Exhibit 99.1
UNIVERSAL TECHNICAL INSTITUTE, INC. REPORTS 22% REVENUE GROWTH
AND 14% NET INCOME IMPROVEMENT FOR THE SECOND QUARTER OF FISCAL 2005
PHOENIX, May 4 /PRNewswire-FirstCall/ -- Universal Technical Institute,
Inc. (NYSE: UTI), a provider of technical education training, today announced
financial results for the second quarter of fiscal 2005, ended March 31, 2005.
Operating Performance
Net revenues for the second quarter were $77.5 million, a 21.7% increase
from $63.7 million for the same quarter last year. The primary driver of the
growth was higher average student enrollment combined with modest tuition
increases.
Income from operations for the second quarter of fiscal 2005 was $14.4
million, a 6.9% increase from $13.5 million for the second quarter of fiscal
2004. The increase primarily relates to growth in overall revenue partially
offset by educational services and facilities and selling, general and
administrative costs.
Operating margin for the second quarter of fiscal 2005 was 18.6%, down from
21.2% for the same quarter last year. This is due to the company expanding its
capacity by more than 20% during the fourth quarter of fiscal 2004, to allow for
future growth of the business. As a result, occupancy cost in the second quarter
of 2005 represents a higher percentage of revenue as compared to the prior year
quarter. Advertising costs and sales representative compensation were also
higher as a percentage of revenue, in support of filling the increased capacity
at existing and future locations.
Net income for the second quarter of fiscal 2005 was $9.2 million, or $0.32
per diluted share, a 13.6% increase from $8.1 million, or $0.28 per diluted
share, for the same quarter in fiscal 2004. Net income margin for the second
quarter of fiscal 2005 was 11.8% compared to 12.6% for the second fiscal quarter
of 2004.
Fiscal 2005 Six Month Operating Performance
Net revenues for the first six months of fiscal 2005 were $150.8 million, a
22.9% increase from $122.7 million for the same period in the previous year.
Income from operations for the six months ended March 31, 2005 was $29.9
million, an increase of 8.7% as compared to the same period in the previous
year. Operating margin for the first six months of fiscal 2005 was 19.8% down
from 22.4% for the first six months of fiscal 2004. Expansion costs related to
occupancy, advertising and sales representative compensation costs for the first
half of fiscal 2005 were higher as a percentage of revenue as compared to the
same period last year. Net income for the six months ended March 31, 2005 was
$19.0 or $0.67 per diluted share, a 22.4% increase from net income of $15.5
million or $0.58 per diluted share, for the same period in fiscal 2004. Net
income margin for the first six months of fiscal 2005 and fiscal 2004 was 12.6%.
"We are excited to announce steady progress on our expansion efforts," said
Kimberly McWaters, President and Chief Executive Officer of Universal Technical
Institute, Inc. "During our second fiscal quarter we closed on our Norwood
facility near Boston and have begun the retrofit of the existing building. In
addition we amended our Exton, Pennsylvania lease to allow for the expansion of
our Diesel program that is planned to open during the fourth quarter of fiscal
2005. Construction has also begun to increase our capacity in Houston, Texas for
the Collision Repair and Refinish program. We are focused on meeting the needs
of our customers in the geographic regions that support strong placement
opportunities for our students and expanding our national footprint," concluded
McWaters.
Balance Sheet
At March 31, 2005, the company had $46.8 million in cash and cash
equivalents, compared with $42.6 million at the end of fiscal 2004 ended
September 30, 2004. In addition, the company had a restricted investment of
$16.1 million at March 31, 2005 and $10.4 million of restricted cash at
September 30, 2004 securing a letter of credit with the Department of Education.
At March 31, 2005, the company had shareholders' equity of $77.5 million,
compared with shareholders' equity of $55.0 million at September 30, 2004. Cash
flow provided from operations was $34.8 million for the first half of fiscal
2005, compared with $31.2 million generated for the same period last year.
Student Enrollment Data
Average undergraduate enrollment for the three months ended March 31, 2005
was 15,517 students, representing an increase of 19.3% from 13,006 students for
the same period a year ago. Average undergraduate enrollment for the six months
ended March 31, 2005 was 15,521, an increase of 20.0% from 12,931 for the same
period a year ago.
Undergraduate enrollment at the end of the second quarter of fiscal 2005 was
15,155 students, compared with 12,834 students at the end of the second 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.
