News Release

WARREN, Mich., Oct. 24, 2013 /PRNewswire/ -- Universal Truckload Services, Inc. (NASDAQ: UACL) today reported third quarter 2013 net income of $13.7 million, or $0.46 per basic and diluted share, on total operating revenues of $261.7 million.  This compares to pro forma net income of $12.0 million, or $0.40 per basic and diluted share, during the third quarter of 2012 on total operating revenues of $256.9 million.  Net income as reported for the third quarter of 2012 was $15.1 million, or $0.50 per basic and diluted share.

Income from operations increased 19.0% to $22.5 million or 8.6% of operating revenues for the third quarter of 2013.  This compares to $18.9 million or 7.4% of operating revenues for the third quarter of 2012. Demand for value-added services continues to expand, growing at a rate of 16.3% compared to the same period last year.  Though still soft, we have seen some stabilization in our transportation services, which declined 2.1% compared to the third quarter of 2012.  Intermodal services revenue continues to grow, increasing 6.0% compared to the same period last year, although not as quickly as in recent quarters. 

Universal's Chief Executive Officer, Scott Wolfe commented, "Our third quarter 2013 operating results and financial performance are in line with our expectations.  Despite the heightened level of economic uncertainty due to the unsettling federal budget and debt limit debates, which we think may moderate demand from our commercial customers, we remain focused on providing the highest level of services to our customers and on continuing our track record of profitable growth. We do anticipate under performance in our government business and metals, but we are cautiously optimistic that the impact will be modest and short-term in nature." 

Our consolidated financial statements for all periods presented include the results of LINC Logistics Company, which we acquired one year ago.  On an as-reported basis, our net income and earnings per share have declined.  However, this is primarily due to the change in LINC's tax status.  LINC was an "S" corporation for federal income tax purposes prior to October 1, 2012.  After various adjustments related to the acquisition, our effective tax rate was 36.1% in the third quarter of 2013, compared to 22.2% in the third quarter of 2012.  For comparative purposes, our effective tax rate through the second quarter of 2013 was 37.9%. 

We calculate and report selected financial metrics in connection with lending arrangements, or 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."  Our EBITDA increased 16.3% to $27.2 million for the thirteen weeks ended September 28, 2013, from $23.3 million for the thirteen weeks ended September 29, 2012.  Expressed as a percentage of operating revenues, third quarter 2013 EBITDA was 10.4%, compared to 9.1% for the third quarter of 2012.  For the third quarter of 2013, trends in EBITDA are substantially similar to trends in income from operations.  

As of September 28, 2013, we held cash and cash equivalents totaling $5.5 million and marketable securities totaling $10.6 million.  Outstanding debt at the end of the third quarter of 2013 totaled $124.0 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 4, 2013 and is expected to be paid on November 14, 2013. 

Conference call:

We invite you to participate in a conference call on Friday, October 25, 2013 at 10:00 a.m. Eastern Time where management will discuss third quarter 2013 financial performance.  Hosting the call will be Scott Wolfe, Chief Executive Officer, Don Cochran, President, and David Crittenden, Chief Financial Officer.

To participate:  Please call (877) 866-3199 (toll free) or (660) 422-4956 (toll) and provide conference ID 88327847.

To listen to an audio replay:  Please call (855) 859-2056 (toll free) or (404) 537-3406 (toll) and enter conference ID 88327847, or locate the link in the investor page at: www.goutsi.com.  Audio replay is available through November 25, 2013.  

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. 

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 adjusted income from operations and adjusted EBITDA as supplemental measures of our performance.   We define adjusted income from operations as income from operations adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance, including previous costs related to LINC's capital market activity, which was terminated in the third quarter of 2012.  We define adjusted 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, further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance, including previous costs related to LINC's capital market activity. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating adjusted income from operations and adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation.  Our presentation of adjusted income from operations and adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

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 income from operations, the most comparable GAAP measure, to adjusted income from operations; and of net income, the most comparable GAAP measure, to EBITDA and adjusted EBITDA for each of the periods indicated:

(a)      Represents expenses incurred as a result of LINC's preparations for an IPO in early 2012.  When the IPO efforts were abandoned in May 2012, the costs were then taken as a charge to income.

(b)     Operating margin, adjusted operating margin, EBITDA margin, and adjusted EBITDA margin are computed by dividing income from operations, adjusted income from operations, EBITDA, and adjusted EBITDA, respectively, by total operating revenues for each of the periods indicated.

We present adjusted income from operations and adjusted 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.

Adjusted income from operations and adjusted EBITDA have limitations as an analytical tool. Some of these limitations are:

• Adjusted income from operations and adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
• Adjusted income from operations and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
• Adjusted income from operations and adjusted EBITDA do 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 adjusted EBITDA does not reflect any cash requirements for such replacements;
• Adjusted income from operations and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
• Other companies in our industry may calculate adjusted income from operations and adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, adjusted income from operations and adjusted 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 using adjusted income from operations and adjusted EBITDA only supplementally.

SOURCE Universal Truckload Services, Inc.

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