Universal Logistics Holdings Reports Fourth Quarter 2021 Financial Results; Achieved Full Year 2021 Record Results; Declares Dividend

Rhea-AI Summary

Universal Logistics Holdings (NASDAQ: ULH) reported a fourth-quarter 2021 net income of $16.2 million, or $0.60 per share, on record quarterly revenues of $467.4 million, marking a 21% year-over-year increase. Despite these achievements, operating results were impacted by $11.0 million in charges related to auto liability claims and contract logistics losses. For the full year 2021, net income was $2.74 per share, and total revenues reached $1.75 billion, both representing historical highs for the company. A cash dividend of $0.105 per share was also declared, payable on April 4, 2022.

Positive

• Fourth quarter 2021 operating revenues of $467.4 million, a record high.
• Full year 2021 total revenues increased by 26% to $1.75 billion.
• Net income for the full year 2021 was $2.74 per share, a 54% increase year-over-year.
• A cash dividend of $0.105 per share declared, payable on April 4, 2022.

Negative

• Fourth quarter 2021 operating margin decreased to 5.1% from 6.1% year-over-year.
• EBITDA declined by $4.5 million to $39.7 million in the fourth quarter 2021.
• Operating income in contract logistics segment decreased by $5.9 million year-over-year.

WARREN, Mich., Feb. 10, 2022 /PRNewswire/ -- Universal Logistics Holdings, Inc. (NASDAQ: ULH), a leading asset-light provider of customized transportation and logistics solutions, today reported consolidated fourth quarter 2021 net income of $16.2 million, or $0.60 per basic and diluted share, on total operating revenues of $467.4 million, Universal's highest quarterly operating revenues ever reported. This compares to net income of $16.2 million, or $0.60 per basic and diluted share, during fourth quarter 2020 on total operating revenues of $386.0 million. Universal's fourth quarter 2021 operating results were negatively affected by $6.0 million of charges for auto liability claims expected to settle in excess of policy limits and an additional $5.0 million of losses incurred in connection with a contract logistics program in Detroit, Michigan.  For the full year 2021, Universal reported $2.74 per basic and diluted share, on total operating revenues of $1.75 billion, both the highest in company history. This compares to $1.78 per basic and diluted share, on total operating revenues of $1.39 billion for the full year 2020.

In the fourth quarter 2021, Universal's operating income increased $0.3 million to $23.8 million, compared to $23.5 million in the fourth quarter one year earlier.  Universal's fourth quarter 2021 operating results were reduced by a total of $11.0 million attributable to the previously mentioned auto liability claims charges and losses attributable to a recent contract logistics program award.  As a percentage of operating revenue, operating margin for the fourth quarter 2021 was 5.1%, compared to 6.1% during the same period last year. EBITDA, a non-GAAP measure, decreased $4.5 million during the fourth quarter 2021 to $39.7 million, compared to $44.2 million one year earlier. As a percentage of operating revenue, EBITDA margin for the fourth quarter 2021 was 8.5%, compared to 11.4% during the same period last year. The claims charges and launch losses recorded in the fourth quarter 2021 adversely impacted both Universal's operating margin and EBITDA margin by 230 basis points. 

"2021 certainly had its share of challenges," stated Tim Phillips, Universal's Chief Executive Officer. "We experienced them predominantly at the macro level, with a lack of fluidity throughout the country's ports and inland supply chains, a tight labor market, particularly in the transportation and logistics space, and transportation equipment in extremely short supply. We also experienced some of those conditions more acutely at Universal. Our automotive customers struggled to meet production due to a lack of semiconductors and we were challenged with significant program losses in executing a major new contract logistics program.

Yet, despite these challenges, Universal's business model continued to deliver impressive results.  For the full year 2021 Universal reported record results on both the top and bottom line. Our year-over-year annual operating revenues increased 26%, and our after-tax earnings were up over 50%, making Universal's full year 2021 operating revenues and earnings per share the greatest in company history. We also closed out the fourth quarter with Universal's highest quarterly revenues ever reported. While there is still plenty of room for improvement, I want to make sure these achievements don't go unrecognized. I would like to thank every member of Team Universal for their individual contributions in making this year a success, and I look forward to what we can accomplish in 2022."

Segment Information:

Contract Logistics

-  Fourth Quarter 2021 Operating Revenues:  $160.7 million, 20.7% increase
-  Fourth Quarter 2021 Operating Income:  $6.1 million, 3.8% operating margin

In the contract logistics segment, which includes our value-added and dedicated services, fourth quarter 2021 operating revenues increased 20.7% to $160.7 million, compared to $133.2 million for the same period last year. At the end of the fourth quarter 2021, we managed 63 value-added programs, compared to 58 such programs at the end of the fourth quarter 2020, and improved our dedicated transportation load volumes by 6.9% compared to the same period last year. Fourth quarter 2021 income from operations decreased $5.9 million to $6.1 million, compared to $12.0 million during the same period last year. Included in fourth quarter 2021 results were $5.0 million of additional losses incurred in connection with a recently launched new business award. As a percentage of revenue, operating margin in the contract logistics segment for the fourth quarter 2021 was 3.8%, compared to 9.0% during the same period last year. The launch losses recorded in the fourth quarter 2021 adversely impacted this segment's operating margin by 310 basis points. 

