UTI Reports Revenue Down in 2017
May 8, 2017—In its quarterly fiscal report, the Universal Technical Institute reported revenues for the Q1 2017 were $82.5 million, compared to $88.2 million for the prior year period.
Here are a list of highlights from the report:
- Revenues exclude tuition related to students participating in the company's proprietary loan program, which were $4.4 million and $4.6 million for the second fiscal quarter of 2017 and 2016, respectively. This tuition will be recognized as revenues when payments are received.
- Operating expenses for the quarter were $81.8 million, compared to $94.0 million for the prior year period. The $12.2 million decrease is largely due to lower compensation expense and improved operating efficiencies pursuant to the implementation of the Financial Improvement Plan.
- Operating income for the quarter was $0.7 million, compared to an operating loss of $5.8 million for the prior year period. The improvement reflects the aforementioned significant cost reductions and $1.0 million in operating income from the Long Beach campus, which opened in August 2015.
- Income tax expense was $2.1 million for the quarter, reflecting a full valuation allowance on deferred tax assets, compared to $25.7 million for the prior year period.
- Net loss for the quarter was $1.7 million, or $0.12 per diluted share, compared to a net loss of $32.0 million, or $1.32 per diluted share, for the prior year period.
- Earnings before interest, taxes, depreciation and amortization (EBITDA) for the three months ended March 31, 2017 was $5.6 million, compared to a loss of $0.6 million for the prior year period.
- Cash, cash equivalents and investments totaled $98.7 million at March 31, 2017, compared to $120.7 million at September 30, 2016. The decrease was primarily attributable to collateral requirements for surety bonds renewed during the second quarter of fiscal 2017 and changes in working capital.
"During the second quarter, we made progress on our plan to expand our program offerings, advance our smaller campus initiative and enhance our strategic partnerships with industry leading manufacturers such as INFINITI with whom we launched a first-of-its-kind advanced training program in April," Kim McWaters, UTI's chairman and CEO, stated. "In addition, we continued to improve our financial foundation and in fact, now expect to deliver full-year cost savings at the higher end of our $30 million to $40 million estimate. This represents a meaningful step in our goal to return the company to profitability while maintaining our commitments to providing a quality educational experience, meeting our partners' increasing demand for trained technicians, and growing our student population.
"While student starts were softer than expected during the first half of the year, we have adjusted our marketing strategy and further enhanced our student support services to achieve our goal of generating new start growth in the second half of the year. We are encouraged by the initial results from these efforts. Looking ahead, we will continue to balance maintaining efficient operations with investing in the business to drive long-term growth."