Q1 2023 Universal Technical Institute Inc Earnings Call
Good afternoon, and welcome to the Universal Technical Institute first quarter fiscal 2023 earnings Conference call.
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I'd now like to turn the conference over to Matt Kempton Vice President Corporate Finance. Please go ahead.
Hello, and thank you for joining US with me today are our CEO Jerome Grant and CFO Troy Anderson during the call today, we will update you on our first quarter 2023 business highlights financial results and vision for the future. Then we will open the call for your questions.
Before we begin we want to remind everyone that today's call will contain forward looking statements within the meaning of the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995. Please.
Please carefully review today's press release for additional information and important disclosures about forward looking statements.
Because forward looking statements relate to the future theyre subject to inherent uncertainties risks and changes in circumstances that are difficult to predict and many of which are outside of our control.
Our actual results and financial condition may differ materially from those indicated in the forward looking statements. Therefore.
Therefore, you should not rely on any of these forward looking statements.
As a reminder, relevant factors that could cause.
Cause actual results to differ materially from the forward looking statements are listed in the press release and our SEC filings in the section entitled forward Looking statements in today's press release also applies to everything discussed during this conference call.
During today's call, we will refer to adjusted net income or loss adjusted EBITDA and adjusted free cash flow, which are non-GAAP financial measures adjust.
Adjusted net income or loss as net income or loss adjusted for items that affect trends in underlying performance from year to year and are not considered normal recurring operations, including the income tax effect from the adjustments utilizing the effective tax rate.
Adjusted EBITDA as net income or loss before interest expense interest income income taxes depreciation amortization adjusted for items not considered as part of the company's normal recurring operations, along with non cash stock based compensation expense.
Adjusted free cash flow as net cash provided by our used in operating activities less capital expenditures adjusted for items not considered as part of the company's normal recurring operations.
Management internally uses adjusted net income or loss adjusted EBITDA and adjusted free cash flow as performance measures and those figures will be discussed on today's call.
As a reminder, we have provided reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements in today's press release, we encourage you to carefully review those reconciliations.
It's now my pleasure to turn the call to our CEO Jerome Grant.
Thank you Matt Good afternoon, everyone and thank you all for joining us today.
I'd like to begin by thanking our faculty staff and students for their continued hard work and commitment during the quarter.
Before we get into discussing any results for the quarter I'd like to take a moment to Orient you on our new multi divisional reporting structure. Following the acquisition of copper career colleges in December .
Along those lines. Please also note that our results for the first quarter include one month of results for copper.
Post acquisition, we now report our results in two business segments, UTI, which includes the transportation skilled trades and energy offerings and conquer which is the acquired Congress health care institutions.
You will see this reporting structure are reflected in our press release, and our 10-Q filings.
Troy will get into more details around the financial results in a moment, but I'll provide a brief overview of some of the key updates across the two segments.
Now, let's turn our attention to the business first we're pleased with the results in both segments during the quarter as each division performed in line with our expectations and reflect solid overall operating performance diligent expense management and execution against our key priorities Arkansas.
Our consolidated first quarter revenue was $120 million adjusted EBITDA of $14 4 million in new student starts were two 300 in China, all of which were consistent with our expectations for the quarter and our guidance for 2023.
Well there has not been significant changes to our business. Since we last spoke just two months ago. Our team has been busy as we focus on executing the initiatives currently in place.
Within UGI overall interest in our programs has continued to be strong. However, as we've noted previously the dramatic jump in inflation in the second half of our last fiscal year had a significant impact on our adult population, while the rate of inflation appears to be normalizing, which is encouraging this.
Continues to impact our prospective adult student population. We are however, seeing signs of moderation in the levels of decline in this channel relative to what we experienced in the second half of the last fiscal year.
We're optimistic that this improving trend will continue due to both stabilizing macro factors and more pointedly. The proactive actions, we are taking internally to drive performance improvements across the activities that are within our control.
And we continue refining our program offerings and identifying further opportunities to mitigate some of this impact.
