Exhibit 99.1
Universal Technical Institute Reports 34% Revenue Growth and 49% Net Income
Improvement for Fiscal 2004 Second Quarter
PHOENIX, May 12 /PRNewswire-FirstCall/ -- Universal Technical Institute,
Inc. (NYSE: UTI) today announced financial results for the second quarter of
fiscal 2004 ended March 31, 2004.
Fiscal 2004 Second Quarter Operating Performance
Revenues for the second quarter of fiscal 2004 were $63.7 million, a 34.5%
increase from $47.4 million for the same quarter last year. The growth
drivers during the second quarter of 2004 were primarily higher average
student enrollment and tuition increases.
Income from operations for the second quarter of fiscal 2004 was
$13.5 million, compared with $9.5 million for the second quarter of fiscal
2003, and $14.0 million for the previous sequential quarter. The
year-over-year increase primarily relates to the growth in overall revenue
combined with improved capacity utilization at existing campuses and continued
development of the North Carolina NASCAR Technical Institute (NTI) campus,
which opened in July 2002.
Operating margin for the second quarter of fiscal 2004 was 21.2% up from
20.0% for the same period last year and compared to 23.7% for the first
quarter of fiscal 2004. Operating margin from the first to the second
quarter, declined by 2.5%. The primary drivers were a non-recurring favorable
adjustment in tool set expense in quarter one, of approximately $0.8 million
combined with higher costs during the second quarter related to professional
services, insurance costs associated with operating as a public company,
increased pre-opening costs related to the company's planned expansions as
well as, internal training that typically occurs during the second and third
quarters.
Net income for the second quarter of fiscal 2004 was $8.1 million, or
$0.28 per diluted share, a 49.1% increase from net income of $5.4 million, or
$0.21 per diluted share, for the same quarter in fiscal 2003. The company's
number of weighted average diluted shares outstanding increased in the second
quarter of fiscal 2004 to 28.5 million from 25.0 million in both the second
quarter of fiscal 2003 and the first quarter of fiscal 2004.
"Our strong performance in the second quarter reflects the continued solid
implementation of our business plan by our sales and marketing teams as well
as our operational teams," said Kimberly McWaters, Universal Technical
Institute, Inc.'s President and Chief Executive Officer.
Fiscal 2004 Six Month Operating Performance
Revenues for the first six months of fiscal 2004 were $122.7 million, a
32.3% increase from $92.7 million for the same period in the previous year.
Income from operations for the six months ended March 31, 2004 was
$27.5 million, compared with $17.7 million for the year-ago period. Operating
margin for the first six months of fiscal 2004 was 22.4%, up from 19.1% for
the first six months of fiscal 2003. Net income for the first six months of
fiscal 2004 was $15.5 million, or $0.58 per diluted share, a 54.3% increase
from net income of $10.0 million, or $0.39 per diluted share, for the same
period in fiscal 2003.
Balance Sheet
At March 31, 2004, the company had $34.0 million in cash and cash
equivalents, compared with $8.9 million at the end of fiscal 2003. On
December 17, 2003, the company completed its initial public offering of common
stock, raising net proceeds of approximately $59.0 million. During April
2004, the company completed a follow-on offering of common stock by selling
shareholders of UTI. The company did not receive any proceeds from the
follow-on offering.
At March 31, 2004, the company had shareholders' equity of $39.6 million,
compared with a shareholders' deficit of $83.2 million at the end of fiscal
2003. Cash flow provided from operations was $31.2 million for the six months
ended March 31, 2004, compared with $19.7 million generated for the same
period last year.
Student Enrollment Data
Average undergraduate enrollment for the three months ended March 31, 2004
was 13,006 students, an increase of 25.9% from 10,329 students for the same
period a year ago. Average undergraduate enrollment for the six months ended
March 31, 2004 was 12,931, an increase of 25.3% from 10,324 students for the
same period a year ago.
Undergraduate enrollment at the end of the second quarter of fiscal 2004
was 12,834 students, compared with 10,382 students at the end of the prior
year quarter and 12,282 students at the end of the first quarter of fiscal
2004.
Business Outlook
The following statements are based on Universal Technical Institute,
Inc.'s current expectations. These statements are forward-looking, and actual
results may differ materially as a result of factors more specifically
referenced below.
Based on the current market environment, the company expects revenue
growth in the 23% to 25% range for the third quarter of fiscal 2004 as
compared to the same quarter last year. This is consistent with the company's
internal growth plans. In light of the company's strong first half
performance, net revenue growth is targeted at approximately 26% to 28% for
the fiscal year ending September 30, 2004. The company also expects
improvement in net income margin for the remainder of the year as compared to
prior year periods, as a result of lower interest expense related to the
repayment of long-term debt. The company is targeting net income margin
growth of 80 basis points for the full fiscal year ending September 30, 2004,
excluding approximately $0.5 million associated with the company's secondary
offering. The costs related to the secondary offering were primarily incurred
during the third quarter of the fiscal year ending September 30, 2004. Future
year margin improvements are expected to be more modest and in-line with
guidance that is described below.
