SCOTTSDALE, Ariz., Aug. 7, 2018 /PRNewswire/ -- Universal Technical Institute, Inc. (NYSE: UTI), the leading provider of transportation technician training, reported financial results for the fiscal 2018 third quarter ended June 30, 2018.
Kim McWaters, UTI's President and Chief Executive Officer, stated, "While third quarter starts underperformed expectations, particularly in the adult channel, we continue to see progress in leading indicators at the front end of our student pipeline. We generated more higher-converting inquiries and increased enrollment applications by 6.5 percent compared to the same period last year. We expect to build on this momentum. The fourth quarter is seasonally the strongest quarter for starts and will be the first quarter where the positive benefits of our Transformation Plan begin impacting our operating results. We implemented the Transformation plan to optimize performance in marketing, admissions and student services to drive starts in all macro environments and are excited to begin seeing its impact.
"We will hit a major milestone in the fourth quarter as the first class at our new third metro campus in Bloomfield, NJ, will start Monday, August 13th. Prospective students are attracted to our metro campuses, because they can live and work at home while pursuing skills training. Further, these campuses support delivering technicians where industry needs them most. We believe through initiatives such as our metro campus strategy and our Transformation Plan, we are setting the foundation for long-term profitable growth for UTI."
Financial Results for the Three-Month Period Ended June 30: 2018 Compared to 2017
Financial Results for the Nine-Month Period Ended June 30: 2018 Compared to 2017
Student Metrics
|
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
||||
|
Total starts |
1,548 |
|
|
1,774 |
|
|
4,683 |
|
|
5,023 |
|
|
Average undergraduate full-time student enrollment |
9,484 |
|
|
9,990 |
|
|
10,380 |
|
|
10,945 |
|
|
End of period undergraduate full-time student enrollment |
9,000 |
|
|
9,458 |
|
|
9,000 |
|
|
9,458 |
|
Fiscal 2018 Outlook
Conference Call
Management will hold a conference call to discuss the 2018 third quarter results on Tuesday, August 7th at 1:30 p.m. PDT (4:30 p.m. EDT). This call can be accessed by dialing 412-317-6790 or 844-881-0138. Investors are invited to listen to the call live at http://uti.investorroom.com/ . Please access the website at least 10 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 website for 60 days or the replay can be accessed through August 19 , 2018 by dialing 412-317-0088 or 877-344-7529 and entering pass code 10123024.
Use of Non-GAAP Financial Information
This press release and the related conference call contains non-GAAP (Generally Accepted Accounting Principles) financial measures, which are intended to supplement, but not substitute for, the most directly comparable GAAP measures. Management chooses to disclose to investors, these non-GAAP financial measures because they provide an additional analytical tool to clarify the results from operations and helps to identify underlying trends. Additionally, such measures help compare the Company's performance on a consistent basis across time periods. Management also utilizes EBITDA as a performance measure internally. To obtain a complete understanding of the Company's performance these measures should be examined in connection with net income (loss), determined in accordance with GAAP, as presented in the financial statements and notes thereto included in the annual and quarterly filings with the Securities and Exchange Commission. Since the items excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered an alternative to net income as a measure of the Company's operating performance or profitability. Exclusion of items in the non-GAAP presentation should not be construed as an inference that these items are unusual, infrequent or non-recurring. Other companies, including other companies in the education industry, may calculate non-GAAP financial measures differently than UTI does, limiting their usefulness as a comparative measure across companies. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures are included below.
Safe Harbor Statement
All statements contained herein, other than statements of historical fact, are "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, as amended. 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, changes to regulations or agency interpretation of such regulations affecting the for-profit education industry, 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 UTI, increased investment in management and capital resources, the effectiveness of the recruiting, advertising and promotional efforts, changes to interest rates and unemployment, general economic conditions of the Company and other risks that are described from time to time in the Company's public filings. Further information on these and other potential factors that could affect the 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. Except as required by law, 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.
About Universal Technical Institute, Inc.
With more than 200,000 graduates in its 52-year history, Universal Technical Institute, Inc. (NYSE: UTI) is the nation's leading provider of technical training for automotive, diesel, collision repair, motorcycle and marine technicians, and offers welding technology and computer numerical control (CNC) machining programs. The company has built partnerships with industry leaders, outfits its state-of-the-industry facilities with current technology, and delivers training that is aligned with employer needs. Through its network of 12 campuses nationwide, UTI offers post-secondary 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 (NASCAR Tech). The company is headquartered in Scottsdale, Arizona. For more information, visit uti.edu .
Company Contact:
Scott Yessner
Interim Chief Financial Officer
Universal Technical Institute, Inc.
