Attached files

file filename
8-K - 8-K - UNIVERSAL LOGISTICS HOLDINGS, INC.d678087d8k.htm

Exhibit 99.1

 

LOGO

For further information:

David A. Crittenden

Chief Financial Officer

DCrittenden@goutsi.com

(586) 467-1427

Universal Truckload Services, Inc. Reports 2013 Financial Results

Warren, MI – February 20, 2014 — Universal Truckload Services, Inc. (NASDAQ: UACL) today reported financial results for the year ended December 31, 2013. Net income was $50.6 million on total 2013 operating revenues of $1.03 billion. Net income in the fourth quarter of 2013 totaled $11.3 million on total operating revenue of $259.5 million, compared to $2.5 million of net income on total operating revenue of $259.1 million in the fourth quarter of 2012.

In the fourth quarter of 2013, demand for value-added services grew 9.5% to $48.2 million compared to the same period last year. For the year, value-added services increased 11.5% over 2012. However, fourth quarter operating income from our logistics segment was dampened by phasing out an aerospace operation due to reductions in military spending, by additional scheduled holiday downtime by selected automotive customers compared to one year earlier, by the late-year launch of a new automotive operation, and due to an industrial customer’s in-sourcing of a value-added services operation.

Demand for flat bed and heavy haul transportation stabilized in recent quarters. Operating revenues from transportation services totaled $179.8 million for the fourth quarter of 2013, compared to $180.2 million for the fourth quarter of 2012, which had included above-normal, high margin business in connection with specialized wind energy shipments and to support recovery operations on the Eastern Seaboard following Hurricane Sandy.

Revenues from intermodal services declined 9.7% in the fourth quarter of 2013, to $31.6 million, compared to $35.0 million one year earlier. Revenues for all of 2013 increased 9.2% to $131.4 million. However, the fourth quarter 2013 comparison to the prior year was challenging due to strong demand for intermodal services in late 2012 from an affiliated LTL carrier.

Based on reported net income, earnings per basic and diluted shares were $0.38 for the fourth quarter of 2013, and $1.68 per basic and diluted shares for the full year. Income from operations increased 40.5% to $19.1 million or 7.4% of operating revenues for the fourth quarter of 2013, compared to $13.6 million or 5.3% of operating revenues for the fourth quarter of 2012. Our income before the provision for income taxes reflects $0.7 million in transaction and other costs related to our acquisition of Westport Axle Corporation on December 19, 2013. In 2012, we incurred $8.4 million in similar costs related to our acquisition of LINC Logistics Company on October 1, 2012. Excluding costs related to these actions, our income from operations decreased 9.7% to $19.9 million or 7.7% of operating revenues for the fourth quarter of 2013, compared to $22.0 million or 8.5% of operating revenues during the fourth quarter of 2012.

Universal’s Chief Executive Officer, Scott Wolfe commented, “Our largest customers performed well throughout 2013, and Universal’s overall financial performance reflects their confidence in us. However, a harsh winter presents challenges and disruptions to the trucking industry, generally, and to the supply chain operations of our key customers. Our outlook for the next few quarters is decidedly mixed, and we are cautious about prospects for near-term growth. We will continue to invest in our enterprise sales organization, taking advantage of customer opportunities as they arise.”


We calculate and report selected financial metrics in connection with lending arrangements, or to isolate and exclude the impact of non-operating expenses related to our corporate development activities. These statistics are described in more detail below in the section captioned “Non-GAAP Financial Measures.”

As of December 31, 2013, we held cash and cash equivalents totaling $10.2 million and marketable securities totaling $11.6 million. Outstanding debt at year end totaled $237.5 million and obligations pursuant to capital leases were valued at $4.6 million.

Universal Truckload Services, Inc. also announced today that our Board of Directors has declared a quarterly cash dividend of $0.07 per share of common stock. The dividend is payable to shareholders of record at the close of business on March 3, 2014 and is expected to be paid on March 13, 2014.

Conference call:

We invite analysts and investors to participate in a conference call on Friday, February 21, 2014 at 10:00 AM ET, where management will discuss fourth quarter 2013 financial performance, current outlook, and trends impacting our business. Hosting the call will be Scott Wolfe, Chief Executive Officer, Don Cochran, President, and David Crittenden, CFO.

