If you are like me, you may want to think about whether this company will grow or shrink. See our latest analysis for Universal Technical Institute. In the latest earnings call of the company McWaters also talked about the implementation of a predictive model and other things, but I don't see that as relevant because it's as simple as whether or not new students are coming on board or not. In this case, in addition to its dividend, UTI repurchased overvalued stock. 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. 14) Incentive programs and employee eligibility are at the discretion of the employer and available at select locations. Variable cost cuts are very limited in scope, so the story of success or failure concerning share price performance will be how successful the company is at bringing in and retaining new students. The usual mantra that it'll take time to implement the measures to combat the changing market conditions isn't believable with McWaters, who has seen the share price and value of the company erode exponentially under her 10-year watch. It operates under the brands Universal Technical Institute, Motorcycle Mechanics Institute, NASCAR Technical Institute and Marine Mechanics Institute. Talk to potential employers to learn more about the programs available in your area. That 4% dividend yield is probably not comforting any investor who bought UTI at the beginning of the year and has lost 30% of their investment. UTI expanded its programs with additional curricula and opened new campuses, growing internally and through acquisitions. 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). Posted on December 13, 2021 by December 13, 2021 by UTI has relationships with manufacturers of more than 35 leading brands. Universal Technical Institute (UTI) is a leading provider of career training for the transportation, skilled trade and energy industries. The Obama administration continues to push for regulations that willlimit the amount of debt that students can take on in career-training programs. "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. Universal Technical Institute, Inc. (UTI). Positions Universal Technical Institute to Seize Opportunity in High-Growth, High-Demand Healthcare Education Market, Significantly Accelerates Ongoing Growth and Diversification Efforts in Conjunction with Existing Initiatives to Meet Increasing Demand from Employers and Students, Universal Technical Institute and Concorde Career Colleges Together Now Serve 20,000+ Students Across 14 States and 33Locations with Significant Opportunitiesto Expand to Meet Varied Workforce-Training Needs, Concorde CEO Jami Frazier Joins the Universal Technical Institute Senior Leadership Team as President of the Healthcare Division. Universal Technical Institute - Reviews. Along with the weak revenue is the high cost structure of the company, much of which is fixed. As at March 2021, Universal Technical Institute had cash of US$78m and no debt. In that regard UTI is easy to understand and measure, and it's best to ignore all the talk of strategies and models and look at the bottom line: is the student population growing or not? ", "We are excited about the opportunity to add Concorde and their healthcare programs to the Universal Technical Institute portfolio," said Universal Technical Institute's CFO Troy Anderson. UTI welcomes General Education Diploma students. Given the changing regulatory landscape and revenue decline in addition to UTIs mountain of off-balance sheet debt, it seems more likely that this company will go out of business than be bought out. The staff here is friendly,, YL M. said: After seeing the reviews posted here, some with no merit on the actual, Kelvin P. said: This school really teaches you the ins and outs of welding not just, Tommy L. said: This is an honest opinion about the school, not a fake review like you. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. 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. 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. Awards vary due to specific conditions, criteria and state. This is a BETA experience. [7], On September 27, 2016, UTI reported that its president and CFO, Eugene Putnam, was removed as part of a financial improvement plan and that Kim McWaters replaced him as president. Click the button and tell us what program you're interested in! UTI is making more than $15 million in scholarships and grants available to students in 2022. This suggests some credibility amongst professional investors. Founded in 1965 and headquartered in Phoenix, Universal Technical Institute's (NYSE: UTI) mission is to serve our students, partners, and communities by providing quality education and support services for in-demand careers. 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. See some of the exciting things our graduates are doing today. To address the needs of industry and corporate clients, UTI started providing continuing education and training for technicians in 1980. Concerned about the content? For internal reporting purposes, Concorde defines adjusted EBITDA as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization and adjusted for items not considered part of the company's normal recurring operations. PTA organized lecture training seminars in markets similar to NTT. The private educational sector continues to face a lot of headwind, and UTI hasn't done very well at successfully implementing new strategies to deal with the realities of the market they serve. Forward-looking statements are neither historical facts nor assurances of future performance. For the second quarter the company lost $900,000, or negative $0.04 per share. institution andcannot guarantee employment or salary. Since that time UTI has purchased $8.8 million in shares under the program at an average price of $11-$12 per share, which gives a buyback yield of 3.8%. Presiding over this type of decline over almost a decade calls for new leadership, as other educational companies, while under similar pressures, have managed to perform much better facing the same headwinds. This shows at least some alignment. [22], Learn how and when to remove this template message, "Don't Expect Miracles from Universal Technical Institute", "Universal Technical Institute, Inc.: Introduction", "Inaugural Class of Fort Bragg BMW MSTEP Program, Taught by UTI, Celebrates Their Graduation & Prepares for New Civilian Careers as BMW Technicians", "New BMW and UTI Program Prepares Service Members for Civilian Careers as BMW Automotive Technicians", "Premier Truck Group and Universal Technical Institute Honor Transitioning Military Service Members as They Graduate from the Inaugural Class of Technician Training at Fort Bliss", "Universal Technical Institute Implements Financial Improvement Plan to Deliver $25 to $30 Million in Annualized Savings in 2017; Reaffirms 2016 Fiscal Year Outlook", "One of Arizona's longest-tenured female CEOs to retire amid losses at Universal Technical Institute", "Universal Technical Institute Announces Jerome A. We have a team of specialists who work with national dealerships, distributors and other employers of all sizes to identify potential jobs for graduates. 2023 Universal Technical Institute, Inc. All rights reserved. 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. Universal Technical Institutewill discuss the acquisition in more detail and provide updated investor materials as part of its previously announced fiscal 2022 full year and fourth quarter earnings call on December 12, 2022. 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. Other than lowering fees and boosting scholarships, I don't see any way UTI can deal with one of the major headwinds it faces, which is the strong reluctance of consumers to take on debt. 14) Incentive programs and employee eligibility are at the discretion of the employer and available at select locations. The ongoing high fixed costs, which can't be managed, is what makes UTI such a risk to own if investors want any type of growth. Grant to Succeed Kimberly J. McWaters as Chief Executive Officer", "Universal Technical Institute Completes Acquisition of MIAT College of Technology", https://www.bizjournals.com/phoenix/news/2021/11/05/phoenix-school-back-in-growth-mode.html, "Universal Technical Institute Will Add 15 New Programs in Transportation and Skilled Trades Across Its National UTI/MIAT Campus Footprint", "UTI Adding New Automotive, Skilled Trade Programs | THE SHOP", "Universal Technical Institute Expands Platform of Workforce Solutions Offerings with Completion of Concorde Career Colleges, Inc. Acquisition", "Universal Technical Institute, Inc. to Acquire Concorde Career Colleges, Inc., a Leading Provider of Healthcare Education Programs", "Universal Technical Institute plans $50M acquisition of Concorde Career Colleges", "Ford to collaborate with Universal Technical Institute on EV training curriculum", "Universal Technical Institute Selects Bosch to Develop New Courseware Supporting its Electric Vehicle Training Strategy", https://www.bizjournals.com/phoenix/news/2018/02/08/uti-stock-up-while-stemming-losses-as-enrollment.html, "Universal Technical Institute Celebrates Opening of Austin Campus", "Universal Technical Institute Selects Miami Metropolitan Area As The Location For The Second New Campus It Plans To Open In 2022", https://en.wikipedia.org/w/index.php?title=Universal_Technical_Institute&oldid=1133240788, This page was last edited on 12 January 2023, at 21:12. The high school segment is made up largely of males as it relates to UTI, and it's working on engaging that tough demographic by building relationships with the students while they're in high school. Is the Trade School Industry a Sinking Ship? SeeTable 1.2 Employment by detailed occupation, 2021 and projected 2031, U.S. Bureau of Labor Statistics,www.bls.gov, viewed October 13, 2022. To address the needs of industry and corporate clients, UTI started providing continuing education and training for technicians in 1980. Since the industry has very high fixed costs, student growth and retention is basically the entire game. 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. You may opt-out of receiving targeted advertisements from other companies that perform interest-based advertising services, including some that we may work with, via the Digital Advertising Alliance (DAA) site at http://optout.aboutads.info. 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 . The acquisition adds campuses in Texas and Michigan and eight new . The acquisition expands Universal Technical Institute's portfolio of offerings into the higher-growth healthcare arena and creates the opportunity to bring workforce educational solutions to a broader array of students and employers. Sam McBride and Andr Rouillard contributed to this report. A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 51% implying that no single shareholder has a majority. "Universal Technical Institute's brands have a great reputation with both employers and students in transportation and skilled trades. Therefore, you should not rely on any of these forward-looking statements. Free cash flow is a metric used to determine the ability of a company to generate future growth. The fall in revenue was directly tied to the decline in students attending the school. UTI may be able to pay out a high dividend and maintain its buyback for a while, but unless it can manage a dramatic and improbable turnaround in its business, the stock will continue to fall. I look forward to collaborating with Jerome and his team as we work to help students and employers close the gap between the need for well-trained and skilled workers and the availability of quality programs designed to meet the needs of employers across a variety of industries.". One way it is attempting to build up the value of the education it offers students is by customizing programs according to the requirements of prospective employers. 