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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 October 3, 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 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.

2


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.

 

3


 

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.

 

 

4


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.

 

5


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.

 

 

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

 

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

)