Dial-in details:

Call Toll Free: (866) 622-0924

International Dial-in: +1 (660) 422-4956

Conference ID: 59437360

A replay of the conference will be available two hours after the call through March 21, 2014, by calling (855) 859-2056 (toll free) or +1 (800) 585-8367 (toll) and using conference ID 59437360. Additionally, the call will be available on www.investors.goutsi.com.

About Universal:

Universal Truckload Services, Inc. is a leading asset-light provider of customized transportation and logistics solutions throughout the United States, Mexico and Canada. We provide our customers with supply chain solutions that can be scaled to meet their changing demands and volumes. We offer our customers a broad array of services across their entire supply chain, including transportation, value-added, and intermodal services.

Forward Looking Statements

Some of the statements contained in this press release might be considered forward-looking statements. These statements identify prospective information. Forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. These forward-looking statements are subject to a number of factors that may cause actual results to differ materially from the expectations described. Additional information about the factors that may adversely affect these forward-looking statements is contained in the Company’s reports and filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws.


UNIVERSAL TRUCKLOAD SERVICES, INC.

Unaudited Condensed Consolidated Statements of Income

(In thousands, except per share data)

 

     Thirteen Weeks Ended
December 31,
    Year Ended
December 31,
 
     2013     2012     2013     2012  

Operating revenues:

        

Transportation services

   $ 179,785      $ 180,171      $ 706,998      $ 741,650   

Value-added services

     48,199        44,016        195,086        174,975   

Intermodal services

     31,564        34,961        131,408        120,381   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

     259,548        259,148        1,033,492        1,037,006   

Operating expenses:

        

Purchased transportation and equipment rent

     140,434        146,563        560,024        592,493   

Direct personnel and related benefits

     45,544        39,103        178,441        163,069   

Commission expense

     9,994        10,557        39,248        42,157   

Operating expense (exclusive of items shown separately)

     21,442        18,372        79,263        71,117   

Occupancy expense

     5,126        4,523        20,049        19,275   

Selling, general and administrative

     8,601        16,806        33,046        41,159   

Insurance and claims

     4,337        4,749        19,242        20,342   

Depreciation and amortization

     4,937        4,854        19,686        18,237   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     240,415        245,527        948,999        967,849   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     19,133        13,621        84,493        69,157   

Interest expense, net

     (912     (1,674     (4,036     (3,983

Other non-operating income

     93        420        459        2,778   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

     18,314        12,367        80,916        67,952   

Provision for income taxes

     7,012        9,915        30,344        20,264   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 11,302      $ 2,452      $ 50,572      $ 47,688   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share:

        

Basic

   $ 0.38      $ 0.08      $ 1.68      $ 1.59   

Diluted

   $ 0.38      $ 0.08      $ 1.68      $ 1.59   

Weighted average number of common shares outstanding:

        

Basic

     30,083        30,023        30,064        30,032   

Diluted

     30,127        30,041        30,160        30,036   

Dividends paid per common share

   $ 0.07      $ —        $ 0.14      $ —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Pre-merger dividends paid per common share

   $ —        $ —        $ —        $ 1.00   
  

 

 

   

 

 

   

 

 

   

 

 

 

Pro Forma earnings per common share - “C” corporation status:

        

Pro Forma provision for income taxes due to LINC Logistics

        

Company conversion to “C” corporation

         $ 11,059   

Pro Forma net income

         $ 36,629   

Earnings per common share:

        

Basic

         $ 1.22   

Diluted

         $ 1.22   


UNIVERSAL TRUCKLOAD SERVICES, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 

     December 31,
2013
     December 31,
2012
 

Assets

     

Cash and cash equivalents

   $ 10,223       $ 2,554   

Marketable securities

     11,626         9,962   

Accounts receivable - net

     132,001         118,903   

Other current assets

     49,539         37,719   
  

 

 

    

 

 

 

Total current assets

     203,389         169,138   

Property and equipment - net

     142,656         127,791   

Other long-term assets - net

     144,091         30,440   
  

 

