10-Q
Q10001308208false--12-310001308208ulh:CompanyManagedBrokerageMemberus-gaap:IntersegmentEliminationMember2023-01-012023-04-010001308208srt:AffiliatedEntityMember2022-04-0200013082082023-04-010001308208ulh:ThirdPartyMember2022-04-020001308208srt:AffiliatedEntityMemberulh:TruckFuelMaintenanceAndOtherOperatingCostsMember2023-01-012023-04-010001308208us-gaap:RestrictedStockMembersrt:ChiefExecutiveOfficerMember2020-01-102020-01-100001308208ulh:EquipmentFinancingMember2023-01-012023-04-010001308208us-gaap:CorporateNonSegmentMember2023-01-012023-04-010001308208us-gaap:AdditionalPaidInCapitalMember2021-12-310001308208srt:AffiliatedEntityMember2023-01-012023-04-010001308208ulh:EquipmentFinancingMember2023-04-010001308208us-gaap:LondonInterbankOfferedRateLIBORMemberulh:MarginFacilityMember2023-01-012023-04-010001308208us-gaap:OtherNonoperatingIncomeExpenseMember2022-01-012022-04-020001308208us-gaap:RetainedEarningsMember2023-01-012023-04-010001308208us-gaap:TreasuryStockMember2023-04-010001308208ulh:ContractLogisticsMemberus-gaap:IntersegmentEliminationMember2022-01-012022-04-0200013082082023-01-012023-04-010001308208srt:AffiliatedEntityMemberulh:InsuranceMember2023-01-012023-04-010001308208us-gaap:AdditionalPaidInCapitalMember2022-12-310001308208us-gaap:SecuredDebtMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberulh:RealEstateFinancingMember2023-01-012023-04-010001308208us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001308208ulh:UACLCreditAndSecurityAgreementMember2023-04-010001308208ulh:CreditAndSecurityAgreementMemberus-gaap:RevolvingCreditFacilityMember2023-04-010001308208ulh:RealEstateFinancingMember2023-04-010001308208us-gaap:TreasuryStockMember2022-01-012022-04-020001308208ulh:CreditAndSecurityAgreementMemberulh:TermLoanMember2023-01-012023-04-010001308208srt:AffiliatedEntityMemberulh:FacilitiesAndRelatedSupportMember2022-01-012022-04-020001308208srt:AffiliatedEntityMemberulh:TruckFuelMaintenanceAndOtherOperatingCostsMember2022-01-012022-04-020001308208us-gaap:OtherCurrentAssetsMember2022-12-310001308208us-gaap:AdditionalPaidInCapitalMember2023-01-012023-04-010001308208us-gaap:CommonStockMember2022-12-310001308208us-gaap:RestrictedStockMember2022-12-3100013082082021-12-310001308208ulh:EquipmentFinancingMembersrt:MinimumMember2023-04-010001308208us-gaap:OperatingSegmentsMemberulh:IntermodalMember2023-01-012023-04-010001308208srt:AffiliatedEntityMemberulh:FacilitiesAndRelatedSupportMember2023-01-012023-04-010001308208us-gaap:OperatingSegmentsMemberulh:TruckingMember2022-01-012022-04-020001308208ulh:EquipmentPromissoryNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-04-010001308208us-gaap:RestrictedStockMemberulh:VestingPeriodFourMember2020-01-100001308208srt:AffiliatedEntityMember2023-04-010001308208us-gaap:RestrictedStockMembersrt:ChiefExecutiveOfficerMember2023-03-242023-03-240001308208ulh:BrokerageServicesMember2022-01-012022-04-0200013082082022-05-310001308208us-gaap:RestrictedStockMemberulh:VestingPeriodThreeMember2020-01-100001308208ulh:TermLoanMemberulh:UACLCreditAndSecurityAgreementMember2023-04-010001308208us-gaap:RestrictedStockMemberulh:VestingPeriodTwoMember2020-01-100001308208ulh:TruckloadServicesMember2023-01-012023-04-010001308208ulh:CreditAndSecurityAgreementMemberus-gaap:RevolvingCreditFacilityMember2023-01-012023-04-010001308208us-gaap:OtherCurrentAssetsMember2023-04-010001308208us-gaap:OperatingSegmentsMemberulh:CompanyManagedBrokerageMember2023-01-012023-04-010001308208ulh:ValueAddedServicesMember2023-01-012023-04-010001308208ulh:DedicatedServicesMember2023-01-012023-04-010001308208ulh:TermLoanMemberulh:RealEstateFinancingMember2023-04-010001308208us-gaap:RevolvingCreditFacilityMemberulh:UACLCreditAndSecurityAgreementMember2023-01-012023-04-010001308208us-gaap:RevolvingCreditFacilityMemberulh:UACLCreditAndSecurityAgreementMember2023-04-010001308208ulh:VestingPeriodOneMemberus-gaap:RestrictedStockMember2020-01-100001308208us-gaap:OperatingSegmentsMemberulh:ContractLogisticsMember2022-01-012022-04-020001308208srt:AffiliatedEntityMemberulh:RealEstateRentAndRelatedCostsMember2023-01-012023-04-010001308208us-gaap:RestrictedStockMember2023-03-242023-03-240001308208ulh:TruckloadServicesMember2022-01-012022-04-020001308208us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001308208us-gaap:RestrictedStockMember2021-09-092021-09-090001308208us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-020001308208us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-3100013082082022-12-310001308208us-gaap:IntersegmentEliminationMember2022-01-012022-04-0200013082082022-04-020001308208ulh:RealEstateNoteMember2023-04-010001308208srt:AffiliatedEntityMember2022-06-012022-06-300001308208us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001308208us-gaap:InterestRateSwapMember2023-01-012023-04-010001308208srt:AffiliatedEntityMemberulh:AdministrativeSupportServicesMember2022-01-012022-04-020001308208us-gaap:RetainedEarningsMember2022-04-020001308208us-gaap:UnionizedEmployeesConcentrationRiskMemberus-gaap:WorkforceSubjectToCollectiveBargainingArrangementsMembercountry:MX2023-01-012023-04-010001308208us-gaap:CommonStockMember2023-04-010001308208ulh:UACLCreditAndSecurityAgreementMemberulh:TermLoanMember2023-01-012023-04-010001308208us-gaap:CorporateNonSegmentMember2022-01-012022-04-020001308208us-gaap:CommonStockMember2023-01-012023-04-010001308208us-gaap:CommonStockMember2021-12-310001308208ulh:IntermodalServicesMember2022-01-012022-04-0200013082082023-02-092023-02-090001308208srt:AffiliatedEntityMemberulh:ContractedTransportationServicesMember2022-01-012022-04-020001308208ulh:CreditAndSecurityAgreementMember2023-04-010001308208us-gaap:OperatingSegmentsMemberulh:CompanyManagedBrokerageMember2022-01-012022-04-020001308208us-gaap:TreasuryStockMember2022-12-310001308208us-gaap:RestrictedStockMember2023-01-012023-04-010001308208us-gaap:CommonStockMember2022-01-012022-04-020001308208us-gaap:IntersegmentEliminationMemberulh:TruckingMember2022-01-012022-04-020001308208us-gaap:FairValueMeasurementsRecurringMember2023-04-010001308208us-gaap:RestrictedStockMembersrt:ChiefFinancialOfficerMember2023-03-242023-03-240001308208us-gaap:AdditionalPaidInCapitalMember2022-04-020001308208us-gaap:AdditionalPaidInCapitalMember2023-04-010001308208srt:AffiliatedEntityMemberulh:ContractedTransportationServicesMember2023-01-012023-04-010001308208srt:MaximumMember2023-01-012023-04-010001308208us-gaap:TreasuryStockMember2021-12-310001308208us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-04-020001308208ulh:IntermodalMemberus-gaap:IntersegmentEliminationMember2023-01-012023-04-010001308208us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-04-010001308208us-gaap:AdditionalPaidInCapitalMember2022-01-012022-04-020001308208us-gaap:IntersegmentEliminationMember2023-01-012023-04-010001308208ulh:IntermodalServicesMember2023