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8-K - FORM 8-K - UNIVERSAL LOGISTICS HOLDINGS, INC.d57617d8k.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 Second Quarter 2015 Financial Results

Warren, MI – July 23, 2015 — Universal Truckload Services, Inc. (NASDAQ: UACL) today reported second quarter 2015 net income of $13.3 million, or $0.44 per basic and diluted share, on total operating revenues of $295.0 million. This compares to $13.6 million, or $0.45 per basic and diluted share, during second quarter 2014 on total operating revenues of $307.5 million.

Operating revenues from transportation services decreased $17.4 million, or 8.8%, to $180.1 million in the quarter ended June 27, 2015, due to a 6.8% year-over-year decrease in loads and a 2.8% decrease in average operating revenues per load, excluding fuel surcharges, compared to the quarter ended June 28, 2014. As previously communicated, second quarter 2015 operating revenues reflect lower demand, particularly in our steel, energy and other heavy haul operations, but a generally more stable volume and pricing environment for truckload transportation services compared to earlier 2015.

Value-added services revenues decreased $0.9 million in the most recent quarter, due to fewer operating locations compared to the comparable period last year. Revenues from intermodal services increased 17.1%, to $39.8 million from $34.0 million in the second quarter of 2014. The $5.8 million net increase in revenues from intermodal services includes a $5.9 million, or 19.2% increase in our intermodal drayage services, which is benefiting from increased import activity, capacity shifted from other businesses, and a 12.6% increase in average operating revenues per loaded mile, excluding fuel surcharges.

Consolidated income from operations decreased 6.1% to $22.9 million, compared to $24.4 million in second quarter 2014. EBITDA decreased 1.9% to $31.8 million in second quarter 2015, compared to $32.4 million one year earlier. Our operating margin and EBITDA margin for second quarter 2015 are 7.8% and 10.8% of operating revenues. These profitability metrics compare to 7.9% and 10.5%, respectively, in second quarter 2014. Consolidated income from operations in the quarter ended June 27, 2015 also reflects a $1.2 million decrease in selling, general and administrative expenses, which are partially offset by a $0.8 million increase in depreciation and amortization expense.

Income from operations in our transportation segment decreased $0.6 million, or 6.1%, to $9.2 million in second quarter 2015 from $9.8 million one year ago, due to a $6.7 million decline in transportation segment revenues. Income from operations in our logistics segment decreased $3.4 million, or 21.1%, to $12.7 million from $16.1 million in the comparable 2014 quarter. Logistics segment income, which originates from Universal’s value-added services and dedicated transportation operations, is lower in second quarter 2015 compared to a year earlier primarily due to changes in the number of operating locations. Logistics segment revenue in second quarter 2015 declined 5.2% or $5.9 million, reflecting the impact of customer-dedicated facilities we closed in second quarter 2014 among other factors.


Universal’s Chief Executive Officer, Jeff Rogers, observed, “Demand for our transportation and logistics services met our recent expectations, reflecting continuing weakness in truckload volumes, but steady volumes and firm pricing in other businesses. We are especially pleased with the continuing strength of our intermodal business, which is prospering due to drayage operations benefiting from increased international trade. Our value-added services also achieved anticipated revenues and margins in the second quarter, as we began the launch of a large value-added project which will positively impact financial results later this year.

“Universal’s recent tender offer reduced the number of Universal shares outstanding by about 5.3%, returning capital not needed to support our asset-light business model to our shareholders and enhancing future EPS. Our commercial focus remains driver development, extending relationships with existing customers, and new customer acquisition. These strategies will drive the growth of our intermodal, brokerage and logistics businesses and, we believe, improve the value of our truckload and dedicated transportation services businesses as well.”

Universal calculates and reports 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 June 27, 2015, we held cash and cash equivalents totaling $7.7 million and marketable securities totaling $15.1 million. Outstanding debt totaled $221.6 million and obligations pursuant to capital leases were valued at $2.5 million. Capital expenditures in second quarter 2015 totaled $7.0 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 August 3, 2015 and is expected to be paid on August 13, 2015.