Examples of such actions. We are taking include establishing a dedicated teams focused on supporting both local and relocating students for the adult channel.
<unk> prospective students through an enhanced call center team as well as continuing to refine our financial and overall support for both local and relocating students.
Turning to our high school and military channels as previously mentioned over the last several quarters.
We invest in these channels, adding more admissions resources and enhancing our tools and processes to better serve these market segments.
We're broadening our reach and more deeply penetrating the better performing markets with the intent of improving the overall performance of both of these channels.
These initiatives and additional resources are now in place and operating well and we expect that these actions will begin to yield improved performance over the coming quarters.
As mentioned last quarter. We are initially targeting the watch 15, new programs most of which came to us by way of the M. I T acquisition.
Beginning in 'twenty, three and continuing into 'twenty four with the first launch of wind and energy program at our Rancho Cucamonga campus in the coming months.
The programs remain on track to launch is plan subject to regulatory approval and we are encouraged by the level of interest we're seeing as we begin to more actively marketing these programs.
These new programs will have a modest impact on students starts in revenue in fiscal 'twenty, three and we expect that they will have a greater impact in fiscal 'twenty four and beyond.
We continue to see enrollment growth at our new campuses in Austin, Texas in Miramar, Florida, which opened in May and August of last year, respectively.
The two campuses now have over 650 students combined and we remain optimistic that both markets will meet the expectations, we had set before they're all banks.
Moving to our health care Education Division.
<unk> performance for December was in line with our expectations. The integration of Concord continues to progress as planned since the acquisition closed on December 1st of last year, and it's been great to meet and work with the Congress students and staff over the last few months.
We continue to see high levels of engagement and talent across the team and great enthusiasm for that with respect to being a key part of the strategic plan of our combined companies.
The smooth and seamless from a student's perspective, making sure that there are no disruption to conference operations. Therefore, as we've indicated last quarter. Our initial focus will be in critical areas to meet the requirements of being part of a public company like financial reporting internal controls compliance and I can security.
We intend to be cautious with broader integration activities and ensure that any steps, we take will bolster operational efficiency student experience and or our financial performance.
<unk> 2023 guidance the positive performance in the first quarter bolsters, our confidence and delivering on our expectations for the full year, we are reiterating our full year guidance.
Revenue from $595 million to $610 million adjust.
Adjusted EBITDA from $58 million to $62 million in total new superstars between 22020 3500.
As a company we are in a much different place than we were a year ago in terms of how we are strategically approaching and executing through a fluid macro environment.
As I noted earlier, we've taken several actions to mitigate the impact that specific economic headwinds like inflation are having on our student population. We expect gradual improvement in performance in the near term with acceleration in the back half of the year as we begin to see the benefits of the initiatives we put into place.
We believe that the continued growth from our expanded core business with the benefits we will see from strategic investments, we've made and initiatives. We have put into place will allow us to accomplish the objectives. We have set for this year and set us up to drive further growth in 2024 and beyond as a reminder, by delivering on our plans for Fisher.
L 2003, and with the decisions we've made in the pieces, we put into place to date, we expected to deliver inaccessible $700 million in revenue and adjusted EBITDA approaching $100 million in fiscal 2024.
I'd now like to turn the call over to Troy to discuss our results from the quarter in more detail drawing.
Thank you drove we reported positive financial and operational performance during the quarter delivering on our expectations for both the top and bottom lines and exceeding analyst expectations.
Before I start I will reiterate that all of our results include comfort for one month and unless stated otherwise a year over year comparisons are on it as reported basis plus the prior periods does not include comfort.
As we referenced on our last call when we set our guidance and its Jerome indicated in his comments with the Concord acquisition closed we now have two reporting segments, UTI and comfort and a corporate unallocated cost reporting it.
Drove previously described the makeup of the two segments the corporate unallocated costs reflect certain resources and third party costs that are generally not directly controllable and supported the segments.
Moving to our performance in the quarter as.
As far as student metrics total new student starts where 2310.