-01-012023-04-010001308208srt:AffiliatedEntityMemberulh:InsuranceMember2022-01-012022-04-020001308208srt:AffiliatedEntityMemberulh:UsedTractorsMember2022-01-012022-04-020001308208us-gaap:RetainedEarningsMember2022-01-012022-04-020001308208us-gaap:OperatingSegmentsMemberulh:IntermodalMember2022-01-012022-04-020001308208ulh:CompanyManagedBrokerageMemberus-gaap:IntersegmentEliminationMember2022-01-012022-04-020001308208ulh:ContractLogisticsMemberus-gaap:IntersegmentEliminationMember2023-01-012023-04-010001308208ulh:DedicatedServicesMember2022-01-012022-04-020001308208us-gaap:RetainedEarningsMember2021-12-310001308208us-gaap:FairValueMeasurementsRecurringMember2022-12-310001308208ulh:RealEstateNoteMember2022-12-310001308208srt:AffiliatedEntityMemberulh:UsedTractorsMember2023-01-012023-04-010001308208ulh:ThirdPartyMember2022-01-012022-04-020001308208us-gaap:UnionizedEmployeesConcentrationRiskMemberulh:UnitedStatesCanadaAndColumbiaMemberus-gaap:WorkforceSubjectToCollectiveBargainingArrangementsMember2023-01-012023-04-010001308208ulh:IntermodalMemberus-gaap:IntersegmentEliminationMember2022-01-012022-04-020001308208us-gaap:SecuredDebtMemberulh:RealEstateFinancingMember2023-01-012023-04-010001308208us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-010001308208ulh:EquipmentFinancingMember2022-12-310001308208ulh:BrokerageServicesMember2023-01-012023-04-010001308208ulh:ThirdPartyMember2023-04-010001308208us-gaap:RestrictedStockMembersrt:ChiefFinancialOfficerMember2020-02-052020-02-050001308208srt:AffiliatedEntityMemberulh:RealEstateRentAndRelatedCostsMember2022-01-012022-04-020001308208us-gaap:OtherNonoperatingIncomeExpenseMember2023-01-012023-04-010001308208us-gaap:CarryingReportedAmountFairValueDisclosureMemberulh:EquipmentPromissoryNotesMember2023-04-010001308208us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:InterestRateSwapMember2023-04-010001308208ulh:TermLoanMemberulh:UACLCreditAndSecurityAgreementMember2022-12-310001308208ulh:MarginFacilityMember2023-01-012023-04-010001308208us-gaap:IntersegmentEliminationMemberulh:TruckingMember2023-01-012023-04-010001308208srt:AffiliatedEntityMember2022-01-012022-04-020001308208us-gaap:SubsequentEventMember2023-04-272023-04-270001308208us-gaap:CommonStockMember2022-04-0200013082082022-01-012022-04-020001308208us-gaap:TreasuryStockMember2022-04-020001308208us-gaap:InterestRateSwapMember2023-04-010001308208ulh:RealEstateFinancingMemberulh:TermLoanMember2023-01-012023-04-010001308208us-gaap:OperatingSegmentsMemberulh:TruckingMember2023-01-012023-04-010001308208us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-04-010001308208ulh:EquipmentFinancingMembersrt:MaximumMember2023-04-010001308208us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-04-010001308208ulh:ThirdPartyMember2023-01-012023-04-010001308208srt:AffiliatedEntityMemberulh:AdministrativeSupportServicesMember2023-01-012023-04-0100013082082023-05-080001308208us-gaap:RestrictedStockMember2023-04-010001308208us-gaap:OperatingSegmentsMemberulh:ContractLogisticsMember2023-01-012023-04-010001308208ulh:ValueAddedServicesMember2022-01-012022-04-020001308208ulh:UACLCreditAndSecurityAgreementMemberulh:TermLoanMember2023-04-010001308208ulh:MarginFacilityMember2023-04-010001308208us-gaap:RetainedEarningsMember2022-12-310001308208us-gaap:RetainedEarningsMember2023-04-01ulh:Installmentxbrli:purexbrli:sharesulh:Segmentulh:Facilityiso4217:USDxbrli:sharesiso4217:USD

