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Mail Stop 03-05
January 27, 2005
Via U.S. Mail
Robert E. Sigler
Chief Financial Officer
Universal Truckload Services, Inc.
11355 Stephens Road
Warren, MI 48089
Re: Universal Truckload Services, Inc.
Form S-1, Amendment No. 2 filed on January 19, 2005
File No. 333-120510
Dear Mr. Sigler,
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects and welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
General
1. Please continue to consider the updating requirements Rule 3-12
of
Regulation S-X.
Recent Developments, page 2
2. At the top of page 3 please revise to include net income data
for
the same periods for which you have included revenue figures, for
your recently acquired Great American Lines operating subsidiary.
Dividend Policy, page 22
3. We have reviewed your responses to comments 17 and 33 made with
respect to your original filing. However, we suggest you further
revise the disclosure on page 22 to explain the reason(s) why the
Board approved the various dividends.
4. Furthermore, please clarify in your disclosure what your
dividend
policy was at the time you declared the $50 million cash dividend.
In the first paragraph on page 22 you state that your dividend
policy
prior to December 30, 2004 was to distribute excess cash to
CenTra.
However, since the $50 million dividend declared on December 28,
2004
is payable with a portion of the net proceeds from this offering,
this particular dividend does not appear to follow your
previously-
stated dividend policy (of distributing excess cash). Please
advise
and revise to clarify, both here and in the Related Party
Transactions section, and elsewhere as necessary.
5. Please revise your disclosure to include a discussion of the
property exchange in December 2004 resulting in an in-kind
dividend
to CenTra of approximately $400,000.
Dilution, page 24
6. Please revise the text describing the value of the increase in
net
tangible book value per share of $7.11 to correspond to that value
as
presented in the table below of $7.12.
Unaudited Pro Forma Financial Information, page 26
7. Please revise your description of the Michigan-Florida property
exchange here and throughout your filing to exclude fair values,
except as part of the discussion of the calculation of the
deferred
tax asset recognized, as this is an asset exchange of entities
under
common control.
Unaudited Pro Forma Combined Statement of Income, page 28
8. We note your response to comment 20, but feel that your
explanations need further revision, as described below. Please
note
that similar revisions should be made on both the interim period
and
year end pro forma explanations.
Footnotes (a) and (b)
a. We note your response to prior comment 5(a). It is still
unclear
from your explanations (a) and (b) how the adjustment of $1.276
was
calculated. Specifically, the pro forma compensation payable to
Mr.
Fonzi based on your explanation (a) would appear to be $112,698
(($10,000 + $2,522)* 9 months), not $53,000, as presented. This
change would yield a total adjustment of $1,216. Please revise or
advise. Pro forma compensation for the year ended December 31,
2003
appears to have been similarly understated.
Footnote (f)
b. We have reviewed the revisions made to prior comment 5(c). We
continue to believe that the calculation explanations are
inadequate
to support the adjustments used to calculate pro forma EPS. The
following items should be considered throughout the entire filing:
* Within explanation (f), please present a reconciliation from net
income for the year ended December 31, 2003 to net income for the
12-
month period ended October 2, 2004.
* It is unclear how the value of $13.9 million for cash and in-
kind
dividends paid during the 12-month period ended October 2, 2004
and
through the date of this amendment was calculated. Please also
provide a detailed analysis of this amount within explanation (f).
Please consider presentation in tabular form for clarity. Also,
please explain how you arrived at 3,129,000 shares. It appears
that
dividends payable in excess of net income of $53.7 million at $19
per
share would yield approximately 2.8 million shares.
* Please explain to us how you arrived at 1,837,000 shares issued
for
the repayment of $32.5 million in debt. It appears issuance at
$19/share would yield 1,710,526 shares.
Unaudited Pro Forma Balance Sheet, page 35
9. We note your response to prior comment 6, but feel that your
explanations need further revision, as described below.
a. Footnote (b): Please revise your footnote (b) to state the
correct value for the borrowings taken under your line of credit
to
pay this dividend, to be consistent with the remainder of your
filing. Specifically, the amount should be $544,000, not
$500,000.
b. Footnote (d): Please refer to prior comment 6(b). Please
revise
your explanation for the following items as the current
presentation
is still unclear. Please consider presentation of all
calculations
in tabular form for clarity:
* It appears that the Tampa, Florida property should be recorded
at
$132,000, the book value of the property on CenTra`s books at
October
2, 2004, and should in no way reflect the $94,000 payment. This
is a
transfer between entities under common control and the value of
the
assets transferred should not be written up. Any additional
consideration given should be recorded separately as a deemed
dividend. Please revise or advise
* Please specify the amount, as stated in Exhibit A to your
response
letter, of the deferred tax liability associated with the transfer
of
the terminal yard to CenTra.
* It is unclear from your current presentation in the filing how
the
net deferred tax asset of $195,000 associated with the Tampa
property
was calculated. Please revise your explanation to completely and
clearly present this calculation. A presentation similar to that
contained in Exhibit A to your response letter, encompassing
revisions necessary per this comment letter, would be appropriate.
Please explain the tax rate used in this calculation.
* Please clarify how the reduction in real estate held for
disposal
other than by sale was calculated. From your current disclosure,
it
appears the amount should be $2,629,000 ($1,900,000 (f/n (c) +
$729,000 (book value of Tampa)).
* Refer to prior comment 12. As the differences in values are a
result of differences in the pro forma and dividend declaration
dates, please revise your presentation here and in the appropriate
financial statement to clearly state the different amounts and
reason
for such differences. Please also ensure the difference of $7
million in the total deemed distribution ($402,000 in pro forma
versus $395,000 in financial statements) is similarly explained.
Management`s Discussion and Analysis, page 40
Predecessor Operations, Dividends and Spin-Off, page 42
10. We have reviewed your responses to our comments 1, 3 and 10
made
with respect to your original filing. Please disclose in an
appropriate section the business purpose of the spin-off.
Our Operations, page 60
11. Consider including a discussion as to how the newly acquired
AFA
Enterprises business will be integrated into your current
operations,
and also consider depicting this business in the chart on page 60.
Financial Statements of Universal Truckload Services as of October
2,
2004 (Unaudited)
(10) Subsequent Events, Acquisition of NYP & Associates, page F-31
12. We note your response to prior comment 9. As you have
asserted
that the contingent payments should be treated as additional
consideration, please note that these should be recorded as
additions
to goodwill, not intangible assets.
Signatures, page II-5
13. Please revise to indicate that the "*" in place of a signature
indicates, if true, that the officer or director authorized
someone
else, by Power of Attorney, to execute any and all amendments to
the
registration statement on his or her behalf.
14. Furthermore, we are unable to locate the power of attorney
document for any of the above persons, with the exception of the
power of attorney for Mr. Wahby, which we note was filed with your
amended Form S-1 on January 7, 2005. Please clarify the location
of
Exhibit 24.1. Also revise the Exhibit Index accordingly, since it
currently indicates that Exhibit 24.1 was previously filed,
although
that does not appear to be the case.
* * * * *
As appropriate, please amend the registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Amy Geddes at (202) 942-2885 or Margery
Reich
at (202) 942-1839 if you have questions regarding comments on the
financial statements and related matters. Please contact Rolaine
Bancroft at (202) 824-5537 or me at (202) 942-2936 with any other
questions.
Regards,
Sara W. Dunton
Branch Chief
cc: William B. Brentani, Esq.
Simpson Thacher & Bartlett LLP
via facsimile: 650-251-5002
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Robert E. Sigler
Universal Truckload Services, Inc.
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