UTI starts were consistent with the prior year period and conquer delivered 336 starts in December .
Overall UTI starts reflect growth in highschool offsetting a decline in militaries with adult roughly even versus the prior year.
Concorde had one core programs start in December lesser Measurably lower start number then you will see in subsequent quarters.
For reference core starts occur each month in most quarters have one large clinical start with some smaller clinical starts in between.
Revenue on a consolidated basis increased 14.2% versus the prior year quarter to $120 million, primarily driven by concord's $14 $4 million contribution.
Utis revenue of $105 $6 million was slightly above the prior year period with a 2% increase in average revenue per students offsetting a 1.6% decrease in average undergraduate full time enrollment.
Note for conquered that December is one of the lowest revenue months of the year given seasonality phasing of their clinical programs.
The lower revenue had a negative impact on profitability in the month as well.
Consolidated net income during the quarter was 2.6 billion and adjusted net income was $5 <unk>, which is down approximately $10 billion versus the prior year.
The year over year decrease in adjusted net income was in line with our expectations as UTI produced exceptionally strong profitability in the prior year period, given timing and mix of revenue and cost and the slower start growth and utis adult channel in the back half of fiscal 2022 pressured revenue and thus profitability in the quarter.
Other factors impacting profitability in the quarter included planned increases and expenses for UTI and corporate unallocated associated with the new campuses and programs launched last year <unk>.
Investments in the ambitions channels in other areas as part of our growth and diversification strategy.
Ah measurably higher effective tax rate due to the valuation allowance rehearsal last year it increase net interest expense.
Finally, the lower profitability also reflects the negative contribution from comfort for December .
Diluted earnings per share was two cents in the quarter versus 25 cents in the prior year period.
Total shares outstanding as of the end of the quarter with $33.95 million.
Adjusted EBITDA was $14 $4 million down $6 2 million overall versus the prior year.
UTI contributed $23.3 million in the quarter, which was partially offset by $8 $8 million of corporate unallocated costs and a slight loss with confidence.
UTI decreased five $3 million a year over year, while corporate unallocated costs are up $8 million.
With most of the same causal for both as I outlined adjusted net income.
Our adjustments are similar to prior quarters with the addition of stock based compensation as I explained on our last call with our 2000 twenty-three guidance.
Moving to the balance sheet and cash flow as of the end of the quarter. The company's total available liquidity was $162 $2 million.
Bringing cash flow of $2.8 million increase point $3 million over the prior year and adjusted free cash flow of $2.6 million approved $6 1 million versus the prior year, driven primarily by lower capital expenditures.
Capex in the quarter was $6.8 million and mostly for UTI for the final phases of the build out of the new Austin, Texas and Miramar, Florida campuses in the initial stages of this year's new program Rollouts.
I also want to briefly recap the balance sheet impacts of the close of the conquered acquisition.
The base purchase price was $50 million.
There were $1.3 million net adjustments total net cash consideration paid $48 70.
Additionally, concrete had $31.8 million cash on their balance sheet at the closing for a net cash outlay of approximately $17 million.
In conjunction with the acquisition, we recorded goodwill a $10.1 million an intangible assets are 489.
Currently and as of the end of the quarter, we maintain the previously disclosed $90 million draw from the revolving credit facility, which we established in November of 2022.
We also have used $1.8 million a revolver capacity for a letter of credit, leaving approximately $8 million additional liquidity available to us.
Please be sure to review our press release financial supplement an investor presentation, which have all been updated for the most current consolidated and segment details about our actual results.
Our strategic roadmap and our guidance.
We continue to make significant progress as we executed our growth and diversification strategy in our building for the future of the company. We believe we have set ourselves up well to drive increase shareholder value in 2023 and beyond.
It is Jerome stated we are reiterating our fiscal 2023 guidance across all key metrics and continued to be confident about our 2024 expectations.
I would also add that we don't see any material change to our pacing expectations for 2023 with growth and new student starts revenue and profitability all skewed to the back half of the year.