Looking further ahead, the company expects to sustain revenue growth over
the next two years in the 20% to 25% range. The company anticipates this
growth will come from three primary sources:
* Increased enrollment growth in the mid to high teens per year;
* Program extension and new elective growth; and
* Tuition increases of approximately 3% to 5% per year.
The company expects to improve operating margins over the next several
years in excess of 20 basis points annually. The improvement is expected to
be driven by efficient capacity utilization combined with constant attention
to cost controls. As new locations are added, the rate of margin improvement
may slow or there may be slight margin compression. In the event that two
campuses are opened within a twelve month period, margins may be lower for
several quarters as the new locations grow their student populations.
"Our business plan is focused on strategic growth aimed at capturing the
significant opportunities in our marketplace," said Ms. McWaters. "We are
increasing our national footprint by opening new campuses, expanding existing
programs and increasing manufacturer specific choices at our locations.
Earlier this year we announced plans to open a new UTI campus outside
Philadelphia and an expansion at our Glendale Heights, Illinois campus, and
more recently, we announced the expansion of our campuses in Rancho Cucamonga,
California and Orlando, Florida.
"Also important to our strategy is establishing new industry
relationships, such as the new training alliance we announced with Toyota
Motor Sales U.S.A to develop brand-specific training programs with them.
These relationships help increase enrollment at our campuses, while providing
us with financial sponsorship and equipment, product and curriculum support,"
continued Ms. McWaters. "As we further strengthen our leadership position by
providing better opportunities for technicians and manufacturers, we are also
solidifying our opportunities for long-term growth and success."
Conference Call
Management of Universal Technical Institute, Inc. will hold a conference
call to discuss its fiscal 2004 second quarter results today at 2:00 p.m.
Mountain (5:00 p.m. Eastern). Investors are invited to listen to the call
live at www.uticorp.com. Please access the web site at least 15 minutes early
to register, download and install any necessary audio software.
About Universal Technical Institute
Universal Technical Institute, Inc. is one of the nation's leading
providers of technical education training for students seeking careers as
professional automotive, diesel, collision repair, motorcycle and marine
technicians. The company offers undergraduate degree, diploma and certificate
programs at seven campuses across the United States, and manufacturer-
sponsored advanced programs at 22 dedicated training centers. Through its
campus-based school system, Universal Technical Institute, Inc. offers
specialized technical 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).
Statements in this press release concerning the future business, operating
results and financial condition of the company are "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
changes to federal and state educational funding, construction delays for new
campuses, possible failure or inability to obtain regulatory consents and
certifications for new campuses, potential increased competition, changes in
demand for the programs offered by the company, increased investment in
management and capital resources, and the effectiveness of the company's
recruiting, advertising and promotional efforts. 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, all of which are incorporated herein by reference. The
company undertakes no obligation to publicly update any forward-looking
statements whether as a result of new information, future events or otherwise.
- tables to follow -
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
March 31, March 31,
2003 2004 2003 2004
Net Revenues $47,358 $63,684 $92,732 $122,727
Operating expenses:
Educational services and
facilities 21,828 28,230 42,708 53,832
Selling, general and
administrative 16,048 21,960 32,302 41,387
Total operating expenses 37,876 50,190 75,010 95,219
Income from operations 9,482 13,494 17,722 27,508
Other expense (income):
Interest income (119) (50) (238) (75)
Interest expense 882 195 2,093 1,010
Other expense -- -- -- 752
Total other expense 763 145 1,855 1,687
Income from continuing
operations before income taxes 8,719 13,349 15,867 25,821
Income tax expense 3,317 5,293 5,819 10,313
Net income 5,402 8,056 10,048 15,508
Preferred stock dividends 1,145 -- 2,290 776
Net income available to common
shareholders $4,257 $8,056 $7,758 $14,732
Earnings per share:
Net income per share - basic $0.32 $0.29 $0.58 $0.68
Net income per share - diluted $0.21 $0.28 $0.39 $0.58
Weighted average number of
common shares outstanding:
Basic 13,402 27,707 13,402 21,573
Diluted 24,952 28,452 24,936 26,695
Other Data:
Depreciation and amortization 1,279 2,018 2,785 4,113
Number of campuses 7 7 7 7
Average undergraduate
enrollments 10,329 13,006 10,324 12,931
For the Period Ended
Sept. 30, 2003 March 31, 2004
Balance Sheet Data:
Cash and cash equivalents $8,925 $33,987
Current assets $31,819 $53,289
Working capital $(29,240) $(7,094)
Total assets $84,099 $108,031
Total long-term debt $28,014 $16
Total debt $31,874 $122
Redeemable convertible preferred stock $47,161 $--
Total shareholders' equity (deficit) $(83,152) $39,605
SOURCE Universal Technical Institute, Inc.
-0- 05/12/2004
/CONTACT: Jennifer Haslip, Senior Vice President and CFO of Universal
Technical Institute, +1-623-445-9402; or Laurie Berman, General Information,
+1-310-407-6546, or Jill Fukuhara, Investor/Analyst Information,
+1-310-407-6539, both of Financial Relations Board, for Universal Technical
Institute/
/Web site: http://www.uticorp.com /
(UTI)
CO: Universal Technical Institute, Inc.
ST: Arizona
IN: EDU CPR
SU: ERN