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Universal Logistics Holdings Reports Fourth Quarter and Year-End Financial Results; Declares Regular and Special Dividends
- Fourth Quarter 2018 Operating Revenues: $386.4 million, 23.0% increase
- Fourth Quarter 2018 Operating Income: $17.9 million, 36.6% increase
- Fourth Quarter 2018 EPS: $0.32, includes $0.23 charge for legal settlement and securities losses
- Regular Quarterly Dividend: $0.105 per share
- Special Annual Dividend: $0.110 per share

WARREN, Mich., Feb. 21, 2019 /PRNewswire/ -- Universal Logistics Holdings, Inc. (NASDAQ: ULH), a leading asset-light provider of customized transportation and logistics solutions, today reported fourth quarter 2018 net income of $9.0 million, or $0.32 per basic and diluted share, on record-high operating revenues of $386.4 million.  Universal has reported eight consecutive quarters of revenue growth.  Included in the results was a $7.0 million pre-tax charge, or approximately $0.19 per share, for the settlement of a previously disclosed legal matter.  Fourth quarter 2018 results also include $1.6 million of pre-tax holding losses, or $0.04 per share, on marketable securities due to changes in fair value recognized in income. These results compare to fourth quarter 2017 net income of $24.4 million, or $0.86 per basic and diluted share, on total operating revenue of $314.0 million.  Fourth quarter 2017 net income included $18.1 million, or $0.64 per basic and diluted share, of tax benefit from the impact of the Tax Cuts and Jobs Act enacted on December 22, 2017. 

Universal Logistics Holdings logo (PRNewsfoto/Universal Logistics Holdings)

Consolidated net income for the full year 2018 was $52.2 million, or $1.84 per basic and diluted share, on total operating revenue of $1.46 billion.  Both operating revenues and earnings per share for the full year 2018 were the highest ever reported in Universal's history.  Included in the full year results were $9.0 million of pre-tax charges, or approximately $0.24 per share, for the settlement of a previously disclosed legal matter.  This compares to net income of $28.2 million, or $0.99 per basic and diluted share, and $1.22 billion of total operating revenues in 2017.   

Operating revenues from truckload services in the fourth quarter 2018 increased $1.9 million, or 2.6% to $73.8 million, compared to $71.9 million for the same period last year. Included in truckload revenues during the period were $8.1 million of separately identified fuel surcharges, compared to $7.6 million in the same period last year.  Universal's average revenue per mile, excluding fuel charges, increased 15.4% during the period, while the number of loads hauled decreased 11.3% during the same period.  During the fourth quarter of 2018, Universal moved 66,821 loads, compared to 75,309 loads during the same period last year. 

Revenues from brokerage services in the fourth quarter 2018 increased $15.9 million, or 19.3% to $98.1 million, compared to $82.2 million one year earlier. The growth is primarily due to an increase in the number of brokerage loads moved.  During the fourth quarter of 2018, Universal brokered 53,467 loads, compared to 45,896 loads during the same period last year. 

Intermodal services revenues increased $43.9 million to $83.9 million in the fourth quarter of 2018, up from $40.0 million one year earlier.  Intermodal revenues for the recently completed quarter included $37.2 million of revenues attributable to Fore Transportation, Southern Counties Express, Specialized Rail Service, and Container Connection, each of which Universal acquired in 2018.  Fuel surcharges included in intermodal revenues in the fourth quarter 2018 totaled $11.1 million compared to $4.5 million during the same period last year.  During the fourth quarter 2018, Universal moved 143,845 intermodal loads, compared to 88,208 loads one year earlier, an increase of 63.1%, while also increasing its average operating revenue per load, excluding fuel surcharges, by 26.6%. 

Fourth quarter 2018 operating revenues from dedicated services increased 50.7% to $33.3 million compared to $22.1 million one year earlier. Dedicated services revenues included $4.7 million of separately identified fuel surcharges, compared to $3.2 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 slightly during the fourth quarter 2018 to $97.3 million.  This compares to $97.8 million from value-added services one year earlier.  Operations supporting passenger vehicle programs declined during the period, while those supporting heavy-truck production continued to record strong growth.  Value-added operations supporting heavy-truck grew $4.0 million, or 18.2% on a year-over-year basis.

