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8-K - 8-K - UNIVERSAL LOGISTICS HOLDINGS, INC.ulh-8k_20160702.htm

Exhibit 99.1

 

 

For further information:

Jude Beres

Chief Financial Officer

JBeres@UniversalLogistics.com

(586) 920-0100

Universal Logistics Holdings, Inc. Reports Second Quarter 2016 Financial Results

Warren, MI – July 28, 2016 — Universal Logistics Holdings, Inc. (NASDAQ: ULH) today reported second quarter 2016 net income of $9.0 million, or $0.32 per basic and diluted share, on total operating revenues of $276.8 million.  This compares to $13.3 million, or $0.44 per basic and diluted share, during second quarter 2015 on total operating revenues of $295.0 million.

Operating revenues from transportation services decreased $17.4 million, including a decline of $5.9 million in separately-identified fuel surcharges, to $162.7 million for the quarter ended July 2, 2016.  This compares to $180.1 million for the same period last year. The reduction in transportation services also reflects a 9.9% year-over-year decrease in operating revenue per load, excluding fuel surcharges.  The declines in transportation services were however partly offset by a 1.5% increase in the number of loads hauled.  During the quarter ended July 2, 2016, Universal hauled 158,283 transportation services loads compared to 155,874 during the same period last year.  

Value-added services revenue was positively impacted by new business awarded in the second half of 2015.  Overall, value-added services increased $3.1 million to $78.2 million in the second quarter of 2016, compared to $75.1 million in the same period last year.  The increase however was partially offset by a decline in value-added services supporting the heavy-truck market, where operating revenues decreased by $7.4 million.  Revenues from intermodal services declined by $3.9 million to $35.9 million in the second quarter of 2016 from $39.8 million during the same period last year.  The decline in intermodal services revenues reflects a $3.0 million decrease in revenues recognized on intermodal drayage services, of which $2.2 million was attributable to a decrease in fuel surcharges.  The average operating revenue per load, excluding fuel surcharges, decreased by 3.0% during the second quarter of 2016, while the number of intermodal loads hauled increased modestly by 0.5% compared to the same period last year.  

Consolidated income from operations decreased $6.1 million to $16.8 million, compared to $22.9 million in second quarter 2015, and EBITDA decreased 18.6% to $25.9 million in second quarter 2016, compared to $31.8 million in the same period last year.  As a percentage of total operating revenues, operating income and EBITDA margins for the second quarter 2016 were 6.1% and 9.4%, respectively.  These profitability metrics compare to 7.8% and 10.8%, respectively, in second quarter 2015.  

A decline of $19.4 million in operating revenues in Universal’s transportation segment in the second quarter of 2016 led to a decrease in income from operations to $6.9 million, compared to $9.2 million one year ago.  Income from operations in Universal’s logistics segment, which includes value-added and dedicated transportation services, decreased $2.1 million to $10.6 million in the second quarter 2016, from $12.7 million in the same period last year.

“We’ve seen some positive momentum this quarter,” commented Jeff Rogers, Universal’s Chief Executive Officer.  “In this challenging freight market, both our transportation and intermodal services performed well in terms of load volumes. Our value-added businesses, excluding where we support the heavy-truck market, are also delivering solid results.  However, the impact on pricing from the weak freight environment continues to negatively impact overall operating revenues and


income.  Despite these challenges, we continue to focus on providing great customer service, managing the costs we can control and preparing to deliver positive results when the overall freight market recovers.

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 July 2, 2016, Universal held cash and cash equivalents totaling $4.0 million and marketable securities totaling $14.3 million.  Outstanding debt, net of debt issue costs, totaled $228.7 million and capital expenditures totaled $10.0 million in the second quarter 2016.

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 August 8, 2016 and is expected to be paid on August 18, 2016.

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 second quarter 2016 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 EDT

Date:

Friday, July 29, 2016

Call Toll Free:

(866) 622-0924

International Dial-in:  

+1 (660) 422-4956

Conference ID:  

42833399

A replay of the conference call will be available beginning two hours after the call through August 25, 2016, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 42833399. The call will also be available on investors.goutsi.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 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 LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Statements of Income

(In thousands, except per share data)

 

  

 

Thirteen Weeks Ended

 

 

Twenty-six Weeks Ended

 

 

 

July 2,

 

 

June 27,

 

 

July 2,

 

 

June 27,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation services

 

$

162,724

 

 

$

180,150

 

 

$

312,648

 

 

$

340,554

 

Value-added services

 

 

78,206

 

 

 

75,105

 

 

 

153,760

 

 

 

145,323

 

