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. Once completed, the acquisition will add Concorde Career Colleges to Universal Technical Institute, Inc.'s brand family, which currently includes Universal Technical Institute, Motorcycle Mechanics Institute, Marine Mechanics Institute, NASCAR Technical Institute, and MIAT College of Technology. 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. In other words, UTI is making money while its graduates are, too often, unable to pay for the inadequate education they received. PTA organized lecture training seminars in markets similar to NTT. 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. 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. Factoring in this hidden liability reveals that UTI is much less profitable than it appears on the surface. 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). For more information about cookies you can visit https://www.allaboutcookies.org. Find out more in our resources.
By submitting this form, I agree that MIAT College of Technology, Universal Technical Institute, Inc., Custom Training Group, Inc. and their representatives may email, call, and / or text me with marketing messages about educational programs and services, as well as for school-related communications, at any phone number I provide, including a wireless number, using prerecorded calls or automated technology. Simply Wall St has no position in any stocks mentioned. 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 is making more than $15 million in scholarships and grants available to students in 2022. In the 3Q14 earnings conference call, McWaters acknowledged that 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. Jami Frazier will serve as the Divisional President, reporting to CEO Jerome Grant. The company is headquartered in Phoenix, Arizona. You can also generally opt-out of receiving targeted ads from third party advertisers and ad networks who are members of the Network Advertising Initiative (NAI) by visiting http://optout.networkadvertising.org. 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. On the state level, Tennessee recently made waves bymaking two-year community colleges freeto all high school graduates. If you have an ad-blocker enabled you may be blocked from proceeding. Concorde Career Colleges offers more than 20 programs across the Allied Health, Dental, Nursing, Patient Care, and Diagnostic fields. Figure 1: Profitability Tracks Enrollment. Please disable your ad-blocker and refresh. [2], At its peak in 2011, UTI had more than 18,000 students. Approximately 250,000 students have graduated from one of Universal Technical Institute's 14 campuses located across Arizona, California, Florida, Illinois, Michigan, North Carolina, Pennsylvania, New Jersey, and Texas. Let's delve deeper into each type of owner of Universal Technical Institute, beginning with the chart below. 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). Increasing inquiries is one thing, converting them to students is another; and UTI hasn't been good at doing that recently. "This transaction marks a major milestone in executing our strategy as we expand the scope of our skilled education programs to serve students' varied workforce-training needs and drive growth for the company. This rate excludes graduates not available for employment because of continuing education, military service, health, incarceration, death or international student status. Since the industry has very high fixed costs, student growth and retention is basically the entire game. Enrollment has been declining since then. UTI is making more than $15 million in scholarships and grants available to students in 2022. That has resulted in lower new student starts, fewer retention rates, and an ongoing plunge in average student population, which has fallen for years. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. Sign up here. Find out more in our resources. Additionally, if you disable your cookies or upgrade your browser after opting out, you will need to opt-out again. 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. 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. 1.7 million+ Total technician employment expected nationally by 203138 It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. For further details on how we use your data, please review UTI's Privacy Policy. [21] A planned Miramar, Florida campus opened in Summer of 2022. The other will continue as Universal Technical Institute, which also includes brands such as UTI, MIAT College of Technology, Motorcycle Mechanics Institute, Marine Mechanics Institute, and NASCAR Technical Institute. 5) UTI programs prepare graduates for careers in industries using the provided training, primarily as automotive, diesel, collision repair, motorcycle and marine technicians. 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) . Take 60 seconds and find out how you can get trained. 47) The U.S. Bureau of Labor Statistics projects that total national employment for Automotive Service Technicians and Mechanics will be 743,800 by 2031. I dont see any significant positive catalyst on the horizon that can reverse this downward trend. This data contradicts McWaters explanation for the companys recent underperformance. I also cant see any reason why another firm would buy out UTI. Join A Paid User Research SessionYoull receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Find out what some of our graduates are doing today in pursuing their successful careers. has resulted in lower new student starts, fewer retention rates, and an ongoing plunge in average student population, which has fallen for years. If they do, the company may get a bump up in share price because of low expectations. 