Universal Technical Institute Reports Fiscal Year 2013 Second Quarter Results

SCOTTSDALE, Ariz., April 30, 2013 /PRNewswire/ -- Universal Technical Institute, Inc. (NYSE: UTI), the leading provider of automotive technician training, today reported revenues for the second quarter ended March 31, 2013 of $95.1 million, a 10.5 percent decrease from $106.2 million for the second quarter of the prior year.  Net loss for the second quarter ended March 31, 2013 was $0.9 million, or a loss of 4 cents per diluted share, compared to net income of $1.9 million, or 8 cents per diluted share, for the second quarter ended March 31, 2012. 

Revenues for the six months ended March 31, 2013 were $193.5 million, a 9.0 percent decrease from $212.7 million for the six months ended March 31, 2012. Net income for the six months ended March 31, 2013 was $2.6 million, or 11 cents per diluted share, compared to $6.4 million, or 26 cents per diluted share, for the six months ended March 31, 2012.

Return on equity for the trailing four quarters ended March 31, 2013 was 3.6 percent compared to 6.2 percent for the trailing four quarters ended Sept. 30, 2012.

"Due to current conditions, we have made choices that balance cost containment with 'return to growth' initiatives which negatively impacted second quarter financial results," said Kim McWaters, chief executive officer.  "While the next few quarters will continue to be challenging, I am encouraged that we have seen some early indications of improved student interest and internal efficiencies.  Our manufacturer partners continue to increase their demand for graduates and as their demand increases, supply of students should follow."

Second Quarter Operating Performance

For the second quarter of 2013, revenues were $95.1 million, a 10.5 percent decrease from $106.2 million for last year's second quarter.  The decrease in revenues primarily related to a decrease in average undergraduate full-time student enrollment of 10.2 percent.  The decrease was partially offset by an increase in tuition rates.  During the second quarter of 2013 and 2012, tuition excluded $5.2 million and $3.7 million, respectively, related to students participating in the Company's proprietary loan program which will be recognized as revenues when payments are received.

Operating loss and margin for the second quarter of 2013 were $1.9 million and (2.0) percent, respectively, compared to operating income and margin of $3.0 million and 2.8 percent, respectively, in the same period last year.  The operating loss was primarily attributable to the decrease in revenues and was partially offset by decreases in compensation and advertising expense.   

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2013 was $4.2 million compared to $9.5 million in the same period last year.  See "Use of Non-GAAP Financial Information" below.

Six Month Operating Performance

Revenues for the six months ended March 31, 2013 were $193.5 million, a 9.0 percent decrease from $212.7 million for the six months ended March 31, 2012.

Operating income and margin for the six months ended March 31, 2013 were $4.1 million and 2.1 percent, respectively, compared to $10.3 million and 4.9 percent, respectively, for the six months ended March 31, 2012. The decreases in operating income and margin were related to the decrease in revenues, partially offset by decreases in compensation and advertising expense.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the six months ended March 31, 2013 was $16.3 million compared to $23.5 million for the six months ended March 31, 2012. See "Use of Non-GAAP Financial Information" below.

Liquidity

Cash, cash equivalents and investments totaled $94.3 million at March 31, 2013, compared to $101.7 million at Sept. 30, 2012.  At March 31, 2013, shareholders' equity totaled $141.4 million as compared to $146.1 million at Sept. 30, 2012.  On Dec. 21, 2012, and March 29, 2013, we paid cash dividends of $0.10 per share to common stockholders of record as of Dec. 7, 2012 and March 15, 2013, respectively.  The aggregate payment was approximately $4.9 million.  Our Board of Directors evaluates dividends quarterly.

Pursuant to the previously announced share repurchase plan, we purchased 556,100 shares of stock during the six months ended March 31, 2013 at an average price of $9.61 for a total cost of approximately $5.4 million.  We did not make any purchases during the three months ended March 31, 2013.

Cash flow provided by operating activities was $9.2 million and $7.6 million for the three months and six months ended March 31, 2013, respectively, compared with cash provided by operating activities of $10.0 million and $15.6 million for the three months and six months ended March 31, 2012, respectively.

2013 Outlook

Given the time required for new initiatives to take hold and the increasing lag between students applying for school and starting school, we expect new student starts to be down in the third quarter of 2013, before possibly showing year over year improvement in the fourth quarter.  We anticipate full year new student starts for 2013 to be down by the mid to high single digits, resulting in a lower average student population for the year.  These lower levels of enrollment will most likely result in a high single digit decline in revenue in 2013.  While we expect significantly lower expenses in the second half of the year, we still believe we will record an overall decline in operating margin and net income compared to 2012.

Conference Call

Management will hold a conference call to discuss the 2013 second quarter results today at 1:30 p.m. PDT (4:30 p.m. EDT). This call can be accessed by dialing 412-858-4600 or 800-860-2442.  Investors are invited to listen to the call live at http://uti.investorroom.com/.  Please access the website 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 for 60 days or the replay can be accessed through May 14^th, 2013 by dialing 412-317-0088 or 877-344-7529 and entering pass code 10027834.

Safe Harbor Statement

All statements contained herein, other than statements of historical fact, are "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, as amended.  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, changes to regulations or agency interpretation of such regulations affecting the for-profit education industry, 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 UTI, increased investment in management and capital resources, the effectiveness of the recruiting, advertising and promotional efforts, changes to interest rates and unemployment, general economic conditions of the Company and other risks that are described from time to time in the Company's public filings.  Further information on these and other potential factors that could affect the 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.  Except as required by law, 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.

Use of Non-GAAP Financial Information

This press release and the related conference call contains non-GAAP (Generally Accepted Accounting Principles) financial measures, which are intended to supplement, but not substitute for, the most directly comparable GAAP measures. Management chooses to disclose to investors, these non-GAAP financial measures because they provide an additional analytical tool to clarify the results from operations and helps to identify underlying trends.  Additionally, such measures help compare the Company's performance on a consistent basis across time periods. To obtain a complete understanding of the Company's performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the financial statements and notes thereto included in the annual and quarterly filings with the Securities and Exchange Commission.  Since the items excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be an alternative to net income as a measure of the Company's operating performance or profitability.  Exclusion of items in the non-GAAP presentation should not be construed as an inference that these items are unusual, infrequent or non-recurring. Other companies, including other companies in the education industry, may calculate non-GAAP financial measures differently than UTI does, limiting their usefulness as a comparative measure across companies.  A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures are included below. 

About Universal Technical Institute, Inc.

Headquartered in Scottsdale, Arizona, Universal Technical Institute, Inc. (NYSE: UTI) is the leading provider of post-secondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. With more than 160,000 graduates in its 47-year history, UTI offers undergraduate degree, diploma and certificate programs at 11 campuses across the United States, as well as manufacturer-specific training programs at dedicated training centers. Through its campus-based school system, UTI provides 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 (NASCAR Tech). To learn more about UTI and its training services, log on to www.uti.edu.

SOURCE Universal Technical Institute, Inc.