands-on experiences including opportunities to learn while providing care to real patients. Prior to graduation, students will complete a number of hours in a clinical setting or externship, depending upon their program of study. We acquired Concorde on December 1, 2022. See Note 4 on “Concorde Acquisition” for additional information.

“Corporate” includes corporate related expenses that are not allocated to the UTI or Concorde reportable segments. Additional information about our reportable segments is presented in Note 19.

Our primary source of revenues is currently tuition and fees paid by students. To pay for a substantial portion of their tuition, the majority of students rely on funds received from federal financial aid programs under Title IV Programs of the Higher Education Act of 1965, as amended (“HEA”), as well as from various veterans’ benefits programs. For further discussion, see Note 2 on “Summary of Significant Accounting Policies - Concentration of Risk” and Note 23 on “Government Regulation and Financial Aid” included in our 2023 Annual Report on Form 10-K.

Note 2 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, our condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. Normal and recurring adjustments considered necessary for a fair statement of the results for the interim periods have been included. Operating results for the nine months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending September 30, 2024. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2023 Annual Report on Form 10-K.

The unaudited condensed consolidated financial statements include the accounts of Universal Technical Institute, Inc. and our wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Other than described below, there have been no material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in Note 2 of our 2023 Annual Report on Form 10-K.

Segment Recast

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 19 for the three and nine months ended June 30, 2023 have been recast from the prior year presentation for comparability to the current year presentation.

Note 3 - Recent Accounting Pronouncements

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 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.

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 4 - Concorde Acquisition

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. The acquisition expands our portfolio of offerings into the higher-growth healthcare arena and creates the opportunity to bring workforce educational solutions to a broader array of students and employers.

Under the terms of the Stock Purchase Agreement (the “Purchase Agreement”), dated May 3, 2022, by and among the Company, Concorde, Liberty Partners Holdings 28, L.L.C., a Delaware limited liability company, and Liberty Investment IIC, LLC, a Delaware limited liability company (each a “Seller,” and collectively, the “Sellers”); and Liberty Partners L.P., a Delaware limited partnership, in its capacity as a representative of the Sellers, we acquired all of the issued and outstanding shares of capital stock of Concorde for a base purchase price of $50.0 million, less $1.9 million of net adjustments including the post-closing working capital adjustment, for total cash consideration paid of $48.1 million. 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 Concorde by the Credit Facility entered into on November 18, 2022. See Note 12 for further details on the Credit Facility.

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 condensed 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 valuation estimates of the fair values as of the acquisition date. As of December 1, 2023, the fair value and purchase price allocation are considered final.

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


Assets acquired:
Cash and cash equivalents	$	30,064
Restricted cash	1,689
Accounts receivable, net	6,800

Prepaid expenses	2,957
Other current assets	827
Property and equipment	23,238
Right-of-use assets for operating leases	71,153
Goodwill	11,600
Intangible assets	5,400
Deferred tax assets	5,112
Other assets	4,997
Total assets acquired	$	163,837

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)


Less: Liabilities assumed
Accounts payable and accrued expenses	$	15,482
Deferred revenue	20,145
Operating lease liability, current portion	10,011
Long-term debt, current portion (1)	807
Other current liabilities	208

Long-term debt (1)	5,468
Operating lease liability	63,582

Total liabilities assumed	115,703
Net assets acquired	$	48,134

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

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 resulted 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. None of the goodwill is expected to be deductible for tax purposes. Factors that contributed to a purchase price resulting in the recognition of goodwill include Concorde’s strategic fit into our growth and diversification strategy, which is focused on offering a broader array of high-quality, in-demand workforce education solutions which both prepare students for a variety of careers in fast-growing fields and help close the country's skills gap by leveraging key industry partnerships.

