Good afternoon ladies and gentlemen and welcome to Universal Technical Institute Inc. fourth quarter fiscal 2008 conference call. At this time all participants are in a listen-only mode. Following today’s presentation, instructions will be given for the question-and-answer session. (Operator Instructions) As a reminder today’s conference call is being recorded. A replay of this call will be available for 60 days at www.uti.edu or alternatively the call will be available through December 1, 2008 by dialing 800-405-2236 or 303-590-3000 and entering passcode 11122194#. At this time, I would now like to turn the conference over to Mr. Jenny Swanson, Director of Investor Relations of Universal Technical Institute; please go ahead.

Hello and thank you for joining us today for Universal Technical Institute’s quarterly conference call. During the call we will discuss the results of our fourth quarter ended September 30, 2008 and then open the call up for your questions. The company’s earnings release was issued after the market closed today and is available on UTI’s website at www.uti.edu. Before we begin we would like to remind everyone that except for historical information presented, the matters discussed today may contain forward-looking statements under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s current expectations and are subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements. Factors that could affect the company’s actual results include among other things, changes to federal and state educational funding, possible failure or inability to obtain regulatory consents and certifications for new or expanding campuses, potential increased competition, changes in demand for the programs offered by the company, increased investment in management and capital resources, the effectiveness of the company’s recruiting, advertising and promotional efforts, changes to interest rates, low unemployment, general economic conditions and other risks that are described from time-to-time in the public filings of the company. Further information on these and other potential factors that could affect the company’s financial results maybe found in the company’s filings with the Securities and Exchange Commission. The company expressly disclaims any obligation to publicly update any forward-looking statements whether as a result of new information, future events, changes in expectations, any changes in events, conditions or circumstances or otherwise. Information in this conference call, including the initial statements by management as well as answers to questions related in anyway to any projection or forward-looking statements, are subject to the Safe Harbor statement. At this time, I would like to turn the call over to Kim McWaters, Chief Executive Officer. Kim.

Thank you, Jenny. Good afternoon ladies and gentlemen. Thank you for joining us to review our fourth quarter and fiscal 2008 results. On today’s call, I’ll provide a high-level overview of the quarter an update on key business initiatives and commentary on the overall economy and the impact to UTI. Eugene Putnam, our CFO, will follow with a more detailed review of our financial results and provide some 2009, forward-looking information before opening the call up for your questions. For the fourth quarter of fiscal 2008, our net revenues were $84.6 million, down 2.7% from the prior year. This is primarily due to having 5% fewer students in school during the quarter than last year at the same time. Our average undergraduate enrollment for the quarter was 14,689 compared to 15,464 a year ago, while we have continue to make significant progress resulting our pipeline of students due to improve lead generation, student contract in third growth, our average student population and revenue growth lag leading indicator trends. Overall, our operating performance improved during the quarter producing net income of $551,000 compared to a net loss of $1.3 million for the same quarter a year ago. This was due to lower compensation and benefits and contract services costs, primarily outplacement services associated with our reduction in force and sale reorganization in September 2007. We also experienced the decrease in advertising expense partially offset by an increase in occupancy cost. This improvement in operating performance was despite the fact that we had several items that negatively impacted the quarter. During September 2008, our Houston campus was closed for approximately one week after hurricane Ike move through the Houston area. Fortunately, our campus experienced minimal damage. However, many of our students, employees were without power and water over a two week period.…

Thanks Kim. As mentioned net revenues for the fourth quarter of fiscal 2008 were $84.6 million, down about 2.7% versus last year. The decline was primarily driven by a decline in average undergraduate student enrollments of 775 students or roughly 5% as well as an increase in need-based tuition scholarships and military and veteran discounts, which totaled $1.2 million. Additionally we did not recognize as Kim talked about approximately a little over $600,000 in revenue due to the one-week closure of the Huston Campus. These decreases in revenue were partially offset by higher tuition prices as well as $1.4 million related to one additional revenue day during this quarter versus last year’s quarter. Operating income for the fourth quarter was $0.5 million compared to an operating loss of $1.9 million last year. The improvement in operating income is due to decreases in compensation cost, contract service expense, and advertising expense, partially offset by the revenue issue we spoke up previously. Compensation and benefit costs decreased $3.1 million to $44.4 million. The decline is primarily attributable to the reduction in force that we had in September of 2007 that resulted in a reduction of $3.8 million in compensation and benefit costs. This decline in this quarter was partially offset by an increase in the number of Campus based sales representatives during 2008 and an increase in the sales rep bonus expense, which is now based on student retention and graduating students. Contract service costs were down $800,000 for the fourth quarter to $3.2 million and primarily related to outplacement services which occurred last year and were not repeated this year. Advertising expense decreased $1.2 million for the fourth quarter from $7.4 million to $6.2 million. As Kim previously discussed we gained efficiency in a new web-based model which allow decreases in…

(Operator Instructions) Your first question comes from Kevin Doherty - Banc of America Securities.

