ulh-8k_20221027.htm
false 0001308208 0001308208 2022-10-27 2022-10-27

 

 

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 27, 2022

Universal Logistics Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

Michigan

0-51142

38-3640097

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

12755 E. Nine Mile Road, Warren, Michigan

(Address of principal executive offices)

48089

(Zip Code)

(586) 920-0100

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.    

 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On October 27, 2022, the Company issued a press release announcing the Company’s financial and operating results for the thirteen weeks and thirty-nine weeks ended October 1, 2022, a copy of which is furnished as Exhibit 99.1 to this Form 8-K.

Item 7.01 Regulation FD Disclosure.

On October 27, 2022, the Company issued a press release announcing that the Company’s Board of Directors declared a cash dividend of $0.105 per share of common stock. The dividend is payable on January 3, 2023 to shareholders of record on December 5, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.

Description

 

 

99.1

Press Release dated October 27, 2022.

104

Cover Page Interactive Data File (formatted as Inline XBRL)

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

 

 

 

 

 

 

Date: October 27, 2022

 

 

/s/ Steven Fitzpatrick

 

 

 

 

Steven Fitzpatrick

 

 

 

 

Secretary

 

 

ulh-ex991_6.htm

Exhibit 99.1

 

Universal Logistics Holdings Tops Previous Record-Setting Results in the Third Quarter 2022; Declares Dividend

 

-

Third Quarter 2022 Operating Revenues:  $505.7 million, 13.5% increase

 

-

Third Quarter 2022 Operating Income:  $69.8 million, 13.8% operating margin

 

-

Third Quarter 2022 Earnings Per Share:  $1.84 per share

 

-

Declares Quarterly Dividend:  $0.105 per share

Warren, MI – October 27, 2022 — Universal Logistics Holdings, Inc. (NASDAQ: ULH) today reported consolidated third quarter 2022 net income of $48.5 million, or $1.84 per basic and diluted share, on total operating revenues of $505.7 million. This compares to net income of $10.3 million, or $0.38 per basic and diluted share, during third quarter 2021 on total operating revenues of $445.6 million. Universal’s third quarter 2022 financial results are its best ever third-quarter results, and once again set new all-time record highs for total operating income and earnings per share, exceeding records set in each of the previous two quarters.

In the third quarter 2022, Universal’s operating income increased $53.1 million to $69.8 million compared to operating income of $16.7 million in the third quarter one year earlier. Included in third quarter 2021 results were $12.9 million of pre-tax charges resulting from $7.1 million in program launch losses and an additional $5.8 million of legal charges. As a percentage of operating revenue, operating margin for the third quarter 2022 was 13.8% compared to 3.8% during the same period last year. EBITDA, a non-GAAP measure, increased $51.3 million during the third quarter 2022 to $84.4 million, compared to $33.1 million one year earlier. As a percentage of operating revenue, EBITDA margin for the third quarter 2022 was 16.7% compared to 7.4% during the same period last year.  

“The third quarter of 2022 proved to be another outstanding quarter for Universal,” stated Universal’s CEO Tim Phillips. “Overall, we experienced double-digit revenue growth and once again reported new all-time highs for operating income and earnings per share, exceeding the records set in each of the first two quarters of the year. Although we experienced downward pressures in our trucking and company-managed brokerage segments, the remarkable third quarter results were driven by strong performances in both our higher-margin intermodal and contract logistics businesses. During the first three quarters of 2022, Universal has more than doubled its net income compared to the same period last year, an accomplishment that I am extremely proud of.”

“As we recognize our current success, we remain laser-focused on Universal’s future,” Phillips continued. “Our growth in the contract logistics space has laid a solid foundation to support Universal’s strategic plan. We have positioned ourselves to capitalize on a strong demand for passenger vehicles while our highly variable cost model somewhat insulates our transactional businesses in a softer freight environment. Although we are facing weakening freight demand and heightened macro concerns, I remain confident in Universal’s ability to navigate the current environment and deliver a solid finish to this record-setting year.”