Conference call:

We invite analysts and investors to participate in our quarterly financial performance conference call, during which Jeff Rogers and David Crittenden, CFO, will discuss Universal’s second quarter 2015 financial performance, the demand outlook in our key markets, trends impacting our business, and the outcome of our modified “Dutch auction” tender offer, which expired on July 8, 2015.

Quarterly Earnings Conference Call Dial-in Details:

 

Time: 10:00 AM EDT
Date: Friday, July 24, 2015
Call Toll Free: (866) 622-0924
International Dial-in: +1 (660) 422-4956
Conference ID: 74274014

A replay of the conference will be available beginning two hours after the call through August 21, 2015, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 74274014. The call will also be available on 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, and in Mexico, Canada and Colombia. 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, intermodal, and value-added 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     Twenty-six Weeks Ended  
     June 27,     June 28,     June 27,     June 28,  
     2015     2014     2015     2014  

Operating revenues:

        

Transportation services

   $ 180,150      $ 197,505      $ 340,554      $ 377,321   

Value-added services

     75,105        76,009        145,323        145,489   

Intermodal services

     39,752        34,035        72,691        64,103   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

  295,007      307,549      558,568      586,913   

Operating expenses:

Purchased transportation and equipment rent

  149,085      155,518      281,165      295,943   

Direct personnel and related benefits

  53,748      55,783      105,258      109,354   

Commission expense

  9,543      11,022      18,361      20,753   

Operating expense (exclusive of items shown separately)

  29,096      31,081      56,141      62,099   

Occupancy expense

  6,607      6,286      13,434      12,593   

Selling, general and administrative

  9,266      10,451      18,272      19,872   

Insurance and claims

  5,875      4,973      10,045      11,594   

Depreciation and amortization

  8,867      8,022      17,905      15,663   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  272,087      283,136      520,581      547,871   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

  22,920      24,413      37,987      39,042   

Interest expense, net

  (1,901   (2,463   (3,743   (4,038

Other non-operating income

  565      125      672      214   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

  21,584      22,075      34,916      35,218   

Provision for income taxes

  8,300      8,442      13,468      13,461   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

$ 13,284    $ 13,633    $ 21,448    $ 21,757   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share:

Basic

$ 0.44    $ 0.45    $ 0.72    $ 0.72   

Diluted

$ 0.44    $ 0.45    $ 0.72    $ 0.72   

Weighted average number of common shares outstanding:

Basic

  29,979      30,054      29,985      30,082   

Diluted

  29,980      30,092      29,990      30,124   

Dividends declared per common share:

$ 0.07    $ 0.07    $ 0.14    $ 0.14   
  

 

 

   

 

 

   

 

 

   

 

 

 


UNIVERSAL TRUCKLOAD SERVICES, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 

     June 27,
2015
     December 31,
2014
 

Assets

     

Cash and cash equivalents

   $ 7,707       $ 8,001   

Marketable securities

     15,125         14,309   

Accounts receivable - net

     161,037         151,107   

Other current assets

     52,748         42,863   
  

 

 

    

 

 

 

Total current assets

  236,617      216,280   

Property and equipment - net

  173,607      178,069   

Other long-term assets - net

  129,191      134,665   
  

 

 

    

 

 

 

Total assets

$ 539,415    $ 529,014   
  

 

 

    

 

 

 

Liabilities and shareholders’ equity

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

$ 113,966    $ 103,389   

Capital lease obligations

  2,473      3,031   

Debt

  221,643      235,298   

Other long-term liabilities

  48,323      50,135   
  

 

 

    

 

 

 

Total liabilities

  386,405      391,853   

Total shareholders’ equity

  153,010      137,161   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

$ 539,415    $ 529,014   
  

 

 

    

 

 

 


UNIVERSAL TRUCKLOAD SERVICES, INC.