 

    

 

 

 

Total assets

   $ 490,136       $ 327,369   
  

 

 

    

 

 

 

Liabilities and shareholders’ equity

     

Current liabilities, excluding current maturities of capital lease obligations and debt

   $ 93,896       $ 103,717   

Capital lease obligations

     4,643         —     

Debt

     237,500         146,000   

Other long-term liabilities

     48,532         20,280   
  

 

 

    

 

 

 

Total liabilities

     384,571         269,997   

Total shareholders’ equity

     105,565         57,372   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 490,136       $ 327,369   
  

 

 

    

 

 

 


UNIVERSAL TRUCKLOAD SERVICES, INC.

Unaudited Summary of Operating Data

 

     Thirteen Weeks Ended
December 31,
     Year Ended
December 31,
 
     2013      2012      2013      2012  

Transportation Services:

           

Average operating revenues per loaded mile (a)

   $ 2.83       $ 2.88       $ 2.78       $ 2.79   

Average operating revenues per loaded mile, excluding fuel surcharges, where separately identifiable (a)

   $ 2.43       $ 2.51       $ 2.39       $ 2.42   

Average operating revenues per load (a)

   $ 1,018       $ 1,005       $ 1,012       $ 995   

Average operating revenues per load, excluding fuel surcharges, where separately identifiable (a)

   $ 874       $ 873       $ 870       $ 863   

Average length of haul (a) (b)

     360         349         364         356   

Number of loads (a)

     155,382         163,163         619,055         678,257   

Value Added Services:

           

Number of facilities (d)

           

Customer provided

     17         14         17         14   

Company leased

     26         27         26         27   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     43         41         43         41   

Intermodal Services:

           

Drayage (in thousands)

   $ 27,944       $ 25,393       $ 109,224       $ 97,303   

Domestic Intermodal (in thousands)

     1,267         7,025         12,153         12,347   

Depot (in thousands)

     2,353         2,543         10,031         10,731   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 31,564       $ 34,961       $ 131,408       $ 120,381   
  

 

 

    

 

 

    

 

 

    

 

 

 

Average operating revenues per loaded mile (c)

   $ 4.86       $ 4.43       $ 4.64       $ 4.38   

Average operating revenues per loaded mile, excluding fuel surcharges, where separately identifiable (c)

   $ 3.91       $ 3.24       $ 3.74       $ 3.40   

Average operating revenues per load (c)

   $ 389       $ 317       $ 356       $ 306   

Average operating revenues per load, excluding fuel surcharges, where separately identifiable (c)

   $ 313       $ 232       $ 286       $ 238   

Number of loads (c)

     71,744         80,038         307,116         317,837   

Number of container yards

     11         10         11         10   

 

(a) Excludes operating data from Universal Logistics Solutions, Inc., Universal Logistics Solutions International, Inc., and Central Global Express, Inc., in order to improve the relevance of the statistical data related to our brokerage services and improve the comparability to our peer companies. Also excludes final mile delivery and shuttle service loads.
(b) Average length of haul is computed using loaded miles, excluding final mile delivery and shuttle service loads.
(c) Excludes operating data from Universal Logistics Solutions, Inc. in order to improve the relevance of the statistical data related to our intermodal services and improve the comparability to our peer companies.
(d) Excludes storage yards, terminals and office facilities.


UNIVERSAL TRUCKLOAD SERVICES, INC.

Unaudited Summary of Operating Data - Continued

 

     Thirteen Weeks Ended
December 31,
    Year Ended
December 31,
 
     2013     2012     2013     2012  

Average Headcount

        

Employees

     3,741        2,492        3,449        2,484   

Full time equivalents

     1,764        2,273        1,786        2,182   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     5,505        4,765        5,235        4,666   

Average number of tractors

        

Provided by owner-operators

     3,335        3,363        3,343        3,314   

Owned

     721        665        701        640   

Third party lease

     127        45        80        45   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     4,183        4,073        4,123        3,999   

Operating Revenues by Segment:

        

