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Universal Logistics Holdings, Inc. Reports 2016 Financial Results

WARREN, Mich., Feb. 23, 2017 /PRNewswire/ -- Universal Logistics Holdings, Inc. (ULH) today reported 2016 consolidated net income of $24.2 million, or $0.85 per basic and diluted share, on total operating revenue of $1.07 billion.  Net income in the fourth quarter of 2016 totaled $2.7 million, or $0.10 per basic and diluted share, on total operating revenue of $264.1 million.  This compares to $9.3 million of net income on total operating revenue of $286.0 million in the fourth quarter of 2015.

Operating revenues from transportation services in the fourth quarter of 2016 decreased 13.8% to $153.0 million compared to the same period last year.  The $24.5 million decrease reflects a 6.1% year-over-year decline in average operating revenues per load, excluding fuel surcharges, a 3.1% decrease in the number of loads hauled, and $2.0 million of lower fuel surcharges.  Top line revenues in Universal's value-added services increased 7.0% to $76.5 million; however, the increase was muted by a decline in operations supporting heavy-truck.  Value-added revenues in heavy-truck fell by 38.2% during the quarter, while revenues in other industries serviced by Universal grew by 13.7%. Revenues from intermodal services declined 6.5% to $34.6 million in the fourth quarter of 2016.  In addition to a $0.7 million decline in depot services, the decrease in intermodal services reflects a 3.0% decrease in the number of loads hauled during the quarter and a $1.0 million decrease in fuel surcharges.  Intermodal's average operating revenues per load, excluding fuel surcharges, remained relatively flat. 

Revenues from operations included in Universal's transportation segment, which is primarily comprised of truckload and intermodal services, decreased $18.6 million, or 10.4%, to $160.0 million in the quarter from $178.6 million one year earlier.  Revenues in the logistics segment, which includes value-added and dedicated transportation services, decreased $3.2 million, or 3.0%, to $104.1 million in the quarter, and included a $10.8 million decline in heavy-truck. 

Consolidated income from operations during the fourth quarter of 2016 decreased $12.7 million to $5.8 million, compared to $18.5 million one year earlier.  Persistent industry-wide headwinds negatively impacted results during the period, where Universal's combined transportation and intermodal revenues fell by $26.9 million. Fourth quarter results were also compressed due to $2.7 million of lower operating income attributable to heavy-truck operations, a $1.2 million charge to bad debt expense for a customer-related bankruptcy and $0.5 million in losses on the sale of used revenue equipment.  Expressed as a percentage of operating revenue, income from operations decreased to 2.2% in the fourth quarter of 2016, compared to 6.5% in the same period last year.

"Our model is strong," stated Jeff Rogers, Universal's Chief Executive Officer. "We endured a difficult environment all year, and the fourth quarter was no exception.  Our unique position servicing heavy industrial customers subjects us to volatility when those end-markets are depressed; however, it also provides us great upside potential when those markets recover.  Universal's 2016 results did not meet our expectations, but our strategy remains the same: Simplify, Focus and Execute.  We have undergone quite a transformation over the past few years; streamlining and rebranding our operating subsidiaries, staying focused on margins and controlling costs. Now, it is time to execute.  I believe in Universal's business model and remain confident that we are well positioned for the years ahead."

Universal calculates and reports selected financial metrics in connection with lending arrangements, in order 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 December 31, 2016, Universal held $1.8 million in cash and cash equivalents and marketable securities totaling $14.4 million.  Net outstanding debt at year end was $261.3 million and fourth quarter capital expenditures totaled $18.7 million. 

Universal Logistics Holdings, Inc. also announced that its Board of Directors has declared a quarterly cash dividend of $0.07 per share of common stock.  The dividend is payable to shareholders of record at the close of business on March 6, 2017 and is expected to be paid on March 16, 2017. 

Conference call:

We invite investors and analysts to our quarterly earnings conference call.  During the call, Jeff Rogers, Chief Executive Officer,  Jude Beres, Chief Financial Officer, and Steven Fitzpatrick, Vice President of Finance and Investor Relations, will discuss Universal's fourth quarter 2016 financial performance, the demand outlook in our key markets and other trends impacting our business.

Quarterly Earnings Conference Call Dial-in Details:

Time:


10:00 AM EST

Date:


Friday, February 24, 2017

Call Toll Free:


(866) 622-0924

International Dial-in: 

+1 (660) 422-4956

Conference ID:  


54192791

A replay of the conference call will be available beginning two hours after the call through March 24, 2017, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 54192791. 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 transportation, intermodal, 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 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,




2016



2015



2016



2015


Operating revenues:

















Transportation services


$

152,957



$

177,466



$

629,192



$

696,134


Value-added services



76,509




71,535




302,225




285,258


Intermodal services



34,585




36,990




141,334




147,381


Total operating revenues



264,051




285,991




1,072,751




1,128,773


Operating expenses:

















Purchased transportation and equipment rent



124,266




139,706




509,775




567,558


Direct personnel and related benefits



68,044




61,279




262,659




220,653


Commission expense



7,682




9,832




32,350




37,844


Operating expense



24,147




26,899




96,612




108,523


Occupancy expense



8,151




6,831




31,923




27,004


Selling, general and administrative



11,850




9,786




38,426




37,510


Insurance and claims



4,117




4,770




17,724




21,413


Depreciation and amortization



9,945




8,424




36,702




34,873


Total operating expenses



258,202




267,527




1,026,171




1,055,378


Income from operations



5,849




18,464




46,580




73,395


Interest expense, net



(1,953)




