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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 September 30, 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 November 6, 2023, was 26,284,223.

 


 

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

September 30,
2023

 

 

December 31,
2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

16,811

 

 

$

47,181

 

Marketable securities

 

 

10,491

 

 

 

10,000

 

Accounts receivable – net of allowance for credit losses of $13,386
   and $
14,308, respectively

 

 

307,452

 

 

 

350,720

 

Other receivables

 

 

24,050

 

 

 

25,146

 

Prepaid expenses and other

 

 

28,478

 

 

 

25,629

 

Due from affiliates

 

 

1,939

 

 

 

976

 

Total current assets

 

 

389,221

 

 

 

459,652

 

Property and equipment – net of accumulated depreciation of $356,532 and
   $
352,231, respectively

 

 

533,951

 

 

 

391,154

 

Operating lease right-of-use asset

 

 

92,542

 

 

 

99,731

 

Goodwill

 

 

170,730

 

 

 

170,730

 

Intangible assets – net of accumulated amortization of $131,383 and $121,843, respectively

 

 

64,427

 

 

 

73,967

 

Deferred income taxes

 

 

1,394

 

 

 

1,394

 

Other assets

 

 

7,011

 

 

 

7,050

 

Total assets

 

$

1,259,276

 

 

$

1,203,678

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

83,893

 

 

$

87,138

 

Current portion of long-term debt

 

 

69,854

 

 

 

65,303

 

Current portion of operating lease liabilities

 

 

29,124

 

 

 

28,227

 

Accrued expenses and other current liabilities

 

 

43,249

 

 

 

43,106

 

Insurance and claims

 

 

30,340

 

 

 

30,574

 

Due to affiliates

 

 

14,853

 

 

 

20,627

 

Income taxes payable

 

 

15,634

 

 

 

11,926

 

Total current liabilities

 

 

286,947

 

 

 

286,901

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

317,355

 

 

 

313,197

 

Operating lease liabilities, net of current portion

 

 

69,867

 

 

 

77,600

 

Deferred income taxes

 

 

69,585

 

 

 

69,585

 

Other long-term liabilities

 

 

5,367

 

 

 

9,465

 

Total long-term liabilities

 

 

462,174

 

 

 

469,847

 

Shareholders' equity:

 

 

 

 

 

 

Common stock, no par value. Authorized 100,000,000 shares; 31,007,100 and
 
30,996,205 shares issued; 26,284,223 and 26,277,549 shares outstanding,
   respectively

 

 

31,007

 

 

 

30,997

 

Paid-in capital

 

 

5,103

 

 

 

4,852

 

Treasury stock, at cost; 4,722,877 and 4,718,656 shares, respectively

 

 

(96,840

)

 

 

(96,706

)

Retained earnings

 

 

576,798

 

 

 

513,589

 

Accumulated other comprehensive (loss):

 

 

 

 

 

 

Interest rate swaps, net of income taxes of $947 and $726, respectively

 

 

2,803

 

 

 

2,156

 

Foreign currency translation adjustments

 

 

(8,716

)

 

 

(7,958

)

Total shareholders’ equity

 

 

510,155

 

 

 

446,930

 

Total liabilities and shareholders’ equity

 

$

1,259,276

 

 

$

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

 

 

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 income

 

 

45

 

 

 

10

 

 

 

1,419

 

 

 

16

 

Interest expense

 

 

(6,540

)

 

 

(4,500

)

 

 

(18,009

)

 

 

(10,858

)

Other non-operating income (expense)

 

 

588

 

 

 

(454

)

 

 

885

 

 

 

(324

)

Income before income taxes

 

 

30,854

 

 

 

64,827

 

 

 

95,647

 

 

 

181,104

 

Income tax expense

 

 

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

 

 

See accompanying notes to consolidated financial statements.