The purchase price allocation requires subjective estimates that, if incorrectly estimated, could be material to our condensed consolidated financial statements including the amount of depreciation and amortization expense. 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 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 6. The accreditations and regulatory approvals were valued using the multi-period excess earnings method (“MPEEM”) under the income approach. The MPEEM is a variation of discounted cash-flow analysis. Rather than focusing on the whole entity, the MPEEM isolates the cash flows that can be associated with a single intangible asset and measures fair value by discounting them to present value. The trademarks and trade names were valued using the relief from royalty method. The value of the trade name encompasses all items necessary to generate revenue utilizing the trade name. The curriculum was valued using the cost approach.

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

Intangible Asset

Useful life

Amount

Accreditations and regulatory approvals

Indefinite

3,500

Trademarks and trade names

10 years

500

Curriculum

5 years

1,400

Total

5,400

See Note 8 and Note 9 and for additional details on goodwill and intangible assets.

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Student receivables

When financial assets are acquired in connection with a business combination, we evaluate whether those acquired financial assets have experienced a more-than-insignificant deterioration in credit quality since origination. Financial assets acquired with evidence of such credit deterioration are referred to as purchased credit deteriorated (“PCD”) assets and reflect the acquirer’s assessment at the acquisition date. The student receivables acquired in the Concorde acquisition were reviewed to determine if any had experienced a more-than-insignificant deterioration in credit quality since origination. Student receivables of approximately $2.3 million met the established criteria to indicate a more-than insignificant deterioration in credit quality and were identified as PCD assets. Using our best estimate of projected losses over the term of the contracts, we calculated an allowance for credit losses on these PCD assets of approximately $1.0 million.

Pro forma financial information

The following unaudited pro forma financial information summarizes our results of operations as though the acquisition occurred on October 1, 2022:


	Nine Months Ended
	June 30, 2023
Revenue	$	473,131
Net income	6,205

The unaudited pro forma financial information includes adjustments to reflect the additional amortization that would have been charged assuming the fair value adjustments to intangible assets and the finance lease asset had been applied from October 1, 2022, with the related tax effects. The unaudited pro forma financial information also includes adjustments to reflect the additional interest expense on the new Credit Facility issued to fund the acquisition (see Note 12 for further details on the Credit Facility). Lastly, the unaudited pro forma financial information includes adjustments to reflect the reduction in depreciation expense assuming the fair value adjustments to property and equipment assets had been applied from October 1, 2022.

This unaudited pro forma financial information is for informational purposes only. It does not reflect the integration of the business or any synergies or incremental costs that may result from the acquisition. As such, it is not indicative of the results of operations that would have been achieved had the acquisition been consummated on October 1, 2022. In addition, the unaudited pro forma financial information amounts are not indicative of future operating results.

Note 5 - Revenue from Contracts with Customers

Nature of Goods and Services

Revenues across the UTI and Concorde segments consist primarily of student tuition and fees derived from the programs we provide after reductions are made for discounts and scholarships that we sponsor and for refunds for students who withdraw from our programs prior to specified dates. We apply the five-step model outlined in Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Tuition and fee revenue is recognized ratably over the term of the course or program offered.

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 includes revenues from dealer technician training and staffing services to manufacturers. All of these revenues are recognized as the transfer of goods or services occurs. Deferred revenue represents the excess of tuition and fee payments received as compared to tuition and fees earned and is reflected as a current liability in our condensed consolidated balance sheets because it is expected to be earned within the next 12 months.

All of our revenues are generated within the United States. The impact of economic factors on the nature, amount, timing and uncertainty of revenue and cash flows is consistent across our various programs for both the UTI and Concorde segments. See Note 19 for disaggregated segment revenue information.

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

The following table provides information about receivables and deferred revenue resulting from our enrollment agreements with students:


	June 30, 2024		September 30, 2023
Receivables (1)	$	71,851	$	59,863
Deferred revenue	65,977		85,738

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

During the nine months ended June 30, 2024, the deferred revenue balance included decreases for revenues recognized during the period and increases related to new students who started their training programs during the period.

Note 6 - Fair Value Measurements

The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers:

Level 1: Defined as quoted market prices in active markets for identical assets or liabilities.