(623) 445-0977
Investor Relations Contact:
Kirsten Chapman
LHA Investor Relations
(415) 433-3777
UTI@lhai.com
(Tables Follow)
|
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED) |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
||||||||
|
|
|
(In thousands, except per share amounts) |
||||||||||||||
|
Revenues |
|
$ |
74,890 |
|
|
$ |
76,258 |
|
|
$ |
236,709 |
|
|
$ |
242,934 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Educational services and facilities |
|
44,737 |
|
|
44,120 |
|
|
134,635 |
|
|
136,108 |
|
||||
|
Selling, general and administrative |
|
41,953 |
|
|
34,922 |
|
|
126,298 |
|
|
107,536 |
|
||||
|
Total operating expenses |
|
86,690 |
|
|
79,042 |
|
|
260,933 |
|
|
243,644 |
|
||||
|
Loss from operations |
|
(11,800) |
|
|
(2,784) |
|
|
(24,224) |
|
|
(710) |
|
||||
|
Other income (expense): |
|
|
|
|
|
|
|
|
||||||||
|
Interest expense, net |
|
(474) |
|
|
(559) |
|
|
(1,405) |
|
|
(2,020) |
|
||||
|
Equity in earnings of unconsolidated affiliate |
|
96 |
|
|
116 |
|
|
289 |
|
|
369 |
|
||||
|
Other income, net |
|
307 |
|
|
277 |
|
|
635 |
|
|
712 |
|
||||
|
Total other expense, net |
|
(71) |
|
|
(166) |
|
|
(481) |
|
|
(939) |
|
||||
|
Loss before income taxes |
|
(11,871) |
|
|
(2,950) |
|
|
(24,705) |
|
|
(1,649) |
|
||||
|
Income tax expense (benefit) |
|
(158) |
|
|
967 |
|
|
(3,024) |
|
|
5,722 |
|
||||
|
Net loss |
|
$ |
(11,713) |
|
|
$ |
(3,917) |
|
|
$ |
(21,681) |
|
|
$ |
(7,371) |
|
|
Preferred stock dividends |
|
1,309 |
|
|
1,309 |
|
|
3,927 |
|
|
3,927 |
|
||||
|
Loss available for distribution |
|
$ |
(13,022) |
|
|
$ |
(5,226) |
|
|
$ |
(25,608) |
|
|
$ |
(11,298) |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Loss per share: |
|
|
|
|
|
|
|
|
||||||||
|
Net loss per share - basic |
|
$ |
(0.52) |
|
|
$ |
(0.21) |
|
|
$ |
(1.02) |
|
|
$ |
(0.46) |
|
|
Net loss per share - diluted |
|
$ |
(0.52) |
|
|
$ |
(0.21) |
|
|
$ |
(1.02) |
|
|
$ |
(0.46) |
|
|
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
25,186 |
|
|
24,748 |
|
|
25,084 |
|
|
24,679 |
|
||||
|
Diluted |
|
25,186 |
|
|
24,748 |
|
|
25,084 |
|
|
24,679 |
|
||||
|
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||
|
|
|
|||||||
|
|
|
June 30, 2018 |
|
Sept. 30, 2017 |
||||
|
Assets |
|
(In thousands) |
||||||
|
Current assets: |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
55,968 |
|
|
$ |
50,138 |
|
|
Restricted cash |
|
13,419 |
|
|
14,822 |
|
||
|
Trading securities |
|
— |
|
|
40,020 |
|
||
|
Held-to-maturity investments |
|
243 |
|
|
7,759 |
|
||
|
Receivables, net |
|
14,833 |
|
|
15,197 |
|
||
|
Notes receivable, current portion |
|
5,198 |
|
|
— |
|
||
|
Prepaid expenses and other current assets |
|
18,836 |
|
|
18,890 |
|
||
|
Total current assets |
|
108,497 |
|
|
146,826 |
|
||
|
Property and equipment, net |
|
113,732 |
|
|
106,664 |
|
||
|
Goodwill |
|
8,222 |
|
|
9,005 |
|
||
|
Notes receivable, less current portion |
|
32,432 |
|
|
— |
|
||
|
Other assets |
|
11,109 |
|
|
11,607 |
|
||
|
Total assets |
|
$ |
273,992 |
|
|
$ |
274,102 |
|
|
|
|
|
|
|
||||
|
Liabilities and Shareholders' Equity |
|
|
|
|
||||
|
Current liabilities: |
|
|
|
|
||||
|
Accounts payable and accrued expenses |
|
$ |
38,710 |
|
|
$ |
37,481 |
|
|
Deferred revenue |
|
25,847 |
|
|
41,338 |
|
||
|
Accrued tool sets |
|
2,706 |
|
|
2,764 |
|
||
|
Dividends payable |
|
1,309 |
|
|
— |
|
||
|
Financing obligation, current portion |