With that I want to thank our team our students and our partners for their efforts and ongoing support and again welcome to conquer team to the company.
I will now turn the call over to Germany for closing remarks.
Thank you Joy to briefly summarize we're pleased with the performance this quarter interest.
Interest in our programs across transportation skilled trades in energy as well as healthcare remain high.
The macro environment continues to create challenges for our adult job changing population, but we are taking proactive steps to mitigate these headwinds.
Both UTI and comfort are performing to our expectations and therefore, we're reaffirming our guidance for the year and continue to see 2024 is a step change year for the company.
And finally, while our primary focus this year will beyond execution of our existing initiatives and effectively integrating conquered we will remain opportunistic and continue to research and explore new potential growth avenues as they arise.
I'd now like to turn the call over to the operator for Q&A operator.
We will now begin the question and answer session excuse me.
To ask a question you May press Star then one on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then too.
At this time, we will pause momentarily to assemble our roster.
Our first question is from Eric Martin, who Z with Lake Street. Please go ahead.
Congratulations on the.
I guess, one partial quarter for a conquered under your belt and one full on for U T I into the new fiscal year it looks like good results.
Curious to know just a couple of questions on Concord.
Two months in here in the ownership you had talked about an expectation of 5% to 10% growth at Concord on a 12 month pro forma basis is that still the assumption.
Yeah, Hi, Eric It's Troy and thanks, Thanks for your comments and your question Yeah, I'd say, it's in the in the mid to upper single digits.
On a like for like basis, and everything has been proceeding as expected.
Our engagement with them is very high and we're happy to have been part of the team they are performing well.
Okay and I notice you didn't include the the.
The new student Historic had conquered obviously you didn't own them in the month of December of 2021, but do you have that available how does the 336, new students compared to a year prior.
I actually do not have that in front of me.
Eric but we can we can follow up if needed.
Okay no problem.
And then for the the investments at U T. I, obviously, we've got a couple of things we're focused on.
Discretionary side, you've invested in advertising you've invested in your admissions resources.
What can you comment on those two areas.
Are we getting the advertising we want at the price per you want are we getting the admission resources at the campuses.
Well, let me, let me break it into two pieces number number one from <unk>.
Marketing standpoint, one of the comments, we made was that interest remained quite high where we're thrilled with the inquiry volume that we've seen to date coming in the right timeframe from the right sources. So we think we're we're getting the bang for the Buck out of our.
Out of our marketing investments as far as the admissions investments.
Much of that ramping up whether it was adding additional resources to the high schools or in the military all happened towards the end of the summer and we.
We see from leading indicators in terms of number of presentations and leaves generating things along that that their their operating quite well. So we're.
We're feeling good about about what what we've done in those spaces.
Okay, and then just on the UTI business one of the major headwinds you had in 28 22 F. Y 22 was a double digit decline in your new students starts for adult learners I saw that that was it looked like it was relatively flat I think that was a tourist prepared remarks.
What's the expectation for 2023 for adults and students starts.
Well as as we said when we started the year, we still believe that the that the adult channel.
We'll be down this year.
As you said it.
As reported at the bat last half of last year. It was down significant double digits due to the high inflationary period et cetera, and those economic headwinds.
We are seeing moderation in that which is really great to see.
It's not down in that double digit range anymore, but but we're not projecting that it'll come back to a positive sense in 2023.
But our expectations for the year, while we budgeted what we're projecting took into account that we believe that that segment would still.
Would still be down yeah, just point of clarification Eric.
Financial supplement.
And the roughly flat adult was all in so that the double digit decline was same store.
But when you put in M I T and the new campuses in the like it's roughly flat.
Yeah, that's what I'm glad you reminded me of that.
And then last question, we saw pretty strong employment numbers and the most recent jobs report.
Those employment figures have been relatively encouraging are you.
Are you seeing any change in Canada.
The pipeline it'll just across the board on the adult side.
And Ah.
The inflationary pressures the employment environment wage inflation.
Color there would be appreciated.
