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. Along with the weak revenue is the high cost structure of the company, much of which is fixed. 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. The company is headquartered in Phoenix, Arizona. Previous guidance from UTI was confirmed in its latest earnings report, with the company expecting revenues to drop into the high single-digits in 2013. Factoring in this hidden liability reveals that UTI is much less profitable than it appears on the surface. Many institutions measure their performance against an index that approximates the local market. Google At least the school is getting a stronger application response using less costly measures to achieve them. Access your no-cost report to get info on jobs in demand in your area, industry insight from top employers, and more. Free cash flow is a metric used to determine the ability of a company to generate future growth. 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. As long as the company is focused on that, the details aren't that important. This rate excludes graduates not available for employment because of continuing education, military service, health, incarceration, death or international student status. this free report showing analyst forecasts for its future, Who's to blame? 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. In fiscal 2022, Universal Technical Institute completed the acquisition of MIAT College of Technology, which brought 2 campuses and 8 unique programs. It looks like hedge funds own 14% of Universal Technical Institute shares. Together in the three student segments, applications dropped 9 percent in the quarter, and is down 6 percent year-over-year. 8-2 Project Three Systems Thinking. Additionally, if you disable your cookies or upgrade your browser after opting out, you will need to opt-out again. Last year in the quarter UTI generated $1.9 million or $0.08 per diluted share. We won't find out until next quarter whether or not that has actually translated into new student applications or not. UTI shares have fallen to under $10 since the buyback began, which indicates that the share repurchase program has destroyed over 20% of the $8.8 million purchased, or around $2 million in value. 14) Incentive programs and employee eligibility are at the discretion of the employer and available at select locations. 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. 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. Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. UTI expressly disclaims any obligation to publicly update any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, changes in expectations, any changes in events, conditions, or circumstances, or otherwise. Forward-looking statements are neither historical facts nor assurances of future performance. It may take several years before the current efforts bear fruit, if they do at all. click here to see if those insiders have been buying or selling. Please. 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). For the trailing twelve months ended September 30, 2022, Concorde reported unaudited revenue of approximately $200 million and adjusted EBITDA of approximately $17 million. UTI welcomes General Education Diploma students. It's always worth thinking about the different groups who own shares in a company. 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. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). UTI is overvalued, has significant downward momentum, and major headwinds in its industry. 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? UTI is an educational institution and cannot guarantee employment or salary. What type of Diploma or Certificate will/did you obtain? 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. Since 1965, more than 230,000 students have graduated from UTI's . [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. information about your activities on our website, which is then associated with your browser, device or online identifier. Talk to potential employers to learn more about the programs available in your area. 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. 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. The bull case for UTI rests on both the market for auto repair growing and the resulting new jobs being won by UTI graduates. With 70% stake, institutions possess the maximum shares in the. SeeTable 1.10 Occupational separations and openings, projected 2021-31, U.S. Bureau of Labor Statistics,www.bls.gov, viewed October 13, 2022. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. 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. Most Programs Take Less Than a Year. These companies may use this data to serve you more relevant ads as you browse the internet. UTI is an educational institution and cannot guarantee employment or salary. The problem with this strategy is that demand for UTIs education appears to be highly elastic. This suggests some credibility amongst professional investors. Expands Universal Technical Institute, Inc.'s career-focused education brand portfolio into certificate, credential, and degree-granting healthcare programs. I dont see any significant positive catalyst on the horizon that can reverse this downward trend. Finally concerning the strategy of the company is an adjustment in its fee structure and a boost in scholarships. Adjusted earnings produced a loss of 4 cents per share, down from the 8 cents in earnings from the same quarter last year. For the second quarter the company lost $900,000, or negative $0.04 per share. On the state level, Tennessee recently made waves bymaking two-year community colleges freeto all high school graduates. Its revenue fell by 16% between 2011 and 2013 while operating profit (NOPAT) fell by 65%. UTIs management blames the companys issues on the poor economy. 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. One will be comprised of Concorde and its leading healthcare education programs and campuses. 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. That said, the strategy of UTI is to cut advertising expenses while increasing inquiry volume. 