Segment Information:

Contract Logistics

 

-

Third Quarter 2022 Operating Revenues:  $209.5 million, 33.5% increase

 

-

Third Quarter 2022 Operating Income:  $35.4 million, 16.9% operating margin

In the contract logistics segment, which includes our value-added and dedicated services, third quarter 2022 operating revenues increased $52.6 million, or 33.5% to $209.5 million compared to $156.9 million for the same period last year. At the end of the third quarter 2022, we managed 63 value-added programs compared to 61 such programs at the end of the third quarter 2021, and we increased our dedicated transportation load volumes 11.4% over the same period last year. Included in contract logistics segment revenues were $11.3 million in separately identified fuel surcharges from dedicated transportation services, compared to $5.1 million during the same period last year. In the contract logistics segment, third quarter 2022 income from operations increased $29.4 million to $35.4 million, compared to $6.0 million during the same period last year. Included in the contract logistics segment in the third quarter 2021 were $7.1 million of losses incurred in connection with a previously announced program launch. As a percentage of revenue, operating margin for the third quarter 2022 was 16.9%, compared to 3.8% during the same period last year. The launch losses recorded in the third quarter 2021 adversely impacted this segment’s operating margin by 460 basis points in that period last year.  

Intermodal

 

-

Third Quarter 2022 Operating Revenues:  $154.4 million, 27.6% increase

 

-

Third Quarter 2022 Operating Income:  $28.1 million, 18.2% operating margin

Operating revenues in the intermodal segment increased $33.4 million to $154.4 million in the third quarter 2022, compared to $121.0 million for the same period last year. Included in intermodal segment revenues for the recently completed quarter were $26.4 million in separately identified fuel surcharges compared to $13.2 million during the same period last year. Intermodal segment revenues also include other accessorial charges such as detention, demurrage and storage which totaled $31.3 million during the third quarter 2022, compared to $23.3 million one year earlier. The average operating revenue per load, excluding fuel surcharges, increased 35.2%; however, load volumes declined 14.8% year-over-year. Third quarter 2022 income from operations increased $26.2 million to $28.1 million compared to $1.9 million during the same period last year.  Prior year intermodal segment results included legal charges totaling $5.8 million in the third quarter 2021. As a percentage of revenue, operating margin for the third quarter 2022 was 18.2% compared to 1.6% during the same period last year. The third quarter 2021 legal charges adversely impacted intermodal’s operating margin by 480 basis points in that period last year.

Trucking

 

-

Third Quarter 2022 Operating Revenues:  $99.6 million, 7.0% decrease

 

-

Third Quarter 2022 Operating Income:  $4.8 million, 4.8% operating margin

In the trucking segment, third quarter 2022 operating revenues decreased $7.6 million to $99.6 million compared to $107.2 million for the same period last year. Third quarter 2022 trucking segment revenues included $43.1 million of brokerage services, compared to $43.0 million during the same period last year. Also included in our trucking segment revenues for the recently completed quarter were $9.1 million in separately identified fuel surcharges compared to $6.5 million in such surcharges during the same period last year.  On a year-over-year basis, the average operating revenue per load, excluding fuel surcharges, increased 26.6%; however, load volumes declined 30.2% as we rationalized underperforming operations in this segment. Income from operations in the third quarter 2022 decreased $2.0 million to $4.8 million compared to $6.8 million during the same period last year. As a percentage of revenue, operating margin for the third quarter 2022 was 4.8% compared to 6.4% during the same period last year.


Company-managed Brokerage

 

-

Third Quarter 2022 Operating Revenues:  $40.6 million, 31.4% decrease

 

-

Third Quarter 2022 Operating Income:  $1.1 million, 2.7% operating margin

Third quarter 2022 operating revenues in the company-managed brokerage segment decreased $18.6 million to $40.6 million compared to $59.2 million for the same period last year. Company-managed brokerage segment average operating revenue per load, excluding fuel surcharges, decreased 8.2% and load volumes declined 31.0% on a year-over-year basis. Third quarter 2022 income from operations in the company-managed brokerage segment was $1.1 million which compares to $1.8 million one year earlier.  As a percentage of revenue, operating margin for the third quarter 2022 was 2.7% compared to 3.0% during the same period last year.

