Form 10-Q
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(Mark One)
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2011
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 1-31923
UNIVERSAL TECHNICAL INSTITUTE, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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86-0226984 |
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(State or other jurisdiction of
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(IRS Employer Identification No.) |
incorporation or organization) |
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16220 North Scottsdale Road, Suite 100
Scottsdale, Arizona 85254
(Address of principal executive offices)
(623) 445-9500
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes
o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act.
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Large accelerated filer o
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Accelerated filer þ
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Non-accelerated filer o
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ
At
April 28, 2011, there were 24,447,433 shares outstanding of the registrants common stock.
UNIVERSAL TECHNICAL INSTITUTE, INC.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2011
Special Note Regarding Forward-Looking Statements
This report contains forward-looking information about our financial results, estimates and
our business prospects that involve substantial risks and uncertainties. From time to time, we
also may provide oral or written forward-looking statements in other materials we release to the
public. Forward-looking statements are expressions of our current expectations or forecasts of
future events. You can identify these statements by the fact that they do not relate strictly to
historical or current facts. They often include words such as anticipate, estimate, expect,
project, intend, plan, believe, will, and other words and terms of similar meaning in
connection with any discussion of future operating or financial performance. In particular, these
include statements relating to future actions, future regulatory initiatives, future performance or
results, expenses, the outcome of contingencies, such as legal proceedings, and financial results.
We cannot guarantee any forward-looking statement will be realized, although we believe we
have been prudent in our plans and assumptions. Achievement of future results is subject to risks,
uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties
materialize, or should underlying assumptions prove inaccurate, actual results could vary
materially from past results and those anticipated, estimated or projected. Investors should bear
this in mind as they consider forward-looking statements.
Except as required by law, we undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events or otherwise. You are advised,
however, to consult any further disclosures we make on related subjects in our Form 10-Q, 8-K and
10-K reports to the Securities and Exchange Commission (SEC). The Form 10-K that we filed with
the SEC on December 1, 2010 listed various important factors that could cause actual results to
differ materially from expected and historical results. We note these factors for investors as
permitted by the Private Securities Litigation Reform Act of 1995. Readers can find them under the
heading Risk Factors in the Form 10-K and investors should refer to them. You should understand
that it is not possible to predict or identify all such factors. Consequently, you should not
consider any such list to be a complete set of all potential risks or uncertainties. Our filings
with the SEC may be accessed at the SECs web site at www.sec.gov.
ii
PART I FINANCIAL INFORMATION
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Item 1. |
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FINANCIAL STATEMENTS |
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
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March 31, |
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September 30, |
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2011 |
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2010 |
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($s in thousands) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
52,676 |
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$ |
48,974 |
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Investments, current portion |
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34,644 |
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28,528 |
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Receivables, net |
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29,849 |
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19,253 |
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Deferred tax assets |
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6,777 |
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8,840 |
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Prepaid expenses and other current assets |
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10,409 |
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9,836 |
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Total current assets |
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134,355 |
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115,431 |
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Investments, less current portion |
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4,541 |
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3,596 |
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Property and equipment, net |
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106,186 |
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99,040 |
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Goodwill |
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20,579 |
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20,579 |
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Other assets |
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4,636 |
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3,853 |
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Total assets |
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$ |
270,297 |
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$ |
242,499 |
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Liabilities and Shareholders Equity |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
48,772 |
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$ |
53,906 |
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Deferred revenue |
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68,569 |
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63,276 |
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Accrued tool sets |
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5,080 |
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5,066 |
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Other current liabilities |
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67 |
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66 |
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Total current liabilities |
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122,488 |
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122,314 |
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Deferred tax liabilities |
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2,607 |
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933 |
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Deferred rent liability |
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10,105 |
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5,621 |
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Other liabilities |
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5,501 |
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5,239 |
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Total liabilities |
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140,701 |
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134,107 |
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Commitments and contingencies (Note 9) |
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Shareholders equity: |
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Common stock, $0.0001 par value, 100,000,000 shares authorized,
29,272,659 shares issued and 24,402,433 shares outstanding
at March 31, 2011 and 29,148,585 shares issued and 24,278,359 shares
outstanding at September 30, 2010 |
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3 |
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3 |
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Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0 shares issued
and outstanding |
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Paid-in capital |
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153,965 |
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150,012 |
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Treasury stock, at cost, 4,870,226 shares at March 31, 2011 and September 30, 2010 |
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(76,506 |
) |
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(76,506 |
) |
Retained earnings |
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52,134 |
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34,883 |
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Total shareholders equity |
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129,596 |
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108,392 |
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Total liabilities and shareholders equity |
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$ |
270,297 |
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$ |
242,499 |
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The accompanying notes are an integral part of these condensed consolidated financial
statements.
1
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(UNAUDITED)
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Three Months Ended |
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Six Months Ended |
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March 31, |
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March 31, |
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2011 |
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2010 |
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2011 |
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2010 |
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(In thousands, except per share amounts) |
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Net revenues |
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$ |
114,161 |
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$ |
105,631 |
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$ |
231,608 |
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$ |
209,153 |
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Operating expenses: |
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Educational services and facilities |
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57,692 |
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51,593 |
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111,528 |
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100,520 |
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Selling, general and administrative |
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45,079 |
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44,154 |
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91,837 |
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83,693 |
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Total operating expenses |
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102,771 |
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95,747 |
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203,365 |
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184,213 |
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Income from operations |
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11,390 |
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9,884 |
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28,243 |
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24,940 |
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Other income (expense): |
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Interest income, net |
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55 |
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74 |
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143 |
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118 |
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Other income |
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125 |
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116 |
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255 |
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251 |
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Total other income |
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180 |
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190 |
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398 |
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369 |
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Income before income taxes |
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11,570 |
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10,074 |
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28,641 |
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25,309 |
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Income tax expense |
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4,575 |
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4,028 |
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11,390 |
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9,983 |
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Net income |
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$ |
6,995 |
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$ |
6,046 |
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$ |
17,251 |
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$ |
15,326 |
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Earnings per share: |
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Net income per share basic |
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$ |
0.29 |
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$ |
0.25 |
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$ |
0.71 |
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$ |
0.64 |
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Net income per share diluted |
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$ |
0.28 |
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$ |
0.25 |
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$ |
0.70 |
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$ |
0.63 |
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Weighted average number of shares
outstanding: |
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Basic |
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24,366 |
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23,957 |
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24,323 |
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23,891 |
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Diluted |
