Universal Logistics Holdings Reports Third Quarter 2023 Financial Results; Declares Dividend

Rhea-AI Summary

Universal Logistics Holdings reports a decrease in operating revenues, income, and earnings per share for the third quarter of 2023. The company's net income was $23.0 million, compared to $48.5 million in the same period last year. Operating income decreased by $33.0 million to $36.8 million, and earnings per share decreased by 52.2% to $0.88. The company's operating margin and EBITDA margin also decreased compared to last year.

Positive

• Universal Logistics Holdings reports a decrease in operating revenues, income, and earnings per share for the third quarter of 2023. The company's net income was $23.0 million, compared to $48.5 million in the same period last year. Operating income decreased by $33.0 million to $36.8 million, and earnings per share decreased by 52.2% to $0.88. The company's operating margin and EBITDA margin also decreased compared to last year.

Negative

• Universal Logistics Holdings reports a decrease in operating revenues, income, and earnings per share for the third quarter of 2023. The company's net income was $23.0 million, compared to $48.5 million in the same period last year. Operating income decreased by $33.0 million to $36.8 million, and earnings per share decreased by 52.2% to $0.88. The company's operating margin and EBITDA margin also decreased compared to last year.

• Third Quarter 2023 Operating Revenues: $421.3 million, 16.7% decrease
• Third Quarter 2023 Operating Income: $36.8 million, 47.3% decrease
• Third Quarter 2023 Earnings Per Share: $0.88 per share, 52.2% decrease
• Declares Quarterly Dividend: $0.105 per share

WARREN, Mich., Oct. 26, 2023 /PRNewswire/ -- Universal Logistics Holdings, Inc. (NASDAQ: ULH) today reported consolidated third quarter 2023 net income of $23.0 million, or $0.88 per basic and diluted share, on total operating revenues of $421.3 million. This compares to net income of $48.5 million, or $1.84 per basic and diluted share, during third quarter 2022 on total operating revenues of $505.7 million.

In the third quarter 2023, Universal's operating income decreased $33.0 million to $36.8 million, compared to $69.8 million in the third quarter one year earlier. As a percentage of operating revenue, operating margin for the third quarter 2023 was 8.7%, compared to 13.8% during the same period last year. EBITDA, a non-GAAP measure, decreased $27.6 million during the third quarter 2023 to $56.7 million, compared to $84.4 million one year earlier. As a percentage of operating revenue, EBITDA margin for the third quarter 2023 was 13.5%, compared to 16.7% during the same period last year.

"Although our individual operating segments experienced varied results, Universal as a whole delivered a solid financial performance for the third quarter of 2023," stated Universal's CEO Tim Phillips. "In this extremely challenging freight environment, depressed volumes and low rates continue to exert downward pressure on the results of our intermodal and company-managed brokerage segments. And while our trucking segment experienced similar macro-level factors, the strong performance in our wind-energy business enhanced the overall financial results in this segment. The highlight of Universal's third quarter was the recurring, strong performance in our contract logistics segment. Although we are acutely aware of the risks posed by on-going union labor disruptions, our contract logistics solutions continue to be in high demand by our OEM customers in automotive and other industries. We believe that Universal's diversified service offerings continue to differentiate us in the market. We remain committed to delivering long-term value to our customers and to our shareholders, and we are extremely grateful for the thousands of Universal employees who get the job done."

Segment Information:

Contract Logistics

• Third Quarter 2023 Operating Revenues: $208.1 million, 0.7% decrease
• Third Quarter 2023 Operating Income: $35.1 million, 16.9% operating margin

In the contract logistics segment, which includes our value-added and dedicated services, third quarter 2023 operating revenues decreased 0.7% to $208.1 million, compared to $209.5 million for the same period last year.  At the end of the third quarter 2023, we managed 73 value-added programs compared to 63 at the end of the third quarter 2022. Included in contract logistics segment revenues were $9.1 million in separately identified fuel surcharges from dedicated transportation services, compared to $11.3 million during the same period last year. Third quarter 2023 income from operations decreased $0.3 million to $35.1 million, compared to $35.4 million during the same period last year. As a percentage of revenue, operating margin in the contract logistics segment was 16.9% for both the third quarters 2023 and 2022, the segment's highest operating margin on record.

Intermodal

• Third Quarter 2023 Operating Revenues: $86.6 million, 43.9% decrease
• Third Quarter 2023 Operating (Loss): $(4.3) million, (5.0)% operating margin

Operating revenues in the intermodal segment decreased 43.9% to $86.6 million in the third quarter 2023, compared to $154.4 million for the same period last year. Included in intermodal segment revenues for the recently completed quarter were $12.7 million in separately identified fuel surcharges, compared to $26.4 million during the same period last year. Intermodal segment revenues also include other accessorial charges such as detention, demurrage and storage, which totaled $9.9 million during the third quarter 2023, compared to $31.3 million one year earlier. The average operating revenue per load, excluding fuel surcharges, decreased 24.7% and load volumes fell an additional 11.8% on a year-over-year basis. In the third quarter 2023, the intermodal segment experienced an operating loss of $4.3 million compared to income from operations of $28.1 million during the same period last year. As a percentage of revenue, operating margin in the intermodal segment for the third quarter 2023 was (5.0)%, compared to 18.2% one year earlier.

