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. UTI Graduation Rate by Race/Ethnicity. This data contradicts McWaters explanation for the companys recent underperformance. If UTI can return to the profits it earned in 2011, the stock would be closer to reasonably valued. As at March 2021, Universal Technical Institute had cash of US$78m and no debt. UTIs recent history of extremely poor capital allocation does not give me faith in the company to execute this kind of turnaround. This should lead to better outcomes for students, which will increase the value of the courses offered and decrease price and debt resistance. The company recently doubled its application fee to attract higher quality applicants, which caused the number of applicants to fall 27%. As at March 2021, Universal Technical Institute had cash of US$78m and no debt. Those numbers are likely to fall. With 70% stake, institutions possess the maximum shares in the. UTI is an educational institution and cannot guarantee employment or salary. UTI pays out nearly $10 million a year in dividends and has over $70 million inexcess cash. has resulted in lower new student starts, fewer retention rates, and an ongoing plunge in average student population, which has fallen for years. However, investors who focus on the dividend and buybacks miss the importance of capital preservation. Even if for-profit universities can shed their current stigma and demand for automotive education improves, the industry landscape is changing. Considering the weak competitive position of UTI, the only likely reason I can discern for UTIs higher valuation is its 4% dividend yield. One of the major problems UTI has faced for some time has been the conversion of inquiries into applications. So while increasing inquiries is a good strategy, it's unclear and very uncertain with the current headwinds whether or not that can be improved in any way. New rulesrelated to the Telephone Consumer Protection Act (TCPA) went into effect in October 2013 that have made it more difficult for telemarketers to reach consumers that have not given prior consent to receive calls. 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. Adjusted EBITDA is a non-GAAP financial measure which is provided to supplement, but not substitute for, the most directly comparable GAAP measure. MIAT College of Technology has joined UTIs family of schools! Courses take up either most of the day or most of the night so it's hard to work and go to school at the same time. 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 schools operated by Concorde Career Colleges are accredited by either the Accrediting Commission of Career Schools and Colleges (ACCSC) or the Council on Occupational Education (COE). Therefore, you should not rely on any of these forward-looking statements. 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. It doesn't matter how it is done, just that it must be done. 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. These schools, along with UTI rank at the bottom of the list in every metric. Visit School's Website Universal Technical Institute - Lisle Cost Value B minus Based on average net price, earnings potential, student and alumni reviews, and additional factors. With the addition of Concorde and the broadening of our program offerings, we will accelerate Universal Technical Institute's revenue, profitability, and cash flow growth over the next several years. 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. Shareholders would probably be interested to learn that insiders own shares in Universal Technical Institute, Inc.. As individuals, the insiders collectively own US$8.6m worth of the US$238m company. 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. This shows at least some alignment. whale wars crew death dropping out of universal technical institute. With the acquisition of Concorde complete, the Company will operate and report as two divisions. If you are like me, you may want to think about whether this company will grow or shrink. UTI welcomes General Education Diploma students. Figure 2: Overvalued and Underperforming in a Struggling Industry, Competition from Free Alternatives Is A Killer. I have no business relationship with any company whose stock is mentioned in this article. Adult students are even more of a challenge, as the value of education at the current price levels is being questioned as it never has been before, and that shows in the 17 percent drop in adult applications at UTI in the second quarter. This may not be consistent with full year annual report figures. Universal Technical Institute, Inc. (NYSE: UTI), a leading workforce solutions provider of transportation and skilled trades education programs, today announced the close of its acquisition of . Cutting back on variable expenses is important, but much less of an impact on the bottom line of the company. 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. Learn more about how we assist our veterans from VA funding to exclusive scholarships. It's always worth thinking about the different groups who own shares in a company. 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. It may take several years before the current efforts bear fruit, if they do at all. I wrote this article myself, and it expresses my own opinions. UTI thrived in the first couple years of the recession. While UTI likes to trumpet its 80% job placement rate, it is difficult for students pay off loans of almost $50,000 for tuition and living costs on an entry-level mechanics salary. On Nov. 1, 2021, UTI announced it had completed the acquisition of MIAT College of Technology,[11][12] On June 9, 2022, the company announced plans to add 15 new programs across its national UTI/MIAT campus footprint. In this case, in addition to its dividend, UTI repurchased overvalued stock. UTI's actual results and financial condition may differ materially from those indicated in the forward-looking statements. We aim to bring you long-term focused analysis driven by fundamental data. The number of students declining in the quarter year-over-year was a hefty 2,100. Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. In the near term money could be made shorting it, and the risk there would be if for some reason the company was able to exceed expectations for new students' enrollments. The bull case for UTI rests on both the market for auto repair growing and the resulting new jobs being won by UTI graduates. We have a team of specialists who work with national dealerships, distributors and other employers of all sizes to identify potential jobs for graduates. 