Document and Entity Information
Document and Entity Information - USD ($) | 3 Months Ended | ||
Dec. 31, 2017 | Feb. 02, 2018 | Mar. 31, 2017 | |
Document Documentand Entity Information [Abstract] | |||
Entity Registrant Name | UNIVERSAL TECHNICAL INSTITUTE INC. | ||
Entity Central Index Key | 1,261,654 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-Q | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | Q1 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 25,009,726 | ||
Trading Symbol | UTI | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 61,600,000 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 86,450 | $ 50,138 |
Restricted cash | 14,143 | 14,822 |
Trading securities | 0 | 40,020 |
Held-to-maturity investments, current portion | 6,804 | 7,759 |
Receivables, net | 8,969 | 15,197 |
Notes receivable, current portion | 5,074 | 0 |
Prepaid expenses and other current assets | 19,847 | 18,890 |
Total current assets | 141,287 | 146,826 |
Property and equipment, net | 105,794 | 106,664 |
Goodwill | 9,005 | 9,005 |
Notes receivable, less current portion | 35,178 | 0 |
Other assets | 11,634 | 11,607 |
Total assets | 302,898 | 274,102 |
Current liabilities: | ||
Accounts payable and accrued expenses | 32,928 | 37,481 |
Dividends payable | 1,323 | 0 |
Deferred revenue | 41,880 | 41,338 |
Accrued tool sets | 2,797 | 2,764 |
Financing obligation, current | 1,158 | 1,106 |
Income tax payable | 334 | 490 |
Other current liabilities | 3,285 | 3,210 |
Total current liabilities | 83,705 | 86,389 |
Deferred tax liabilities, net | 329 | 3,141 |
Deferred rent liability | 6,334 | 6,887 |
Financing obligation | 41,724 | 42,035 |
Other liabilities | 9,923 | 9,874 |
Total liabilities | 142,015 | 148,326 |
Commitments and contingencies (Note 11) | ||
Shareholders' equity: | ||
Common stock, $0.0001 par value, 100,000,000 shares authorized, 31,874,623 shares issued and 25,009,726 shares outstanding as of December 31, 2017 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 December 31, 2017 and September 30, 2017, liquidation preference of $100 per share | 0 | 0 |
Paid-in capital - common | 185,496 | 185,140 |
Paid-in capital - preferred | 68,853 | 68,853 |
Treasury stock, at cost, 6,864,897 shares as of December 31, 2017 and September 30, 2017 | (97,388) | (97,388) |
Retained earnings (deficit) | 3,919 | (30,832) |
Total shareholders' equity | 160,883 | 125,776 |
Total liabilities and shareholders' equity | $ 302,898 | $ 274,102 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Dec. 31, 2017 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 31,874,623 | 31,872,433 |
Common stock, shares outstanding | 25,009,726 | 25,007,536 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 700,000 | 700,000 |
Preferred stock, shares outstanding | 700,000 | 700,000 |
Treasury stock, at cost | 6,864,897 | 6,864,897 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED) Statement - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | $ 81,156 | $ 84,179 |
Operating Expenses [Abstract] | ||
Educational services and facilities | 44,081 | 47,154 |
Selling, general and administrative | 40,679 | 35,638 |
Total operating expenses | 84,760 | 82,792 |
Income (loss) from operations | (3,604) | 1,387 |
Other income (expense): | ||
Interest expense, net | (431) | (749) |
Equity in earnings of unconsolidated affiliate | 97 | 128 |
Other income (expense), net | (26) | 120 |
Total other expense, net | (360) | (501) |
Income (loss) before income taxes | (3,964) | 886 |
Income tax expense (benefit) | (2,829) | 2,610 |
Net loss | (1,135) | (1,724) |
Preferred stock dividends | 1,323 | 1,323 |
Loss available for distribution | $ (2,458) | $ (3,047) |
Earnings Per Share [Abstract] | ||
Net loss per share - basic | $ (0.10) | $ (0.12) |
Net loss per share - diluted | $ (0.10) | $ (0.12) |
Weighted average number of shares outstanding | ||
Basic | 25,008 | 24,625 |
Diluted | 25,008 | 24,625 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) Statement - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net loss | $ (1,135) | $ (1,724) |
Equity interest in investee's unrealized loss on hedging derivatives, net of taxes | 0 | (3) |
Comprehensive loss | $ (1,135) | $ (1,727) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - 3 months ended Dec. 31, 2017 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Retained Deficit | Series A Preferred Stock | Series A Preferred StockPaid-in Capital | Common StockPaid-in Capital |
Beginning Balance, shares at Sep. 30, 2017 | 31,872 | 6,865 | 700 | ||||
Beginning Balance at Sep. 30, 2017 | $ 125,776 | $ 3 | $ (97,388) | $ (30,832) | $ 0 | $ 68,853 | $ 185,140 |
Cumulative effect adjustment | 37,209 | ||||||
Net loss | (1,135) | (1,135) | |||||
Issuance of common stock under employee plans, shares | 3 | ||||||
Issuance of common stock under employee plans | 0 | $ 0 | |||||
Shares withheld for payroll taxes, shares | 0 | ||||||
Shares withheld for payroll taxes | (3) | $ 0 | (3) | ||||
Stock-based compensation | 359 | 359 | |||||
Preferred stock dividends | (1,323) | (1,323) | |||||
Equity interest in investee's unrealized loss on hedging derivatives, net of taxes | 0 | ||||||
Ending Balance, shares at Dec. 31, 2017 | 31,875 | 6,865 | 700 | ||||
Ending Balance at Dec. 31, 2017 | $ 160,883 | $ 3 | $ (97,388) | $ 3,919 | $ 0 | $ 68,853 | $ 185,496 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (1,135) | $ (1,724) |
Depreciation and amortization | 3,362 | 3,639 |
Amortization of assets subject to financing obligation | 671 | 670 |
Bad debt expense | 338 | 249 |
Stock-based compensation | 359 | 548 |
Deferred income taxes | (2,812) | 0 |
Equity in earnings of unconsolidated affiliate | (97) | (128) |
Training equipment credits earned, net | (224) | (246) |
Other gains (losses), net | 11 | (13) |
Changes in assets and liabilities: | ||
Restricted cash | (21) | (11,147) |
Receivables | 5,890 | 2,574 |
Prepaid expenses and other current assets | (1,250) | (362) |
Notes receivable | 3,043 | 0 |
Accounts payable and accrued expenses | (4,952) | (12,644) |
Deferred revenue | 542 | (2,283) |
Income tax payable/receivable | (156) | 4,198 |
Accrued tool sets and other current liabilities | 360 | 78 |
Deferred rent liability | (553) | (509) |
Other liabilities | 82 | (304) |
Net cash used in operating activities | (2,628) | (17,404) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (2,556) | (1,441) |
Proceeds from disposal of property and equipment | 2 | 0 |
Proceeds received upon maturity of investments | 947 | 720 |
Purchase of trading securities | (894) | 0 |
Proceeds from sales of trading securities | 40,902 | 0 |
Return of capital contribution from unconsolidated affiliate | 101 | 118 |
Restricted cash: other | 700 | 2,037 |
Net cash provided by investing activities | 39,202 | 1,434 |
Cash flows from financing activities: | ||
Payments of financing obligation | (259) | (214) |
Payment of payroll taxes on stock-based compensation through shares withheld | (3) | (2) |
Net cash used in financing activities | (262) | (216) |
Net increase (decrease) in cash and cash equivalents | 36,312 | (16,186) |
Cash and cash equivalents, beginning of period | 50,138 | 119,045 |
Cash and cash equivalents, end of period | 86,450 | 102,859 |
Supplemental disclosure of cash flow information: | ||
Taxes paid (refunds received) | 139 | |
Proceeds from Income Tax Refunds | (1,587) | |
Interest Paid | 835 | 852 |
Training equipment obtained in exchange for services | 418 | 346 |
Depreciation on training equipment obtained in exchange for services | 343 | 330 |
Change in accrued capital expenditures during the period | (399) | 204 |
Dividends payable | $ 1,323 | $ 1,323 |
Nature of the Business
Nature of the Business | 3 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the business | Nature of the Business We are the leading provider of postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians as measured by total average undergraduate full-time student enrollment and graduates. We recently began offering undergraduate diploma programs for welding and computer numerical control (CNC) machining. We offer certificate, diploma or degree programs at 12 campuses across the United States under the banner of several well-known brands, including Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute and NASCAR Technical Institute. We also offer manufacturer specific advanced training (MSAT) programs, including student-paid electives, at our campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers. We work closely with leading original equipment manufacturers (OEMs) in the automotive, diesel, motorcycle and marine industries to understand their needs for qualified service professionals. Revenues generated from our schools consist primarily of tuition and fees paid by students. To pay for a substantial portion of their tuition, the majority of students rely on funds received from federal financial aid programs under Title IV Programs of the Higher Education Act of 1965 (HEA), as amended, as well as from various veterans benefits programs. For further discussion, see Note 2 "Summary of Significant Accounting Policies - Concentration of Risk" and Note 18 “Government Regulation and Financial Aid” included in our 2017 Annual Report on Form 10-K filed with the SEC on December 1, 2017. |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 3 Months Ended |