Trucking

• - Third Quarter 2023 Operating Revenues: $97.1 million, 2.5% decrease
• - Third Quarter 2023 Operating Income: $6.6 million, 6.8% operating margin

In the trucking segment, third quarter 2023 operating revenues decreased 2.5% to $97.1 million, compared to $99.6 million for the same period last year. Third quarter 2023 trucking segment revenues included $28.8 million of brokerage services, compared to $43.1 million during the same period last year. Also included in our trucking segment revenues were $6.3 million in separately identified fuel surcharges during the third quarter 2023, compared to $9.1 million in fuel surcharges during the same period last year. On a year-over-year basis, the average operating revenue per load, excluding fuel surcharges, increased 13.3% while load volumes declined 13.1%. Income from operations in the third quarter 2023 increased $1.8 million to $6.6 million compared to $4.8 million during the same period last year. As a percentage of revenue, operating margin in the trucking segment for the third quarter 2023 was 6.8% compared to 4.8% during the same period last year.

Company-managed Brokerage

• Third Quarter 2023 Operating Revenues: $28.1 million, 30.8% decrease
• Third Quarter 2023 Operating (Loss): $(1.1) million, (3.8)% operating margin

Third quarter 2023 operating revenues in the company-managed brokerage segment decreased 30.8% to $28.1 million compared to $40.6 million for the same period last year. On a year-over-year basis, average operating revenue per load and load volumes in the company-managed brokerage segment decreased 11.1% and 12.3%, respectively. Third quarter 2023 operating losses in the company-managed brokerage segment were $(1.1) million which compares to $1.1 million of operating income during the same period last year. As a percentage of revenue, operating margin for the third quarter 2023 was (3.8)% compared to 2.7% during the same period last year.

Cash Dividend

Universal Logistics Holdings, Inc. also announced today that its Board of Directors 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 4, 2023 and is expected to be paid on January 2, 2024.

Other Matters 

As of September 30, 2023, Universal held cash and cash equivalents totaling $16.8 million, and $10.5 million in marketable securities. Outstanding debt at the end of the third quarter 2023 was $392.0 million, and capital expenditures totaled $112.3 million, including $80.0 million for the acquisition of a terminal in Compton, Los Angeles County, California.

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 27, 2023
Call Toll Free:	(877) 270-2148
International Dial-in:	+1 (412) 902-6510

A replay of the conference call will be available through November 3, 2023, by calling (877) 344-7529 (toll free) or +1 (412) 317-0088 (toll) and using encore replay code 2772793. The call will also be available on investors.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
		September 30, 2023				October 1, 2022				September 30, 2023				October 1, 2022
Operating revenues:
Truckload services		$	69,598			$	58,107			$	167,858			$	176,651
Brokerage services			56,894				83,687				185,892				292,789
Intermodal services			86,630				154,391				289,241				468,869
Dedicated services			86,701				86,613				258,003				241,551
Value-added services			121,428				122,894				370,225				376,875
Total operating revenues			421,251				505,692				1,271,219				1,556,735
Operating expenses:
Purchased transportation and equipment rent			147,470				208,870				443,434				668,216
Direct personnel and related benefits			134,866				127,125				412,004				389,966
Operating supplies and expenses			43,060				44,734				130,351				132,886
Commission expense			8,334				10,632				24,149				31,412
Occupancy expense			10,913				10,150				33,106				30,345
General and administrative			13,633				13,617				38,967				36,382
Insurance and claims			6,828				5,745				20,795				16,925
Depreciation and amortization			19,386				15,048				57,061				58,333
Total operating expenses			384,490				435,921				1,159,867				1,364,465
Income from operations			36,761				69,771				111,352				192,270
Interest expense, net			(6,495)				(4,490)				(16,590)				(10,842)
Other non-operating income (loss)			588				(454)				885				(324)
Income before income taxes			30,854				64,827				95,647				181,104
Provision for income taxes			7,807				16,347				24,159				45,917
Net income		$	23,047			$	48,480			$	71,488			$	135,187
Earnings per common share:
Basic		$	0.88			$	1.84			$	2.72			$	5.10
Diluted		$	0.88			$	1.84			$	2.72			$	5.09
Weighted average number of common shares outstanding:
Basic			26,286				26,278				26,284				26,533
Diluted			26,310				26,309				26,311				26,551
Dividends declared per common share:		$	0.105			$	0.105			$	0.315			$	0.315

