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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 July 1, 2023

or

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.

Large accelerated filer

 

Accelerated filer

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

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 August 7, 2023, was 26,287,973.

 


PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

July 1,
2023

 

 

December 31,
2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

65,014

 

 

$

47,181

 

Marketable securities

 

 

10,107

 

 

 

10,000

 

Accounts receivable – net of allowance for credit losses of $14,019
   and $
14,308, respectively

 

 

317,254

 

 

 

350,720

 

Other receivables

 

 

24,910

 

 

 

25,146

 

Prepaid expenses and other

 

 

28,489

 

 

 

25,629

 

Due from affiliates

 

 

2,124

 

 

 

976

 

Total current assets

 

 

447,898

 

 

 

459,652

 

Property and equipment – net of accumulated depreciation of $347,388 and
   $
352,231, respectively

 

 

438,663

 

 

 

391,154

 

Operating lease right-of-use asset

 

 

100,093

 

 

 

99,731

 

Goodwill

 

 

170,730

 

 

 

170,730

 

Intangible assets – net of accumulated amortization of $128,205 and $121,843, respectively

 

 

67,604

 

 

 

73,967

 

Deferred income taxes

 

 

1,394

 

 

 

1,394

 

Other assets

 

 

8,984

 

 

 

7,050

 

Total assets

 

$

1,235,366

 

 

$

1,203,678

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

76,730

 

 

$

87,138

 

Current portion of long-term debt

 

 

70,038

 

 

 

65,303

 

Current portion of operating lease liabilities

 

 

29,614

 

 

 

28,227

 

Accrued expenses and other current liabilities

 

 

41,774

 

 

 

43,106

 

Insurance and claims

 

 

31,708

 

 

 

30,574

 

Due to affiliates

 

 

27,259

 

 

 

20,627

 

Income taxes payable

 

 

9,154

 

 

 

11,926

 

Total current liabilities

 

 

286,277

 

 

 

286,901

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

308,005

 

 

 

313,197

 

Operating lease liabilities, net of current portion

 

 

77,013

 

 

 

77,600

 

Deferred income taxes

 

 

69,585

 

 

 

69,585

 

Other long-term liabilities

 

 

5,096

 

 

 

9,465

 

Total long-term liabilities

 

 

459,699

 

 

 

469,847

 

Shareholders' equity:

 

 

 

 

 

 

Common stock, no par value. Authorized 100,000,000 shares; 31,006,629 and
 
30,996,205 shares issued; 26,287,973 and 26,277,549 shares outstanding,
   respectively

 

 

31,006

 

 

 

30,997

 

Paid-in capital

 

 

5,094

 

 

 

4,852

 

Treasury stock, at cost; 4,718,656 shares

 

 

(96,706

)

 

 

(96,706

)

Retained earnings

 

 

556,511

 

 

 

513,589

 

Accumulated other comprehensive (loss):

 

 

 

 

 

 

Interest rate swaps, net of income taxes of $816 and $726, respectively

 

 

2,418

 

 

 

2,156

 

Foreign currency translation adjustments

 

 

(8,933

)

 

 

(7,958

)

Total shareholders’ equity

 

 

489,390

 

 

 

446,930

 

Total liabilities and shareholders’ equity

 

$

1,235,366

 

 

$

1,203,678

 

See accompanying notes to consolidated financial statements.

2


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Income

(In thousands, except per share data)

 

 

 

Thirteen Weeks Ended

 

 

Twenty-six Weeks Ended

 

 

 

July 1,
2023

 

 

July 2,
2022

 

 

July 1,
2023

 

 

July 2,
2022

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Truckload services

 

$

51,860

 

 

$

61,061

 

 

$

98,261

 

 

$

118,544

 

Brokerage services

 

 

60,325

 

 

 

101,929

 

 

 

128,998

 

 

 

209,101

 

Intermodal services

 

 

91,585

 

 

 

156,865

 

 

 

202,611

 

 

 

314,478

 

Dedicated services

 

 

86,069

 

 

 

79,452

 

 

 

171,301

 

