The scholarship growth angle is a good one, but unless it includes a large number of students it won't do much to change the performance of UTI over the long term. The company's largest shareholder is Park West Asset Management LLC, with ownership of 7.1%. In response, UTI has increased its scholarship opportunities to attract new students but it has also been forced to raise tuition to prevent revenues from falling in the face of declining enrollment. This scenario assumes a consistent level of profitability as the company achieved over the past two years, as UTI would continue to earn its current 6% return on invested capital (ROIC). Yet increasing inquiries at least gives the school an opportunity to convert inquiries into students. Dear Better Business Bureau of Orlando, On Monday, August 15, 2022, Universal Technical Institute (UTI) Orlando, FL campus received complaint case #XXXXXXXX. You can click here to see if those insiders have been buying or selling. Therefore, you should not rely on any of these forward-looking statements. 3) A total of 82% of UTI graduates in 2021 were employed within one year of their graduation date. "On behalf of the Concorde team, I am excited to be joining Universal Technical Institute," said Concorde Chief Executive Officer Jami Frazier. Forward-looking statements are neither historical facts nor assurances of future performance. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. While UTI has no debt on its balance sheet, it has operating lease commitments with a present value of over $142 million, or an alarming 60% of the companys market value. Of those three veterans continue to be the most successful segment, with 21 straight quarters of. 43) For Bus and Truck Mechanics and Diesel Engine Specialists, the U.S. Bureau of Labor Statistics projects an annual average of 28,500 job openings between 2021 and 2031. The firm said it grew adult applications by 10 percent (year-over-year) in April, and while cautious in outlook because of it being only one month, it is the first time in a long time since adult student applications increased. Of course, keep in mind that there are other factors to consider, too. It may take several years before the current efforts bear fruit, if they do at all. Free cash flow is a metric used to determine the ability of a company to generate future growth. The acquisition adds campuses in Texas and Michigan and eight new . A drop to the mid-to-high single digits for new student starts is the reasoning there. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. UTI has struggled in recent years. Choose from a range of programs you need to get the technical career you want. Take an interactive 360 virtual tour by clicking on any of the program links below. Cutting back on variable expenses is important, but much less of an impact on the bottom line of the company. Jami Frazier will serve as the Divisional President, reporting to CEO Jerome Grant. If they do, the company may get a bump up in share price because of low expectations. The rate includes graduates who completed manufacturer-specific advanced training programs and those employed in positions that were obtained before or during their UTI education, where the primary job duties after graduation align with the educational and training objectives of the program. PHOENIX, May 3, 2022 /PRNewswire/ -- Universal Technical Institute, Inc. (NYSE: UTI), a leading provider of transportation and technical training programs, has entered into a definitive. [9] Jerome Grant was named CEO in 2019.[10]. Dividends Cannot Protect You From A Big Drop In the Stock Price. UTI expressly disclaims any obligation to publicly update any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, changes in expectations, any changes in events, conditions, or circumstances, or otherwise. In the last year, its cash burn was US$36m. Examples of forward-looking statements include, among others, statements regarding (1) UTI's belief that the acquisition will serve as a cornerstone for its key future growth and diversification efforts; (2) UTI's ability to integrate Concorde's healthcare programs into its portfolio of educational offerings; (3) UTI's anticipated expansion efforts; (4) UTI's expectation of increasing shareholder value; and (5) UTI's expectation of accelerating its revenue, profitability and cash flow over the next several years. Access your no-cost report to get info on jobs in demand in your area, industry insight from top employers, and more. UTI thrived in the first couple years of the recession. Universal Technical Institute will support Concorde's existing efforts to expand the healthcare opportunities for students and alumni, including adding new programs (pending regulatory approval), growing existing online offerings, and optimizing the current campus locations to enhance the opportunity for past, current and future students to increase their skills. A more reasonable scenario of6% NOPAT growth for 10 yearsyields a fair value of just $3.75/share 60% downside. Universal Technical Institute (UTI) is a leading provider of career training for the transportation, skilled trade and energy industries. Any forward-looking statements made by UTI in this press release are based only on information currently available to UTI and speak only as of the date on which it is made. UTI settled out of court with the employee. [4], While Universal Technical Institute in the past had limited access to military bases for student recruitment, as of 2021 it operates BMW MSTEP at Ft. Bragg, N.C.[5] and Marine Corps Base Camp Pendleton, Calif.,[6] and Premier Truck Group Technician Training at Ft. Bliss in Texas. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future. has resulted in lower new student starts, fewer retention rates, and an ongoing plunge in average student population, which has fallen for years. Jerome Grant will continue to directly lead this division until a Divisional President is named. We choose to disclose this non-GAAP financial measure for Concorde because it provides an additional performance measure. It doesn't matter how it is done, just that it must be done. If you have an ad-blocker enabled you may be blocked from proceeding. 