Intermodal

-  Fourth Quarter 2021 Operating Revenues:  $141.7 million, 33.8% increase
-  Fourth Quarter 2021 Operating Income:  $13.8 million, 9.7% operating margin

Operating revenues in the intermodal segment increased $35.8 million to $141.7 million in the fourth quarter 2021, compared to $105.9 million for the same period last year. Included in intermodal segment revenues for the recently completed quarter were $16.1 million in separately identified fuel surcharges, compared to $8.9 million during the same period last year. Intermodal segment revenues also include other accessorial charges such as detention, demurrage and storage which totaled $35.7 million during the fourth quarter 2021, compared to $20.0 million one year earlier. The average operating revenue per load, excluding fuel surcharges, increased 31.9%; however, load volumes decreased 14.2% year-over-year. Fourth quarter 2021 income from operations increased $6.0 million to $13.8 million, compared to $7.8 million during the same period last year. As a percentage of revenue, operating margin in the intermodal segment for the fourth quarter 2021 was 9.7%, compared to 7.3% during the same period last year.

Trucking

-  Fourth Quarter 2021 Operating Revenues:  $101.5 million, 25.5% increase
-  Fourth Quarter 2021 Operating Income:  $1.1 million, 1.1% operating margin

In the trucking segment, which includes agent-based and company-managed trucking operations, fourth quarter 2021 operating revenues increased 25.5% to $101.5 million, compared to $80.9 million for the same period last year. Fourth quarter 2021 trucking segment revenues included $38.1 million of brokerage services, compared to $31.3 million during the same period last year. Also included in our trucking segment revenues were $6.8 million in separately identified fuel surcharges during the fourth quarter 2021, compared to $3.7 million in fuel surcharges during the same period last year. On a year-over-year basis, trucking segment load volumes increased 2.8% and the average operating revenue per load, excluding fuel surcharges, increased an additional 19.3% during the same period. Income from operations in the fourth quarter 2021 decreased $2.4 million to $1.1 million compared to $3.5 million during the same period last year. Fourth quarter 2021 results also included a $6.0 million charge for auto liability claims expected to settle in excess of policy limits. As a percentage of revenue, operating margin in the trucking segment for the fourth quarter 2021 was 1.1% compared to 4.4% during the same period last year. The claim charges recorded in the fourth quarter 2021 adversely impacted the trucking segment's operating margin by 590 basis points. 

Company-managed Brokerage

-  Fourth Quarter 2021 Operating Revenues:  $62.0 million, 5.8% decrease
-  Fourth Quarter 2021 Operating Income:  $2.5 million, 4.0% operating margin

Fourth quarter 2021 operating revenues in the company-managed brokerage segment decreased $3.8 million to $62.0 million, compared to $65.8 million for the same period last year, while income from operations increased $2.3 million to $2.5 million in the fourth quarter 2021.  This compares to income from operations of $0.2 million one year earlier. The company-managed brokerage segment's average operating revenue per load, excluding fuel surcharges, increased 10.1%; however, load volumes decreased 19.4% on a year-over-year basis. As a percentage of revenue, operating margin in the company-managed brokerage segment for the fourth quarter 2021 was 4.0% compared to 0.3% 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 March 7, 2022 and is expected to be paid on April 4, 2022.

Other Matters 

As of December 31, 2021, Universal held cash and cash equivalents totaling $13.9 million, and $8.0 million in marketable securities. Outstanding debt at the end of the fourth quarter 2021 was $428.4 million and capital expenditures totaled $12.6 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, February 11, 2022
Call Toll Free:  (844) 955-2101
International Dial-in:  +1 (661) 567-1249
Conference ID:  6075298

A replay of the conference call will be available beginning two hours after the call through February 18, 2022, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 6075298. The call will also be available on investors.universallogistics.com. 

Source: Universal Logistics Holdings, Inc.

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," "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 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								Year Ended
	December 31,								December 31,
	2021				2020				2021				2020
Operating revenues:
Truckload services	$	64,838			$	49,786			$	248,878			$	201,419
Brokerage services		100,143				97,116				401,823				336,365
Intermodal services		141,723				105,887				473,059				393,633
Dedicated services		54,003				38,524				204,102				127,510
Value-added services		106,665				94,640				423,118				332,156
Total operating revenues		467,372				385,953				1,750,980				1,391,083
Operating expenses:
Purchased transportation and equipment rent		224,516				187,469				824,789				674,143
Direct personnel and related benefits		119,720				93,756				456,643				337,618
Operating supplies and expenses		35,779				32,398				149,394				111,056
Commission expense		8,914				7,711				33,894				26,661
Occupancy expense		10,380				8,097				37,286				34,586
General and administrative		9,783				9,177				39,648				33,267
Insurance and claims		18,847				4,597				38,829				19,252
Depreciation and amortization		15,657				19,199				67,537				74,141
Total operating expenses		443,596				362,404				1,648,020				1,310,724
Income from operations		23,776				23,549				102,960				80,359
Interest expense, net		(2,510)				(3,428)				(11,599)				(14,579)
Other non-operating income (loss)		247				1,418				7,220				(1,870)
Income before income taxes		21,513				21,539				98,581				63,910
Provision for income taxes		5,314				5,316				24,848				15,778
Net income	$	16,199			$	16,223			$	73,733			$	48,132
Earnings per common share:
Basic	$	0.60			$	0.60			$	2.74			$	1.78
Diluted	$	0.60			$	0.60			$	2.74			$	1.78
Weighted average number of common shares outstanding:
Basic		26,919				26,917				26,919				26,997
Diluted		26,923				26,926				26,929				27,000
Dividends declared per common share:	$	0.105			$	0.105			$	0.420			$	0.210