Well, let me break down into three three buckets number number one we are seeing moderation in the.
In the macro environment in terms of inflation.
Et cetera, we think that's contributing to.
The the.
Uptake in in the Donald population the second thing in terms of unemployment I actually just looked it up. This morning is that the member of that population is 18 to 24 year old male and and that's.
<unk> that unemployment number has been on the rise over the last few months I think it's around seven 8% right now, which is actually higher than 2000 and and <unk>.
19.
Pre pandemic pre pandemic levels I don't know if that Ah hold on but so I think we're seeing some.
Some of the the folks in our demographic are looking for more stable long term careers and that that's a affecting us as well and then as we sat in the statement we've taken quite a few steps in terms of mitigation of the of the issues and to address it whether it's.
How we work with adult job changers through the enrollment process setting up a.
Call center to stay with them through that process.
I'm looking at how we can support those who need to relocate and an enhanced way you know as you've probably read out their rent is up pretty significantly across the country and most of the major metropolitan areas and so we're.
We are working to bend a knee if it were to help people over the hump until they're settled in and both working and going to school in locations that they relocate so the combination of those three things we think is.
Is why we're beginning to see that that positive movement in the adult sector.
Got it thanks for taking my questions and good luck in case too.
Hey, thanks, Thanks, Sir.
The next question is from Steve Frankel with Rosenblatt. Please go ahead.
Good afternoon truly in Corona.
Could we get a little more color on through high school recruiting pipeline and your confidence level and being able to execute on that growth plan for.
For the back half of the year.
Actually it's a it's a great question I mean, we watch a lot of leading indicators when it comes to when it comes to that right. Now you know most of the kids are making their decisions into February March and April of what they're gonna do when they graduate and and May June and or May in until late June on the on the.
On the East Coast and number one with more resources in there were getting to more schools and the indicator around that is a number of presentations, we're seeing our reps do presentations, which are digital and we can tell where they are and how many of those presentations are happening in and.
<unk>, great it looks great from from a presentation standpoint and the.
The corollary to that is the number of interested students. They have in Leeds, which is which is on the rise as we would expect with the resources that that we added.
Okay and then.
By the time, we get to the next conference call when you have.
Pretty good handle on.
What the what the enrollment <unk> yep.
Yeah, Yeah, we will and again you know you're you're hitting right at the heart period here you know there's a lot of presentations that happen October November December January as as schools are helping their students think about what they're gonna do when they graduate in May and June and so the.
The setups looking good and you are right in about three months will have a pretty clear picture of the pipeline.
Of of what's coming through in high school.
Okay and just.
May a little more clarity on the slope of the decline in the same store adult.
Pipeline kind of where are we now versus three.
And pick the monthly Bill in terms of this pull up the board decline.
Yeah, Yeah, Steve destroy we were seeing.
It wasn't consistent quarter to quarter, but in the back half of the year, we were about a 20%.
Same store decline.
We saw some pressure in Q2 as well coming out of omicron.
Last winter, which seems like a long time ago.
And we were you know single digit alright, I'm sorry for starts we were in.
In the in the teens Bud enrollments more importantly, because those starts are a function of enrollments at really happened.
In the prior quarter, which when we're still seeing some of that elevated pressure. So enrollments were also down in that same range 20 plus percent.
And so the Q1 starts while they were better against some of the mitigating actions Jerome talked about helping although maybe we didn't have all the enrollments. We wanted we were help getting more students to start.
So therefore, we saw some benefit on to start right.
Or the percentage year over year decline on them on starts which we those mitigation will help us as we continue to move forward more importantly, enrollments were more in the single digits.
Your year over year decline, so a measurable improvement there now one quarter is not a trend, but again, we have a substantial number of of mitigation that we've been working on and transformation is within our admissions organization.
Really across all three channels, but adults in particular, given the pressure that we saw there last year. So we're encouraged by what we're seeing.
And we're going to continue working at it and and has drawn said for the full year. We don't expect growth out of that channel. We do expect to see some repair improvement improvement as we get into the back half of the year, but but on a four year basis, we don't expect to see growth Sir.