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24,668 |
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24,497 |
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24,629 |
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24,401 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
2
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
(UNAUDITED)
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Total |
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Common Stock |
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Paid-in |
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Treasury Stock |
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Retained |
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Shareholders |
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Shares |
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Amount |
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Capital |
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Shares |
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Amount |
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Earnings |
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Equity |
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(In thousands) |
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Balance at September 30, 2010 |
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29,149 |
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$ |
3 |
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$ |
150,012 |
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4,870 |
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$ |
(76,506 |
) |
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$ |
34,883 |
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$ |
108,392 |
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Net income |
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17,251 |
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17,251 |
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Issuance of common stock under employee plans |
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143 |
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493 |
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493 |
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Shares withheld for payroll taxes |
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(19 |
) |
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(348 |
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(348 |
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Tax benefit from employee stock plans |
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255 |
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|
255 |
|
Stock-based compensation |
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3,553 |
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3,553 |
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Balance at March 31, 2011 |
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29,273 |
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$ |
3 |
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$ |
153,965 |
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|
4,870 |
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$ |
(76,506 |
) |
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$ |
52,134 |
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$ |
129,596 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Six Months Ended |
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March 31, |
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2011 |
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2010 |
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(In thousands) |
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Cash flows from operating activities: |
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Net income |
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$ |
17,251 |
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$ |
15,326 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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12,228 |
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|
8,834 |
|
Amortization of held-to-maturity investments |
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|
479 |
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|
729 |
|
Bad debt expense |
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|
3,802 |
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|
2,979 |
|
Stock-based compensation |
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|
3,515 |
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|
3,341 |
|
Excess tax benefit from stock-based compensation |
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|
(339 |
) |
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|
(1,311 |
) |
Deferred income taxes |
|
|
3,737 |
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|
(319 |
) |
Loss on disposal of property and equipment |
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|
788 |
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|
80 |
|
Changes in assets and liabilities: |
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Receivables |
|
|
(10,931 |
) |
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|
441 |
|
Prepaid expenses and other current assets |
|
|
(731 |
) |
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|
(411 |
) |
Other assets |
|
|
(789 |
) |
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|
79 |
|
Accounts payable and accrued expenses |
|
|
(7,079 |
) |
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|
(4,672 |
) |
Deferred revenue |
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|
5,293 |
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|
2,309 |
|
Income tax receivable |
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(3,212 |
) |
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|
(2,421 |
) |
Accrued tool sets and other current liabilities |
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|
15 |
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|
527 |
|
Deferred rent liability |
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|
4,484 |
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|
(35 |
) |
Other liabilities |
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358 |
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|
(247 |
) |
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Net cash provided by operating activities |
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|
28,869 |
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|
25,229 |
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Cash flows from investing activities: |
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Purchase of property and equipment |
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(18,151 |
) |
|
|
(14,567 |
) |
Proceeds from disposal of property and equipment |
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|
40 |
|
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|
1 |
|
Purchase of investments |
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(26,200 |
) |
|
|
(26,484 |
) |
Proceeds received upon maturity of investments |
|
|
18,660 |
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|
4,874 |
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|
Net cash used in investing activities |
|
|
(25,651 |
) |
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|
(36,176 |
) |
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|
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|
Cash flows from financing activities: |
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|
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|
|
|
Proceeds from issuance of common stock under employee plans |
|
|
493 |
|
|
|
3,314 |
|
Payment of payroll taxes on stock-based compensation through shares withheld |
|
|
(348 |
) |
|
|
(523 |
) |
Excess tax benefit from stock-based compensation |
|
|
339 |
|
|
|
1,311 |
|
|
|
|
|
|
|
|
Net provided by financing activities |
|
|
484 |
|
|
|
4,102 |
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
3,702 |
|
|
|
(6,845 |
) |
Cash and cash equivalents, beginning of period |
|
|
48,974 |
|
|
|
56,199 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
52,676 |
|
|
$ |
49,354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Taxes paid |
|
$ |
10,866 |
|
|
$ |
12,751 |
|
|
|
|
|
|
|
|
Training equipment obtained in exchange for services |
|
$ |
482 |
|
|
$ |
382 |
|
|
|
|
|
|
|
|
Accrued capital expenditures |
|
$ |
1,945 |
|
|
$ |
(1,207 |
) |
|
|
|
|
|
|
|
Capitalized stock-based compensation |
|
$ |
38 |
|
|
$ |
42 |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($s in thousands, except per share amounts)
1. Nature of the Business
We are the leading provider of postsecondary education for students seeking careers as
professional automotive, diesel, collision repair, motorcycle and marine technicians as measured by
total average undergraduate full-time student enrollment and graduates. We offer undergraduate
degree, diploma and certificate programs at 11 campuses across the United States under the banner
of several well-known brands, including Universal Technical Institute, Motorcycle Mechanics
Institute and Marine Mechanics Institute and NASCAR Technical Institute. We also offer
manufacturer-specific training programs including both student paid electives at our campuses and
manufacturer or dealer sponsored training at dedicated training centers.
We work closely with leading original equipment manufacturers (OEMs) in the automotive,
diesel, motorcycle and marine industries to understand their needs for qualified service
professionals. Through our relationships with OEMs, we are able to continuously refine and expand
our programs and curricula. We believe our industry-oriented educational philosophy and national
presence have enabled us to develop valuable industry relationships which provide us with
significant competitive strength and support our market leadership.
2. Government Regulation and Financial Aid
On October 29, 2010, the Department of Education (ED) issued new regulations pertaining to
certain aspects of the administration of Title IV Programs, regulations which, with minor
exceptions, become effective July 1, 2011. ED previously announced that it was delaying until 2011
publication of additional regulations concerning students gainful employment in recognized
occupations, which are expected to become effective July 1, 2012 . ED has since issued interpretive
guidance on the final regulations in the form of multiple Dear Colleague Letters to institutions.
However, there remains uncertainty in how various aspects of the new regulations will be
interpreted and applied which could increase the risk that ED could seek to impose monetary or
other sanctions on us if it believed we were not in full compliance with all aspects of the new
regulations.
We have devoted significant effort to understanding the effects of the new regulations on our
business and to developing compliant solutions that are also congruent with our business, culture
and mission to serve our students and industry partners. However, these solutions, and the
development of additional solutions based on further analysis and interpretive guidance related to
implementation and compliance with these final rules, including but not limited to, gainful
employment, compensation, the definition of a credit hour, state authorization and the broadened
definition of misrepresentation, may have a material impact on the manner in which we conduct our
business, our student populations and nature of our programs, financial condition, cash flows,
results of operations and stock price.
ED issued a Dear Colleague Letter (DCL) dated March 18, 2011 which created open questions and
interpretive issues with respect to the final regulations related to determining what will
constitute a credit hour. We may not be able to obtain sufficient guidance from ED or our
accreditor prior to July 1, 2011 to understand and implement the definition of a credit hour based
on the Carnegie Unit or its equivalent as required by the new regulations and the DCL. Students
attending credit hour programs of study that are unable to meet the measurements under the Carnegie
definition or its equivalent will likely receive less funds from the Title IV Programs to pay their
cost of education with respect to those programs of study. Students interested in those programs of
study and those affected by the reduction of year round Pell funding may have to use other
non-Title IV Program funding, with such funding potentially being more expensive or unavailable and
may include increased usage of our proprietary loan program.
5
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($s in thousands, except per share amounts)
Furthermore, we have made modifications to our employee compensation structures to comply with
the elimination of the safe harbors in the current regulations and such modifications will be
effective by July 1, 2011. Other companies in the industry have experienced and reported material
adverse impacts to their business when changes to compensation have been implemented, but we cannot
fully predict whether we will experience a similar impact given our dissimilar solutions, culture
and timing, nor can we predict how significant any such impact will be. Our operating costs have
and will change materially as we adjust compensation in a manner that we believe to be fair and
compliant.
Interpretation of the new regulations is subject to change as ED provides further guidance and
clarification. Existing or future understanding could be different from EDs interpretations and
thus lead to changes in our operations, fines, restrictions or litigation, and such efforts or
differences could reduce our enrollment, which could have a material adverse effect on our
business, financial condition, results of operations, cash flows and stock price.
3. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America (GAAP) for
interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, our condensed consolidated financial statements do not include all the information and
footnotes required by GAAP for complete financial statements. In the opinion of management, all
normal and recurring adjustments considered necessary for a fair statement of the results for the
interim periods have been included. Operating results for the three months and six months ended
March 31, 2011 are not necessarily indicative of the results that may be expected for the year
ending September 30, 2011. The accompanying condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes thereto included in our
2010 Annual Report on Form 10-K filed with the SEC on December 1, 2010.
The unaudited condensed consolidated financial statements include the accounts of Universal
Technical Institute, Inc. (UTI) and our wholly owned subsidiaries. All significant intercompany
transactions and balances have been eliminated.
The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and the reported amounts
of revenue and expenses during the reporting period. Actual results could differ from these
estimates.
We lease substantially all of our administrative and educational facilities under operating
lease agreements. Some lease agreements contain tenant improvement allowances, free rent periods or
rent escalation clauses. In instances where one or more of these items are included in a lease
agreement, we record a deferred rent liability on the consolidated balance sheets and record rent
expense evenly over the initial term of the lease.