|
1,264 |
|
|
1,106 |
|
||
|
Income tax payable |
|
— |
|
|
490 |
|
||
|
Other current liabilities |
|
3,428 |
|
|
3,210 |
|
||
|
Total current liabilities |
|
73,264 |
|
|
86,389 |
|
||
|
Deferred tax liabilities, net |
|
329 |
|
|
3,141 |
|
||
|
Deferred rent liability |
|
10,914 |
|
|
6,887 |
|
||
|
Financing obligation |
|
41,061 |
|
|
42,035 |
|
||
|
Other liabilities |
|
9,815 |
|
|
9,874 |
|
||
|
Total liabilities |
|
135,383 |
|
|
148,326 |
|
||
|
|
|
|
|
|
||||
|
Commitments and contingencies |
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Shareholders' equity: |
|
|
|
|
||||
|
Common stock, $0.0001 par value, 100,000,000 shares authorized, 32,051,892 shares issued and 25,186,995 shares outstanding as of June 30, 2018 and 31,872,433 shares issued and 25,007,536 shares outstanding as of September 30, 2017 |
|
3 |
|
|
3 |
|
||
|
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 700,000 shares of Series A Convertible Preferred Stock issued and outstanding as of June 30, 2018 and September 30, 2017, liquidation preference of $100 per share |
|
— |
|
|
— |
|
||
|
Paid-in capital - common |
|
186,372 |
|
|
185,140 |
|
||
|
Paid-in capital - preferred |
|
68,853 |
|
|
68,853 |
|
||
|
Treasury stock, at cost, 6,864,897 shares as of June 30, 2018 and September 30, 2017 |
|
(97,388) |
|
|
(97,388) |
|
||
|
Retained deficit |
|
(19,231) |
|
|
(30,832) |
|
||
|
Total shareholders' equity |
|
138,609 |
|
|
125,776 |
|
||
|
Total liabilities and shareholders' equity |
|
$ |
273,992 |
|
|
$ |
274,102 |
|
|
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||
|
|
|
|
||||||
|
|
|
Nine Months Ended June 30, |
||||||
|
|
|
2018 |
|
2017 |
||||
|
|
|
(In thousands) |
||||||
|
Cash flows from operating activities: |
|
|
|
|
||||
|
Net loss |
|
$ |
(21,681) |
|
|
$ |
(7,371) |
|
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
||||
|
Depreciation and amortization |
|
9,891 |
|
|
10,726 |
|
||
|
Amortization of assets subject to financing obligation |
|
2,012 |
|
|
2,012 |
|
||
|
Goodwill and intangible asset impairment expense |
|
1,164 |
|
|
— |
|
||
|
Unrealized gains on trading securities |
|
— |
|
|
(10) |
|
||
|
Bad debt expense |
|
1,191 |
|
|
503 |
|
||
|
Stock-based compensation |
|
1,245 |
|
|
1,992 |
|
||
|
Deferred income taxes |
|
(2,812) |
|
|
— |
|
||
|
Equity in earnings of unconsolidated affiliate |
|
(289) |
|
|
(369) |
|
||
|
Training equipment credits earned, net |
|
116 |
|
|
(710) |
|
||
|
Other gains, net |
|
71 |
|
|
50 |
|
||
|
Changes in assets and liabilities: |
|
|
|
|
||||
|
Restricted cash |
|
46 |
|
|
(11,050) |
|
||
|
Receivables |
|
175 |
|
|
2,453 |
|
||
|
Prepaid expenses and other assets |
|
(1,342) |
|
|
358 |
|
||
|
Other assets |
|
(31) |
|
|
263 |
|
||
|
Notes receivable |
|
(421) |
|
|
— |
|
||
|
Accounts payable and accrued expenses |
|
556 |
|
|
(11,359) |
|
||
|
Deferred revenue |
|
(15,491) |
|
|
(19,451) |
|
||
|
Income tax payable/receivable |
|
(1,490) |
|
|
3,052 |
|
||
|
Accrued tool sets and other current liabilities |
|
507 |
|
|
768 |
|
||
|
Deferred rent liability |
|
4,027 |
|
|
(1,622) |
|
||
|
Other liabilities |
|
148 |
|
|
(70) |
|
||
|
Net cash used in operating activities |
|
(22,408) |
|
|
(29,835) |
|
||
|
Cash flows from investing activities: |
|
|
|
|
||||
|
Purchase of property and equipment |
|
(17,088) |
|
|
(6,497) |
|
||
|
Proceeds from disposal of property and equipment |
|
9 |
