Universal Technical Institute (NYSE: UTI) reported Q1 EPS of ($0.01), $0.07 worse than the analyst estimate of $0.06. Revenue for the quarter came in at $76.13 million versus the consensus estimate of $81.1 million.

• New student starts increased 20.9% from the prior year quarter.
• Average enrollments increased 1.8% during the quarter as compared to the prior year period.
• First quarter revenue of $76.1 million decreased 12.7% compared to the prior year quarter.
• Adjusted free cash flow* of $5.8 million for the quarter, compared to $7.0 million in the prior year quarter.

Financial Results for the Three-Month Period Ended December 31, 2020 Compared to 2019

• New student starts increased 20.9% reflecting strong front-end demand across all channels.
• Revenues decreased 12.7% to $76.1 million compared to $87.2 million, which includes the deferral of $2.0 million of revenue related to the timing of completion of student make-up labs. The overall decrease is primarily attributable to lower average revenue per student driven by the pace in which students are progressing through their programs due to the impacts of COVID-19.
• Operating expenses decreased by 9.2% to $75.4 million, compared to $83.0 million. The decrease was primarily attributable to $3.2 million lower compensation, benefits and severance expenses from lower headcount and productivity improvements, as well as cost efficiencies from occupancy, travel, advertising and other costs.
• Operating income and adjusted operating income* were $0.8 million, compared to $4.3 million and $6.5 million, respectively.
• Net income was $1.1 million, compared to $4.7 million. Basic and diluted loss per share (EPS) were $(0.01).
• Adjusted EBITDA* was $4.3 million, compared to $10.1 million.
• Operating cash flow was $7.8 million, compared to $7.1 million.
• Adjusted free cash flow* was $5.8 million, compared to $7.0 million.

"This quarter marks another important step as we continue to build on UTI's superior track-record of preparing our students for careers in fields where the demand far outstrips the supply of credentialed candidates. Our strategy is focused in three key areas: student outcomes, innovation, and the accelerated growth and diversification of UTI," said Jerome Grant, UTI's Chief Executive Officer. "We have made deliberate shifts in our marketing and admissions functions that are already allowing us to reach record numbers of potential students who, now more than ever, can benefit from our programs. Our blended learning approach continues to advance and is being recognized by industry and employer partners as an essential platform upon which crucial digital skills for lifelong learning are built."

Grant continued, "Our growth and diversification strategy continues to move forward, with the intention to expand and diversify our offerings and capacity to best serve and meet America's growing need for highly trained middle-skills professionals. Driven by our vision for the future of our organization, we will continue to evolve and innovate to support student success and enhance outcomes."

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