Level 2: Defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Defined as unobservable inputs that are not corroborated by market data.

Any transfers of investments between levels occurs at the end of the reporting period. Assets measured or disclosed at fair value on a recurring basis consisted of the following:


			Fair Value Measurements Using
	June 30, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds(1)	$	37,070	$	37,070	$	—	$	—
Notes receivable(2)	41,358		—		—		41,358



Total assets at fair value on a recurring basis	$	78,428	$	37,070	$	—	$	41,358

Revolving credit facility and term loans(3)	132,746		—		132,746		—
Total liabilities at fair value on a recurring basis	$	132,746	$	—	$	132,746	$	—

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)


			Fair Value Measurements Using
	September 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds(1)	$	29,687	$	29,687	$	—	$	—
Notes receivable(2)	36,663		—		—		36,663


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

Revolving credit facility and term loans(3)	156,991		—		156,991		—
Total liabilities at fair value on a recurring basis	$	156,991	$	—	$	156,991	$	—

(1) Money market funds and other highly liquid investments with maturity dates less than 90 days are reflected as “Cash and cash equivalents” in our condensed consolidated balance sheets as of June 30, 2024 and September 30, 2023.

(2) Notes receivable relate to UTI’s proprietary loan program and are reflected as “Notes receivable, current portion” and “Notes receivable, less current portion” in our condensed consolidated balance sheets as of June 30, 2024 and September 30, 2023.

(3) The Credit Facility and Term Loans bear interest at rates commensurate with market rates, and therefore, the respective carrying values approximate fair value (Level 2).

Note 7 - Property and Equipment, net

Property and equipment, net consisted of the following:


	June 30, 2024		September 30, 2023
Land	$	25,601	$	25,601
Buildings and building improvements	164,490		160,920
Leasehold improvements	90,102		87,525
Training equipment	116,116		110,292
Office and computer equipment	35,628		37,251
Curriculum development	4,808		2,478
Software developed for internal use	12,654		12,573
Vehicles	1,432		1,406
Right-of-use assets for finance leases	5,603		5,603
Construction in progress	9,010		9,061
	465,444		452,710
Less: Accumulated depreciation and amortization	(202,192)		(186,364)
Total	$	263,252	$	266,346

Depreciation expense related to property and equipment was $7.2 million and $21.1 million for the three and nine months ended June 30, 2024, and $6.5 million and $18.2 million for the three and nine months ended June 30, 2023, respectively.

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 8 - Goodwill

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

The goodwill balance by reportable segment as of June 30, 2024 and September 30, 2023 was:



UTI	$	16,859
Concorde	11,600
Total	$	28,459

Goodwill is reviewed at least annually for impairment, which may result from the deterioration in the operating performance of the acquired businesses, adverse market conditions, adverse changes in applicable laws or regulations and a variety of other circumstances. Our goodwill is tested annually for impairment as of August 1 and more frequently if events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. There were no indicators of goodwill impairment as of June 30, 2024.

Note 9 - Intangible Assets

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


	Gross Carrying Value		Accumulated Amortization		Net Book Value		Weighted Average Remaining Useful Life (Years)
Accreditations and regulatory approvals	$	16,300	$	—	$	16,300	Indefinite
Trademarks, trade names and other	1,942		(932)		1,010		4.78
Curriculum	1,800		(657)		1,143		3.24

Total	$	20,042	$	(1,589)	$	18,453	3.96


	Gross Carrying Value		Accumulated Amortization		Net Book Value		Weighted Average Remaining Useful Life (Years)
Accreditations and regulatory approvals	$	16,300	$	—	$	16,300	Indefinite
Trademarks, trade names and other	1,942		(680)		1,262		5.17
Curriculum	1,800		(387)		1,413		3.98

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

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Amortization expense was $0.2 million and $0.5 million for the three and nine months ended June 30, 2024, and $0.2 million and $0.5 million for the three and nine months ended June 30, 2023, respectively.

