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8-K - FORM 8-K - UNIVERSAL LOGISTICS HOLDINGS, INC.ulh-8k_20171026.htm

Exhibit 99.1

 

For further information:

Jude Beres

Chief Financial Officer

JBeres@UniversalLogistics.com

Universal Logistics Holdings, Inc. Reports Third Quarter 2017 Financial Results

Warren, MI – October 26, 2017 — Universal Logistics Holdings, Inc. (NASDAQ: ULH) today reported a third quarter 2017 net loss of $3.3 million, or $(0.12) per basic and diluted share, on total operating revenues of $313.0 million.  Included in the reported loss was $17.4 million of pre-tax charges, or approximately $0.38 per share, for on-going litigation. This compares to net income of $5.0 million, or $0.18 per basic and diluted share, during third quarter 2016 on total operating revenues of $271.5 million.  

Operating revenues from truckload services increased $10.7 million, or 14.8% to $82.8 million, compared to $72.1 million for the same period last year. Included in truckload revenues in the third quarter 2017 were $7.1 million of separately-identified fuel surcharges compared to $6.0 million during the same period last year.  During the quarter, Universal’s average operating revenue per load, excluding fuel surcharges, increased 10.9% primarily due to increases in revenue per mile and in length of haul.  This increase was partially offset by a 1.6% decrease in the number of loads hauled.  During the third quarter 2017, Universal hauled 78,965 loads compared to 80,224 during the same period last year.  

Revenues from brokerage services in the third quarter 2017 increased $15.3 million, or 26.4% to $73.3 million compared to $58.0 million one year earlier. The growth is due to increases in both the average operating revenue per load and in the number of loads hauled.  Universal’s average operating revenue per load, excluding fuel surcharges, increased 10.7% to $1,392 per load, up from $1,257 per load a year earlier.  The number of brokerage loads increased 14.4% in the third quarter 2017 to 48,870 compared to 42,717 during the same period last year.  

Intermodal services revenues increased $2.7 million to $39.1 million in the third quarter of 2017, up from $36.4 million during the same period last year.  During the quarter ended September 30, 2017, Universal moved 87,342 intermodal loads compared to 85,033 during the same period last year.  Included in intermodal revenues in the third quarter 2017 were also $3.9 million in separately-identified fuel surcharges compared to $3.5 million during the same period last year.  Overall, intermodal services grew by 7.4% compared to the third quarter 2016.

Operating revenues from dedicated services in the third quarter 2017 decreased $3.1 million to $22.1 million compared to $25.2 million one year earlier. The decrease was primarily due to a decrease in the number of loads hauled.   During the quarter ended September 30, 2017, Universal moved 44,069 dedicated loads compared to 54,840 one year earlier.  This decrease was partially offset by an increase in average revenue per load, primarily from an increase in the average length of haul.  Included in dedicated revenues in the quarter ended September 30, 2017 were also $2.9 million in separately-identified fuel surcharges compared to $3.2 million during the same period last year.  

Value-added services revenues increased $15.9 million, or 19.9% to $95.7 million in the third quarter of 2017, compared to $79.8 million in the same period last year.  Revenues in our heavy-truck operations improved 34.9% on a year-over-year basis, and significant operations in support of passenger vehicle programs continues to drive top-line results.


During the third quarter 2017, Universal reported an operating loss of $3.5 million, which included the $17.4 million in accruals made for on-going litigation.  This compares to income from operations of $10.0 million in third quarter 2016.  Accruals for legal matters are attributable to Universal’s transportation segment.  As a result, this segment, which is primarily comprised of truckload, brokerage and intermodal services operations, reported an operating loss of $7.6 million in the third quarter 2017.  This compares to operating income of $4.6 million during the same period last year.  In the third quarter 2017, Universal’s logistics segment, which includes value-added and dedicated services, reported income from operations of $4.7 million.  This compares to $5.4 million in third quarter 2016.  

EBITDA, including charges for litigation of $17.4 million, decreased $10.3 million to $9.0 million during the third quarter of 2017 compared to $19.3 million in the same period last year.  The decrease is also attributable to accruals made for legal matters.  As a percentage of total operating revenues, operating income and EBITDA margins for the third quarter 2017 were (1.1%) and 2.9%, respectively.  These metrics compare to 3.7% and 7.1%, respectively, in third quarter 2016.  

“I am extremely proud of our results this quarter,” stated Jeff Rogers, Universal’s Chief Executive Officer.  “Despite some unfavorable developments in a personal injury lawsuit, our operating folks are doing a great job.  We exceeded even our own expectations on revenues and results.  The outlook across almost all of our end markets is strong, particularly in support of North American Class 8 production.  With tightening capacity fueling our transportation growth, and improving results in our logistics group, I am confident we are well positioned for the remainder of 2017 and beyond.”

Universal calculates and reports selected financial metrics in connection with lending arrangements, or in an effort 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 September 30, 2017, Universal held cash and cash equivalents totaling $2.9 million, and $14.6 million in marketable securities.  Outstanding debt at the end of the third quarter 2017 was $244.9 million and capital expenditures totaled $13.4 million during the period.

