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Dec. 27, 2004 – Finance Digest

December 27, 2004
Filed under Features

UTI Net Income Up 41%
Universal Technical Institute, Inc. (NYSE: UTI), a provider of technical education training, announced net revenues for the year ended Sept. 30, 2004, of $255.1 million, a 29.9% increase from $196.5 million for the same period in the previous year.
UTI’s net income for the year ended Sept. 30 was $28.8 million, or $1.04 per diluted share, a 41.4% increase from net income of $20.4 million, or $0.79 per diluted share, for the fiscal year ended Sept. 30, 2003.
Income from operations was $50.1 million, up 38.6%, compared to $36.2 million for the previous year.
On Dec. 17, 2003, the company completed its initial public offering of common stock, raising net proceeds of about $59 million. During April 2004, the company completed a follow-up offering of common stock. The company did not receive any proceeds from the follow-up offering.
UTI leaders say the year-over-year increase relates primarily to growth in overall revenue and efficiencies in selling, and in general and administrative costs.
“Fiscal 2004 was a year of solid execution and growth for UTI,” said Kimberly McWaters, UTI president and chief executive officer. “During this period of growth, we successfully opened our Exton, Pa., campus, launched a new automotive training program at our Orlando campus and increased capacity at four of our existing campuses.”
UTI offers undergraduate degree, diploma and certificate programs at eight campuses across the United States, and manufacturer-sponsored advanced programs at 22 dedicated training centers. The company functions under the banner of several well-known brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (MMI) and NASCAR Technical Institute (NTI).
Average undergraduate enrollment for the year ended Sept. 30 was 13,076 students, an increase of 23.7% from 10,568 students for the same period a year ago.
The company is targeting a 20% to 22% increase in net revenue for the year ending September 30, 2005 as compared to the prior year, and plans to open a new campus in Boston in the fourth quarter of fiscal 2005, and a campus in Sacramento in the first half of fiscal 2006.

Orbital Expects Improvement in 2005
In October, Orbital Corporation Limited (OCP) forecast a $1.5 million to $1.9 million operating loss for the six months ending Dec. 31, 2004. The company said the loss was the result of a combination of poor volumes in both the European scooter market and in the personal watercraft market as well as a delay in powertrain engineering orders which was not corrected until the end of the first quarter.
Earlier this month, Orbital leaders said they expect the company to return to profit in the six months ending June 2005 after garnering several new contracts, including projects to supply a direct injection management system for four-stroke two wheeler applications, engine calibration and testing, and government vehicle testing programs.
Piaggio uses OCP technology in a number of offerings, including the Gilera Race Replica 50cc scooter and the new NRG Purejet; Aprilia utilizes OCP in its Sr 50 R Factory; Kymco revealed it plans to release its first product incorporating OCP, a 100cc direct injection scooter; and Bajaj Auto in India, OCP’s most recent licensee, says it has plans to utilize the direct-injection technology in a variety of its models.
Furthermore, in Europe, Suzuki recently released the 50cc Katana direct injection scooter, which utilizes OCP’s patented combustion technology in an engine supplied under license by Aprilia. It is the first Japanese-branded product using Orbital technology.
“Soft conditions prevalent in the first half of full year 2005 should not be expected to be carried into full year 2006,” Orbital leaders said in a prepared statement. “These contracts together with other anticipated programs are expected to produce a solid second half for full year 2005.”
Headquartered in Perth, Western Australia, Orbital stock is traded on the Australian Stock Exchange (OEC) and the OTC Bulletin Board (OBTLY).

Piaggio Going Public in 2007?
Piaggio may go public in 2007 with a listing on the Italian Stock Exchange.
Piaggio President Roberto Colaninno has the controlling stake in the scooter and small engine manufacturer through his diversified holding company IMMSI. Colaninno, speaking during a Nov. 26 press conference, said the move has been agreed to by other Piaggio shareholders and lending institutions, according to reports in the Italian press.

NMDA Signs Merrill Lynch
The National Motorcycle Dealers Association (NMDA), a division of M.B.A. Holdings Inc. (OTCBB: MBAH), says it has arranged for Merrill Lynch Business Services to provide a basket of financial services to its dealer members. These services will include 401(k) programs covering members’ employees, working capital management accounts, lines of credit and commercial mortgage financing services.
The NMDA says its goal is to provide a full range of services that are specifically designed to service the local dealerships and their employees. These new services are the first of many that NMDA says it will offer dealership owners and their employees.

H-D Supplier Files for Restructure
Australian parts supplier Ion Ltd. placed itself in voluntary administration Dec. 7, similar to bankruptcy Chapter 11, after its major lenders withdrew a key A$440 million (approximately U.S. $334.2 million) loan needed to fund a capital expenditure program.
Ion, which employs almost 3,000 people in three countries and is a supplier to Ford, Holden and Harley-Davidson, makes wheels and alloy components, transmission assemblies, cylinder heads and oil pans, among other things.
Ion has been undergoing an overhaul since midyear, when a downturn in forecast sales, particularly to some North American customers, cut cash-flow and also compounded cost overruns.

Giant Motorsports Expands Chicago Location
The news keeps coming from Giant Motorsports, Inc. The company, which owns and operates Andrews Cycles in Salem, Ohio, and Chicago Cycle Center in Chicago, has leased a 93,000-square-foot commercial building to expand its Chicago retail location.
Greg Haehn, president of Giant Motorsports, says the new facility will triple the size of the venture.
“We expect that the newly-designed Chicago facility will become our flagship dealership, serving as a model for our future acquisitions and re-deployment of regional Giant Motorsports retail centers in key markets throughout the United States,” Haehn said.
Giant Motorsports acquired Chicago Cycle in May. The dealership generated $40 million in revenues last year under its previous owners. The new retail facility is expected to be fully operational by March 1.

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