Dec. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, our condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. Normal and recurring adjustments considered necessary for a fair statement of the results for the interim periods have been included. Operating results for the three months ended December 31, 2017 are not necessarily indicative of the results that may be expected for the year ending September 30, 2018. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2017 Annual Report on Form 10-K filed with the SEC on December 1, 2017. The unaudited condensed consolidated financial statements include the accounts of Universal Technical Institute, Inc. and our wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Revenue Recognition Post-secondary education. Revenues consist primarily of student tuition and fees derived from the programs we provide after reductions are made for discounts and scholarships that we sponsor and for refunds for students who withdraw from our programs prior to specified dates. We apply the five-step model outlined in Accounting Standards Codification Topic 606, Revenue from Contracts from Customers (ASC 606) . Tuition and fee revenue is recognized ratably over the term of the course or program offered. The majority of our undergraduate programs are designed to be completed in 36 to 102 weeks, and our advanced training programs range from 12 to 23 weeks in duration. We supplement our revenues with sales of textbooks and program supplies and other revenues, which are recognized as the transfer of goods or services occurs. Deferred revenue represents the excess of tuition and fee payments received as compared to tuition and fees earned and is reflected as a current liability in our consolidated balance sheets because it is expected to be earned within the next 12 months. Through our proprietary loan program, we, in substance, provide the students who participate in this program with extended payment terms for a portion of their tuition. Based on historical collection rates, we believe a portion of these loans are collectible, which results in a change in accounting due to our adoption of ASC 606. Accordingly, we recognize tuition and loan origination fees financed by the loan and any related interest revenue under the effective interest method required under the loan based on this collection rate. For additional discussion of this adoption, see Note 3. Other. We provide dealer technician training or instructor staffing services to manufacturers. Revenues are recognized as transfer of the services occurs. Proprietary Loan Program In order to provide funding for students who are not able to fully finance the cost of their education under traditional governmental financial aid programs, commercial loan programs or other alternative sources, we established a private loan program with a bank. Under the terms of the proprietary loan program, the bank originates loans for our students who meet our specific credit criteria with the related proceeds used exclusively to fund a portion of their tuition. We then purchase all such loans from the bank at least monthly and assume all of the related credit risk. The loans bear interest at market rates ranging from approximately 7% - 10% ; however, principal and interest payments are not required until six months after the student completes or withdraws from his or her program. After the deferral period, monthly principal and interest payments are required over the related term of the loan. The repayment term is up to ten years . The bank provides these services in exchange for a fee at a percentage of the principal balance of each loan and related fees. Under the terms of the related agreement, we transfer funds for loan purchases to a deposit account with the bank in advance of the bank funding the loan, which secures our related loan purchase obligation. Such funds are classified as restricted cash in our condensed consolidated balance sheet. All related expenses incurred with the bank or other service providers are expensed as incurred within educational services and facilities expense and were approximately $0.4 million and $0.4 million for the three months ended December 31, 2017 and 2016, respectively. Under ASC 606, the portion of tuition revenue related to the proprietary loan program is considered a form of variable consideration. We estimate the amount we ultimately expect to collect from the portion of tuition that is funded by the proprietary loan program, resulting in a note receivable. Estimating the collection rate requires significant management judgment. The estimated amount is determined at the inception of the contract and we recognize the related revenue as the student progresses through school.Each reporting period, we update our assessment of the variable consideration associated with the proprietary loan program and account for any changes in the transaction price. Prior to adopting ASC 606, we recognized revenue related to the proprietary loan program as cash was received. For additional discussion of this adoption, see Note 3. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements (Notes) | 3 Months Ended |
Dec. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09 which outlines a single comprehensive revenue model for entities to use in accounting for revenue arising from contracts with customers. The guidance supersedes most current revenue recognition guidance, including industry-specific guidance, and requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted for periods beginning after December 15, 2016. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). In 2016, the FASB issued further guidance that offers narrow scope improvements and clarifies certain implementation issues related to revenue recognition, including principal versus agent considerations and the identification of performance obligations and licensing. These additional updates have the same effective date as the new revenue guidance. We adopted ASC 606 using the modified retrospective method as of October 1, 2017. This approach was applied to all contracts not completed as of October 1, 2017. In addition to the enhanced footnote disclosures related to customer contracts, the most significant impact of the new standard related to the timing of revenue recognition for our proprietary loan program and the accounting for student program changes. We do not incur significant costs to obtain or fulfill revenue contracts. There were no other significant changes to the accounting for tuition or other revenues. Proprietary Loan Program Revenue Recognition Prior to adopting the new revenue standard, we recognized revenue related to the proprietary loan program as cash was received. The adoption of the new standard resulted in a change in the timing of revenue recognition. Under ASC 606, the portion of tuition revenue related to the proprietary loan program is considered a form of variable consideration. Based on our historical collection rates, we estimate the amount we ultimately expect to collect from the portion of tuition that is funded by the proprietary loan program. Estimating the collection rate requires significant management judgment. The estimated amount is determined at the inception of the contract and reevaluated each reporting period, and we recognize the related revenue as the student progresses through school. The change in the timing of revenue recognition also resulted in the recognition of a note receivable. The cumulative impact of changing the timing of revenue recognition for the proprietary loan program as of October 1, 2017 was an increase in stockholders' equity of approximately $37.2 million and an increase in deferred revenue of $2.9 million , and a corresponding increase in notes receivable and related interest. Program Changes From time to time, a student may elect to “upgrade” or “downgrade” their program, which will change the program length and price. When a student changes their program, a new enrollment agreement is signed and a new financial aid package is completed for the student since this modification will impact the length of the program and/or the transaction price. Prior to adopting the standard, when a student changed their program, we recorded any changes to the tuition price or program length through a cumulative catch up adjustment from the inception of the contract through the date of the change. Under ASC 606, we must assess the contract modification to determine if there has been an increase in price or scope. For those program changes that result in either an increase in price or scope, we will now record the change on a prospective basis. Based on our analysis, the cumulative change of accounting for program changes under ASC 606 was not material as of October 1, 2017. Effective the First Quarter of Fiscal 2019: In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 clarifies the definition of a business. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, then the acquisition is not a business. In addition, a business must include at least one substantive process. The standard is to be applied on a prospective basis to purchases or disposals of a business or an asset. The effect of this new standard on our consolidated financial statements will be dependent on any future acquisitions. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We are currently evaluating the impact that the standard will have on our consolidated statements of cash flows. Further, in November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash. This guidance requires restricted cash and cash equivalents to be included with cash and cash equivalents on the statement of cash flows. Based on the restricted cash balances on our consolidated balance sheets, we expect this standard to have an impact on the presentation of our consolidated statements of cash flows. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 primarily impacts the accounting for equity investments other than those accounted for using the equity method of accounting, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. Additionally, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting for other financial instruments, such as loans, investments in debt securities and financial liabilities is largely unchanged. Based on our current portfolio of investments in debt securities accounted for as held-to-maturity securities and investments made in equity securities accounted for as trading securities, the adoption of this standard is not expected to have a material impact on our financial statements. Effective the First Quarter of Fiscal 2020: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for substantially all leases, with the exception of short-term leases. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the statement of income. We are currently evaluating the impact that the update will have on our results of operations, financial condition and financial statement disclosures. Effective the First Quarter of Fiscal 2021: In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 includes an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses (ECL), which the FASB believes will result in more timely recognition of such losses. We are currently evaluating the impact that the update will have on our results of operations, financial condition and financial statement disclosures. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers (Notes) | 3 Months Ended |
Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | Revenue from Contracts with Customers Adoption of ASC 606 We adopted ASC 606 effective October 1, 2017. As a result, we have changed our accounting for revenue recognition as detailed in Note 2. Except for the changes resulting from this adoption, we have consistently applied the accounting policies to all periods presented in these consolidated financial statements. We applied ASC 606 using the modified retrospective method - i.e., by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of equity at October 1, 2017. Therefore, the comparative information has not been adjusted and continues to be reported under the prior guidance of ASC 605. The details of the significant changes and quantitative impact of the changes are disclosed in Note 3. Nature of Goods and Services See Note 2 for a description of the nature of revenues. We provide post-secondary education and other services in the same geographical market, the U.S. The impact of economic factors on the nature, amount, timing and uncertainty of revenue and cash flows is consistent among our various post-secondary education programs. See Note 14 for disaggregated segment revenue information. Contract Balances Contract assets primarily relate to the Company’s rights to consideration for work completed in relation to its services performed but not billed at the reporting date. The contract assets are transferred to the receivables when the rights become unconditional. Currently, the Company does not have any contract assets which have not transferred to a receivable. The contract liabilities primarily relate to service contracts where we received payments but we have not yet satisfied the related performance obligations. The advance consideration received from customers for the services is a contract liability until services are provided to the customer. The following table provides information about receivables and contract liabilities from contracts with customers: December 31, 2017 September 30, 2017 Receivables, which includes Tuition and Notes Receivable $ 44,139 $ 10,268 Contract liabilities $ 41,880 $ 41,338 During the three months ended December 31, 2017, the contract liabilities balance included decreases for revenues recognized during the period and increases related to new students who started school during the period. Transaction Price Allocated to the Remaining Performance Obligations Tuition and fee revenue is recognized ratably over the term of the course or program offered. The majority of our undergraduate programs are designed to be completed in 36 to 102 weeks, and our advanced training programs range from 12 to 23 weeks in duration. Impacts on Financial Statements In accordance with Topic 606, the disclosure of the impact of adoption to our condensed consolidated statements of income and balance sheets was as follows: December 31, 2017 As Reported Adjustments Balance Without ASC 606 Adoption Consolidated Balance Sheet Data: Notes receivable, current portion $ 5,074 $ (5,074 ) $ — Total current assets 141,287 (5,074 ) 136,213 Notes receivable, less current portion 35,178 (35,178 ) — Total assets 302,898 (40,252 ) 262,646 Deferred revenue $ 41,880 $ (2,896 ) $ 38,984 Total current liabilities 83,705 (2,896 ) 80,809 Total liabilities 142,015 (2,896 ) 139,119 Retained earnings (deficit) 3,919 (37,356 ) (33,437 ) Total shareholders' equity 160,883 (37,356 ) 123,527 Total liabilities and shareholders' equity 302,898 (40,252 ) 262,646 Three Months Ended December 31, 2017 As Reported Adjustments Balance Without ASC 606 Adoption Consolidated Income Statement Data: Revenues 81,156 (146 ) 81,010 Loss from operations (3,604 ) (146 ) (3,750 ) Loss before income taxes (3,964 ) (146 ) (4,110 ) Net loss (1,135 ) (146 ) (1,281 ) |
Investments
Investments | 3 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments During 2017, we began investing in various bond funds. These investments are held principally for resale in the near term and are classified as trading securities. Trading securities are recorded at fair value based on the closing market price of the security. During the three months ended December 31, 2017 , we liquidated our investment in trading securities; as a result, there was no unrealized gain on trading securities at December 31, 2017. Held-to-maturity securities consist of pre-funded municipal bonds, which are generally secured by escrowed-to-maturity U.S. Treasury notes. Municipal bonds represent debt obligations issued by states, cities, counties and other governmental entities, which earn interest that is exempt from federal income taxes. Held-to-maturity securities also include certificates of deposit issued by financial institutions and corporate bonds from large cap industrial and selected financial companies with a minimum credit rating of A. We have the ability and intention to hold our investments until maturity and therefore classify these investments as held-to-maturity and report them at amortized cost. Amortized cost and fair value for investments classified as held-to-maturity at December 31, 2017 were as follows: Estimated Amortized Gross Unrealized Fair Market Cost Gains Losses Value Due in less than 1 year: Corporate bonds $ 6,804 $ — $ (5 ) $ 6,799 $ 6,804 $ — $ (5 ) $ 6,799 Amortized cost and fair value for investments classified as held-to-maturity at September 30, 2017 were as follows: Estimated Amortized Gross Unrealized Fair Market Cost Gains Losses Value Due in less than 1 year: Corporate bonds $ 7,759 $ — $ (4 ) $ 7,755 $ 7,759 $ — $ (4 ) $ 7,755 Investments are exposed to various risks, including interest rate, market and credit risk, and as a result, it is possible that changes in the values of these investments may occur and that such changes could affect the amounts reported in the condensed consolidated balance sheets, condensed consolidated statements of loss and condensed consolidated statements of comprehensive loss. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities and Level 3, defined as unobservable inputs that are not corroborated by market data. Any transfers of investments between levels occurs at the end of the reporting period. Assets measured or disclosed at fair value on a recurring basis consisted of the following: Fair Value Measurements Using December 31, 2017 Quoted Prices Significant Significant Money market funds $ 68,457 $ 68,457 $ — $ — Notes receivable 40,252 — — 40,252 Corporate bonds 6,799 6,799 — — Total assets at fair value on a recurring basis $ 115,508 $ 75,256 $ — $ 40,252 Fair Value Measurements Using September 30, 2017 Quoted Prices Significant Significant Trading securities $ 40,020 $ 40,020 $ — $ — Money market funds 39,569 39,569 — — Corporate bonds 7,755 7,755 — — Total assets at fair value on a recurring basis $ 87,344 $ 87,344 $ — $ — Notes receivable relate to our proprietary loan program. See Notes 2 and 3 for additional discussion. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consisted of the following: Depreciable December 31, 2017 September 30, 2017 Land — $ 3,189 $ 3,189 Buildings and building improvements 30-35 79,932 79,712 Leasehold improvements 1-28 41,834 41,825 Training equipment 3-10 94,745 94,817 Office and computer equipment 3-10 36,598 36,458 Curriculum development 5 19,580 19,713 Software developed for internal use 1-5 12,114 11,772 Vehicles 5 1,276 1,269 Construction in progress — 3,031 1,599 292,299 290,354 Less accumulated depreciation and amortization (186,505 ) (183,690 ) $ 105,794 $ 106,664 The following amounts, which are included in the above table, represent assets financed by financing obligations resulting from the build-to-suit arrangements at our Lisle, Illinois and Long Beach, California campuses: December 31, 2017 September 30, 2017 Assets financed by financing obligations, gross $ 45,816 $ 45,816 Less accumulated depreciation and amortization (9,515 ) (8,844 ) Assets financed by financing obligations, net $ 36,301 $ 36,972 |
Investment in Unconsolidated Af
Investment in Unconsolidated Affiliate (Notes) | 3 Months Ended |
Dec. 31, 2017 | |
Investment in Unconsolidated Affiliate [Abstract] | |
Equity Method Investments Disclosure [Text Block] | Investment in Unconsolidated Affiliate We have an equity interest in a joint venture related to the lease of our Lisle, Illinois campus facility (JV). In connection with this investment, we do not possess a controlling financial interest as we do not hold a majority of the equity interest, nor do we have the power to make major decisions without approval from the other equity member. Therefore, we do not qualify as the primary beneficiary. Accordingly, this investment is accounted for under the equity method of accounting and is included in other assets in our condensed consolidated balance sheets. We recognize our proportionate share of the net income or loss during each accounting period and any return of capital as a change in our investment. Historically, the JV used an interest rate cap to manage interest rate risk associated with its floating rate debt. This derivative instrument was designated as a cash flow hedge based on the nature of the risk being hedged. As such, the effective portion of the gain or loss on the derivative was initially reported as a component of the JV’s accumulated other comprehensive income or loss, net of tax, and was subsequently reclassified into earnings when the hedged transaction affects earnings. Any ineffective portion of the gain or loss was recognized in the JV’s current earnings. Due to our equity method investment in the JV, when the JV reports a current year component of other comprehensive income (OCI), we, as an investor, likewise adjust our investment account for the change in investee equity. In addition, we adjust our OCI for our share of the JV’s currently reported OCI item. During the three months ended December 31, 2017, the JV refinanced the facility loan and discontinued its use of an interest rate cap. Investment in unconsolidated affiliate consisted of the following: December 31, 2017 September 30, 2017 Carrying Value Ownership Percentage Carrying Value Ownership Percentage Investment in JV $ 4,108 27.972 % $ 4,112 27.972 % Investment in unconsolidated affiliate included the following activity during the period: Three Months Ended December 31, 2017 2016 Balance at beginning of period $ 4,112 $ 4,036 Equity in earnings of unconsolidated affiliates 97 128 Return of capital contribution from unconsolidated affiliates (101 ) (118 ) Equity interest in investee's unrealized losses on hedging derivatives, net of taxes — (3 ) Balance at end of period $ 4,108 $ 4,043 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following: December 31, 2017 September 30, 2017 Accounts payable $ 7,583 $ 9,515 Accrued compensation and benefits 14,384 16,612 Other accrued expenses 10,961 11,354 $ 32,928 $ 37,481 |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes Each reporting period, we estimate the likelihood that we will be able to recover our deferred tax assets, which represent timing differences in the recognition of revenue and certain tax deductions for accounting and tax purposes. The realization of deferred tax assets is dependent, in part, upon future taxable income. In assessing the need for a valuation allowance, we consider all available evidence, including our historical profitability and projections of future taxable income. If, based on the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, we record a valuation allowance. Such valuation allowance is maintained on our deferred tax assets until sufficient positive evidence exists to support its reversal in future periods. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. Significant judgment is required to determine if, and the extent to which, valuation allowances should be recorded against deferred tax assets. During the three months ended March 31, 2016, there were several pieces of negative evidence that contributed to our conclusion that a valuation allowance was appropriate against all deferred tax assets that rely upon future taxable income for their realization. As a result of our assessment, we recorded a full valuation allowance during the three months ended March 31, 2016. The amount of the deferred tax assets considered realizable, however, could be adjusted in future periods if estimates of future taxable income during the carryforward period are increased, if objective negative evidence in the form of cumulative losses is no longer present and if additional weight may be given to subjective evidence such as our projections for growth. We will continue to evaluate our valuation allowance in future periods for any change in circumstances that causes a change in judgment about the realizability of the deferred tax assets. Tax Cuts and Jobs Act On December 22, 2017, the Tax Cuts and Jobs Act (the Act) was enacted. The Act makes significant changes to U.S. tax laws, including the following that are expected to be impactful to us: lower corporate tax rates; limitations on the amount of net operating losses that can be used to offset income beginning with our fiscal year ending September 30, 2019; the elimination of net operating loss carryback sand the allowance of indefinite loss carryforwards; and the immediate expensing of short-lived capital investment, such as machinery and equipment. As of December 31, 2017, we have adjusted our deferred tax liabilities and deferred tax assets, and the corresponding valuation allowance, for the expected impact of the provisions of the Act. As our net operating losses can now be carried forward indefinitely, our related deferred tax asset can be offset with the deferred tax liability related to goodwill, before a full valuation allowance was applied to the deferred tax asset. As a result, we released approximately $2.8 million of the existing valuation allowance during the three months ended December 31, 2017. Section 382 Change in Ownership Under Section 382 of the Internal Revenue Code (IRC), for income tax purposes only, we underwent a change in ownership as a result of a preferred stock issuance in June 2016, which is discussed in Note 12. Under the IRC, a change in ownership occurs when a five percent shareholder, as measured by ownership value, increases their ownership in a loss corporation by more than 50 percentage points during the defined testing period; both common and preferred stock are included in the determination of ownership value. Since the purchaser of the preferred stock acquired ownership exceeding 50 percent of our total ownership value, this transaction qualified as a change in ownership under section 382 of the IRC only. Accordingly, certain deductions and losses will be subject to an annual Section 382 limitation. The limitation will affect the timing of when these deductions and losses can be used and may cause us to make income tax payments even if a pre-tax loss is recorded in future periods. The limitation may also cause the deductions and losses to expire unused. The components of income tax expense are as follows: Three Months Ended December 31, 2017 2016 Current expense (benefit) Federal $ (3 ) $ 2,227 State (14 ) 383 Total current expense (benefit) (17 ) 2,610 Deferred expense Federal (2,878 ) — State 66 — Total deferred expense (2,812 ) — Total provision for income taxes $ (2,829 ) $ 2,610 The income tax provision differs from the tax that would result from application of the statutory federal tax rate of 21% to pre-tax loss for the three months ended December 31, 2017 and 35% to pre-tax income for the three months ended December 31, 2016. The reasons for the differences are as follows: Three Months Ended December 31, 2017 2016 Income tax expense (benefit) at statutory rate $ (971 ) $ 310 State income taxes (benefits), net of federal tax benefit (173 ) 107 Increase (decrease) in valuation allowance (1,836 ) 2,139 Other, net 151 54 Total income tax expense $ (2,829 ) $ 2,610 The components of the deferred tax assets (liabilities) recorded in the accompanying condensed consolidated balance sheets were as follows: December 31, 2017 September 30, 2017 Gross deferred tax assets: Deferred compensation $ 1,325 $ 1,976 Reserves and accruals 3,357 5,017 Accrued tool sets 750 1,111 Deferred revenue 8,144 27,056 Deferred rent liability 159 455 Net operating losses and tax credit carryforwards 1,362 416 Depreciation and amortization of property and equipment 2,564 3,151 Charitable contribution carryovers 528 665 Deductions limited by Section 382 646 943 Valuation allowance (15,537 ) (38,407 ) Total gross deferred tax assets 3,298 2,383 Gross deferred tax liabilities: Amortization of goodwill and intangibles (2,056 ) (3,141 ) Prepaid and other expenses deductible for tax (1,571 ) (2,383 ) Total gross deferred tax liabilities (3,627 ) (5,524 ) Net deferred tax liabilities $ (329 ) $ (3,141 ) The following table summarizes the activity for the valuation allowance for the three months ended December 31, 2017 : Balance at Additions (Reductions) to Income Reassessment of Deferred Tax Assets (1) Balance at End of $ 38,407 $ (1,836 ) $ (21,034 ) $ 15,537 (1) Of this total, approximately $9.6 million relates to our adoption of ASC 606 as of October 1, 2017, and approximately $11.4 million relates to the impact of the Tax Cuts and Jobs Act. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal In the ordinary conduct of our business, we are periodically subject to lawsuits, demands in arbitration, investigations, regulatory proceedings or other claims, including, but not limited to, claims involving current or former students, routine employment matters, business disputes and regulatory demands. When we are aware of a claim or potential claim, we assess the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, we accrue a liability for the loss. When a loss is not both probable and estimable, we do not accrue a liability. Where a loss is not probable but is reasonably possible, including if a loss in excess of an accrued liability is reasonably possible, we determine whether it is possible to provide an estimate of the amount of the loss or range of possible losses for the claim. Because we cannot predict with certainty the ultimate resolution of the legal proceedings (including lawsuits, investigations, regulatory proceedings or claims) asserted against us, it is not currently possible to provide such an estimate. The ultimate outcome of pending legal proceedings to which we are a party may have a material adverse effect on our business, cash flows, results of operations or financial condition. In September 2012, we received a Civil Investigative Demand (CID) from the Attorney General of the Commonwealth of Massachusetts related to a pending investigation in connection with allegations that we caused false claims to be submitted to the Commonwealth relating to student loans, guarantees and grants provided to students at our Norwood, Massachusetts campus. The CID required us to produce documents and provide written testimony regarding a broad range of our business from September 2006 to September 2012. We responded timely to the request. The Attorney General made a follow-up request for documents, and we complied with this request in February 2013. In response to a status update request from us, the Attorney General requested and we provided in April 2015 additional documents and information related to graduate employment at our Norwood, Massachusetts campus and our policies and practices for determining graduate employment. We have not received any additional requests since April 2015. At this time, we cannot predict the eventual scope, duration, outcome or associated costs of this request, and accordingly we have not recorded any liability in the accompanying condensed consolidated financial statements. Operating Leases In October 2017, we entered into lease agreements for a new campus in Bloomfield, New Jersey, which is expected to open in fall 2018. The leases have an initial term of approximately 12 years. We determined the leases are operating leases. Future minimum lease payments as of December 31, 2017 are as follows: Years ending September 30, 2018 $ — 2019 1,353 2020 1,826 2021 1,862 2022 1,900 Thereafter 17,204 $ 24,145 Proprietary Loan Program As discussed in Note 2, we have established a private loan program with a bank under which we ultimately purchase the loans originated by the bank. As of December 31, 2017 , we had committed to provide loans to our students for approximately $154.3 million since inception. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Common Shareholders’ Equity | Shareholders’ Equity Common Stock Holders of our common stock are entitled to receive dividends when and as declared by our Board of Directors and have the right to one vote per share on all matters requiring shareholder approval. On June 9, 2016, our Board of Directors voted to eliminate the quarterly cash dividend on our common stock. Any future common stock dividends require the approval of a majority of the voting power of the Series A Preferred Stock. Preferred Stock Preferred Stock consists of 10,000,000 authorized preferred shares of $0.0001 par value each. As of December 31, 2017 and September 30, 2017, 700,000 shares of Series A Convertible Preferred Stock (Series A Preferred Stock) were issued and outstanding. The liquidation preference associated with the Series A Preferred Stock was $100 per share at December 31, 2017 . Pursuant to the terms of the Securities Purchase Agreement, we may pay a cash dividend on each share of the Series A Preferred Stock at a rate of 7.5% per year on the liquidation preference then in effect (Cash Dividend). If we do not pay a Cash Dividend, the liquidation preference shall be increased to an amount equal to the current liquidation preference in effect plus an amount reflecting that liquidation preference multiplied by the Cash Dividend rate then in effect plus 2.0% per year (Accrued Dividend). Cash Dividends are payable semi-annually in arrears on September 30 and March 31 of each year, and begin to accrue on the first day of the applicable dividend period. We accrued Cash Dividends of $1.3 million as of December 31, 2017 . Share Repurchase Program On December 20, 2011, our Board of Directors authorized the repurchase of up to $25.0 million of our common stock in the open market or through privately negotiated transactions. The timing and actual number of shares purchased will depend on a variety of factors such as price, corporate and regulatory requirements and prevailing market conditions. We may terminate or limit the share repurchase program at any time without prior notice. We did not repurchase shares during the three months ended December 31, 2017 . As of December 31, 2017 , we have purchased 1,677,570 shares at an average price per share of $9.09 and a total cost of approximately $15.3 million under this program. Under the terms of the Securities Purchase Agreement, future stock purchases under this program require the approval of a majority of the voting power of the Series A Preferred Stock. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic net income (loss) per share has historically been calculated by dividing net income (loss) attributable to common stock by the weighted average number of common shares outstanding for the period. Our Series A Preferred Stock is considered a participating security because, in the event that we pay a dividend or make a distribution on the outstanding common stock, we shall also pay each holder of the Series A Preferred Stock a dividend on an as-converted basis. As such, for periods subsequent to the issuance of the Series A Preferred Stock, which occurred on June 24, 2016, we calculated basic earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividend and participation rights in undistributed earnings. Under this method, all earnings, distributed and undistributed, are allocated to common shares and participating securities based on their respective rights to receive dividends. The Series A Preferred Stock is not included in the computation of basic income (loss) per share in periods in which we have a net loss, as the Series A Preferred Stock is not contractually obligated to share in our net losses. Accordingly, the two-class method was not applicable for the three months ended December 31, 2017 and 2016. Diluted net income per share is calculated using the more dilutive of the as-converted or the two-class method. The two-class method assumes conversion of all potential shares other than the participating securities. Dilutive potential common shares include outstanding stock options, unvested restricted share awards and units and convertible preferred stock. The basic and diluted net loss amounts are the same for the three months ended December 31, 2017 and 2016 as a result of the net loss and anti-dilutive impact of the potentially dilutive securities. The following table summarizes the computation of basic and diluted loss per share under the as-converted method: Three Months Ended December 31, 2017 2016 (In thousands) Loss available for distribution $ (2,458 ) $ (3,047 ) Weighted average number of shares Basic shares outstanding 25,008 24,625 Dilutive effect related to employee stock plans — — Diluted shares outstanding 25,008 24,625 Net loss per share - basic $ (0.10 ) $ (0.12 ) Net loss per share - diluted $ (0.10 ) $ (0.12 ) The following table summarizes the potential weighted average shares of common stock that were excluded from the determination of our diluted shares outstanding as they were anti-dilutive: Three Months Ended December 31, 2017 2016 (In thousands) Outstanding stock-based grants 363 665 Convertible preferred stock 21,021 21,021 21,384 21,686 |
Segment Information
Segment Information | 3 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our principal business is providing postsecondary education. We also provide manufacturer-specific training and these operations are managed separately from our campus operations. These operations do not currently meet the quantitative criteria for segments and therefore are reflected in the Other category. Our equity method investment and other non-Postsecondary Education operations are also included within the Other category. Corporate expenses are allocated to Postsecondary Education and the Other category based on compensation expense. Depreciation and amortization includes amortization of assets subject to a financing obligation. Summary information by reportable segment is as follows: Three Months Ended December 31, 2017 2016 Revenues Postsecondary Education $ 77,344 $ 80,544 Other 3,813 3,635 Intersegment eliminations (1 ) — Consolidated $ 81,156 $ 84,179 Income (loss) from operations Postsecondary Education $ (2,780 ) $ 2,097 Other (824 ) (710 ) Consolidated $ (3,604 ) $ 1,387 Depreciation and amortization (1) Postsecondary Education $ 3,938 $ 4,208 Other 95 101 Consolidated $ 4,033 $ 4,309 Net loss Postsecondary Education $ (440 ) $ (1,546 ) Other (695 ) (178 ) Consolidated $ (1,135 ) $ (1,724 ) December 31, 2017 September 30, 2017 Goodwill Postsecondary Education $ 8,222 $ 8,222 Other 783 783 Consolidated $ 9,005 $ 9,005 Total assets Postsecondary Education $ 295,199 $ 266,370 Other 7,699 7,732 Consolidated $ 302,898 $ 274,102 (1) Excludes depreciation of training equipment obtained in exchange for services of $0.3 million for each of the three months ended December 31, 2017 and 2016, respectively. |
Government Regulation and Finan
Government Regulation and Financial Aid (Notes) | 3 Months Ended |
Dec. 31, 2017 | |
Government Regulation and Financial Aid [Abstract] | |
Government Regulation And Financial Aid [Text Block] | Government Regulation and Financial Aid Accreditation In December 2017, we received formal notification from the Accrediting Commission of Career Schools and Colleges (ACCSC) granting continuing accreditation for our Sacramento, California campus. In December 2017, we also received formal notification from ACCSC granting continuing accreditation with a stipulation for our Long Beach, California campus. As required by the stipulation, we submitted our response and a new leave of absence policy reflecting feedback received from ACCSC on January 22, 2018. Regulation of Federal Student Financial Aid Programs Gainful Employment. On January 19, 2018, ED announced the release of a new Gainful Employment Disclosure Template and provided institutions until April 6, 2018 to update disclosures for each of their gainful employment programs using the new template. ED made several modifications to the template including, among other things, to provide that: 1) institutions are no longer required to disclose room and board charges in the template, 2) institutions will not be required to disclose median earnings data in the template, and 3) institutions may add more than one accreditor job placement rate. ED’s January 19, 2018 electronic announcement also indicated that warning requirements are temporarily suspended for programs with an alternate earnings appeal currently under consideration by ED. Following the withdrawal or rejection of a program’s appeal, an institution has 30 days to revise its GE Disclosure Template to include the warning. As noted in our 2017 Annual Report on Form 10-K filed with the SEC on December 1, 2017, none of our programs is currently subject to the warning requirements based on the 2015 debt measurement year rates. Program Participation Agreements. The HEA specifies the manner in which ED reviews institutions for eligibility and certification to participate in Title IV Programs. Every educational institution seeking Title IV Program funding for its students must be certified to participate and is required to periodically renew this certification. Each institution must apply to ED for continued certification to participate in Title IV Programs before its current term of certification expires, or if it undergoes a change of control. The Program Participation Agreement (PPA) document serves as ED’s formal authorization of an institution and its associated additional locations to participate in Title IV Programs for a specified period of time. All of our institutions’ current PPAs will expire on March 31, 2018. In accordance with ED guidance, we submitted materially complete applications for recertification prior to the December 31, 2017 deadline, which will allow our schools to continue to fully participate without interruption beyond the ordinary expiration date until ED makes a determination of recertification. |
Basis of Presentation Summary o
