Student Starts Increased 32%; Average Students Increased 10%
PHOENIX, Aug. 4 /PRNewswire-FirstCall/ -- Universal Technical
Institute, Inc. (NYSE:UTI) (the "Company"), a leading provider of
technical education training, reported net income for the third
quarter ended June 30, 2009 of $1.9 million, or 8 cents per diluted
share, as compared to a net loss of $0.7 million, or 3 cents per
diluted share, for the third quarter of the prior year. Net income
for the nine months ended June 30, 2009 was $4.1 million, or 17
cents per diluted share, compared with $7.7 million, or 30 cents
per diluted share, for the nine months ended June 30, 2008. "I am
pleased with the student metrics and financial results for the
quarter. The growth in starts of more than 30% and average student
population of 10% resulted in a meaningful increase in revenues and
improvement in margins for the third quarter," said Kimberly
McWaters, President and Chief Executive Officer of UTI. Student
Metrics Three Months Ended Nine Months Ended June 30, 2009 June 30,
2009 ---------------------- ----------------------- 2009 2008
Growth 2009 2008 Growth ------ ------ ------ ------ ------ ------
Total starts 2,946 2,225 32.4% 9,646 8,180 17.9% Average
undergraduate full-time student enrollment 14,813 13,452 10.1%
15,531 15,018 3.4% End of period undergraduate full-time student
enrollment 14,281 12,478 14.4% 14,281 12,478 14.4% Average capacity
utilization 60.6% 53.7% 690bps 63.5% 60.0% 350bps Third Quarter
Operating Performance For the third quarter of fiscal 2009, net
revenues were $87.9 million, an 8.9 percent increase from $80.6
million for last year's third quarter. The increase in net revenues
resulted from an increase in average undergraduate full-time
student enrollment, higher tuition prices and a decrease in tuition
discounts. Tuition revenue and loan origination fees financed under
the proprietary loan program decreased net revenues by $1.9
million, which because collectibility is not reasonably assured,
will be recognized as tuition revenue when such amounts have been
collected. Educational services and facilities expense increased
$0.9 million, or 2.0 percent, to $47.3 million for the three months
ended June 30, 2009, from $46.4 million for the three months ended
June 30, 2008. This increase was due to an increase in compensation
and benefits expense related to an increase in the number of
employees in the financial aid and other student support
departments which was necessary to meet the needs of the increasing
student population. Selling, general and administrative expense
increased $1.9 million, or 5.3 percent to $37.6 million for the
three months ended June 30, 2009, from $35.7 million for the three
months ended June 30, 2008. The increase was due to increases in
compensation and benefits expense, partially offset by decreases in
advertising and contract services expense. Operating income for the
third quarter of fiscal 2009 was $3.0 million, compared to
operating loss of $1.4 million in the same period last year.
Interest income decreased $0.5 million to $43 thousand for the
three months ended June 30, 2009, from $0.5 million for the three
months ended June 30, 2008. The decrease is related to moving a
portion of cash to lower risk, lower yield, U.S. government
securities mutual funds and pre-refunded municipal bonds. During
the three months ended June 30, 2009, the Company invested $17.3
million of cash in pre-refunded municipal bonds, which earn
interest that is exempt from federal income taxes. Nine Month
Operating Performance Net revenues for the first nine months of
fiscal 2009 were $267.1 million, a 3.2 percent increase, compared
with $258.8 million for the first nine months of fiscal 2008.
Operating income in the first nine months of fiscal 2009 was $6.4
million compared with $10.2 million for the first nine months of
fiscal 2008 resulting from increases in compensation and benefits
expense which were partially offset by the increase in net revenues
as previously described. Balance Sheet and Cash Flow At June 30,
2009, the Company's cash and cash equivalents totaled $50.1 million
as compared to $80.9 million at Sept. 30, 2008. The $30.7 million
decrease is related to investing $17.3 million of cash in
pre-refunded municipal bonds during the three months ended June 30,
2009 which are classified as current and non-current investments on
the balance sheet. Additionally, during the nine months ended June
30, 2009, the Company used $16.9 million of cash to repurchase
outstanding common stock of the Company at an average price of
$10.87 per share. At June 30, 2009, the Company's shareholders'
equity totaled $97.6 million as compared to $108.2 million at Sept.
