Exhibit 99.01
UNIVERSAL TECHNICAL INSTITUTE, INC. REPORTS 21% REVENUE GROWTH AND
15% NET INCOME IMPROVEMENT FOR THE THIRD QUARTER OF FISCAL 2005
PHOENIX, Aug. 10 /PRNewswire-FirstCall/ -- Universal Technical Institute,
Inc. (NYSE: UTI), a provider of technical education training, today announced
financial results for the third quarter of fiscal 2005, ended June 30, 2005.
Operating Performance
Net revenues for the third quarter were $76.1 million, a 20.9% increase from
$62.9 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 third quarter of fiscal 2005 was $11.5
million, a 5.4% increase from $10.9 million for the third 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 third quarter of fiscal 2005 was 15.1%, down from
17.3% 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 third quarter
of 2005 represents a higher percentage of revenue as compared to the prior year
quarter. In addition, compensation costs in the educational services and
facilities line were higher as a percentage of revenue primarily resulting from
expansion activities in advance of expected net revenues.
Net income for the third quarter of fiscal 2005 was $7.6 million, or $0.27
per diluted share, a 14.6% increase from $6.6 million, or $0.23 per diluted
share, for the same quarter in fiscal 2004. Net income margin for the third
quarter of fiscal 2005 was 10.0% compared to 10.5% for the third fiscal quarter
of 2004.
Fiscal 2005 Nine Month Operating Performance
Net revenues for the first nine months of fiscal 2005 were $226.9 million, a
22.2% increase from $185.7 million for the same period in the previous year.
Income from operations for the nine months ended June 30, 2005 was $41.4
million, an increase of 7.8% as compared to the same period in the previous
year. Operating margin for the first nine months of fiscal 2005 was 18.2% down
from 20.7% for the first nine months of fiscal 2004. Expansion costs related to
occupancy, advertising and sales representative compensation costs for the first
nine months of fiscal 2005 were higher as a percentage of revenue as compared to
the same period last year. Tool costs for the first nine months of fiscal 2005
were also higher as a percentage of revenue as compared to the same period in
fiscal 2004. Net income for the nine months ended June 30, 2005 was $26.6
million or $0.93 per diluted share, a 20.1% increase from net income of $22.1
million or $0.81 per diluted share, for the same period in fiscal 2004. Net
income margin for the first nine months of fiscal 2005 was 11.7% compared to
11.9% for the same period during fiscal 2004.
"We are proud to announce the opening of our ninth campus located in
Norwood, Massachusetts, a suburb of Boston. The campus opened with approximately
65 students in the first class during June, 2005. At maturity the campus has
available capacity for approximately 1,900 students. This marks another
milestone in our expansion efforts in direct response to our industry customer's
needs," said Kimberly McWaters, President and Chief Executive Officer of
Universal Technical Institute, Inc. "During our third quarter we also obtained
state licensure for our Norwood location. The retrofit of the Norwood facility
is expected to continue for several months, accommodating additional students at
this location. We are on target to increase capacity in Houston, Texas for the
Collision Repair and Refinish program as well as expanding our Diesel program to
our Exton, Pennsylvania campus, both during the fourth quarter of fiscal 2005.
We are focused on serving our industry customer's training needs across broad
geographic regions," concluded McWaters.
Balance Sheet
At June 30, 2005, the company had $47.3 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 June 30, 2005 and $10.4 million of restricted cash at September
30, 2004 securing a letter of credit with the Department of Education.
At June 30, 2005, the company had shareholders' equity of $85.5 million,
compared with shareholders' equity of $55.0 million at September 30, 2004. Cash
flow provided from operations was $52.3 million for the first nine months of
fiscal 2005, compared with $41.9 million generated for the same period last
year.
Student Enrollment Data
Average undergraduate enrollment for the three months ended June 30, 2005
was 14,572 students, representing an increase of 16.4% from 12,517 students for
the same period a year ago. Average undergraduate enrollment for the nine months
ended June 30, 2005 was 15,155, an increase of 18.8% from 12,762 for the same
period a year ago.
Undergraduate enrollment at the end of the third quarter of fiscal 2005 was
13,867 students, compared with 12,020 students at the end of the third 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 planning to expand the Exton campus to include
the diesel program and the Houston campus to include additional seats for the
Collision Repair and Refinish program. In addition the company intends to open a
campus in Sacramento, CA in the first quarter 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 during fiscal 2005. 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%.
Fiscal 2006 Outlook
The company expects to sustain revenue growth over the next year 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 third 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 nine 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 Nine Months Ended
June 30, June 30,
------------------------- -------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net Revenues $ 76,074 $ 62,947 $ 226,892 $ 185,674
Operating expenses:
Educational services
and facilities 37,047 29,376 105,357 83,208
Selling, general
and administrative 27,577 22,706 80,180 64,093
Total operating
expenses 64,624 52,082 185,537 147,301
Income from operations 11,450 10,865 41,355 38,373
Other (income) expense:
Interest income (437) (96) (1,027) (171)
Interest expense 34 185 91 1,195
Other expense -- -- -- 752
Total other expense (403) 89 (936) 1,776
Income from continuing
operations and
before income taxes 11,853 10,776 42,291 36,597
Income tax expense 4,248 4,140 15,703 14,453
Net income 7,605 6,636 26,588 22,144
Preferred stock dividends -- -- -- 776
Net income available
to common shareholders $ 7,605 $ 6,636 $ 26,588 $ 21,368
Earnings per share:
Net income
per share - basic $ 0.27 $ 0.24 $ 0.95 $ 0.90
Net income
per share - diluted $ 0.27 $ 0.23 $ 0.93 $ 0.81
Weighted average number of
common shares outstanding:
Basic 27,934 27,713 27,875 23,620
Diluted 28,545 28,569 28,530 27,309
Other Data:
Depreciation and
amortization (1) $ 2,526 $ 2,196 $ 7,091 $ 6,309
Number of campuses 9 7 9 7
Average undergraduate
enrollment 14,572 12,517 15,155 12,762
For the Period Ended
---------------------------
June 30, September 30,
Balance Sheet Data: 2005 2004
- ---------------------------------------- ----------- -------------
Cash and cash equivalents $ 47,264 $ 42,602
Current assets $ 85,423 $ 77,128
Working capital $ 8,333 $ 6,612
Total assets $ 172,098 $ 136,316
Total long-term debt $ -- $ 6
Total debt $ 10 $ 43
Total shareholders' equity (deficit) $ 85,462 $ 55,025
(1) Depreciation and amortization includes amortization of the restricted
investment of $101 for the three months and $235 for the nine months ended
June 30, 2005.
SOURCE Universal Technical Institute, Inc.
-0- 08/10/2005
/CONTACT: Jennifer Haslip, Senior Vice President and CFO,
+1-623-445-9402, or Jennifer Pelczarski, Director of Investor Relations,
+1-623-445-0727, both of Universal Technical Institute, Inc.; or
Investor/Analyst Information, Jill Fukuhara Peters of Financial Relations
Board, +1-310-854-8312, for Universal Technical Institute, Inc./
/Web site: http://www.uticorp.com/
(UTI)