Basis of Presentation Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Post-secondary education. Revenues consist primarily of student tuition and fees derived from the programs we provide after reductions are made for discounts and scholarships that we sponsor and for refunds for students who withdraw from our programs prior to specified dates. We apply the five-step model outlined in Accounting Standards Codification Topic 606, Revenue from Contracts from Customers (ASC 606) . Tuition and fee revenue is recognized ratably over the term of the course or program offered. The majority of our undergraduate programs are designed to be completed in 36 to 102 weeks, and our advanced training programs range from 12 to 23 weeks in duration. We supplement our revenues with sales of textbooks and program supplies and other revenues, which are recognized as the transfer of goods or services occurs. Deferred revenue represents the excess of tuition and fee payments received as compared to tuition and fees earned and is reflected as a current liability in our consolidated balance sheets because it is expected to be earned within the next 12 months. Through our proprietary loan program, we, in substance, provide the students who participate in this program with extended payment terms for a portion of their tuition. Based on historical collection rates, we believe a portion of these loans are collectible, which results in a change in accounting due to our adoption of ASC 606. Accordingly, we recognize tuition and loan origination fees financed by the loan and any related interest revenue under the effective interest method required under the loan based on this collection rate. For additional discussion of this adoption, see Note 3. Other. We provide dealer technician training or instructor staffing services to manufacturers. Revenues are recognized as transfer of the services occurs. |
Proprietary Loan Program Policy [Policy Text Block] | Proprietary Loan Program In order to provide funding for students who are not able to fully finance the cost of their education under traditional governmental financial aid programs, commercial loan programs or other alternative sources, we established a private loan program with a bank. Under the terms of the proprietary loan program, the bank originates loans for our students who meet our specific credit criteria with the related proceeds used exclusively to fund a portion of their tuition. We then purchase all such loans from the bank at least monthly and assume all of the related credit risk. The loans bear interest at market rates ranging from approximately 7% - 10% ; however, principal and interest payments are not required until six months after the student completes or withdraws from his or her program. After the deferral period, monthly principal and interest payments are required over the related term of the loan. The repayment term is up to ten years . The bank provides these services in exchange for a fee at a percentage of the principal balance of each loan and related fees. Under the terms of the related agreement, we transfer funds for loan purchases to a deposit account with the bank in advance of the bank funding the loan, which secures our related loan purchase obligation. Such funds are classified as restricted cash in our condensed consolidated balance sheet. All related expenses incurred with the bank or other service providers are expensed as incurred within educational services and facilities expense and were approximately $0.4 million and $0.4 million for the three months ended December 31, 2017 and 2016, respectively. Under ASC 606, the portion of tuition revenue related to the proprietary loan program is considered a form of variable consideration. We estimate the amount we ultimately expect to collect from the portion of tuition that is funded by the proprietary loan program, resulting in a note receivable. Estimating the collection rate requires significant management judgment. The estimated amount is determined at the inception of the contract and we recognize the related revenue as the student progresses through school.Each reporting period, we update our assessment of the variable consideration associated with the proprietary loan program and account for any changes in the transaction price. Prior to adopting ASC 606, we recognized revenue related to the proprietary loan program as cash was received. For additional discussion of this adoption, see Note 3. |
Revenue from Contracts with C24
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table provides information about receivables and contract liabilities from contracts with customers: December 31, 2017 September 30, 2017 Receivables, which includes Tuition and Notes Receivable $ 44,139 $ 10,268 Contract liabilities $ 41,880 $ 41,338 |
New Accounting Pronouncement, Early Adoption | In accordance with Topic 606, the disclosure of the impact of adoption to our condensed consolidated statements of income and balance sheets was as follows: December 31, 2017 As Reported Adjustments Balance Without ASC 606 Adoption Consolidated Balance Sheet Data: Notes receivable, current portion $ 5,074 $ (5,074 ) $ — Total current assets 141,287 (5,074 ) 136,213 Notes receivable, less current portion 35,178 (35,178 ) — Total assets 302,898 (40,252 ) 262,646 Deferred revenue $ 41,880 $ (2,896 ) $ 38,984 Total current liabilities 83,705 (2,896 ) 80,809 Total liabilities 142,015 (2,896 ) 139,119 Retained earnings (deficit) 3,919 (37,356 ) (33,437 ) Total shareholders' equity 160,883 (37,356 ) 123,527 Total liabilities and shareholders' equity 302,898 (40,252 ) 262,646 Three Months Ended December 31, 2017 As Reported Adjustments Balance Without ASC 606 Adoption Consolidated Income Statement Data: Revenues 81,156 (146 ) 81,010 Loss from operations (3,604 ) (146 ) (3,750 ) Loss before income taxes (3,964 ) (146 ) (4,110 ) Net loss (1,135 ) (146 ) (1,281 ) |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized Cost and Fair Value of Held to Maturity Investments | Amortized cost and fair value for investments classified as held-to-maturity at December 31, 2017 were as follows: Estimated Amortized Gross Unrealized Fair Market Cost Gains Losses Value Due in less than 1 year: Corporate bonds $ 6,804 $ — $ (5 ) $ 6,799 $ 6,804 $ — $ (5 ) $ 6,799 Amortized cost and fair value for investments classified as held-to-maturity at September 30, 2017 were as follows: Estimated Amortized Gross Unrealized Fair Market Cost Gains Losses Value Due in less than 1 year: Corporate bonds $ 7,759 $ — $ (4 ) $ 7,755 $ 7,759 $ — $ (4 ) $ 7,755 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Our Money Market Mutual Funds, Municipal Bonds and Certificates of Deposit | Assets measured or disclosed at fair value on a recurring basis consisted of the following: Fair Value Measurements Using December 31, 2017 Quoted Prices Significant Significant Money market funds $ 68,457 $ 68,457 $ — $ — Notes receivable 40,252 — — 40,252 Corporate bonds 6,799 6,799 — — Total assets at fair value on a recurring basis $ 115,508 $ 75,256 $ — $ 40,252 Fair Value Measurements Using September 30, 2017 Quoted Prices Significant Significant Trading securities $ 40,020 $ 40,020 $ — $ — Money market funds 39,569 39,569 — — Corporate bonds 7,755 7,755 — — Total assets at fair value on a recurring basis $ 87,344 $ 87,344 $ — $ — |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Property and equipment, net consisted of the following: Depreciable December 31, 2017 September 30, 2017 Land — $ 3,189 $ 3,189 Buildings and building improvements 30-35 79,932 79,712 Leasehold improvements 1-28 41,834 41,825 Training equipment 3-10 94,745 94,817 Office and computer equipment 3-10 36,598 36,458 Curriculum development 5 19,580 19,713 Software developed for internal use 1-5 12,114 11,772 Vehicles 5 1,276 1,269 Construction in progress — 3,031 1,599 292,299 290,354 Less accumulated depreciation and amortization (186,505 ) (183,690 ) $ 105,794 $ 106,664 |
Assets financed by financing obligations | The following amounts, which are included in the above table, represent assets financed by financing obligations resulting from the build-to-suit arrangements at our Lisle, Illinois and Long Beach, California campuses: December 31, 2017 September 30, 2017 Assets financed by financing obligations, gross $ 45,816 $ 45,816 Less accumulated depreciation and amortization (9,515 ) (8,844 ) Assets financed by financing obligations, net $ 36,301 $ 36,972 |
Investment in Unconsolidated 28
Investment in Unconsolidated Affiliate (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Investment in Unconsolidated Affiliate [Abstract] | |
Equity Method Investments | Investment in unconsolidated affiliate consisted of the following: December 31, 2017 September 30, 2017 Carrying Value Ownership Percentage Carrying Value Ownership Percentage Investment in JV $ 4,108 27.972 % $ 4,112 27.972 % Investment in unconsolidated affiliate included the following activity during the period: Three Months Ended December 31, 2017 2016 Balance at beginning of period $ 4,112 $ 4,036 Equity in earnings of unconsolidated affiliates 97 128 Return of capital contribution from unconsolidated affiliates (101 ) (118 ) Equity interest in investee's unrealized losses on hedging derivatives, net of taxes — (3 ) Balance at end of period $ 4,108 $ 4,043 |
Accounts Payable and Accrued 29
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued expenses | Accounts payable and accrued expenses consisted of the following: December 31, 2017 September 30, 2017 Accounts payable $ 7,583 $ 9,515 Accrued compensation and benefits 14,384 16,612 Other accrued expenses 10,961 11,354 $ 32,928 $ 37,481 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense are as follows: Three Months Ended December 31, 2017 2016 Current expense (benefit) Federal $ (3 ) $ 2,227 State (14 ) 383 Total current expense (benefit) (17 ) 2,610 Deferred expense Federal (2,878 ) — State 66 — Total deferred expense (2,812 ) — Total provision for income taxes $ (2,829 ) $ 2,610 |
Schedule of Effective Income Tax Rate Reconciliation | The income tax provision differs from the tax that would result from application of the statutory federal tax rate of 21% to pre-tax loss for the three months ended December 31, 2017 and 35% to pre-tax income for the three months ended December 31, 2016. The reasons for the differences are as follows: Three Months Ended December 31, 2017 2016 Income tax expense (benefit) at statutory rate $ (971 ) $ 310 State income taxes (benefits), net of federal tax benefit (173 ) 107 Increase (decrease) in valuation allowance (1,836 ) 2,139 Other, net 151 54 Total income tax expense $ (2,829 ) $ 2,610 |
Schedule of Deferred Tax Assets and Liabilities | The components of the deferred tax assets (liabilities) recorded in the accompanying condensed consolidated balance sheets were as follows: December 31, 2017 September 30, 2017 Gross deferred tax assets: Deferred compensation $ 1,325 $ 1,976 Reserves and accruals 3,357 5,017 Accrued tool sets 750 1,111 Deferred revenue 8,144 27,056 Deferred rent liability 159 455 Net operating losses and tax credit carryforwards 1,362 416 Depreciation and amortization of property and equipment 2,564 3,151 Charitable contribution carryovers 528 665 Deductions limited by Section 382 646 943 Valuation allowance (15,537 ) (38,407 ) Total gross deferred tax assets 3,298 2,383 Gross deferred tax liabilities: Amortization of goodwill and intangibles (2,056 ) (3,141 ) Prepaid and other expenses deductible for tax (1,571 ) (2,383 ) Total gross deferred tax liabilities (3,627 ) (5,524 ) Net deferred tax liabilities $ (329 ) $ (3,141 ) |