 

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 April 1, 2023

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 May 8, 2023, was 26,287,973.

 


PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

April 1,
2023

 

 

December 31,
2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

76,775

 

 

$

47,181

 

Marketable securities

 

 

9,987

 

 

 

10,000

 

Accounts receivable – net of allowance for credit losses of $14,744
   and $
14,308, respectively

 

 

332,407

 

 

 

350,720

 

Other receivables

 

 

28,186

 

 

 

25,146

 

Prepaid expenses and other

 

 

25,542

 

 

 

25,629

 

Due from affiliates

 

 

929

 

 

 

976

 

Total current assets

 

 

473,826

 

 

 

459,652

 

Property and equipment – net of accumulated depreciation of $349,852 and
   $
352,231, respectively

 

 

406,473

 

 

 

391,154

 

Operating lease right-of-use asset

 

 

105,280

 

 

 

99,731

 

Goodwill

 

 

170,730

 

 

 

170,730

 

Intangible assets – net of accumulated amortization of $125,028 and $121,843, respectively

 

 

70,782

 

 

 

73,967

 

Deferred income taxes

 

 

1,394

 

 

 

1,394

 

Other assets

 

 

6,815

 

 

 

7,050

 

Total assets

 

$

1,235,300

 

 

$

1,203,678

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

83,659

 

 

$

87,138

 

Current portion of long-term debt

 

 

67,544

 

 

 

65,303

 

Current portion of operating lease liabilities

 

 

29,146

 

 

 

28,227

 

Accrued expenses and other current liabilities

 

 

47,660

 

 

 

43,106

 

Insurance and claims

 

 

36,567

 

 

 

30,574

 

Due to affiliates

 

 

17,494

 

 

 

20,627

 

Income taxes payable

 

 

18,232

 

 

 

11,926

 

Total current liabilities

 

 

300,302

 

 

 

286,901

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

310,180

 

 

 

313,197

 

Operating lease liabilities, net of current portion

 

 

82,534

 

 

 

77,600

 

Deferred income taxes

 

 

69,585

 

 

 

69,585

 

Other long-term liabilities

 

 

4,400

 

 

 

9,465

 

Total long-term liabilities

 

 

466,699

 

 

 

469,847

 

Shareholders' equity:

 

 

 

 

 

 

Common stock, no par value. Authorized 100,000,000 shares; 31,003,080 and
 
30,996,205 shares issued; 26,284,424 and 26,277,549 shares outstanding,
   respectively

 

 

31,003

 

 

 

30,997

 

Paid-in capital

 

 

5,007

 

 

 

4,852

 

Treasury stock, at cost; 4,718,656 shares

 

 

(96,706

)

 

 

(96,706

)

Retained earnings

 

 

535,706

 

 

 

513,589

 

Accumulated other comprehensive (loss):

 

 

 

 

 

 

Interest rate swaps, net of income taxes of $449 and $726, respectively

 

 

1,336

 

 

 

2,156

 

Foreign currency translation adjustments

 

 

(8,047

)

 

 

(7,958

)

Total shareholders’ equity

 

 

468,299

 

 

 

446,930

 

Total liabilities and shareholders’ equity

 

$

1,235,300

 

 

$

1,203,678

 

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

 

 

 

April 1,
2023

 

 

April 2,
2022

 

Operating revenues:

 

 

 

 

 

 

Truckload services

 

$

46,401

 

 

$

57,483

 

Brokerage services

 

 

68,673

 

 

 

107,172

 

Intermodal services

 

 

111,026

 

 

 

157,613

 

Dedicated services

 

 

85,232

 

 

 

75,487

 

Value-added services

 

 

126,064

 

 

 

126,106

 

Total operating revenues

 

 

437,396

 

 

 

523,861

 

Operating expenses:

 

 

 

 

 

 

Purchased transportation and equipment rent

 

 

156,085

 

 

 

232,131

 

Direct personnel and related benefits

 

 

139,752

 

 

 

136,667

 

Operating supplies and expenses

 

 

46,189

 

 

 

42,124

 

Commission expense

 

 

8,172

 

 

 

10,024

 

Occupancy expense

 

 

11,152

 

 

 

10,195

 

General and administrative

 

 

11,256

 

 

 

10,063

 

Insurance and claims

 

 

8,079

 

 

 

8,581

 

Depreciation and amortization

 

 

18,515

 

 

 

16,228

 

Total operating expenses

 

 

399,200

 

 

 

466,013

 

Income from operations

 

 

38,196

 

 

 

57,848

 

Interest income

 

 

752

 

 

 

 

Interest expense

 

 

(5,727

)

 

 

(2,433

)

Other non-operating income

 

 

15

 

 

 

953

 

Income before income taxes

 

 

33,236

 

 

 

56,368

 

Income tax expense

 

 

8,360

 

 

 

14,360

 

Net income

 

$

24,876

 

 

$

42,008

 

Earnings per common share:

 

 

 

 

 

 

Basic

 

$

0.95

 

 

$

1.56

 

Diluted

 

$

0.95

 

 

$

1.56

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

Basic

 

 

26,281

 

 

 

26,864

 

Diluted

 

 

26,314

 

 

 

26,865

 

Dividends declared per common share

 

$

0.105

 

 

$

0.105

 

 

See accompanying notes to consolidated financial statements.

