Universal Technical Institute (UTI) has announced the expansion of its Welding Technology program to a seventh campus and significant cost savings from lease restructuring and rightsizing at its Sacramento campus.
“As more Americans turn to technical careers, and as we continue to see increasing interest in UTI’s education, we remain focused on delivering growth through innovative initiatives to attract and serve more students, meet the nation’s urgent need for skilled workers, and optimize our cost structure,” said Jerome Grant, CEO. “We are actively pursuing our growth strategy, including launching new programs and rationalizing our campus footprint, as we continue to evolve our blended learning model and support our students and employees in response to the COVID-19 pandemic.”
Welding Technology Training program expansion
UTI plans to expand its successful Welding Technology Training program to a seventh campus during the fourth quarter of fiscal 2021. Also, as scheduled, the company will launch welding at UTI-Lisle in the second quarter of fiscal 2021.
Building on its existing program locations at Rancho Cucamonga, Calif., Avondale, Ariz., and Dallas, Texas, the company opened Welding Technology in Houston, Texas on May 18, 2020 and in Long Beach, Calif. on August 10, 2020. The company continues to see strong demand for its welding program across its campuses. On average, once fully ramped, each new welding launch increases UTI’s current overall new student starts by approximately 1.5 percent.
“Welding is an important piece of our growth strategy,” Grant said. “It broadens our student base and lets us serve a much wider range of industry customers. At the same time, it complements our core technical training business and is consistent with our commitment to quality education that prepares students for rewarding careers.”
Welders are increasingly sought after in essential industries such as transportation, energy, and manufacturing, and are particularly in demand for major infrastructure projects. The U.S. Bureau of Labor Statistics projects that there will be more than 488,000 job openings for welders by the year 2028.
Campus footprint optimization
As part of its larger footprint optimization strategy, UTI will eliminate underutilized square footage by downsizing its Sacramento, Calif. campus over 50 percent, or 128,000 square feet, and decreasing the cost per square foot. The combination of these actions will reduce annual occupancy costs and improve EBITDA by approximately $3 million beginning in January of 2022.
The company will make a one-time capital investment of approximately $2 million to consolidate its operations into one of the two buildings it currently occupies, effective Dec. 31, 2021. In addition, it has negotiated favorable terms and is in the process of finalizing a new lease, which goes into effect on January 1, 2022. As part of the transition, the campus’ Collision Repair and Refinish Technology program (CRRT) will be phased out at the Sacramento campus. All current CRRT students will be able to complete their program, and the company will continue to offer its successful CRRT program in Houston and Long Beach.