 

 

154,938

 

Value-added services

 

 

122,733

 

 

 

127,875

 

 

 

248,797

 

 

 

253,982

 

Total operating revenues

 

 

412,572

 

 

 

527,182

 

 

 

849,968

 

 

 

1,051,043

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation and equipment rent

 

 

139,879

 

 

 

227,215

 

 

 

295,964

 

 

 

459,346

 

Direct personnel and related benefits

 

 

138,046

 

 

 

126,746

 

 

 

277,138

 

 

 

262,840

 

Operating supplies and expenses

 

 

41,101

 

 

 

46,027

 

 

 

87,290

 

 

 

88,151

 

Commission expense

 

 

7,643

 

 

 

10,757

 

 

 

15,815

 

 

 

20,780

 

Occupancy expense

 

 

11,041

 

 

 

10,001

 

 

 

22,193

 

 

 

20,196

 

General and administrative

 

 

13,418

 

 

 

12,129

 

 

 

25,334

 

 

 

22,765

 

Insurance and claims

 

 

5,889

 

 

 

2,598

 

 

 

13,968

 

 

 

11,180

 

Depreciation and amortization

 

 

19,160

 

 

 

27,058

 

 

 

37,675

 

 

 

43,286

 

Total operating expenses

 

 

376,177

 

 

 

462,531

 

 

 

775,377

 

 

 

928,544

 

Income from operations

 

 

36,395

 

 

 

64,651

 

 

 

74,591

 

 

 

122,499

 

Interest income

 

 

621

 

 

 

6

 

 

 

1,373

 

 

 

6

 

Interest expense

 

 

(5,742

)

 

 

(3,925

)

 

 

(11,469

)

 

 

(6,358

)

Other non-operating income (expense)

 

 

284

 

 

 

(823

)

 

 

299

 

 

 

130

 

Income before income taxes

 

 

31,558

 

 

 

59,909

 

 

 

64,794

 

 

 

116,277

 

Income tax expense

 

 

7,992

 

 

 

15,210

 

 

 

16,352

 

 

 

29,570

 

Net income

 

$

23,566

 

 

$

44,699

 

 

$

48,442

 

 

$

86,707

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.90

 

 

$

1.69

 

 

$

1.84

 

 

$

3.25

 

Diluted

 

$

0.90

 

 

$

1.69

 

 

$

1.84

 

 

$

3.25

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

26,287

 

 

 

26,453

 

 

 

26,284

 

 

 

26,660

 

Diluted

 

 

26,308

 

 

 

26,468

 

 

 

26,312

 

 

 

26,668

 

Dividends declared per common share

 

$

0.105

 

 

$

0.105

 

 

$

0.210

 

 

$

0.210

 

 

See accompanying notes to consolidated financial statements.

 

3


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)

 

 

 

Thirteen Weeks Ended

 

 

Twenty-six Weeks Ended

 

 

 

July 1,
2023

 

 

July 2,
2022

 

 

July 1,
2023

 

 

July 2,
2022

 

Net Income

 

$

23,566

 

 

$

44,699

 

 

$

48,442

 

 

$

86,707

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized changes in fair value of interest rate swaps,
   net of income taxes of $
367, $(215), $90 and $(133), respectively

 

 

1,082

 

 

 

(630

)

 

 

262

 

 

 

(389

)

Foreign currency translation adjustments

 

 

(886

)

 

 

1,012

 

 

 

(975

)

 

 

(1,822

)

Total other comprehensive income (loss)

 

 

196

 

 

 

382

 

 

 

(713

)

 

 

(2,211

)

Total comprehensive income

 

$

23,762

 

 

$

45,081

 

 

$

47,729

 

 

$

84,496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 

4


UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Cash Flows

(In thousands)

 

 

Twenty-six Weeks Ended

 

 

 

July 1,
2023

 

 

July 2,
2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

48,442

 

 

$

86,707

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

37,675

 

 

 

43,286

 

Noncash lease expense

 

 

15,295

 

 

 

14,337

 

Gain on marketable equity securities

 

