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SCOTTSDALE, Ariz., May 9, 2019 /PRNewswire/ -- Universal Technical Institute, Inc. (NYSE: UTI), the leading provider of transportation technician training, reported financial results for the fiscal 2019 second quarter ended March 31, 2019.

Kim McWaters, UTI's President and Chief Executive Officer, stated, "The continued success of our Transformation Plan helped drive growth in new student starts and our average student population for the fiscal second quarter. New student start growth was 11.2%, with half of the growth coming from our new Bloomfield, New Jersey campus. Multiple quarters of student start growth drove our average student population higher than the year before.

"For the six-month period ending March 31, 2019, we generated $2.8 million in cash flow from operations and $3.0 million in adjusted free cash flow through new student start growth, improved operating efficiencies and continued rationalization of our campus footprint. Based on our progress year to date, we are reaffirming our 2019 guidance and remain well-positioned for 2020."

Financial Results for the Three-Month Period Ended March 31 2019 Compared to 2018

• Revenues increased 1.3% to $81.7 million, driven by higher average full-time enrollment. The increase occurred despite one less earning day compared to the prior year period.
• Operating expenses decreased by 2.4% to $87.3 million, primarily due to lower compensation and related costs and contract and professional services expense. This decline was partially offset by $1.25 million in one-time costs related to the Norwood, Massachusetts campus exit and $1.3 million in direct costs from the Bloomfield, New Jersey campus that did not occur in the prior year period. UTI expects the Norwood, Massachusetts campus exit to result in an improvement in annual pre-tax net income, EBITDA and cash flows of between $4 million and $5 million starting in 2021.
• Operating loss was $5.6 million, compared to an operating loss of $8.8 million.
• Net loss was $5.3 million, compared to a net loss of $8.8 million.
• Adjusted operating loss was $4.2 million, compared to an adjusted operating loss of $6.7 million for the prior year period. (See "Use of Non-GAAP Financial Information" below.)
• Loss available for distribution to common shareholders was $6.6 million, or $0.26 per share, compared to a loss of $10.1 million, or $0.40 per share.
• Adjusted EBITDA was $0.8 million, compared to an Adjusted EBITDA loss of $2.3 million.

Financial Results for the Six-Month Period Ended March 31 2019 Compared to 2018

• Revenues increased 1.8% to $164.8 million, driven by higher average full-time enrollment. The increase was net of a decrease in industry training revenue and slightly higher tuition discounts compared to the prior year period.
• Operating expenses increased 1.9% to $177.6 million, due to $1.25 million of one-time costs for the Norwood, Massachusetts campus closure and $1.7 million in higher transformation consultant fees due to a one-time exit cost realized in October 2018. The growing student population at the Bloomfield, New Jersey campus added $2.9 million of direct costs year over year.
• Operating loss was $12.8 million, compared to an operating loss of $12.4 million.
• Net loss was $12.9 million, compared to a net loss of $10.0 million (includes $2.9 million tax benefit).
• Adjusted operating loss was $7.2 million, compared to an adjusted operating loss of $8.7 million.
• Loss available for distribution to common shareholders was $15.6 million, or $0.61 per share, compared to a loss of $12.6 million, or $0.50 per share.
• Adjusted EBITDA was $2.1 million, compared to Adjusted EBITDA of $0.3 million.
• Cash flow from operating activities was $2.8 million, improving $8.9 million.
• Adjusted free cash flow was $3.0 million, improving by $9.9 million.

2019 Outlook

UTI reaffirms the following guidance:

• UTI expects new student starts to grow in the mid to high single digits in fiscal 2019 across the existing campuses and UTI's new Bloomfield, New Jersey campus.
• Fiscal 2019 average student population is anticipated to be up low single digits as a result of the transformation plan initiatives and the Bloomfield, New Jersey campus.
• UTI expects full year 2019 revenue to range between $322 million and $332 million, compared to $317 million in fiscal 2018, reflecting the expected increase in the average student population.
• Operating expenses are expected to range between $337 million and $347 million, compared to $352.2 million in fiscal 2018. The decrease in operating expenses are driven across multiple expense categories.
• UTI expects an operating loss of between $10 million and $15 million. UTI expects an adjusted operating loss of between $6 million and $11 million.
• UTI expects to be operating cash flow and adjusted free cash flow positive in fiscal 2019 with an ending cash balance at or above the same level as year-end 2018.
• Net loss is expected to range between $10 million and $15 million. Adjusted EBITDA is expected to be positive and range between $9 million and $15 million.
• Capital expenditures are expected to range between $6 million and $8 million.

Conference Call

Management will hold a conference call to discuss the 2019 second quarter results on Friday, May 10 ^th at 8:00 a.m. PDT (11:00 a.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 90 days or the replay can be accessed through May 24, 2019 by dialing 412-317-0088 or 877-344-7529 and entering pass code 10130240.

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 help to identify underlying trends.  Additionally, such measures help compare the company's performance on a consistent basis across time periods.  Management defines adjusted EBITDA as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization and adjusted for items not considered as part of the company's normal recurring operations. Management defines adjusted operating income as operating income (loss), adjusted for items that affect trends in underlying performance from year to year and are not considered normal recurring cash operating expenses.  Management defines free cash flow as cash flow from operating activities less capital expenditures.  Management defines adjusted free cash flow as cash flow from operating activities less capital expenditures, adjusted for items not considered as part of the company's normal recurring operations.  Management chooses to disclose any campus adjustments as direct costs (net of any corporate allocations).  Management utilizes adjusted figures as performance measures internally for operating decisions, strategic planning, annual budgeting and forecasting.  For the periods presented, this includes consulting fees incurred as part of the company's transformation initiative and startup costs related to the Bloomfield, New Jersey campus.  To obtain a complete understanding of the company's performance, these measures should be examined in connection with net income (loss), operating income (loss) and cash flow from operating activities, 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 to be an alternative to net income (loss), operating income (loss) or cash flow from operating activities as a measure of the company's operating performance or liquidity.  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 historical non-GAAP financial measures to the most directly comparable GAAP measures are included below.

Information reconciling forward-looking adjusted EBITDA, adjusted operating income and adjusted free cash flow to the most directly comparable GAAP financial measure is unavailable to the company without unreasonable effort. The company is not able to provide a quantitative reconciliation of adjusted EBITDA, adjusted operating income or adjusted free cash flow to the most directly comparable GAAP financial measure because certain items required for such reconciliation are uncertain, outside of the company's control and/or cannot be reasonably predicted, including but not limited to the provision for (benefit from) income taxes. Preparation of such reconciliation would require a forward-looking statement of income and statement of cash flows prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the company without unreasonable effort.

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 53-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 13 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:
Moriah Shilton
LHA Investor Relations
(415) 433-3777
UTI@lhai.com

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SOURCE Universal Technical Institute, Inc.