Okay and just to.
Grilled down on the first the M. I T M I, a T program and one of your legacy cancelled.
When he expect that.
In enrolling.
Yeah, so as drugs remarks, he commented about.
We're preparing to launch as soon as towards the end of Q2, if not early Q3, we are waiting regulatory approval.
For all of them, but we're we're moving forward as if we will get the approvals and time and we will make adjustments as needed that's not a process we control, but all of the applications are in and they've been in for a good bit of time now. So we're starting to expect to see some movement. There and then that will dictate the ultimate start dates but.
Well, we're moving forward to be ready to launch.
As quickly as we can late in queue too early Q3.
That's the first program the rest of it yeah. The rest of them are scheduled for a Q4 and beyond.
Thank you.
Alright. Thanks. Thanks.
Again, if you have a question. Please press Star then one.
The next question is from <unk> Sharma would be Riley. Please go ahead.
I.
Thank you for taking my questions I wanted to kind of go back to the discharge.
<unk> for the year and I just wanted to understand so.
The guidance that you've given for starts for fiscal twenty-three.
If if we kind of.
If it <unk>, if I take out the core U T. I M. I E T of around five per cent plus <unk>.
Charged you on here.
How does how would you building that I mean, I know that it's back have kind of back half loaded.
So my question is what is the composition of that given the fact that unemployment is still <unk> in your in your demographic, but you are not you are projecting an improvement in in adults.
But that's gotta be flat the balance is coming up you know balance of the grilled and starts is coming from high schoolers and.
And and then military you know given that it was kind of weaker in the first quarter, how does that shape.
And then yeah I think so I.
A similar question on <unk>.
Thank you.
Okay. Yeah. Thanks rods destroy the we do have a bridge in our Investor presentation set with the same material that we had last quarter, which starts in revenue and adjusted EBITDA Highschool and military will drive the bulk of the growth that will ramp in the year. We are still ramping the new campuses that we launched last year.
Military we added rats in the first part really throughout Q1, so the benefit of that really has not been materialized yet in in the numbers and as you as you noted and we said in the past it can be a little bit volatile quarter to quarter.
Just based on the flow of prospective students there.
But having more reps in that space will certainly help as we get in the back half of the year and then the program expansions.
Again, we're we're pending regulatory approval there but.
Guidance, we're assuming.
A bit of a lift relative to those with a number of those programs launching in the fourth quarter and.
You know of course high school will contribute some to that.
Just given the nature of the fourth quarter and that will have a number of high school students coming out, but adult will contribute to those program expansions as well.
<unk> I see the bridge <unk> the bridge doesn't give numbers, but I just kind of wanted to I see that.
If the core U T N M. I T is going to be up five per cent you were saying that despite the unemployment situation staying bad for the adults you <unk> you see all these programs.
Helping.
Helping you.
You know the the improving the decline on young adults and the balance is all coming from high school in military and what is the for the Concorde starts that you have in the year what is that sort of represented in their year on year growth.
Yeah I'll work it backwards. The Concorde is similar to the revenue question earlier is mid slightly upper mid single digit growth on a like for like basis again, a partial year. So the 7500 to 8000 range that were reference.
Thing there is representative of just having the the 336 in December .
So you'll you'll see 2000, plus the next two quarters and and.
3000 in the fourth quarter, so those those will ramp as well.
The new campuses don't forget we didn't get a full high school benefit of the new campuses in twenty-two Miramar first class was in August .
So really we missed the high school season for all intensive purposes for Miramar, So that that alone would be a lift in Austin was again launched in May. So we really didn't get a chance to build as much of a an enrollment book there is as we would expect normally so there's just a number of things as you think about twenty-three verse.
22 that we their in flight or not in place at all that that are building this year.
And again, the broader macro environment at least stabilizing of we're not economists. So we're not we're not calling one way or the other with what direction, it's going but.