 

3


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)

 

 

 

Thirteen Weeks Ended

 

 

 

April 1,
2023

 

 

April 2,
2022

 

Net Income

 

$

24,876

 

 

$

42,008

 

Other comprehensive income (loss):

 

 

 

 

 

 

Unrealized changes in fair value of interest rate swaps, net of income taxes of
   $(
277) and $82, respectively

 

 

(820

)

 

 

241

 

Foreign currency translation adjustments

 

 

(89

)

 

 

(2,834

)

Total other comprehensive income (loss)

 

 

(909

)

 

 

(2,593

)

Total comprehensive income

 

$

23,967

 

 

$

39,415

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 

4


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Cash Flows

(In thousands)

 

 

Thirteen Weeks Ended

 

 

 

April 1,
2023

 

 

April 2,
2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

24,876

 

 

$

42,008

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

18,515

 

 

 

16,228

 

Noncash lease expense

 

 

7,593

 

 

 

7,194

 

Loss (gain) on marketable equity securities

 

 

13

 

 

 

(949

)

Gain on disposal of property and equipment

 

 

(902

)

 

 

(1,079

)

Amortization of debt issuance costs

 

 

189

 

 

 

120

 

Stock-based compensation

 

 

161

 

 

 

162

 

Provision for credit losses

 

 

2,130

 

 

 

1,848

 

Deferred income taxes

 

 

 

 

 

(81

)

Change in assets and liabilities:

 

 

 

 

 

 

Trade and other accounts receivable

 

 

12,840

 

 

 

(55,994

)

Prepaid expenses and other assets

 

 

(725

)

 

 

(1,050

)

Principal reduction in operating lease liabilities

 

 

(7,435

)

 

 

(6,501

)

Accounts payable, accrued expenses, income taxes payable,
   insurance and claims and other current liabilities

 

 

15,377

 

 

 

43,925

 

Due to/from affiliates, net

 

 

(3,086

)

 

 

(2,524

)

Other long-term liabilities

 

 

(5,065

)

 

 

(2,187

)

Net cash provided by operating activities

 

 

64,481

 

 

 

41,120

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(31,336

)

 

 

(6,047

)

Proceeds from the sale of property and equipment

 

 

1,588

 

 

 

2,607

 

Net cash used in investing activities

 

 

(29,748

)

 

 

(3,440

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from borrowing - revolving debt

 

 

 

 

 

107,961

 

Repayments of debt - revolving debt

 

 

 

 

 

(122,200

)

Proceeds from borrowing - term debt

 

 

15,949

 

 

 

4,344

 

Repayments of debt - term debt

 

 

(16,914

)

 

 

(15,873

)

Dividends paid

 

 

(2,759

)

 

 

(5,646

)

Purchases of treasury stock

 

 

 

 

 

(5,254

)

Net cash used in financing activities

 

 

(3,724

)

 

 

(36,668

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(1,415

)

 

 

(22

)

Net increase in cash

 

 

29,594

 

 

 

990

 

Cash and cash equivalents – beginning of period

 

 

47,181

 

 

 

13,932

 

Cash and cash equivalents – end of period

 

$

76,775

 

 

$

14,922

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

5,479

 

 

$

2,336

 

Cash paid for income taxes

 

$

1,477

 

 

$

602

 

 

See accompanying notes to consolidated financial statements.

5


 

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, 2021

 

$

30,988

 

 

$

4,639

 

 

$

(82,385

)

 

$

356,071

 

 

$

(7,103

)

 

$

302,210

 

Net income

 

 

 

 

 

 

 

 

 

 

 

42,008

 

 

 

 

 

 

42,008

 

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,593

)

 

 

(2,593

)

Dividends ($0.105 per share)

 

 

 

 

 

 

 

 

 

 

 

(2,819

)

 

 

 

 

 

(2,819

)

Purchases of treasury stock

 

 

 

 

 

 

 

 

(5,254

)

 

 

 

 

 

 

 

 

(5,254

)

Stock based compensation

 

 

7

 

 

 

155

 

 

 

 

 

 

 

 

 

 

 

 

162

 

Balances – April 2, 2022

 

$

30,995

 

 