In September 2010, we entered into a leasing arrangement to relocate our headquarters during
the second quarter of 2011. The lease included incentives such as a leasehold improvement
allowance, moving allowance, and free rent periods which will be recognized on a straight-line
basis over the initial lease term resulting in a $4.5 million increase in deferred rent.
6
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($s in thousands, except per share amounts)
4. Investments
We invest in pre-funded municipal bonds which are generally secured by escrowed-to-maturity
U.S. Treasury notes. Municipal bonds represent debt obligations issued by states, cities, counties,
and other governmental entities, which earn interest that is exempt from federal income taxes.
Additionally, we invest in certificates of deposit issued by financial institutions and corporate
bonds from large cap industrial and selected financial companies with a minimum credit rating of A.
We have the ability and intent to hold our investments until maturity and therefore classify these
investments as held-to-maturity and report them at amortized cost. We measure fair value for these
instruments using quoted market prices for identical assets (Level 1).
The amortized cost and estimated fair market value for investments classified as
held-to-maturity at March 31, 2011 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated |
|
|
|
Amortized |
|
|
Gross Unrealized |
|
|
Fair Market |
|
|
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of deposit due in less than 1 year |
|
$ |
9,679 |
|
|
$ |
2 |
|
|
$ |
|
|
|
$ |
9,681 |
|
Certificates of deposit due in 1- 2 years |
|
|
4,541 |
|
|
|
|
|
|
|
|
|
|
|
4,541 |
|
Municipal bonds due in less than 1 year |
|
|
17,164 |
|
|
|
1 |
|
|
|
(10 |
) |
|
|
17,155 |
|
Corporate bonds due in less than 1 year |
|
|
7,801 |
|
|
|
|
|
|
|
(9 |
) |
|
|
7,792 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
39,185 |
|
|
$ |
3 |
|
|
$ |
(19 |
) |
|
$ |
39,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments are exposed to various risks, including interest rate, market and credit risk
and as a result, it is possible that changes in the values of these investments may occur and that
such changes could affect the amounts reported in the condensed consolidated balance sheets and
condensed consolidated statements of income.
5. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. As such,
fair value is a market-based measurement that should be determined based on assumptions that market
participants would use in pricing an asset or liability. The valuation techniques used to determine
fair value are consistent with either the market approach, income approach and/or cost approach.
The following three-tier fair value hierarchy that prioritizes the inputs used in the valuation
techniques to measure fair value:
|
|
Level 1 Observable inputs that reflect quoted market prices (unadjusted) for identical
assets and liabilities in active markets; |
|
|
Level 2 Observable inputs, other than quoted market prices, that are either directly or
indirectly observable in the marketplace for identical or similar assets and liabilities,
quoted prices in markets that are not active, or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets and
liabilities; and |
|
|
Level 3 Unobservable inputs that are supported by little or no market activity that are
significant to the fair value of assets or liabilities. |
7
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($s in thousands, except per share amounts)
Valuation techniques used to measure fair value must maximize the use of observable inputs and
minimize the use of unobservable inputs. We use prices and inputs that are current as of the
measurement date, including during periods of market volatility. Therefore, classification of
inputs within the hierarchy may change from period to period depending upon the ability to observe
those prices and inputs. Our assessment of the significance of a particular input to the fair value
measurement requires judgment, and may affect the valuation of fair value for certain assets and
liabilities and their placement within the fair value hierarchy.
At March 31, 2011, we held $32.1 million in money market mutual funds, municipal bonds and
certificates of deposit which are classified within cash and cash equivalents in our consolidated
balance sheet. We measure fair value for these instruments using quoted market prices for identical
assets (Level 1).
6. Earnings per Share
Basic net income per share is calculated by dividing net income by the weighted average number
of shares outstanding for the period. Diluted net income per share reflects the assumed conversion
of all dilutive securities. For the three months and six months ended March 31, 2011, 998,291
shares and 1,008,316 shares, respectively, and for the three months and six months ended March 31,
2010, 641,726 shares and 706,407 shares, respectively, which could be issued under outstanding
stock-based grants, were not included in the determination of our diluted shares outstanding as
they were anti-dilutive.
The calculation of the weighted average number of shares outstanding used in computing basic
and diluted net income per share is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
(In thousands) |
|
Weighted average number of shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic shares outstanding |
|
|
24,366 |
|
|
|
23,957 |
|
|
|
24,323 |
|
|
|
23,891 |
|
Dilutive effect related to employee stock plans |
|
|
302 |
|
|
|
540 |
|
|
|
306 |
|
|
|
510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares outstanding |
|
|
24,668 |
|
|
|
24,497 |
|
|
|
24,629 |
|
|
|
24,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($s in thousands, except per share amounts)
7. Property and Equipment, net
Property and equipment, net consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciable |
|
|
March 31, |
|
|
September 30, |
|
|
|
Lives (in years) |
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land |
|
|
|
|
|
$ |
1,456 |
|
|
$ |
1,456 |
|
Building and building improvements |
|
|
35 |
|
|
|
13,622 |
|
|
|
13,269 |
|
Leasehold improvements |
|
|
1-28 |
|
|
|
42,280 |
|
|
|
37,806 |
|
Training equipment |
|
|
3-10 |
|
|
|
76,873 |
|
|
|
71,255 |
|
Office and computer equipment |
|
|
3-10 |
|
|
|
38,810 |
|
|
|
38,397 |
|
Software developed for internal use |
|
|
3-5 |
|
|
|
11,342 |
|
|
|
11,292 |
|
Curriculum development |
|
|
5 |
|
|
|
16,083 |
|
|
|
14,726 |
|
Vehicles |
|
|
5 |
|
|
|
770 |
|
|
|
726 |
|
Construction in progress |
|
|
|
|
|
|
6,516 |
|
|
|
3,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
207,752 |
|
|
|
191,959 |
|
Less accumulated depreciation and amortization |
|
|
|
|
|
|
(101,566 |
) |
|
|
(92,919 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
106,186 |
|
|
$ |
99,040 |
|
|
|
|
|
|
|
|
|
|
|
|
8. Accounts Payable and Accrued Expenses
|
|
Accounts payable and accrued expenses consist of the following: |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
5,208 |
|
|
$ |
9,147 |
|
Accrued compensation and benefits |
|
|
30,073 |
|
|
|
35,854 |
|
Other accrued expenses |
|
|
13,491 |
|
|
|
8,905 |
|
|
|
|
|
|
|
|
|
|
$ |
48,772 |
|
|
$ |
53,906 |
|
|
|
|
|
|
|
|
9. Commitments and Contingencies
Legal
In the ordinary conduct of our business, we are periodically subject to lawsuits,
investigations and claims, including, but not limited to, claims involving students or graduates
and routine employment matters. Based on internal review, we record reserves using our best
estimate of the probable and reasonably estimable contingent liabilities. Although we cannot
predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted
against us, we do not believe that any currently pending legal proceeding to which we are a party
will have a material adverse effect on our business, results of operations, cash flows or financial
condition.
9
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($s in thousands, except per share amounts)
Proprietary Loan Program
In order to provide funding for students who are not able to fully finance the cost of their
education under traditional governmental financial aid programs, commercial loan programs or other
alternative sources, we established a private loan program with a national chartered bank in 2008.
Under terms of the related agreement, the bank originates loans for our students who meet our
specific credit criteria with the related proceeds used exclusively to fund a portion of their
tuition. We then purchase all such loans from the bank on a monthly basis and assume all of the
related credit risk. The loans bear interest at market rates; however, principal and interest
payments are not required until six months after the student completes or withdraws from his or her
program. After the deferral period, monthly principal and interest payments are required over the
related term of the loan.
