UNIVERSAL TECHNICAL INSTITUTE INCUTI
UNIVERSAL TECHNICAL INSTITUTE INC Debt Disclosure
Note 14 - Debt
| September 30, 2025 | September 30, 2024 | |||||||||||||||||||||||||
| Interest Rate | Maturity Date | Carrying Value of Debt (6) | Carrying Value of Debt (6) | |||||||||||||||||||||||
Revolving Credit Facility(1) | 5.97 | % | Nov 2027 | $ | 20,000 | $ | 56,000 | |||||||||||||||||||
Avondale Term Loan(2) | 6.33 | % | May 2028 | 27,498 | 28,390 | |||||||||||||||||||||
Lisle Term Loan(3) | 6.28 | % | Apr 2029 | 36,058 | 36,929 | |||||||||||||||||||||
Finance lease(4) | 6.02 | % | Jan 2029 | 3,834 | 4,768 | |||||||||||||||||||||
| Total debt | 87,390 | 126,087 | ||||||||||||||||||||||||
Debt issuance costs presented with debt (5) | (291) | (383) | ||||||||||||||||||||||||
| Total debt, net | 87,099 | 125,704 | ||||||||||||||||||||||||
| Less: current portion of long-term debt | (2,865) | (2,697) | ||||||||||||||||||||||||
| Long-term debt | $ | 84,234 | $ | 123,007 | ||||||||||||||||||||||
(1) Interest on the Revolving Credit Facility (as defined below) accrues at annual rate equal to Term SOFR plus a margin of 1.85%.
(2) Interest on the Avondale Term Loan (as defined below) accrues at annual rate equal to Term SOFR plus 2.0% and a tranche adjustment of 0.046%.
(3) Interest on the Lisle Term Loan (as defined below) accrues at annual rate equal to the Term SOFR plus 2.0%.
(4) The finance lease is related to a facility lease with an annual interest rate of 6.02% that matures in 2029. See Note 12 for additional details on our finance leases.
(5) The unamortized debt issuance costs relate to the Avondale Term Loan and the Lisle Term Loan.
(6) The Revolving Credit Facility, Avondale Term Loan, Lisle Term Loan and finance lease bear interest at rates commensurate with market rates, and therefore, the respective carrying values approximate fair value (Level 2).
Revolving Credit Facility
On November 18, 2022, we entered into a $100.0 million senior secured revolving credit facility with Fifth Third Bank (the “Credit Facility” or “Revolving Credit Facility”), which included a $20.0 million sub facility available for letters of credit. On September 26, 2024, we amended the Credit Facility to increase the commitment amount to $125.0 million, extend the maturity date to November 30, 2027, and provide for the option to request an increase of up to an additional $25.0 million, which may be granted at the lender’s discretion. Advances made under the Credit Facility bear interest at an annual rate equal to (i) the Term SOFR rate, (ii) the Daily Simple SOFR rate, or (iii) the Base Rate (i.e., the greater of 3.5% and the lender’s prime rate). In each case that a SOFR rate is selected, an applicable margin that varies from 1.85% up to 2.35%, based on our then-current total leverage ratio, is applied.
During the year ended September 30, 2025, we made payments on the Credit Facility of $62.0 million and we received proceeds of $26.0 million. In July 2025, we issued a letter of credit for $19.6 million, with an expiration date of June 30, 2026, to the ED in order to lift the core growth restrictions imposed on Concorde and UTI campuses as a result of our acquisition of Concorde. The remaining availability under the Credit Facility as of September 30, 2025 was $85.4 million and sub facility available for letters of credit to $0.4 million.
In October 2025, we used cash on hand to pay $20.0 million on the Credit Facility, which increased the availability under the Credit Facility to $105.4 million. It is likely that we will borrow from the Credit Facility in future periods based on future working capital or other needs.
Avondale Term Loan
In connection with the Avondale, Arizona building purchase in December 2020, we entered into a credit agreement with Fifth Third Bank, national banking association (the “Avondale Lender”) on May 12, 2021 in the maximum principal amount of $31.2 million with a maturity of seven years (the “Avondale Term Loan”). Originally, the Avondale Term Loan bore interest at the rate of LIBOR plus 2.0%. On April 3, 2023 in connection with applying the guidance in ASU 2020-04, we executed an
amendment for our Avondale Term Loan to convert the stated rate from LIBOR to Term SOFR. As of April 3, 2023, the Avondale Term Loan bears interest at the rate of Term SOFR plus 2.0% and a tranche rate adjustment of 0.046%. Principal and interest payments are due monthly. The Avondale Term Loan is secured by a first priority lien on our Avondale, Arizona property, including all land and improvements. Additionally, we entered into an interest rate swap agreement with the Avondale Lender. See Note 15 below for further discussion on the interest rate swap.
Lisle Term Loan
On April 14, 2022, our consolidated subsidiary, 2611 Corporate West Drive Venture LLC (the “Borrower”), entered into a new Loan Agreement (“Lisle Loan Agreement”) with Valley National Bank (the “Lisle Lender”), to fund the acquisition and retire the prior loan agreement with Western Alliance bank, via a term loan in the original principal amount of $38.0 million with a maturity of seven years (the “Lisle Term Loan”). The Lisle Term Loan bears interest at a rate of one-month Term SOFR plus 2.0%. The Lisle Term Loan is secured by a mortgage on the Lisle, Illinois campus and is guaranteed by the Company. In connection with the Lisle Term Loan, we entered into an interest rate swap agreement. See Note 15 below for further discussion on the interest rate swap.
Debt Covenants
We are subject to certain customary affirmative and negative covenants under the Revolving Credit Facility, the Avondale Term Loan and the Lisle Term Loan. As of September 30, 2025, we were in compliance with all financial debt covenants.
Debt Maturities
Scheduled principal payments due on our debt for each year through the period ended September 30, 2030 and thereafter were as follows at September 30, 2025:
| Maturity | Revolving Credit Facility & Term Loans | Finance Leases | Total | |||||||||||||||||
| 2026 | $ | 1,837 | $ | 1,029 | $ | 2,866 | ||||||||||||||
| 2027 | 1,909 | 1,131 | 3,040 | |||||||||||||||||
| 2028 | 46,610 | 1,239 | 47,849 | |||||||||||||||||
| 2029 | 33,200 | 435 | 33,635 | |||||||||||||||||
| 2030 and thereafter | — | — | — | |||||||||||||||||
| Subtotal | 83,556 | 3,834 | 87,390 | |||||||||||||||||
| Debt issuance costs presented with debt | (291) | — | (291) | |||||||||||||||||
| Total | $ | 83,265 | $ | 3,834 | $ | 87,099 | ||||||||||||||
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.