30, 2008. Cash flow provided by operations was $18.5 million for
the nine months ended June 30, 2009, compared with $6.0 million for
the nine months ended June 30, 2008. This increase is primarily
attributable to a decrease in accounts receivable and an increase
in accounts payable and accrued expenses, partially offset by a
decrease in deferred revenue. Proprietary Loan Program As of June
30, 2009, the Company had committed to provide loans to students
for approximately $13.0 million and of that amount there was
approximately $11.0 million in loans outstanding. Share Repurchase
Program On April 28, 2009 the Board of Directors authorized a
common share repurchase plan of up to $20 million in both open
market and privately negotiated transactions. The timing and actual
number of shares purchased will depend on a variety of factors such
as price, corporate and regulatory requirements and other
prevailing market conditions. The plan may be limited or terminated
without prior notice. The Company did not make any purchases during
the three months ended June 30, 2009. Fiscal 2009 Outlook For the
remainder of fiscal 2009, the Company anticipates continued year
over year growth in the key leading indicators and the percentage
growth in student starts to be in the low teens. Additionally, the
Company believes average undergraduate enrollment and capacity
utilization will continue to show year over year improvement.
Excluding any unusual items, the Company currently anticipates
earnings for the fourth quarter of the fiscal year to be in the
range of $0.12 to $0.16 per diluted share. Conference Call
Management of Universal Technical Institute will hold a conference
call to discuss its fiscal 2009 third quarter results today at 7:00
a.m. Phoenix Time (10:00 a.m. Eastern Time). This call can be
accessed by dialing 412-858-4600 or 800-860-2442. Investors are
invited to listen to the call live at http://www.uti.edu/. Please
access the web site at least 15 minutes early to register, download
and install any necessary audio software. A replay of the call will
be available on the Investor Relations section of UTI's web site
and will be archived for 60 days or alternatively the call will be
available through August 11, 2009. To hear the replay, dial
412-317-0088 or 877-344-7529 and enter pass code 432399#. About
Universal Technical Institute Universal Technical Institute is the
leading provider of technical education training for students
seeking careers as professional automotive, diesel, collision
repair, motorcycle and marine technicians as measured by total
average undergraduate enrollment. The Company offers undergraduate
degree, diploma and certificate programs at 10 campuses across the
United States, and manufacturer specific training programs that are
sponsored by the manufacturer or dealer at dedicated training
centers. Through its campus-based school system, Universal
Technical Institute offers specialized technical education programs
under the banner of several well-known brands, including Universal
Technical Institute (UTI), Motorcycle Mechanics Institute and
Marine Mechanics Institute (MMI) and NASCAR Technical Institute
(NTI). We routinely post important information about us on our web
site at http://www.uti.edu/ under the "About Us - Investors -
Information" captions. Safe Harbor Statement All statements
contained herein, other than statements of historical fact, could
be deemed "forward-looking" statements as defined in the Private
Securities Litigation Reform Act of 1995. Such statements are based
upon management's current expectations and are subject to a number
of uncertainties that could cause actual performance and results to
differ materially from the results discussed in the forward-looking
statements. Factors that could affect the Company's actual results
include, among other things, changes to federal and state
educational funding, possible failure or inability to obtain
regulatory consents and certifications for new or expanding
campuses, potential increased competition, changes in demand for
the programs offered by the Company, increased investment in
management and capital resources, the effectiveness of the
Company's recruiting, advertising and promotional efforts, changes
to interest rates and unemployment, general economic conditions and
other risks that are described from time to time in the public
filings of the Company. Further information on these and other
potential factors that could affect the Company's financial results
or condition may be found in the Company's filings with the
Securities and Exchange Commission. The forward-looking statements
speak only as of the date of this press release. The Company
expressly disclaims any obligation to publicly update any
forward-looking statements whether as a result of new information,
future events, changes in expectations, any changes in events,
conditions or circumstances, or otherwise. (Tables Follow)
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED INCOME STATEMENTS (UNAUDITED) Three Months Ended Nine
Months Ended June 30, June 30, ------------------ -----------------
