Universal Technical Institute (UTI) Plans Long Beach Campus; Job Cuts Planned

Universal Technical Institute (NYSE: UTI) announced plans to open a new campus in Long Beach, California while restructuring the organization to better align with new, streamlined processes as well as current student populations at its existing campuses.

"We are very excited about expanding in the greater Los Angeles metropolitan area where there is both strong student and employer demand," said Kimberly McWaters, chief executive officer of UTI. "Like our successful metro-model campus in Dallas, the Long Beach campus will predominantly serve a commuter population; allowing students to work while going to school without the cost of relocating to an existing campus. We believe this new campus will complement our Rancho Cucamonga, California campus and help us fully optimize our current marketing investment in this important market."

UTI has entered into a 15-year lease agreement for a build-to-suit campus conveniently located with access from numerous major freeways as well as in close proximity to the Long Beach airport. The Long Beach campus, which is set to open in late summer 2015, will house the company's automotive, diesel and collision repair programs including a number of manufacturer specific advanced training programs. At full capacity, the campus will accommodate approximately 800 students.

"Our focus on improving operating efficiencies, controlling costs and running a lean organization gives UTI the flexibility to invest in growth opportunities like new campuses, fund initiatives to rebuild student populations in our existing campuses and make our training more accessible and affordable for all of our students," McWaters said.

During the past year, the company implemented key process improvements and technology solutions to operate more efficiently and effectively in the current business environment. To further align with these new ways of doing business, the company is restructuring its organization and reducing staff.

The first phase of the restructuring, completed in the fourth quarter of 2014, impacted approximately 50 employees. Severance and outplacement charges relating to this reduction will impact the fourth quarter pre-tax earnings by approximately $1.3 million and are expected to provide operating expense savings in compensation and related benefits in 2015 of approximately $5.2 million. The second phase of this restructuring, with reductions and related charges of similar magnitude, is expected to be completed in the first quarter of 2015.

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