 

(199

)

 

 

(92

)

Gain on disposal of property and equipment

 

 

(1,519

)

 

 

(2,743

)

Amortization of debt issuance costs

 

 

378

 

 

 

207

 

Write-off of debt issuance costs

 

 

 

 

 

583

 

Stock-based compensation

 

 

251

 

 

 

162

 

Provision for credit losses

 

 

4,116

 

 

 

5,501

 

Deferred income taxes

 

 

 

 

 

133

 

Change in assets and liabilities:

 

 

 

 

 

 

Trade and other accounts receivable

 

 

29,518

 

 

 

(64,438

)

Prepaid expenses and other assets

 

 

(4,509

)

 

 

(4,424

)

Principal reduction in operating lease liabilities

 

 

(15,117

)

 

 

(13,085

)

Accounts payable, accrued expenses, income taxes payable,
   insurance and claims and other current liabilities

 

 

(10,484

)

 

 

8,154

 

Due to/from affiliates, net

 

 

5,484

 

 

 

(4,243

)

Other long-term liabilities

 

 

(4,369

)

 

 

(727

)

Net cash provided by operating activities

 

 

104,962

 

 

 

69,318

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(79,842

)

 

 

(37,544

)

Proceeds from the sale of property and equipment

 

 

2,540

 

 

 

5,567

 

Proceeds from the sale of marketable securities

 

 

92

 

 

 

 

Purchases of marketable securities

 

 

 

 

 

(114

)

Net cash used in investing activities

 

 

(77,210

)

 

 

(32,091

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from borrowing - revolving debt

 

 

 

 

 

262,065

 

Repayments of debt - revolving debt

 

 

 

 

 

(274,828

)

Proceeds from borrowing - term debt

 

 

33,738

 

 

 

193,926

 

Repayments of debt - term debt

 

 

(34,573

)

 

 

(192,262

)

Dividends paid

 

 

(5,520

)

 

 

(8,422

)

Capitalized financing costs

 

 

 

 

 

(1,723

)

Purchases of treasury stock

 

 

 

 

 

(14,305

)

Net cash used in financing activities

 

 

(6,355

)

 

 

(35,549

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(3,564

)

 

 

(927

)

Net increase in cash

 

 

17,833

 

 

 

751

 

Cash and cash equivalents – beginning of period

 

 

47,181

 

 

 

13,932

 

Cash and cash equivalents – end of period

 

$

65,014

 

 

$

14,683

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

11,018

 

 

$

5,638

 

Cash paid for income taxes

 

$

19,511

 

 

$

23,368

 

 

See accompanying notes to consolidated financial statements.

5


 

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, 2021

 

$

30,988

 

 

$

4,639

 

 

$

(82,385

)

 

$

356,071

 

 

$

(7,103

)

 

$

302,210

 

Net income

 

 

 

 

 

 

 

 

 

 

 

42,008

 

 

 

 

 

 

42,008

 

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,593

)

 

 

(2,593

)

Dividends ($0.105 per share)

 

 

 

 

 

 

 

 

 

 

 

(2,819

)

 

 

 

 

 

(2,819

)

Purchases of treasury stock

 

 

 

 

 

 

 

 

(5,254

)

 

 

 

 

 

 

 

 

(5,254

)

Stock based compensation

 

 

7

 

 

 

155

 

 

 

 

 

 

 

 

 

 

 

 

162

 

Balances – April 2, 2022

 

$

30,995

 

 

$

4,794

 

 

$

(87,639

)

 

$

395,260

 

 

$

(9,696

)

 

$

333,714

 

Net income

 

 

 

 

 

 

 

 

 

 

 

44,699

 

 

 

 

 

 

44,699

 

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

382

 

 

 

382

 

Purchases of treasury stock

 

 

 

 

 

 

 

 

(9,051

)

 

 

 

 

 

 

 

 

(9,051

)

Dividends ($0.105 per share)

 

 

 

 

 

 

 

 

 

 

 

(2,777

)

 

 

 

 

 

(2,777

)

Balances - July 2, 2022