Schedule of Valuation and Qualifying Accounts Disclosure | The following table summarizes the activity for the valuation allowance for the three months ended December 31, 2017 : Balance at Additions (Reductions) to Income Reassessment of Deferred Tax Assets (1) Balance at End of $ 38,407 $ (1,836 ) $ (21,034 ) $ 15,537 (1) Of this total, approximately $9.6 million relates to our adoption of ASC 606 as of October 1, 2017, and approximately $11.4 million relates to the impact of the Tax Cuts and Jobs Act. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Operating Leases In October 2017, we entered into lease agreements for a new campus in Bloomfield, New Jersey, which is expected to open in fall 2018. The leases have an initial term of approximately 12 years. We determined the leases are operating leases. Future minimum lease payments as of December 31, 2017 are as follows: Years ending September 30, 2018 $ — 2019 1,353 2020 1,826 2021 1,862 2022 1,900 Thereafter 17,204 $ 24,145 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the potential weighted average shares of common stock that were excluded from the determination of our diluted shares outstanding as they were anti-dilutive: Three Months Ended December 31, 2017 2016 (In thousands) Outstanding stock-based grants 363 665 Convertible preferred stock 21,021 21,021 21,384 21,686 |
Summary of Calculation of Weighted Average Number of Shares Outstanding Used in Computing Basic and Diluted Net Income Loss Per Share | The following table summarizes the computation of basic and diluted loss per share under the as-converted method: Three Months Ended December 31, 2017 2016 (In thousands) Loss available for distribution $ (2,458 ) $ (3,047 ) Weighted average number of shares Basic shares outstanding 25,008 24,625 Dilutive effect related to employee stock plans — — Diluted shares outstanding 25,008 24,625 Net loss per share - basic $ (0.10 ) $ (0.12 ) Net loss per share - diluted $ (0.10 ) $ (0.12 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Information by Reportable Segment | Summary information by reportable segment is as follows: Three Months Ended December 31, 2017 2016 Revenues Postsecondary Education $ 77,344 $ 80,544 Other 3,813 3,635 Intersegment eliminations (1 ) — Consolidated $ 81,156 $ 84,179 Income (loss) from operations Postsecondary Education $ (2,780 ) $ 2,097 Other (824 ) (710 ) Consolidated $ (3,604 ) $ 1,387 Depreciation and amortization (1) Postsecondary Education $ 3,938 $ 4,208 Other 95 101 Consolidated $ 4,033 $ 4,309 Net loss Postsecondary Education $ (440 ) $ (1,546 ) Other (695 ) (178 ) Consolidated $ (1,135 ) $ (1,724 ) December 31, 2017 September 30, 2017 Goodwill Postsecondary Education $ 8,222 $ 8,222 Other 783 783 Consolidated $ 9,005 $ 9,005 Total assets Postsecondary Education $ 295,199 $ 266,370 Other 7,699 7,732 Consolidated $ 302,898 $ 274,102 (1) Excludes depreciation of training equipment obtained in exchange for services of $0.3 million for each of the three months ended December 31, 2017 and 2016, respectively. |
Nature of the Business (Narrati
Nature of the Business (Narrative) (Details) | Dec. 31, 2017Campus |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of campuses through which undergraduate degree, diploma and certificate programs are offered | 12 |
Basis of Presentation Narrative
Basis of Presentation Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Proprietary Loan Program [Line Items] | ||
Loans receivable, term | 10 years | |
Loan Processing Fee | $ 0.4 | $ 0.4 |
Minimum [Member] | ||
Proprietary Loan Program [Line Items] | ||
Interest rate for proprietary loan program | 7.00% | |
Maximum [Member] | ||
Proprietary Loan Program [Line Items] | ||
Interest rate for proprietary loan program | 10.00% |
Recent Accounting Pronounceme36
Recent Accounting Pronouncements Narrative (Details) - USD ($) $ in Thousands | Oct. 01, 2017 | Dec. 31, 2017 | Sep. 30, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect adjustment | $ 3,919 | $ (30,832) | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect adjustment | $ 37,209 | $ (37,356) | |
Deferred Revenue, Period Increase (Decrease) | $ 2,900 |
Revenue from Contracts with C37
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Revenue from Contract with Customer [Abstract] | ||
Accounts and Notes Receivable, Net | $ 44,139 | $ 10,268 |
Deferred revenue | $ 41,880 | $ 41,338 |
Revenue from Contracts with C38
Revenue from Contracts with Customers Impact of adoption of ASC 606 on financial statements (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Oct. 01, 2017 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Notes receivable, current portion | $ 5,074 | $ 0 | ||
Total current assets | 141,287 | 146,826 | ||
Notes receivable, less current portion | 35,178 | 0 | ||
Total assets | 302,898 | 274,102 | ||
Deferred revenue | 41,880 | 41,338 | ||
Total current liabilities | 83,705 | 86,389 | ||
Total liabilities | 142,015 | 148,326 | ||
Retained earnings (deficit) | 3,919 | (30,832) | ||
Total shareholders' equity | 160,883 | 125,776 | ||
Total liabilities and shareholders' equity | 302,898 | $ 274,102 | ||
Revenues | 81,156 | $ 84,179 | ||
Loss from operations | (3,604) | 1,387 | ||
Loss before income taxes | (3,964) | 886 | ||
Net loss | (1,135) | $ (1,724) | ||
Balance Without ASC 606 Adoption [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Notes receivable, current portion | 0 | |||
Total current assets | 136,213 | |||
Notes receivable, less current portion | 0 | |||
Total assets | 262,646 | |||
Deferred revenue | 38,984 | |||
Total current liabilities | 80,809 | |||
Total liabilities | 139,119 | |||
Retained earnings (deficit) | (33,437) | |||
Total shareholders' equity | 123,527 | |||
Total liabilities and shareholders' equity | 262,646 | |||
Revenues | 81,010 | |||
Loss from operations | (3,750) | |||
Loss before income taxes | (4,110) | |||
Net loss | (1,281) | |||
Accounting Standards Update 2014-09 [Member] | Adjustments [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Notes receivable, current portion | (5,074) | |||
Total current assets | (5,074) | |||
Notes receivable, less current portion | (35,178) | |||
Total assets | (40,252) | |||
Deferred revenue | (2,896) | |||
Total current liabilities | (2,896) | |||
Total liabilities | (2,896) | |||
Retained earnings (deficit) | (37,356) | $ 37,209 | ||
Total shareholders' equity | (37,356) | |||
Total liabilities and shareholders' equity | (40,252) | |||
Revenues | (146) | |||
Loss from operations | (146) | |||
Loss before income taxes | (146) | |||
Net loss | $ (146) |
Investments Narrative (Details)
Investments Narrative (Details) | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Trading securities, unrealized holding gain | $ 0 |
Investments (Amortized Cost and
Investments (Amortized Cost and Fair Value of Held to Maturity Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 6,804 | $ 7,759 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (5) | (4) |
Estimated Fair Market Value | 6,799 | 7,755 |
Corporate bonds, due in less than 1 year | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 6,804 | 7,759 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (5) | (4) |
Estimated Fair Market Value | $ 6,799 | $ 7,755 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets Measured at Fair Value on a Recurring Basis) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | $ 75,256 | $ 87,344 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Trading Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 40,020 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 68,457 | 39,569 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Notes Receivable [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 6,799 | 7,755 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Trading Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 0 | |
Significant Other Observable Inputs (Level 2) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Notes Receivable [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 0 | |
Significant Other Observable Inputs (Level 2) | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 40,252 | 0 |
Significant Unobservable Inputs (Level 3) | Trading Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 0 | |
Significant Unobservable Inputs (Level 3) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Notes Receivable [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 40,252 | |
Significant Unobservable Inputs (Level 3) | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 0 | 0 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 115,508 | 87,344 |
Estimate of Fair Value Measurement [Member] | Trading Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 40,020 | |
Estimate of Fair Value Measurement [Member] | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 68,457 | 39,569 |
Estimate of Fair Value Measurement [Member] | Notes Receivable [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | 40,252 | |
Estimate of Fair Value Measurement [Member] | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value on a recurring basis | $ 6,799 | $ 7,755 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 292,299 | $ 290,354 |
Less accumulated depreciation and amortization | (186,505) | (183,690) |
Property and equipment, net | 105,794 | 106,664 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,189 | 3,189 |
Buildings and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 79,932 | 79,712 |
Buildings and Building Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 30 years | |
Buildings and Building Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 35 years | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 41,834 | 41,825 |
Leasehold improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 1 year | |
Leasehold improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 28 years | |
Training equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 94,745 | 94,817 |