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. 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. Awards vary due to specific conditions, criteria and state. These days I invest only for myself while continuing to write on a variety of financial and economic topics. 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. 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. See some of the exciting things our graduates are doing today. Opinions expressed by Forbes Contributors are their own. PTA organized lecture training seminars in markets similar to NTT. Combined it resulted in the operating loss of $1.9 million in the second quarter. Contact an Admissions Representative to begin the enrollment process. UTI expressly disclaims any obligation to publicly update any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, changes in expectations, any changes in events, conditions, or circumstances, or otherwise. 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. 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. The Concorde Career Colleges blended education model combines online coursework with in-person lab classes and clinical experiences. 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. Our data reflects individual insiders, capturing board members at the very least. 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. 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. This technology allows these advertising partners to receive SeeTable 1.2 Employment by detailed occupation, 2021 and projected 2031, U.S. Bureau of Labor Statistics,www.bls.gov, viewed October 13, 2022. 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.". This should lead to better outcomes for students, which will increase the value of the courses offered and decrease price and debt resistance. For those that are open to it, it is difficult for many to obtain the student financing needed to go to school. 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.". The California Consumer Privacy Act of 2018 (CCPA) provides California residents with specific rights regarding their personal information, including the right to opt out of any sale of such information. 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. 3) A total of 82% of UTI graduates in 2021 were employed within one year of their graduation date. has resulted in lower new student starts, fewer retention rates, and an ongoing plunge in average student population, which has fallen for years. In 1988 UTI opened their Lisle, Illinois, campus. 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. Learn more about how we assist our veterans from VA funding to exclusive scholarships. 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). But to understand Universal Technical Institute better, we need to consider many other factors. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Jami Frazier will serve as the Divisional President, reporting to CEO Jerome Grant. Find out what some of our graduates are doing today in pursuing their successful careers. 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. 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. "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. Privacy Policy For further details on how we use your data, please review UTI's Privacy Policy. "I am looking forward to the opportunity to join this organization and become one of the preeminent educational providers in the country. Universal Technical Institute welcomes General Education Diploma students. The Company is comprised of two divisions: UTI and Concorde Career Colleges. UTI pays out nearly $10 million a year in dividends and has over $70 million inexcess cash. Investors impressed by UTIs job placement rates need also to look at the quality of the jobs the graduates are getting. Universal Technical Institute, Inc. to Acquire Concorde Career Colleges, Inc., a Leading Provider of Healthcare Education Programs. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. Find out more here. 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. "We take the responsibility of becoming one of this country's leading workforce solutions providers seriously, and entering the healthcare space allows us to help even more students and support employers as they seek to solve some of their toughest workforce-related challenges. Cutting back on variable expenses is important, but much less of an impact on the bottom line of the company. All shareholders and investors need to watch to evaluate the company is its success or failure at growing its student population. I am a former investment advisor and owner of several businesses. 1) UTI is an educational institution and cannot guarantee employment or salary. 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. 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. Note that UTI scores second lowest in profit margins, profit growth, and is the most highly valued company on the list. ", "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. 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. We aim to bring you long-term focused analysis driven by fundamental data. The company's largest shareholder is Park West Asset Management LLC, with ownership of 7.1%. 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. If you opt out, you may still see ads, but they will not be personalized based on your online activity. On arecent conference call, CEO Kimberly McWaters offered the explanation that Lingering effects of the great recession have impacted consumer confidence in the job market and made them question the value of an education.. 2) For program outcome information and other disclosures, visit 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. 4 out of 5 UTI graduates find employment in careers within their field of study within 1 year of graduation. UTI's actual results and financial condition may differ materially from those indicated in the forward-looking statements. 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 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). 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