Universal Technical Institute(US:UTI)2020-08-07 12:19Financial Performance - Revenues for the three months ended June 30, 2020 were $54.5 million, a decrease of $24.6 million, or 31.1%, compared to $79.0 million for the same period in 2019[142] - Operating loss for the three months ended June 30, 2020 was $13.8 million, compared to a loss of $0.5 million in the prior year period[142] - Revenues for the nine months ended June 30, 2020 were $224.4 million, a decrease of $19.4 million, or 8.0%, compared to $243.8 million for the same period in 2019[167] - The net loss available for distribution for the three months ended June 30, 2020 was $14.6 million, compared to $1.7 million for the same period in 2019[164] - The net loss available for distribution for the nine months ended June 30, 2020 was $2.4 million, down from $17.3 million for the same period in 2019[181] - EBITDA for the nine months ended June 30, 2020 was negative $0.2 million, compared to $1.2 million for the same period in 2019[182] Enrollment and Student Metrics - Average undergraduate full-time enrollment decreased by 8.3% to 9,068 for the three months ended June 30, 2020, primarily due to higher student leaves of absence related to COVID-19[141] - The company started 1,824 new students during the three months ended June 30, 2020, an increase of 8.4% from the prior year comparable period[141] - Average full-time student enrollment decreased by 3.3% due to a higher number of students going on leave of absence related to the COVID-19 crisis[167] - The consolidated graduate employment rate for fiscal 2019 graduates as of June 30, 2020 was 2.9% lower than the rate at the same time in the prior year[146] Expenses and Cost Management - Educational services and facilities expenses were $32.5 million for the three months ended June 30, 2020, a decrease of $10.3 million from $42.8 million in the same period in 2019[152] - Educational services and facilities expenses were $118.3 million for the nine months ended June 30, 2020, a decrease of $16.1 million compared to $134.4 million for the same period in 2019[168] - Selling, general and administrative expenses for the nine months ended June 30, 2020 were $116.2 million, a decrease of $6.5 million compared to $122.7 million for the same period in 2019[174] - Compensation and related costs decreased by $3.9 million for the three months ended June 30, 2020[154] - Compensation and related costs decreased by $8.1 million for the nine months ended June 30, 2020[169] - Salaries expense decreased by $0.7 million for the nine months ended June 30, 2020, primarily due to lower headcount[179] - Employee benefits and tax decreased by $1.7 million for the nine months ended June 30, 2020, attributed to lower headcount and lower cost per employee[179] - Bonus expense increased by $4.0 million for the nine months ended June 30, 2020, due to projected performance against bonus plan metrics[179] Revenue Recognition and Deferred Revenue - The company deferred revenue of $10.8 million during the three months ended June 30, 2020, due to students delaying in-person labs and graduation dates[143] - The company recognized $5.8 million on an accrual basis related to revenues and interest under its proprietary loan program for the nine months ended June 30, 2020, compared to $4.7 million for the same period in 2019[167] Tax and Financial Aid - The effective income tax rate for the three months ended June 30, 2020 was 0.2% of pre-tax loss, compared to 9.3% for the same period in 2019[162] - The income tax benefit for the nine months ended June 30, 2020 was $10.7 million, or 117.0% of pre-tax loss, compared to an income tax expense of $0.3 million, or 1.9% of pre-tax loss for the same period in 2019[179] - The company received approximately $33.0 million in HEERF funds under the CARES Act, with $16.5 million allocated for emergency financial aid grants to students[191] Cash Flow and Financing Activities - Cash and cash equivalents were $60.0 million as of June 30, 2020, a decrease of $5.5 million from September 30, 2019[186] - Cash provided by financing activities was $45.9 million during the nine months ended June 30, 2020, primarily from the net proceeds of a public offering[198] - Cash used in investing activities was $37.2 million for the nine months ended June 30, 2020, primarily for the purchase of held-to-maturity investments[196] Strategic Initiatives and Future Outlook - The company has transitioned to a blended training model combining online instruction with in-person labs to meet health and safety guidelines[143] - The company plans to expand into new geographic markets and offer new programs, including associate level degree programs at additional campus locations[148] - The transition to a blended training model may impact future new student enrollments, graduations, and student attrition[201] Accounting and Market Risk - There were no significant changes in critical accounting policies during the nine months ended June 30, 2020[202] - No material changes to market risk have occurred since September 30, 2019[204]