Training equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 3 years | |
Training equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 10 years | |
Office and computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 36,598 | 36,458 |
Office and computer equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 3 years | |
Office and computer equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 10 years | |
Curriculum development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 5 years | |
Property and equipment, gross | $ 19,580 | 19,713 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 12,114 | 11,772 |
Software Development [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 1 year | |
Software Development [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 5 years | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives | 5 years | |
Property and equipment, gross | $ 1,276 | 1,269 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,031 | $ 1,599 |
Property and Equipment, net Ass
Property and Equipment, net Assets Financed by Financing Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Assets financed by financing obligations [Line Items] | ||
Less accumulated depreciation and amortization | $ (9,515) | $ (8,844) |
Assets financed by financing obligation, net | (36,301) | (36,972) |
Buildings and Building Improvements [Member] | ||
Assets financed by financing obligations [Line Items] | ||
Assets financed by financing obligations, gross | $ 45,816 | $ 45,816 |
Investment in Unconsolidated 44
Investment in Unconsolidated Affiliate Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Schedule of Equity Method Investments [Line Items] | ||||
Investment in Unconsolidated Affiliate | $ 4,108 | $ 4,112 | $ 4,043 | $ 4,036 |
Investment in JV [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment in Unconsolidated Affiliate | $ 4,108 | $ 4,112 | ||
Investment in Unconsolidated Affiliate, Ownership Percentage | 27.972% | 27.972% |
Investment in Unconsolidated 45
Investment in Unconsolidated Affiliate (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||||
Investment in Unconsolidated Affiliate | $ 4,108 | $ 4,043 | $ 4,112 | $ 4,036 |
Equity in earnings of unconsolidated affiliate | 97 | 128 | ||
Return of capital contribution from unconsolidated affiliate | (101) | (118) | ||
Equity interest in investee's unrealized loss on hedging derivatives, net of taxes | 0 | $ (3) | ||
Investment in JV [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment in Unconsolidated Affiliate | $ 4,108 | $ 4,112 | ||
Investment in Unconsolidated Affiliate, Ownership Percentage | 27.972% | 27.972% |
Accounts Payable and Accrued 46
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 7,583 | $ 9,515 |
Accrued compensation and benefits | 14,384 | 16,612 |
Other accrued expenses | 10,961 | 11,354 |
Accounts payable and accrued expenses, total | $ 32,928 | $ 37,481 |
Income Taxes Components of Inco
Income Taxes Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Components of income tax expense [Line Items] | ||
Current Income Tax Expense (Benefit) | $ (17) | $ 2,610 |
Deferred income taxes | (2,812) | 0 |
Income tax expense (benefit) | (2,829) | 2,610 |
UNITED STATES | ||
Components of income tax expense [Line Items] | ||
Current Income Tax Expense (Benefit) | (3) | 2,227 |
Deferred income taxes | (2,878) | 0 |
State and Local Jurisdiction [Member] | ||
Components of income tax expense [Line Items] | ||
Current Income Tax Expense (Benefit) | (14) | 383 |
Deferred income taxes | $ 66 | $ 0 |
Income Taxes Reconciliation of
Income Taxes Reconciliation of Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense at statutory rate | $ (971) | $ 310 |
State income taxes (benefits), net of federal tax benefit | (173) | 107 |
Increase in valuation allowance | (1,836) | 2,139 |
Other, net | 151 | 54 |
Income tax expense (benefit) | $ (2,829) | $ 2,610 |
Income Taxes Components of Defe
Income Taxes Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 |
Income Tax Disclosure [Abstract] | ||
Deferred compensation | $ 1,325 | $ 1,976 |
Reserves and accruals | 3,357 | 5,017 |
Accrued tool sets | 750 | 1,111 |
Deferred revenue | 8,144 | 27,056 |
Deferred rent liability | 159 | 455 |
Net operating losses and tax credit carryforwards | 1,362 | 416 |
Depreciation and amortization of property and equipment | 2,564 | 3,151 |
Charitable contribution carryforwards | 528 | 665 |
Deductions limited by Section 382 | 646 | 943 |
Valuation Allowance | (15,537) | (38,407) |
Total gross deferred tax assets | 3,298 | 2,383 |
Amortization of goodwill and intangibles | (2,056) | (3,141) |
Prepaid and other expenses deductible for tax | (1,571) | (2,383) |
Total gross deferred tax liabilities | (3,627) | (5,524) |
Net deferred tax assets (liabilities) | $ (329) | $ (3,141) |
Income Taxes Summary of Valuati
Income Taxes Summary of Valuation Allowance (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Beginning Balance Valuation Allowances and Reserves | $ 38,407 |
Valuation Allowances and Reserves, Period Increase (Decrease) | (1,836) |
Reassessment of Deferred Tax Assets | 21,034 |
Ending Balance Valuation Allowances and Reserves | 15,537 |
Valuation Allowance, Tax Credit Carryforward [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Reassessment of Deferred Tax Assets | 2,800 |
deferred tax asset related to asc 606 adoption [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Reassessment of Deferred Tax Assets | 9,600 |
deferred tax asset related to Tax Cut and Jobs Act [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Reassessment of Deferred Tax Assets | $ 11,400 |
Commitments and Contingencies51
Commitments and Contingencies (Future Minimum Rental Commitments) (Details) - Bloomfield, New Jersey campus [Member] $ in Thousands | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Operating Leased Assets [Line Items] | |
Lessee, Operating Lease, Term of Contract | 12 months |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 0 |
Operating Leases, Future Minimum Payments, Due in Two Years | 1,353 |
Operating Leases, Future Minimum Payments, Due in Three Years | 1,826 |
Operating Leases, Future Minimum Payments, Due in Four Years | 1,862 |
Operating Leases, Future Minimum Payments, Due in Five Years | 1,900 |
Operating Leases, Future Minimum Payments, Due Thereafter | 17,204 |
Operating Leases, Future Minimum Payments Due | $ 24,145 |
Commitments and Contingencies52
Commitments and Contingencies (Narrative) (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies (Textual) [Abstract] | |
Amount Of Loans Committed To Provide | $ 154.3 |
Shareholders' Equity Shareholde
Shareholders' Equity Shareholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 72 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 20, 2011 | |
Stockholders Equity Note [Line Items] | |||||
Common Stock, Voting Rights | 1 | ||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares issued | 700,000 | 700,000 | 700,000 | ||
Dividends payable | $ 1,323 | $ 1,323 | $ 0 | $ 1,323 | |
Repurchase of common stock authorized by Board of Directors | $ 25,000 | ||||
Purchased shares | 1,677,570 | ||||
Average price per share | $ 9.09 | ||||
Aggregate cost of treasury stock repurchased during the period | $ 15,300 | ||||
Series A Preferred Stock | |||||
Stockholders Equity Note [Line Items] | |||||
Preferred stock, shares issued | 700,000 | 700,000 | 700,000 | ||
Preferred Stock, Liquidation Preference Per Share | $ 100 | $ 100 | |||
Preferred Stock, Dividend Rate, Percentage | 7.50% | ||||
Preferred Stock, Dividend Payment Rate, Variable | If we do not pay a Cash Dividend, the liquidation preference shall be increased to an amount equal to the current liquidation preference in effect plus an amount reflecting that liquidation preference multiplied by the Cash Dividend rate then in effect plus 2.0% per year (Accrued Dividend). |
Earnings per Share (Calculation
Earnings per Share (Calculation of the Weighted Average Number of Shares Outstanding) (Details) - shares shares in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average number of shares | ||
Basic | 25,008 | 24,625 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0 | 0 |
Diluted | 25,008 | 24,625 |
Earnings per Share calculation
Earnings per Share calculation of earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Loss available for distribution | $ (2,458) | $ (3,047) |
Weighted Average Number of Shares Outstanding, Basic | 25,008 | 24,625 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 25,008 | 24,625 |
Loss per share - basic | $ (0.10) | $ (0.12) |
Loss per share - diluted | $ (0.10) | $ (0.12) |
Earnings per Share Schedule of
Earnings per Share Schedule of antidilutive securities (Details) - shares | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 21,384,000 | 21,686,000 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 363,000 | 665,000 |
Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 21,021,000 | 21,021,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | |||
Depreciation on training equipment obtained in exchange for services | $ 343 | $ 330 | |
Revenues | |||
Revenues | 81,156 | 84,179 | |
Income (loss) from operations | |||
Loss from operations | (3,604) | 1,387 | |
Depreciation and amortization | |||
Depreciation and amortization | 3,362 | 3,639 | |
Total Depreciation and Amortization | 4,033 | 4,309 | |
Net income (loss) | |||
Net loss | (1,135) | (1,724) | |
Goodwill | |||
Goodwill | 9,005 | $ 9,005 | |
Assets | |||
Total assets | 302,898 | 274,102 | |
Postsecondary education | |||
Revenues | |||
Revenues | 77,344 | 80,544 | |
Income (loss) from operations | |||
Loss from operations | (2,780) | 2,097 | |
Depreciation and amortization | |||
Depreciation and amortization | 3,938 | 4,208 | |
Net income (loss) | |||
Net loss | (440) | (1,546) | |
Goodwill | |||
Goodwill | 8,222 | 8,222 | |
Assets | |||
Total assets | 295,199 | 266,370 | |
Other | |||
Revenues | |||
Revenues | 3,813 | 3,635 | |
Income (loss) from operations | |||
Loss from operations | (824) | (710) | |
Depreciation and amortization | |||
Depreciation and amortization | 95 | 101 | |
Net income (loss) | |||
Net loss | (695) | (178) | |
Goodwill | |||
Goodwill | 783 | 783 | |
Assets | |||
Total assets | 7,699 | $ 7,732 | |
Intersegment Eliminations [Member] | |||
Revenues | |||
Revenues | $ (1) | $ 0 |
Uncategorized Items - uti-20171
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 37,209,000 |