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Item 5. Market for Registrant’s Common Equity

2021-12-02 compared with 2020-12-03 · 40 added, 74 removed, 20 unchanged (85% of the section changed)

8 unchanged sentences

Repurchase of Securities

On December 20, 2011, our board of directors authorized the repurchase of up to $25.0 million of our common stock in the open market or through privately negotiated transactions.

As of September 30, 2020, we have purchased an aggregate of 1,677,570 shares of our common stock for an aggregate purchase price of $15.3 million under this stock repurchase program.

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.

On December 10, 2020, our Board of Directors authorized a new share repurchase plan that would allow for the repurchase of up to $35.0 million of our common stock in the open market or through privately negotiated transactions.

This new share repurchase plan replaced the previously authorized plan from fiscal 2012.

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

We did not repurchase any shares during the year ended September 30, 2021.

Stock Performance Graph

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.

Companies) and a Peer Issuer Group Index.

The peer issuer group consists of the companies identified below, which were selected on the basis of the similar nature of their business.

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

Symbol CRSP Total Returns Index for:

The following performance graph compares the performance of our common stock to the Russell 2000 Index, CRSP NYSE Stock Market (US Companies) Index, our previous peer group as determined by management, and a new peer group established by management based upon changes in our growth and diversification strategy.

The companies comprising the old and new peer groups are summarized in the tables below.

We feel that the Russell 2000 Index and the new peer group provides a more meaningful comparison to our common stock’s performance and we intend to compare our performance to these two indices going forward.

The graph below compares our annual percentage change in cumulative total return on common shares over the past five years with the cumulative total return of companies comprising the Russell 2000 Index, CRSP NYSE Stock Market (US Companies) Index, our previous peer group index and our new peer group index.

This presentation assumes that $100 was invested in shares of the relevant issuers on September 30, 2016, and that dividends received were immediately invested in additional shares.

The graph plots the value of the initial $100 investment at one-year intervals for the fiscal years shown.

The CRSP index has been included with data through 2020 as such data is no longer available.

CRSP Total Returns Index for:

09/2016 09/2017 09/2018 09/2019 09/2020 09/2021

u Universal Technical Institute, Inc.

Universal Technical Institute, Inc.

$ 100.00 $ 194.94 $ 149.44 $ 305.62 $ 285.39 $ 379.78

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:

Russell 2000 100.00 120.74 139.14 126.77 127.27 187.94

NYSE Stock Market (US Companies) 100.00 116.49 131.92 136.53 137.11 —

New Peer Group 100.00 156.11 221.72 200.49 151.15 150.63

Old Peer Group 100.00 185.72 244.33 216.35 164.02 173.23

Companies in the New Self-Determined Peer Group:

Adtalem Global Education, Inc.

Career Education Corporation

Grand Canyon Education, Inc.

Lincoln Educational Services Corporation

American Public Education, Inc.

Perdoceo Education Corporation

Aspen Group, Inc.

Strategic Education, Inc.

The lines represent quarterly index levels derived from compounded daily returns that include all dividends.

Peer group indices use beginning of period market capitalization weighting.

If the quarterly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.

Companies in the Old Self-Determined Peer Group:

Adtalem Global Education, Inc.

Perdoceo Education Corporation

Grand Canyon Education, Inc.

Strategic Education, Inc.

Lincoln Educational Services Corporation Zovio, Inc.

• The lines represent monthly index levels derived from compounded daily returns that include all dividends.

• The indexes are reweighted daily, using the market capitalization on the previous trading day

• If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.

• The index level for all series was set to $100 on September 30, 2016.

• Russell 2000 Index Data:

Used with permission.

• NYSE Index Data:

Calculated (or Derived) based from CRSP NYSE Stock Market (US Companies), Center for Research in Security Prices (CRSP®), Graduate School of Business, The University of Chicago.

Used with permission.

Prepared by Zacks Investment Research, Inc.

1 unchanged sentence

SELECTED FINANCIAL DATA

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 Annual 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, 2020, 2019, 2018, 2017 and 2016 have been derived from our consolidated financial statements.

Year Ended September 30,

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:

Educational services and facilities 155,932 178,317 182,589 181,027 194,395

Selling, general and administrative 148,700 160,989 169,651 145,060 171,374

Total operating expenses 304,632 339,306 352,240 326,087 365,769

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

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, 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

Working capital 58,539 21,260 24,333 60,437 67,389

Total assets 441,981 270,526 282,278 274,102 297,159

Total shareholders’ equity

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.

(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.

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