Universal Logistics Holdings, Inc. also announced today that its 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 November 6, 2017 and is expected to be paid on November 16, 2017.

Conference call:

We invite investors and analysts to our quarterly earnings conference call.  During the call, Jeff Rogers, Chief Executive Officer,  Jude Beres, Chief Financial Officer, and Steven Fitzpatrick, Vice President of Finance and Investor Relations, will discuss Universal’s third quarter 2017 financial performance, the demand outlook in our key markets and other trends impacting our business.

Quarterly Earnings Conference Call Dial-in Details:

Time:

 

10:00 AM ET

Date:

 

Friday, October 27, 2017

Call Toll Free:

 

(866) 622-0924

International Dial-in:  

 

+1 (660) 422-4956

Conference ID:  

 

92392088

A replay of the conference call will be available beginning two hours after the call through November 23, 2017, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 92392088. The call will also be available on investors.universallogistics.com.  

About Universal:

Universal Logistics Holdings, 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 truckload, brokerage, intermodal, dedicated, 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 can be identified by words such as: “expect,” “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “future,” “likely,” “may,” “should” and similar references to future periods. 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 LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Statements of Income

(In thousands, except per share data)

 

  

 

Thirteen Weeks Ended

 

 

Thirty-nine Weeks Ended

 

 

 

September 30,

 

 

October 1,

 

 

September 30,

 

 

October 1,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Truckload services

 

$

82,812

 

 

$

72,127

 

 

$

231,046

 

 

$

215,775

 

Brokerage services

 

 

73,285

 

 

 

58,003

 

 

 

195,988

 

 

 

164,239

 

Intermodal services

 

 

39,057

 

 

 

36,366

 

 

 

113,713

 

 

 

108,040

 

Dedicated services

 

 

22,135

 

 

 

25,200

 

 

 

71,406

 

 

 

71,336

 

Value-added services

 

 

95,712

 

 

 

79,797

 

 

 

290,489

 

 

 

249,310

 

Total operating revenues

 

 

313,001

 

 

 

271,493

 

 

 

902,642

 

 

 

808,700

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation and equipment rent

 

 

153,277

 

 

 

131,832

 

 

 

427,104

 

 

 

385,509

 

Direct personnel and related benefits

 

 

77,570

 

 

 

66,091

 

 

 

234,352

 

 

 

196,509

 

Operating supplies and expenses

 

 

28,306

 

 

 

25,725

 

 

 

88,757

 

 

 

75,810

 

Commission expense

 

 

8,503

 

 

 

8,217

 

 

 

24,284

 

 

 

24,668

 

Occupancy expense

 

 

7,504

 

 

 

8,075

 

 

 

23,001

 

 

 

23,772

 

General and administrative

 

 

8,968

 

 

 

7,501

 

 

 

23,421

 

 

 

21,337

 

Insurance and claims

 

 

20,562

 

 

 

4,949

 

 

 

35,958

 

 

 

13,607

 

Depreciation and amortization

 

 

11,795

 

 

 

9,076

 

 

 

33,663

 

 

 

26,757

 

Total operating expenses

 

 

316,485

 

 

 

261,466

 

 

 

890,540

 

 

 

767,969

 

(Loss) income from operations

 

 

(3,484

)

 

 

10,027

 

 

 

12,102

 

 

 

40,731

 

Interest expense, net

 

 

(2,508

)

 

 

(2,078

)

 

 

(7,225

)

 

 

(6,156

)

Other non-operating income

 

 

721

 

 

 

170

 

 

 

1,253

 

 

 

420

 

(Loss) income before provision for income taxes

 

 

(5,271

)

 

 

8,119

 

 

 

6,130

 

 

 

34,995

 

Provision for income taxes

 

 

(1,966

)

 

 

3,122

 

 

 

2,378

 

 

 

13,474

 

Net (loss) income

 

$

(3,305

)

 

$

4,997

 

 

$

3,752

 

 

$

21,521

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.12

)

 

$

0.18

 

 

$

0.13

 

 

$

0.76

 

Diluted

 

$

(0.12

)

 

$

0.18

 

 

$

0.13

 

 

$

0.76

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

28,441

 

 

 

28,413

 

 

 

28,440

 

 

 

28,410

 

Diluted

 

 

28,444

 

 

 

28,413

 

 

 

28,440

 

 

 

28,410

 

Dividends declared per common share:

 

$

0.07

 

 

$

0.07

 

 

$

0.21

 

 

$

0.21

 

 


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 

  

 

September 30,

2017

 

 

December 31,

2016

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,897

 

 

$

1,755

 

Marketable securities

 

 

14,648

 

 

 

14,359

 

Accounts receivable - net

 

 

170,182

 

 

 

144,712

 

Other current assets

 

 

40,405

 

 

 

46,625

 

Total current assets

 

 

228,132

 

 

 

207,451

 

Property and equipment - net

 

 

263,441

 

 

 

246,277

 

Other long-term assets - net

 

 

112,282

 

 

 

116,729

 

Total assets

 

$

603,855

 

 

$

570,457

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Current liabilities, excluding current maturities of debt

