Universal Technical Institute Reports Record Revenue of $105.6 Million, Net Income of $6.0 Million and Student Start Growth of 22% for Second Quarter 2010
PHOENIX, May 3 /PRNewswire-FirstCall/ -- Universal Technical Institute, Inc. (NYSE: UTI), the leading provider of automotive technician training, reported results for the second quarter ended March 31, 2010. Net revenues for the second quarter ended March 31, 2010 were $105.6 million, an 18.5 percent increase from $89.1 million for the second quarter of the prior year. Net income for the second quarter ended March 31, 2010 was $6.0 million, or 25 cents per diluted share, as compared to a net loss of $0.1 million, or no earnings per diluted share, for the second quarter of the prior year. Net revenues for the six months ended March 31, 2010 were $209.2 million, a 16.7 percent increase from $179.2 million for the six months ended March 31, 2009. Net income for the six months ended March 31, 2010 was $15.3 million, or 63 cents per diluted share, as compared to net income of $2.2 million, or 9 cents per diluted share, for the six months ended March 31, 2009.
"I am very pleased with another strong quarter of financial results and continued strength in student metrics. We achieved record revenues for an individual quarter and a 22 percent year over year growth in students starting school, marking our 8th consecutive quarter of student start growth," said Kimberly McWaters, president and chief executive officer.
Student Metrics
Three Months Ended |
Six Months Ended |
|||||||||||
March 31, |
March 31, |
|||||||||||
2010 |
2009 |
Growth |
2010 |
2009 |
Growth |
|||||||
Total starts |
4,135 |
3,381 |
22.3% |
7,985 |
6,700 |
19.2% |
||||||
Average undergraduate full-time student enrollment |
18,241 |
15,457 |
18.0% |
18,472 |
15,835 |
16.7% |
||||||
End of period undergraduate full-time student enrollment |
18,251 |
15,391 |
18.6% |
18,251 |
15,391 |
18.6% |
||||||
Average capacity utilization |
71.6% |
63.1% |
849bps |
72.5% |
64.7% |
785bps |
||||||
Second Quarter Operating Performance
For the second quarter of fiscal 2010, net revenues were $105.6 million, an 18.5 percent increase from $89.1 million for last year's second quarter. The increase in net revenues primarily relates to an increase in average undergraduate full-time student enrollment, an increase in tuition rates, and a decrease in tuition discounts. Net revenues for the second quarter of fiscal 2010 and 2009 excluded $2.5 million and $1.8 million, respectively, of tuition revenue related to students participating in our proprietary loan program. Additionally, there was a decrease in revenue from our industry training programs.
Educational services and facilities expense increased $2.7 million, or 5.5 percent to $51.6 million for the three months ended March 31, 2010, from $48.9 million in the three months ended March 31, 2009. This increase was due to higher compensation and benefits expense related to an increase in the number of employees in the financial aid and other student support departments which was to support the needs of the growing student population.
Selling, general and administrative expense increased $3.7 million, or 9.2 percent to $44.2 million for the three months ended March 31, 2010, from $40.4 million for the three months ended March 31, 2009. The increase was due to an increase in compensation and benefits expense related to the increase in sales force representatives, and an increase in advertising expense.
Operating income and margin for the second quarter of fiscal 2010 was $9.9 million and 9.4%, respectively, compared to an operating loss of $0.2 million and 0.2%, respectively, in the same period last year.
Liquidity
Cash, cash equivalents and investments totaled $98.8 million at March 31, 2010, compared to $97.2 million at Dec. 31, 2009 and $85.1 million at Sept. 30, 2009. At March 31, 2010, shareholders' equity totaled $129.2 million as compared to $106.7 million at Sept. 30, 2009.
Cash flow provided by operations was $24.5 million for the six months ended March 31, 2010, compared with $14.1 million for the six months ended March 31, 2009. This increase is primarily attributable to the increase in net income and an increase in deferred revenue, partially offset by a decrease in accounts payable and accrued expenses.
Proprietary Loan Program
There is $30 million of credit currently authorized under the proprietary loan program. As of March 31, 2010, UTI committed to provide loans to students for approximately $21.1 million and of that amount there was approximately $19.6 million in loans outstanding. At March 31, 2009, there was approximately $7.5 million in loans outstanding. Since the inception of the program, we have not recognized revenue or interest in the amounts of approximately $14.2 million through March 31, 2010 and $3.7 million through March 31, 2009.
