SEC Filing | Universal Logistics Holdings, Inc.

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ulh-10q_20221001.htm

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 1, 2022

☐	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.

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 7, 2022, was 26,277,549.

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Balance Sheets

(In thousands, except share data)

	October 1, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	14,646		$	13,932
Marketable securities		8,557			8,031
Accounts receivable – net of allowance for doubtful accounts of $13,426 and $7,841, respectively		384,075			341,398
Other receivables		21,718			26,318
Prepaid expenses and other		29,435			30,209
Due from affiliates		789			807
Total current assets		459,220			420,695
Property and equipment – net of accumulated depreciation of $358,511 and $333,833, respectively		377,191			345,583
Operating lease right-of-use asset		104,439			105,859
Goodwill		170,730			170,730
Intangible assets – net of accumulated amortization of $118,136 and $107,461, respectively		77,673			88,349
Deferred income taxes		2,060			2,060
Other assets		7,866			4,215
Total assets	$	1,199,179		$	1,137,491
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	107,539		$	117,837
Current portion of long-term debt		62,472			61,160
Current portion of operating lease liabilities		28,251			24,566
Accrued expenses and other current liabilities		41,897			43,627
Insurance and claims		31,055			43,357
Due to affiliates		22,723			17,839
Income taxes payable		11,466			4,323
Total current liabilities		305,403			312,709
Long-term liabilities:
Long-term debt, net of current portion		326,698			366,188
Operating lease liabilities, net of current portion		82,036			85,984
Deferred income taxes		61,250			61,250
Other long-term liabilities		8,783			9,150
Total long-term liabilities		478,767			522,572
Shareholders' equity:
Common stock, no par value. Authorized 100,000,000 shares; 30,996,205 and 30,986,702 shares issued; 26,278,020 and 26,919,455 shares outstanding, respectively		30,996			30,988
Paid-in capital		4,803			4,639
Treasury stock, at cost; 4,718,185 and 4,067,247 shares, respectively		(96,690	)		(82,385	)
Retained earnings		482,903			356,071
Accumulated other comprehensive (loss):
Interest rate swaps, net of income taxes of $778 and $(60), respectively		2,292			(178	)
Foreign currency translation adjustments		(9,295	)		(6,925	)
Total shareholders’ equity		415,009			302,210
Total liabilities and shareholders’ equity	$	1,199,179		$	1,137,491

See accompanying notes to consolidated financial statements.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Income

(In thousands, except per share data)

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 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 income		10			8			16			41
Interest expense		(4,500	)		(3,008	)		(10,858	)		(9,130	)
Other non-operating income (expense)		(454	)		(112	)		(324	)		6,973
Income before income taxes		64,827			13,602			181,104			77,067
Income tax expense		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

See accompanying notes to consolidated financial statements.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021
Net Income	$	48,480		$	10,273		$	135,187		$	57,533
Other comprehensive income (loss):
Unrealized changes in fair value of interest rate swaps, net of income taxes of $972, $17, $838 and $52, respectively		2,859			37			2,470			200
Foreign currency translation adjustments		(548	)		(1,573	)		(2,370	)		(1,172	)
Total other comprehensive income (loss)		2,311			(1,536	)		100			(972	)
Total comprehensive income	$	50,791		$	8,737		$	135,287		$	56,561

See accompanying notes to consolidated financial statements.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Cash Flows

(In thousands)

	Thirty-nine Weeks Ended
	October 1, 2022			October 2, 2021
Cash flows from operating activities:
Net income	$	135,187		$	57,533
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		58,333			51,880
Noncash lease expense		21,898			19,557
Loss (gain) on marketable equity securities		399			(1,274	)
Gain on disposal of property and equipment		(4,237	)		(1,006	)
Amortization of debt issuance costs		356			360
Write-off of debt issuance costs		583			—
Stock-based compensation		172			162
Provision for doubtful accounts		7,740			4,610
Deferred income taxes		(838	)		(49	)
Change in assets and liabilities:
Trade and other accounts receivable		(47,098	)		(74,031	)
Prepaid expenses and other assets		192			(723	)
Principal reduction in operating lease liabilities		(20,543	)		(18,480	)
Accounts payable, accrued expenses and other current liabilities, insurance and claims, and income taxes payable		(12,183	)		16,131
Due to/from affiliates, net		4,903			(1,840	)
Other long-term liabilities		(367	)		918
Net cash provided by operating activities		144,497			53,748
Cash flows from investing activities:
Capital expenditures		(85,810	)		(26,235	)
Proceeds from the sale of property and equipment		10,366			5,116
Purchases of marketable securities		(925	)		(114	)
Proceeds from sale of marketable securities		—			117
Net cash used in investing activities		(76,369	)		(21,116	)
Cash flows from financing activities:
Proceeds from borrowing - revolving debt		398,552			303,078
Repayments of debt - revolving debt		(546,431	)		(282,220	)
Proceeds from borrowing - term debt		318,714			8,302
Repayments of debt - term debt		(205,535	)		(46,051	)
Dividends paid		(11,181	)		(11,305	)
Capitalized financing costs		(4,417	)		—
Purchases of treasury stock		(14,305	)		—
Net cash used in financing activities		(64,603	)		(28,196	)
Effect of exchange rate changes on cash and cash equivalents		(2,811	)		(189	)
Net increase in cash		714			4,247
Cash and cash equivalents – beginning of period		13,932			8,763
Cash and cash equivalents – end of period	$	14,646		$	13,010
Supplemental cash flow information:
Cash paid for interest	$	9,399		$	8,810
Cash paid for income taxes	$	39,593		$	29,423

See accompanying notes to consolidated financial statements.

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, 2020	$	30,981	$	4,484	$	(82,385	)	$	293,643		$	(7,150	)	$	239,573
Net income		—		—		—			21,656			—			21,656
Comprehensive income (loss)		—		—		—			—			1,200			1,200
Dividends ($0.105 per share)		—		—		—			(2,826	)		—			(2,826	)
Stock based compensation		7		155		—			—			—			162
Balances - April 3, 2021		30,988		4,639		(82,385	)		312,473			(5,950	)		259,765
Net income		—		—		—			25,604			—			25,604
Comprehensive income (loss)		—		—		—			—			(636	)		(636	)
Dividends ($0.105 per share)		—		—		—			(2,825	)		—			(2,825	)
Balances - July 3, 2021		30,988		4,639		(82,385	)		335,252			(6,586	)		281,908
Net income		—		—		—			10,273			—			10,273
Comprehensive income (loss)		—		—		—			—			(1,536	)		(1,536	)
Dividends ($0.105 per share)		—		—		—			(2,826	)		—			(2,826	)
Balances – October 2, 2021	$	30,988	$	4,639	$	(82,385	)	$	342,699		$	(8,122	)	$	287,819