2009 2008 2009 2008 ------ ------ ------ ------ (In thousands,
except per share amounts) Net revenues $ 87,852 $ 80,639 $267,098
$258,831 Operating expenses: Educational services and facilities
47,307 46,378 143,947 139,386 Selling, general and administrative
37,579 35,690 116,799 109,295 ------- ------- ------- ------- Total
operating expenses 84,886 82,068 260,746 248,681 ------- -------
------- ------- Income (loss) from operations 2,966 (1,429) 6,352
10,150 ------- ------- ------- ------- Other income (expense):
Interest income 43 521 181 2,758 Interest expense (16) (10) (37)
(29) Other income 64 183 207 183 ------- ------- ------- -------
Total other income 91 694 351 2,912 ------- ------- ------- -------
Income (loss) before income taxes 3,057 (735) 6,703 13,062 Income
tax expense (benefit) 1,134 (11) 2,556 5,397 ------- -------
------- ------- Net income (loss) $ 1,923 $ (724) $ 4,147 $7,665
======= ======= ======= ======= Earnings per share: Net income per
share - basic $ 0.08 $ (0.03) $ 0.17 $ 0.30 ======= ======= =======
======= Net income per share - diluted $ 0.08 $ (0.03) $ 0.17 $
0.30 ======= ======= ======= ======= Weighted average number of
common shares outstanding Basic 23,626 25,059 24,451 25,736 =======
======= ======= ======= Diluted 23,953 25,059 24,836 25,978 =======
======= ======= ======= UNIVERSAL TECHNICAL INSTITUTE, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June
30, September 30, 2009 2008 --------- -------------- ($'s in
thousands) Assets Current assets: Cash and cash equivalents $50,149
$80,878 Restricted cash - 2,000 Investments, current portion 9,106
- Receivables, net 13,207 20,222 Deferred tax assets 7,156 5,951
Prepaid expenses and other current assets 9,146 8,568 --------
-------- Total current assets 88,764 117,619 Investments, less
current portion 8,181 - Property and equipment, net 70,391 68,258
Goodwill 20,579 20,579 Other assets 4,703 2,919 -------- --------
Total assets $192,618 $209,375 ======== ======== Liabilities and
Shareholders' Equity Current liabilities: Accounts payable and
accrued expenses $40,295 $37,995 Deferred revenue 36,628 44,695
Accrued tool sets 4,256 3,870 Other current liabilities 80 44
-------- -------- Total current liabilities 81,259 86,604 Deferred
tax liabilities 1,419 2,908 Deferred rent liability 5,600 5,354
Other liabilities 6,725 6,322 -------- -------- Total liabilities
95,003 101,188 -------- -------- Commitments and contingencies
Shareholders' equity: Common stock, $0.0001 par value, 100,000,000
shares authorized, 28,570,160 shares issued and 23,699,934 shares
outstanding at June 30, 2009 and 28,406,762 shares issued and
25,089,517 shares outstanding at September 30, 2008 3 3 Preferred
stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares
issued and outstanding - - Paid-in capital 139,316 137,100 Treasury
stock, at cost, 4,870,226 shares and 3,317,245 shares at June 30,
2009 and September 30, 2008, respectively (76,506) (59,571)
Retained earnings 34,802 30,655 -------- -------- Total
shareholders' equity 97,615 108,187 -------- -------- Total
liabilities and shareholders' equity $192,618 $209,375 ========
======== UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine
Months Ended June 30, ---------------------- 2009 2008 ---------
--------- (In thousands) Cash flows from operating activities: Net
income $4,147 $7,665 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 13,092 13,177 Bad debt expense 5,048 3,377 Stock-based
compensation 3,630 4,151 Deferred income taxes (3,370) 149 Loss on
disposal of property and equipment 727 720 Changes in assets and
liabilities: Receivables 2,439 (8,177) Prepaid expenses and other
current assets (650) 495 Other assets 128 493 Accounts payable and
accrued expenses 1,441 (3,703) Deferred revenue (8,067) (12,387)
Income tax payable (receivable) (668) 636 Accrued tool sets and
other current liabilities 422 (716) Other liabilities 143 167
--------- --------- Net cash provided by operating activities
18,462 6,047 --------- --------- Cash flows from investing
activities: Purchase of property and equipment (14,411) (13,385)
Proceeds from sale of property and equipment 35 32,688 Purchase of
investments (17,287) - --------- --------- Net cash (used in)
provided by investing activities (31,663) 19,303 ---------
--------- Cash flows from financing activities: Proceeds from
issuance of common stock under employee plans 261 652 Payment of
payroll taxes on stock-based compensation through shares withheld
(1,049) (313) Excess tax benefit from stock-based compensation 195
250 Purchase of treasury stock (16,935) (29,542) ---------
--------- Net cash used in financing activities (17,528) (28,953)
--------- --------- Net decrease in cash and cash equivalents
(30,729) (3,603) Cash and cash equivalents, beginning of period
80,878 75,594 --------- --------- Cash and cash equivalents, end of
period $50,149 $71,991 ========= ========= DATASOURCE: Universal
Technical Institute, Inc. CONTACT: Jenny Bruso, Director, Investor
Relations of Universal Technical Institute, Inc., +1-623-445-9351
Web Site: http://www.uti.edu/
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