I guess just want to follow-up, first on the comments on the outlook, kind of getting back to that double-digit margin rate and the start numbers; I mean how confident are you that you can reach some of those targets and just thinking about that double-digit level? I guess you guys really haven’t been there for about four years, just looking at the 4Q seasonal levels? So, it’s sort of a sharp ramp up there, but maybe if you can just talk about where you see some of the biggest opportunities for cost leverage and really how much of that will be contributed by the lower spend environment?

Well I would caution you that I don’t expected to be a cost driven returned operating metrics into operating margin; it’s more getting the growth up in our students in school and that really what will drive. Obviously, given today’s environment and we can talk about that more, there is opportunity to do things on the expense side from advertising, but it’s a nice problem to have. We have not decided whether we’re really going to scale back on advertising. Obviously, the more efficient that we get with advertising converting those into contracts and then eventually into starts that will provide us greater leverage there. To your initial question about confidence, I’m not going to give you a confidence level, that’s our best thinking right now. It is certainly not a lay up, but I wouldn’t have said it if we didn’t believe that it was achievable. There are certainly trends out there and headwinds that we struggle against everyday and will in every economy and we have tailwinds that help us, but we think it’s achievable and it’s something that we’re shooting for.

Your next question comes from Mark Marostica - Piper Jaffray.

Just speaking up on the question of double-digit operating margins not to beat a dead horse, but I’m curious the last time you had double-digit operating margins in that fourth quarter, do you recall what capacity utilization level you were at or maybe asked a better way, where this capacity utilization needs to be for you to hit that?

I do not have it in front of me where it was. Obviously, it was significantly higher than they were roughly 60% that we’re at; somewhere I believe with a seven handle on it, it’s the big driver.

Your next question comes from Jeff Silber - BMO Capital Markets.

Do you see any meaningful difference between any pushback coming from your high school students or potential high school enrollees and the working adult market and the reason I’m asking is I’m picking some of the folks that are working right now, would obviously have to stop working and go back part time in order to go back to your campuses, as opposed to the high school students that we’re not working in the first place, any meaningful difference between those two populations?

I think how we interact with them is different certainly. With the high school students you have the parents in a larger buying committee and how they view these opportunities might be different than the students or the prospective student who is underemployed and looking at this career choice. I don’t think that the automotive overhang is affecting them differently, necessarily; it’s just how we respond to them. I think, if we see anything between the two markets or the two student segments there, is that it’s taking longer to make a decision. They are fully vetting out the opportunities and looking at this and it’s requiring more interaction with our representatives both the Field and Campus based to get them there, but I think we’re successfully doing so.

Your next question comes from Corey Greendale - First Analysis.

Wanted to ask about the lending environment whether you’ve seen changes in the credit standards from Sallie Mae or anybody else that you’re using and whether you are seeing a greater percentage of your students having to use your internal lending program?

We have not certainly in the past quarter really seen anything other than a recommitment to the business from the Sallie Mae. The lenders that we work with, we are not really privy to their underwriting black box, but that said looking at what comes out and looking at the pie of our students if you will, we’re still seeing roughly a little bit under 110% utilized our loan program and the 10% was roughly the number that it was anticipated to replace. So I would say the lending environment while crazy reading from the media perspective has been fairly stable over the last quarter.

Your next question comes from Jason Anderson - Stifel Nicolaus.

You touched on the job placement there in your comments about independent versus the dealer. Just could you give us any more color, do you need to try to change anything strategically to address independent more? Would that include any additional build-outs in your career services or anything like that?

I think that potentially it could mean a few more resources across the system. What we are discovering is that it’s taking more touches, more calls out to employers on both the dealer side as well as the aftermarket and certainly with the independents, we have more work to do from a relationship building standpoint than on the dealer side, but again 50% of our graduates are already going to those types of job, so I don’t think it’s a major strategic shift. We believe that we have the relationships across the industry to serve dealerships and the aftermarket as well as the diesel. I just think it’s going to take more effort focused and on relationship building.