The bank agreed to provide these services in exchange for a fee equivalent to 0.4% of the
principal balance of each loan and related fees. Under the terms of the related agreement, we have
a $2.0 million deposit with the bank in order to secure our related loan purchase obligation. This
balance is classified as other assets in our condensed consolidated balance sheets.
In substance, we provide the students who participate in this program with extended payment
terms for a portion of their tuition and as a result, we account for the underlying transactions in
accordance with our tuition revenue recognition policy. However, due to the nature of the program
coupled with the extended payment terms required under the student loan agreements, collectability
is not reasonably assured. Accordingly, we recognize tuition revenue and loan origination fees
financed by the loan and any related interest income required under the loan when such amounts are
collected. We will reevaluate this policy on the basis of our historical collection experience
under the program and will accelerate recognition of the related revenue if appropriate. All
related expenses incurred with the bank or other service providers are expensed as incurred and
were approximately $0.2 million and $0.4 million during the three months and six months ended March
31, 2011, respectively, and $0.2 million and $0.4 million during the three months and six months
ended March 31, 2010, respectively. Since loan collectability is not reasonably assured, the loans
and related deferred tuition revenue are presented net and therefore are effectively not recognized
in our consolidated balance sheets. Our presentation will be reevaluated when sufficient collection
history has been obtained.
The following table aggregates the impact of our proprietary loan program on tuition revenue
and interest income in our Condensed Consolidated Income Statements from inception through the
periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
|
|
|
March 31, |
|
|
March 31, |
|
|
Inception |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
to date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tuition revenue and interest income excluded |
|
$ |
2,030 |
|
|
$ |
2,932 |
|
|
$ |
4,390 |
|
|
$ |
5,931 |
|
|
$ |
25,017 |
|
Amounts collected and recognized |
|
|
(210 |
) |
|
|
(64 |
) |
|
|
(352 |
) |
|
|
(83 |
) |
|
|
(663 |
) |
Amounts written-off |
|
|
(1,169 |
) |
|
|
(482 |
) |
|
|
(2,917 |
) |
|
|
(670 |
) |
|
|
(5,344 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate amount
excluded during the period |
|
$ |
651 |
|
|
$ |
2,386 |
|
|
$ |
1,121 |
|
|
$ |
5,178 |
|
|
$ |
19,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($s in thousands, except per share amounts)
Our Board of Directors authorized the extension of up to an aggregate of $40.0 million of
credit under our proprietary loan program. At March 31, 2011, we have used approximately $27.4
million by either providing or committing to provide loans to our students. We monitor the
aggregate amount approved under this program and may make changes in future periods.
The balance outstanding under the program includes loans outstanding and interest and
origination fees which are not reflected in our condensed consolidated balance sheets.
The following table summarizes the activity in our proprietary loan program for the period
indicated:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
Balance at beginning of period |
|
$ |
23,301 |
|
|
$ |
14,671 |
|
Loans extended |
|
|
3,032 |
|
|
|
6,104 |
|
Interest accrued |
|
|
1,064 |
|
|
|
811 |
|
Amounts collected and recognized |
|
|
(352 |
) |
|
|
(83 |
) |
Amounts written off |
|
|
(2,917 |
) |
|
|
(670 |
) |
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
24,128 |
|
|
$ |
20,833 |
|
|
|
|
|
|
|
|
10. Common Shareholders Equity
Common Stock
Holders of our common stock are entitled to receive dividends when and as declared by the
Board of Directors and have the right to one vote per share on all matters requiring shareholder
approval.
Stock Repurchase Program
In previous years, our Board of Directors authorized the repurchase of up to $70.0 million of
our common stock. Through March 31, 2011, we have purchased 3.4 million shares at an average price
per share of $13.50 and a total cost of approximately $46.4 million under this program. We did
not make any purchases during the six months ended March 31, 2011.
11
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($s in thousands, except per share amounts)
11. Segment Information
Our principal business is providing postsecondary education. We also provide
manufacturer-specific training, and these operations are managed separately from our campus
operations. These operations do not currently meet the quantitative criteria for segments and
therefore are reflected in the Other category. Corporate expenses are allocated to Postsecondary
Education and the Other category based on compensation expense.
Summary information by reportable segment is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postsecondary education |
|
$ |
111,989 |
|
|
$ |
103,564 |
|
|
$ |
227,443 |
|
|
$ |
204,391 |
|
Other |
|
|
2,172 |
|
|
|
2,067 |
|
|
|
4,165 |
|
|
|
4,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
114,161 |
|
|
$ |
105,631 |
|
|
$ |
231,608 |
|
|
$ |
209,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postsecondary education |
|
$ |
12,533 |
|
|
$ |
10,875 |
|
|
$ |
30,149 |
|
|
$ |
26,459 |
|
Other |
|
|
(1,143 |
) |
|
|
(991 |
) |
|
|
(1,906 |
) |
|
|
(1,519 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
11,390 |
|
|
$ |
9,884 |
|
|
$ |
28,243 |
|
|
$ |
24,940 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postsecondary education |
|
$ |
5,998 |
|
|
$ |
4,320 |
|
|
$ |
11,944 |
|
|
$ |
8,499 |
|
Other |
|
|
148 |
|
|
|
142 |
|
|
|
284 |
|
|
|
335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
6,146 |
|
|
$ |
4,462 |
|
|
$ |
12,228 |
|
|
$ |
8,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postsecondary education |
|
$ |
7,668 |
|
|
$ |
6,624 |
|
|
$ |
18,363 |
|
|
$ |
16,202 |
|
Other |
|
|
(673 |
) |
|
|
(578 |
) |
|
|
(1,112 |
) |
|
|
(876 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
6,995 |
|
|
$ |
6,046 |
|
|
$ |
17,251 |
|
|
$ |
15,326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postsecondary education |
|
$ |
20,579 |
|
|
$ |
20,579 |
|
|
$ |
20,579 |
|
|
$ |
20,579 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
20,579 |
|
|
$ |
20,579 |
|
|
$ |
20,579 |
|
|
$ |
20,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postsecondary education |
|
$ |
267,783 |
|
|
$ |
235,211 |
|
|
$ |
267,783 |
|
|
$ |
235,211 |
|
Other |
|
|
2,514 |
|
|
|
2,644 |
|
|
|
2,514 |
|
|
|
2,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
270,297 |
|
|
$ |
237,855 |
|
|
$ |
270,297 |
|
|
$ |
237,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
Item 2. |
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion and analysis should be read in conjunction with the consolidated financial
statements and related notes included in this report and those in our 2010 Annual Report on Form
10-K filed with the SEC on December 1, 2010. This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results may differ materially from those
anticipated in such forward-looking statements as a result of certain factors, including but not
limited to those described under Risk Factors included in Part II, Item IA of this report.
2011 Overview
Operations
Our average undergraduate full-time student enrollment increased 3.3% to 18,800 students
and 5.9% to 19,600 students for the three months and six months ended March 31, 2011, respectively,
resulting in revenue growth of 8.1% and 10.7%, respectively. Our revenues for the three months and
six months ended March 31, 2011 were $114.2 million and $231.6 million, respectively, increases of
$8.5 million and $22.5 million, respectively, from the prior year. Our net income for the three
months and six months ended March 31, 2011 was $7.0 million and $17.3 million, respectively,
increases of $0.9 million and $1.9 million, respectively, from the prior year. The increase in
revenues for the three months and six months ended March 31, 2011 was primarily due to an increase
in tuition rates and an increase in average undergraduate full-time student enrollment. Our
revenues for the three months and six months ended March 31, 2011 excluded $1.5 million and $3.3
million, respectively, of tuition revenue related to students participating in our proprietary loan
program.