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. I am a former investment advisor and owner of several businesses. We choose to disclose this non-GAAP financial measure for Concorde because it provides an additional performance measure. The boards of directors of both companies have unanimously approved the agreement. There is an outside possibility new student starts may improve in the fourth quarter, although it would be a surprise. These forward-looking statements which address Universal Technical Institute, Inc.'s ("UTI") expected future business and financial performance may contain words such as "goal," "target," "future," "estimate," "expect," "anticipate," "intend," "plan," "believe," "seek," "project," "may," "should," "will," the negative form of these expressions or similar expressions. [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. Universal Technical Institute (UTI) suffers from unreasonably high valuation and steadily declining enrollment. For further details on how we use your data, please review UTI's Privacy Policy. All they want is, Brianna W. said: I'm currently enrolled at Platt College! Therefore, you should not rely on any of these forward-looking statements. Factoring in this hidden liability reveals that UTI is much less profitable than it appears on the surface. 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. ", Mr. Grant continued, "Together with Concorde, we have now more than doubled the number of campuses in our ecosystem and expanded into the critical area of healthcare training to help meet the national shortage of healthcare workers, as part of our mission of becoming a valued and trusted educational partner for students across multiple industry verticals.". We have 9 programs at 13 locations. Please. Free cash flow is a metric used to determine the ability of a company to generate future growth. 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. As a result, advertising expense has increased by $2 million in 2014, which breaks a trend of several years of declining advertising expense. 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. In the 3Q14 earnings conference call, McWaters acknowledged that 3) A total of 82% of UTI graduates in 2021 were employed within one year of their graduation date. 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. Find out more in our resources. Lincoln Education and Corinthian colleges are the other schools on the list with automotive technology programs. 2023 Universal Technical Institute, Inc. All rights reserved. "We are pleased to welcome Concorde's leadership team, faculty and staff, and, most importantly its students, to the Company," said Universal Technical Institute Chief Executive Officer Jerome Grant. Instead, they are based only on UTI's current beliefs, expectations, and assumptions regarding the future of its business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. 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. Concorde Career Colleges has a strong reputation in healthcare education, making this an excellent combination for addressing the nation's skills gap," said Concorde CEO Jami Frazier. "On behalf of the Concorde team, I am excited to be joining Universal Technical Institute," said Concorde Chief Executive Officer Jami Frazier. The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. 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. Have feedback on this article? [2], In January 1998, UTI acquired Clinton Harley Corporation and Clinton Education Group, Inc. for $26.3 million. The high fixed costs also limit the ability to adjust fees in any real meaningful way. These days I invest only for myself while continuing to write on a variety of financial and economic topics. Please disable your ad-blocker and refresh. Of those three veterans continue to be the most successful segment, with 21 straight quarters of application growth. Since the industry has very high fixed costs, student growth and retention is basically the entire game. Second Quarter Fiscal Year 2022 Results conference call, https://www.bls.gov/ooh/healthcare/home.htm. High costs, declining revenue and low free cash flow make this company a huge risk. Additionally, if you disable your cookies or upgrade your browser after opting out, you will need to opt-out again. If school is not listed, please fill in here: If your duty station is not listed, enter here: What kind of training are you interested in? "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. Bulls focus on UTI's assets and clean balance sheet but overlook the company's. 8-2 Project Three Systems Thinking. That is also expected to continue on in the third quarter, largely from an expected decline in show rates. 1Source: U.S. Bureau of Labor Statistics, https://www.bls.gov/ooh/healthcare/home.htm, viewed May 2, 2022.2 Encompasses 12 UTI campuses, 2 MIAT campuses, and 17 Concorde campuses post-close. Every investor in Universal Technical Institute, Inc. ( NYSE:UTI) should be aware of the most powerful shareholder groups. UTI expanded its programs with additional curricula and opened new campuses, growing internally and through acquisitions. For more information, visit www.uti.eduor www.concorde.edu, or visit us on LinkedIn at @Universal Technical Institute and @Concorde Career Colleges or on Twitter @news_UTI or @ConcordeCareer. Perhaps investors are overlooking the fundamental problems in the business due to the steady cash payments from the company. Find out more in our resources. UTI expanded its programs with additional curricula and opened new campuses, growing internally and through acquisitions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). 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. AboutUniversal 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 careers across a number of highly-skilled fields. 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. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. 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. The fall in revenue was directly tied to the decline in students attending the school. 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. We won't find out until next quarter whether or not that has actually translated into new student applications or not. On top of the stigma against for-profit schools, UTI faces other significant headwinds in attracting students. As a result, the company is likely to default on the promises implied by the stocks lofty valuation. 