News Release

WARREN, Mich., July 25, 2019 /PRNewswire/ -- Universal Logistics Holdings, Inc. (NASDAQ: ULH), a leading asset-light provider of customized transportation and logistics solutions, today reported consolidated second quarter 2019 net income of $20.0 million, or $0.70 per basic and diluted share, a 12.9% increase over the same period last year.  Universal also reported second quarter 2019 total operating revenues of $383.2 million, a 4.7% increase over the same period last year. This compares to $17.7 million, or $0.62 per basic and diluted share, during second quarter 2018 on total operating revenues of $365.9 million. 

Consolidated income from operations increased $4.5 million to $30.7 million, a 17.0% increase compared to $26.3 million one year earlier. As a percentage of operating revenue, operating income margin for the second quarter 2019 was 8.0% compared to 7.2% during the same period last year.  EBITDA, a non-GAAP measure, increased $8.4 million during the second quarter 2019 to $48.2 million, compared to $39.8 million one year earlier.  As a percentage of operating revenue, EBITDA margin for the second quarter 2019 was 12.6% compared to 10.9% during the same period last year, an increase of 170 basis points. 

Operating revenues from truckload services decreased $17.8 million to $64.8 million, compared to $82.7 million for the same period last year. Included in truckload revenues for the recently completed quarter were $7.0 million in separately identified fuel surcharges compared to $9.2 million during the same period last year.  The decrease in truckload services reflects an 18.0% decrease in the number of loads hauled and a 4.0% decrease in average operating revenue per load, excluding fuel surcharges.  During the quarter ended June 29, 2019, Universal moved 61,423 loads compared to 74,878 during the same period last year. 

Revenues for the second quarter 2019 from brokerage services decreased $3.1 million, or 3.4%, to $89.4 million compared to $92.5 million one year earlier. The decrease is primarily due to a 10.5% decrease in the average operating revenue per load, which was partially offset by an 8.7% increase in the number of brokerage loads moved.  During the second quarter of 2019, Universal brokered 57,710 loads, compared to 53,101 loads during the same period last year.

Intermodal services revenues increased $39.0 million to $93.9 million in the second quarter 2019, up from $54.9 million during the same period last year.  Included in intermodal revenues for the recently completed quarter were $41.5 million of acquisition revenues from companies acquired by Universal in the second half of 2018 and second quarter of 2019.  During the second quarter 2019 intermodal fuel surcharges totaled $11.6 million, compared to $5.8 million during the same period last year.  The growth is also due to increases in the average operating revenue per load, excluding fuel surcharges, and in the number of loads hauled.  During the quarter ended June 29, 2019, Universal moved 164,761 intermodal loads, compared to 98,468 loads during the same period last year, while also increasing its average operating revenue per load, excluding fuel surcharges, by 1.4%.

Second quarter 2019 operating revenues from dedicated services increased slightly to $35.9 million compared to $35.7 million one year earlier. Dedicated services revenues included $4.3 million in separately identified fuel surcharges in the second quarter 2019 compared to $4.5 million during the same period last year.  The increase was primarily attributable to increases in both shuttle moves and in the number of over-the-road loads hauled. 

Overall, revenues from value-added services decreased during the second quarter 2019 to $99.2 million.  This compares to $100.2 million from value-added services one year earlier.  Operations supporting passenger vehicle programs declined during the period due to a plant shut-down at a major program location and reduced production during its ramp up, while those supporting heavy-truck production continued to record strong growth.  Value-added operations supporting heavy-truck grew $3.1 million, or 10.7% on a year-over-year basis.

Both Universal's transportation and logistics segments outperformed the same period last year. Income from operations in the transportation segment, which is primarily comprised of truckload, brokerage and intermodal services operations, increased 29.4% to $13.3 million in the quarter ended June 29, 2019.  In the logistics segment, which includes value-added and dedicated services, income from operations increased 15.5% to $17.3 million in the second quarter 2019.

"Universal continues to deliver solid results in the second quarter of 2019," stated Jeff Rogers, Universal's Chief Executive Officer, "surpassing our strong first quarter performance, and achieving our 8% targeted operating margin.  We experienced some softness in trucking rates and volumes during the quarter, which was consistent across our industry, but overall we finished up reporting our best second quarter revenue on record and our highest earnings per share ever. We can clearly see the results of our acquisition strategy paying off, and continue to look for additional opportunities that fit our existing lines of business.  While I do see signs of diminished demand in the spot market continuing into the second half of the year, we intend to stay disciplined in controlling our costs, maintaining our margin and always delivering excellent customer service."

Universal also updated its full-year revenue expectation for 2019, citing the declines in trucking volumes and rates experienced in the second quarter. Based on currently available information, Universal revised its expected range for full-year operating revenues from $1.6 billion to $1.7 billion, to $1.5 billion to $1.6 billion.  Expected operating margins continue to be in the 7% to 9% range, and full-year capital expenditures in the range of $65 million to $75 million.  Total interest expense for the year is also expected to remain in the range of $15 million to $17 million.

As of June 29, 2019, Universal held cash and cash equivalents totaling $6.5 million, and $9.6 million in marketable securities.  Outstanding debt at the end of the second quarter 2019 was $366.8 million and capital expenditures totaled $14.3 million.

Universal Logistics Holdings, Inc. also announced today that its Board of Directors declared its second quarter cash dividend of $0.105 per share of common stock. The dividend is payable on August 12, 2019 to shareholders of record on August 5, 2019. The Board also declared that Universal's third quarter cash dividend of $0.105 per share is payable on October 1, 2019 to shareholders of record on September 2, 2019.

Universal calculates and reports selected financial metrics for purposes of our lending arrangements, and 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 26, 2019
Call Toll Free:  (866) 622-0924
International Dial-in:  +1 (660) 422-4956
Conference ID:  9367357

A replay of the conference call will be available beginning two hours after the call through August 23, 2019, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 9367357. 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.

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:

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