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 SEC. Awards vary due to specific conditions, criteria and state. With 70% stake, institutions possess the maximum shares in the. Universal Technical Institute will post an updated presentation regarding its growth and diversification strategy on its investor relations website. This data contradicts McWaters explanation for the companys recent underperformance. UTI welcomes General Education Diploma students. Let's delve deeper into each type of owner of Universal Technical Institute, beginning with the chart below. It remains a challenge the school must solve if it is to have a chance of even remaining at current student levels, let alone growing. With the addition of the Concorde brand and its portfolio of programs and campuses, Universal Technical Institute will significantly expand upon its already announced growth and diversification plans. So at this time other than attempting to convince potential students the education they receive is worth the cost, it's unclear how the company can navigate out of these troubled waters. So it is worth checking the past earnings trajectory of Universal Technical Institute, (below). whale wars crew death dropping out of universal technical institute. The NTT business was discontinued at a loss of $42.9 million. On arecent conference call, CEO Kimberly McWaters offered the explanation that Lingering effects of the great recession have impacted consumer confidence in the job market and made them question the value of an education.. UTI cannot guarantee employment or salary. I understand that my consent is not required to apply, enroll or make any purchase. While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. [20] In Spring of 2022, UTI opened the Austin, Texas campus. Figure 1 shows that average enrollment at UTI colleges peaked in 2010 and has been on the decline since. 41) For Automotive Service Technicians and Mechanics, the U.S. Bureau of Labor Statistics projects an annual average of 73,300 job openings between 2021 and 2031. Find out more in our resources. I think UTI is treating investors like the company treats many of its graduates. Important factors that could affect UTI's actual results include, among other things, changes to federal and state educational funding, changes to regulations or agency interpretation of such regulations affecting the for-profit education industry, possible failure or inability to obtain regulatory consents and certifications for new or modified campuses or instruction, potential increased competition, impacts related to the COVID-19 pandemic, changes in demand for the programs UTI offers, increased investment in management and capital resources, the effectiveness of UTI student recruiting, advertising and promotional efforts, changes to interest rates and unemployment, general economic and political conditions, the adoption of new accounting standards, and other risks that are described from time to time in UTI's public filings. 1) UTI is an educational institution and cannot guarantee employment or salary. Looking at the last year, the company burnt through US$36m. [18][19], Since December 2018, Universal Technical Institute has seen a significant drop in the number of students enrolled. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. More than anything that's the challenge faced by UTI, and until it's able to turn that sentiment around it will continue to lose students. Net Price $21,726 / year National $15,523 Average cost after financial aid for students receiving grant or scholarship aid, as reported by the college. UTI is making more than $15 million in scholarships and grants available to students in 2022. [21] A planned Miramar, Florida campus opened in Summer of 2022. Second Quarter Fiscal Year 2022 Results conference call, https://www.bls.gov/ooh/healthcare/home.htm. PHOENIX, July 19, 2021 /PRNewswire/ -- Universal Technical Institute, Inc. (NYSE: UTI), the nation's leading provider of transportation technician training, today announced that it plans to report results for the third quarter of fiscal 2021 ended June 30, 2021 on Monday, August 2, 2021, after market close. Under Jami's leadership, UTI's first step into healthcare will serve as a solid cornerstone for some of our key future growth and diversification efforts.". 1) UTI is an educational institution and cannot guarantee employment or salary. The Obama administration continues to push for regulations that willlimit the amount of debt that students can take on in career-training programs. Investors impressed by UTIs job placement rates need also to look at the quality of the jobs the graduates are getting. Analysts are somewhat down on the company, as they are looking for the company to lose $0.02 in earnings for the next quarter, and to drop from a prior estimate of a profit of $0.25 a share to a profit of $0.21 for the year. Combined it resulted in the operating loss of $1.9 million in the second quarter. These days I invest only for myself while continuing to write on a variety of financial and economic topics. UTIs recent history of extremely poor capital allocation does not give me faith in the company to execute this kind of turnaround. 1.7 million+ Total technician employment expected nationally by 203138 For the first half growth came in at 17 percent. 2) For important information about the educational debt, earnings and completion rates of students who attended this program, and to review the applicable Gainful Employment disclosure, visit our website at www.uti.edu/disclosures. UTI has not faced the same kind of legal issues asITT Technical Institute(ESI) orCorinthian Colleges(COCO), but these high-profile cases have hurt the publics perception of the entire industry. Have feedback on this article? KAlice S. said: My husband and I were previous students here so we were ready and, Wrecks N. said: This place is the worst place to get an education. For more information about cookies you can visit https://www.allaboutcookies.org. Universal Technical Institute defines estimated adjusted EBITDA margin as estimated adjusted EBITDA over estimated revenue. Among the reasons stated by UTI CEO Kimberly J. McWaters for the underperformance are "changes in consumer perception and behaviors regarding education and the lingering effects of regulatory change, including increased competition for higher-quality students." UTI expanded its programs with additional curricula and opened new campuses, growing internally and through acquisitions. Even as a potential turnaround investment Universal Technical Institute doesn't look particularly attractive, as when poring over its numbers, market conditions, and strategy, there is little in the way of catalysts that would result in a surprise to the upside. Privacy Policy For further details on how we use your data, please review UTI's Privacy Policy. 