Universal Technical Institute, Inc. (NYSE:UTI) Q4 2019 Earnings Conference Call - Final Transcript

Dec 02, 2019 • 04:30 pm ET


Universal Technical Institute, Inc. (NYSE:UTI) Q4 2019 Earnings Conference Call - Final Transcript


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Jerome A. Grant


I'm excited to build on the work we've done to open new campuses, optimize our cost structure and, as part of our transformation plan, reshape our approach to marketing, operational execution and industry engagement. This work is fueling our turnaround and has laid a strong foundation for the next phase of growth.

At UTI, we're intently focused on building a profitable business that can thrive in any phase of the business or economic cycle, while also delivering a high-value education to our students and meeting our industry partners' acute need for highly trained technicians. We were successful in 2019. In the face of economic headwinds caused by low unemployment rates, we delivered year-over-year revenue growth for the first time since 2011.

Student enrollment, student starts, revenue, profitability and cash flow, all performed at the high end or even exceeded our expectations. Revenue was up 4.6% in 2019 and we had 3.6% more students in school at the end of 2019 than at the end of 2018. Total new student starts were up 8.8% for the full year for a total of 11,652 new student starts.

That top line performance, coupled with our work to streamline costs, reduced our fiscal 2019 operating loss by $27.5 million from the year prior to a loss of just $7.8 million. Our three-pronged strategy, which includes our transformation plan, new campuses and programs and real estate footprint rationalization delivered these strong results and, more importantly, has positioned us for continued growth. Troy will provide more detail on our 2020 outlook, but suffice it to say, we fully expect UTI to grow revenue, increase profitability and generate even more cash than we did in 2019.

In 2020, as part of the transformation plan, we're continuing to refine marketing and admission strategies to attract new students. Ongoing growth in student applications indicates increasing interest in our programs, which we believe is driven in part by our thoughtful investment in our national brand awareness campaigns. This work is focused on reaching younger students who are more inclined to pursue an education right out of high school, while adult career changers are more likely to skip school right now in favor of a job in today's robust economy.

In addition, we continue to invest our marketing dollars to direct inquiries to our highest converting media channels such as our recently redesigned website, uti.edu. Today, we're consistently achieving our goal of generating more than 50% of our inquiries from these sources, which when combined with other improvements in marketing and admissions, will allow us to increase the efficiency of our lead generation and improve our show rates.

Case in point, consolidated show rates improved 160 basis points in 2019. An increased focus on events and programs is also raising awareness of UTI and helping us highlight the ROI we consistently deliver for our students. In 2019, we conducted more than 500 future tech nights and industry days. These events allow students to explore careers, learn about our programs and