Consolidated income from operations for the fourth quarter 2018 increased $4.8 million, or 36.6% to $17.9 million.  Included in fourth quarter 2018 results was a $7.0 million charge for the settlement of a previously disclosed legal matter attributed to Universal's logistics segment.  Universal's transportation and logistics segments both outperformed the same period last year. During the fourth quarter 2018, income from operations in Universal's transportation segment, which is primarily comprised of truckload, brokerage and intermodal services operations, increased to $19.4 million compared to $7.3 million during the same period last year, and income (loss) from operations in Universal's logistics segment, which includes value-added and dedicated services, decreased to $(1.8) million compared to $4.2 million during the same period last year.  However, the operating loss for the logistics segment during the fourth quarter of 2018 includes the $7.0 million of pre-tax charge for the settlement of pending litigation.   

"2018 proved to be a very exciting year for Universal," stated Jeff Rogers, Universal's Chief Executive Officer.  "We closed out the year with the highest quarterly revenue ever reported, making the fourth quarter of 2018 Universal's eighth consecutive quarter of top-line revenue growth.  In fact, we reported double-digit revenue growth in each quarter of 2018, all while delivering outstanding customer service.  During the year, Universal also completed the acquisition of four best-in-class intermodal service providers, further expanding our strategic footprint into some of the largest intermodal markets in the United States.  And this year, we delivered the best operating results ever reported in Universal's history.  I am pleased with all that we have accomplished as Team Universal, and I remain optimistic about what lies in store for the year ahead."

Universal calculates and reports selected financial metrics not only in connection with 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."

During the fourth quarter of 2018, EBITDA increased $4.8 million, or 18.0% to $31.4 million, compared to $26.6 million in the same period last year.  As a percentage of total operating revenues, operating income and EBITDA margins for the fourth quarter 2018 were 4.6% and 8.5%, respectively.  These profitability metrics compare to 4.2% and 8.4%, respectively, in fourth quarter 2017. 

As of December 31, 2018, Universal held cash and cash equivalents totaling $5.7 million, and $9.3 million in marketable securities.  Outstanding debt at the end of the fourth quarter 2018 was $403.2 million and capital expenditures totaled $9.4 million during the period.

Universal Logistics Holdings, Inc. also announced today that its Board of Directors has declared the regular quarterly cash dividend of $0.105 per share of common stock.  In addition, after taking into consideration Universal's overall financial performance, the Board of Directors approved an additional special annual dividend of $0.110 per share of common stock.  Both dividends are payable to shareholders of record at the close of business on March 4, 2019 and is expected to be paid on March 14, 2019.

Conference call:

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

Quarterly Earnings Conference Call Dial-in Details:

Time:  10:00 AM Eastern Time
Date:  Friday, February 22, 2019
Call Toll Free:  (866) 622-0924
International Dial-in:  +1 (660) 422-4956
Conference ID:  2665778

A replay of the conference call will be available beginning two hours after the call through March 29, 2019, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 2665778. 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

December 31,



Year Ended

December 31,




2018



2017



2018



2017


Operating revenues:

















Truckload services


$

73,758



$

71,868



$

313,811



$

302,914


Brokerage services



98,133




82,199




367,579




278,187


Intermodal services



83,884




40,013




251,074




153,726


Dedicated services



33,298




22,099




121,023




93,505


Value-added services



97,305




97,844




408,221




388,333


Total operating revenues



386,378




314,023




1,461,708




1,216,665



















Operating expenses:

















Purchased transportation and equipment rent



189,517




150,381




716,019




577,485


Direct personnel and related benefits



94,106




80,012




354,654




314,364


Operating supplies and expenses



32,189




26,663




122,736




115,420


Commission expense



9,083




8,929




37,381




33,213


Occupancy expense



8,127




7,574




30,701




30,575


General and administrative



8,169




8,097




31,523




31,518


Insurance and claims



12,302




5,923




30,475




41,881


Depreciation and amortization



14,977




13,332




54,425




46,995


Total operating expenses



368,470




300,911




1,377,914




1,191,451


Income from operations



17,908




13,112




83,794




25,214


Interest expense, net



(4,783)




(2,221)




(14,593)




(9,446)


Other non-operating income (expense)



(1,500)




120




188




1,373


Income before provision for income taxes



11,625




11,011




69,389




17,141


Provision for income taxes



2,605




(13,390)




17,211




(11,012)


Net income


$

9,020



$

24,401



$

52,178



$

28,153



















Earnings per common share:

















