Investor Presentation SIDO IDOTI TI FALL LL 2017 2017 CONFER ERENCE Sep September 28, 2017
Sa Safe harbor This presentation may contain forward-looking statements regarding events or future financial performance. These statements are only predictions and the actual events or results may differ materially. For important factors that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to the Company’s filings with the Securities and Exchange Commission. 2 2
Universal Technical Institute (NYSE: UTI) is the nation’s leading provider of skilled transportation technicians STOCK PR PROFILE: COMPANY PROFILE: E: • Founded in 1965 • NYSE: UTI • 200,000+ techs trained • Stock price: $3.60 • 30+ leading manufacturer partners • Market capitalization: $91.3 • 88% of graduates employed 1 • Fiscal 2016 revenue: $347.1 million million • $70m financing in 2016 • Fiscal year end: Sept. 30 • $84.5m in cash & equivalents/investments 2 1 UTI employment rate for 2015 graduates who were employed within one year of graduation was 88%. See UTI’s 10 -K for additional information. The employment calculation is based on all graduates, including those that completed manufacturer-specific advanced training programs from Oct. 1, 2014 to Sept. 30, 2015, excluding graduates not available for employment because of continuing education, military service, health, incarceration, death, or international student status. Graduates are counted as employed based on a verified understanding of the graduates job duties to assess and confirm that the graduates’ primary job responsibilities are in his or her field of study. For 2015, we had app roximately 9,700 total graduates, of which approximately 9,100 were available for employment. Of those graduates available for employment, approximately 8,000 were employed within one year of their graduation date, for a total of 88%; 2 June 30, 2017 3
Management has > 120 years of experience in education Kimberly McWaters Bryce Peterson Piper Jameson Sherrell Smith Chad Freed Rhonda Turner President & Chief EVP & CFO EVP & CMO EVP Admissions EVP & General SVP People Executive Officer & Operations Counsel Services • 33 years with UTI • Nine years with UTI • • • • 12 years with UTI 28 years with UTI 14 years with UTI Nine years with UTI • • • Education industry Education industry Education industry • Appointed CEO in • Education industry • experience (23 experience: experience: Education 2003 experience: years): marketing campus governance, industry finance, • Education industry and admissions operations regulatory/SEC experience: accounting, including compliance, human capital experience: compliance, and education and corporate management business strategy, information operations, admissions development, technology marketing, and mergers and admissions acquisitions 4
Market leader with national campus network ESTABLISHED FOOTPRINT • 12 campuses in eight states • 2,305,700 square footage • New smaller campus coming Summer/Fall 2018 Smaller campus format • Nearly 13% market share and 2.5x the share of nearest competitor 5
First-class campus facilities 6
State-of-the-industry training labs 7
Targeting strong industry demand • An estimated 264 million vehicles were in service by 2016 1.3 million service • Average age of vehicles on the road as technicians of 2016: 11.6 years needed between • Roughly half of all service technicians 2014 and 2024 eligible to retire between 2013-2028 • 37,100+ new job openings every year SOURCES: BLS Employment Outlook Summary, December 2013. Includes new job growth and replacements: IHS Market report, 2016; National Institute for Automotive Service Excellence, 2014 8
Student focus: UTI’s recruitment model MIL MILITARY Y PER ERSONNEL ADULT STU ADU TUDENTS HIGH HIGH SC SCHO HOOL L STU TUDENTS S • High school presentations • Presentations to service people • Traditional and digital advertising • Campus and employer events • Relationships with bases and staff • Campus-based admissions • Skills competitions • Leveraging industry partnerships on base • Effective inquiry response system • Third-party endorsements • On-base classes — currently expanding at Fort Bliss (Texas) • STEM* program alignment 9 * STEM = Science, Technology, Engineering and Math