Your next question comes from Kian Ghazi - Hawkshaw Capital Management.

I had a couple of questions the first was about the double-digit margin potential for fourth quarter ’09. Historically, the fourth quarter has been the weakest or if not the weakest one of the weakest quarters of the year so, if you are exiting 2009 with a double-digit margin and yes I know it’s a projection, but if that happens it would suggest you’re on run rate to do better than that, whatever that double-digit number is, but better than that into fiscal 2010? Is that a fair presumption?

I think you need to remember we’re on a September 30 fiscal year. So, our fourth quarter does tend to be a fairly strong quarter for us. That said, the follow-up to your question, yes I mean this business as we’re trending upward and the year on an upward trajectory; yes, that would clearly set us up into comments and that’s what I was trying to imply which set us up fairly well going into full-year fiscal 2010, but let me just add to that, I don’t think it would be wise to take double-digit in the fourth quarter and then significantly add to that on a quarterly basis going into 2010, at least as far out as we are right now. We’re shooting to kind of hit that first turtle and get back to that double-digit and then go from there.

Your next question comes from Arieh Coll - Eaton Vance.

Question number one; in this September quarter, most of your intake new starts accruing from high school students who graduated a couple of months earlier and I’m just wondering, what are your plans going forward before next September, it also run in ’09 to get more those high school students to enroll at UTI? Clearly this was your opportunity in September, there was growth, but I’m just surprised or just wondering how you get even more of those high school students to coming in the next six months or you really kind of missed your opportunity and you have to wait another year to get most of them?

Well, I think with the graduating seniors, typically they tried to start in the late summer early fall, so there is a window where you want to maximize your high school recruitment efforts. You will also see some that may not it had opportunity to save enough funds to relocate, show up after the first of the year. So, you’ll see some increase in high school students in the January timeframe. With that said, we continue to try a different strategies related to the high school marketing efforts and sales efforts to tap into a wider student population and just the vocational education classes and we are seeing some success there. I think our opportunity is to make certain that ones these students are enrolled in our contract, the students have committed, is that we are doing all that we can to hold their hands and help them walk through a very complicated financing process to get these students to show the school. So, we will continue to enhance and improve that. I think also strengthening the interaction with the parents to provide that support should help us in future periods, but the downside of the high school market is they tend to start in the summer fall timeframe, I think the good news here is that we are being very successful with the young adults, those who been out school for a couple of months or a couple of years and we’re seeing those success and we make certain that we build on those as well and those students do tend to start all throughout the year.

Your next question comes from Trace Urdan - Signal Hill.

I wonder if could tell us sort of what contract you’ve had with the different manufacturers that you have programs with and how they’re thinking about those programs in the context of the current?

Well, it differenced by manufacturer and of course we’re having ongoing conversations with them all of whom are cost conscious and so as we’ve done in the previous contract renewal periods, we are looking for ways to improve efficiencies through our facilities utilization and instructor resources etc. So as we’re going through these contract renewals, we do expect to see some consolidation on some of the training side, which is good for the manufacturer and it’s good for UTI as well. It’s a little bit more of an inconvenience for students because they have to transfer or change locations for these programs, but overall we’ve been working in prior period. Some of the decline in technician throughput requirements, others are increasing and I say specifically on the diesel side, we’re continuing to see more growth and interest from the diesel manufacturers other than the autos. With that said, I don’t believe that the relationships are at risk. I think they will just be redefined to meet the current needs of the various manufacturers brand.

Your next question comes from Mark Marostica - Piper Jaffray.

Kim, I’m not sure if you mentioned this, but in the past you provided start growth for the month of October and I know you provided contracted growth for October, I didn’t hear start growth.

I do not actually have that in front of me, but we might be able to get it by the end of the call. It’s not intentional; I just didn’t bring it in. We’ll come back to you on its.

We just need to be a little careful with what we give you, because start dates, when you look at it a quarter it’s usually fairly relative on months. We don’t necessarily always having the same number of starts each month on a year-over-year basis, but if you’ll give us a call we’ll give you a follow-up on color on that. I would just say, so that everybody doesn’t have to call us. You heard our comments about expecting start growth in future quarters. We obviously would have been much more cautious with that statement, where we not seeing it in October. So, everything that we have seeing year-to-date since September 30 coincides with that comment about our expectation of continued start growth.

Your next question comes from Jeffrey Silber - BMO Capital Markets.