 

UNIVERSAL LOGISTICS HOLDINGS, INC. Unaudited Condensed Consolidated Balance Sheets (In thousands)
		September 30, 2023				December 31, 2022
Assets
Cash and cash equivalents		$	16,811			$	47,181
Marketable securities			10,491				10,000
Accounts receivable - net			307,452				350,720
Other current assets			54,467				51,751
Total current assets			389,221				459,652
Property and equipment - net			533,951				391,154
Other long-term assets - net			336,104				352,872
Total assets		$	1,259,276			$	1,203,678
Liabilities and shareholders' equity
Current liabilities, excluding current maturities of debt		$	217,094			$	221,598
Debt - net			387,209				378,500
Other long-term liabilities			144,818				156,650
Total liabilities			749,121				756,748
Total shareholders' equity			510,155				446,930
Total liabilities and shareholders' equity		$	1,259,276			$	1,203,678

 

UNIVERSAL LOGISTICS HOLDINGS, INC. Unaudited Summary of Operating Data
		Thirteen Weeks Ended								Thirty-nine Weeks Ended
		September 30, 2023				October 1, 2022				September 30, 2023				October 1, 2022
Contract Logistics Segment:
Average number of value-added direct employees			5,439				4,968				5,501				5,064
Average number of value-added full-time equivalents			300				1,226				631				1,384
Number of active value-added programs			73				63				73				63
Intermodal Segment:
Number of loads			119,792				135,800				355,016				435,923
Average operating revenue per load, excluding fuel surcharges		$	547			$	726			$	567			$	706
Average number of tractors			2,027				2,269				2,102				2,185
Number of depots			9				10				9				10
Trucking Segment:
Number of loads			43,996				50,614				134,568				154,479
Average operating revenue per load, excluding fuel surcharges		$	2,033			$	1,794			$	1,759			$	1,799
Average number of tractors			879				896				893				899
Average length of haul			382				388				388				397
Company-Managed Brokerage Segment:
Number of loads (a)			18,535				21,141				56,305				68,453
Average operating revenue per load (a)		$	1,475			$	1,659			$	1,593			$	1,960
Average length of haul (a)			601				608				621				593

(a)	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
		September 30, 2023				October 1, 2022				September 30, 2023				October 1, 2022
Operating Revenues by Segment:
Contract logistics		$	208,129			$	209,507			$	628,228			$	618,426
Intermodal			86,630				154,391				289,241				468,869
Trucking			97,085				99,619				258,043				303,649
Company-managed brokerage			28,102				40,615				91,652				160,940
Other			1,305				1,560				4,055				4,851
Total		$	421,251			$	505,692			$	1,271,219			$	1,556,735
Income from Operations by Segment:
Contract logistics		$	35,103			$	35,400			$	95,673			$	88,300
Intermodal			(4,324)				28,148				2,241				72,526
Trucking			6,558				4,791				14,770				21,821
Company-managed brokerage			(1,070)				1,079				(2,230)				9,097
Other			494				353				898				526
Total		$	36,761			$	69,771			$	111,352			$	192,270

 

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
		September 30, 2023				October 1, 2022				September 30, 2023				October 1, 2022
		( in thousands)								( in thousands)
EBITDA
Net income		$	23,047			$	48,480			$	71,488			$	135,187
Income tax expense			7,807				16,347				24,159				45,917
Interest expense, net			6,495				4,490				16,590				10,842
Depreciation			16,208				11,498				47,521				47,658
Amortization			3,178				3,550				9,540				10,675
EBITDA		$	56,735			$	84,365			$	169,298			$	250,279
EBITDA margin (a)			13.5	%			16.7	%			13.3	%			16.1	%

(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 Universal Logistics Holdings' operating revenues for the third quarter of 2023?

Universal Logistics Holdings' operating revenues for the third quarter of 2023 were $421.3 million.

What was the net income for Universal Logistics Holdings in the third quarter of 2023?

Universal Logistics Holdings' net income for the third quarter of 2023 was $23.0 million.

How much did Universal Logistics Holdings' operating income decrease in the third quarter of 2023?

Universal Logistics Holdings' operating income decreased by $33.0 million to $36.8 million in the third quarter of 2023.

What was the decrease in earnings per share for Universal Logistics Holdings in the third quarter of 2023?

Universal Logistics Holdings' earnings per share decreased by 52.2% to $0.88 in the third quarter of 2023.

What was Universal Logistics Holdings' operating margin for the third quarter of 2023?

Universal Logistics Holdings' operating margin for the third quarter of 2023 was 8.7%.

What was Universal Logistics Holdings' EBITDA margin for the third quarter of 2023?

Universal Logistics Holdings' EBITDA margin for the third quarter of 2023 was 13.5%.