Exhibit 99.1
Universal Technical Institute, Inc. Reports 30% Revenue Growth and
41% Net Income Improvement for Fiscal 2004
PHOENIX, Dec. 1 /PRNewswire-FirstCall/ -- Universal Technical Institute,
Inc. (NYSE: UTI), a provider of technical education training, today announced
financial results for the fourth quarter and fiscal year ending September 30,
2004.
Fiscal 2004 Fourth Quarter Operating Performance
Net revenues for the fourth quarter of fiscal 2004 were $69.5 million, a
26.7% increase from $54.9 million for the same quarter last year. The
significant growth drivers during the fourth fiscal quarter were higher
average student enrollments and tuition increases.
Income from operations for the fourth quarter of fiscal 2004 was
$11.7 million compared to $9.3 million for the fourth quarter of fiscal 2003.
The year over year increase relates primarily to growth in overall revenue and
efficiencies in selling, general and administrative costs. The increase in
income from operations was partially offset by expansion costs throughout the
year, at the company's new Exton, PA campus and the addition of an automotive
program at the existing Orlando, FL campus as well as additional costs related
to operating as a public company.
Operating margin for the fourth quarter of fiscal 2004 was 16.9%, and was
flat when compared to the same period last year. Costs associated with the
expansion of Exton, PA, and the addition of the Orlando automotive program,
together totaled approximately $2.0 million and represented approximately 2.9%
of revenue for the fourth fiscal quarter of 2004. Favorable results at
maturing campuses offset a significant portion of the fiscal 2004 fourth
quarter's expansion related costs.
Net income for the fourth quarter of fiscal 2004 was $6.7 million, or
$0.23 per diluted share, a 27.4% increase from net income of $5.2 million, or
$0.16 per diluted share, for the same quarter in fiscal 2003. The company's
number of weighted average diluted shares outstanding increased in the fourth
quarter of fiscal 2004 to 28.4 million shares from 14.7 million shares for the
fourth quarter in 2003. The increase in weighted average diluted shares as
compared to the 2003 fourth quarter is partially attributable to the issuance
of 3.3 million shares in connection with the company's initial public offering
completed in December 2003. In addition, 10.3 million shares were excluded
from the fourth quarter 2003 share count because they were antidilutive.
Fiscal 2004 Operating Performance
Net revenues for the year ended September 30, 2004 were $255.1 million, a
29.9% increase from $196.5 million for the same period in the previous year.
Income from operations for the year ended September 30, 2004 was
$50.1 million, a $14.0 million increase or 38.6%, as compared to income from
operations of $36.2 million for the previous year. Operating margin for the
fiscal year ended September 30, 2004 was 19.6%, up 1.2 percentage points
compared to 18.4% for the prior fiscal year. Net income for the year ended
September 30, 2004 was $28.8 million or $1.04 per diluted share, a
41.4% increase from net income of $20.4 million or $0.79 per diluted share,
for the fiscal year ended September 30, 2003.
"Fiscal 2004 was a year of solid execution and growth for UTI," said
Kimberly McWaters, President and Chief Executive Officer of Universal
Technical Institute, Inc. "Our performance reflects a 35% increase in student
capacity as compared to the beginning of our fiscal year, supporting a 24%
increase in average students for the year. During this period of growth, we
successfully opened our Exton, PA campus, launched a new automotive training
program at our Orlando campus and increased capacity at four of our existing
campuses. Our industry-oriented business model continued to expand with the
addition of our new Toyota T-PAT program. We remain committed to our industry
customers and students, providing quality education and meaningful outcomes to
both. We look forward to the successful opening of our new campuses in Boston
and Sacramento in the upcoming year."
Balance Sheet
At September 30, 2004, the company had $42.6 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. The company did not
receive any proceeds from the follow-on offering.
At September 30, 2004, the company had shareholders' equity of
$55.0 million, compared with shareholders' deficit of $83.2 million at the end
of fiscal 2003. Cash flow provided from operations was $47.7 million for the
year ended September 30, 2004 compared with $36.4 million for the previous
year.
Student Enrollment Data
Average undergraduate enrollment for the three months ended September 30,
2004 was 14,048 students, an increase of 21.3% from 11,582 students for the
same period a year ago. Average undergraduate enrollment for the year ended
September 30, 2004 was 13,076, an increase of 23.7% from 10,568 for the same
period a year ago.
Undergraduate enrollment at the end of the fourth quarter of fiscal 2004
was 15,212 students, compared with 12,561 students at the end of the fourth
quarter of fiscal 2003.
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. The company undertakes no obligation to update these
expectations.