I’ve got some numbers related question. I’m going to ask them all at once before I get cutoff. I don’t know if you gave show rates in the quarter or at least change year-over-year, if you can give us that and then also looking out at fiscal year ’09. If you can tell us, what your capital spending budget is and how much you would be willing to commit for funding in fiscal year ’09 for students? Thanks.

Show rate was up 160 basis points on a year-over-year basis and so you know that’s traditionally what we give; it’s the movement, not the absolute number. The CapEx question, we put out a number of 17.74 for this year and that is actually a little bit higher that without getting into the details of accruals from previous years that get backed out, but in essence we spent about $15 million this year. I would expect next year for that number to be all else equal about the same and then depending upon what piece of the curriculum transformation project we do, we would add and that would be an addition to kind of the $15 million run rate number I think your last question revolves around the lending program. We currently have the $10 million that are allocated toward it. I always will be hesitant talking for the board and I don’t mean to be doing that, but I would anticipate that we have given the current environment, enough money to take us into the middle of next calendar year. I would anticipate sometime early next year going to the board with a thorough review of our program, how it’s working, is it working for the purposes intended and probably at that point if we’re in today’s environment or similar environment, probably recommend doing some more of it, whether it would be on the exact same terms and conditions. I don’t know, but at some point you get to a level of commitment where you balance sheet and your P&L require you to you tweak the program a little bit, but everything I see today suggest that it is working as intended, not seeing any abuses and its getting people that want to come to UTI that otherwise would not be able to do actually show up and given while were at these levels of capacity utilization, I would certainly be in favor personally of continuing that.

Your next question comes from Corey Greendale – First Analysis.

Eugene you somewhat answered us, kind of pointing us towards the guidance for next year, but would you say that your confident about the tone of business is better; we’re or unchanged now from what it was last time reported and specifically are you seeing more people raising questions about affordability in the current environments and also raising questions about what historically has been your competitive advantage being the connection with OEMs, being either less of a new advantage or disadvantage given this headlines while it’s unnecessarily your partners. The headlines are pretty negative about the OEM at this points?

I know that gets a lot of headline risk and its certainly real out there; there’s no doubt about it, but I don’t think we can point to any downturn in our business as witnessed by the results that we just reported as well as what we’re seeing from a lead regeneration and contract growth standpoint into this year. What I think it is creating is as Kim mentioned, a longer sales process more and probably appropriate, intelligent questions by potential students and parents, but I think its something that there are good answers to and I think the value proposition is still holding guess your question was am I more positive or more negative. I would have to say on a whole I’m more positive, because we’ve had another quarter of good results not only at the front-end, which we’ve been seeing for basically a year now, but some of that is starting to flow out the funnel as far as getting additional starts there. So notwithstanding, the challenges, the headlines, the macro economy and new administration, all those things that keep you up at night, if you want to be really good Coconino, the bottom line is the business is performing better now than it was three months ago and better than it was three months before that. So from that perspective, I’ll let Kim add to that, but I’m more positive.

I would second what Eugene is saying and I think that we are listening carefully to both our industry customers, as well as the student customers IN adjusting our message. As Eugene said, there are good answers to it, the value proposition remain strong and I think with the little more effort and focus we can overcome any of the employment hurdles on the backend. With that said, I don’t see the automotive cloud hurting our recruitment and marking efforts. As Eugene said, we’ve seen better results in the last three months and six months than we’ve seen in the previous quarters and year for that matter. So, I remain optimistic and very pleased with the success that we are making in spite of a challenging macro environment.

Your next question comes from [Jennifer Todd] - Credit Suisse.

Kim, can you put the growth in contract signed in some sort of context. Maybe in other words, if show rates remain consistent, what rate of start growth should we expect based on your current run rate or maybe where you were last year at this point relative and how that translated into starts? Thanks.

I think what we’ve already given as far as the forward-looking indicators, it accounts for that the show rate remaining stable or slight improvement, as well as the contract growth at the rate that we’re currently seeing and experiencing. So, I don’t know that I want to go that far and be that specific as to if this happens and it’s going to yield that number of start. So, I feel very comfortable with what we have already provided and believe we’ve already given the statistics and data to support that.

And don’t forget there is, we’re taking a little bit apples and oranges. When we talk about contract growth that is for contracts that are written during that period, but they can range from starts as soon as the following month to as long as 12 months or even longer out there. So, we need to be careful and I think that’s why we since that we fraise the guidance going forward in terms not only a contract written, which suggest future growth goes down the road, but as a undisclosed and unknown time versus giving you some guidance on what we expect from start growth, which is more immediate in its impact.

