Universal Technical Institute(US:UTI)2021-05-09 13:47Financial Data and Key Metrics Changes - Total revenue for the quarter was $77.7 million, down 6.1% year-on-year, primarily due to a decrease in revenue per student [24] - Operating loss for the quarter was $1.7 million, compared to a loss of $0.5 million in the prior year, largely due to lower revenue [27] - Adjusted EBITDA was $2.8 million, compared to $3.1 million in Q2 of 2020, highlighting efficiencies in the operating model despite lower revenue [27] - Net loss for the quarter was $1.5 million, compared to net income of $10.1 million in the prior year quarter [27] - Available liquidity as of March 31 was $78.5 million, including $59 million of unrestricted cash and cash equivalents [29] Business Line Data and Key Metrics Changes - The company started 2,405 students in the second quarter, representing a nearly 15% increase over the prior year quarter [8] - Average active students increased by 10.8% during the period compared to the same quarter last year [24] - Show rates for the quarter exceeded expectations by 50 basis points but decreased 150 basis points year-on-year [23] Market Data and Key Metrics Changes - The company continues to see strong prospective student interest, with media inquiries growing 14% year-on-year [10] - Scheduled new student starts were 18.3% higher than the prior year quarters, indicating strong demand [23] Company Strategy and Development Direction - The company is executing a growth and diversification strategy, including the acquisition of MIT College of Technology and the opening of new campuses in Austin and Miami [11][12] - The acquisition of MIT is expected to enhance the company's financial position and expand its program offerings into high-demand skilled trades [12][15] - The company aims for a compound annual growth rate of over 10% through 2025 and to expand adjusted EBITDA margin to over 20% [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving previously outlined 2021 guidance and indicated strong momentum heading into fiscal 2022 [9][30] - The company is focused on filling the skills gap in the U.S. and believes that its educational offerings provide immense value for graduates and employers [20][21] - Management noted that the pandemic has caused challenges but remains optimistic about the company's growth trajectory and operational improvements [21] Other Important Information - The company appointed Congresswoman Loretta Sanchez to its Board of Directors, effective May 4, which is expected to enhance its advocacy for higher education [38][39] - The company is exploring potential financing opportunities for the Avondale campus to increase deployable capital [29] Q&A Session Summary Question: What is the expected growth rate and margin profile for fiscal '22? - Management anticipates growth rates in the low to mid-20s and margins in the low teens for fiscal '22, driven by strong performance and the full-year benefit of operating in a more normalized environment [44] Question: What are the EBITDA margins at MIT? - MIT had $3.5 million of adjusted EBITDA on $25 million in revenue for calendar '20, reflecting a margin of about 14% [45] Question: What is the status of the show rate? - The show rate is expected to improve gradually throughout the year, with management seeing positive momentum [47] Question: How is the company addressing students who are behind in their coursework? - The company has implemented various initiatives to mentor students and improve engagement, resulting in lower leaves of absence and withdrawals [48] Question: What is the expected revenue for Q3 and Q4? - Management expects revenue to exceed $80 million in Q3 and $95 million in Q4 [55] Question: What is the outlook for average quarterly tuition per student? - The company expects Q4 to resemble pre-COVID levels, with a gradual increase in revenue per student anticipated in fiscal '22 [58] Question: Is there an update on the share buyback? - The company has received board authorization for a $35 million share buyback, which remains a consideration alongside growth investments [59]