(3,359)




(8,109)




(9,180)


Other non-operating income (expense)



514




(17)




934




790


Income before provision for income taxes



4,410




15,088




39,405




65,005


Provision for income taxes



1,687




5,782




15,161




25,004


Net income


$

2,723



$

9,306



$

24,244



$

40,001



















Earnings per common share:

















Basic


$

0.10



$

0.33



$

0.85



$

1.37


Diluted


$

0.10



$

0.33



$

0.85



$

1.37



















Weighted average number of common shares outstanding:

















Basic



28,415




28,380




28,411




29,233


Diluted



28,415




28,382




28,411




29,235



















Dividends declared per common share


$

0.07



$

0.07



$

0.28



$

0.28


 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)




December 31,
2016



December 31,
2015


Assets









Cash and cash equivalents


$

1,755



$

12,930


Marketable securities



14,359




13,431


Accounts receivable - net



144,712




141,275


Other current assets



46,625




35,204


Total current assets



207,451




202,840


Property and equipment - net



246,277




177,189


Other long-term assets - net



116,729




123,126


Total assets


$

570,457



$

503,155











Liabilities and shareholders' equity









Current liabilities, excluding current maturities of capital lease
obligations and debt


$

109,961



$

91,700


Debt - net



261,267




233,414


Capital lease obligations



192




1,981


Other long-term liabilities



51,305




44,979


    Total liabilities



422,725




372,074


    Total shareholders' equity



147,732




131,081


    Total liabilities and shareholders' equity


$

570,457



$

503,155


 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data




Thirteen Weeks Ended



Year Ended




December 31,



December 31,




2016



2015



2016



2015


Transportation Services:

















Average operating revenues per loaded mile (a)


$

2.45



$

2.61



$

2.42



$

2.69


Average operating revenues per loaded mile, excluding fuel
surcharges, where separately identifiable (a)


$

2.29



$

2.44



$

2.27



$

2.47


Average operating revenues per load (a)


$

935



$

1,023



$

916



$

1,028


Average operating revenues per load, excluding fuel surcharges,
where separately identifiable (a)


$

873



$

956



$

860



$

945


Average length of haul (a) (b)



381




392




379




382


Number of loads (a)



144,704




149,386




606,041




602,739



















Value Added Services:

















Number of facilities (c)

















Customer provided



18




17




18




17


Company leased



29




32




29




32


Total



47




49




47




49



















Intermodal Services:

















Drayage (in thousands)


$

32,409



$

34,000



$

131,888



$

135,062


Domestic Intermodal (in thousands)



365




469




1,620




2,108


Depot (in thousands)



1,811




2,521




7,826




10,211


Total (in thousands)


$

34,585



$

36,990



$

141,334



$

147,381



















Average operating revenues per loaded mile


$

6.23



$

5.42



$

5.77



$

5.46


Average operating revenues per loaded mile, excluding fuel 
surcharges, where separately identifiable


$

5.54



$

4.69



$

5.16



$

4.62


Average operating revenues per load


$

393



$

399



$

394



$

410


Average operating revenues per load, excluding fuel surcharges, 
where separately identifiable


$

349



$

346



$

352



$

347


Number of loads



82,566




85,140




335,129




329,426


Number of container yards



11




10




11




10




(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. Also excludes final mile delivery and shuttle
service loads.

(b)   

Average length of haul is computed using loaded miles, excluding final mile delivery and shuttle service loads.

(c)   

Excludes storage yards, terminals and office facilities.

 

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data - Continued




Thirteen Weeks Ended



Year Ended




December 31,



December 31,




2016



2015



2016



2015


Average Headcount:

















Employees



5,828




4,396




5,573




4,397


Full time equivalents



2,497




1,844




2,172




1,606


Total



8,325




6,240




7,745




6,003



















Average number of tractors:

















Provided by owner-operators



3,083




3,293




3,136




3,298


Owned



1,279




766




1,183




811


Third party lease



24




41




16




33


Total



4,386




4,100




4,335




4,142



















Operating Revenues by Segment:

















Transportation


$

160,008



$

178,554



$

656,496



$

721,437


Logistics



104,052




107,230




414,948




406,822


Other



(9)




207




1,307




514




$

264,051



$

285,991



$

1,072,751



$

1,128,773



















Income from Operations by Segment:

















Transportation


$

5,015



$

5,080



$

22,399



$

28,683


Logistics



3,136




12,222




27,653




43,848


Other



(2,302)




1,162




(3,472)




864




$

5,849



$

18,464



$

46,580



$

73,395


 

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 as supplemental measures of our performance. We define EBITDA as net income plus (i) interest expense, net, (ii) provision for 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



Year Ended




December 31,



December 31,




2016



2015



2016



2015




( in thousands)



( in thousands)


EBITDA

















Net income


$

2,723



$

9,306



$

24,244



$

40,001


Provision for income taxes



1,687




5,782




15,161




25,004


Interest expense, net



1,953




3,359




8,109




9,180


Depreciation and amortization



9,945




8,424




36,702




34,873


    EBITDA


$

16,308



$

26,871



$

84,216



$

109,058



















EBITDA margin (a)



6.2%




9.4%




7.9%




9.7%




(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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