Universal Technical Institute (UTI) announced a multi-year transformation plan aiming to generate approximately $30 million of incremental operating income in fiscal 2020.
Developed to drive new student starts, completions and enhance student success, the plan is expected to be implemented over 12 to 18 months, with significant benefits to UTI’s financial performance starting in fiscal 2019, according to UTI.
“In November 2017, following the successful completion of our financial improvement plan that reduced costs by $40 million, we launched a comprehensive evaluation of our business, with a focus on growing new student starts and rebuilding our student population,” said Kim McWaters, UTI’s president and CEO. “The analysis, driven by a team of external education industry experts, validated the strong demand for our graduates, our student value proposition and the strength of our differentiated brand. The process also identified significant opportunities for growth with selective tactical investments in marketing, admissions and student service strategies.
“Our Transformation Plan will build upon the traction we are already seeing in core areas of our business and be incremental to current growth initiatives, including new, smaller campuses and program expansions. We believe the plan will maximize UTI’s market leadership position, differentiating us from existing and emerging sources of vocational education and better serve prospective students who are pursuing increasingly valuable technician trades.=”
To help UTI realize its market opportunity, the company said it engaged a consulting organization with a strong track record of partnering with education sector clients to deliver short- and long-term value, as well as sustainable growth. UTI structured the engagement so that a portion of the consultant’s compensation is linked to UTI reaching its transformation targets.
The transformation also will include an incremental internal net investment of approximately $4 million for additional marketing campaigns and new resources in marketing, admissions and support services in fiscal 2018, according to UTI.