News Release

WARREN, Mich., Oct. 23, 2014 /PRNewswire/ -- Universal Truckload Services, Inc. (NASDAQ: UACL) reported today third quarter net income of $13.1 million, or $0.44 per basic and diluted share on total operating revenue of $302.1 million.  This compares to net income of $13.7 million, or $0.46 per basic and diluted share, on total operating revenues of $261.7 million during the third quarter of 2013.  Total operating revenues increased 15.5% and earnings per share declined $0.02 compared to the prior year, reflecting a different mix of transportation and logistics segment business and corporate charges unrelated to operating activities. 

Operating revenues from transportation services increased $15.9 million, or 8.8%, to $196.8 million in the quarter ended September 27, 2014, from the comparable period last year, due to a 6.2% year-over-year increase in loads and continuing strength in pricing.  Value-added services revenues increased $21.2 million in the most recent quarter.  However, revenues from subsidiaries delivering these services that have been included in consolidated financial results for more than one year declined 6.9%, or $3.3 million, due to the conclusion of certain customer operations.  Revenues from intermodal services increased 10.0%, to $36.2 million from $32.9 million in the third quarter of 2013.  The $3.3 million net increase in revenues from intermodal services includes a $4.1 million increase in our intermodal drayage services.

In the aggregate, income from operations increased 2.2% to $23.0 million, compared to $22.5 million in the third quarter of 2013.  Income from operations in our transportation segment increased 23.7% to $10.2 million or 5.0% of segment operating revenues for the third quarter of 2014, which compares to $8.3 million or 4.5% of segment operating revenues for the third quarter of 2013.  Income from operations in our logistics segment, which includes value-added services and dedicated transportation services, decreased 9.1% to $14.0 million or 14.3% of operating revenues for the third quarter of 2014.  This compares to $15.4 million or 19.2% of operating revenues one year earlier.

"Universal's truckload and intermodal businesses met our revenue expectations in the third quarter, owing to favorable load count and pricing trends, and they achieved quarter-over-quarter margin improvements," according to Jeff Rogers, Executive Vice President.  "In our logistics segment, we are focused on three priorities: enhancing and further penetrating existing customer relationships, improving the profitability of our dedicated transportation services, and continuing to develop domestic and international opportunities in our sales pipeline."

We calculate and report selected financial metrics in connection with lending arrangements, and also to isolate and separately identify the impact of corporate development activities, which can include non-operating transaction costs and amortization of intangible assets recognized as the result of prior acquisitions. These statistics are described in more detail below in the section captioned "Non-GAAP Financial Measures."

For the thirteen weeks ended September 27, 2014, our EBITDA increased 15.8% to $31.5 million, from $27.2 million for the thirteen weeks ended September 27, 2013.  Expressed as a percentage of operating revenues, third quarter 2014 EBITDA remained unchanged at 10.4% compared the third quarter of 2013.  Trends in EBITDA expressed as a percentage of operating revenues are substantially similar to trends in income from operations, excluding amortization of acquisition-related intangibles.

As of September 27, 2014, we held cash and cash equivalents totaling $10.0 million and marketable securities totaling $12.3 million.  Outstanding debt totaled $238.4 million and obligations pursuant to capital leases were valued at $3.6 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 November 3, 2014 and is expected to be paid on November 13, 2014. 

Conference call:

We invite analysts and investors to participate in a conference call on Friday, October 24, 2014 at 10:00 AM ET.  During the call, we will discuss Universal's third quarter 2014 financial performance, the current demand outlook in key markets we serve, and trends impacting our business. 

Dial-in details:

Call Toll Free:  (866) 622-0924
International Dial-in:  +1 (660) 422-4956
Conference ID:  11057654

A replay of the conference will be available two hours after the call through November 20, 2014, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 11057654. Additionally, the call will 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, Mexico and Canada.  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, value-added, and intermodal 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.

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:

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.

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SOURCE Universal Truckload Services, Inc.

David A. Crittenden, Chief Financial Officer, DCrittenden@goutsi.com, (586) 467-1427