Conference Call
Management of Universal Technical Institute will hold a conference call to discuss the fiscal 2010 second quarter results today at 1:30 p.m. Phoenix Time (4:30 p.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://uti.investorroom.com/. 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 for 60 days or the replay can be accessed through May 14, 2010 by dialing 412-317-0088 or 877-344-7529 and entering pass code 439553#.
About Universal Technical Institute
Universal Technical Institute, Inc. is the leading provider of post-secondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. We offer undergraduate degree, diploma and certificate programs at 10 campuses across the United States, and manufacturer-specific training programs, both student paid at our campuses and manufacturer or dealer sponsored at dedicated training centers. Through our campus-based school system, we offer specialized post-secondary 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 investor relations web site at http://uti.investorroom.com/.
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 our 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 UTI, increased investment in management and capital resources, the effectiveness of our 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 our public filings. Further information on these and other potential factors that could affect our financial results or condition may be found in our filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release. We expressly disclaim 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.
Use of Non-GAAP Financial Information
This press release and the related conference call contain non-GAAP financial measures, which are intended to supplement, but not substitute for, the most directly comparable GAAP measures. Management uses, and chooses to disclose to investors, these non-GAAP financial measures because (i) such measures provide an additional analytical tool to clarify our results from operations and help to identify underlying trends in its results of operations; (ii) as to the non-GAAP earnings measures, such measures help compare our performance on a consistent basis across time periods; and (iii) these non-GAAP measures are employed by the management in its own evaluation of performance and are utilized in financial and operational decision-making processes, such as budgeting and forecasting. Exclusion of items in our 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 we do, limiting their usefulness as a comparative measure across companies.
(Tables Follow)
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) |
|||||||||||
Three Months Ended |
Six Months Ended |
||||||||||
March 31, |
March 31, |
||||||||||
2010 |
2009 |
2010 |
2009 |
||||||||
(In thousands, except per share amounts) |
|||||||||||
Net Revenues |
$ 105,631 |
$ 89,125 |
$ 209,153 |
$ 179,246 |
|||||||
Operating expenses: |
|||||||||||
Educational services and facilities |
51,593 |
48,898 |
100,520 |
96,640 |
|||||||
Selling, general and administrative |
44,154 |
40,430 |
83,693 |
79,220 |
|||||||
Total operating expenses |
95,747 |
89,328 |
184,213 |
175,860 |
|||||||
Income (loss) from operations |
9,884 |
(203) |
24,940 |
3,386 |
|||||||
Other income (expense): |
|||||||||||
Interest income |
74 |
59 |
122 |
138 |
|||||||
Interest expense |
- |
(9) |
(4) |
(21) |
|||||||
Other income |
116 |
72 |
251 |
143 |
|||||||
Total other income |
190 |
122 |
369 |
260 |
|||||||
Income (loss) before income taxes |
10,074 |
(81) |
25,309 |
3,646 |
|||||||
Income tax expense (benefit) |
4,028 |
(1) |
9,983 |
1,422 |
|||||||
Net income (loss) |
$ 6,046 |
$ (80) |
$ 15,326 |
$ 2,224 |
|||||||
Earnings per share: |
|||||||||||
Net income per share – basic |
$ 0.25 |
$ 0.00 |
$ 0.64 |
$ 0.09 |
|||||||
Net income per share – diluted |
$ 0.25 |
$ 0.00 |
$ 0.63 |
$ 0.09 |
|||||||
Weighted average number of shares outstanding: |
|||||||||||
Basic |
23,957 |
24,529 |
23,891 |
24,812 |
|||||||
Diluted |
24,497 |
24,529 |
24,401 |
25,154 |
|||||||
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
|||||||
March 31, |
September 30, |
||||||
2010 |
2009 |
||||||
($'s in thousands) |
|||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ 49,354 |
$ 56,199 |
|||||
Investments, current portion |
42,390 |
25,142 |
|||||
Receivables, net |
12,485 |
14,892 |
|||||
Deferred tax assets |
