Jenny Bruso Director, Investor Relations Universal Technical Institute, Inc. (623) 445-9351
Universal Technical Institute Reports Fiscal 2009 Fourth Quarter Results
Student Starts and Average Students Increased 15%
PHOENIX, ARIZ. – Dec. 1, 2009 – Universal Technical Institute, Inc. (NYSE: UTI), the leading provider of automotive technician training, reported net income for the fourth quarter ended Sept. 30, 2009 of $7.6 million, or 32 cents per diluted share, as compared to net income of $0.6 million, or 2 cents per diluted share, for the fourth quarter of the prior year. Net income for the year ended Sept. 30, 2009 was $11.7 million, or 48 cents per diluted share, compared with $8.2 million, or 32 cents per diluted share, for the year ended Sept. 30, 2008.
“The positive momentum we have created throughout the year culminated in the fourth quarter with record level student enrollment of 18,800 students and a return to double-digit operating margins. This solid performance provides a great beginning for 2010 with 2,300 more students in school than a year ago. Increasing utilization rates and continued focus on cost management should drive meaningful improvement to the bottom line in 2010,” said Kimberly McWaters, president and chief executive officer.
1
Student Metrics
Three Months Ended
Year Ended
September 30,
September 30,
2009
2008
Growth
2009
2008
Growth
Total starts
7,985
6,939
15.1
%
17,631
15,119
16.6
%
Average undergraduate full-time student enrollment
16,905
14,689
15.1
%
15,854
14,941
6.1
%
End of period undergraduate full-time student enrollment
18,802
16,481
14.1
%
18,802
16,481
14.1
%
Average capacity utilization
68.1
%
58.8
%
930bps
63.9
%
59.8
%
410bps
Fourth Quarter Operating Performance For the fourth quarter of fiscal 2009, net revenues were $99.5 million, a 17.6 percent increase from $84.6 million for last year’s fourth quarter. The increase in net revenues resulted from an increase in average undergraduate full-time student enrollment, higher tuition prices and a decrease in tuition discounts. These increases in net revenues were partially offset by an increase of $2.0 million primarily related to tuition revenue and loan origination fees financed under the proprietary loan program which will be recognized as tuition revenue when such amounts have been collected.
Educational services and facilities expense increased $2.3 million, or 4.8 percent, to $49.5 million for the three months ended Sept. 30, 2009, from $47.3 million for the three months ended Sept. 30, 2008. This was due to higher compensation and benefits expense related to an increase in the number of employees in the financial aid and other student support departments which was necessary to meet the needs of the growing student population.
Selling, general and administrative expense increased $0.9 million, or 2.4 percent to $37.7 million for the three months ended Sept. 30, 2009, from $36.8 million for the three months ended Sept. 30, 2008. The increase was due to increases in compensation and benefits expense and bad debt expense, partially offset by a decrease in advertising expense.
Operating income for the fourth quarter of fiscal 2009 was $12.3 million, compared to operating income of $0.5 million in the same period last year. Operating income margin for the fourth quarter of fiscal 2009 increased to 12.3% from 0.6% for the fourth quarter of fiscal 2008.
Interest income decreased $0.4 million to $65 thousand for the three months ended Sept. 30, 2009, from $0.4 million for the three months ended Sept. 30, 2008. The decrease is related to moving a portion of cash to lower risk, lower yield, U.S. government securities mutual funds and pre-refunded municipal bonds. During the three months ended Sept. 30, 2009, $15.0 million of cash was invested in pre-refunded municipal bonds, which earn interest that is exempt from federal income taxes.
Fiscal 2009 Operating Performance Net revenues for the year ended Sept. 30, 2009 were $366.6 million, a 6.7 percent increase, compared with $343.5 million for the year ended Sept. 30, 2008. Approximately $8.0 million of revenue funded under our proprietary loan program was not recognized during the year ended Sept. 30, 2009. These amounts will be recognized when cash has been collected.
Operating income for the year ended Sept. 30, 2009 was $18.6 million compared with $10.7 million for the year ended Sept. 30, 2008 resulting from the increase in net revenues as previously described and decreases in advertising and contract services expenses, partially offset by increases in compensation and benefits expense and bad debt expense.
Net income for the year ended Sept. 30, 2009 was $11.7 million, or $0.48 per diluted share, as compared to $8.2 million, or $0.32 per diluted share for the year ended Sept. 30, 2008.