 

3


 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)

 

 

 

Thirteen Weeks Ended

 

 

Thirty-nine Weeks Ended

 

 

 

September 30,
2023

 

 

October 1,
2022

 

 

September 30,
2023

 

 

October 1,
2022

 

Net Income

 

$

23,047

 

 

$

48,480

 

 

$

71,488

 

 

$

135,187

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized changes in fair value of interest rate swaps,
   net of income taxes of $
131, $972, $221 and $838, respectively

 

 

385

 

 

 

2,859

 

 

 

647

 

 

 

2,470

 

Foreign currency translation adjustments

 

 

217

 

 

 

(548

)

 

 

(758

)

 

 

(2,370

)

Total other comprehensive income (loss)

 

 

602

 

 

 

2,311

 

 

 

(111

)

 

 

100

 

Total comprehensive income

 

$

23,649

 

 

$

50,791

 

 

$

71,377

 

 

$

135,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 

4


 

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Consolidated Statements of Cash Flows

(In thousands)

 

 

Thirty-nine Weeks Ended

 

 

 

September 30,
2023

 

 

October 1,
2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

71,488

 

 

$

135,187

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

57,061

 

 

 

58,333

 

Noncash lease expense

 

 

22,941

 

 

 

21,898

 

(Gain) loss on marketable equity securities

 

 

(693

)

 

 

399

 

(Gain) loss on disposal of property and equipment

 

 

(1,511

)

 

 

(4,237

)

Amortization of debt issuance costs

 

 

568

 

 

 

356

 

Write-off of debt issuance costs

 

 

 

 

 

583

 

Stock-based compensation

 

 

261

 

 

 

172

 

Provision for credit losses

 

 

4,334

 

 

 

7,740

 

Deferred income taxes

 

 

 

 

 

(838

)

Change in assets and liabilities:

 

 

 

 

 

 

Trade and other accounts receivable

 

 

40,853

 

 

 

(47,098

)

Prepaid expenses and other assets

 

 

(2,121

)

 

 

192

 

Principal reduction in operating lease liabilities

 

 

(22,910

)

 

 

(20,543

)

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

 

 

1,772

 

 

 

(12,183

)

Due to/from affiliates, net

 

 

(6,737

)

 

 

4,903

 

Other long-term liabilities

 

 

(4,098

)

 

 

(367

)

Net cash provided by operating activities

 

 

161,208

 

 

 

144,497

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(192,098

)

 

 

(85,810

)

Proceeds from the sale of property and equipment

 

 

3,290

 

 

 

10,366

 

Proceeds from the sale of marketable securities

 

 

202

 

 

 

 

Purchases of marketable securities

 

 

 

 

 

(925

)

Net cash used in investing activities

 

 

(188,606

)

 

 

(76,369

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from borrowing - revolving debt

 

 

113,860

 

 

 

398,552

 

Repayments of debt - revolving debt

 

 

(87,790

)

 

 

(546,431

)

Proceeds from borrowing - term debt

 

 

38,999

 

 

 

318,714

 

Repayments of debt - term debt

 

 

(55,981

)

 

 

(205,535

)

Dividends paid

 

 

(8,280

)

 

 

(11,181

)

Capitalized financing costs

 

 

(947

)

 

 

(4,417

)

Purchases of treasury stock

 

 

(134

)

 

 

(14,305

)

Net cash used in financing activities

 

 

(273

)

 

 

(64,603

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(2,699

)

 

 

(2,811

)

Net increase in cash

 

 

(30,370

)

 

 

714

 

Cash and cash equivalents – beginning of period

 

 

47,181

 

 

 

13,932

 

Cash and cash equivalents – end of period

 

$

16,811

 

 

$

14,646

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

17,062

 

 

$

9,399

 

Cash paid for income taxes

 

$

20,479

 

 

$

39,593

 

 

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

 

 

30,995

 

 

 

4,794

 

 

 

(96,690

)

 

 

437,182

 

 

 

(9,314

)

 

 

366,967

 

Net income

 

 

 

 

 

 

 

 

 

 

 

48,480

 

 

 

 

 

 

48,480

 

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,311

 

 

 

2,311

 

Dividends ($0.105 per share)

 

 

 

 

 

 

 

 

 

 

 

(2,759

)

 

 

 

 

 

(2,759

)

Stock based compensation

 

 

1

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

10

 

Balances – October 1, 2022

 

$

30,996

 

 

$

4,803

 

 

$

(96,690

)

 

$

482,903

 

 

$

(7,003

)

 

$

415,009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances – December 31, 2022

 

$

30,997

 

 

$

4,852

 

 

$

(96,706

)

 

$

513,589

 

 

$

(5,802

)

 

$

446,930

 

Net income

 

 

 

 

 

 

 

 

 

 

 

24,876

 

 

 

 

 

 

24,876

 

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(909

)

 

 

(909

)

Dividends ($0.105 per share)

 

 

 

 

 

 

 

 

 

 

 

(2,759

)

 

 

 

 

 

(2,759

)

Stock based compensation

 

 

6

 

 

 

155