|
|
1 |
|
||
|
Purchase of investments |
|
— |
|
|
(9,671) |
|
||
|
Proceeds received upon maturity of investments |
|
7,497 |
|
|
1,687 |
|
||
|
Purchase of trading securities |
|
(894) |
|
|
(41,585) |
|
||
|
Proceeds from sales of trading securities |
|
40,902 |
|
|
1,799 |
|
||
|
Capitalized costs for intangible assets |
|
(325) |
|
|
(325) |
|
||
|
Return of capital contribution from unconsolidated affiliate |
|
229 |
|
|
352 |
|
||
|
Restricted cash: other |
|
1,355 |
|
|
3,407 |
|
||
|
Net cash provided by (used in) investing activities |
|
31,685 |
|
|
(50,832) |
|
||
|
Cash flows from financing activities: |
|
|
|
|
||||
|
Payment of preferred stock cash dividend |
|
(2,618) |
|
|
(2,618) |
|
||
|
Payment of financing obligation |
|
(816) |
|
|
(673) |
|
||
|
Payment of payroll taxes on stock-based compensation through shares withheld |
|
(13) |
|
|
(10) |
|
||
|
Net cash used in financing activities |
|
(3,447) |
|
|
(3,301) |
|
||
|
Net increase (decrease) in cash and cash equivalents |
|
5,830 |
|
|
(83,968) |
|
||
|
Cash and cash equivalents, beginning of period |
|
50,138 |
|
|
119,045 |
|
||
|
Cash and cash equivalents, end of period |
|
$ |
55,968 |
|
|
$ |
35,077 |
|
|
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL INFORMATION (UNAUDITED) |
||||||||||||||||
|
|
||||||||||||||||
|
Reconciliation of Net Loss to EBITDA |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
||||||||
|
|
|
(In thousands) |
||||||||||||||
|
Net loss |
|
$ |
(11,713) |
|
|
$ |
(3,917) |
|
|
$ |
(21,681) |
|
|
$ |
(7,371) |
|
|
Interest expense, net |
|
474 |
|
|
559 |
|
|
1,405 |
|
|
2,020 |
|
||||
|
Income tax expense (benefit) |
|
(158) |
|
|
967 |
|
|
(3,024) |
|
|
5,722 |
|
||||
|
Depreciation and amortization |
|
4,192 |
|
|
4,537 |
|
|
12,923 |
|
|
13,698 |
|
||||
|
EBITDA |
|
$ |
(7,205) |
|
|
$ |
2,146 |
|
|
$ |
(10,377) |
|
|
$ |
14,069 |
|
|
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES SELECTED SUPPLEMENTAL INFORMATION (UNAUDITED) |
||||||||||||||||
|
|
||||||||||||||||
|
Selected Supplemental Financial Information |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
||||||||||||
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
||||||||
|
|
|
(In thousands) |
||||||||||||||
|
Salaries expense |
|
$ |
34,879 |
|
|
$ |
33,692 |
|
|
$ |
103,779 |
|
|
$ |
104,416 |
|
|
Employee benefits and tax |
|
7,168 |
|
|
7,697 |
|
|
22,869 |
|
|
22,465 |
|
||||
|
Bonus expense |
|
1,560 |
|
|
830 |
|
|
6,274 |
|
|
2,910 |
|
||||
|
Stock-based compensation |
|
145 |
|
|
557 |
|
|
1,295 |
|
|
2,042 |
|
||||
|
Total compensation and related costs |
|
$ |
43,752 |
|
|
$ |
42,776 |
|
|
$ |
134,217 |
|
|
$ |
131,833 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Advertising expense |
|
$ |
10,722 |
|
|
$ |
9,255 |
|
|
$ |
32,891 |
|
|
$ |
29,074 |
|
|
Occupancy expense, net of subleases |
|
$ |
9,672 |
|
|
$ |
9,244 |
|
|
$ |
28,396 |
|
|
$ |
28,087 |
|
|
Contract service expense |
|
$ |
3,988 |
|
|
$ |
1,799 |
|
|
$ |
10,887 |
|
|
$ |
6,037 |
|
|
Supplies and maintenance |
|
$ |
2,021 |
|
|
$ |
2,066 |
|
|
$ |
6,187 |
|
|
$ |
5,572 |
|
|
Goodwill and intangible asset impairment expense |
|
$ |
1,164 |
|
|
$ |
— |
|
|
$ |
1,164 |
|
|
$ |
— |
|
|
Professional accounting services expense |
|
$ |
325 |
|
|
$ |
363 |
|
|
$ |
1,608 |
|
|
$ |
998 |
|
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SOURCE Universal Technical Institute, Inc.