UNIVERSAL LOGISTICS HOLDINGS, INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
	December 31, 2021				December 31, 2020
Assets
Cash and cash equivalents	$	13,932			$	8,763
Marketable securities		8,031				6,534
Accounts receivable - net		341,398				259,154
Other current assets		57,334				47,073
Total current assets		420,695				321,524
Property and equipment - net		345,583				364,795
Other long-term assets - net		371,213				376,730
Total assets	$	1,137,491			$	1,063,049
Liabilities and shareholders' equity
Current liabilities, excluding current maturities of debt	$	251,550			$	213,094
Debt - net		427,348				460,120
Other long-term liabilities		156,383				150,262
Total liabilities		835,281				823,476
Total shareholders' equity		302,210				239,573
Total liabilities and shareholders' equity	$	1,137,491			$	1,063,049

UNIVERSAL LOGISTICS HOLDINGS, INC.
Unaudited Summary of Operating Data
	Thirteen Weeks Ended								Year Ended
	December 31,								December 31,
	2021				2020				2021				2020
Contract Logistics Segment:
Number of dedicated transportation loads (a)		145,127				135,821				594,748				493,733
Average number of value-added direct employees		5,005				3,507				4,534				3,444
Average number of value-added full-time equivalents		1,322				1,387				1,448				1,233
Number of active value-added programs		63				58				63				58
Intermodal Segment:
Number of loads		156,736				182,582				665,088				719,947
Average operating revenue per load, excluding fuel surcharges	$	595			$	451			$	522			$	461
Average number of tractors		2,056				1,951				2,042				2,168
Number of depots		12				12				12				12
Trucking Segment:
Number of loads		67,440				65,572				288,378				257,562
Average operating revenue per load, excluding fuel surcharges	$	1,475			$	1,236			$	1,356			$	1,218
Average number of tractors		1,234				1,276				1,299				1,324
Average length of haul		374				386				372				398
Company-Managed Brokerage Segment:
Number of loads (b)		27,434				34,033				121,944				145,655
Average operating revenue per load (b)	$	1,976			$	1,794			$	1,845			$	1,403
Average length of haul (b)		533				580				553				576

(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								Year Ended
	December 31,								December 31,
	2021				2020				2021				2020
Operating Revenues by Segment:
Contract logistics	$	160,668			$	133,164			$	627,220			$	459,666
Intermodal		141,723				105,887				473,059				393,633
Trucking		101,474				80,863				403,312				318,385
Company-managed brokerage		62,035				65,822				242,794				218,123
Other		1,472				217				4,595				1,276
Total	$	467,372			$	385,953			$	1,750,980			$	1,391,083
Income from Operations by Segment:
Contract logistics	$	6,067			$	11,956			$	44,809			$	35,967
Intermodal		13,799				7,770				30,379				30,353
Trucking		1,105				3,545				19,607				16,413
Company-managed brokerage		2,466				227				7,122				(2,681)
Other		339				51				1,043				307
Total	$	23,776			$	23,549			$	102,960			$	80,359

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								Year Ended
	December 31,								December 31,
	2021				2020				2021				2020
	( in thousands)								( in thousands)
EBITDA
Net income	$	16,199			$	16,223			$	73,733			$	48,132
Income tax expense		5,314				5,316				24,848				15,778
Interest expense, net		2,510				3,428				11,599				14,579
Depreciation		12,248				15,413				53,650				58,934
Amortization		3,409				3,786				13,887				15,207
EBITDA	$	39,680			$	44,166			$	177,717			$	152,630
EBITDA margin (a)		8.5	%			11.4	%			10.1	%			11.0	%

(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.

 

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SOURCE Universal Logistics Holdings, Inc.

FAQ

What were the fourth quarter 2021 results for Universal Logistics (ULH)?

Universal Logistics reported a net income of $16.2 million, or $0.60 per share, on total operating revenues of $467.4 million.

How did Universal Logistics perform in 2021 compared to 2020?

In 2021, Universal Logistics achieved revenues of $1.75 billion and earnings of $2.74 per share, marking increases of 26% and 54% respectively from 2020.

What challenges affected Universal Logistics' fourth quarter results?

The fourth quarter results were impacted by $11.0 million in charges related to auto liability claims and losses from a new contract logistics program.

When is the cash dividend for Universal Logistics shareholders payable?

The cash dividend of $0.105 per share is payable on April 4, 2022, to shareholders of record as of March 7, 2022.