Fiscal Year Ending September 30, 2005
The company is targeting a 20% to 22% increase in net revenue for the year
ending September 30, 2005 as compared to the prior year. The company is
currently planning to open one new campus in Boston, MA during the fourth
quarter of fiscal 2005 with an additional campus opening in Sacramento, CA the
first half of fiscal 2006. A full year of pre-opening costs are anticipated
to be incurred for the Boston facility and a partial year of costs are
anticipated to be incurred related to the Sacramento facility. A significant
portion of these costs directly relate to building a backlog of potential
students that supports strong fall classes at the planned campus openings.
The company expects to report net income margins for fiscal 2005 ranging from
10.5% to 11.0%. The company is raising guidance for two primary reasons. The
company has identified approximately $2.0 million of costs related to our
Sacramento facility that can be delayed and timed to coordinate with the
anticipated opening during the first half of fiscal 2006. In addition, the
company's student population is trending higher than originally planned as a
result of strong starts at its locations in California, Illinois and
Pennsylvania. The majority of additional net income is expected to occur
during the fourth fiscal quarter of 2005, coinciding with the company's peak
average student enrollment for the year. The targets include
pre-opening costs for new locations as described above, as well as costs
associated with the company's fiscal 2005 Sarbanes-Oxley compliance program.
The planned campus openings during fiscal 2005 and 2006 will alleviate
capacity constraints in the company's current structure, as well as allow for
future growth of the company.
Fiscal Year Ending September 30, 2006
Looking further ahead, the company expects to sustain revenue growth in
the 20% to 25% range. The company anticipates this growth will come from
three primary sources:
* 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.
Looking forward to September 30, 2006 net income margins are anticipated
to return to fiscal 2004 levels of 11.0% to 11.5%. The margin 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.
Conference Call
Management of Universal Technical Institute, Inc. will hold a conference
call to discuss its fiscal 2004 fourth quarter and fiscal year end results
today at 3:00 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. A replay of the call will be available on the Investor Relations
section of UTI's website and will be archived for 90 days.
About Universal Technical Institute
Universal Technical Institute, Inc. is a provider 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 eight 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
or expanding campuses, 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, 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.
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
September 30, September 30,
2004 2003 2004 2003
Net Revenues $69,475 $54,853 $255,149 $196,495
Operating expenses:
Educational services and
facilities 33,522 25,892 116,730 92,443
Selling, general and
administrative 24,204 19,698 88,297 67,896
Total operating expenses 57,726 45,590 205,027 160,339
Income from operations 11,749 9,263 50,122 36,156
Other expense (income):
Interest income (157) (120) (328) (475)
Interest expense 164 969 1,359 4,133
Other expense (income) 382 (234) 1,134 (234)
Total other expense 389 615 2,165 3,424
Income from continuing
operations and before
income taxes 11,360 8,648 47,957 32,732
Income tax expense 4,684 3,409 19,137 12,353
Net income 6,676 5,239 28,820 20,379
Preferred stock dividends -- 2,979 776 6,413
Net income available to
common shareholders $6,676 $2,260 $28,044 $13,966
Earnings per share:
Net income per share
- basic $0.24 $0.16 $1.14 $1.03
Net income per share
- diluted $0.23 $0.16 $1.04 $0.79
Weighted average number
of common shares
outstanding:
Basic 27,775 13,872 24,659 13,543
Diluted 28,416 14,690 27,585 25,051
Other Data:
Depreciation and amortization $2,523 $1,906 $8,832 $6,382
Number of campuses 8 7 8 7
Average undergraduate
enrollments 14,048 11,582 13,076 10,568
For the Period Ended
September 30, 2004 September 30, 2003
Balance Sheet Data:
Cash and cash equivalents $42,602 $8,925
Current assets $77,128 $31,819
Working capital $6,612 $(29,240)
Total assets $136,316 $84,099
Total long-term debt $6 $53,476
Total debt $43 $57,336
Redeemable convertible preferred stock $-- $47,161
Total shareholders' equity (deficit) $55,025 $(83,152)
SOURCE Universal Technical Institute, Inc.
-0- 12/01/2004
/CONTACT: Jennifer Haslip, Senior Vice President and CFO of Universal
Technical Institute, Inc., +1-623-445-9402; or general information, Laurie
Berman, +1-310-854-8315, or investor/analyst information, Jill Fukuhara,
+1-310-854-8312, both of Financial Relations Board, for Universal Technical
Institute, Inc./
/Web site: http://www.uticorp.com /
(UTI)
CO: Universal Technical Institute, Inc.
ST: Arizona
IN: CPR EDU
SU: ERN ERP CCA