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Universal Logistics Holdings Reports Second Quarter 2020 Financial Results
- Second Quarter 2020 Operating Revenues: $258.0 million, 32.7% decrease
 
- Second Quarter 2020 Operating Income: $10.8 million, 64.7% decrease
 
- Second Quarter 2020 Earnings Per Share: $0.23 per share

WARREN, Mich., July 30, 2020 /PRNewswire/ -- Universal Logistics Holdings, Inc. (NASDAQ: ULH), a leading asset-light provider of customized transportation and logistics solutions, today reported consolidated second quarter 2020 net income of $6.2 million, or $0.23 per basic and diluted share, on total operating revenues of $258.0 million. This compares to $20.0 million, or $0.70 per basic and diluted share, during second quarter 2019 on total operating revenues of $383.2 million.  Included in second quarter 2020 results were $0.9 million of pre-tax holding gains, or $0.02 per share, on marketable securities due to changes in fair value recognized in income. 

In the second quarter 2020, Universal reported operating income of $10.8 million compared to $30.7 million in the second quarter one year earlier. As a percentage of operating revenue, operating income margin for the second quarter 2020 was 4.2% compared to 8.0% during the same period last year.  EBITDA, a non-GAAP measure, decreased by $18.0 million during the second quarter 2020 to $30.2 million, compared to $48.2 million one year earlier.  As a percentage of operating revenue, EBITDA margin for the second quarter 2020 was 11.7% compared to 12.6% during the same period last year. 

"Our performance during these unprecedented times once again highlights the resilience of Universal's business model," commented Tim Phillips, Universal's Chief Executive Officer.  "With a substantial portion of our customer base shuttered during the peak of the COVID-19 pandemic, Universal was able to quickly adapt to a rapidly changing environment, adjust our operations to meet customer demands, and still report positive operating results.  We were able to accomplish all of this while staying focused on the safety and well-being of our employees, contractors and customers. 

"We're excited to see the resumption of North American manufacturing, particularly in the automotive and heavy-truck space, as well as improving demand for truckload transportation throughout the second quarter. While some of our Southern California intermodal operations struggled amid muted port volumes, we are optimistic that continued strength in retail sales will boost container volumes and cascade improvements throughout our network. Although it is difficult to predict the operating environment for second half of the year, we are generally pleased with the anticipated direction of our current operations and remain committed to controlling costs and scaling our services to support customer activity."

Operating revenues from truckload services in the second quarter decreased $24.3 million to $40.5 million, compared to $64.8 million for the same period last year. Included in truckload revenues for the recently completed quarter were $2.9 million in separately identified fuel surcharges compared to $7.0 million during the same period last year. The decrease in truckload services reflects a 40.7% decrease in the number of loads hauled, which was partially offset by a 6.8% increase in average operating revenue per load, excluding fuel surcharges. During the quarter ended July 4, 2020, Universal moved 36,445 loads compared to 61,423 during the same period last year. 

Revenues for the second quarter 2020 from brokerage services decreased $26.6 million, or 29.8%, to $62.8 million compared to $89.4 million one year earlier. The decrease is primarily due to a 17.2% decrease in the number of brokerage loads moved and a 16.7% decrease average operating revenue per load. During the second quarter of 2020, Universal brokered 47,797 loads, compared to 57,710 loads during the same period last year.

Intermodal services revenues decreased $11.0 million to $82.9 million in the second quarter 2020, down from $93.9 million during the same period last year.  Included in intermodal revenues for the recently completed quarter were $8.2 million in separately identified fuel surcharges compared to $11.6 million during the same period last year.  The decrease in intermodal services reflects a decrease in the number of loads hauled, in addition to a decrease in the average operating revenue per load, excluding fuel surcharges.  During the quarter ended July 4, 2020, Universal moved 156,779 intermodal loads, compared to 164,761 loads during the same period last year, while its average operating revenue per load, excluding fuel surcharges, fell by 3.0%.

