Universal Technical Institute To Cut Jobs; CFO Eugene Putnam To Step Down

(RTTNews) - Universal Technical Institute Inc. (UTI), a provider of transportation technician training, announced a Financial Improvement Plan with the goal of generating operating income and improved levels of EBITDA in 2017.

As a part of the Plan, the company will flatten the organization, streamline its business processes and implement cost-saving initiatives. UTI expects the Plan to deliver $25 million to $30 million in annualized cost savings coming from a reduction in its workforce consisting primarily of corporate positions, changes to its marketing strategy and admissions structure as previously disclosed and a number of process improvement initiatives. In addition, it expects to record a severance charge of approximately $4 million in the fiscal quarter ending September 30, 2016.

As part of the Plan, Eugene Putnam, UTI's President and Chief Financial Officer will leave UTI, effective November 30, 2016. To ensure a seamless transition, Mr. Putnam will continue to support the Company through the 2016 fiscal year-end financial reporting cycle. Bryce Peterson, UTI's Senior Vice President of Information Technology, has been promoted to Chief Financial Officer, effective immediately.

Peterson has served the company in a senior leadership capacity since 2011 and was previously identified as a successor for the company's CFO. Kim McWaters, UTI's Chairman and Chief Executive Officer, will assume the President's role and title.

In addition, Chad Freed, the Company's Executive Vice President and General Counsel, is returning to private practice with a law firm in Phoenix where he will continue to manage the Company's legal needs as its outside General Counsel. Freed's direct employment with UTI will end November 30, 2016.

UTI also confirmed fiscal year 2016 guidance it provided as part of its third quarter earnings announcement. For the year ending September 30, 2016, it expects new student starts and average student population to be down in the low double digits as a percentage compared to the prior year. It expects revenue to decline by 6-7% leading to minimal levels of EBITDA excluding severance charges. Capital expenditures for the full year are expected to be in the range of $8.0 million to $9.0 million.