SEC Filing | Universal Logistics Holdings, Inc.

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ulh-10q_20201003.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 3, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 0-51142

UNIVERSAL LOGISTICS HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Michigan

38-3640097

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

12755 E. Nine Mile Road

Warren, Michigan 48089

(Address, including Zip Code of Principal Executive Offices)

(586) 920-0100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, no par value		ULH		The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, no par value, outstanding as of November 9, 2020, was 26,918,830.

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Balance Sheets

(In thousands, except share data)

	October 3, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	8,677		$	7,726
Marketable securities		6,699			9,369
Accounts receivable – net of allowance for doubtful accounts of $3,442 and $2,545, respectively		248,965			210,534
Other receivables		21,898			19,065
Prepaid expenses and other		25,987			19,676
Due from affiliates		1,476			1,705
Prepaid income taxes		1,479			3,768
Total current assets		315,181			271,843
Property and equipment – net of accumulated depreciation of $296,552 and $270,062, respectively		363,449			339,823
Operating lease right-of-use asset		96,205			87,209
Goodwill		170,730			168,451
Intangible assets – net of accumulated amortization of $89,788 and $78,366, respectively		106,022			116,111
Deferred income taxes		1,413			1,460
Other assets		3,866			3,100
Total assets	$	1,056,866		$	987,997
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	110,758		$	91,909
Current portion of long-term debt		61,244			59,476
Insurance and claims		26,058			27,484
Accrued expenses and other current liabilities		34,869			34,825
Current portion of operating lease liabilities		24,270			23,039
Due to affiliates		16,146			14,842
Total current liabilities		273,345			251,575
Long-term liabilities:
Long-term debt, net of current portion		405,351			398,136
Operating lease liabilities, net of current portion		72,504			61,674
Deferred income taxes		71,684			65,692
Other long-term liabilities		6,354			5,703
Total long-term liabilities		555,893			531,205
Shareholders' equity:
Common stock, no par value. Authorized 100,000,000 shares; 30,979,827 and 30,970,452 shares issued; 26,918,830 and 27,282,230 shares outstanding, respectively		30,981			30,972
Paid-in capital		4,484			4,298
Treasury stock, at cost; 4,060,997 and 3,688,222 shares, respectively		(82,247	)		(77,247	)
Retained earnings		280,248			251,204
Accumulated other comprehensive (loss):
Interest rate swaps, net of income taxes of $(164) and $(32), respectively		(530	)		(105	)
Foreign currency translation adjustments		(5,308	)		(3,905	)
Total shareholders’ equity		227,628			205,217
Total liabilities and shareholders’ equity	$	1,056,866		$	987,997

See accompanying notes to consolidated financial statements.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Income

(In thousands, except per share data)

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Operating revenues:
Truckload services	$	52,212		$	62,615		$	151,633		$	193,133
Brokerage services		90,568			94,442			239,249			269,680
Intermodal services		94,543			93,022			287,746			278,043
Dedicated services		39,376			32,730			88,986			105,618
Value-added services		88,289			92,676			237,516			289,593
Total operating revenues		364,988			375,485			1,005,130			1,136,067
Operating expenses:
Purchased transportation and equipment rent		177,207			183,902			486,674			539,584
Direct personnel and related benefits		88,881			91,946			243,862			278,763
Operating supplies and expenses		31,001			30,465			78,658			91,972
Commission expense		6,756			7,991			18,950			23,685
Occupancy expense		8,674			8,380			26,489			27,523
General and administrative		8,586			11,435			24,090			30,309
Insurance and claims		4,926			29,912			14,655			41,215
Depreciation and amortization		16,894			18,807			54,942			53,140
Total operating expenses		342,925			382,838			948,320			1,086,191
Income (loss) from operations		22,063			(7,353	)		56,810			49,876
Interest income		13			14			37			57
Interest expense		(3,518	)		(4,091	)		(11,188	)		(12,602	)
Other non-operating income (expense)		(494	)		163			(3,289	)		1,212
Income (loss) before income taxes		18,064			(11,267	)		42,370			38,543
Provision for income taxes		4,486			(2,847	)		10,461			9,694
Net income (loss)	$	13,578		$	(8,420	)	$	31,909		$	28,849
Earnings per common share:
Basic	$	0.50		$	(0.30	)	$	1.18		$	1.02
Diluted	$	0.50		$	(0.30	)	$	1.18		$	1.02
Weighted average number of common shares outstanding:
Basic		26,919			28,263			27,023			28,342
Diluted		26,922			28,264			27,023			28,343
Dividends declared per common share	$	-		$	0.105		$	0.105		$	0.315