$

4,794

 

 

$

(87,639

)

 

$

395,260

 

 

$

(9,696

)

 

$

333,714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances – December 31, 2022

 

$

30,997

 

 

$

4,852

 

 

$

(96,706

)

 

$

513,589

 

 

$

(5,802

)

 

$

446,930

 

Net income

 

 

 

 

 

 

 

 

 

 

 

24,876

 

 

 

 

 

 

24,876

 

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(909

)

 

 

(909

)

Dividends ($0.105 per share)

 

 

 

 

 

 

 

 

 

 

 

(2,759

)

 

 

 

 

 

(2,759

)

Stock based compensation

 

 

6

 

 

 

155

 

 

 

 

 

 

 

 

 

 

 

 

161

 

Balances – April 1, 2023

 

$

31,003

 

 

$

5,007

 

 

$

(96,706

)

 

$

535,706

 

 

$

(6,711

)

 

$

468,299

 

 

See accompanying notes to consolidated financial statements.

 

 

6


UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements

(1)
Basis of Presentation

The accompanying unaudited consolidated financial statements of Universal Logistics Holdings, Inc. and its wholly-owned subsidiaries (“Universal”) have been prepared by the Company’s management. In these notes, the terms “us,” “we,” “our,” or the “Company” refer to Universal and its consolidated subsidiaries. In the opinion of management, the unaudited consolidated financial statements include all normal recurring adjustments necessary to present fairly the information required to be set forth therein. All intercompany transactions and balances have been eliminated in consolidation. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, should be read in conjunction with the consolidated financial statements as of December 31, 2022 and 2021 and for each of the years in the three-year period ended December 31, 2022 included in the Company’s Form 10-K filed with the Securities and Exchange Commission. The preparation of the consolidated financial statements requires the use of management’s estimates. Actual results could differ from those estimates.

Our fiscal year ends on December 31 and consists of four quarters, each with thirteen weeks.

Current Economic Conditions

The Company makes estimates and assumptions that affect reported amounts and disclosures included in its financial statements and accompanying notes and assesses certain accounting matters that require consideration of forecasted financial information. The Company's assumptions about future conditions important to these estimates and assumptions are subject to uncertainty, including the negative impact inflationary pressures can have on our operating costs. Prolonged periods of inflation could cause interest rates, equipment, maintenance, labor and other operating costs to continue to increase.

(2)
Recent Accounting Pronouncements

On January 1, 2023, the Company adopted ASU 2016-13, Accounting for Credit Losses (Topic 326). The ASU requires the use of an “expected loss” model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale debt securities and requires estimated credit losses to be recorded as allowances instead of reductions to amortized cost of the securities. The adoption of this standard did not have a material impact on our consolidated financial statements.

(3)
Revenue Recognition

Universal is a holding company that owns subsidiaries engaged in providing customized transportation and logistics services. For financial reporting, we broadly group the services provided by our consolidated subsidiaries into the following categories: truckload, brokerage, intermodal, dedicated and value-added. We disaggregate these categories and report our service lines separately on the Consolidated Statements of Income.

Truckload services include dry van, flatbed, heavy-haul and refrigerated operations. We transport a wide variety of general commodities, including automotive parts, machinery, building materials, paper, food, consumer goods, furniture, steel and other metals on behalf of customers in various industries.

To complement our available capacity, we provide customers with freight brokerage services by utilizing third-party transportation providers to move freight. Brokerage services also include full-service domestic and international freight forwarding and customs brokerage.

Intermodal services include rail-truck, steamship-truck and support services. Our intermodal support services are primarily short- to medium-distance delivery of rail and steamship containers between the railhead or port and the customer.

Dedicated services are primarily provided in support of automotive and retail customers using van equipment. Our dedicated services are primarily short-run or round-trip moves within a defined geographic area.

Transportation services are short-term in nature; agreements governing their provision generally have a term of one year or less. They do not contain significant financing components. The Company recognizes revenue over the period transportation services are provided to the customer, including service performed as of the end of the reporting period for loads currently in-transit, in order to recognize the value that is transferred to a customer over the course of the transportation service.

We determine revenue in-transit using the input method, under which revenue is recognized based on the duration of time that has lapsed from the departure date (start of transportation services) to the arrival date (completion of transportation services). Measurement of revenue in-transit requires the application of significant judgment. We calculate the estimated percentage of an order’s transit time that is complete at period end, and we apply that percentage of completion to the order’s estimated revenue.

