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Universal Logistics Holdings, Inc. Reports Consolidated Second Quarter 2018 Financial Results

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Universal Logistics Holdings, Inc. Reports Consolidated Second Quarter 2018 Financial Results

- Second Quarter 2018 Operating Revenues: $365.9 million, highest quarterly revenue ever

- Second Quarter 2018 Operating Income: $26.3 million, highest reported operating income

- Second Quarter 2018 EPS: $0.62, best earnings per share in our history

PR Newswire

WARREN, Mich., July 26, 2018 /PRNewswire/ -- Universal Logistics Holdings, Inc. (NASDAQ:ULH), a leading asset-light provider of customized transportation and logistics solutions, today reported consolidated second quarter 2018 net income of $17.7 million, or $0.62 per basic and diluted share, a 520% increase over the same period last year.  Universal also reported second quarter 2018 total operating revenues of $365.9 million, the highest quarterly revenue ever reported.  This compares to net income of $2.7 million, or $0.10 per basic and diluted share, during second quarter 2017 on total operating revenues of $305.2 million

Universal Logistics Holdings logo

Operating revenues from truckload services increased $6.0 million to $82.7 million, compared to $76.7 million for the same period last year. Included in truckload revenues for the recently completed quarter were $9.2 million in separately identified fuel surcharges compared to $7.1 million during the same period last year.  The increase in truckload services reflects a 12.7% increase in average operating revenue per load, excluding fuel surcharges.  This increase was partially offset by a 7.2% decrease in the number of loads hauled.  During the quarter ended June 30, 2018, Universal moved 74,878 loads compared to 80,720 during the same period last year. 

Revenues for the second quarter 2018 from brokerage services increased $27.8 million, or 43.0%, to $92.5 million compared to $64.7 million one year earlier. The growth in brokerage revenues is due to increases in the average operating revenue per load and in the number of loads hauled.  Universal's average operating revenue per load increased 30.1% to $1,659 per load, up from $1,275 per load one year earlier. The number of brokerage loads hauled in the second quarter 2018 increased 8.9% to 53,101 compared to 48,768 during the same period last year. 

Intermodal services revenues increased $16.2 million, or 41.9%, to $54.9 million in the second quarter 2018, up from $38.7 million during the same period last year.  Intermodal revenues for the recently completed quarter included $9.8 million of revenues from Universal's acquisition of Fore Transportation in February 2018.  Second quarter 2018 intermodal revenues also included $5.8 million in separately identified fuel surcharges, compared to $3.9 million during the same period last year.  Intermodal services growth included increases both in the average operating revenue per load, excluding fuel surcharges, and in the number of loads hauled.  During the quarter ended June 30, 2018, Universal moved 98,468 intermodal loads, compared to 87,952 loads during the same period last year, an increase of 12.0%, while also increasing its average operating revenue per load, excluding fuel surcharges, by 27.4%.

Second quarter 2018 operating revenues from dedicated services increased to $28.7 million compared to $24.4 million one year earlier. Dedicated services revenues included $4.5 million in separately identified fuel surcharges in the second quarter 2018 compared to $3.3 million during the same period last year.  The increase in dedicated services revenues is also attributable to increases in the number of loads hauled and in the average operating revenue per mile, excluding fuel surcharges.  During the quarter ended June 30, 2018, Universal moved 61,732 dedicated services loads, compared to 52,310 loads one year earlier, and the average rate per mile, excluding fuel surcharges increased 2.6%.  Universal's average dedicated operating revenue per load, excluding fuel surcharges, decreased 8.0%, primarily driven by a decrease in the average length of haul.    

Revenues from value-added services increased $6.6 million to $107.2 million in the quarter ended June 30, 2018.  This compares to $100.6 million from value-added services one year earlier.  Operations supporting heavy-truck accounted for $5.3 million of the increase in value-added services in the second quarter 2018.  Overall, revenues from value-added services grew by 6.6% compared to the same period last year.

Consolidated income from operations increased $19.9 million to $26.3 million, compared to $6.4 million one year earlier. Both Universal's transportation and logistics segments outperformed the same period last year. Income from operations in the transportation segment, which is primarily comprised of truckload, brokerage and intermodal services operations, increased 21.0% to $10.3 million in the quarter ended June 30, 2018.  In the logistics segment, which includes value-added and dedicated services, operating income increased $17.5 million to $15.0 million in the second quarter 2018.  This compares to an operating loss of $2.5 million in second quarter of 2017, which included approximately $8.0 million of losses in our Mexican value-added operations.