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. 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. Whether or not UTI is truly guilty of any wrongdoing, the presence of these allegations against it and for-profit schools, in general, serves as a deterrent to potential students. As a result, the company is likely to default on the promises implied by the stocks lofty valuation. 3) A total of 82% of UTI graduates in 2021 were employed within one year of their graduation date. 10) Financial aid, scholarships and grants are available to those who qualify. To that end, you should learn about the 2 warning signs we've spotted with Universal Technical Institute (including 1 which is a bit concerning) . UTIs recent history of extremely poor capital allocation does not give me faith in the company to execute this kind of turnaround. In 2011, a former employee filed a lawsuit against the company accusing it of violating Title IV regulations in its compensation incentives for admissions representatives. Those numbers are likely to fall. 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. Universal Technical Institute defines estimated adjusted EBITDA margin as estimated adjusted EBITDA over estimated revenue. Search trends for automotive education are down 10% year-over-year. 2018 Universal Technical Institute, Inc. All rights reserved. In the last year, its cash burn was US$36m. Second Quarter Fiscal Year 2022 Results conference call, https://www.bls.gov/ooh/healthcare/home.htm. That implies potential students don't see the costs of going to UTI as commensurate with the benefits. UTI is an educational institution and cannot guarantee employment or salary. On the state level, Tennessee recently made waves bymaking two-year community colleges freeto all high school graduates. This rate excludes graduates not available for employment because of continuing education, military service, health, incarceration, death or international student status. With negative free cash flow to price of $-0.49 per share, it's hard to see how UTI expects to grow in the future. 8-2 Project Three Systems Thinking. if you are a super douchebag you will fit in just fine with students and instructors alike." Keeping things as they are won't cut it. Enrollment has been declining since then. Also provided by the company are customized training programs specific to manufacturer or dealer requests. 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. Over the last 12 months (TTM) the gross margin is 48.5 percent, operating margin is 3.6 percent, and net margin is 2.0 percent. Is this happening to you frequently? I have no business relationship with any company whose stock is mentioned in this article. [9] Jerome Grant was named CEO in 2019.[10]. About Universal Technical Institute, Inc. Universal Technical Institute (NYSE: UTI) was founded in 1965 and is a leading workforce solutions provider of transportation, skilled trades and healthcare education programs, whose mission is to serve students, partners, and communities by providing quality education and support services for in-demand . For the first half growth came in at 17 percent. In fiscal 2022, Universal Technical Institute completed the acquisition of MIAT College of Technology, which brought 2 campuses and 8 unique programs. This should lead to better outcomes for students, which will increase the value of the courses offered and decrease price and debt resistance. information about your activities on our website, which is then associated with your browser, device or online identifier. If you opt out, you may still see ads, but they will not be personalized based on your online activity. Universal Technical Institute (NYSE:UTI) has been struggling lately, and there's little to suggest this stock is going to recover anytime soon, making it a good candidate to short or get out of altogether. Even so, it's the converting of applications to students that counts, and the jury is still out on whether or not that will be the outcome. Other than cutting variable costs, the other major thing UTI must do is build back its student population. It looks like hedge funds own 14% of Universal Technical Institute shares. Access your no-cost report to get info on jobs in demand in your area, industry insight from top employers, and more. Student-Paid vs. Manufacturer-Paid Programs. Universal Technical Institute will post an updated presentation regarding its growth and diversification strategy on its investor relations website. Concorde's programs, geographic footprint, solid leadership team, exemplary faculty and staff, diverse student body, tight industry alignment, and strong alumni network make this acquisition a great fit. SeeTable 1.2 Employment by detailed occupation, 2021 and projected 2031, U.S. Bureau of Labor Statistics,www.bls.gov, viewed October 13, 2022. In career-training programs about the programs available in your area, student growth and diversification strategy on investor. 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