Balance Sheet and Cash Flow At Sept. 30, 2009, cash and cash equivalents totaled $56.2 million as compared to $80.9 million at Sept. 30, 2008. The $24.7 million decrease is related to investing $31.6 million of cash in pre-refunded municipal bonds during the year ended Sept. 30, 2009 which are classified as current and non-current investments on the balance sheet. In September 2009, we purchased a facility for $9.1 million to accommodate the new Dallas/Fort Worth campus. Additionally, during the year ended Sept. 30, 2009, $16.9 million of cash was used to repurchase outstanding UTI common stock at an average price of $10.87 per share.
At Sept. 30, 2009, shareholders’ equity totaled $106.7 million as compared to $108.2 million at Sept. 30, 2008. UTI did not make any share repurchases during the three months ended Sept. 30, 2009; however, there is $23.6 million available under the share repurchase program.
Cash flow provided by operations was $49.2 million for the year ended Sept. 30, 2009, compared with $21.1 million for the year ended Sept. 30, 2008. This increase is primarily attributable to the increase in net income and an increase in deferred revenue and income tax payable, partially offset by an increase in other assets.
2
Proprietary Loan Program There is $30 million of credit available under the proprietary loan program. As of Sept. 30, 2009, UTI committed to provide loans to students for approximately $17.1 million and of that amount there was approximately $14.0 million in loans outstanding.
Fiscal 2010 Outlook During fiscal 2010, we anticipate the positive momentum in our key leading indicators to continue and anticipate student contracts, student starts and average undergraduate full-time student enrollment for the full year to grow year over year on a percentage basis in the low to mid teens. Due to the seasonality of our business and normal fluctuations in student populations, we would expect volatility in our quarterly results.
Conference Call Management of Universal Technical Institute will hold a conference call to discuss its fiscal 2009 fourth quarter results today at 7:00 a.m. Phoenix Time (9:00 a.m. Eastern Time). This call can be accessed by dialing 412-858-4600 or 800-860-2442. Investors are invited to listen to the call live athttp://uti.investorroom.com/. Please access the web site at least 15 minutes early to register, download and install any necessary audio software. A replay of the call will be available on the Investor Relations section of UTI’s Web site for 60 days or the replay can be accessed through Dec. 8, 2009 by dialing 412-317-0088 or 877-344-7529 and entering pass code 435399#.
3
About Universal Technical Institute Universal Technical Institute, Inc. (the “Company”) is the leading provider of post-secondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians as measured by total average undergraduate enrollment and graduates. The Company offers undergraduate degree, diploma and certificate programs at 10 campuses across the United States, and manufacturer-specific training programs, both student paid at our campuses and manufacturer or dealer sponsored at dedicated training centers. Through its campus-based school system, Universal Technical Institute offers specialized post-secondary education programs under the banner of several well-known brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (MMI) and NASCAR Technical Institute (NTI). We routinely post important information about us on our investor relations web site athttp://uti.investorroom.com/.
Safe Harbor Statement All statements contained herein, other than statements of historical fact, could be deemed “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s current expectations and are subject to a number of uncertainties that could cause actual performance and results to differ materially from the results discussed in the forward-looking statements. Factors that could affect the Company’s actual results include, among other things, changes to federal and state educational funding, possible failure or inability to obtain regulatory consents and certifications for new or expanding campuses, potential increased competition, changes in demand for the programs offered by the Company, increased investment in management and capital resources, the effectiveness of the Company’s recruiting, advertising and promotional efforts, changes to interest rates and unemployment, general economic conditions and other risks that are described from time to time in the public filings of the Company. Further information on these and other potential factors that could affect the Company’s financial results or condition may be found in the Company’s filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to publicly update any forward-looking statements whether as a result of new information, future events, changes in expectations, any changes in events, conditions or circumstances, or otherwise.
