Universal Technical Institute Inc · NYSE:UTI
Universal Technical Institute — Q1 2018 Earnings Presentation
15 slides from Universal Technical Institute's earnings presentation, Feb 8, 2018
Slide 1: Q1 2018 Supplemental Slides
Q1 2018 Supplemental Slides February 8, 2018
Slide 2: Safe harbor
Safe harbor This presentation may contain forward-looking statements regarding events or future financial performance. These statements are only predictions and the actual events or results may differ materially. For important factors that could cause actual results to differ materially from those c
Slide 3: Use of Non-GAAP financial information
Use of Non-GAAP financial information This presentation contains non-GAAP (Generally Accepted Accounting Principles) financial measures, which are intended to supplement, but not substitute for, the most directly comparable GAAP measures. Management chooses to disclose to investors, these non-GAAP f
Slide 4: Q1 2018 Supplemental Presentation Contents
Q1 2018 Supplemental Presentation Contents • Commuter Campus Cash Flows/Pro Forma • Campus Portfolio • Welding Program Cash Flows • Q1 2018 Financials, including FY 2018 Outlook • Summary – UTI’s Focus for the Future 4
Slide 5: Long Beach campus cash flows
Long Beach campus cash flows Long Beach cash flows ($mm)(a) FY15A FY16A FY17A FY18P FY19P Revenue $0.7 $12.2 $18.3 $18.6 $20.8 EBITDA contribution(b) (3.6) 2.9 9.0 9.5 11.5 Net finance obligation (0.2) (1.4) (1.4) (1.5) (1.5) Capital expenditures (15.8) (0.2) (0.4) (0.2) (0.2) Pre-tax cash flow $(19
Slide 6: Bloomfield, NJ campus cash flows
Bloomfield, NJ campus cash flows NJ pro-forma cash flows ($mm)(a) FY18P FY19P FY20P FY21P FY22P Revenue $0.9 $9.7 $16.5 $19.2 $21.4 EBITDA contribution(b) (6.0) (0.7) 5.9 7.8 9.2 Capital expenditures(c) (7.8) (0.9) (0.2) (0.2) (0.2) Pre-tax cash flow $(13.8) $(1.6) $5.8 $7.6 $9.0 Perpetuity IRR 35%+
Slide 7: Right-sizing destination campuses to drive efficiencies
Right-sizing destination campuses to drive efficiencies Add new Divest real Sub-lease 1 Enhance utilization of existing space programs estate space AVONDALE, AZ Welding FY18 with new programs PHOENIX, AZ FY17 2 Review opportunities to RANCHO CUCAMONGA, CA Welding FY17 FY18 SACRAMENTO, CA FY18
Slide 8: Avondale Welding program cash flows
Avondale Welding program cash flows Welding pro-forma cash flows ($mm)(a) FY17A FY18P FY19P FY20P FY21P Revenue $0.0 $1.3 $3.0 $3.2 $3.2 EBITDA contribution(b) (0.1) 0.2 1.9 2.0 2.0 Capital expenditures(c) (0.4) (1.6) (0.0) (0.1) (0.1) Pre-tax cash flow $(0.5) $(1.4) $1.9 $1.9 $2.0 Perpetuity IRR 80
Slide 9: Q1 performance reflects investment in growth initiatives
Q1 performance reflects investment in growth initiatives ($ in millions, except for 3 Months Ended student data and EPS) Q1’18 Q4‘17 Q3‘17 Q2‘17 Q1‘17 New student starts 1,300 5,600 1,800 1,900 1,400 Y/Y growth/(decline) (7.1)% -- 12.5% (17.4)% (22.2)% Average enrollment 11,300 10,700 10,000 10,900
Slide 10: Statement of loss
Statement of loss ($ in thousands, except per share amounts) 3 Mos. 3 Mos. 3 Mos. 3 Mos. 3 Mos. 12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 Revenues $ 81,156 $ 81,329 $ 76,258 $ 82,497 $ 84,179 Operating expenses: Educational services & facilities 44,081 44,919 44,120 44,834 47,154 SG&A 40,679 37,524
Slide 11: EBITDA reconciliation
EBITDA reconciliation ($ in thousands) 3 Mos. 3 Mos. 3 Mos. 12 Mos. 12 Mos. 12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 Net loss $ (1,135) $ (757) $ (3,917) $ (1,730) $ (1,724) Interest expense, net 431 461 559 712 749 Income tax expense (benefit) (2,829) (325) 967 2,145 2,610 Depreciation and amortiz
Slide 12: Balance sheet summary
Balance sheet summary ($ in thousands) At: 12/31/17 9/30/17 Cash & cash equivalents/investments $93,254 $97,917 Restricted cash* 14,143 14,822 • On June 24, 2016, UTI raised $70 million through Current assets 141,287 146,826 the sale of Series A Convertible Preferred Stock to Coliseum Holdings Total
Slide 13: ASC 606 adopted in Q1 2018
ASC 606 adopted in Q1 2018 • UTI is early adopting ASC 606 (Revenue from Contracts with Customers) • The SEC encourages companies to early adopt, when possible • 8 of 10 of our peer group* are required to comply starting January 1, 2018 • Adjusting entry to equity provides additional strength to com
Slide 14: 2018 financial outlook
2018 financial outlook • Start growth: low single digits; weighted toward back of year • Average population: down mid-single digits • Revenue: $310 – $320 million • Operating expenses: $340 – $345 million • Operating loss: $20 – $25 million; negative EBITDA due to revenue decline and investments in:
Slide 15: Our focus for the future is growth and efficiency
Our focus for the future is growth and efficiency Demand for skilled technicians remains at historic highs, but the habits and preferences of our prospective students have fundamentally changed. • Reinventing our go-to-market strategy and our customer experience to expand our reach and the way we en
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