Second quarter 2020 operating revenues from dedicated services decreased 49.7% to $18.0 million compared to $35.9 million one year earlier. Dedicated services revenues included $1.3 million in separately identified fuel surcharges in the second quarter 2020 compared to $4.3 million during the same period last year.  During the second quarter of 2020, Universal moved 57,703 dedicated loads, compared to 151,755 loads during the same period last year. Universal's dedicated operations were substantially impacted by the shutdown of North American automotive manufacturing from the COVID-19 pandemic for several weeks during the quarter. 

Overall, revenues from value-added services decreased during the second quarter 2020 to $53.8 million. This compares to $99.2 million from value-added services one year earlier. Operations supporting passenger vehicle programs declined due to plant shutdowns during the height of the pandemic and reduced output as production began to ramp up near the end of the second quarter. Value-added operations supporting heavy-truck production also decreased this quarter falling $20.6 million in the thirteen weeks ended July 4, 2020 compared to the same period last year. Both platforms were adversely impacted by the shutdown of North American automotive and heavy-truck manufacturing for several weeks during the period.

During the second quarter 2020, the transportation segment, which is primarily comprised of truckload, brokerage and intermodal services operations, reported operating income of $10.0 million on total operating revenues of $185.8 million. The transportation segment performed well during the period despite the depressed volumes experienced in each transportation service lines. In the logistics segment, which includes value-added and dedicated services, the shutdown of North American automotive and heavy-truck manufacturing for several weeks during the quarter adversely impacted results.  For the second quarter 2020, income from operations in the logistics segment was $0.8 million on total operating revenues of $71.8 million.

As of July 4, 2020, Universal held cash and cash equivalents totaling $8.0 million, and $7.2 million in marketable securities.  Outstanding debt at the end of the second quarter 2020 was $405.6 million and capital expenditures totaled $9.6 million

Universal calculates and reports selected financial metrics not only for purposes of our lending arrangements but also 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."

Conference call:

We invite investors and analysts to our quarterly earnings conference call. 

Quarterly Earnings Conference Call Dial-in Details:

Time:  10:00 a.m. Eastern Time
Date:  Friday, July 31, 2020
Call Toll Free:  (866) 622-0924
International Dial-in:  +1 (660) 422-4956
Conference ID:  3877109

A replay of the conference call will be available beginning two hours after the call through September 4, 2020, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 3877109. 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



Twenty-six Weeks Ended




July 4,



June 29,



July 4,



June 29,




2020



2019



2020



2019


Operating revenues:

















Truckload services


$

40,523



$

64,846



$

99,421



$

130,517


Brokerage services



62,782




89,371




148,681




175,238


Intermodal services



82,881




93,853




193,203




185,021


Dedicated services



18,031




35,867




49,610




72,888


Value-added services



53,763




99,238




149,227




196,917


Total operating revenues



257,980




383,175




640,142




760,581



















Operating expenses:

















Purchased transportation and equipment rent



128,611




178,356




309,467




355,681


Direct personnel and related benefits



57,592




93,650




154,980




186,817


Operating supplies and expenses



16,962




30,737




47,657




61,507


Commission expense



5,024




7,858




12,194




15,694


Occupancy expense



8,984




9,859




17,815




19,143


General and administrative



6,580




9,633




15,504




18,874


Insurance and claims



4,858




4,951




9,730




11,303


Depreciation and amortization



18,530




17,415




38,048




34,333


Total operating expenses



247,141




352,459




605,395




703,352


Income from operations



10,839




30,716




34,747




57,229


Interest expense, net



(3,438)




(4,098)




(7,647)




(8,467)


Other non-operating income



811




96




(2,794)




1,049


Income before income taxes



8,212




26,714




24,306




49,811


Income tax expense



2,044




6,742




5,975




12,542


Net income


$

6,168



$

19,972



$

18,331



$

37,269



















Earnings per common share:

















Basic


$

0.23



$

0.70



$

0.68



$

1.31


Diluted


$

0.23



$

0.70



$

0.68



$

1.31



















Weighted average number of common shares outstanding:

















Basic



26,919




28,383




27,074




28,382


Diluted



26,919




28,385




27,074




28,383



















Dividends declared per common share:


$

-



$

0.105



$

0.105



$

0.210


 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)