Transportation

   $ 176,182      $ 187,746      $ 705,557      $ 747,313   

Logistics

     83,254        71,282        327,498        289,268   

Other

     112        120        437        425   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 259,548      $ 259,148      $ 1,033,492      $ 1,037,006   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from Operations by Segment:

        

Transportation

   $ 7,056      $ 8,329      $ 28,537      $ 30,623   

Logistics

     12,692        14,621        58,724        49,497   

Other

     (615     (9,329     (2,768     (10,963
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 19,133      $ 13,621      $ 84,493      $ 69,157   
  

 

 

   

 

 

   

 

 

   

 

 

 


Non-GAAP Financial Measures

In addition to providing consolidated financial statements based on generally accepted accounting principles in the United States of America (GAAP), we are providing additional financial measures that are not required by or prepared in accordance with GAAP (non-GAAP). We present adjusted income from operations and adjusted EBITDA as supplemental measures of our performance. We define adjusted income from operations as income from operations adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance, including transaction and other costs related to our acquisitions of Westport and LINC and previous costs related to LINC’s capital market activity, which was terminated in the third quarter of 2012. We define adjusted EBITDA as net income plus (i) interest expense, net, (ii) provision for income taxes and (iii) depreciation and amortization, and less other non-operating income, or EBITDA, further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance, including transaction and other costs related to our acquisitions of Westport and LINC and previous costs related to LINC’s capital market activity. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating adjusted income from operations and adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of adjusted income from operations and adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, we are presenting the most directly comparable GAAP financial measure and reconciling the non-GAAP financial measure to the comparable GAAP measure. Set forth below is a reconciliation of income from operations, the most comparable GAAP measure, to adjusted income from operations; and of net income, the most comparable GAAP measure, to EBITDA and adjusted EBITDA for each of the periods indicated:

 

     Thirteen Weeks Ended
December 31,
    Year Ended
December 31,
 
     2013     2012     2013     2012  
     (in thousands)     (in thousands)  

Adjusted income from operations

        

Income from operations

   $ 19,133      $ 13,621      $ 84,493      $ 69,157   

Transaction and other costs (a)

     723        8,369        723        8,369   

Suspended capital markets activity (b)

     —          —          —          1,882   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted income from operations

   $ 19,856      $ 21,990      $ 85,216      $ 79,408   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating margin (c)

     7.4     5.3     8.2     6.7

Adjusted operating margin (c)

     7.7     8.5     8.2     7.7

Adjusted EBITDA

        

Net income

   $ 11,302      $ 2,452      $ 50,572      $ 47,688   

Provision for income taxes

     7,012        9,915        30,344        20,264   

Interest expense, net

     912        1,674        4,036        3,983   

Depreciation and amortization

     4,937        4,854        19,686        18,237   

Other non-operating income

     (93     (420     (459     (2,778
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     24,070        18,475        104,179        87,394   

Transaction and other costs (a)

     723        8,369        723        8,369   

Suspended capital markets activity (b)

     —          —          —          1,882   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 24,793      $ 26,844      $ 104,902      $ 97,645   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA margin (c)

     9.3     7.1     10.1     8.4

Adjusted EBITDA margin (c)

     9.6     10.4     10.2     9.4


(a) Represents transaction and other costs incurred that were directly related to the acquisitions of Westport in December 2013 and LINC in October 2012.
(b) Represents expenses incurred as a result of LINC’s preparations for an IPO in early 2012. When the IPO efforts were abandoned in May 2012, the costs were then taken as a charge to income.
(c) Operating margin, adjusted operating margin, EBITDA margin, and adjusted EBITDA margin are computed by dividing income from operations, adjusted income from operations, EBITDA, and adjusted EBITDA, respectively, by total operating revenues for each of the periods indicated.

We present adjusted income from operations and adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

Adjusted income from operations and adjusted EBITDA have limitations as an analytical tool. Some of these limitations are:

 

  Adjusted income from operations and adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

 

  Adjusted income from operations and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

 

  Adjusted income from operations and adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;

 

  Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements;

 

  Adjusted income from operations and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and

 

  Other companies in our industry may calculate adjusted income from operations and adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, adjusted income from operations and adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using adjusted income from operations and adjusted EBITDA only supplementally.