7


UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(3)
Revenue Recognition - continued

Value-added services, which are typically dedicated to individual customer requirements, include material handling, consolidation, sequencing, sub-assembly, cross-dock services, kitting, repacking, warehousing and returnable container management. Value-added revenues are substantially driven by the level of demand for outsourced logistics services. Major factors that affect value-added service revenue include changes in manufacturing supply chain requirements and production levels in specific industries, particularly the North American automotive and Class 8 heavy-truck industries.

Revenue is recognized as control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to receive in exchange for its services. We have elected to use the “right to invoice” practical expedient to recognize revenue, reflecting that a customer obtains the benefit associated with value-added services as they are provided. The contracts in our value-added services businesses are negotiated agreements, which contain both fixed and variable components. The variability of revenues is driven by volumes and transactions, which are known as of an invoice date. Value-added service contracts typically have terms that extend beyond one year, and they do not include financing components.

The following table provides information related to contract balances associated with our contracts with customers (in thousands):

 

 

April 1,
2023

 

 

December 31,
2022

 

Prepaid expenses and other - contract assets

 

$

1,267

 

 

$

839

 

We generally receive payment for performance obligations within 45 days of completion of transportation services and 65 days for completion of value-added services. Contract assets in the table above generally relate to revenue in-transit at the end of the reporting period.

(4)
Marketable Securities

The Company accounts for its marketable equity securities in accordance with ASC Topic 321 “Investments- Equity Securities.” ASC Topic 321 requires companies to measure equity investments at fair value, with changes in fair value recognized in net income. The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost basis of securities sold is based on the specific identification method, and interest and dividends on securities are included in non-operating income (expense).

Marketable equity securities are carried at fair value, with gains and losses in fair market value included in the determination of net income. The fair value of marketable equity securities is determined based on quoted market prices in active markets, as described in Note 7.

The following table sets forth market value, cost basis, and unrealized gains on equity securities (in thousands):

 

 

April 1,
2023

 

 

December 31,
2022

 

Fair value

 

$

9,987

 

 

$

10,000

 

Cost basis

 

 

7,351

 

 

 

7,351

 

Unrealized gain

 

$

2,636

 

 

$

2,649

 

 

 

 

 

 

 

 

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities (in thousands):

 

 

April 1,
2023

 

 

December 31,
2022

 

Gross unrealized gains

 

$

3,519

 

 

$

3,513

 

Gross unrealized losses

 

 

(883

)

 

 

(864

)

Net unrealized gains

 

$

2,636

 

 

$

2,649

 

 

 

 

 

 

 

 

The Company did not sell marketable equity securities during either of the thirteen-week week periods ended April 1, 2023 or April 2, 2022.

During the thirteen-week week periods ended April 1, 2023 and April 2, 2022, our marketable equity securities portfolio experienced a net unrealized pre-tax gain (loss) in market value of approximately $(13,000) and $949,000, respectively, which was reported in other non-operating income (expense) for the period.

8


UNIVERSAL LOGISTICS HOLDINGS, INC.

Notes to Unaudited Consolidated Financial Statements - Continued

 

(5)
Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities are comprised of the following (in thousands):

 

 

 

April 1,
2023

 

 

December 31,
2022

 

 

 

 

 

 

 

 

Accrued payroll

 

$

17,377

 

 

$

15,889

 

Accrued payroll taxes

 

 

5,033

 

 

 

2,124

 

Driver escrow liabilities

 

 

4,147

 

 

 

4,101

 

Legal settlements and claims

 

 

5,850

 

 

 

5,850

 

Commissions, other taxes and other

 

 

15,253

 

 

 

15,142

 

Total

 

$

47,660

 

 

$

43,106

 

 

(6)
Debt

Debt is comprised of the following (in thousands):

 

 

 

Interest Rates
at April 1, 2023

 

April 1,
2023

 

 

December 31,
2022

 

Outstanding Debt:

 

 

 

 

 

 

 

 

Revolving Credit Facility (1) (2)

 

6.15%

 

$

 

 

$

 

UACL Credit Agreement (2)

 

 

 

 

 

 

 

 

Term Loan

 

6.65%

 

 

78,000

 

 

 

79,000

 

Revolver

 

6.65%

 

 

 

 

 

 

Equipment Financing (3)