July 4,

2020



December 31,

2019


Assets









Cash and cash equivalents


$

7,977



$

7,726


Marketable securities



7,195




9,369


Accounts receivable - net



180,942




210,534


Other current assets



45,778




44,214


Total current assets



241,892




271,843


Property and equipment - net



350,346




339,823


Other long-term assets - net



371,187




376,331


Total assets


$

963,425



$

987,997











Liabilities and shareholders' equity









Current liabilities, excluding current maturities of debt


$

209,462



$

192,099


Debt - net



403,721




457,612


Other long-term liabilities



133,692




133,069


Total liabilities



746,875




782,780


Total shareholders' equity



216,550




205,217


Total liabilities and shareholders' equity


$

963,425



$

987,997


 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data




Thirteen Weeks Ended



Twenty-six Weeks Ended




July 4,



June 29,



July 4,



June 29,




2020



2019



2020



2019


Truckload Services:

















Number of loads



36,445




61,423




93,132




122,515


Average operating revenue per load, excluding fuel surcharges


$

1,001



$

937



$

937



$

938


Average operating revenue per mile, excluding fuel surcharges


$

3.61



$

3.18



$

3.24



$

3.27


Average length of haul



277




295




289




287


Average number of tractors



1,320




1,525




1,373




1,576



















Brokerage Services:

















Number of loads (a)



47,797




57,710




108,849




111,319


Average operating revenue per load (a)


$

1,236



$

1,484



$

1,315



$

1,501


Average length of haul (a)



599




642




607




641



















Intermodal Services:

















Number of loads



156,779




164,761




354,562




329,938


Average operating revenue per load, excluding fuel surcharges


$

485



$

500



$

491



$

497


Average number of tractors



2,236




1,889




2,383




1,773


Number of depots



14




14




14




14



















Dedicated Services:

















Number of loads (b)



57,703




151,755




197,218




295,003




(a)

Excludes operating data from freight forwarding division in order to improve the relevance of the statistical data related to our
brokerage services and improve the comparability to our peer companies.

(b)

Includes shuttle moves.

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data - Continued

(Dollars in thousands)




Thirteen Weeks Ended



Twenty-six Weeks Ended




July 4,



June 29,



July 4,



June 29,




2020



2019



2020



2019


Value-added Services

















Average number of direct employees



3,238




3,768




3,445




3,734


Average number of full-time equivalents



787




1,564




1,109




1,667


Number of active programs



55




49




55




49



















Operating Revenues by Segment:

















Transportation


$

185,831



$

251,777



$

440,504



$

498,482


Logistics



71,794




131,160




198,836




261,559


Other



355




238




802




540


Total


$

257,980



$

383,175



$

640,142



$

760,581



















Income from Operations by Segment:

















Transportation


$

10,035



$

13,294



$

22,138



$

25,826


Logistics



750




17,339




12,440




31,159


Other



54




83




169




244


Total


$

10,839



$

30,716



$

34,747



$

57,229


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 and EBITDA margin, each a non-GAAP measure, as supplemental measures of our performance. We define EBITDA as net income plus (i) interest expense, net, (ii) income taxes, (iii) depreciation, and (iv) amortization. We define EBITDA margin as EBITDA as a percentage of total operating revenues. 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 4,



June 29,



July 4,



June 29,




2020



2019



2020



2019




( in thousands)



( in thousands)


EBITDA

















Net income


$

6,168



$

19,972



$

18,331



$

37,269


Income tax expense



2,044




6,742




5,975




12,542


Interest expense, net



3,438




4,098




7,647




8,467


Depreciation



14,485




13,242




29,927




26,176


Amortization



4,045




4,173




8,121




8,157


EBITDA


$

30,180



$

48,227



$

70,001



$

92,611



















EBITDA margin (a)



11.7

%



12.6

%



10.9

%



12.2

%



(a)

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

We present EBITDA and EBITDA margin because we believe they assist 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 and EBITDA margin 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 only supplementally on EBITDA and EBITDA margin.

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SOURCE Universal Logistics Holdings, Inc.

For Further Information: Steven Fitzpatrick, Investor Relations, SFitzpatrick@UniversalLogistics.com