People are looking for change of high school students need to figure out what the next step in their life is and so there there were the steady demand is there the inquiry flow is there.
Thank you so on on the interest you.
You that Jerome was talking about.
Mmm, how does that compare to last year and is that higher in any particular segment.
<unk>.
Which is the other.
Well I mean, most of our if you if you think about the way we drive lead generation and most of the lead generation for the high school market is driven by presentations done by the high school rats. So they aren't media driven media driven leads in the high school is a very small population of of where they are and frankly they tend to be.
You know students who are in class on their on their.
Iphones in the middle of a presentation that will click on our website et cetera, along those lines and so one of the things I sat around that piece of lead generation was that our presentations and therefore, the leaves associated with them are up nicely.
We don't usually give out numbers to lead generation, but but they're they're up nicely and then also.
On the adult side, where it's primarily driven by immediately.
We're seeing them go exactly the way, we modeled them to get to get the.
The the outcome, we're looking for I say outcome in the adult market as as we said before and what we said last year as we don't think the adult market will be will.
It will be an increase in the same store basis. It just won't be that 20 per cent decline that Troy was talking about and that's coming through I think the the the difference between the third and fourth quarter of last year in the first quarter of this year.
Or two of the other factors, we talked about in the adult population, which was conversion rate of those Lee so people going through the process of understanding what's the commitment they make to US what is the cost of the commitment.
Can we get them a job during school and so so we're seeing some improvement along those lines and then the show rate the number of people who sign a contract go through the financial aid process and then come to school on the <unk> on the first date, we're seeing we're seeing some healthy improvement on our show rates as well from the adult population and those are the signs.
That we're talking about of.
Of of improvement of the behavior of those in that 20 to 25 eight.
<unk> category.
Got it that's that's very helpful.
Can can you talk and.
And I'll I'll give any color on the cadence for second quarter.
The March quarter, the seasonality in terms of and it should we expect a similar sort of a performance on start.
I mean outside of the Concorde edition as much consideration.
We you know we expect some building as we get through the year again, the back half is really where you'll see a notable difference and I'm speaking of the UTI business, there again conquered with one month.
And the numbers is not going to be meaningful comparison quarter over quarter there.
You'll see over.
Probably roughly 2000, if not a little bit more for Concord and then.
We should see some modest growth versus the flattish that we were for U T I and and Q2.
Got it.
And then just lastly on the military it seemed a week in the first quarter any sort of color there.
It's the timing of the investment there that that channel is again, it's more of a ground game like the like the high School channel. The difference is typically they're experienced military recruiters are who we hire as our recruiters they have base access already.
And they know where who to talk to and where to go very quickly. It's just a matter of training them on our offerings. The highschool ramp processes is a little bit different there's a lot more relationship building that occurs, especially if you hire somebody who's not been a krueger.
Krueger in the space before.
So really it was just I think it's just the timing.
Aspect predominantly relative to that when we made the investment in those resources and then ramping up.
We should see some improvement Darren and as I mentioned earlier, there's just tends to be a little more volatility in that channel, it's just going to ebb and flow a little bit it's roughly half of the.
People that we define that based upon their funding source not necessarily that there Ah direct transition out of the military so if somebody could be really an adult job changer who's been in and out of the military for a few years. They just have G. I bill benefits that they are leveraging for their education. So their dynamics are going to be more like the adult dynamics.
As far as their decision, making but they have a funding.
Funding available to them, which it makes it an easier decision to them versus the other half being a direct transition at a military and again, that's more of an ebb and flow.
Can be a little bit more of an elongated timeline there making plans ahead of their transition out of the military there's other dynamics that come into play there.
Great Great. Thank you. Thank you for taking my questions I'll I'll take this offline.
Thank you <unk>. Thank you rush.
This concludes our question and answer session I would like to turn the conference back over to Rome Grant for any closing remarks.
Thank you operator, and thank you everyone for joining us today, and we look forward to speaking with you all in about three months and answering any questions. You have between now and then so thanks, a lot for joining us and have a great evening.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Mmm.
[music].