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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 July 4, 2020 

or

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.

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

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 August 10, 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)

 

 

 

July 4,

2020

 

 

December 31,

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,977

 

 

$

7,726

 

Marketable securities

 

 

7,195

 

 

 

9,369

 

Accounts receivable – net of allowance for doubtful accounts of $2,993

   and $2,545, respectively

 

 

180,942

 

 

 

210,534

 

Other receivables

 

 

19,640

 

 

 

19,065

 

Prepaid expenses and other

 

 

25,204

 

 

 

19,676

 

Due from affiliates

 

 

934

 

 

 

1,705

 

Prepaid income taxes

 

 

-

 

 

 

3,768

 

Total current assets

 

 

241,892

 

 

 

271,843

 

Property and equipment – net of accumulated depreciation of $284,563 and

   $270,062, respectively

 

 

350,346

 

 

 

339,823

 

Operating lease right-of-use asset

 

 

87,678

 

 

 

87,209

 

Goodwill

 

 

170,039

 

 

 

168,451

 

Intangible assets – net of accumulated amortization of $86,487 and $78,366, respectively

 

 

107,991

 

 

 

116,111

 

Deferred income taxes

 

 

1,412

 

 

 

1,460

 

Other assets

 

 

4,067

 

 

 

3,100

 

Total assets

 

$

963,425

 

 

$

987,997

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

111,659

 

 

$

91,909

 

Current portion of long-term debt

 

 

60,122

 

 

 

59,476

 

Insurance and claims

 

 

25,576

 

 

 

27,484

 

Accrued expenses and other current liabilities

 

 

28,023

 

 

 

34,825

 

Current portion of operating lease liabilities

 

 

24,612

 

 

 

23,039

 

Due to affiliates

 

 

15,763

 

 

 

14,842

 

Income taxes payable

 

 

3,829

 

 

 

-

 

Total current liabilities

 

 

269,584

 

 

 

251,575

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

343,599

 

 

 

398,136

 

Operating lease liabilities, net of current portion

 

 

62,902

 

 

 

61,674

 

Deferred income taxes

 

 

64,966

 

 

 

65,692

 

Other long-term liabilities

 

 

5,824

 

 

 

5,703

 

Total long-term liabilities

 

 

477,291

 

 

 

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

 

 

266,670

 

 

 

251,204

 

Accumulated other comprehensive (loss):

 

 

 

 

 

 

 

 

Interest rate swaps, net of income taxes of $(177) and $(32), respectively

 

 

(577

)

 

 

(105

)

Foreign currency translation adjustments

 

 

(2,761

)

 

 

(3,905

)

Total shareholders’ equity

 

 

216,550

 

 

 

205,217

 

Total liabilities and shareholders’ equity

 

$

963,425

 

 

$

987,997

 

See accompanying notes to consolidated financial statements.

2


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Income

(In thousands, except per share data)

 

 

 

Thirteen Weeks Ended

 

 

Twenty-six Weeks Ended

 

 

 

July 4,

2020

 

 

June 29,

2019

 

 

July 4,

2020

 

 

June 29,

2019

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Truckload services

 

$

40,523

 

 

$

64,846

 

 

$

99,421

 

 

$

130,517

 

Brokerage services

 

 

62,782

 

 

 

89,371

 

 

 

148,681

 

 

 

175,238

 

Intermodal services

 

 

82,881

 

 

 

93,853

 

 

 

193,203

 

 

 

185,021

 

Dedicated services

 

 

18,031

 

 

 

35,867

 

 

 

49,610

 

 

 

72,888

 

Value-added services

 

 

53,763

 

 

 

99,238

 

 

 

149,227

 

 

 

196,917

 

Total operating revenues

 

 

257,980

 

 

 

383,175

 

 

 

640,142

 

 

 

760,581

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation and equipment rent

 

 

128,611

 

 

 

178,356

 

 

 

309,467

 

 

 

355,681

 

Direct personnel and related benefits

 

 

57,592

 

 

 

93,650

 

 

 

154,980

 

 

 

186,817

 

Operating supplies and expenses

 

 

16,962

 

 

 

30,737

 

 

 

47,657

 

 

 

61,507

 

Commission expense

 

 

5,024

 

 

 

7,858

 

 

 

12,194

 

 

 

15,694

 

Occupancy expense

 

 

8,984

 

 

 

9,859

 

 

 

17,815

 

 

 

19,143

 

General and administrative

 

 

6,580

 

 

 

9,633

 

 

 

15,504

 

 

 

18,874

 

Insurance and claims

 

 

4,858

 

 

 

4,951

 

 

 

9,730

 

 

 

11,303

 

Depreciation and amortization

 

 

18,530

 

 

 

17,415

 

 

 

38,048

 

 

 

34,333

 

Total operating expenses

 

 

247,141

 

 

 

352,459

 

 

 

605,395

 

 

 

703,352

 

Income from operations

 

 

10,839

 

 

 

30,716

 

 

 

34,747

 

 

 

57,229

 

Interest income

 

 

15

 

 

 

21

 

 

 

23

 

 

 

43

 

Interest expense

 

 

(3,453

)

 

 

(4,119

)

 

 

(7,670

)

 

 

(8,510

)

Other non-operating income (expense)

 

 

811

 

 

 

96

 

 

 

(2,794

)

 

 

1,049

 

Income before income taxes

 

 

8,212

 

 

 

26,714

 

 

 

24,306

 

 

 

49,811

 

Income tax expense

 

 

2,044

 

 

 

6,742

 

 

 

5,975

 

 

 

12,542

 

Net income

 

$

6,168

 

 

$

19,972

 

 

$

18,331

 

 

$

37,269

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.23

 

 

$

0.70

 

 

$

0.68

 

 

$

1.31

 

Diluted

 

$

0.23

 

 

$

0.70

 

 

$

0.68

 

 

$

1.31

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

26,919

 

 

 

28,383

 

 

 

27,074

 

 

 

28,382

 

Diluted

 

 

26,919

 

 

 

28,385

 

 

 

27,074

 

 

 

28,383

 

Dividends declared per common share

 

$

-

 

 

$

0.105

 

 

$

0.105

 

 

$

0.210

 

 

See accompanying notes to consolidated financial statements.

