Contact:

John Jenson
Vice President, Corporate Controller
Universal Technical Institute, Inc.
(623) 445-0821

Universal Technical Institute Reports Fiscal Year 2012 Second Quarter Results

SCOTTSDALE, ARIZ. – May 1, 2012 – Universal Technical Institute, Inc. (NYSE: UTI), the leading provider of automotive technician training, today reported revenues for the second quarter ended March 31, 2012 of $106.2 million, a 6.9 percent decrease from $114.2 million for the second quarter of the prior year. Net income for the second quarter ended March 31, 2012 was $1.9 million, or 8 cents per diluted share, compared to $7.0 million, or 28 cents per diluted share, for the second quarter ended March 31, 2011.

Revenues for the six months ended March 31, 2012 were $212.7 million, an 8.2 percent decrease from $231.6 million for the six months ended March 31, 2011. Net income for the six months ended March 31, 2012 was $5.9 million, or 24 cents per diluted share, compared to $17.3 million, or 70 cents per diluted share, for the six months ended March 31, 2011.

Return on equity for the trailing four quarters ended March 31, 2012 was 11.3 percent compared to 21.4 percent for the trailing four quarters ended Sept. 30, 2011.

“Second quarter financial results were negatively impacted by our lower average student enrollment,” said Kim McWaters, chief executive officer. “We remain very focused on managing our costs, without compromise to quality educational outcomes. Further, we continue to execute on strategies necessary to build new student enrollment and as a result anticipate new student start growth in the second half of the year.”

Student Metrics

Second Quarter Operating Performance

For the second quarter of 2012, revenues were $106.2 million, a 6.9 percent decrease from $114.2 million for last year’s second quarter. The decrease in revenues primarily related to a decrease in average undergraduate full-time student enrollment of 11.2 percent. The decrease was partially offset by one additional earning day in the current year and an increase in tuition rates. During the second quarter of 2012 and 2011, tuition excluded $3.7 million and $1.5 million, respectively, related to students participating in the Company’s proprietary loan program which will be recognized as revenues when payments are received.

Operating income and margin for the second quarter of 2012 were $2.9 million and 2.7 percent, respectively, compared to operating income and margin of $11.4 million and 10.0 percent, respectively, in the same period last year. The decrease in operating income was primarily attributable to the decrease in revenues and an increase in advertising expense. We anticipate our advertising expense will be in the range of 10% — 11% of revenue for the year ended September 30, 2012. The decrease was partially offset by a decrease in tools and training aids expense and supplies and maintenance.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2012 was $9.4 million compared to $17.9 million in the same period last year. See “Use of Non-GAAP Financial Information” below.

Six Month Operating Performance

Revenues for the six months ended March 31, 2012 were $212.7 million, an 8.2 percent decrease from $231.6 million for the six months ended March 31, 2011.

Operating income and margin for the six months ended March 31, 2012 were $9.5 million and 4.5 percent, respectively, compared to $28.2 million and 12.2 percent, respectively, for the six months ended March 31, 2011. The decreases in operating income and margin were related to the decreases in revenues and an increase in advertising expense.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the six months ended March 31, 2012 was $22.6 million compared to $41.1 million for the six months ended March 31, 2011. See “Use of Non-GAAP Financial Information” below.

Liquidity

Cash, cash equivalents and investments totaled $116.9 million at March 31, 2012, compared to $109.6 million at Sept. 30, 2011. At March 31, 2012, shareholders’ equity totaled $147.7 million as compared to $142.1 million at Sept. 30, 2011. The board of directors declared a cash dividend on UTI common stock of $0.10 per share on February 22, 2012 which totaled $2.5 million and was paid on March 30, 2012 to common shareholders of record as of March 15, 2012.

Pursuant to the previously announced share repurchase plan, we purchased 125,800 shares of stock during the three months ended March 31, 2012 at an average price of $12.99 for a total cost of approximately $1.6 million.

Cash flow provided by operating activities was $10.0 million and $15.6 million for the three months and six months ended March 31, 2012, respectively, compared with $17.1 million and $28.9 million for the three months and six months ended March 31, 2011, respectively.