Basic


$

0.32



$

0.86



$

1.84



$

0.99


Diluted


$

0.32



$

0.86



$

1.84



$

0.99


Weighted average number of common shares outstanding:

















Basic



28,373




28,382




28,384




28,425


Diluted



28,376




28,390




28,385




28,428



















Dividends declared per common share:


$

0.215



$

0.070



$

0.530



$

0.280


 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)








December 31,

2018



December 31,

2017


Assets









Cash and cash equivalents


$

5,727



$

1,672


Marketable securities



9,333




15,144


Accounts receivable - net



215,991




171,036


Other current assets



44,207




40,814


Total current assets



275,258




228,666


Property and equipment - net



303,234




267,195


Other long-term assets - net



264,327




114,731


Total assets


$

842,819



$

610,592











Liabilities and shareholders' equity









Current liabilities, excluding current maturities of debt


$

169,267



$

158,200


Debt - net



400,452




247,978


Other long-term liabilities



63,801




35,649


Total liabilities



633,520




441,827


Total shareholders' equity



209,299




168,765


Total liabilities and shareholders' equity


$

842,819



$

610,592


 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data








Thirteen Weeks Ended

December 31,



Year Ended

December 31,




2018



2017



2018



2017


Truckload Services:

















Number of loads



66,821




75,309




287,782




314,530


Average operating revenue per load, excluding fuel surcharges


$

1,014



$

936



$

975



$

874


Average operating revenue per mile, excluding fuel surcharges


$

3.07



$

2.66



$

2.89



$

2.50


Average length of haul



330




352




337




349


Average number of tractors



1,711




1,946




1,787




1,950



















Brokerage Services:

















Number of loads (a)



53,467




45,896




210,713




185,892


Average operating revenue per load (a)


$

1,710



$

1,743



$

1,665



$

1,420


Average length of haul (a)



622




556




598




556



















Intermodal Services:

















Number of loads



143,845




88,208




455,752




347,056


Average operating revenue per load, excluding fuel surcharges


$

514



$

406



$

482



$

396


Average number of tractors



1,523




922




1,175




913


Number of depots



14




13




14




13



















Dedicated Services:

















Number of loads (b)



53,434




42,393




231,616




190,768


Average number of drivers



1,081




1,002




1,038




960




(a)  

Excludes operating data from Cavalry Logistics International, Inc., in order to improve the relevance of the statistical data related to our brokerage services and improve the comparability to our peer companies.

(b)   

Excludes shuttle moves.

 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data – Continued

(Dollars in thousands)








Thirteen Weeks Ended

December 31,



Year Ended

December 31,




2018



2017



2018



2017


Value-added Services

















Average number of direct employees



3,757




4,012




3,841




4,166


Average number of full-time equivalents



1,463




1,622




1,405




1,731


Number of active programs



50




50




50




50



















Operating Revenues by Segment:

















Transportation


$

260,448



$

197,860



$

949,242



$

750,302


Logistics



125,487




115,818




510,918




465,070


Other



443




345




1,548




1,293


Total


$

386,378



$

314,023



$

1,461,708



$

1,216,665



















Income (Loss) from Operations by Segment:

















Transportation


$

19,361



$

7,304



$

51,634



$

14,512


Logistics



(1,814)




4,237




31,136




10,597


Other



361




1,571




1,024




105


Total


$

17,908



$

13,112



$

83,794



$

25,214


 

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 a supplemental measure of our performance. We define EBITDA, a non-GAAP measure, as net income plus (i) interest expense, net, (ii) provision for income taxes and (iii) depreciation and amortization. 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

December 31,



Year Ended

December 31,




2018



2017



2018



2017




( in thousands)



( in thousands)


EBITDA

















Net income


$

9,020



$

24,401



$

52,178



$

28,153


Provision for income taxes



2,605




(13,390)




17,211




(11,012)


Interest expense, net



4,783




2,221




14,593




9,446


Depreciation and amortization



14,977




13,332




54,425




46,995


EBITDA


$

31,385



$

26,564



$

138,407



$

73,582



















EBITDA margin (a)



8.1

%



8.5

%



9.5

%



6.0

%

 

(a)    EBITDA margin is computed by dividing EBITDA by total operating revenues 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 Logistics Holdings, Inc.

Steven Fitzpatrick, Investor Relations, SFitzpatrick@UniversalLogistics.com