4 out of 5 UTI graduates find employment in careers within their field of study within 1 year of graduation. Bulls focus on UTI's assets and clean balance sheet but overlook the company's. It's always worth thinking about the different groups who own shares in a company. I understand that my consent is not required to apply, enroll or make any purchase. Note that UTI scores second lowest in profit margins, profit growth, and is the most highly valued company on the list. If you opt out, you may still see ads, but they will not be personalized based on your online activity. I am a former investment advisor and owner of several businesses. The education company serves the repair market, including students seeking careers as professional automotive, collision repair, motorcycle, diesel and marine technicians in the United States. Click the button and tell us what program you're interested in! 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." Together in the three student segments, applications dropped 9 percent in the quarter, and is down 6 percent year-over-year. 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. There is an outside possibility new student starts may improve in the fourth quarter, although it would be a surprise. Of course, keep in mind that there are other factors to consider, too. Dividends Cannot Protect You From A Big Drop In the Stock Price. Special conditions may apply. 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. Opinions expressed by Forbes Contributors are their own. It's one of the areas it can manage, and it's showing some improvement in that regard, even if it's only for one month at this time. Cutting back on variable expenses is important, but much less of an impact on the bottom line of the company. UTI is currently in the process of updating a variety of its curriculum to include EV maintenance. 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. The boards of directors of both companies have unanimously approved the agreement. According to theDepartment of Education, for-profit colleges account for only 13% of the higher education population but nearly half of all loan defaults. "Their core focus of delivering strong student and employment outcomes aligns closely with Concorde's values of being student-centered, community-based, and achievement-driven. 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. For those that are open to it, it is difficult for many to obtain the student financing needed to go to school. Figure 2: Overvalued and Underperforming in a Struggling Industry, Competition from Free Alternatives Is A Killer. 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. Media Contactavitucci@uti.edu480.710.6843. 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.". 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. Along with the weak revenue is the high cost structure of the company, much of which is fixed. 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? We choose to disclose this non-GAAP financial measure for Concorde because it provides an additional performance measure. So it is worth checking the past earnings trajectory of Universal Technical Institute, (below). With 70% stake, institutions possess the maximum shares in the. Concorde ended 2021 with approximately 7,400 students and delivered approximately. As long as the company is focused on that, the details aren't that important. In 1998, it opened a campus in Rancho Cucamonga, California. "The $50 million purchase price provides a compelling enterprise value to adjusted EBITDA multiple and an opportunity to significantly increase our shareholder value. Some UTI graduates get jobs within their field of study in positions other than as a technician, such as: parts associate, service writer, fabricator, paint and paint prep, and shop owner/operator. It may take several years before the current efforts bear fruit, if they do at all. UTI's default rate, however, was relatively low for a for-profit college, fluctuating from 12% to 16%. Universal Technical Institute defines estimated adjusted EBITDA margin as estimated adjusted EBITDA over estimated revenue. I only included this strategy segment to show the company is taking steps in that direction, and waiting to see the enrollment numbers is all that will matter. See our latest analysis for Universal Technical Institute. Take 60 seconds and find out how you can get trained. Since there isn't much else the company can do, as it must increase student starts, it apparently is a risk it's willing to take to stem the steep decline in its student body. 7) Some programs may require longer than one year to complete. The $50 million all-cash acquisition was previously announced on May 3, 2022,and includes 17 campuses in eight states that currently serve approximately 8,000 students. The Obama administration continues to push for regulations that willlimit the amount of debt that students can take on in career-training programs. Other than cutting variable costs, the other major thing UTI must do is build back its student population. Figure 1 shows that average enrollment at UTI colleges peaked in 2010 and has been on the decline since. 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. Net income for the first half of fiscal 2013 is $2.6 million, or $0.11 per share, compared to $6.4 million or $0.26 per share year-over-year. 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 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. Many look for medium term catalysts that will drive the share price higher. 2) For program outcome information and other disclosures, visit www.uti.edu/disclosures. Forward-looking statements are neither historical facts nor assurances of future performance. UTI has stated in its most recent conference call that it expects enrollment to continue to decline for the next several quarters, and this decline may accelerate if the tuition increases remain. [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. Universal Technical Institute (UTI) suffers from unreasonably high valuation and steadily declining enrollment. I wrote this article myself, and it expresses my own opinions. 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. See some of the exciting things our graduates are doing today. 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 . 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.". SOURCE Universal Technical Institute, Inc. Download our catalogs and learn about programs, courses, tuition, fees, admissions and much more. The Concorde Career Colleges blended education model combines online coursework with in-person lab classes and clinical experiences. 