UTI Reduces Forecast
April 18, 2006
Filed under Uncategorized
Universal Technical Institute, Inc. (UTI), a provider of technical education training, said it expects revenue for the second quarter ended March 31, 2006, to be approximately $88 to $89 million and reduced its revenue outlook for the fiscal year ending September 30, 2006.
Excluding equity based compensation expense, UTI anticipates its net income margin for the quarter to range from 9.5 percent to 10 percent; including equity based compensation expense, the net income margin is forecast in the range of 8.5 percent to 9.0 percent.
UTI also reduced its revenue outlook for the fiscal year, stating that net revenue may increase 11 percent to 13 percent compared to last year. The company previously forecast a revenue growth of 19 percent to 21 percent.
The above-stated figures are anticipated results based on partial information that includes estimates and assumptions made by management. The company plans to release official second quarter results May 9.
UTI officials say external and internal factors continue to negatively impact the company's ability to recruit, show and retain students according to plan.
Specifically, recruitment efforts and student starts in the southern region lag the prior year due to the lingering hurricane impact and the recovery efforts in the south. Furthermore, officials say a strong labor market across the country coupled with affordability concerns due to climbing interest rates and increased gas prices have made it more challenging and expensive to recruit and start students.
"A confluence of external factors and internal issues have negatively impacted our ability to recruit, show and retain students as planned,” said Kimberly McWaters, President and Chief Executive Officer of Universal Technical Institute, Inc. “While we have worked diligently to overcome the obstacles, and have realized some recent success as a result of our efforts, we now believe it would be very difficult to overcome the issues inside of this fiscal year.”
Universal Technical Institute, Inc. offers specialized technical education programs under the banner of Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (MMI) and NASCAR Technical Institute (NTI).