1.7 million+ Total technician employment expected nationally by 203138 Search trends for automotive education are down 10% year-over-year. I further understand and agree that I may instead call MIAT at 1-800-477-1310 for Canton, MI and 1-888-547-7047 for Houston, TX or UTI at 1-800-913-7524 to request admission information. As long as the company is focused on that, the details aren't that important. If they do, the company may get a bump up in share price because of low expectations. Media Contactavitucci@uti.edu480.710.6843. Due to an increase in customer demand and shortage of skilled technicians, jobs are growing in the skilled trades. It looks like hedge funds own 14% of Universal Technical Institute shares. 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. To address the needs of industry and corporate clients, UTI started providing continuing education and training for technicians in 1980. Investors impressed by UTIs job placement rates need also to look at the quality of the jobs the graduates are getting. Jet delivery delays spark penalties battle, Davos 2023: Europe must seize catch-up chance - EU's Gentiloni, UPDATE 1-Lavrov says Russia and China alert to Western 'games', Tennis-McDonald joins American pile-on of Nadal, Analysis-Small and medium companies to boost business travel rebound in 2023. Luckily, you can check this free report showing analyst forecasts for its future. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Concorde's revenue and adjusted EBITDA for calendar 2021 were approximately $180 million and $13 million, respectively. 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. 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. Sam McBride and Andr Rouillard contributed to this report. If school is not listed, please fill in here: If your duty station is not listed, enter here: What kind of training are you interested in? Universal Technical is adjusting its own loan programs to make it easier for students to qualify by lower eligibility restrictions and making them more accessible to students. 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. Universal Technical Institute (UTI) is a leading provider of career training for the transportation, skilled trade and energy industries. 14) Incentive programs and employee eligibility are at the discretion of the employer and available at select locations. 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. 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. Together in the three student segments, applications dropped 9 percent in the quarter, and is down 6 percent year-over-year. Concorde Career Collegesoperates 17 campuses across eight states under the brands Concorde Career College and Concorde Career Institute, focused on preparing America's next generation of health care and dental professionals for rewarding careers. I also cant see any reason why another firm would buy out UTI. Concorde Career Colleges operates across 17 campuses in 8 states, offering programs in the Allied Health, Dental, Nursing, Patient Care, and Diagnostic fields. Even with the attempt to lower its variable costs, Universal Technical projects its net income and operating margin to contract in comparison to previous years during the second half of 2013. Many institutions measure their performance against an index that approximates the local market. UTI is an educational institution and cannot guarantee employment or salary. Universal Technical Institute's campuses are accredited by the Accrediting Commission of Career Schools and Colleges (ACCSC), while its employer-aligned technical training programs are offered under four brands:Universal Technical Institute, Motorcycle Mechanics Institute / Marine Mechanics Institute, NASCAR Technical Institute, and MIAT College of Technology. Get in touch with us directly. 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. Concorde ended 2021 with approximately 7,400 students and delivered approximately. Expands Universal Technical Institute, Inc.'s career-focused education brand portfolio into certificate, credential, and degree-granting healthcare programs. Universal Technical Institute of Illinois, Inc. is approved by the Division of Private Business and Vocational Schools of the Illinois Board of Higher Education. Jerome Grant will continue to directly lead this division until a Divisional President is named. Learning is hands on so no online classes to get it done. 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. UTI is making more than $15 million in scholarships and grants available to students in 2022. UTIs management blames the companys issues on the poor economy. These companies may use this data to serve you more relevant ads as you browse the internet. 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. Find the campus that matches your career goals here. This rate excludes graduates not available for employment because of continuing education, military service, health, incarceration, death or international student status. SeeTable 1.2 Employment by detailed occupation, 2021 and projected 2031, U.S. Bureau of Labor Statistics,www.bls.gov, viewed October 13, 2022. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. 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." Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. This demographic is resistant to high costs and debt. 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 . See our latest analysis for Universal Technical Institute. If it is, UTI has a future, if not, the share price will continue to take a big hit. At the time of its initial public offering, UTI carried a debt load of $57.3 million. 4 out of 5 UTI graduates find employment in careers within their field of study within 1 year of graduation. They aren't always helpful and tuition way overpriced. Growing Distrust Deters Potential Students. UTI is an educational institution and cannot guarantee employment or salary. 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. Universal Technical Institute of Illinois, Inc. is approved by the Division of Private Business and Vocational Schools of the Illinois Board of Higher Education. 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. We expect the transaction to close during the first half of fiscal 2023, subject to regulatory approvals and other customary closing conditions.". [9] Jerome Grant was named CEO in 2019.[10].
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