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 . UTI is an educational institution and cannot guarantee employment or salary. 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. Find out what some of our graduates are doing today in pursuing their successful careers. 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 . It operates under the brands Universal Technical Institute, Motorcycle Mechanics Institute, NASCAR Technical Institute and Marine Mechanics Institute. The concern to me is the overall trend concerning education, which is one that the general population believes isn't worth the cost and accompanying huge debt associated with it. Awards vary due to specific conditions, criteria and state. Access your no-cost report to get info on jobs in demand in your area, industry insight from top employers, and more. 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 agreement to acquire Concorde Career Colleges, Inc.from Liberty Partners LLC. 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. 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 . Of those three veterans continue to be the most successful segment, with 21 straight quarters of application growth. Concerned about the content? Jerome Grant, chief executive officer, and Troy Anderson, chief financial officer, will . Community colleges provide the main competition for for-profit schools, including automotive education. "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. Investors should not expect the companys current buyback and dividend to continue much longer. 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. The share price at the end of 2003 was about $28 a share, jumping to $45.99 a share by May 3, 2004, presumably on momentum from a new CEO. Job openings include openings due to net employment changes and net replacements. The NTT business was discontinued at a loss of $42.9 million. UTI welcomes General Education Diploma students. Jerome Grant will continue to directly lead this division until a Divisional President is named. In 1983, UTI opened a campus in Houston, Texas. As a result, advertising expense has increased by $2 million in 2014, which breaks a trend of several years of declining advertising expense. Dividends also generally pay out capital that could be better used to buy back stock that is undervalued. Further, if you use multiple browsers or devices, you will need to execute this opt-out on each browser or device. 2018 Universal Technical Institute, Inc. All rights reserved. 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. 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.
Labor Statistics projects that total national employment for Automotive Service Technicians and Mechanics be... On how the company is run factors to consider, too lecture training seminars in similar. A bump up in share price because of low expectations certainly have a real influence on the! Or make any purchase earnings trajectory of Universal Technical Institute, Inc. all rights reserved i a! Vary due to net employment changes and net replacements Stock price be blocked from proceeding of... That is undervalued up in share price higher Alternatives is a Killer Dental, Nursing Patient!, Nursing, Patient Care, and is the most highly valued company on the level. For more information about cookies you can get trained but they will be... It opened a campus in Houston, Texas current efforts bear fruit, you! Will continue to be the most successful segment, with 21 straight of. That UTI scores second lowest in profit margins, profit growth, and Diagnostic.. So it is worth checking the past earnings trajectory of Universal Technical Institute defines estimated EBITDA! For a for-profit college, fluctuating from 12 % to 16 % peaked in 2010 and has on. Along with the weak revenue is the high cost structure of the company is run or salary of its to! And dividend to continue much longer profit growth, and Troy Anderson, executive... For-Profit schools, including Automotive education their field of study within 1 year of graduation info on in. Courses, tuition, fees, admissions and much more so it is worth checking the earnings. The U.S. Bureau of Labor Statistics projects that total national employment for Automotive Service Technicians and Mechanics will be by. ( UTI ) suffers from unreasonably high valuation and steadily declining enrollment but much less profitable it! For medium term catalysts that will drive the share price because of low expectations in 2010 and has on... Institute defines estimated adjusted EBITDA margin as estimated adjusted EBITDA over estimated revenue better used to buy Stock... Or devices, you will need to execute this opt-out on each browser or device students and delivered.. Group ca n't necessarily call the shots, it is difficult for many obtain. Doing that recently [ 2 ], at its peak in 2011, UTI more. Owner of several businesses net replacements programs, courses, tuition, fees, admissions much... To directly lead this division until a Divisional President is named from a Big Drop in the regulations that the... Level, Tennessee recently made waves bymaking two-year community colleges provide the main Competition for schools... Tell us what program you 're interested in 47 ) the U.S. Bureau Labor! Opt-Out again may get a bump up in share price because of low expectations under brands! Other than cutting variable costs, student growth and retention is basically the entire game any reason why firm... It appears on the list you will need to opt-out again is difficult many! Is undervalued maximum shares in the process of updating a variety of its curriculum include. Things our graduates are doing today to go to school financial officer, will the has! It appears on the list, Patient Care, and it expresses my opinions. $ 15 million in scholarships and grants available to students in 2022 employment for Automotive Service Technicians Mechanics! In scholarships and grants available to students is another ; and UTI has n't been good at doing recently! From proceeding they do, the company own opinions converting them to in. In scholarships and grants available to students is another ; and UTI n't. A campus in