Cash Dividend

Universal Logistics Holdings, Inc. also announced today that its Board of Directors has declared a cash dividend of $0.105 per share of common stock.  The dividend is payable to shareholders of record at the close of business on December 5, 2022 and is expected to be paid on January 3, 2023.

Other Matters  

As of October 1, 2022, Universal held cash and cash equivalents totaling $14.6 million, and $8.6 million in marketable securities. Outstanding debt at the end of the third quarter 2022 was $393.7 million and capital expenditures during the period totaled $48.3 million.

Universal calculates and reports selected financial metrics not only for purposes of our 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.”

Conference call:

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

 

Quarterly Earnings Conference Call Dial-in Details:

 

Time:  10:00 a.m. Eastern Time

Date:  Friday, October 28, 2022

Call Toll Free:  (877) 270-2148

International Dial-in:  +1 (412) 902-6510

Conference ID:  10171516

 

A replay of the conference call will be available through November 4, 2022, by calling (877) 344-7529 (toll free) or +1 (412) 317-0088 (toll) and using encore replay code 6817218. The call will also be available on investors.universallogistics.com.

 


 

Source: Universal Logistics Holdings, Inc.

 

For Further Information:

Steven Fitzpatrick, Investor Relations

SFitzpatrick@UniversalLogistics.com

About Universal:

Universal Logistics Holdings, Inc. (“Universal”) is a holding company that owns subsidiaries engaged in providing a variety of customized transportation and logistics solutions throughout the United States, and in Mexico, Canada and Colombia.  Our operating subsidiaries provide customers with supply chain solutions that can be scaled to meet their changing demands and volumes. Universal’s consolidated subsidiaries offer customers a broad array of services across the entire supply chain, including truckload, brokerage, intermodal, dedicated, and value-added services. In this press release, the terms “us,” “we,” “our,” or the “Company” refer to Universal and its consolidated subsidiaries. 

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,” “prospect,” “seek,” “believe,” “targets,” “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 Universal’s reports and filings with the Securities and Exchange Commission. Universal 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

 

 

Thirty-nine Weeks Ended

 

 

 

October 1,

 

 

October 2,

 

 

October 1,

 

 

October 2,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Truckload services

 

$

58,107

 

 

$

65,458

 

 

$

176,651

 

 

$

184,040

 

Brokerage services

 

 

83,687

 

 

 

102,229

 

 

 

292,789

 

 

 

301,680

 

Intermodal services

 

 

154,391

 

 

 

121,018

 

 

 

468,869

 

 

 

331,336

 

Dedicated services

 

 

86,613

 

 

 

51,742

 

 

 

241,551

 

 

 

150,099

 

Value-added services

 

 

122,894

 

 

 

105,147

 

 

 

376,875

 

 

 

316,453

 

Total operating revenues

 

 

505,692

 

 

 

445,594

 

 

 

1,556,735

 

 

 

1,283,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation and equipment rent

 

 

208,870

 

 

 

212,910

 

 

 

668,216

 

 

 

600,273

 

Direct personnel and related benefits

 

 

127,721

 

 

 

118,371

 

 

 

391,723

 

 

 

336,923

 

Operating supplies and expenses

 

 

44,734

 

 

 

43,811

 

 

 

132,886

 

 

 

113,616

 

Commission expense

 

 

10,632

 

 

 

9,086

 

 

 

31,412

 

 

 

24,980

 

Occupancy expense

 

 

10,150

 

 

 

9,336

 

 

 

30,345

 

 

 

26,905

 

General and administrative

 

 

13,021

 

 

 

10,998

 

 

 

34,625

 

 

 

29,866

 

Insurance and claims

 

 

5,745

 

 

 

7,912

 

 

 

16,925

 