See accompanying notes to consolidated financial statements.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Net Income (loss)	$	13,578		$	(8,420	)	$	31,909		$	28,849
Other comprehensive income (loss):
Unrealized changes in fair value of interest rate swaps, net of income taxes of $14, $(34), $(132) and $(155), respectively		46			(107	)		(425	)		(485	)
Foreign currency translation adjustments		(2,546	)		(185	)		(1,403	)		7
Total other comprehensive income (loss)		(2,500	)		(292	)		(1,828	)		(478	)
Total comprehensive income (loss)	$	11,078		$	(8,712	)	$	30,081		$	28,371

See accompanying notes to consolidated financial statements.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Cash Flows

(In thousands)

	Thirty-nine Weeks Ended
	October 3, 2020			September 28, 2019
Cash flows from operating activities:
Net income	$	31,909		$	28,849
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		54,942			53,140
Noncash lease expense		21,972			22,361
Loss (gain) on marketable equity securities		3,031			(960	)
Loss (gain) on disposal of property and equipment		(638	)		6
Amortization of debt issuance costs		441			439
Stock-based compensation		195			73
Provision for doubtful accounts		2,351			2,157
Deferred income taxes		4,733			(1,877	)
Change in assets and liabilities:
Trade and other accounts receivable		(45,695	)		7,246
Prepaid income taxes, prepaid expenses and other assets		(4,739	)		1,236
Principal reduction in operating lease liabilities		(21,360	)		(21,103	)
Accounts payable, accrued expenses and other current liabilities, insurance and claims, and income taxes payable		28,974			36,230
Due to/from affiliates, net		1,534			4,503
Other long-term liabilities		90			(324	)
Net cash provided by operating activities		77,740			131,976
Cash flows from investing activities:
Capital expenditures		(72,836	)		(60,752	)
Proceeds from the sale of property and equipment		2,978			5,002
Purchases of marketable securities		(361	)		(92	)
Proceeds from sale of marketable securities		—			1,246
Acquisition of business		(1,295	)		(22,457	)
Net cash used in investing activities		(71,514	)		(77,053	)
Cash flows from financing activities:
Proceeds from borrowing - revolving debt		296,794			214,393
Repayments of debt - revolving debt		(298,191	)		(229,392	)
Proceeds from borrowing - term debt		54,602			45,433
Repayments of debt - term debt		(44,617	)		(44,228	)
Borrowings under margin account		256			—
Repayments under margin account		(256	)		(541	)
Capitalized financing costs		(46	)		—
Dividends paid		(5,731	)		(15,042	)
Purchases of treasury stock		(5,000	)		(24,786	)
Net cash used in financing activities		(2,189	)		(54,163	)
Effect of exchange rate changes on cash and cash equivalents		(3,086	)		(2	)
Net increase in cash		951			758
Cash and cash equivalents – beginning of period		7,726			5,727
Cash and cash equivalents – end of period	$	8,677		$	6,485

See accompanying notes to consolidated financial statements.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Cash Flows - Continued

(In thousands)

	Thirty-nine Weeks Ended
	October 3, 2020		September 28, 2019
Supplemental cash flow information:
Cash paid for interest	$	10,734	$	11,282
Cash paid for income taxes	$	3,108	$	11,892
Acquisition of business:
Fair value of assets acquired	$	—	$	23,981
Liabilities assumed		—		(2,779	)
Payment of acquisition obligations		1,295		1,255
Net cash paid for acquisition of business	$	1,295	$	22,457

See accompanying notes to consolidated financial statements.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Shareholders’ Equity

(In thousands, except per share data)

	Common stock		Paid-in capital		Treasury stock			Retained earnings			Accumulated other comprehensive income (loss)			Total
Balances – December 31, 2018	$	30,967	$	4,230	$	(52,462	)	$	231,525		$	(4,961	)	$	209,299
Net income		—		—		—			17,297			—			17,297
Comprehensive income		—		—		—			—			86			86
Dividends paid ($0.215 per share)		—		—		—			(6,101	)		—			(6,101	)
Stock based compensation		5		68		—			—			—			73
Balances - March 30, 2019		30,972		4,298		(52,462	)		242,721			(4,875	)		220,654
Net income		—		—		—			19,972			—			19,972
Comprehensive (loss)		—		—		—			—			(272	)		(272	)
Dividends paid ($0.105 per share)		—		—		—			(2,981	)		—			(2,981	)
Balances – June 29, 2019		30,972		4,298		(52,462	)		259,712			(5,147	)		237,373
Net (loss)		—		—		—			(8,420	)		—			(8,420	)
Comprehensive income		—		—		—			—			(292	)		(292	)
Dividends paid ($0.105 per share)		—		—		—			(2,980	)		—			(2,980	)
Dividends payable ($0.105 per share)		—		—		—			(2,980	)		—			(2,980	)
Purchases of treasury stock		—		—		(24,786	)		—