(Tables Follow)
4
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
Three Months Ended
Year Ended
September 30,
September 30,
2009
2008
2009
2008
(In thousands, except per share amounts)
Net revenues
$
99,537
$
84,629
$
366,635
$
343,460
Operating expenses:
Educational services and facilities
49,543
47,254
193,490
186,640
Selling, general and administrative
37,705
36,828
154,504
146,123
Total operating expenses
87,248
84,082
347,994
332,763
Income from operations
12,289
547
18,641
10,697
Other income (expense):
Interest income
65
427
246
3,185
Interest expense
(11
)
(10
)
(48
)
(39
)
Other income (expense)
259
(5
)
466
178
Total other income
313
412
664
3,324
Income before income taxes
12,602
959
19,305
14,021
Income tax expense
5,016
408
7,572
5,805
Net income
$
7,586
$
551
$
11,733
$
8,216
Earnings per share:
Net income per share – basic
$
0.32
$
0.02
$
0.48
$
0.32
Net income per share – diluted
$
0.32
$
0.02
$
0.48
$
0.32
Weighted average number of common shares outstanding
Basic
23,739
25,089
24,246
25,574
Diluted
24,054
25,403
24,627
25,807
5
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30,
September 30,
2009
2008
($’s in thousands)
Assets
Current assets:
Cash and cash equivalents
$
56,199
$
80,878
Restricted cash
—
2,000
Investments, current portion
25,142
—
Receivables, net
14,892
20,222
Deferred tax assets
7,452
5,951
Prepaid expenses and other current assets
10,480
8,568
Total current assets
114,165
117,619
Investments, less current portion
3,806
-
Property and equipment, net
81,168
68,258
Goodwill
20,579
20,579
Other assets
3,633
2,919
Total assets
$
223,351
$
209,375
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued expenses
$
47,276
$
37,995
Deferred revenue
48,175
44,695
Accrued tool sets
4,276
3,870
Income tax payable
1,794
—
Other current liabilities
25
44
Total current liabilities
101,546
86,604
Deferred tax liabilities
3,086
2,908
Deferred rent liability
5,593
5,354
Other liabilities
6,428
6,322
Total liabilities
116,653
101,188
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.0001 par value, 100,000,000 shares authorized,
28,641,006 shares issued and 23,770,780
shares outstanding at September 30, 2009 and
28,406,762 shares issued and 25,089,517
shares outstanding at September 30, 2008
3
3
Preferred stock, $0.0001 par value, 10,000,000 shares authorized,
0 shares issued and outstanding
—
—
Paid-in capital
140,813
137,100
Treasury stock, at cost, 4,870,226 shares and 3,317,245 shares at
September 30, 2009 and September 30, 2008, respectively
(76,506
)
(59,571
)
Retained earnings
42,388
30,655
Total shareholders’ equity
106,698
108,187
Total liabilities and shareholders’ equity
$
223,351
$
209,375
6
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Year Ended
September 30,
2009
2008
(In thousands)
Cash flows from operating activities:
Net income
$
11,733
$
8,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
17,568
17,605
Bad debt expense
6,732
4,379
Stock-based compensation
4,702
5,325
Deferred income taxes
(2,165
)
(249
)
Loss on disposal of property and equipment
1,004
1,216
Changes in assets and liabilities:
Receivables
(1,936
)
(11,307
)
Income tax payable (receivable)
1,564
960
Prepaid expenses and other current assets
(2,036
)
(1,327
)
Other assets
1,176
1,304
Accounts payable and accrued expenses
6,989
109
Deferred revenue
3,480
(4,694
)
Accrued tool sets and other current liabilities
387
(511
)
Other liabilities
(47
)
68
Net cash provided by operating activities
49,151
21,094
Cash flows from investing activities:
Purchase of property and equipment
(28,524
)
(17,705
)
Proceeds from disposal of property and equipment
36
32,689
Purchase of investments
(31,629
)
—
Proceeds received upon maturity of investments
3,067
-
Increase in restricted cash
—
(2,000
)
Net cash (used in) provided by investing activities
(57,050
)
12,984
Cash flows from financing activities:
Proceeds from issuance of common stock under employee plans
878
497
Payment of payroll taxes on stock-based compensation through shares withheld
(1,101
)
-
Excess tax benefit from stock-based compensation
378
251
Purchase of treasury stock, including fees of $75 in 2008
(16,935
)
(29,542
)
Net cash used in financing activities
(16,780
)
(28,794
)
Net increase (decrease) in cash and cash equivalents
(24,679
)
5,284
Cash and cash equivalents, beginning of year
80,878
75,594
Cash and cash equivalents, end of year
$
56,199
$
80,878
7
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