Our operating results were impacted by an overall increase in compensation and benefits for
the three months and six months ended March 31, 2011 due to an increase in our staffing levels in
order to meet the increase in our average undergraduate full-time student enrollment. This increase
was partially offset by a decrease during the three months ended March 31, 2011 as a result of
modifications we are making to our compensation plans in response to the final regulations issued
by the Department of Education (ED) in October 2010 which become effective July 1, 2011 and are
discussed in the Regulatory Environment section below. The modifications resulted in a decrease in
compensation and related costs of $2.3 million during the three months ended March 31, 2011, of
which a $3.2 million decrease was recorded in selling, general and administrative expenses and a
$0.9 million increase was recorded in educational services and facilities. We anticipate the
modifications to the compensation plans for our Admissions organization combined with the change in
the number of admissions representatives to decrease compensation and related expense for that
organization by approximately $6.0 million during the year ended September 30, 2011, compared to
the year ended September 30, 2010. Furthermore, if the number of our admissions representatives
remains consistent during the year ended September 30, 2012, we anticipate an increase of
approximately $6.0 million in compensation and related expenses. Specific to bonus plans for the
remainder of the organization, we anticipate the modifications to compensation plans will decrease
compensation and related expense by approximately $2.0 million during the year ended September 30,
2011, as compared to the year ended September 30, 2010.
Student starts for the three months and six months ended March 31, 2011 were 3,600 and 7,000,
respectively, decreases of 12.4% and 12.8%, respectively, as compared to 4,100 and 8,000 for the
three months and six months ended March 31, 2010, respectively. The decrease in starts was
partially due to a decrease in student applications in the prior year and the result of certain
economic and regulatory challenges. The general U.S. economic conditions, including the depth and
longevity of unemployment impacting our typical student demographic, may be negatively impacting
our operating results while it may be positively impacting our student outcome results. We
anticipate new students for the year will be below fiscal 2010 levels producing single-digit
revenue growth for the year. Given the lower than anticipated student populations, we are
evaluating implementing meaningful cost structure changes during the second half of the year. With
a heightened focus on improving efficiencies and cost containment we still expect operating margins
for the year in the range of 11% to 13%. This guidance excludes any impact from new
regulations which we cannot estimate at this time. Due to the seasonality of our business and
normal fluctuations in student populations, we would expect volatility in our quarterly results.
13
Regulatory Environment
On October 29, 2010, ED issued new regulations pertaining to certain aspects of the
administration of Title IV Programs, regulations which, with minor exceptions, become effective
July 1, 2011. ED previously announced that it was delaying until 2011 publication of additional
regulations concerning students gainful employment in recognized occupations, which are expected
to become effective July 1, 2012. ED has since issued interpretive guidance on the final
regulations in the form of multiple Dear Colleague Letters to institutions. However, there remains
uncertainty in how various aspects of the new regulations will be interpreted and applied, which
could increase the risk that ED could seek to impose monetary or other sanctions on us if it
believed we were not in full compliance with all aspects of the new regulations.
We have devoted significant effort to understanding the effects of the new regulations on our
business and to developing compliant solutions that are also congruent with our business, culture
and mission to serve our students and industry partners. However, these solutions, and the
development of additional solutions based on further analysis and interpretive guidance related to
implementation and compliance with these final rules, including but not limited to gainful
employment, compensation, the definition of a credit hour, state authorization and the broadened
definition of misrepresentation, may have a material impact on the manner in which we conduct our
business, our student populations, and the nature of our programs, financial condition, cash flows,
results of operations and stock price.
ED issued a Dear Colleague Letter (DCL) dated March 18, 2011 that created open questions and
interpretive issues with respect to the final regulations related to determining what will
constitute a credit hour. We may not be able to obtain sufficient guidance from ED or our
accreditor prior to July 1, 2011 to understand and implement the definition of a credit hour based
on the Carnegie Unit or its equivalent as required by the new regulations and the DCL. Students
attending credit hour programs of study that are unable to meet the measurements under the Carnegie
definition or its equivalent will likely receive less funds from the Title IV Programs to pay their
cost of education with respect to those programs of study. Students interested in those programs
of study and those affected by the reduction of year round Pell funding may have to use other
non-Title IV Program funding, with such funding potentially being more expensive or unavailable and
which may include increased usage of our proprietary loan program.
Furthermore, we have made modifications to our employee compensation structures to comply with
the elimination of the safe harbors in the current regulations and such modifications will be
effective by July 1, 2011. Other companies in the industry have experienced and reported material
adverse impacts to their business when changes to compensation have been implemented, but we cannot
fully predict whether we will experience a similar impact given our dissimilar solutions, culture
and timing, nor can we predict how significant any such impact will be. Our operating costs have
and will change materially as we adjust compensation in a manner that we believe to be fair and
compliant (please see Overview; Operations).
Interpretation of the new regulations is subject to change as ED provides further guidance and
clarification. Existing or future understanding could be different from EDs interpretations and
thus lead to changes in our operations, fines, restrictions or litigation, and such efforts or
differences could reduce our enrollment, which could have a material adverse effect on our
business, financial condition, results of operations, cash flows and stock price.
14
Curriculum Transformation
We are transforming our Automotive Technology and Diesel Technology II program curricula to a
blend of daily instructor-led theory and hands-on lab training complemented by interactive
web-based learning, which is reflective of current industry training methods and standards. In
addition to improving the overall educational experience for our students, the new curricula offer
more convenience and training flexibility for our students while meeting industry standards. We
began offering the new curricula at the Dallas/Ft. Worth, Texas campus at the time of opening and
we intend to integrate the new curricula at our other campuses in the
future, starting with one of our other campuses which teaches
Automotive/Diesel Technology programs, as early as the second quarter
of 2012. To date we have
invested approximately $18.3 million for this transformation and anticipate investing within the
range of $1.0 million to $2.0 million during the remainder of 2011.
Graduate Placement
Securing employment opportunities in industry for our graduates is critical to our ability to
help our graduates benefit from their education. Accordingly, we dedicate significant resources to
maintaining an effective graduate placement team. Our campus-based staff instruct active students
on employment search and interviewing skills, facilitate employer visits to campuses, provide
access to reference materials and assist with the composition of resumes. We also have a
centralized department whose focus is to develop job opportunities and referrals. We believe that
our employment services program provides our students with a more compelling value proposition and
enhances the employment opportunities for our graduates. Our consolidated placement rate for 2010
graduates improved 530 basis points during the three months ended March 31, 2011 when compared to
the placement rate for 2009 graduates during the three months ended March 31, 2010.
Results of Operations
The following table sets forth selected statements of operations data as a percentage of net
revenues for each of the periods indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Educational services and facilities |
|
|
50.5 |
% |
|
|
48.8 |
% |
|
|
48.1 |
% |
|
|
48.1 |
% |
Selling, general and administrative |
|
|
39.5 |
% |
|
|
41.8 |
% |
|
|
39.7 |
% |
|
|
40.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
90.0 |
% |
|
|
90.6 |
% |
|
|
87.8 |
% |
|
|
88.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
10.0 |
% |
|
|
9.4 |
% |
|
|
12.2 |
% |
|
|
11.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
Other income |
|
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income |
|
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.2 |
% |
|
|
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
10.1 |
% |
|
|
9.5 |
% |
|
|
12.4 |
% |
|
|
12.1 |
% |
Income tax expense |
|
|
4.0 |
% |
|
|
3.8 |
% |
|
|
5.0 |
% |
|
|
4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
6.1 |
% |
|
|
5.7 |
% |
|
|
7.4 |
% |
|
|
7.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
15
We opened a new campus in Dallas/Ft. Worth, Texas in June 2010. For the three months and six
months ended March 31, 2011, this campus had revenues of $2.5 million and $4.3 million,
respectively, and operating expenses of $3.7 million and $6.9 million, respectively, including
corporate allocations of $1.6 million and $3.1 million, respectively. For the three months and six
months ended March 31, 2010, this campus had operating expenses of $1.0 million and $1.6 million,
respectively, including corporate allocations of $0.6 million and $1.0 million, respectively.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the three months
and six months ended March 31, 2011 were $17.9 million and $41.1 million, respectively, as compared
to $14.7 million and $34.5 million for the three months and six months ended March 31, 2010,
respectively. EBITDA is a non-GAAP financial measure which is provided to supplement, but not
substitute for, the most directly comparable GAAP measure. We choose to disclose to investors this
non-GAAP financial measure because it provides an additional analytical tool to clarify our results
from operations and helps to identify underlying trends. Additionally, such measure helps compare
our performance on a consistent basis across time periods. To obtain a complete understanding of
our performance, this measure should be examined in connection with net income determined in
accordance with GAAP. Since the items excluded from this measure are significant components in
understanding and assessing financial performance under GAAP, this measure should not be considered
to be an alternative to net income as a measure of our operating performance or profitability.