Fiscal Year Ending September 30, 2005
The company is targeting a 21% to 23% increase in net revenue for the year
ending September 30, 2005. The above target is unchanged from the company's
prior guidance. The company is currently planning to open one new campus in
Norwood, MA during the fourth quarter of fiscal 2005 with an additional campus
in Sacramento, CA opening in the first half of fiscal 2006. A full year of
pre-opening costs are anticipated to be incurred for the Norwood facility and a
partial year of costs are anticipated to be incurred related to the Sacramento
facility. A significant portion of these costs relate to sales and marketing
efforts in support of the planned new campus openings. The company is
reconfirming guidance for net income margins. Fiscal 2005 net income margins are
expected to range from 11.0% to 11.5%.
Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (FASB) issued a
Statement of Financial Accounting Standard (SFAS) related to accounting for
stock based compensation. The pronouncement as originally defined impacted the
company's fourth fiscal quarter of 2005. The pronouncement was recently delayed
and is currently scheduled to impact fiscal 2006.
Fiscal 2006 Outlook
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:
. 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 has typically experienced seasonality during the year.
Historically, the company has experienced its highest revenue during the fourth
quarter of the fiscal year. During the fall, the student population typically
reaches its highest point. School is not in session during the one-week holiday
break which occurs in December. As a result, first quarter revenue does not
correlate to the peak in student population. Operating income typically is the
lowest during the third fiscal quarter, ending in June, due to a lower
population of students. Significant variations in quarterly operating margins
have historically been attributable to expansion related activities. The
company's costs do not vary significantly with changes in student population
within existing campuses. The company expects quarterly fluctuations in
operating results to continue as a result of seasonal enrollment patterns. Such
patterns may change, however as a result of new school openings, new program
introductions and increased enrollments of adult students.
Conference Call
Management of Universal Technical Institute, Inc. will hold a conference
call to discuss its second quarter fiscal 2005 results today at 2:00 p.m.
Phoenix time (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 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). For more information, visit www.uticorp.com.
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 or
campus expansions, 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 Six Months Ended
March 31, March 31,
----------------------- -----------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Net Revenues $ 77,482 $ 63,684 $ 150,818 $ 122,727
Operating expenses:
Educational services and
facilities 34,958 28,230 68,311 53,832
Selling, general and
administrative 28,095 21,960 52,602 41,387
Total operating expenses 63,053 50,190 120,913 95,219
Income from operations 14,429 13,494 29,905 27,508
Other (income) expense:
Interest income (332) (50) (590) (75)
Interest expense 16 195 57 1,010
Other expense -- -- -- 752
Total other expense (316) 145 (533) 1,687
Income from continuing
operations and before income
taxes 14,745 13,349 30,438 25,821
Income tax expense 5,590 5,293 11,455 10,313
Net income 9,155 8,056 18,983 15,508
Preferred stock dividends -- -- -- 776
Net income available to common
shareholders $ 9,155 $ 8,056 $ 18,983 $ 14,732
Earnings per share:
Net income per share - basic $ 0.33 $ 0.29 $ 0.68 $ 0.68
Net income per share - diluted $ 0.32 $ 0.28 $ 0.67 $ 0.58
Weighted average number of
common shares outstanding:
Basic 27,894 27,707 27,845 21,573
Diluted 28,566 28,452 28,523 26,695
Other Data:
Depreciation and amortization (1) $ 2,364 $ 2,018 $ 4,565 $ 4,113
Number of campuses 8 7 8 7
Average undergraduate enrollment 15,517 13,006 15,521 12,931
For the Period Ended
----------------------------
March 31, September 30,
Balance Sheet Data: 2005 2004
- -------------------------- ------------ -------------
Cash and cash equivalents $ 46,836 $ 42,602
Current assets $ 88,566 $ 77,128
Working capital $ 11,546 $ 6,612
Total assets $ 165,436 $ 136,316
Total long-term debt $ 3 $ 6
Total debt $ 13 $ 43
Total shareholders' equity
(deficit) $ 77,461 $ 55,025
(1) Depreciation and amortization includes amortization of the restricted
investment of $78 for the three months and $134 for the six months
ended March 31, 2005.
SOURCE Universal Technical Institute, Inc.
-0- 05/04/2005
/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
Peters, +1-310-854-8312, both of Financial Relations Board, for Universal
Technical Institute, Inc./
/Web site: http://www.uticorp.com /