2012 Outlook

For the remainder of 2012, we expect to continue to be impacted by the macro-economic headwinds, continued student financing challenges and our lower student populations as we entered the year. The rate of decline improved for applications during the second quarter and we are cautiously optimistic that new student starts will turn positive in the second half of the year. However, we continue to expect average student populations for the full year to decline, as compared to the prior year, resulting in a mid to high single digit decline in revenues in 2012 and an overall decline in operating margins compared to 2011. Due to the seasonality of our business and normal fluctuations in student populations, we expect our third quarter net income to be lower than the second quarter and, consistent with our historic trends, the lowest for the year, before improving in the fourth quarter. Given these trends and the higher fixed component in our admissions cost structure as a result of regulatory changes, we are focused on efficiencies, managing costs and other opportunities to improve operating margins during the remainder of the year. 

Conference Call

Management will hold a conference call to discuss the 2012 second quarter results today at 1:30 p.m. PDT (4:30 p.m. EDT). This call can be accessed by dialing 412-858-4600 or 800-860-2442. Investors are invited to listen to the call live at http://uti.investorroom.com/. Please access the website at least 15 minutes early to register, download and install any necessary audio software. A replay of the call will be available on the Investor Relations section of UTI’s website for 60 days or the replay can be accessed through May 9th, 2012 by dialing 412-317-0088 or 877-344-7529 and entering pass code 10012983.

Safe Harbor Statement

All statements contained herein, other than statements of historical fact, are “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, as amended. Such statements are based upon management’s current expectations and are subject to a number of uncertainties that could cause actual performance and results to differ materially from the results discussed in the forward-looking statements. Factors that could affect the Company’s actual results include, among other things, changes to federal and state educational funding, changes to regulations affecting the for-profit education industry, possible failure or inability to obtain regulatory consents and certifications for new or expanding campuses, potential increased competition, changes in demand for the programs offered by UTI, increased investment in management and capital resources, the effectiveness of the recruiting, advertising and promotional efforts, changes to interest rates and unemployment, general economic conditions of the Company and other risks that are described from time to time in the Company’s public filings. Further information on these and other potential factors that could affect the financial results or condition may be found in the Company’s filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release. Except as required by law, the Company expressly disclaims any obligation to publicly update any forward-looking statements whether as a result of new information, future events, changes in expectations, any changes in events, conditions or circumstances, or otherwise.

Use of Non-GAAP Financial Information

This press release and the related conference call 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 financial measures because they provide an additional analytical tool to clarify the results from operations and helps to identify underlying trends. Additionally, such measures help compare the Company’s performance on a consistent basis across time periods. To obtain a complete understanding of the Company’s performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the financial statements and notes thereto included in the annual and quarterly filings with the Securities and Exchange Commission. Since the items excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be an alternative to net income as a measure of the Company’s operating performance or profitability. Exclusion of items in the non-GAAP presentation should not be construed as an inference that these items are unusual, infrequent or non-recurring. Other companies, including other companies in the education industry, may calculate non-GAAP financial measures differently than UTI does, limiting their usefulness as a comparative measure across companies. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures are included below.

About Universal Technical Institute, Inc.

Headquartered in Scottsdale, Arizona, Universal Technical Institute, Inc. (NYSE: UTI) is the leading provider of post-secondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. With more than 160,000 graduates in its 47-year history, UTI offers undergraduate degree, diploma and certificate programs at 11 campuses across the United States, as well as manufacturer-specific training programs at dedicated training centers. Through its campus-based school system, UTI provides specialized post-secondary education programs under the banner of several well-known brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (MMI) and NASCAR Technical Institute (NTI). To learn more about UTI and its training services, log on to www.uti.edu.

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL INFORMATION TO NON-GAAP FINANCIAL INFORMATION
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Reconciliation of Net Income to EBITDA

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UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
SELECTED SUPPLEMENTAL FINANCIAL INFORMATION
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