Universal Technical Institute Reports Fiscal Year 2015 Third Quarter Results

SCOTTSDALE, Ariz., Aug. 6, 2015 /PRNewswire/ -- Universal Technical Institute, Inc. (NYSE: UTI), the leading provider of automotive technician training, today reported revenues for the third quarter ended June 30, 2015 of $85.1 million, a 6.8 percent decrease from $91.3 million for the third quarter of the prior year.  Net loss for the third quarter ended June 30, 2015 was $3.0 million, or a loss of 12 cents per diluted share, compared to net income of $0.4 million, or 1 cent per diluted share, for the third quarter ended June 30, 2014. Pre-opening costs for our Long Beach, California campus impacted operating loss by approximately $1.4 million for the quarter.

Revenues for the nine months ended June 30, 2015 were $272.0 million, a 3.9 percent decrease from $283.1 million for the nine months ended June 30, 2014. Net income for the nine months ended June 30, 2015 was $0.7 million, or 3 cents per diluted share, compared to  $0.5 million, or 2 cents per diluted share, for the nine months ended June 30, 2014. Pre-opening costs for the Long Beach campus impacted operating income by approximately $2.0 million for the nine month period.

"Our focus on attracting new students to meet the increasingly growing demand from industry for technicians remains a top priority," said Kim McWaters, chairman and CEO.  "New student starts in the quarter were flat to last year, in line with our expectation. Engagement with industry employers to assist us in helping prospective new students understand the opportunities afforded by a UTI education continues to grow, which we believe will positively impact future enrollment."

Student Metrics

 

 

Third Quarter Operating Performance

Revenues for the third quarter of 2015 were $85.1 million, a 6.8 percent decrease from $91.3 million for last year's third quarter. Tuition excluded $5.1 million and $5.6 million, respectively, related to students participating in the Company's proprietary loan program which will be recognized as revenues when payments are received.

Operating loss and margin for the third quarter of 2015 were $4.0 million and 4.7 percent, respectively, compared to operating income and margin of $1.0 million and 1.1 percent, respectively, in the same period last year. The decreases in operating income and margin were related to the decrease in revenues and an increase in advertising expenses, partially offset by a decrease in compensation costs. Additionally, pre-opening costs for our Long Beach, California campus impacted operating loss by approximately $1.4 million for the quarter.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2015 was $1.3 million compared to $6.7 million in the same period last year. See "Use of Non-GAAP Financial Information" below.

Nine Month Operating Performance

Revenues for the nine months ended June 30, 2015 were $272.0 million, a 3.9 percent decrease from $283.1 million for the nine months ended June 30, 2014. Tuition excluded $16.5 million and $18.4 million, respectively, related to students participating in the Company's proprietary loan program which will be recognized as revenues when payments are received.

Operating income and margin for the nine months ended June 30, 2015 were $4.0 million and 1.5 percent, respectively, compared to $2.5 million and 0.9 percent, respectively, for the nine months ended June 30, 2014. The increases in operating income and margin were related to decreases in compensation costs, contract services expense and bad debt expense, partially offset by the decrease in revenues, an increase in advertising expense and pre-opening costs for the Long Beach campus of approximately $2.0 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the nine months ended June 30, 2015 was $20.1 million compared to $19.8 million for the nine months ended June 30, 2014. See "Use of Non-GAAP Financial Information" below.

Liquidity

Cash, cash equivalents and investments totaled $60.4 million at June 30, 2015, compared to $96.1 million at September 30, 2014.  At June 30, 2015, shareholders' equity totaled $123.4 million as compared to $133.2 million at September 30, 2014.  We paid cash dividends of $0.10 per common share on December 19, 2014 and March 31 and June 30, 2015 totaling approximately $7.3 million. 

Pursuant to the previously announced share repurchase plan, we purchased 748,000 shares during the nine months ended June 30, 2015 at an average price per share of $8.15 and a total cost of approximately $6.1 million. We did not purchase any shares during the three months ended June 30, 2015.

Cash used in operating activities was $0.2 million for the nine months ended June 30, 2015 compared to cash provided by operating activities of $9.8 million for the nine months ended June 30, 2014.

2015 Outlook

Based on the results for the nine months ended June 30, 2015, our guidance for the full year ending September 30, 2015 remains relatively unchanged. We expect revenue to decline approximately 3 to 4%, however, excluding the impact of pre-opening costs of our new campus, we expect to see year over year growth in operating income. We expect new student starts as well as our average student population to be down for the full year in the mid-single digits.  We are cautiously optimistic that with a slight pick up in our pacing, we could see slight year over year growth in new student starts in the fourth quarter.  Due to the seasonality of our business and normal fluctuations in student populations, we would expect volatility in our quarterly results.

Conference Call

Management will hold a conference call to discuss the 2015 third quarter results on Thursday, August 6 at 1:30 p.m. PDT (4:30 p.m. EDT). 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 website 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 website for 60 days or the replay can be accessed through August 20, 2015 by dialing 412-317-0088 or 877-344-7529 and entering pass code 10069922.

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. To obtain a complete understanding of the Company's performance these measures should be examined in connection with net income, 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 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.

Headquartered in Scottsdale, Arizona, Universal Technical Institute, Inc. (NYSE: UTI) is the leading provider of post-secondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. With more than 190,000 graduates in its 50-year history, UTI offers undergraduate degree and diploma programs at 11 campuses across the United States, as well as manufacturer-specific training programs at dedicated training centers. Through its campus-based school system, UTI provides 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 (NASCAR Tech). For more information visit www.uti.edu.

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SOURCE Universal Technical Institute, Inc.