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 (loss) or any other measures derived in accordance with GAAP as a measure of operating performance or profitability. UTI is an educational institution and cannot guarantee employment or salary. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of UTI's control. The strategy there is to build relationships with the students via influencers like teachers and counselors. The Company is comprised of two divisions: UTI and Concorde Career Colleges. Additionally, if you disable your cookies or upgrade your browser after opting out, you will need to opt-out again. Concorde ended 2021 with approximately 7,400 students and delivered approximately. Important factors that could affect UTI's actual results include, among other things, changes to federal and state educational funding, changes to regulations or agency interpretation of such regulations affecting the for-profit education industry, possible failure or inability to obtain regulatory consents and certifications for new or modified campuses or instruction, potential increased competition, impacts related to the COVID-19 pandemic, changes in demand for the programs UTI offers, increased investment in management and capital resources, the effectiveness of UTI student recruiting, advertising and promotional efforts, changes to interest rates and unemployment, general economic and political conditions, the adoption of new accounting standards, and other risks that are described from time to time in UTI's public filings. click here to see if those insiders have been buying or selling. UTI shares have fallen to under $10 since the buyback began, which indicates that the share repurchase program has destroyed over 20% of the $8.8 million purchased, or around $2 million in value. That's unlikely to happen, and there's little in the way of it continuing its free fall; although a new CEO would probably give the company a temporary boost, and if the right person, may even help to generate sustainable growth for the company. This demographic is resistant to high costs and debt. The problem with this strategy is that demand for UTIs education appears to be highly elastic. It's always worth thinking about the different groups who own shares in a company. The company will provide further commentary on the Concorde acquisition during the Second Quarter Fiscal Year 2022 Results conference call it will be hosting tomorrow at 4:30 pm Eastern Daylight Time . 14) Incentive programs and employee eligibility are at the discretion of the employer and available at select locations. For more information, visit www.uti.edu, or follow on LinkedIn @UniversalTechnicalInstitute and on Twitter @news_UTI. Concorde's revenue and adjusted EBITDA for calendar 2021 were approximately $180 million and $13 million, respectively. [3], The 2012 Harkin Commission noted that: "Compared to public colleges offering the same programs, the price of tuition is significantly higher at UTI.The same Certificate costs almost 20 times more at UTI than it does at the public college." Lincoln Education and Corinthian colleges are the other schools on the list with automotive technology programs. Universal Technical Institute was founded in 1965. The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. In 1988 UTI opened their Lisle, Illinois, campus. SeeTable 1.2 Employment by detailed occupation, 2021 and projected 2031, U.S. Bureau of Labor Statistics,www.bls.gov, viewed October 13, 2022. Additionally, Universal Technical Institute is opening new campuses in Miramar, Florida., and Austin, Texas and is further expanding its welding programs to 2 additional locations during the fiscal year. Of those three veterans continue to be the most successful segment, with 21 straight quarters of application growth. So they usually pay more attention to companies that are included in major indices. Concorde Career Colleges is a leading provider of healthcare education programs focused on preparing students for successful professions in the healthcare sector, which is expected to add about 2.6 million new jobs over the next decade due to attrition in the workforce along with an aging population that is expected to drive increased demand for healthcare services.1 The company offers diploma and degree programs across nursing, dental hygiene, and other direct patient care fields including physical therapy assistant and respiratory therapy, as well as allied health including medical and dental assisting and healthcare administration. In the high school segment the company has been struggling, as new student applications fell 4 percent in the quarter. "The acquisition of Concorde Career Colleges will be a significant next step in our previously announced growth and diversification strategy," said Universal Technical Institute CEO Jerome Grant. rate. We expect the transaction to close during the first half of fiscal 2023, subject to regulatory approvals and other customary closing conditions.". 1) UTI cannot guarantee employment or salary. It looks like hedge funds own 14% of Universal Technical Institute shares. It operates under the brands Universal Technical Institute, Motorcycle Mechanics Institute, NASCAR Technical Institute and Marine Mechanics Institute. UTI expressly disclaims any obligation to publicly update any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, changes in expectations, any changes in events, conditions, or circumstances, or otherwise. I am not receiving compensation for it (other than from Seeking Alpha). The economy was in worse shape in 2010 than it is now, but during that year UTI had its highest enrollment and profits of the past decade. The numbers dont support this story. 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