Student focus: delivering a strong value proposition 88% employment rate among 2015 graduates 3 1 See Competitive Salary Data in Appendix at Slide 27; 2 See Competitive Salary Data in Appendix at Slide 27; 3 Source: College Scorecard (https://collegescorecard.ed.gov/). 63.1% rate represents College Scorecard’s methodology for the UTI -Avondale campus; 4 For information on employment rate calculation, see Slide 3, Footnote 1.; 5 The earnings data shown in the College Scorecard for UTI of Arizona represent earnings for the four campuses that were operating in 2001-2003 (Arizona, Rancho Cucamonga, NASCAR Technical Institute and Illinois). 10
Growth objectives: executing the smaller campus strategy DALLAS/FT. WORTH LONG BEACH • $10 million to $15 million investment • Accretive to earnings in 18 months • Cash flow breakeven in fourth year of operation • Next campus in Summer/Fall 2018 11
Growth objectives: executing in new markets PHILADELPHIA MARKET ENTRY ( a) DALLAS/FORT WORTH MARKET ENTRY (b) 1200 650 600 1000 550 800 500 Completions Completions 450 600 400 350 400 300 200 250 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016-Prelim UTI Lincoln UTI Lincoln (a) Total completions for UTI-Exton versus Lincoln-Philadelphia. Includes all certificates below the baccalaureate level and associ ate’s degrees for automotive and diesel programs. Source is IPEDS . (b) Total completions for UTI-Dallas versus Lincoln-Grand Prairie. Includes all certificates below the baccalaureate level and asso ciate’s degrees for automotive , collision and diesel programs. Source is IPEDS. UTI’s Dallas campus opened in 2010. 12
Growth objectives: expanding educational offerings Increasing the pool of potential students and improving capacity utilization at existing facilities WELDING TECHNOLOGY CNC MACHINING • Techs in high demand • CNC machinists in high demand • 36-week program -- Rancho Cucamonga & Avondale • 36-week program at NASCAR Technical Institute • Expanding to additional campuses in 2018 - 2019 • Only CNC machinist school affiliated with Roush Yates & NASCAR 13
Growth objectives: growing new student enrollment MARKETING: ADMISSIONS: • Create awareness • Utilize powerful tools and messaging • Efficiently and effectively target • Train the team prospective students • Employ graduate-based compensation • Build the brand • Leverage industry and employer partners • Create powerful tools and messaging to validate value and ROI INSTRUCTORS: STUDENT SUPPORT SERVICES: • Deliver excellent customer service • Create a great student experience • Align programs with industry standards • Help students stay in school • Offer financial aid • Communicate value and ROI of advanced training • Provide employment services 14
Growth objectives: leveraging partnerships to deliver value STU TUDENTS UTI TI PAR ARTNERS • Pipeline to jobs • Current technology and tools • Efficient hiring source • Better jobs and higher starting wages * • Increased marketing impact • Lowers costs • Tuition support • Lower expenses and Capex • Techs who are ready to work • Certifications and credentials • Value for students 26,000+ graduates 3,200+ 4,800+ graduates 330+ 33,000+ graduates since 2000 graduates since since 1995 graduates since 1987 2006 since 2013 15 * Based on comparison with graduates from core programs between October 1, 2007, and September 30, 2014.
Cost savings: financial improvement plan FINANCIAL IMPROVEMENT PLAN REDUCING EXPENSES AND IMPROVING OPERATING EFFICIENCIES • Goal: deliver $25 million to $30 ($ in thousands) million in annualized savings in $95 $92.1 2017 $90 $87.7 • As of Q3, UTI is on track to drive savings at the higher end of $85 $82.8 $81.8 between $79.0 $30 million and $40 million in $80 2017 1 $75 $70 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 1. As of UTI’s fiscal second quarter earnings release on August 3, 2017 16
Cost savings: rationalizing our operating footprint STRATEGY TO OPTIMIZE CAPACITY UTILIZATION • Enhance utilization of existing space with new programs • Review opportunities to divest real estate and/or not renew leases • Consolidate corporate functions • Explore subleasing options for existing capacity RECENT PROGRESS • Opened Welding at Rancho Cucamonga and CNC Machining at NASCAR Tech. Will expand Welding program to Avondale in January 2018 • Additional Welding programs in 2018 and 2019 • Relocated staff from Scottsdale headquarters to MMI Phoenix campus, subleasing a portion of the corporate office • Vacating properties in Arizona and Houston and eliminating leases 17 17
Recommend
More recommend