Exclusion of items in our 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 EBITDA differently than we do, limiting its usefulness as a
comparative measure across companies. Investors are encouraged to use GAAP measures when evaluating
our financial performance.
EBITDA reconciles to net income as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
(In thousands) |
|
Net income |
|
$ |
6,995 |
|
|
$ |
6,046 |
|
|
$ |
17,251 |
|
|
$ |
15,326 |
|
Interest income, net |
|
|
(55 |
) |
|
|
(74 |
) |
|
|
(143 |
) |
|
|
(118 |
) |
Income tax expense |
|
|
4,575 |
|
|
|
4,028 |
|
|
|
11,390 |
|
|
|
9,983 |
|
Depreciation and amortization |
|
|
6,355 |
|
|
|
4,690 |
|
|
|
12,645 |
|
|
|
9,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
17,870 |
|
|
$ |
14,690 |
|
|
$ |
41,143 |
|
|
$ |
34,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity for the trailing four quarters ended March 31, 2011 was 26.2% compared to
25.6% percent for the trailing four quarters ended September 30, 2010. Return on equity is
calculated as the sum of net income for the last four quarters divided by the average of our total
shareholders equity balances at the end of each of the last five quarters.
16
Capacity utilization is the ratio of our average undergraduate full-time student enrollment to
total seats available. Total seats available represents our maximum capacity; however, due to
certain dynamics, our operating capacity tends to be lower. The following table sets forth our
average capacity utilization during each of the periods indicated and the total seats available at
the end of each of the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average undergraduate full-time student enrollment |
|
|
18,800 |
|
|
|
18,200 |
|
|
|
19,600 |
|
|
|
18,500 |
|
Total seats available |
|
|
29,500 |
|
|
|
25,500 |
|
|
|
29,500 |
|
|
|
25,500 |
|
Average capacity utilization |
|
|
63.7 |
% |
|
|
71.4 |
% |
|
|
66.4 |
% |
|
|
72.5 |
% |
The increase in our total seats available was primarily due to classrooms transferred to
our Automotive Technology programs as a result of reductions in and discontinuation of training for
certain manufacturer specific training programs and the opening of our Dallas/Ft. Worth, Texas
campus. We continue to seek alternate uses for our underutilized space at existing campuses.
Alternate uses may include subleasing space to third parties, allocating space for use by our
manufacturer specific advanced training programs, adding new industry relationships or
consolidating administrative functions into campus facilities.
Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010 and Six Months
Ended March 31, 2011 Compared to Six Months Ended March 31, 2010
Revenues. Our revenues for the three months ended March 31, 2011 were $114.2 million,
representing an increase of $8.5 million, or 8.1%, as compared to revenues of $105.6 million for
the three months ended March 31, 2010. This increase was a result of tuition rate increases
between 3% and 5%, depending on the program, and an increase in the average undergraduate full-time
student enrollment of 3.3%. Our revenues for the three months ended March 31, 2011 and 2010
excluded $1.5 million and $2.5 million, respectively, of tuition revenue related to students
participating in our proprietary loan program. In accordance with our accounting policy, we will
recognize the related revenue as payments are received from the students participating in this
program. We recognized revenue and interest of $0.2 million under the program during the three
months ended March 31, 2011 and minimal amounts during the three months ended March 31, 2010.
Our revenues for the six months ended March 31, 2011 were $231.6 million, representing an
increase of $22.5 million, or 10.7%, as compared to net revenues of $209.2 million for the six
months ended March 31, 2010. This increase was a result of an increase in the average
undergraduate full-time student enrollment of 5.9% as well as tuition increases between 3% and 5%,
depending on the program. Our revenues for the six months ended March 31, 2011 and 2010 excluded
$3.3 million and $5.1 million, respectively, of tuition revenue related to students participating
in our proprietary loan program. We recognized revenue and interest of $0.3 million under the
program during the six months ended March 31, 2011, and minimal amounts during the six months ended
March 31, 2010.
Educational services and facilities expenses. Our educational services and facilities
expenses for the three months and six months ended March 31, 2011 were $57.7 million and $111.5
million, respectively, an increase of $6.1 million and $11.0 million, respectively, as compared to
$51.6 million and $100.5 million for the three months and six months ended March 31, 2010,
respectively. Our educational services and facilities expenses for the three months and six months
ended March 31, 2011 for our Dallas/Ft. Worth, Texas campus were $2.0 million and $3.6 million,
respectively, including corporate allocations of $0.3 million and $0.5 million, respectively; for
the three months and six months ended March 31, 2010, the expenses were $0.2 million and $0.4
million, respectively, including minimal corporate allocations.
17
The following table sets forth the significant components of our educational services and
facilities expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
(In thousands) |
|
Compensation and related costs |
|
$ |
32,022 |
|
|
$ |
27,364 |
|
|
$ |
60,468 |
|
|
$ |
53,183 |
|
Occupancy costs |
|
|
9,037 |
|
|
|
8,838 |
|
|
|
18,126 |
|
|
|
17,774 |
|
Other educational services and
facilities expenses |
|
|
5,865 |
|
|
|
5,852 |
|
|
|
11,453 |
|
|
|
11,047 |
|
Depreciation expense |
|
|
4,714 |
|
|
|
3,599 |
|
|
|
9,261 |
|
|
|
7,180 |
|
Tools and training aids
expense |
|
|
2,954 |
|
|
|
3,038 |
|
|
|
6,283 |
|
|
|
5,749 |
|
Supplies and maintenance |
|
|
3,100 |
|
|
|
2,902 |
|
|
|
5,937 |
|
|
|
5,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
57,692 |
|
|
$ |
51,593 |
|
|
$ |
111,528 |
|
|
$ |
100,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and related costs increased $4.7 million and $7.3 million during the three months
and six months ended March 31, 2011, respectively, and was primarily due to the addition of
instructors to support our higher average undergraduate full-time student enrollment, additional
staff dedicated to student outcomes as well as the modifications to our compensation plans
discussed previously. Compensation and related costs for our Dallas/Ft. Worth, Texas campus were
$0.8 million and $1.4 million for the three months and six months ended March 31, 2011, including
corporate allocations of $0.1 million and $0.2 million, respectively; the expenses were minimal for
the three months and six months ended March 31, 2010.
Depreciation expense increased $1.1 million and $2.1 million for the three months and six
months ended March 31, 2011, respectively, and was primarily due to the addition of assets related
to our Automotive Technology and Diesel Technology II curriculum project and the opening of our
Dallas/Ft. Worth, Texas campus during the last half of 2010. Depreciation expense related to our
Automotive Technology and Diesel Technology II curriculum was $0.7 million and $1.4 million for the
three months and six months ended March 31, 2011, respectively and for our Dallas/Ft. Worth, Texas
campus was $0.3 million and $0.6 million for the three months and six months ended March 31, 2011,
respectively.