Your next question comes from Kian Ghazi - Hawkshaw Capital Management.

It seems to me that given the roughly 10% of your students that you are actually lending some money to. I believe if I remember correctly, that’s a number that was comparable to the amount of discount loans that were being given in the past. So, if I’m not mistaken it seems like there’s been no increase in the number of students that would be in this category whether it was previously discount or now; discount loans are now; you’re funding them, but they are doesn’t seem to be any increase in the number of students that would following to that category. Am I recollecting this right and is that a fair presumption?

Yes, you are recollecting that right and it is fair; in fact I would go further, that we’re actually getting slightly less usage as a percentage of our students than we say in the back in the discount fund days. It still a relatively small sample size, so I attribute a little of it to that, I attribute a little of it to just the kind of it would easier to go. I think it was easier to go I think to the discount program than probably it is to ours and I think you combined that the small sample size and just the resiliency of students and parents that are still paying a fair amount by cash and/or credit card and that contributes to us doing slightly under what we actually forecasted and thought we might see.

Your next question comes from Jason Anderson - Stifel Nicolaus.

In 2009, should we think about the timeline for a potential tuition increase to be similar to this past year timeline and amount actually?

Yes, I would think you couldn’t model it that way. We may see some variations by certain locations, but it should be pretty similar to last year.

Your next question comes from Mark Marostica - Piper Jaffray.

It’s a two part question on operating margin guidance that you provided; first part, is the operating margin target that you have for fourth quarter, is that GAAP operating margins or exclusive of stock-based comp and secondly, what does that portend for Q1 operating margin? Should we believe that Q1 operating margin should be up year-over-year to kind of hit that Q4 target that you have? Thank you.

Yes, GAAP; the answer to your first question and I assume you are talking about first quarter and I apologize, maybe operator if we don’t cut him off quite as quickly, so there’s a little of give and take, I think that might help. I think your question is, I’m making assumption for your question was first of 2009 versus first quarter of 2008? I don’t really want to get into the quarterly guidance at this point because it is going to be volatile, don’t read that as a no, it won’t be or yes, it will be. I’m just really more comfortable given the guidance that we gave for the fourth quarter and as we get into the first quarter, we’ll report it and we’ll go from there. I guess to add to that, I mean there is a bit of hockey stick here, I mean we’re entering the quarter with less students than we had entering the quarter a year ago. So, from that perspective, we’re still kind of digging out the hole, although and I apologize this is a corny analogy, but we’re throwing dirt back into the hole that were a year ago, we were still digging the hole. So, that enrollment growth is filling up, but I think until we actually get to that point where we have year-over-year total enrollment growth, it will be difficult to show operating margin growth on a year-over-year basis.

Your next question is a follow-up from the line Kian Ghazi - Hawkshaw Capital Management.

Correct me if I’m wrong; the bulk of high school students signing contracts I imagine would be happening in the December and the March quarters. So, I would think that the number you report for those quarters that are forthcoming for our contracting signing is going to be more heavily high school students, which has been lagging the contract growth rates you’ve been signing on the campus level. So, as we go to the December quarter and the March quarter, should we anticipate that the contract growth rates that have accelerating as far and I think you said there were 28% in the September quarter and 30% in October. Should we anticipate that’s going to decelerate in December and March as they are more heavily skewed towards high school students, which we have been growing contracts and slightly at a meaningfully lower rate than your campus contract growth rates.

I think that your logic is correct other than we continue to spend and invest in campus admissions. So, while you historically expect to see fewer of the high school contracts written during that time period, because we’re investing so much in the campus admission side and the growth is significantly higher than we’ve experienced in previous years. We do believe that will offset it and that without getting into all of the detail, remember a year so ago we did change the lead policy and shifted some of these younger students to campus admissions and so it does create difficulty comparing historical norms they came from the high school reps or the Field reps. So, you may not see as great an increase from the high school reps, but I think that what campus is doing with the younger adult market is going to offset that and I don’t think it will be a significant deceleration now, when you look at contracts for both teams.

And Miss McWaters, there are no further questions at this time; please continue.

Well, we would just like to thank everybody for participating on our call. We look forward to updating you our first quarter earnings, which is schedule for Tuesday, February 3. Hope you have a great evening. Thank you.

And ladies and gentlemen this does conclude your conference call. You may now disconnect and we thank for using ACT conferencing.