UTI Fine-Tuning Operation

Universal Technical Institute, Inc. (UTI) completed its 42nd year of business and fourth year as a public company in 2007. While the education provider's revenue last year increased about 2% to $353,370, operating expenses increased 7% to $329,620 and undergraduate enrollment fell 3% to 15,440 students. UTI leadership says the school has launched multiple initiatives to improve those numbers in the future.

UTI is a provider of post-secondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. Doing business beneath the banners of Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (collectively, MMI) and NASCAR Technical Institute (NTI), the company offers undergraduate degree, diploma and certificate programs at 10 campuses across the United States. It also offers manufacturer specific advanced training (MSAT) programs sponsored by manufacturers and dealers at 18 dedicated training centers.

Kimberly McWaters, president and CEO, UTI, says she believes there are three primary factors driving the decline in the company's statistics: 1) the economic environment, specifically low unemployment and higher interest rates; 2) the increased cost of education compounded by insufficient government funding and limited access to private funding; and 3) "certain deficiencies within the company's internal processes which we continue to address relentlessly."

"Even though there is growing weakness in the economy, the country is flush with jobs and strong wages which appeal to our targeted demographic: the 18- to 24-year-old male," McWaters says. "Abundant jobs — skilled and unskilled — from construction to retail service, pose as formidable competition to our education representatives. As a consequence, many potential students have chosen to postpone post-secondary education in favor of immediate employment."

Another barrier to attracting more students: the rapidly increasing cost of post-secondary education. UTI tuition ranges from approximately $17,300 to $40,500 per program. "The cost of education remains a challenge not only for UTI, but for the nation," McWaters says. "The gap between the cost of tuition and available aid continues to widen. For some students, the gap and related high interest rates has become insurmountable; thereby driving those students toward less expensive education alternatives or to suspend the pursuit of higher education altogether."

UTI launched several initiatives intended to aid future business. Among the operational updates: offering tuition discounts and needs-based scholarships; creating the UTI Foundation to seek outside funding and coordinate scholarships; establishing an alternative lending program aimed at higher credit risk students; increasing the quantity and quality of student leads while more efficiently distributing those leads to admissions representatives; and updating marketing to increase the school's appeal to more market segments.

"UTI today is a different company than it was one year ago," McWaters says. "We have continued to adapt to the changing needs of our customers — both students and industry. Yet, given the strong academic results that we have achieved over the last several years, we do not intend to significantly alter our strategy or business model. And, in spite of operating setbacks in 2007, we remain steadfast in our mission to build a nationwide system of technical schools. We have seen nothing which lessens our confidence in the attractiveness of our academic product or the potential size of the market we are attempting to penetrate."

UTI Graduates 2005-2007
2005… 9,458
2006 … 10,798
2007… 11,200

UTI had 15,440 students begin the 2007 school year, down 3% from the prior year. Still, the 11,200 year-end graduates marked an all-time high for the school. Kimberly McWaters, president and CEO, UTI, says 91% of graduating students found employment in their areas of study, "thereby strengthening our relationships with our other key customers — the manufacturers, dealers and other employers."

MMI At A Glance
Established in 1973, Motorcycle Mechanics Institute (MMI) is designed to teach students how to diagnose, service and repair motorcycles and ATVs.

Offered on campuses in Orlando and Phoenix, the program ranges from 48 to 72 weeks in duration and tuition ranges from approximately $17,300 to $26,000. Graduates are qualified to work as entry-level service technicians in motorcycle dealerships and independent repair facilities.

MMI is supported by six major motorcycle manufacturers that support the educator through their endorsement of curricula content, assisting course development, instructor training, and equipment and product donations. MMI has written agreements relating to motorcycle elective programs with BMW of North America, LLC; Harley-Davidson Motor Co.; and Kawasaki Motors Corp., U.S.A., and maintains verbal understandings relating to motorcycle elective programs with American Honda Motor Co., Inc.; American Suzuki Motor Corp.; and Yamaha Motor Corp., USA. Written agreements for dealer training also are maintained with Honda, Harley-Davidson and Kawasaki.

The U.S. Department of Labor estimates the number of technicians in the motorcycle industry will increase 14% from 2004 to 2014. Many of those technicians will be graduates of MMI's facilities in Orlando and Phoenix.