 

3


 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)

 

 

 

Thirteen Weeks Ended

 

 

Twenty-six Weeks Ended

 

 

 

July 4,

2020

 

 

June 29,

2019

 

 

July 4,

2020

 

 

June 29,

2019

 

Net Income

 

$

6,168

 

 

$

19,972

 

 

$

18,331

 

 

$

37,269

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized changes in fair value of interest rate swaps,

   net of income taxes of $(11), $(75), $(146) and $(120), respectively

 

 

(24

)

 

 

(236

)

 

 

(472

)

 

 

(378

)

Foreign currency translation adjustments

 

 

1,824

 

 

 

(36

)

 

 

1,144

 

 

 

192

 

Total other comprehensive income (loss)

 

 

1,800

 

 

 

(272

)

 

 

672

 

 

 

(186

)

Total comprehensive income

 

$

7,968

 

 

$

19,700

 

 

$

19,003

 

 

$

37,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 

 

4


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Cash Flows

(In thousands)

 

 

Twenty-six Weeks Ended

 

 

 

July 4,

2020

 

 

June 29,

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

18,331

 

 

$

37,269

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

38,048

 

 

 

34,333

 

Noncash lease expense

 

 

14,724

 

 

 

14,788

 

Loss (gain) on marketable equity securities

 

 

2,534

 

 

 

(870

)

Gain on disposal of property and equipment

 

 

(591

)

 

 

(90

)

Amortization of debt issuance costs

 

 

294

 

 

 

293

 

Stock-based compensation

 

 

195

 

 

 

73

 

Provision for doubtful accounts

 

 

1,348

 

 

 

927

 

Deferred income taxes

 

 

(2,208

)

 

 

5,173

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

Trade and other accounts receivable

 

 

25,543

 

 

 

15,361

 

Prepaid income taxes, prepaid expenses and other assets

 

 

(2,693

)

 

 

(2,025

)

Principal reduction in operating lease liabilities

 

 

(14,310

)

 

 

(13,938

)

Accounts payable, accrued expenses and other current liabilities, insurance

   and claims, and income taxes payable

 

 

26,013

 

 

 

941

 

Due to/from affiliates, net

 

 

1,690

 

 

 

253

 

Other long-term liabilities

 

 

(498

)

 

 

(651

)

Net cash provided by operating activities

 

 

108,420

 

 

 

91,837

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(42,369

)

 

 

(25,128

)

Proceeds from the sale of property and equipment

 

 

2,509

 

 

 

1,172

 

Purchases of marketable securities

 

 

(360

)

 

 

 

Proceeds from sale of marketable securities

 

 

 

 

 

557

 

Acquisition of business

 

 

 

 

 

(22,457

)

Net cash used in investing activities

 

 

(40,220

)

 

 

(45,856

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from borrowing - revolving debt

 

 

141,801

 

 

 

111,771

 

Repayments of debt - revolving debt

 

 

(203,053

)

 

 

(139,337

)

Proceeds from borrowing - term debt

 

 

35,295

 

 

 

18,528

 

Repayments of debt - term debt

 

 

(28,182

)

 

 

(26,780

)

Borrowings under margin account

 

 

256

 

 

 

 

Repayments under margin account

 

 

(256

)

 

 

(541

)

Dividends paid

 

 

(5,731

)

 

 

(9,082

)

Capitalized financing costs

 

 

(46

)

 

 

 

Purchases of treasury stock

 

 

(5,000

)

 

 

 

Net cash used in financing activities

 

 

(64,916

)

 

 

(45,441

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(3,033

)

 

 

192

 

Net increase in cash

 

 

251

 

 

 

732

 

Cash  and cash equivalents – beginning of period

 

 

7,726

 

 

 

5,727

 

Cash and cash equivalents – end of period

 

$

7,977

 

 

$

6,459

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 

5


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Cash Flows - Continued

(In thousands)

 

 

Twenty-six Weeks Ended

 

 

 

July 4,

2020

 

 

June 29,

2019

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

7,033

 

 

$

8,090

 

Cash paid for income taxes

 

$

457

 

 

$

9,251

 

Acquisition of business:

 

 

 

 

 

 

 

 

Fair value of assets acquired

 

$

 

 

$

23,981

 

Liabilities assumed

 

 

 

 

 

(2,779

)

Payment of acquisition obligations

 

 

 

 

 

1,255

 

Net cash paid for acquisition of business

 

$

 

 

$

22,457

 

 

See accompanying notes to consolidated financial statements.

 

 

6


 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances – December 31, 2019

 

$

30,972

 

 

$

4,298

 

 

$

(77,247

)

 

$

251,204

 

 

$

(4,010

)

 

$

205,217

 

Net income

 

 

 

 

 

 

 

 

 

 

 

12,163

 

 

 

 

 

 

12,163

 

Comprehensive (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,128

)

 

 

(1,128

)

Dividends paid ($0.105 per share)