The NTT business was discontinued at a loss of $42.9 million. We choose to disclose this non-GAAP financial measure for Concorde because it provides an additional performance measure. UTI is making more than $15 million in scholarships and grants available to students in 2022. The problem with this strategy is that demand for UTIs education appears to be highly elastic. Universal Technical Institute (UTI) suffers from unreasonably high valuation and steadily declining enrollment. Even though UTIs stock price is down 50% over the past five years, the company remains significantly overvalued. Universal Technical Institute serves three student segments: high school, veterans, and adult. 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. Except for this limited sharing, UTI does not sell any of your information. The school offers specialized technical education programs under the banner of several brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (MMI), MIAT College of Technology (MIAT), and NASCAR Technical Institute (NTI). Universal Technical Institute will post an updated presentationregarding its growth and diversification strategy on its investor relations website. I understand that my consent is not required to apply, enroll or make any purchase. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. 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. Management understands what must be done, but the overwhelming negative trend in the market will be hard to overcome no matter what changes are made. For the trailing twelve months ended September 30, 2022, Concorde reported unaudited revenue of approximately $200 million and adjusted EBITDA of approximately $17 million. Lincoln Education and Corinthian colleges are the other schools on the list with automotive technology programs. UTI is an educational institution and cannot guarantee employment or salary. Since the items excluded from this measure are significant components in understanding and assessing financial performance under GAAP, this measure 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. The fall in revenue was directly tied to the decline in students attending the school. [2], In January 1998, UTI acquired Clinton Harley Corporation and Clinton Education Group, Inc. for $26.3 million. Contact an Admissions Representative to begin the enrollment process. Even if for-profit universities can shed their current stigma and demand for automotive education improves, the industry landscape is changing. The bull case for UTI rests on both the market for auto repair growing and the resulting new jobs being won by UTI graduates. Figure 1: Profitability Tracks Enrollment. Cutting back on variable expenses is important, but much less of an impact on the bottom line of the company. 7) Some programs may require longer than one year to complete. Find out more in our resources. That was part of the fiasco of mortgages several years ago when applicants shouldn't have been given adjustable rate mortgages to buy a home. However, such a recovery seems highly unlikely. SOURCE Universal Technical Institute, Inc. Download our catalogs and learn about programs, courses, tuition, fees, admissions and much more. PHOENIX, Dec. 1, 2022 /PRNewswire/ -- 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 Concorde Career Colleges, Inc. ("Concorde"),which offers more than 20 programs across the Allied Health, Dental, Nursing, Patient Care, and Diagnosticfields. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. This data contradicts McWaters explanation for the companys recent underperformance. That level of sustained growth seems unlikely given the many problems facing UTIs industry. 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. We expect the transaction to close during the first half of fiscal 2023, subject to regulatory approvals and other customary closing conditions.". 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.". Along with the weak revenue is the high cost structure of the company, much of which is fixed. Learn more about how we assist our veterans from VA funding to exclusive scholarships. Divided Government And The Way Forward For The Markets, How Negativity Bias Leads To Mistakes In Portfolios, Transforming The Wealth Management Experience For Todays Client, MoneyStamps Of South America - As Investments, Theyre Different Part 1, Covid-19 Related Municipal Defaults Begin, The Dynamics Of Price Discovery In The Stamp Market, limit the amount of debt that students can take on in career-training programs, grow NOPAT by 17% compounded annually for 12 years. If they do, the company may get a bump up in share price because of low expectations. 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. 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. 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 . In the 3Q14 earnings conference call, McWaters acknowledged that Further, if you use multiple browsers or devices, you will need to execute this opt-out on each browser or device. If you have an ad-blocker enabled you may be blocked from proceeding. Finally concerning the strategy of the company is an adjustment in its fee structure and a boost in scholarships. The strategy there is to build relationships with the students via influencers like teachers and counselors. For the first half growth came in at 17 percent. UTI has not entirely avoided allegations of wrongdoing either. The fall in revenue was directly tied to the decline in students attending the school. COVID-19 FAQs | COVID-19 Updates | Lab Info | CDC's COVID-19 website. [13][14] On Dec. 1, 2022,[15] UTI announced it had closed on the acquisition of Concorde Career Colleges, Inc., which was announced on May 3, 2022[16][17] UTI and Concorde Career Colleges together now serve 20,000+ students across 14 states and 33 locations. institution andcannot guarantee employment or salary. Concorde Career Colleges operates across 17 campuses in 8 states, offering programs in the Allied Health, Dental, Nursing, Patient Care, and Diagnostic fields. Take an interactive 360 virtual tour by clicking on any of the program links below. As a result, the company is likely to default on the promises implied by the stocks lofty valuation. 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. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). 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. For further details on how we use your data, please review UTI's Privacy Policy. Google UTI expanded its programs with additional curricula and opened new campuses, growing internally and through acquisitions. All shareholders and investors need to watch to evaluate the company is its success or failure at growing its student population. Every investor in Universal Technical Institute, Inc. ( NYSE:UTI) should be aware of the most powerful shareholder groups. UTI has relationships with manufacturers of more than 35 leading brands. Special conditions may apply. At the time of its initial public offering, UTI carried a debt load of $57.3 million. 