Selling, general and administrative expenses. Our selling, general and administrative
expenses for the three months and six months ended March 31, 2011 were $45.1 million and $91.8
million, respectively, representing an increase of $0.9 million and $8.1 million, respectively, as
compared to $44.2 million and $83.7 million for the three months and six months ended March 31,
2010, respectively. Our selling, general and administrative expenses for the three months and six
months ended March 31, 2011 for our Dallas/Ft. Worth, Texas campus were $1.7 million and $3.3
million, respectively, including corporate allocations of $1.3 million and $2.5 million,
respectively; for the three months and six months ended March 31, 2010, the expenses were $0.7
million and $1.2 million, respectively, including corporate allocations of $0.6 million and $0.9
million, respectively.
18
The following table sets forth the significant components of our selling, general and
administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
|
(In thousands) |
|
Compensation and related costs |
|
$ |
23,816 |
|
|
$ |
24,960 |
|
|
$ |
49,291 |
|
|
$ |
48,544 |
|
Advertising expense |
|
|
8,736 |
|
|
|
9,021 |
|
|
|
16,765 |
|
|
|
14,889 |
|
Other selling, general and administrative expenses |
|
|
7,933 |
|
|
|
6,382 |
|
|
|
15,829 |
|
|
|
12,544 |
|
Bad debt expense |
|
|
1,519 |
|
|
|
1,483 |
|
|
|
3,802 |
|
|
|
2,979 |
|
Depreciation expense |
|
|
1,639 |
|
|
|
1,088 |
|
|
|
3,379 |
|
|
|
2,135 |
|
Contract services expense |
|
|
1,436 |
|
|
|
1,220 |
|
|
|
2,771 |
|
|
|
2,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
45,079 |
|
|
$ |
44,154 |
|
|
$ |
91,837 |
|
|
$ |
83,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and related costs decreased by $1.1 million for the three months ended March
31, 2011 primarily due to modifications to our compensation plans discussed previously.
Compensation and related costs increased by $0.7 million for the six months ended March 31, 2011
primarily due to an increase in the number of staff to support the transformation of our Automotive
Technology and Diesel Technology II program curricula, increases which were partially offset by the
compensation changes noted above. Our compensation and related costs for the three months and six
months ended March 31, 2011 for our Dallas/Ft. Worth, Texas campus were $0.6 million and $1.3
million, respectively, including corporate allocations of $0.3 million and $0.7 million,
respectively; for the three months and six months ended March 31, 2010, the expenses were $0.4
million and $0.7 million, respectively, including corporate allocations of $0.3 million and $0.5
million, respectively.
Advertising expense increased $1.9 million for the six months ended March 31, 2011 primarily
due to an increase in our spending on internet media. We expect our advertising expense to remain
in the range of approximately 8.0% 9.0% of revenues for the remainder of the year, and
approximately 7.5% 8.5% of revenues for the full year.
Depreciation expense increased $1.2 million for the six months ended March 31, 2011 primarily
related to the addition of software developed for internal use, acceleration of depreciation
related to the move of our corporate offices in March 2011 and investments in information
technology infrastructure.
Income taxes. Our provision for income taxes for the three months and six months ended March
31, 2011 was $4.6 million, or 39.5% of pre-tax income, and $11.4 million, or 39.8% of pre-tax
income, respectively. Our provision for income taxes for the three months and six months ended
March 31, 2010 was $4.0 million, or 40.0% of pre-tax income, and $10.0 million, or 39.4% of pre-tax
income, respectively. The effective income tax rate in each period differed from the federal
statutory tax rate of 35% primarily as a result of state income taxes, net of related federal
income tax benefits.
Liquidity and Capital Resources
Based on past performance and current expectations, we believe that our cash flows from
operations, cash on hand and investments will satisfy our working capital needs, capital
expenditures, commitments, and other liquidity requirements associated with our existing operations
through the next 12 months.
19
We believe that the strategic use of our cash resources includes funding our new campus as
well as subsidizing funding alternatives for our students. In addition, we evaluate the repurchase
of our common stock, payment of dividends, consideration of strategic acquisitions and other
potential uses of cash. To the extent that potential acquisitions are large enough to require
financing beyond cash from operations, we may issue debt resulting in increased interest expense.
Our aggregate cash and cash equivalents and current investments were $87.3 million at March 31,
2011.
Our principal source of liquidity is operating cash flows. A majority of our net revenues are
derived from Title IV Programs. Federal regulations dictate the timing of disbursements of funds
under Title IV Programs. Students must apply for a new loan for each academic year consisting of
thirty-week periods. Loan funds are generally provided by lenders in two disbursements for each
academic year. The first disbursement is usually received within 30 days of the start of a
students academic year and the second disbursement is typically received at the beginning of the
sixteenth week from the start of the students academic year. We established a proprietary loan
program in which we bear all credit and collection risk and students are not required to begin
repayment until six months after the student completes or withdraws from his or her program. These
factors, together with the timing of when our students begin their programs, affect our operating
cash flow.
Operating Activities
Six months ended March 31, 2011
For the six months ended March 31, 2011, our cash flows provided by operating activities were
$28.9 million resulting from net income of $17.3 million with adjustments of $24.2 million for
non-cash and other items which were offset by $12.6 million related to the change in our operating
assets and liabilities.
For the six months ended March 31, 2011, the primary adjustments to our net income for
non-cash and other items were depreciation and amortization of $12.2 million, substantially all of
which was depreciation, bad debt expense of $3.8 million, stock-based compensation of $3.5 million,
and deferred income taxes of $3.7 million
Six months ended March 31, 2010
For the six months ended March 31, 2010, our cash flows provided by operating activities were
$25.2 million resulting from net income of $15.3 million with adjustments of $14.3 million for
non-cash and other items which were offset by $4.4 million related to the change in our operating
assets and liabilities.
For the six months ended March 31, 2010, the primary adjustments to our net income for
non-cash and other items were depreciation and amortization of $8.8 million, substantially all of
which was depreciation, bad debt expense of $3.0 million, and stock-based compensation of $3.3
million.
Changes in operating assets and liabilities
Six months ended March 31, 2011
For the six months ended March 31, 2011, changes in our operating assets and liabilities
resulted in cash outflows of $12.6 million and were primarily attributable to changes in
receivables, accounts payable and accrued expenses and income tax receivable, partially offset by
changes in deferred revenue and deferred rent.
The increase in our receivables resulted in a use of cash of $10.9 million. This was
primarily due to the timing of the receipt of financial aid funding.
The decrease in accounts payable and accrued expenses resulted in a use of cash of $7.1
million and was primarily due to the timing of our payroll cycle, payments of 2010 bonuses and the
modifications to our compensation plans.
20
The change in income tax from a payable position to a receivable position resulted in cash
used of $3.2 million and was primarily due to the timing of tax payments.
The increase in deferred revenue resulted in cash provided of $5.3 million. The increase was
primarily attributable to the timing of student starts, the number of students in school and where
they were at period end in relation to the completion of their program at March 31, 2011 compared
to September 30, 2010.
In September 2010, we entered into a leasing arrangement to relocate our headquarters during
the second quarter of 2011. The lease included incentives such as a leasehold improvement
allowance, moving allowance, and free rent periods which will be recognized on a straight-line
basis over the initial lease term resulting in a $4.5 million increase in deferred rent.
Six months ended March 31, 2010
For the six months ended March 31, 2010, changes in our operating assets and liabilities
resulted in cash outflows of $4.4 million and were primarily attributable to changes in accounts
payable and accrued expenses and income tax receivable, partially offset by changes in deferred
revenue.
The decrease in accounts payable and accrued expenses resulted in a use of cash of $4.7
million and was primarily due to the timing of our accounts payable cycle and a decrease in accrued
payroll and benefits. The timing of our accounts payable cycle resulted in a decrease in accounts
payable and accrued expenses of $2.6 million. Accrued payroll and benefits decreased $2.1 million
primarily due to the payment of 2009 bonuses and the timing of our payroll cycle.