The effective tax rate for the second quarter 2018 was 25.2%, and reflects the estimated impact of the Tax Cuts and Jobs Act.  This compares to an effective tax rate of 37.8% during the same period last year.  Net income for the second quarter 2018 also includes $0.2 million of pre-tax holding gains on marketable securities due to changes in fair value recognized in income.

During the second quarter of 2018, EBITDA, a non-GAAP measure, increased $21.4 million to $39.8 million, compared to $18.4 million in the same period last year.  As a percentage of total operating revenues, operating income and EBITDA margins for the second quarter 2018 were 7.2% and 10.9%, respectively.  These profitability metrics compare to 2.1% and 6.0%, respectively, in second quarter 2017. 

"Team Universal delivered excellent results this quarter," stated Jeff Rogers, Universal's Chief Executive Officer.  "This is the third consecutive quarter we have reported record breaking revenues, and the second quarter 2018 also boasts Universal's highest level of operating income in history.  We are successfully executing on our profitability targets, while continuing to deliver the highest level of customer service.  I can't thank the Universal team enough for the hard work and dedication it took to get to this point, and I look forward to continued success in the future."

Universal calculates and reports selected financial metrics for purposes of our lending arrangements and 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."

As of June 30, 2018, Universal held cash and cash equivalents totaling $1.7 million and $12.5 million in marketable securities.  Outstanding debt at the end of the second quarter 2018 was $273.4 million and capital expenditures totaled $24.3 million.

Universal Logistics Holdings, Inc. also announced today that its Board of Directors has declared a quarterly cash dividend of $0.105 per share of common stock.  The dividend is payable to shareholders of record at the close of business on August 6, 2018 and will be paid on August 16, 2018.

Conference call:

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

Quarterly Earnings Conference Call Dial-in Details:

Time:  10:00 AM Eastern Time

Date:  Friday, July 27, 2018

Call Toll Free:  (866) 622-0924

International Dial-in:  +1 (660) 422-4956

Conference ID:  7840079

A replay of the conference call will be available beginning two hours after the call through August 31, 2018, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 7840079. The call will also be available on investors.universallogistics.com

About Universal:

Universal Logistics Holdings, Inc. is a leading asset-light provider of customized transportation and logistics solutions throughout the United States, and in Mexico, Canada and Colombia.  We provide our customers with supply chain solutions that can be scaled to meet their changing demands and volumes.  We offer our customers a broad array of services across their entire supply chain, including truckload, brokerage, intermodal, dedicated, and value-added services. 

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," "seek," "believe," "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 the Company's reports and filings with the Securities and Exchange Commission. The Company 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


Twenty-six Weeks Ended



June 30,


July 1,


June 30,


July 1,



2018


2017


2018


2017

Operating revenues:













Truckload services


$

82,657


$

76,744


$

159,849


$

148,234

Brokerage services



92,486



64,714



170,645



122,703

Intermodal services



54,871



38,729



101,480



74,656

Dedicated services



28,708



24,375



56,783



49,271

Value-added services



107,203



100,637



212,281



194,777

Total operating revenues



365,925



305,199



701,038



589,641














Operating expenses:













Purchased transportation and equipment rent



178,252



142,600



340,263



273,827

Direct personnel and related benefits



87,403



81,238



173,359



156,782

Operating supplies and expenses



30,336



31,467



58,428



60,451

Commission expense



9,733



8,237



18,645



15,781

Occupancy expense



7,791



7,666



15,164



15,497

General and administrative



7,618



6,495



15,605



14,453

Insurance and claims



5,294



9,538



10,754



15,396

Depreciation and amortization



13,246



11,541



25,464



21,868

Total operating expenses



339,673



298,782



657,682



574,055

Income from operations



26,252



6,417



43,356



15,586

Interest expense, net



(2,954)



(2,481)



(5,507)



(4,717)

Other non-operating income



336



464



(59)



532

Income before income taxes



23,634



4,400



37,790



11,401

Income tax expense



5,965



1,661



9,687



4,344

Net income


$

17,669


$

2,739


$

28,103


$

7,057














Earnings per common share:













Basic


$

0.62


$

0.10


$

0.99


$

0.25

Diluted


$

0.62


$

0.10


$

0.99


$

0.25














Weighted average number of common shares outstanding:













Basic



28,395



28,443



28,391



28,439

Diluted



28,402



28,443



28,398



28,439














Dividends declared per common share:


$

0.105


$

0.070


$

0.210


$

0.140

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)




June 30,

2018


December 31,

2017

Assets







Cash and cash equivalents


$

1,664


$

1,672

Marketable securities



12,526



15,144

Accounts receivable - net



213,681



171,036

Other current assets



41,260



40,814

Total current assets



269,131



228,666

Property and equipment - net



284,374



267,195

Other long-term assets - net



134,406



114,731

Total assets


$

687,911


$

610,592








Liabilities and shareholders' equity







Current liabilities, excluding current maturities of debt


$

184,463


$

158,200

Debt - net



272,224



247,978

Other long-term liabilities



38,446



35,649

Total liabilities



495,133



441,827

Total shareholders' equity



192,778



168,765

Total liabilities and shareholders' equity


$

687,911


$

610,592

 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data




Thirteen Weeks Ended


Twenty-six Weeks Ended



June 30,


July 1,


June 30,


July 1,



2018


2017


2018


2017

Truckload Services:













Number of loads



74,878



80,720



147,844



160,255

Average operating revenue per load, excluding fuel
surcharges


$

976


$

866


$

953


$

838

Average operating revenue per mile, excluding fuel
surcharges


$

2.85


$

2.46


$

2.76


$

2.41

Average length of haul



342



351



346



347

Average number of tractors



1,792



1,959



1,833



1,944














Brokerage Services:













Number of loads (a)



53,101



48,768



99,099



91,126

Average operating revenue per load (a)


$

1,659


$

1,275


$

1,654


$

1,270

Average length of haul (a)



582



548



576



572














Intermodal Services:













Number of loads



98,468



87,952



192,497



171,505

Average operating revenue per load, excluding fuel
surcharges


$

493


$

387


$

466


$

387

Average number of tractors



1,030



924



955



900

Number of depots



14



12



14



12














Dedicated Services:













Number of loads



61,732



52,310



122,221



104,306

Average operating revenue per load, excluding fuel
surcharges


$

358


$

389


$

365


$

392

Average operating revenue per mile, excluding fuel
surcharges


$

1.96


$

1.91


$

1.97


$

1.96

Average length of haul



183



203



186



200

Average number of tractors



722



812



745



771



(a)  

Excludes operating data from Universal Logistics Solutions International, Inc., 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




Thirteen Weeks Ended


Twenty-six Weeks Ended



June 30,


July 1,


June 30,


July 1,



2018


2017


2018


2017

Value-added Services













Average number of direct employees



3,855



3,931



3,972



4,354

Average number of full-time equivalents



1,513



1,846



1,372



1,666

Number of active programs



49



50



49



50














Operating Revenues by Segment:













Transportation


$

234,157


$

175,032


$

440,265


$

353,428

Logistics



131,397



129,850



260,046



235,585

Other



371



317



727



628

Total


$

365,925


$

305,199


$

701,038


$

589,641














Income from Operations by Segment:













Transportation


$

10,275


$

8,495


$

20,388


$

14,848

Logistics



15,014



(2,525)



22,447



1,668

Other



963



447



521



(930)

Total


$

26,252


$

6,417


$

43,356


$

15,586

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, a non-GAAP measure, as supplemental measures of our performance. We define EBITDA as net income plus (i) interest expense, net, (ii) income taxes and (iii) depreciation and amortization, or EBITDA. 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



Twenty-six Weeks Ended




June 30,



July 1,



June 30,



July 1,




2018



2017



2018



2017




( in thousands)



( in thousands)


EBITDA

















Net income


$

17,669



$

2,739



$

28,103



$

7,057


Income tax expense



5,965




1,661




9,687




4,344


Interest expense, net



2,954




2,481




5,507




4,717


Depreciation and amortization



13,246




11,541




25,464




21,868


EBITDA


$

39,834



$

18,422



$

68,761



$

37,986



















EBITDA margin (a)



10.9

%



6.0

%



9.8

%



6.4

%



(a)  

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

We present EBITDA because we believe it assists 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 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 EBITDA only supplementally.

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SOURCE Universal Logistics Holdings, Inc.

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