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. However, investors who focus on the dividend and buybacks miss the importance of capital preservation. 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. All statements contained in this press release, other than statements of historical fact, are "forward-looking" statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Simply Wall St has no position in any stocks mentioned. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future. 5) UTI programs prepare graduates for careers in industries using the provided training, primarily as automotive, diesel, collision repair, motorcycle and marine technicians. UTI is an educational institution and cannot guarantee employment or salary. Choose from a range of programs you need to get the technical career you want. The problem with that is there were eligibility requirements in place for a reason, and it could result in a negative reputation for the company over time if more students gain admittance but struggle with paying back loans they possibly shouldn't have received. Jerome Grant will continue to directly lead this division until a Divisional President is named. UTI has struggled in recent years. If it is, UTI has a future, if not, the share price will continue to take a big hit. 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. Universal Technical Institute, Inc. (UTI). It looks like hedge funds own 14% of Universal Technical Institute shares. It offers diploma, undergraduate degree, and certificate programs. Access your no-cost report to get info on jobs in demand in your area, industry insight from top employers, and more. Come take a look at our hands-on labs with state-of-the-industry equipment and technology. Jami Frazier will serve as the Divisional President, reporting to CEO Jerome Grant. UTI cannot guarantee employment or salary. SOURCE Universal Technical Institute, Inc. Concorde Career Colleges, Inc. ("Concorde"), 2022 full year and fourth quarter earnings call on, https://www.prnewswire.com/news-releases/universal-technical-institute-expands-platform-of-workforce-solutions-offerings-with-completion-of-concorde-career-colleges-inc-acquisition-301692062.html, Stock market news live updates: Stock futures stagnant as earnings season picks up, Who's to blame? Universal Technical Institute (UTI: $12/share), already down 30% in 2014, is likely to drop another 50% as investors factor in its unreasonably high valuation, steadily declining enrollment and . 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. PTA organized lecture training seminars in markets similar to NTT. UTI is an educational Figure 2: Overvalued and Underperforming in a Struggling Industry, Competition from Free Alternatives Is A Killer. 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. 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. These days I invest only for myself while continuing to write on a variety of financial and economic topics. Keeping things as they are won't cut it. Growing Distrust Deters Potential Students. Since 1965, more than 230,000 students have graduated from UTI's . The most recent data shows that average enrollment has again decreased in 2014, which exerts further downward pressure on profitability. That means it had a cash runway of about 2.2 years as of March 2021 . Yet increasing inquiries at least gives the school an opportunity to convert inquiries into students. Awards vary due to specific conditions, criteria and state. Universal Technical Institute (UTI) is a leading provider of career training for the transportation, skilled trade and energy industries. Now is an exciting time to pursue a career in the industry, as new vehicle technology and high-tech systems are now considered standard equipment. Enrollment has been declining since then. It's always worth thinking about the different groups who own shares in a company. Jerome Grant, chief executive officer, and Troy Anderson, chief financial officer, will . 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. 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. Upon completion of the Concorde acquisition, the company will serve over 20,000 students across 14 states and 312locations. We won't find out until next quarter whether or not that has actually translated into new student applications or not. easier for students to qualify by lower eligibility restrictions and making them more accessible to students. In the second quarter that continued with a year-over-year growth rate of 14 percent. All they want is, Brianna W. said: I'm currently enrolled at Platt College! Quite a few analysts cover the stock, so you could look into forecast growth quite easily. 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 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 . Universal Technical Institute serves three student segments: high school, veterans, and adult. UTI is overvalued, has significant downward momentum, and major headwinds in its industry. [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." 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. 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. 3) A total of 82% of UTI graduates in 2021 were employed within one year of their graduation date. information about your activities on our website, which is then associated with your browser, device or online identifier. Posted on December 13, 2021 by December 13, 2021 by UTI is currently in the process of updating a variety of its curriculum to include EV maintenance. These companies may use this data to serve you more relevant ads as you browse the internet. 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. 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). [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. In this case, in addition to its dividend, UTI repurchased overvalued stock. The definition of company insiders can be subjective and does vary between jurisdictions. UTI thrived in the first couple years of the recession. Concorde Career Colleges' 20 student-focused academic programs and personalized support prepare graduates for in-demand careers in nursing, dental, respiratory, diagnostic, and other health care roles. Perhaps investors are overlooking the fundamental problems in the business due to the steady cash payments from the company. 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