Intermodal services

 

 

35,883

 

 

 

39,752

 

 

 

70,799

 

 

 

72,691

 

Total operating revenues

 

 

276,813

 

 

 

295,007

 

 

 

537,207

 

 

 

558,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation and equipment rent

 

 

132,012

 

 

 

149,085

 

 

 

253,677

 

 

 

281,165

 

Direct personnel and related benefits

 

 

65,348

 

 

 

53,748

 

 

 

129,358

 

 

 

105,258

 

Commission expense

 

 

8,379

 

 

 

9,543

 

 

 

16,451

 

 

 

18,361

 

Operating expense (exclusive of items shown separately)

 

 

23,566

 

 

 

29,096

 

 

 

47,492

 

 

 

56,141

 

Occupancy expense

 

 

7,974

 

 

 

6,607

 

 

 

15,697

 

 

 

13,434

 

Selling, general and administrative

 

 

9,139

 

 

 

9,266

 

 

 

17,489

 

 

 

18,272

 

Insurance and claims

 

 

4,486

 

 

 

5,875

 

 

 

8,658

 

 

 

10,045

 

Depreciation and amortization

 

 

9,135

 

 

 

8,867

 

 

 

17,681

 

 

 

17,905

 

Total operating expenses

 

 

260,039

 

 

 

272,087

 

 

 

506,503

 

 

 

520,581

 

Income from operations

 

 

16,774

 

 

 

22,920

 

 

 

30,704

 

 

 

37,987

 

Interest expense, net

 

 

(2,115

)

 

 

(1,901

)

 

 

(4,078

)

 

 

(3,743

)

Other non-operating income

 

 

112

 

 

 

565

 

 

 

250

 

 

 

672

 

Income before provision for income taxes

 

 

14,771

 

 

 

21,584

 

 

 

26,876

 

 

 

34,916

 

Provision for income taxes

 

 

5,724

 

 

 

8,300

 

 

 

10,352

 

 

 

13,468

 

Net income

 

$

9,047

 

 

$

13,284

 

 

$

16,524

 

 

$

21,448

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.32

 

 

$

0.44

 

 

$

0.58

 

 

$

0.72

 

Diluted

 

$

0.32

 

 

$

0.44

 

 

$

0.58

 

 

$

0.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

28,414

 

 

 

29,979

 

 

 

28,408

 

 

 

29,985

 

Diluted

 

 

28,414

 

 

 

29,980

 

 

 

28,408

 

 

 

29,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share:

 

$

0.07

 

 

$

0.07

 

 

$

0.14

 

 

$

0.14

 

 


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 

  

 

July 2,

2016

 

 

December 31,

2015

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,020

 

 

$

12,930

 

Marketable securities

 

 

14,254

 

 

 

13,431

 

Accounts receivable - net

 

 

146,795

 

 

 

141,275

 

Other current assets

 

 

36,888

 

 

 

35,204

 

Total current assets

 

 

201,957

 

 

 

202,840

 

Property and equipment - net

 

 

207,707

 

 

 

177,189

 

Other long-term assets - net

 

 

127,329

 

 

 

129,470

 

Total assets

 

$

536,993

 

 

$

509,499

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

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

 

$

115,525

 

 

$

91,700

 

Debt - net

 

 

228,739

 

 

 

233,414

 

Capital lease obligations

 

 

245

 

 

 

1,981

 

Other long-term liabilities

 

 

49,101

 

 

 

51,323

 

Total liabilities

 

 

393,610

 

 

 

378,418

 

Total shareholders' equity

 

 

143,383

 

 

 

131,081

 

Total liabilities and shareholders' equity

 

$

536,993

 

 

$

509,499

 

 


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data

 

  

 

Thirteen Weeks Ended

 

 

Twenty-six Weeks Ended

 

 

 

July 2,

 

 

June 27,

 

 

July 2,

 

 

June 27,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Transportation Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average operating revenues per loaded mile (a)

 

$

2.41

 

 

$

2.71

 

 

$

2.38

 

 

$

2.70

 

Average operating revenues per loaded mile, excluding fuel

   surcharges, where separately identifiable (a)

 

$

2.26

 

 

$

2.47

 

 

$

2.24

 

 

$

2.45

 

Average operating revenues per load (a)

 

$

903

 

 

$

1,034

 

 

$

899

 

 

$

1,015

 

Average operating revenues per load, excluding fuel

   surcharges, where separately identifiable (a)

 

$

848

 

 

$

941

 

 

$

846

 

 

$

923

 

Average length of haul (a) (b)

 

 

375

 

 

 

381

 

 