6,584 |
7,452 |
|||||
Prepaid expenses and other current assets |
10,864 |
10,480 |
|||||
Total current assets |
121,677 |
114,165 |
|||||
Investments, less current portion |
7,053 |
3,806 |
|||||
Property and equipment, net |
85,018 |
81,168 |
|||||
Goodwill |
20,579 |
20,579 |
|||||
Other assets |
3,528 |
3,633 |
|||||
Total assets |
$ 237,855 |
$ 223,351 |
|||||
Liabilities and Shareholders' Equity |
|||||||
Current liabilities: |
|||||||
Accounts payable and accrued expenses |
$ 41,397 |
$ 47,276 |
|||||
Deferred revenue |
50,484 |
48,175 |
|||||
Accrued tool sets |
4,789 |
4,276 |
|||||
Income tax payable |
- |
1,794 |
|||||
Other current liabilities |
39 |
25 |
|||||
Total current liabilities |
96,709 |
101,546 |
|||||
Deferred tax liabilities |
871 |
3,086 |
|||||
Deferred rent liability |
5,558 |
5,593 |
|||||
Other liabilities |
5,491 |
6,428 |
|||||
Total liabilities |
108,629 |
116,653 |
|||||
Commitments and contingencies |
|||||||
Shareholders' equity: |
|||||||
Common stock, $0.0001 par value, 100,000,000 shares authorized, |
|||||||
28,986,435 shares issued and 24,116,209 |
|||||||
shares outstanding at March 31, 2010 and |
|||||||
28,641,006 shares issued and 23,770,780 |
|||||||
shares outstanding at September 30, 2009 |
3 |
3 |
|||||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, |
|||||||
0 shares issued and outstanding |
- |
- |
|||||
Paid-in capital |
148,015 |
140,813 |
|||||
Treasury stock, at cost, 4,870,226 shares at March 31, 2010 |
|||||||
and September 30, 2009 |
(76,506) |
(76,506) |
|||||
Retained earnings |
57,714 |
42,388 |
|||||
Total shareholders' equity |
129,226 |
106,698 |
|||||
Total liabilities and shareholders' equity |
$ 237,855 |
$ 223,351 |
|||||
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||||
Six Months Ended |
||||||||||
March 31, |
||||||||||
2010 |
2009 |
|||||||||
(In thousands) |
||||||||||
Cash flows from operating activities: |
||||||||||
Net income |
$ 15,326 |
$ 2,224 |
||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||
Depreciation and amortization |
8,834 |
8,826 |
||||||||
Bad debt expense |
2,979 |
3,667 |
||||||||
Stock-based compensation |
3,341 |
2,697 |
||||||||
Deferred income taxes |
(319) |
(2,774) |
||||||||
Loss on disposal of property and equipment |
80 |
706 |
||||||||
Changes in assets and liabilities: |
||||||||||
Receivables |
441 |
263 |
||||||||
Prepaid expenses and other current assets |
(411) |
(988) |
||||||||
Other assets |
79 |
45 |
||||||||
Accounts payable and accrued expenses |
(4,672) |
2,667 |
||||||||
Deferred revenue |
2,309 |
(3,308) |
||||||||
Income tax payable (receivable) |
(3,732) |
(191) |
||||||||
Accrued tool sets and other current liabilities |
527 |
157 |
||||||||
Other liabilities |
(282) |
94 |
||||||||
Net cash provided by operating activities |
24,500 |
14,085 |
||||||||
Cash flows from investing activities: |
||||||||||
Purchase of property and equipment |
(14,567) |
(8,448) |
||||||||
Proceeds from disposal of property and equipment |
1 |
6 |
||||||||
Purchase of investments |
(25,755) |
- |
||||||||
Proceeds received upon maturity of investments |
4,874 |
- |
||||||||
Net cash used in investing activities |
(35,447) |
(8,442) |
||||||||
Cash flows from financing activities: |
||||||||||
Proceeds from issuance of common stock under employee plans |
3,314 |
(134) |
||||||||
Payment of payroll taxes on stock-based compensation through shares withheld |
(523) |
- |
||||||||
Excess tax benefit from stock-based compensation |
1,311 |
1 |
||||||||
Purchase of treasury stock |
- |
(16,935) |
||||||||
Net cash provided by (used in) financing activities |
4,102 |
(17,068) |
||||||||
Net decrease in cash and cash equivalents |
(6,845) |
(11,425) |
||||||||
Cash and cash equivalents, beginning of period |
56,199 |
80,878 |
||||||||
Cash and cash equivalents, end of period |
$ 49,354 |
$ 69,453 |
||||||||
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL INFORMATION (UNAUDITED) |
|||||||
March 31, |
September 30, |
||||||
2010 |
2009 |
||||||
($'s in thousands) |
|||||||
Cash and cash equivalents |
$ 49,354 |
$ 56,199 |
|||||
Investments, current portion |
42,390 |
25,142 |
|||||
Investments, less current portion |
7,053 |
3,806 |
|||||
Total cash, cash equivalents and investments |
$ 98,797 |
$ 85,147 |
|||||
SOURCE Universal Technical Institute, Inc.
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