The change in income tax from a payable position to a receivable position resulted in cash
used of $2.4 million and was primarily due to the timing of tax payments.
The increase in deferred revenue resulted in cash provided of $2.3 million. The increase was
primarily attributable to the timing of student starts, the number of students in school and where
they were at period end in relation to the completion of their program at March 31, 2010 compared
to September 30, 2009.
Investing Activities
Six months ended March 31, 2011
For the six months ended March 31, 2011, cash used in investing activities was $25.7 million
and was primarily related to our investment of $18.1 million in
office leasehold improvements, our Automotive Technology and Diesel
Technology II program curricula and in new and replacement training equipment for our ongoing
operations. We had cash outflows of $26.2 million for purchases of investments, and cash inflows
of $18.7 from proceeds received upon maturity of investments.
Six months ended March 31, 2010
For the six months ended March 31, 2010, cash used in investing activities was $36.2 million
and was primarily related to our investment of $26.5 million in pre-funded municipal bonds and
certificates of deposit partially offset by $4.9 million of proceeds received upon the maturity of
investments, all of which were re-invested. Additionally, we invested $14.6 million for the
purchase of property and equipment associated with information technology projects, curriculum
development, campus improvements and ongoing replacement of equipment related to student training.
21
Financing Activities
Six months ended March 31, 2011 and 2010
During the six months ended March 31, 2011 and 2010, cash used in or provided by financing
activities was primarily attributable to activity in our stock-based compensation plans.
Seasonality and Trends
Our revenues and operating results normally fluctuate as a result of seasonal variations in
our business, principally due to changes in total student population and costs associated with
opening or expanding our campuses. Student population varies as a result of new student
enrollments, graduations and student attrition. Historically, our schools have had lower student
populations in our third quarter than in the remainder of our year because fewer students are
enrolled during the summer months. Additionally, our schools have had higher student populations
in our fourth quarter than in the remainder of the year because more students enroll during this
period. Our expenses, however, do not vary significantly with changes in student population and
revenues and, as a result, such expenses do not fluctuate significantly on a quarterly basis. We
expect 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, increased enrollments of adult students or acquisitions. In addition, our revenues
for the first quarter ending December 31 are impacted by the closure of our campuses for a week in
December for a holiday break and, accordingly, we do not earn revenue during that closure period.
Operating income is negatively impacted during the initial start up of new campus openings. We
incur sales and marketing costs as well as campus personnel costs in advance of the campus opening.
Typically we begin to incur such costs approximately 12 to 15 months in advance of the campus
opening, with the majority of the costs being incurred in the nine month period prior to a campus
opening.
Critical Accounting Policies and Estimates
Our critical accounting policies are disclosed in our 2010 Annual Report on Form 10-K, filed
with the SEC on December 1, 2010. During the six months ended March 31, 2011 there have been no
significant changes in our critical accounting policies.
Recent Accounting Pronouncements
Recent accounting pronouncements are disclosed in our 2010 Annual Report on Form 10-K, filed
with the SEC on December 1, 2010. During the six months ended March 31, 2011 there have been no
new accounting pronouncements which are expected to significantly impact our consolidated financial
statements.
|
|
|
Item 3. |
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
There have been no significant changes to our market risk since September 30, 2010. For a
discussion of our exposure to market risk, refer to our 2010 Annual Report on Form 10-K, filed with
the SEC on December 1, 2010.
22
|
|
|
Item 4. |
|
CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief
Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design
and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act), pursuant to Exchange Act Rule 13a-15 as of the end of the
period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures are effective in ensuring
that (i) information required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the SECs rules and forms and (ii) information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Companys management, including its principal executive and principal financial
officers, or persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in
connection with the evaluation required by Exchange Act Rule 13a-15(d) that occurred during the
three months ended March 31, 2011 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
|
|
|
Item 1. |
|
LEGAL PROCEEDINGS |
In the ordinary conduct of our business, we are periodically subject to lawsuits,
investigations and claims including, but not limited to, claims involving students or graduates and
routine employment matters. Although we cannot predict with certainty the ultimate resolution of
lawsuits, investigations and claims asserted against us, we do not believe that any currently
pending legal proceeding to which we are a party will have a material adverse effect on our
business, results of operations, cash flows or financial condition.
In addition to the other information set forth in this report, including the information
contained in Part I, Item 3, you should carefully consider the factors discussed in Part I, Item IA
of our Annual Report on Form 10-K filed with the SEC on December 1, 2010 and as updated below,
which could materially affect our business, financial condition or operating results. The risks
described in this report and in our Annual Report on Form 10-K are not the only risks we face.
Additional risks and uncertainties not currently known to us or that we currently deem to be
immaterial also may materially adversely affect our business, financial condition or operating
results.
23
|
|
|
Item 2. |
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
The following table summarizes the purchase of equity securities for the three months ended
March 31, 2011:
ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) Approximate Dollar |
|
|
|
|
|
|
|
|
|
|
|
(c) Total Number |
|
|
Value of Shares that |
|
|
|
(a) Total |
|
|
|
|
|
|
of Shares |
|
|
May Yet Be Purchased |
|
|
|
Number of |
|
|
(b) Average |
|
|
Purchased as |
|
|
Under the Plans Or |
|
|
|
Shares |
|
|
Price Paid |
|
|
Part of Publicly |
|
|
Programs |
|
Period |
|
Purchased(1) |
|
|
per Share |
|
|
Announced Plans |
|
|
(In thousands)(2) |
|
January 2011 |
|
|
442 |
|
|
$ |
19.75 |
|
|
|
|
|
|
$ |
23,660 |
|
February 2011 |
|
|
13,641 |
|
|
$ |
18.38 |
|
|
|
|
|
|
$ |
23,660 |
|
March 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
23,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
14,083 |
|
|
|
|
|
|
|
|
|
|
$ |
23,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents shares of common stock withheld by us as payment of taxes on the vesting
of shares of our common stock which were granted subject to forfeiture restrictions
under our 2003 Incentive Compensation Plan. |
|
(2) |
|
Our Board of Directors has authorized the repurchase of up to $70.0 million of
our common stock in the open market or through privately negotiated transactions. |
24
|
|
|
|
|
Number |
|
Description |
|
|
|
|
|
|
10.1 |
|
|
Employment Agreement, dated March 7, 2011, between the
Company and Kimberly J. McWaters. (Incorporated by
reference to the Form 8-K filed by the Registrant on
March 8, 2011). |
|
|
|
|
|
|
10.2 |
|
|
Employment Agreement, dated March 7, 2011, between the
Company and Eugene S. Putnam, Jr. (Incorporated by
reference to the Form 8-K filed by the Registrant on
March 8, 2011). |
|
|
|
|
|
|
10.3 |
|
|
Employment Agreement, dated March 7, 2011, between the
Company and John C. White. (Incorporated by reference
to the Form 8-K filed by the Registrant on March 8,
2011). |
|
|
|
|
|
|
31.1 |
|
|
Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. (Filed
herewith.) |
|
|
|
|
|
|
31.2 |
|
|
Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. (Filed
herewith.) |
|
|
|
|
|
|
32.1 |
|
|
Certification of Chief Executive Officer pursuant to 18
U.S.C. §1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. (Filed herewith.) |
|
|
|
|
|
|
32.2 |
|
|
Certification of Chief Financial Officer pursuant to 18
U.S.C. §1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. (Filed herewith.) |
25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
UNIVERSAL TECHNICAL INSTITUTE, INC.
|
|
Dated: May 4, 2011 |
By: |
/s/ Eugene S. Putnam, Jr.
|
|
|
|
Eugene S. Putnam, Jr. |
|
|
|
President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer) |
|
26