What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2020-12-03 compared with 2019-12-06 · 44 added, 65 removed, 50 unchanged (69% of the section changed)

1 unchanged sentence

Market Information

Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol “UTI”.

Our common stock is listed on the NYSE under the symbol “UTI.”

The closing price of our common stock as reported by the NYSE on November 30, 2020 was $6.56 per share.

7 unchanged sentences

During the year ended September 30, 2020, we made no purchases under this stock repurchase program.

The last stock repurchase under this stock repurchase program was during fiscal 2015.

Any future repurchases under this stock repurchase program require the approval of a majority of the voting power of our Series A Preferred Stock.

The following table summarizes our share repurchases to settle individual employee tax liabilities.

These are not included in the repurchase plan totals as they were approved in conjunction with restricted share awards, during each period in the three months ended September 30, 2019 .

Shares from share repurchases in lieu of taxes are returned to the pool of shares issuable under our 2003 Incentive Compensation Plan.

ISSUER PURCHASES OF EQUITY SECURITIES

(a) Total Number of Shares Purchased

(b) Average Price Paid per Share

(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans Or Programs

(In thousands)

Tax Withholdings

July 1-31, 2019

August 1-31, 2019

September 1-30, 2019

Stock Performance Graph

The following Stock Performance Graph and related information shall not be deemed “soliciting material” or “filed” with the Securities and Exchange Commission, nor should such information be incorporated by reference into any future filings under the Securities Act or the Securities Exchange Act except to the extent that we specifically incorporate it by reference in such filing.

The following Stock Performance Graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor should such information be incorporated by reference into any future filings under the Securities Act or the Exchange Act except to the extent that we specifically incorporate it by reference in such filing.

This graph compares total cumulative stockholder return on our common stock during the period from September 30, 2015 through September 30, 2020 with the cumulative return on the NYSE Stock Market Index (U.S.

2 unchanged sentences

The graph assumes that $100 was invested on September 30, 2015, and any dividends were reinvested on the date on which they were paid.

CRSP Total Returns Index for:

Universal Technical Institute, Inc.

NYSE Stock Market (US Companies)

Symbol CRSP Total Returns Index for:

09/2015 09/2016 09/2017 09/2018 09/2019 09/2020

u Universal Technical Institute, Inc.

$ 100.00 $ 51.18 $ 99.76 $ 76.48 $ 156.40 $ 146.05

n NYSE Stock Market (US Companies) 100.00 114.41 133.27 150.92 156.20 156.86

p Peer Group 100.00 99.90 185.53 244.09 216.13 163.86

Companies in the Self-Determined Peer Group:

13 unchanged sentences

The following table sets forth our selected consolidated financial and operating data as of and for the periods indicated.

You should read the selected financial data set forth below together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements included elsewhere in this Report on Form 10-K.

The selected consolidated statement of operations data and the selected consolidated balance sheet data as of and for the years ended September 30, 2019 , 2018 , 2017 , 2016 and 2015 have been derived from our audited consolidated financial statements.

The selected consolidated statement of operations data and the selected consolidated balance sheet data as of and for the years ended September 30, 2020, 2019, 2018, 2017 and 2016 have been derived from our consolidated financial statements.

Year Ended September 30,

($'s in thousands, except per share amounts)

2017 2016 (4)

Statement of Operations Data:

(In thousands, except per share amounts, number of campuses and average enrollments)

Revenues $ 300,761 $ 331,504 $ 316,965 $ 324,263 $ 347,146

Operating expenses:

3 unchanged sentences

Loss from operations (3,871) (7,802) (35,275) (1,824) (18,623)

Interest expense, net (5) (11)

Equity in earnings of unconsolidated affiliate (6)

Other income (expense), net

Loss before taxes (2) (3) (12)

Income tax expense (benefit) (7)

Net loss (4) (7)

Preferred stock dividends (8)

Loss available for distribution (8)

Net loss per share:

Weighted average shares (in thousands):

Net income (loss) $ 8,008 $ (7,868) $ (32,682) $ (8,128) $ (47,696)

Earnings per share:

Net income (loss) per share - basic $ 0.05 $ (0.52) $ (1.51) $ (0.54) $ (2.02)

Net income (loss) per share - diluted $ 0.05 $ (0.52) $ (1.51) $ (0.54) $ (2.02)

Weighted average number of shares outstanding:

Basic 29,812 25,438 25,115 24,712 24,313

Diluted 30,113 25,438 25,115 24,712 24,313

Cash dividends declared per common share (5)

$ — $ — $ — $ — $ 0.04

Depreciation and amortization (6)

$ 11,804 $ 15,904 $ 15,688 $ 16,886 $ 17,749

Number of campuses

12 13 13 12 12

Average enrollments 10,462 10,674 10,418 10,889 12,026

Balance Sheet Data:

Cash and cash equivalents (8) (10) (11)

Cash, cash equivalents and short-term investments $ 114,858 $ 65,442 $ 58,104 $ 97,917 $ 120,736

Current assets 180,179 118,104 116,795 146,826 161,949

2 unchanged sentences

Total shareholders’ equity

In 2018, we opened a campus in Bloomfield, New Jersey, which contributed to the fluctuations in operations and financial position during 2018 and 2019.

In 2015, we opened a campus in Long Beach, California, which contributed to the fluctuation in operations and financial position during 2015, 2016 and 2017.

The decline in our average full-time enrollment from 2015 to 2018 contributed to the decrease in revenues, loss from operations, and loss before taxes.

The increase in our average full-time enrollment during 2019 contributed to the increase in revenues.

We adopted ASC 606 using the modified retrospective method as of October 1, 2017.

This approach was applied to all contracts not completed as of October 1, 2017.