 

 

19,982

 

Depreciation and amortization

 

 

15,048

 

 

 

16,456

 

 

 

58,333

 

 

 

51,880

 

Total operating expenses

 

 

435,921

 

 

 

428,880

 

 

 

1,364,465

 

 

 

1,204,425

 

Income from operations

 

 

69,771

 

 

 

16,714

 

 

 

192,270

 

 

 

79,183

 

Interest expense, net

 

 

(4,490

)

 

 

(3,000

)

 

 

(10,842

)

 

 

(9,089

)

Other non-operating income (loss)

 

 

(454

)

 

 

(112

)

 

 

(324

)

 

 

6,973

 

Income before income taxes

 

 

64,827

 

 

 

13,602

 

 

 

181,104

 

 

 

77,067

 

Provision for income taxes

 

 

16,347

 

 

 

3,329

 

 

 

45,917

 

 

 

19,534

 

Net income

 

$

48,480

 

 

$

10,273

 

 

$

135,187

 

 

$

57,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.84

 

 

$

0.38

 

 

$

5.10

 

 

$

2.14

 

Diluted

 

$

1.84

 

 

$

0.38

 

 

$

5.09

 

 

$

2.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

26,278

 

 

 

26,919

 

 

 

26,533

 

 

 

26,918

 

Diluted

 

 

26,309

 

 

 

26,928

 

 

 

26,551

 

 

 

26,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share:

 

$

0.105

 

 

$

0.105

 

 

$

0.315

 

 

$

0.315

 

 


 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 

 

October 1,

2022

 

 

December 31,

2021

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

14,646

 

 

$

13,932

 

Marketable securities

 

 

8,557

 

 

 

8,031

 

Accounts receivable - net

 

 

384,075

 

 

 

341,398

 

Other current assets

 

 

51,942

 

 

 

57,334

 

Total current assets

 

 

459,220

 

 

 

420,695

 

Property and equipment - net

 

 

377,191

 

 

 

345,583

 

Other long-term assets - net

 

 

362,768

 

 

 

371,213

 

Total assets

 

$

1,199,179

 

 

$

1,137,491

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Current liabilities, excluding current maturities of debt

 

$

242,931

 

 

$

251,550

 

Debt - net

 

 

389,170

 

 

 

427,348

 

Other long-term liabilities

 

 

152,069

 

 

 

156,383

 

Total liabilities

 

 

784,170

 

 

 

835,281

 

Total shareholders' equity

 

 

415,009

 

 

 

302,210

 

Total liabilities and shareholders' equity

 

$

1,199,179

 

 

$

1,137,491

 

 


 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data

 

 

Thirteen Weeks Ended

 

 

Thirty-nine Weeks Ended

 

 

 

October 1,

 

 

October 2,

 

 

October 1,

 

 

October 2,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Contract Logistics Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of dedicated transportation loads (a)

 

 

152,734

 

 

 

137,127

 

 

 

466,852

 

 

 

449,621

 

Average number of value-added direct employees

 

 

4,968

 

 

 

4,767

 

 

 

5,064

 

 

 

4,377

 

Average number of value-added full-time equivalents

 

 

1,226

 

 

 

1,277

 

 

 

1,384

 

 

 

1,490

 

Number of active value-added programs

 

 

63

 

 

 

61

 

 

 

63

 

 

 

61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of loads

 

 

135,800

 

 

 

159,428

 

 

 

435,923

 

 

 

508,352

 

Average operating revenue per load, excluding fuel surcharges

 

$

726

 

 

$

537

 

 

$

706

 

 

$

500

 

Average number of tractors

 

 

2,269

 

 

 

2,018

 

 

 

2,185

 

 

 

2,008

 

Number of depots

 

 

10

 

 

 

12

 

 

 

10

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trucking Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of loads

 

 

50,614

 

 

 

72,549

 

 

 

154,479

 

 

 

220,938

 

Average operating revenue per load, excluding fuel surcharges

 

$

1,794

 

 

$

1,417

 

 