Unaudited Summary of Operating Data

 

     Thirteen Weeks Ended      Twenty-six Weeks Ended  
     June 27,      June 28,      June 27,      June 28,  
     2015      2014      2015      2014  

Transportation Services:

           

Average operating revenues per loaded mile (a)

   $ 2.71       $ 2.93       $ 2.70       $ 2.95   

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

   $ 2.47       $ 2.54       $ 2.45       $ 2.55   

Average operating revenues per load (a)

   $ 1,034       $ 1,031       $ 1,015       $ 1,039   

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

   $ 941       $ 892       $ 923       $ 898   

Average length of haul (a) (b)

     381         351         376         353   

Number of loads (a)

     155,874         167,299         302,685         317,660   

Value Added Services:

           

Number of facilities (c)

           

Customer provided

     17         19         17         19   

Company leased

     31         28         31         28   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

  48      47      48      47   

Intermodal Services:

Drayage (in thousands)

$ 36,513    $ 30,629    $ 66,136    $ 57,573   

Domestic Intermodal (in thousands)

  441      743      1,250      1,547   

Depot (in thousands)

  2,798      2,663      5,305      4,983   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total (in thousands)

$ 39,752    $ 34,035    $ 72,691    $ 64,103   
  

 

 

    

 

 

    

 

 

    

 

 

 

Average operating revenues per loaded mile

$ 5.68    $ 5.30    $ 5.41    $ 5.21   

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

$ 4.82    $ 4.28    $ 4.51    $ 4.20   

Average operating revenues per load

$ 428    $ 395    $ 414    $ 397   

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

$ 363    $ 319    $ 346    $ 320   

Number of loads

  85,250      77,460      159,566      145,081   

Number of container yards

  10      11      10      11   

 

(a) Excludes operating data from Universal Logistics Solutions International, 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 storage yards, terminals and office facilities.

 


UNIVERSAL TRUCKLOAD SERVICES, INC.

Unaudited Summary of Operating Data - Continued

 

     Thirteen Weeks Ended     Twenty-six Weeks Ended  
     June 27,      June 28,     June 27,      June 28,  
     2015      2014     2015      2014  

Average Headcount:

          

Employees

     4,474         4,251        4,389         4,241   

Full time equivalents

     1,510         1,539        1,447         1,583   
  

 

 

    

 

 

   

 

 

    

 

 

 

Total

  5,984      5,790      5,836      5,824   

Average number of tractors:

Provided by owner-operators

  3,303      3,323      3,282      3,309   

Owned

  839      801      841      779   

Third party lease

  24      67      30      77   
  

 

 

    

 

 

   

 

 

    

 

 

 

Total

  4,166      4,191      4,152      4,165   

Operating Revenues by Segment:

Transportation

$ 188,724    $ 195,374    $ 355,957    $ 370,723   

Logistics

  106,181      112,062      202,412      215,968   

Other

  102      113      199      222   
  

 

 

    

 

 

   

 

 

    

 

 

 
$ 295,007    $ 307,549    $ 558,568    $ 586,913   
  

 

 

    

 

 

   

 

 

    

 

 

 

Income from Operations by Segment:

Transportation

$ 9,166    $ 9,819    $ 15,516    $ 15,129   

Logistics

  12,725      16,081      21,498      25,762   

Other

  1,029      (1,487   973      (1,849
  

 

 

    

 

 

   

 

 

    

 

 

 
$ 22,920    $ 24,413    $ 37,987    $ 39,042   
  

 

 

    

 

 

   

 

 

    

 

 

 


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 EBITDA as supplemental measures of our performance. We define 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. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis.

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 net income, the most comparable GAAP measure, to EBITDA for each of the periods indicated:

 

     Thirteen Weeks Ended     Twenty-six Weeks Ended  
     June 27,     June 28,     June 27,     June 28,  
     2015     2014     2015     2014  
     ( in thousands)     ( in thousands)  

EBITDA

        

Net income

   $ 13,284      $ 13,633      $ 21,448      $ 21,757   

Provision for income taxes

     8,300        8,442        13,468        13,461   

Interest expense, net

     1,901        2,463        3,743        4,038   

Depreciation and amortization

     8,867        8,022        17,905        15,663   

Other non-operating income

     (565     (125     (672     (214
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

$ 31,787    $ 32,435    $ 55,892    $ 54,705   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA margin (a)

  10.8   10.5   10.0   9.3

 

(a) EBITDA margin is computed by dividing EBITDA by total operating revenues for each of the periods indicated.

We present 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.

EBITDA has limitations as an analytical tool. Some of these limitations are:

 

  EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

 

  EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

 

  EBITDA does 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 EBITDA does not reflect any cash requirements for such replacements; and

 

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

Because of these limitations, 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 EBITDA only supplementally.