The adoption of the new standard resulted in a change in the timing of revenue recognition as it relates to our proprietary loan program.

In September and November 2016, we completed reductions in workforce impacting approximately 145 employees, which decreased operating expenses and decreased loss from operations and loss before taxes in 2017.

In February 2019, we announced that the Norwood, Massachusetts campus is no longer accepting new student applications, and its last group of students started on March 18, 2019, which increased operating expenses and increased loss from operations in 2019.

In 2015, we recorded a non-cash impairment charge of $12.4 million to write off goodwill for our MMI Phoenix, Arizona campus based on our annual impairment test.

In 2015, we began recording interest expense related to amortization of the financing obligations for our Long Beach, California campus and for our Lisle, Illinois campus, respectively.

In October 2014, we entered into a 15-year lease agreement for a build-to-suit facility related to the design and construction of a new campus in Long Beach, California.

We recorded approximately $20.3 million in property and equipment and a financing obligation of approximately $12.3 million as of September 30, 2015 related to this lease agreement.

In 2016, we recorded a full valuation allowance on our deferred tax assets which impacted income tax expense by $34.2 million for the year ended September 30, 2016.

On December 22, 2017, the Tax Cuts and Jobs Act was enacted.

As a result of the Tax Cuts and Jobs Act, we reversed approximately $2.8 million of the valuation allowance on our deferred tax assets during the three months ended December 31, 2017, as such assets are now offset by the deferred tax liability related to our goodwill before the full valuation allowance was applied to the deferred tax asset.

In 2016, we paid common stock cash dividends of $0.02 per share in December and March totaling $1.0 million.

176,522 114,288 126,645 125,776 136,614

(1) Our results of operations for the year ended September 30, 2020 were impacted by the COVID-19 pandemic.

More students took a leave of absence in fiscal 2020 due to the COVID-19 pandemic and our campuses suspended operations for a period of time.

While we have transitioned to a blended learning model, the COVID-19 pandemic has impacted the pace in which students are progressing through their programs.

As a result, our total graduates in fiscal 2020 decreased by 19% as compared to the prior year due to these delays.

We recorded $6.1 million in deferred revenue during the year ended September 30, 2020.

In February 2020, we raised $49.5 million of net proceeds through an equity offering which was focused on supporting our longer-term strategy of growth, diversification and scale.

We invested a portion of the proceeds from the equity offering in held-to-maturity securities.

Additionally, we adopted ASC 842, Leases , at the beginning of fiscal 2020 using the modified retrospective method without the recasting of comparative periods’ financial information which resulted in recording an operating lease liability of $163.0 million and an operating lease right-of-use asset of $148.6 million on October 1, 2019.

(2) In February 2019, we announced that the Norwood, Massachusetts campus is no longer accepting new student applications.

The last group of students started in March 2019, and the campus closed on July 31, 2020.

We recorded a $1.4 million restructuring charge for the Norwood campus exit during fiscal 2019, which impacted operating expenses and the loss from operations.

(3) In fiscal 2018, we opened a campus in Bloomfield, New Jersey.

The implementation spanned most of fiscal 2018 and we commenced teaching at this campus in August 2018, which contributed to the fluctuations in operations and financial position during fiscal 2018.

Additionally, we adopted ASC 606, Revenue from Contracts from Customers , at the beginning of fiscal 2018 using the modified retrospective method.

The adoption of this standard resulted in the change in the timing of revenue recognition as it relates to our proprietary loan program.

(4) In fiscal 2016, we sold 700,000 shares of Series A Preferred Stock for $70.0 million in cash.

Additionally, during fiscal 2016 we recorded a full valuation allowance on our deferred tax assets which impacted income tax expense by $34.2 million for the year ended September 30, 2016.

(5) In fiscal 2016, we paid common stock cash dividends of $0.02 per share in December and March totaling $1.0 million.

On June 9, 2016, our board of directors voted to eliminate the quarterly cash dividend on our common stock.

In 2015, we paid cash dividends of $0.10 per share in December, March and June totaling $7.3 million.

In 2016, we sold 700,000 shares of Series A Preferred Stock for $70.0 million in cash.

We paid preferred stock cash dividends of $5.3 million during the years ended September 30, 2019, 2018 and 2017, respectively, and $1.4 million during the year ended September 30, 2016.

In 2015, we used cash and cash equivalents to repurchase approximately $6.6 million and $1.4 million, respectively, of our common shares.

(6) Excludes depreciation of training equipment obtained in exchange for services of $1.3 million, $1.4 million, $1.4 million, $1.3 million and $1.3 million for the years ended September 30, 2020, 2019, 2018, 2017 and 2016, respectively.

In 2015, we purchased the majority of the buildings and land for our Houston, Texas campus.

The purchase price of $9.4 million, excluding fees, was allocated between buildings ($7.7 million) and land ($1.7 million) based on the ratio of appraised values, which decreased cash and current assets.

At the time of purchase, we had leasehold improvements related to the purchased building recorded at $5.0 million in historical cost and $4.3 million of accumulated depreciation.

The historical cost and accumulated depreciation for these assets were removed from the related classification and the net book value was recorded into building and building improvements.

The buildings and building improvements are being depreciated over a useful life of 30 years.

In the third quarter of 2017, we began investing in various bond funds, which decreased cash and cash equivalents and increased interest income.

In the first quarter of 2018, we liquidated our investment in trading securities;

as a result, there was no unrealized gain on trading securities at September 30, 2019 and 2018.

In October 2017, we entered into lease agreements for a new campus in Bloomfield, New Jersey, which opened in August 2018.

One of the leases was amended in May 2018.

The leases have an initial term of approximately 12 years.

We determined the leases are operating leases, which increased operating expenses and increased loss from operations and loss before taxes in 2018.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity