Annual Reports

 
Quarterly Reports

  • 10-Q (Apr 29, 2016)
  • 10-Q (Feb 5, 2016)
  • 10-Q (Aug 7, 2015)
  • 10-Q (May 1, 2015)
  • 10-Q (Feb 6, 2015)
  • 10-Q (Aug 6, 2014)

 
8-K

 
Other

Universal Technical Institute 10-Q 2015

Documents found in this filing:

  1. 10-Q
  2. Ex-10.1
  3. Ex-31.1
  4. Ex-31.2
  5. Ex-32.1
  6. Ex-32.2
  7. Ex-32.2
UTI-3.31.15 10Q

__________________________________________________________________________________________
__________________________________________________________________________________________
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 _____________________________________________
Form 10-Q
(Mark One)

þ    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2015
 
¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
 _____________________________________________
Commission File Number 1-31923
 _____________________________________________

 UNIVERSAL TECHNICAL INSTITUTE, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
 
86-0226984
(State or other jurisdiction of
incorporation or organization)
 
 
(IRS Employer Identification No.)
16220 North Scottsdale Road, Suite 100
Scottsdale, Arizona 85254
(Address of principal executive offices)
(623) 445-9500
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   þ    No ¨  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ¨    Accelerated filer  þ     Non-accelerated filer  ¨    Smaller reporting company  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ
At April 24, 2015, there were 24,137,317 shares outstanding of the registrant's common stock.




UNIVERSAL TECHNICAL INSTITUTE, INC.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED March 31, 2015
 
 
 
 
 
 
Page
 
 
Number
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Special Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act) and Section 27A of the Securities Act of 1933, as amended (Securities Act), which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. From time to time, we also provide forward-looking statements in other materials we release to the public as well as verbal forward-looking statements. These forward-looking statements include, without limitation, statements regarding: proposed new programs; scheduled openings of new campuses and campus expansions; expectations that regulatory developments, or agency interpretations of such regulatory developments or other matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity and anticipated timing for ongoing regulatory initiatives; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; and statements of management’s goals and objectives and other similar expressions. Such statements give our current expectations or forecasts of future events; they do not relate strictly to historical or current facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. However, not all forward-looking statements contain these identifying words.

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions. Many events beyond our control may determine whether results we anticipate will be achieved. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements.

Except as required by law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Form 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission (SEC). The Annual Report on Form 10-K that we filed with the SEC on December 3, 2014 listed various important factors that could cause actual results to differ materially from expected and historical results. We note these factors for investors within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act. Readers can find them under the heading “Risk Factors” in the Form 10-K and in this Form 10-Q, and investors should refer to them. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties. Our filings with the SEC may be accessed at the SEC’s web site at www.sec.gov.



ii


PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
 
March 31, 2015
 
September 30, 2014
Assets
 
(In thousands)
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
16,367

 
$
38,985

Restricted cash
 
8,199

 
6,544

Investments, current portion
 
48,244

 
45,906

Receivables, net
 
9,864

 
12,118

Deferred tax assets, net
 
4,485

 
7,470

Prepaid expenses and other current assets
 
17,521

 
16,509

Total current assets
 
104,680

 
127,532

Investments, less current portion
 
10,006

 
11,257

Property and equipment, net
 
113,376

 
106,927

Goodwill
 
20,579

 
20,579

Deferred tax assets, net
 
12,694

 
11,923

Other assets
 
10,533

 
9,851

Total assets
 
$
271,868

 
$
288,069

Liabilities and Shareholders’ Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued expenses
 
$
37,335

 
$
38,827

Deferred revenue
 
40,680

 
46,365

Accrued tool sets
 
3,810

 
3,806

Construction liability, current
 
6,172

 
1,252

Financing obligation, current
 
648

 
5,234

Income tax payable
 

 
4,336

Other current liabilities
 
2,362

 
2,515

Total current liabilities
 
91,007

 
102,335

Deferred rent liability
 
11,633

 
10,323

Financing obligation
 
32,138

 
32,478

Other liabilities
 
9,085

 
9,741

Total liabilities
 
143,863

 
154,877

Commitments and contingencies (Note 11)
 

 

Shareholders’ equity:
 
 
 
 
Common stock, $0.0001 par value, 100,000,000 shares authorized, 30,897,896 shares issued and 24,137,317 shares outstanding as of March 31, 2015 and 30,838,460 shares issued and 24,825,881 shares outstanding as of September 30, 2014
 
3

 
3

Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding
 

 

Paid-in capital
 
176,538

 
174,376

Treasury stock, at cost, 6,760,579 shares as of March 31, 2015 and 6,012,579 as of September 30, 2014
 
(96,888
)
 
(90,769
)
Retained earnings
 
48,335

 
49,582

Accumulated other comprehensive income

17



Total shareholders’ equity
 
128,005

 
133,192

Total liabilities and shareholders’ equity
 
$
271,868

 
$
288,069

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

 
 
Three Months Ended March 31,
 
Six Months Ended March 31,
 
 
2015
 
2014
 
2015
 
2014
 
 
(In thousands, except per share amounts)
Revenues
 
$
91,235

 
$
94,711

 
$
186,915

 
$
191,751

Operating expenses:
 
 
 
 
 
 
 
 
Educational services and facilities
 
48,143

 
50,777

 
95,973

 
101,851

Selling, general and administrative
 
40,690

 
45,546

 
82,940

 
88,454

Total operating expenses
 
88,833

 
96,323

 
178,913

 
190,305

Income (loss) from operations
 
2,402

 
(1,612
)
 
8,002

 
1,446

Other (expense) income:
 
 
 
 
 
 
 
 
Interest expense, net
 
(481
)
 
(491
)
 
(980
)
 
(623
)
Equity in earnings of unconsolidated affiliate
 
136

 
127

 
254

 
208

Other income
 
133

 
105

 
245

 
379

Total other expense, net
 
(212
)
 
(259
)
 
(481
)
 
(36
)
Income (loss) before income taxes
 
2,190

 
(1,871
)
 
7,521

 
1,410

Income tax expense (benefit)
 
1,635

 
(251
)
 
3,872

 
1,323

Net income (loss)
 
$
555

 
$
(1,620
)
 
$
3,649

 
$
87

Other comprehensive income (net of tax):






 
 
 
 
Equity interest in investee's unrealized gains on hedging derivatives, net of taxes(1)

$
6


$

 
$
17

 
$

Comprehensive income (loss)

$
561


$
(1,620
)
 
$
3,666

 
$
87

 
 
 
 
 
 
 
 
 
Earnings per share:






 
 
 
 
Net income (loss) per share - basic
 
$
0.02

 
$
(0.07
)
 
$
0.15

 
$

Net income (loss) per share - diluted
 
$
0.02

 
$
(0.07
)
 
$
0.15

 
$

Weighted average number of shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
24,463

 
24,661

 
24,647

 
24,653

Diluted
 
24,551

 
24,661

 
24,741

 
24,888

Cash dividends declared per common share
 
$
0.10

 
$
0.10

 
$
0.20

 
$
0.20

(1)The tax effect during the three months and six months ended March 31, 2015 was not significant.



The accompanying notes are an integral part of these condensed consolidated financial statements.

2


UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

 
 
Common Stock
 
Paid-in
Capital
 
Treasury Stock
 
Retained
Earnings
 
Accumulated Other Comprehensive Income
 
Total
Shareholders’
Equity
 
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
(In thousands)
Balance as of September 30, 2014
 
30,838

 
$
3

 
$
174,376

 
6,013

 
$
(90,769
)
 
$
49,582

 
$

 
$
133,192

Net income
 

 

 

 

 

 
3,649

 

 
3,649

Issuance of common stock under employee plans
 
63

 

 

 

 

 

 

 

Shares withheld for payroll taxes
 
(3
)
 

 
(36
)
 

 

 

 

 
(36
)
Stock-based compensation
 

 

 
2,198

 

 

 

 

 
2,198

Shares repurchased
 

 

 

 
748

 
(6,119
)
 

 

 
(6,119
)
Cash dividends declared
 

 

 

 

 

 
(4,896
)
 

 
(4,896
)
Equity interest in investee's unrealized gains on hedging derivatives, net of tax
 

 

 

 

 

 

 
17

 
17

Balance as of March 31, 2015
 
30,898

 
$
3

 
$
176,538

 
6,761

 
$
(96,888
)
 
$
48,335

 
$
17

 
$
128,005


The accompanying notes are an integral part of these condensed consolidated financial statements.

3


UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
Six Months Ended March 31,
 
 
2015
 
2014
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
3,649

 
$
87

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
 
8,859

 
9,861

Amortization of assets subject to financing obligation
 
931

 
620

Amortization of held-to-maturity investments
 
931

 
1,235

Bad debt expense
 
307

 
1,974

Stock-based compensation
 
2,198

 
3,106

Excess tax benefit from stock-based compensation
 

 
(7
)
Deferred income taxes
 
2,214

 
(157
)
Equity in earnings of unconsolidated affiliate
 
(254
)
 
(208
)
Training equipment credits earned, net
 
(697
)
 
(601
)
(Gain) loss on disposal of property and equipment
 
(41
)
 
150

Changes in assets and liabilities:
 
 
 
 
Restricted cash: Title IV credit balances
 
242

 
284

Receivables
 
2,616

 
128

Prepaid expenses and other current assets
 
(214
)
 
(1,230
)
Other assets
 
(640
)
 
(190
)
Accounts payable and accrued expenses
 
(742
)
 
(1,147
)
Deferred revenue
 
(5,685
)
 
3,617

Income tax payable/receivable
 
(5,005
)
 
(1,292
)
Accrued tool sets and other current liabilities
 
(150
)
 
242

Deferred rent liability
 
58

 
(725
)
Other liabilities
 
158

 
400

Net cash provided by operating activities
 
8,735

 
16,147

Cash flows from investing activities:
 
 
 
 
Purchase of property and equipment
 
(16,215
)
 
(5,488
)
Proceeds from disposal of property and equipment
 
3

 
5

Purchase of investments
 
(24,425
)
 
(33,132
)
Proceeds received upon maturity of investments
 
22,407

 
26,057

Return of capital contribution from unconsolidated affiliate
 
228

 

Restricted cash: proprietary loan program
 
(1,950
)
 
944

Net cash used in investing activities
 
(19,952
)
 
(11,614
)
Cash flows from financing activities:
 
 
 
 
Payment of cash dividend
 
(4,896
)
 
(4,934
)
Payment of financing obligation
 
(350
)
 
(167
)
Payment of payroll taxes on stock-based compensation through shares withheld
 
(36
)
 
(58
)
Excess tax benefit from stock-based compensation
 

 
7

Purchase of treasury stock
 
(6,119
)
 
(410
)
Net cash used in financing activities
 
(11,401
)
 
(5,562
)
Net decrease in cash and cash equivalents
 
(22,618
)
 
(1,029
)
Cash and cash equivalents, beginning of period
 
38,985

 
34,596

Cash and cash equivalents, end of period
 
$
16,367

 
$
33,567


The accompanying notes are an integral part of these condensed consolidated financial statements.


4



UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), continued
 
 
Six Months Ended March 31,
 
 
2015
 
2014
 
 
(In thousands)
Supplemental disclosure of cash flow information:
 
 
 
 
Taxes paid
 
$
6,662

 
$
2,772

Interest paid
 
$
1,121

 
$
757

Training equipment obtained in exchange for services
 
$
220

 
$
1,937

Depreciation of training equipment obtained in exchange for services
 
$
600

 
$
580

Change in accrued capital expenditures during the period
 
$
(890
)
 
$
112

Construction period construction liability - construction in progress
 
$
6,172

 
$
5,868

Construction period financing obligation - building
 
$
(4,825
)
 
$

Construction liability recognized as financing obligation
 
$

 
$
33,500

The accompanying notes are an integral part of these condensed consolidated financial statements.

5




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)




1.    Nature of the Business

We are the leading provider of postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians as measured by total average undergraduate full-time student enrollment and graduates. We offer undergraduate degree and diploma programs at 11 campuses across the United States under the banner of several well-known brands, including Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute and NASCAR Technical Institute. We also offer manufacturer specific training (MSAT) programs, including student paid electives, at our campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers.

We work closely with leading original equipment manufacturers (OEMs) in the automotive, diesel, motorcycle and marine industries to understand their needs for qualified service professionals. Revenues generated from our schools consist primarily of tuition and fees paid by students. To pay for a substantial portion of their tuition, the majority of students rely on funds received from federal financial aid programs under Title IV Programs of the Higher Education Act of 1965, as amended (HEA), as well as from various veterans benefits programs. For further discussion, see Note 2 "Summary of Significant Accounting Policies - Concentration of Risk" and Note 19 “Government Regulation and Financial Aid” included in our 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on December 3, 2014.
2.    Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, our condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair statement of the results for the interim periods have been included. Operating results for the three months and six months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending September 30, 2015. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2014 Annual Report on Form 10-K filed with the SEC on December 3, 2014.

The unaudited condensed consolidated financial statements include the accounts of Universal Technical Institute, Inc. and our wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Historically, we have calculated income tax expense for interim periods based on estimated annual effective tax rates. These rates have been derived, in part, from expected income before taxes for the year. However, authoritative accounting guidance indicates that companies should not apply the estimated annual tax rate to interim financial results if the estimated annual tax rate is not reliably predictable. We are not able to reasonably estimate the annual effective tax rate for the year ending September 30, 2015 because small fluctuations in our earnings before taxes could result in a material change in the estimated annual effective tax rate based on our current projections. Therefore, for the three months and six months ended March 31, 2015, we calculated income taxes using the actual income tax rate for the respective periods.

6




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



Revision of Previously Issued Financial Statements
During the three months ended September 30, 2014, we identified approximately $0.5 million (pre-tax) of retake revenue and $0.2 million (pre-tax) of bad debt expense reduction related to fees for student retakes for the periods from October 1, 2008 through June 30, 2014 which were not recorded. Additionally, we identified approximately $0.2 million (pre-tax) of contract services expense related to the outsourcing of certain financial aid processes that should have been recognized during the quarterly periods from October 1, 2013 through June 30, 2014.
We evaluated the impact of the items on prior periods under the materiality guidance and determined that the amounts were not material. We also evaluated the impact of correcting these items through a cumulative adjustment to our 2014 financial statements and concluded that it was appropriate to revise our previously issued financial statements to reflect the cumulative impact of this correction.
Additionally, we recorded an immaterial balance sheet correction between cash and restricted cash related to funds held for students from Title IV financial program funds that result in credit balances on student accounts.
The following tables present the impact of this revision on our condensed consolidated statement of comprehensive income for the three months and six months ended March 31, 2014 and our condensed consolidated statement of cash flows for the six months ended March 31, 2014:
 
 
Three Months Ended March 31, 2014
 
 
As Reported
 
Adjustment
 
As Revised
Condensed Consolidated Statement of Comprehensive Income Data:
 
 
 
 
 
 
Revenues
 
$
94,702

 
$
9

 
$
94,711

Educational services and facilities
 
$
50,652

 
$
125

 
$
50,777

Selling, general and administrative
 
$
45,554

 
$
(8
)
 
$
45,546

Total operating expenses
 
$
96,206

 
$
117

 
$
96,323

Income (loss) from operations
 
$
(1,504
)
 
$
(108
)
 
$
(1,612
)
Income (loss) before income taxes
 
$
(1,764
)
 
$
(107
)
 
$
(1,871
)
Income tax expense (benefit)
 
$
(259
)
 
$
8

 
$
(251
)
Net income (loss)
 
$
(1,505
)
 
$
(115
)
 
$
(1,620
)
 
 
Six Months Ended March 31, 2014
As Reported
 
Adjustment
 
As Revised
Condensed Consolidated Statement of Comprehensive Income Data:
 
 
 
 
 
 
Revenues
 
$
191,731

 
$
20

 
$
191,751

Educational services and facilities
 
$
101,763

 
$
88

 
$
101,851

Selling, general and administrative
 
$
88,469

 
$
(15
)
 
$
88,454

Total operating expenses
 
$
190,232

 
$
73

 
$
190,305

Income (loss) from operations
 
$
1,499

 
$
(53
)
 
$
1,446

Income (loss) before income taxes
 
$
1,463

 
$
(53
)
 
$
1,410

Income tax expense (benefit)
 
$
1,308

 
$
15

 
$
1,323

Net income (loss)
 
$
155

 
$
(68
)
 
$
87



7




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



 
 
Six Months Ended March 31, 2014
As Reported
 
Adjustment
 
As Revised
Condensed Consolidated Statement of Cash Flows Data:
 
 
 
 
 
 
Net income
 
$
155

 
$
(68
)
 
$
87

Bad debt expense
 
$
1,990

 
$
(16
)
 
$
1,974

Deferred income taxes
 
$
(158
)
 
$
1

 
$
(157
)
Restricted cash: Title IV credit balances
 
$

 
$
284

 
$
284

Receivables
 
$
174

 
$
(46
)
 
$
128

Prepaid expenses and other current assets
 
$
(1,318
)
 
$
88

 
$
(1,230
)
Other assets
 
$
(189
)
 
$
(1
)
 
$
(190
)
Deferred revenue
 
$
3,592

 
$
25

 
$
3,617

Income tax payable (receivable)
 
$
(1,307
)
 
$
15

 
$
(1,292
)
Other liabilities
 
$
397

 
$
3

 
$
400

Net cash provided by operating activities
 
$
15,862

 
$
285

 
$
16,147

Net decrease in cash and cash equivalents
 
$
(1,314
)
 
$
285

 
$
(1,029
)
Cash and cash equivalents, beginning of period
 
$
35,657

 
$
(1,061
)
 
$
34,596

Cash and cash equivalents, end of period
 
$
34,343

 
$
(776
)
 
$
33,567

3.    Recent Accounting Pronouncements
        
In April 2015, the Financial Accounting Standards Board (FASB) issued guidance related to customer’s accounting for fees paid in a cloud computing arrangement. The guidance provides clarification on whether a cloud computing arrangement includes a software license. If an arrangement includes a software license, then the software license element is accounted for consistent with the acquisition of other such licenses. If the arrangement does not include a software license, the arrangement is accounted for as a service contract. Entities have the option of adopting the guidance retrospectively or prospectively. The guidance is effective for annual and interim reporting periods beginning after December 15, 2015 with early adoption permitted. We are currently evaluating both the adoption method and the impact that the update will have on our results of operations, financial condition and the financial statement disclosures.
    
In February 2015, the FASB issued guidance which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. Specifically, the amendments (1) modify the evaluation of whether limited partnerships with similar legal entities are variable interest entities (VIEs) or voting interest entities, (2) eliminate the presumption that a general partner should consolidate a limited partnership, (3) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships and (4) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. Entities have the option of using a full or modified retrospective approach to adopt the guidance. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015 with early adoption permitted. We are currently evaluating both the adoption method and the impact that the update will have on our results of operations, financial condition and the financial statement disclosures.

In May 2014, the FASB issued guidance which outlines a single comprehensive revenue model for entities to use in accounting for revenue arising from contracts with customers. The guidance supersedes most current revenue recognition guidance, including industry-specific guidance, and requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Entities have the option of using either a full retrospective or modified approach to adopt the guidance. This guidance is effective for annual and interim reporting periods

8




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



beginning after December 15, 2016; early adoption is not permitted. Accordingly, the standard will be effective for us starting with our fiscal year beginning October 1, 2017. We are currently evaluating the adoption methods and the impact that the update will have on our results of operations, financial condition and financial statement disclosures. 

4.  Postemployment Benefits
In October 2014, we completed a restructuring and provided postemployment benefits totaling approximately $1.2 million to approximately 50 additional impacted employees. Additionally, we periodically enter into agreements which provide postemployment benefits to personnel whose employment is terminated. The postemployment benefit liability, which is included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets, is generally paid out ratably over the terms of the agreements, which range from 1 month to 24 months, with the final agreement expiring in December 2015.
 
The postemployment benefit accrual activity for the six months ended March 31, 2015 was as follows:
 
 
Liability Balance at
September 30, 2014
 
Postemployment
Benefit Charges
 
Cash Paid
 
Other
Non-cash (1)
 
Liability Balance at
March 31, 2015
Severance
 
$
2,150

 
$
1,127

 
$
(2,402
)
 
$
(179
)
 
$
696

Other
 
16

 
205

 
(140
)
 
(78
)
 
3

Total
 
$
2,166

 
$
1,332

 
$
(2,542
)
 
$
(257
)
 
$
699


(1)
Primarily relates to the expiration of benefits not used within the time offered under the separation agreement and non-cash severance.

5.  Investments
We invest in pre-funded municipal bonds which are generally secured by escrowed-to-maturity U.S. Treasury notes. Municipal bonds represent debt obligations issued by states, cities, counties and other governmental entities, which earn interest that is exempt from federal income taxes. Additionally, we invest in certificates of deposit issued by financial institutions and corporate bonds from large cap industrial and selected financial companies with a minimum credit rating of A. We have the ability and intention to hold our investments until maturity and therefore classify these investments as held-to-maturity and report them at amortized cost.
 

9




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



Amortized cost and fair value for investments classified as held-to-maturity at March 31, 2015 were as follows:
 
 
 
 
 
 
 
 
 
Estimated
 
 
Amortized
 
Gross Unrealized
 
Fair Market
 
 
Cost
 
Gains
 
Losses
 
Value
Due in less than 1 year:
 
 
 
 
 
 
 
 
Municipal bonds
 
$
24,420

 
$
16

 
$

 
$
24,436

Corporate bonds
 
19,152

 

 
(22
)
 
19,130

Certificates of deposit
 
4,672

 

 

 
4,672

Due in 1 - 2 years:
 
 
 
 
 
 
 
 
Municipal bonds
 
4,608

 
9

 

 
4,617

Corporate bonds
 
4,107

 
1

 
(7
)
 
4,101

Certificates of deposit
 
1,291

 

 

 
1,291

 
 
$
58,250

 
$
26

 
$
(29
)
 
$
58,247


Amortized cost and fair value for investments classified as held-to-maturity at September 30, 2014 were as follows:
 
 
 
 
 
 
 
 
 
Estimated
 
 
Amortized
 
Gross Unrealized
 
Fair Market
 
 
Cost
 
Gains
 
Losses
 
Value
Due in less than 1 year:
 
 
 
 
 
 
 
 
Municipal bonds
 
$
26,894

 
$
20

 
$

 
$
26,914

Corporate bonds
 
16,836

 
1

 
(24
)
 
16,813

Certificates of deposit
 
2,176

 

 

 
2,176

Due in 1 - 2 years:
 
 
 
 
 
 
 
 
Municipal bonds
 
4,230

 
7

 

 
4,237

Corporate bonds
 
4,054

 

 
(13
)
 
4,041

Certificates of deposit
 
2,973

 

 

 
2,973

 
 
$
57,163

 
$
28

 
$
(37
)
 
$
57,154

Investments are exposed to various risks, including interest rate, market and credit risk, and as a result, it is possible that changes in the values of these investments may occur and that such changes could affect the amounts reported in the condensed consolidated balance sheets and condensed consolidated statements of comprehensive income.

6.  Fair Value Measurements
The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions

10




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



are observable in the market or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities and Level 3, defined as unobservable inputs that are not corroborated by market data. Any transfers of investments between levels occurs at the end of the reporting period.
Assets measured or disclosed at fair value on a recurring basis consisted of the following:
 
 
 
 
 
Fair Value Measurements Using
 
 
March 31, 2015
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Money market funds
 
$
4,036

 
$
4,036

 
$

 
$

Corporate bonds
 
23,231

 
23,231

 

 

Municipal bonds
 
29,053

 

 
29,053

 

Commercial paper
 
6,753

 

 
6,753

 

Certificates of deposit
 
5,963

 

 
5,963

 

Total assets at fair value on a recurring basis
 
$
69,036

 
$
27,267

 
$
41,769

 
$


 
 
 
 
Fair Value Measurements Using
 
 
September 30, 2014
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Money market funds
 
$
29,995

 
$
29,995

 
$

 
$

Corporate bonds
 
20,854

 
20,854

 

 

Municipal bonds
 
31,151

 

 
31,151

 

Certificates of deposit
 
5,149

 

 
5,149

 

Total assets at fair value on a recurring basis
 
$
87,149

 
$
50,849

 
$
36,300

 
$


Our Level 2 investments are valued using readily available pricing sources which utilize market observable inputs, including the current interest rate for similar types of instruments.


11




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



7.   Property and Equipment, net
Property and equipment, net consisted of the following:
 
 
 
Depreciable
Lives (in years)
 
March 31,
2015
 
September 30,
2014
Land
 
 
$
3,189

 
$
1,456

Buildings and building improvements
 
30-35
 
58,831

 
50,306

Leasehold improvements
 
1-28
 
38,890

 
38,906

Training equipment
 
3-10
 
85,893

 
85,673

Office and computer equipment
 
3-10
 
38,281

 
37,271

Software developed for internal use
 
3-5
 
11,874

 
11,888

Curriculum development
 
5
 
18,716

 
18,716

Vehicles
 
5
 
1,225

 
1,207

Construction in progress
 
 
10,203

 
10,746

 
 
 
 
267,102

 
256,169

Less accumulated depreciation and amortization
 
 
 
(153,726
)
 
(149,242
)
 
 
 
 
$
113,376

 
$
106,927


In March 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. 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 will be depreciated over a useful life of 30 years.

Additionally, we entered into amended lease agreements for the buildings and land we did not acquire at our Houston, Texas campus, which extended the lease terms through December 31, 2018 and amended the payment schedule.
 
At March 31, 2015, construction in progress included $7.9 million related primarily to the design and construction of our Long Beach, California campus. See Note 8 for further discussion.

The following amounts, which are included in the above table, represent assets financed by financing obligations:
 
 
March 31,
2015
 
September 30,
2014
Buildings and building improvements
 
$
33,500

 
$
33,500

Construction in progress
 

 
4,638

Assets financed by financing obligations, gross
 
33,500

 
38,138

Less accumulated depreciation and amortization
 
(2,482
)
 
(1,551
)
Assets financed by financing obligations, net
 
$
31,018

 
$
36,587


12




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)




As previously disclosed, in 2014 we entered into amended lease agreements for certain buildings on our Orlando, Florida campus, which extended the lease terms to August 31, 2022 and modified the scheduled rental payments. Additionally, one of the amendments included a provision which allowed us to expand the square footage at one building by approximately 13,500 square feet. Construction occurred during June through October 2014. For accounting purposes, we were considered the owner during the construction period, and during that period, the existing building and the addition were considered one unit of account.

Accordingly, as of September 30, 2014, we recorded the existing building and a corresponding short-term financing obligation of approximately $4.6 million on our condensed consolidated balance sheet. The facility was placed into service effective November 1, 2014. We determined that we do not have continuing involvement after the construction period was complete, and that the lease will be accounted for as an operating lease. Accordingly, the asset and the corresponding short-term financing obligation were derecognized from our December 31, 2014 condensed consolidated balance sheet.

8.   Build-to-Suit Lease

On October 3, 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. Under the agreement, we have retained substantially all of the construction risk. Therefore, for accounting purposes, we are considered the owner during the construction period and establish assets and liabilities for the estimated construction costs incurred to the extent we are involved in the construction of structural improvements or take construction risk prior to the lease commencement.
Although we are the owner during the construction period, we do not own the underlying land. Therefore, we have an imputed operating lease expense related to our use of the land that will be recognized from the time we entered into the agreement through the initial lease term.

9.   Investment in Unconsolidated Affiliate

During the year ended September 30, 2012, we invested $4.0 million to acquire an equity interest of approximately 28% in a joint venture (JV) related to the lease of our Lisle, Illinois campus facility. In connection with this investment, we do not possess a controlling financial interest as we do not hold a majority of the equity interest, nor do we have the power to make major decisions without approval from the other equity member. Therefore, we do not qualify as the primary beneficiary. Accordingly, this investment is accounted for under the equity method of accounting and is included in other assets in our condensed consolidated balance sheet. We recognize our proportionate share of the JV’s net income or loss during each accounting period as a change in our investment.

Currently, the JV uses an interest rate cap to manage interest rate risk associated with its floating rate debt.  This derivative instrument is designated as a cash flow hedge based on the nature of the risk being hedged. 
As such, the effective portion of the gain or loss on the derivative is initially reported as a component of the JV’s accumulated other comprehensive income or loss, net of tax, and is subsequently reclassified into earnings when the hedged transaction affects earnings.  Any ineffective portion of the gain or loss is recognized in the JV’s current earnings.  Due to our equity method investment in the JV, when the JV reports a current year component of other comprehensive income (OCI), we, as an investor, likewise adjust our investment account for the change in investee equity.  In addition, we adjust our OCI for our share of the JV’s currently reported OCI item.  For the three months and six months ended March 31, 2015, our share of the JV’s OCI was less than $0.1 million.


13




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



Investment in unconsolidated affiliate consists of the following:
 
 
March 31, 2015
 
September 30, 2014
 
 
Carrying Value
 
Ownership Percentage
 
Carrying Value
 
Ownership Percentage
Investment in unconsolidated affiliate
 
$
3,946

 
27.972
%
 
$
3,903

 
27.972
%

Investment in unconsolidated affiliate included the following activity during the period:
 
 
Six Months Ended March 31,
 
 
2015
 
2014
Balance at beginning of period
 
$
3,903

 
$
4,000

Equity in earnings of unconsolidated affiliate
 
254

 
208

Return of capital contribution from unconsolidated affiliate
 
(228
)
 

Equity interest in investee's unrealized gains on hedging derivatives, net of taxes
 
17

 

Balance at end of period
 
$
3,946

 
$
4,208


10.   Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following:
 
 
 
March 31, 2015
 
September 30, 2014
Accounts payable
 
$
14,137

 
$
12,990

Accrued compensation and benefits
 
17,833

 
17,963

Other accrued expenses
 
5,365

 
7,874

 
 
$
37,335

 
$
38,827


11.   Commitments and Contingencies
Legal
In the ordinary conduct of our business, we are periodically subject to lawsuits, demands in arbitration, investigations, regulatory proceedings or other claims, including, but not limited to, claims involving current or former students, routine employment matters, business disputes and regulatory demands. When we are aware of a claim or potential claim, we assess the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, we accrue a liability for the loss. When a loss is not both probable and estimable, we do not accrue a liability. Where a loss is not probable but is reasonably possible, including if a loss in excess of an accrued liability is reasonably possible, we determine whether it is possible to provide an estimate of the amount of the loss or range of possible losses for the claim. Because we cannot predict with certainty the ultimate resolution of the legal proceedings (including lawsuits, investigations, regulatory proceedings or claims) asserted against us, it is not currently possible to provide such an estimate. The ultimate outcome of pending legal proceedings to which we are a party may have a material adverse effect on our business, cash flows, results of operations or financial condition.

In September 2012, we received a Civil Investigative Demand (CID) from the Attorney General of the Commonwealth of Massachusetts related to a pending investigation in connection with allegations that we caused

14




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



false claims to be submitted to the Commonwealth relating to student loans, guarantees and grants provided to students at our Norwood, Massachusetts campus. The CID required us to produce documents and provide written testimony regarding a broad range of our business activities from September 2006 to the present. We responded timely to the request. The Attorney General made a follow-up request for documents, and we complied with this request in February 2013.  In response to a status update request from us, the Attorney General has requested and we have provided additional documents and information related to graduate employment at our Norwood, Massachusetts campus and our policies and practices for determining graduate employment. At this time, we cannot predict the eventual scope, duration, outcome or associated costs or operational impact of this inquiry, and accordingly we have not recorded any liability in the accompanying condensed consolidated financial statements.

Proprietary Loan Program
    
In order to provide funding for students who are not able to fully finance the cost of their education under traditional governmental financial aid programs, commercial loan programs or other alternative sources, we established a private loan program with a bank.

Under terms of the proprietary loan program, the bank originates loans for our students who meet our specific credit criteria with the related proceeds used exclusively to fund a portion of their tuition. We then purchase all such loans from the bank at least monthly and assume all of the related credit risk. The loans bear interest at market rates; however, principal and interest payments are not required until six months after the student completes or withdraws from his or her program. After the deferral period, monthly principal and interest payments are required over the related term of the loan.

The bank provides these services in exchange for a fee at a percentage of the principal balance of each loan and related fees. Under the terms of the related agreement, we transfer funds for loan purchases to a deposit account with the bank in advance of the bank funding the loan, which secures our related loan purchase obligation. Such funds are classified as restricted cash in our condensed consolidated balance sheet.

In substance, we provide the students who participate in this program with extended payment terms for a portion of their tuition and as a result, we account for the underlying transactions in accordance with our tuition revenue recognition policy. However, due to the nature of the program coupled with the extended payment terms required under the student loan agreements, collectability is not reasonably assured. Accordingly, we recognize tuition and loan origination fees financed by the loan and any related interest income required under the loan when such amounts are collected. All related expenses incurred with the bank or other service providers are expensed as incurred within educational services and facilities expense and were approximately $0.4 million for each of the three months ended March 31, 2015 and 2014, and $0.8 million for each of the six months ended March 31, 2015 and 2014. Since loan collectability is not reasonably assured, the loans and related deferred tuition revenue are not recognized in our condensed consolidated balance sheets.

15




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



The following table summarizes the impact of the proprietary loan program on our tuition revenue and interest income during the period as well as on a cumulative basis at the end of each period in our condensed consolidated statements of comprehensive income. Tuition revenue and interest income excluded represents amounts which would have been recognized during the period had collectability of the related amounts been assured. Amounts collected and recognized represent actual cash receipts during the period. Amounts written off represent amounts which have been turned over to third party collectors; such amounts are not included within bad debt expense in our condensed consolidated statements of comprehensive income.

 
 
Three Months Ended March 31,
 
Six Months Ended March 31,
 
Inception
to date
 
 
2015
 
2014
 
2015
 
2014
 
Tuition and interest income excluded
 
$
6,377

 
$
7,252

 
$
12,777

 
$
14,253

 
$
108,678

Amounts collected and recognized
 
(1,454
)
 
(846
)
 
(2,511
)
 
(1,546
)
 
(10,990
)
Amounts written off
 
(3,081
)
 
(2,468
)
 
(6,248
)
 
(4,263
)
 
(37,803
)
Net amount excluded during the period
 
$
1,842

 
$
3,938

 
$
4,018

 
$
8,444

 
$
59,885

As of March 31, 2015, we had committed to provide loans to our students for approximately $111.5 million since inception.

The following table summarizes the activity related to the balances outstanding under our proprietary loan program, including loans outstanding, interest and origination fees, which are not recognized in our condensed consolidated balance sheets: 

 
 
Six Months Ended March 31,
 
 
2015
 
2014
Balance at beginning of period
 
$
70,759

 
$
59,767

Loans extended
 
11,244

 
16,125

Interest accrued
 
1,421

 
1,427

Amounts collected and recognized
 
(2,511
)
 
(1,546
)
Amounts written off
 
(6,248
)
 
(4,263
)
Balance at end of period
 
$
74,665

 
$
71,510


Licensing Agreements
    
In April 2015, we entered into a licensing agreement that gives us the right to use certain trademarks in connection with the operation of our campuses and courses. The agreement has an initial term of four years, with options for three annual renewals totaling a seven year term. The maximum license fee over seven years is $2.3 million.

12.  Common Shareholders’ Equity
Common Stock
Holders of our common stock are entitled to receive dividends when and as declared by our Board of Directors and have the right to one vote per share on all matters requiring shareholder approval. On December 19, 2014 and March 31, 2015, we paid cash dividends of $0.10 per share to common stockholders of record as of December 8, 2014 and March 20, 2015, respectively, totaling approximately $4.9 million.

16




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



Share Repurchase Program
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. The timing and actual number of shares purchased will depend on a variety of factors such as price, corporate and regulatory requirements and prevailing market conditions. We may terminate or limit the share repurchase program at any time without prior notice. During the three months and six months ended March 31, 2015, we purchased 748,000 shares at an average price per share of $8.15 and a total cost of approximately $6.1 million. As of March 31, 2015, we have purchased 1,573,252 shares at an average price per share of $9.38 and a total cost of approximately $14.8 million under this program.

13.   Earnings per Share
Basic net income per share is calculated by dividing net income by the weighted average number of shares outstanding for the period. Diluted net income per share reflects the assumed conversion of all dilutive securities, if any. For the three months ended March 31, 2015, 678,481 shares which could be issued under outstanding stock-based grants, were not included in the determination of our diluted shares outstanding as they were anti-dilutive. For the six months ended March 31, 2015 and 2014, 715,458 shares and 576,837 shares, respectively, which could be issued under outstanding stock-based grants, were not included in the determination of our diluted shares outstanding as they were anti-dilutive. For the three months ended March 31, 2014, diluted loss per share equaled basic loss per share as the assumed activity related to outstanding stock-based grants would have an anti-dilutive effect.
The calculation of the weighted average number of shares outstanding used in computing basic and diluted net income per share was as follows:
 

 
Three Months Ended March 31,
 
Six Months Ended March 31,
 
 
2015
 
2014
 
2015
 
2014
Weighted average number of shares
 
(In thousands)
Basic shares outstanding
 
24,463

 
24,661

 
24,647

 
24,653

Dilutive effect related to employee stock plans
 
88

 

 
94

 
235

Diluted shares outstanding
 
24,551

 
24,661

 
24,741

 
24,888



17




UNIVERSAL TECHNICAL INSTITUTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
($’s in thousands, except per share amounts)



14.   Segment Information
Our principal business is providing postsecondary education. We also provide manufacturer-specific training and these operations are managed separately from our campus operations. These operations do not currently meet the quantitative criteria for segments and therefore are reflected in the Other category. Corporate expenses are allocated to Postsecondary Education and the Other category based on compensation expense. Depreciation and amortization includes amortization of assets subject to financing obligation.
Summary information by reportable segment is as follows:
 
 
Three Months Ended March 31,
 
Six Months Ended March 31,
 
 
2015
 
2014
 
2015
 
2014
Revenues
 
 
 
 
 
 
 
 
Postsecondary education
 
$
88,101

 
$
91,900

 
$
181,003

 
$
186,204

Other
 
3,134

 
2,811

 
5,912

 
5,547

Consolidated
 
$
91,235

 
$
94,711

 
$
186,915

 
$
191,751

Income (loss) from operations
 
 
 
 
 
 
 
 
Postsecondary education
 
$
2,902

 
$
(1,023
)
 
$
9,351

 
$
2,617

Other
 
(500
)
 
(589
)
 
(1,349
)
 
(1,171
)
Consolidated
 
$
2,402

 
$
(1,612
)
 
$
8,002

 
$
1,446

Depreciation and amortization
 
 
 
 
 
 
 
 
Postsecondary education
 
$
4,774

 
$
5,148

 
$
9,649

 
$
10,293

Other
 
66

 
87

 
141

 
188

Consolidated
 
$
4,840

 
$
5,235

 
$
9,790

 
$
10,481

Net income (loss)
 
 
 
 
 
 
 
 
Postsecondary education
 
$
761

 
$
(1,360
)
 
$
4,262

 
$
606

Other
 
(206
)
 
(260
)
 
(613
)
 
(519
)
Consolidated
 
$
555

 
$
(1,620
)
 
$
3,649

 
$
87

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2015
 
September 30, 2014
Goodwill
 
 
 
 
 
 
 
 
Postsecondary education
 
 
 
 
 
$
20,579

 
$
20,579

Other
 
 
 
 
 

 

Consolidated
 
 
 
 
 
$
20,579

 
$
20,579

Total assets
 
 
 
 
 
 
 
 
Postsecondary education
 
 
 
 
 
$
265,761

 
$
282,501

Other
 
 
 
 
 
6,107