Future intangible asset amortization expense is expected to be as follows:


Fiscal Year
Remainder of 2024	$	174
2025	677
2026	660
2027	337
2028	97
Thereafter	208
Total	$	2,153

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 June 30, 2024.

Note 10 - Leases

As of June 30, 2024, we have facility leases at 29 of our 33 campuses and three 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. The facility leases have original lease terms ranging from 5 to 20 years and expire at various dates through 2036. In addition, the leases commonly include lease incentives in the form of rent abatements and tenant improvement allowances. We sublease certain portions of unused building space to third parties, which as of June 30, 2024, resulted in minimal income. All leases, other than those that may qualify for the short-term scope exception of 12 months or less, are recorded on our condensed consolidated balance sheets.

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 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 condensed consolidated statement of operations, with the exception of interest on lease liabilities, which is included in “Interest expense.”

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

The components of lease expense during the three and nine months ended June 30, 2024 and 2023 were as follows:


	Three Months Ended June 30,				Nine Months Ended June 30,
Lease Expense	2024		2023		2024		2023
Operating lease expense(1)	$	7,603	$	7,765	$	22,862	$	21,742
Finance lease expense:
Amortization of leased assets	227		227		681		552
Interest on lease liabilities	77		88		238		210
Variable lease expense	2,776		2,186		7,613		6,443
Sublease income	(122)		(29)		(187)		(86)
Total net lease expense	$	10,561	$	10,237	$	31,207	$	28,861

(1) Excludes the expense for short-term leases not accounted for under ASC 842, which was not significant for the three and nine months ended June 30, 2024 and 2023.

Supplemental balance sheet, cash flow and other information related to our leases was as follows (in thousands, except lease term and discount rate):


Leases	Classification	June 30, 2024		September 30, 2023
Assets:
Operating lease assets	Right-of-use assets for operating leases	$	164,170	$	176,657
Finance lease assets	Property and equipment, net(1)	4,164		4,846
Total leased assets		$	168,334	$	181,503

Liabilities:
Current
Operating lease liabilities	Operating lease liability, current portion	$	22,275	$	22,481
Finance lease liabilities	Long-term debt, current portion(1)	911		844
Non-current
Operating lease liabilities	Operating lease liability	153,267		165,026
Finance lease liabilities	Long-term debt	4,076		4,757
Total lease liabilities		$	180,529	$	193,108

(1) The finance lease assets and liabilities as of June 30, 2024 and September 30, 2023 consisted of one facility lease. Finance lease assets are recorded net of accumulated amortization of $1.4 million and $0.8 million as of June 30, 2024 and September 30, 2023, respectively.


Lease Term and Discount Rate	June 30, 2024		September 30, 2023
Weighted-average remaining lease term (in years):
Operating leases	7.24		7.91
Finance lease	4.58		5.33

Weighted average discount rate:
Operating leases	4.87	%	4.76	%
Finance lease	6.02	%	6.02	%

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)


	Nine Months Ended June 30,
Supplemental Disclosure of Cash Flow and Other Information	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,946	$	16,094
Financing cash flows from finance leases	625		499

Non-cash activity related to lease liabilities:
Lease assets obtained in exchange for new operating lease liabilities (1)	$	3,981	$	4,857

(1) During the nine months ended June 30, 2024, Concorde renewed the campus lease for the San Antonio, Texas campus.

Maturities of lease liabilities were as follows:


	As of June 30, 2024
Years ending September 30,	Operating Leases		Finance Lease
Remainder of 2024	$	6,462	$	292
2025	30,168		1,190
2026	30,525		1,226
2027	28,882		1,263
2028	26,747		1,301
2029 and thereafter	85,892		439
Total lease payments	208,676		5,711
Less: interest	(33,134)		(724)
Present value of lease liabilities	175,542		4,987
Less: current lease liabilities	(22,275)		(911)
Long-term lease liabilities	$	153,267	$