 

378

 

 

 

376

 

Number of loads (a)

 

 

158,283

 

 

 

155,874

 

 

 

306,637

 

 

 

302,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value-Added Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of facilities (c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer provided

 

 

17

 

 

 

17

 

 

 

17

 

 

 

17

 

Company leased

 

 

34

 

 

 

31

 

 

 

34

 

 

 

31

 

Total

 

 

51

 

 

 

48

 

 

 

51

 

 

 

48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drayage (in thousands)

 

$

33,499

 

 

$

36,513

 

 

$

65,780

 

 

$

66,136

 

Domestic Intermodal (in thousands)

 

 

401

 

 

 

441

 

 

 

852

 

 

 

1,250

 

Depot (in thousands)

 

 

1,983

 

 

 

2,798

 

 

 

4,167

 

 

 

5,305

 

Total (in thousands)

 

$

35,883

 

 

$

39,752

 

 

$

70,799

 

 

$

72,691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average operating revenues per loaded mile

 

$

5.74

 

 

$

5.68

 

 

$

5.39

 

 

$

5.41

 

Average operating revenues per loaded mile, excluding fuel

   surcharges, where separately identifiable

 

$

5.17

 

 

$

4.82

 

 

$

4.83

 

 

$

4.51

 

Average operating revenues per load

 

$

391

 

 

$

428

 

 

$

393

 

 

$

414

 

Average operating revenues per load, excluding fuel

   surcharges, where separately identifiable

 

$

352

 

 

$

363

 

 

$

353

 

 

$

346

 

Number of loads

 

 

85,701

 

 

 

85,250

 

 

 

167,196

 

 

 

159,566

 

Number of container yards

 

 

11

 

 

 

10

 

 

 

11

 

 

 

10

 

 

(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 LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data - Continued

 

  

 

Thirteen Weeks Ended

 

 

Twenty-six Weeks Ended

 

 

 

July 2,

 

 

June 27,

 

 

July 2,

 

 

June 27,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Average Headcount:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees

 

 

5,336

 

 

 

4,474

 

 

 

5,254

 

 

 

4,389

 

Full time equivalents

 

 

2,049

 

 

 

1,510

 

 

 

1,955

 

 

 

1,447

 

Total

 

 

7,385

 

 

 

5,984

 

 

 

7,209

 

 

 

5,836

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of tractors:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provided by owner-operators

 

 

3,166

 

 

 

3,303

 

 

 

3,172

 

 

 

3,282

 

Owned

 

 

1,189

 

 

 

839

 

 

 

1,151

 

 

 

841

 

Third party lease

 

 

14

 

 

 

24

 

 

 

25

 

 

 

30

 

Total

 

 

4,369

 

 

 

4,166

 

 

 

4,348

 

 

 

4,153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues by Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

$

169,286

 

 

$

188,724

 

 

$

326,832

 

 

$

355,957

 

Logistics

 

 

107,229

 

 

 

106,181

 

 

 

209,786

 

 

 

202,412

 

Other

 

 

298

 

 

 

102

 

 

 

589

 

 

 

199

 

 

 

$

276,813

 

 

$

295,007

 

 

$

537,207

 

 

$

558,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Operations by Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

$

6,919

 

 

$

9,166

 

 

$

12,807

 

 

$

15,516

 

Logistics

 

 

10,609

 

 

 

12,725

 

 

 

19,158

 

 

 

21,498

 

Other

 

 

(754

)

 

 

1,029

 

 

 

(1,261

)

 

 

973

 

 

 

$

16,774

 

 

$

22,920

 

 

$

30,704

 

 

$

37,987

 

 

 



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

 

 

 

July 2,

 

 

June 27,

 

 

July 2,

 

 

June 27,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

( in thousands)

 

 

( in thousands)

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

9,047

 

 

$

13,284

 

 

$

16,524

 

 

$

21,448

 

Provision for income taxes

 

 

5,724

 

 

 

8,300

 

 

 

10,352

 

 

 

13,468

 

Interest expense, net

 

 

2,115

 

 

 

1,901

 

 

 

4,078

 

 

 

3,743

 

Depreciation and amortization

 

 

9,135

 

 

 

8,867

 

 

 

17,681

 

 

 

17,905

 

Other non-operating income

 

 

(112

)

 

 

(565

)

 

 

(250

)

 

 

(672

)

EBITDA

 

$

25,909

 

 

$

31,787

 

 

$

48,385

 

 

$

55,892

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA margin (a)

 

 

9.4

%

 

 

10.8

%

 

 

9.0

%

 

 

10.0

%

 

(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.