 

$

167,680

 

 

$

110,061

 

Debt - net

 

 

243,540

 

 

 

261,267

 

Other long-term liabilities

 

 

46,327

 

 

 

51,397

 

Total liabilities

 

 

457,547

 

 

 

422,725

 

Total shareholders' equity

 

 

146,308

 

 

 

147,732

 

Total liabilities and shareholders' equity

 

$

603,855

 

 

$

570,457

 

 


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data

 

  

 

Thirteen Weeks Ended

 

 

Thirty-nine Weeks Ended

 

 

 

September 30,

 

 

October 1,

 

 

September 30,

 

 

October 1,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Truckload Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of loads

 

 

78,965

 

 

 

80,224

 

 

 

239,220

 

 

 

242,899

 

Average operating revenue per load, excluding fuel surcharges

 

$

898

 

 

$

810

 

 

$

858

 

 

$

801

 

Average operating revenue per mile, excluding fuel surcharges

 

$

2.54

 

 

$

2.30

 

 

$

2.46

 

 

$

2.34

 

Average length of haul

 

 

354

 

 

 

352

 

 

 

349

 

 

 

342

 

Average number of tractors

 

 

1,965

 

 

 

1,973

 

 

 

1,951

 

 

 

1,994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of loads (a)

 

 

48,870

 

 

 

42,717

 

 

 

139,996

 

 

 

122,207

 

Average operating revenue per load (a)

 

$

1,392

 

 

$

1,257

 

 

$

1,315

 

 

$

1,227

 

Average length of haul (a)

 

 

527

 

 

 

584

 

 

 

556

 

 

 

580

 

Number of active carriers

 

 

39,537

 

 

 

29,275

 

 

 

39,537

 

 

 

29,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of loads

 

 

87,342

 

 

 

85,033

 

 

 

258,847

 

 

 

251,082

 

Average operating revenue per load, excluding fuel surcharges

 

$

402

 

 

$

388

 

 

$

392

 

 

$

390

 

Average number of tractors

 

 

929

 

 

 

890

 

 

 

910

 

 

 

903

 

Number of depots

 

 

12

 

 

 

11

 

 

 

12

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dedicated Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of loads

 

 

44,069

 

 

 

54,840

 

 

 

148,375

 

 

 

152,484

 

Average operating revenue per load, excluding fuel surcharges

 

$

407

 

 

$

382

 

 

$

396

 

 

$

390

 

Average operating revenue per mile, excluding fuel surcharges

 

$

1.96

 

 

$

2.04

 

 

$

1.96

 

 

$

1.97

 

Average length of haul

 

 

208

 

 

 

187

 

 

 

202

 

 

 

198

 

Average number of tractors

 

 

813

 

 

 

732

 

 

 

785

 

 

 

730

 

 

(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.


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data - Continued

 

  

 

Thirteen Weeks Ended

 

 

Thirty-nine Weeks Ended

 

 

 

September 30,

 

 

October 1,

 

 

September 30,

 

 

October 1,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Value-added Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of direct employees

 

 

3,944

 

 

 

3,829

 

 

$

4,217

 

 

$

4,045

 

Average number of full-time equivalents

 

 

1,970

 

 

 

1,533

 

 

 

1,767

 

 

 

1,503

 

Number of active programs

 

 

51

 

 

 

47

 

 

 

51

 

 

 

47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues by Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

$

199,013

 

 

$

169,655

 

 

$

552,442

 

 

$

496,488

 

Logistics

 

 

113,667

 

 

 

101,110

 

 

 

349,252

 

 

 

310,896

 

Other

 

 

321

 

 

 

728

 

 

 

948

 

 

 

1,316

 

Total

 

$

313,001

 

 

$

271,493

 

 

$

902,642

 

 

$

808,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Operations by Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

$

(7,641

)

 

$

4,577

 

 

$

7,208

 

 

$

17,384

 

Logistics

 

 

4,692

 

 

 

5,360

 

 

 

6,359

 

 

 

24,517

 

Other

 

 

(535

)

 

 

90

 

 

 

(1,465

)

 

 

(1,170

)

Total

 

$

(3,484

)

 

$

10,027

 

 

$

12,102

 

 

$

40,731

 

 

 



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. 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

 

 

Thirty-nine Weeks Ended

 

 

 

September 30,

 

 

October 1,

 

 

September 30,

 

 

October 1,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

( in thousands)

 

 

( in thousands)

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(3,305

)

 

$

4,997

 

 

$

3,752

 

 

$

21,521

 

Provision for income taxes

 

 

(1,966

)

 

 

3,122

 

 

 

2,378

 

 

 

13,474

 

Interest expense, net

 

 

2,508

 

 

 

2,078

 

 

 

7,225

 

 

 

6,156

 

Depreciation and amortization

 

 

11,795

 

 

 

9,076

 

 

 

33,663

 

 

 

26,757

 

EBITDA

 

$

9,032

 

 

$

19,273

 

 

$

47,018

 

 

$

67,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA margin (a)

 

 

2.9

%

 

 

7.1

%

 

 

5.2

%

 

 

8.4

%

 

(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.