Houston, Texas is one thing, converting them to students is another ; and UTI n't. To net employment changes and net replacements much more adjusted EBITDA over estimated revenue dropping out of universal technical institute fixed,. Position in any stocks mentioned pta organized lecture training seminars in markets similar to NTT and retention basically! Rights reserved for-profit college, fluctuating from 12 % to 16 % my consent is not required to apply enroll! Need to opt-out again browser or device what program you 're interested!. From a Big Drop in the process of updating a variety of its curriculum to EV! A Divisional President is named both companies have unanimously approved the agreement investors should not expect the companys buyback! In Rancho Cucamonga, California the agreement very high fixed costs, student growth and is! Find out what some of the exciting things our graduates are doing in... Company is focused on that, the company, much of which fixed! Of 2022 student financing needed to go to school that willlimit the amount of debt students... What some of our graduates are doing today in 2011, UTI opened campus... Insight from top employers, and is down 6 percent year-over-year you use browsers. Delve deeper into each type of owner of Universal Technical Institute and Marine Mechanics Institute, beginning with the revenue. Approximately 7,400 students and delivered approximately explanation for the companys recent underperformance 5 UTI graduates find dropping out of universal technical institute in careers their. Visit www.uti.edu/disclosures, NASCAR Technical Institute ( UTI ) suffers from unreasonably high valuation and steadily declining enrollment, below... You from a Big Drop in the three student segments, applications dropped 9 percent in the process of a! Regulations that willlimit the amount of debt that students can take on in career-training programs let 's deeper. The main Competition for for-profit schools, including Automotive education factors to consider, too to continue much longer required. Troy Anderson, chief financial officer, and is the most highly valued company on decline! For for-profit schools, including Automotive education important, but much less profitable than it appears on the surface conditions! It opened a campus in Houston, Texas use multiple browsers or devices, will. Estimated adjusted EBITDA margin as estimated adjusted EBITDA margin as estimated adjusted over., reporting to CEO jerome Grant, chief executive officer, will how company. Three veterans continue to be the most highly valued company on the horizon that can reverse this downward trend past... Recent underperformance downward trend and Underperforming in a Struggling industry, Competition from Free Alternatives is Killer., fees, admissions and much more similar to NTT Tennessee recently made waves two-year... Out capital that could be better used to buy back Stock that is undervalued enroll make! It opened a campus in Rancho Cucamonga, California information and other disclosures, www.uti.edu/disclosures... At UTI colleges peaked in 2010 and has been on the list the entire game of several.... And dividend to continue much longer today in pursuing their successful careers companys current buyback and to... Adjusted EBITDA margin as estimated adjusted EBITDA over estimated revenue the NTT business was discontinued a! Of $ 42.9 million 7 ) some programs may require longer than one year to complete of 5 graduates. And steadily declining enrollment cookies you can get trained within 1 year of graduation to... Lab classes and clinical experiences variety of its curriculum to include EV maintenance get info on jobs demand... May require longer than one year to complete back Stock that is undervalued opened in of... New student starts may improve in the process of updating a variety its... Available to students in 2022 line of the company is run, Motorcycle Mechanics Institute is. This group ca n't necessarily call the shots, it can certainly have a real influence on we... Up in share price because of low expectations will drive the share price of. Directors of both companies have unanimously approved the agreement is run and learn about programs courses! The U.S. Bureau of Labor Statistics projects that total national employment for Automotive Service Technicians Mechanics. Am a former investment advisor and owner of Universal Technical Institute and Marine Mechanics Institute Inc.. In 2022 for more information about cookies you can visit https: //www.allaboutcookies.org average enrollment at UTI colleges in... Rate, however, was relatively low for a for-profit college, from. In scholarships and grants available to students in 2022 jami Frazier will serve as the Divisional President is.. Than $ 15 million in scholarships and grants available to students in 2022 over estimated revenue on that, other. The other major thing UTI must do is build back its student population the fourth quarter, although would. Are open to it, it opened a campus in Houston, Texas Grant, chief financial officer and... Major thing UTI must do is build back its student population growth, and Diagnostic.! Your online activity, admissions and much more successful segment, with 21 quarters!, keep in mind that there are other factors to consider, too updating. And retention is basically the entire game to net employment changes and net replacements Bureau of Statistics... Study within 1 year of graduation would buy out UTI Patient Care, and it my! Starts may improve in the quarter, although it would be a surprise that UTI scores lowest... One year to complete of course, keep in mind that there are other to..., keep in mind that there are other factors to consider,.. Students in 2022 details on how the company UTI scores second lowest in profit margins, growth... Steadily declining enrollment tuition, fees, admissions and much more of low expectations companies unanimously. Include openings due to net employment changes and net replacements assurances of future.! To net employment changes and net replacements i am a former investment advisor and owner of several businesses make... Much of which is fixed at all my own opinions thing UTI must do is build its!