$

1,799

 

 

$

1,319

 

Average number of tractors

 

 

896

 

 

 

1,349

 

 

 

899

 

 

 

1,334

 

Average length of haul

 

 

388

 

 

 

376

 

 

 

397

 

 

 

372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-Managed Brokerage Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of loads (b)

 

 

21,141

 

 

 

30,619

 

 

 

68,453

 

 

 

94,510

 

Average operating revenue per load (b)

 

$

1,659

 

 

$

1,808

 

 

$

1,960

 

 

$

1,807

 

Average length of haul (b)

 

 

608

 

 

 

537

 

 

 

593

 

 

 

558

 

 

(a)

Includes shuttle moves.

(b)

Excludes operating data from freight forwarding division in order to improve the relevance of the statistical data related to our brokerage services and improve the comparability to our peer companies.


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data - Continued

(Dollars in thousands)

 

 

Thirteen Weeks Ended

 

 

Thirty-nine Weeks Ended

 

 

 

October 1,

 

 

October 2,

 

 

October 1,

 

 

October 2,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating Revenues by Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract logistics

 

$

209,507

 

 

$

156,889

 

 

$

618,426

 

 

$

466,552

 

Intermodal

 

 

154,391

 

 

 

121,018

 

 

 

468,869

 

 

 

331,336

 

Trucking

 

 

99,619

 

 

 

107,161

 

 

 

303,649

 

 

 

301,838

 

Company-managed brokerage

 

 

40,615

 

 

 

59,221

 

 

 

160,940

 

 

 

180,758

 

Other

 

 

1,560

 

 

 

1,305

 

 

 

4,851

 

 

 

3,124

 

Total

 

$

505,692

 

 

$

445,594

 

 

$

1,556,735

 

 

$

1,283,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Operations by Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract logistics

 

$

35,400

 

 

$

5,976

 

 

$

88,300

 

 

$

38,742

 

Intermodal

 

 

28,148

 

 

 

1,935

 

 

 

72,526

 

 

 

16,580

 

Trucking

 

 

4,791

 

 

 

6,830

 

 

 

21,821

 

 

 

18,503

 

Company-managed brokerage

 

 

1,079

 

 

 

1,770

 

 

 

9,097

 

 

 

4,656

 

Other

 

 

353

 

 

 

203

 

 

 

526

 

 

 

702

 

Total

 

$

69,771

 

 

$

16,714

 

 

$

192,270

 

 

$

79,183

 

 

 



 

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 and EBITDA margin, each a non-GAAP measure, as supplemental measures of our performance. We define EBITDA as net income plus (i) interest expense, net, (ii) income taxes, (iii) depreciation, and (iv) amortization. We define EBITDA margin as EBITDA as a percentage of total operating revenues. 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

 

 

Thirty-nine Weeks Ended

 

 

 

October 1,

 

 

October 2,

 

 

October 1,

 

 

October 2,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

( in thousands)

 

 

( in thousands)

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

48,480

 

 

$

10,273

 

 

$

135,187

 

 

$

57,533

 

Income tax expense

 

 

16,347

 

 

 

3,329

 

 

 

45,917

 

 

 

19,534

 

Interest expense, net

 

 

4,490

 

 

 

3,000

 

 

 

10,842

 

 

 

9,089

 

Depreciation

 

 

11,498

 

 

 

12,968

 

 

 

47,658

 

 

 

41,402

 

Amortization

 

 

3,550

 

 

 

3,488

 

 

 

10,675

 

 

 

10,478

 

EBITDA

 

$

84,365

 

 

$

33,058

 

 

$

250,279

 

 

$

138,036

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA margin (a)

 

 

16.7

%

 

 

7.4

%

 

 

16.1

%

 

 

10.8

%

 

(a)

EBITDA margin is computed by dividing EBITDA by total operating revenues for each of the periods indicated.

We present EBITDA and EBITDA margin because we believe they assist 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 and EBITDA margin 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 only supplementally on EBITDA and EBITDA margin.