Universal Logistics Holdings, Inc.: Universal Logistics Holdings Reports Fourth Quarter 2023 Financial Results; Declares Dividend

• Fourth Quarter 2023 Operating Revenues: $390.9 million, 14.8% decrease
• Fourth Quarter 2023 Operating Income: $34.1 million, 29.2% decrease
• Fourth Quarter 2023 Earnings Per Share: $0.81 per share, 36.2% decrease
• Declares Quarterly Dividend: $0.105 per share

WARREN, Mich., Feb. 15, 2024 /PRNewswire/ -- Universal Logistics Holdings, Inc. (NASDAQ: ULH) today reported consolidated fourth quarter 2023 net income of $21.4 million, or $0.81 per basic and diluted share, on total operating revenues of $390.9 million. This compares to net income of $33.4 million, or $1.27 per basic and diluted share, during fourth quarter 2022 on total operating revenues of $458.7 million. For the full year 2023, Universal reported $3.53 per basic and diluted share, on total operating revenues of $1.66 billion. This compares to Universal's record 2022 performance of $6.37 per basic and diluted share, on total operating revenues of $2.02 billion for the full year.

In the fourth quarter 2023, Universal's operating income decreased $14.1 million to $34.1 million, compared to $48.2 million in the fourth quarter one year earlier. As a percentage of operating revenue, operating margin for the fourth quarter 2023 was 8.7%, compared to 10.5% during the same period last year. EBITDA, a non-GAAP measure, decreased $13.2 million during the fourth quarter 2023 to $54.8 million, compared to $68.0 million one year earlier. As a percentage of operating revenue, EBITDA margin for the fourth quarter 2023 was 14.0%, compared to 14.8% during the same period last year.

"As we close out 2023, I am exceptionally grateful for the talented group of individuals who led us through a turbulent year in the transportation and logistics space," stated Universal's CEO Tim Phillips. "Navigating a difficult freight environment and in the face of prolonged labor strikes at some of our largest customers, Universal still reported its second best full-year financial results in company history. Our contract logistics segment led the way producing exceptional returns during each quarter of 2023. And although underperforming compared to our expectations, I am encouraged to see sequential improvement in both our intermodal and company-managed brokerage segments in the fourth quarter 2023."

"We have some work to do in 2024," Phillips continued, "but I am confident in our team and our business model. We have a robust pipeline in our contract logistics segment, and the outlook for North American automotive and Class 8 production remains strong. While we await some relief in overall freight conditions and look for opportunities to improve operational efficiencies, I anticipate the continued strong demand in our contract logistics segment positions us well for a solid 2024."

Segment Information:

Contract Logistics

• Fourth Quarter 2023 Operating Revenues: $201.3 million, 2.0% decrease
• Fourth Quarter 2023 Operating Income: $32.1 million, 15.9% operating margin

In the contract logistics segment, which includes our value-added and dedicated services, fourth quarter 2023 operating revenues decreased 2.0% to $201.3 million, compared to $205.5 million for the same period last year. At the end of the fourth quarter 2023, we managed 71 value-added programs compared to 63 at the end of the fourth quarter 2022. Included in contract logistics segment revenues were $8.9 million in separately identified fuel surcharges from dedicated transportation services, compared to $10.6 million during the same period last year. Fourth quarter 2023 income from operations increased $2.0 million to $32.1 million, compared to $30.1 million during the same period last year. As a percentage of revenue, operating margin in the contract logistics segment for the fourth quarter 2023 was 15.9%, compared to 14.7% during the same period last year.

Intermodal

• Fourth Quarter 2023 Operating Revenues: $85.4 million, 30.6% decrease
• Fourth Quarter 2023 Operating (Loss): $(0.9) million, (1.1)% operating margin

Operating revenues in the intermodal segment decreased 30.6% to $85.4 million in the fourth quarter 2023, compared to $123.1 million for the same period last year. Included in intermodal segment revenues for the recently completed quarter were $13.0 million in separately identified fuel surcharges, compared to $22.4 million during the same period last year. Intermodal segment revenues also include other accessorial charges such as detention, demurrage and storage which totaled $8.7 million during the fourth quarter 2023, compared to $22.5 million one year earlier. Load volumes increased 1.8%, however, the average operating revenue per load, excluding fuel surcharges, decreased 19.9% on a year-over-year basis. Fourth quarter 2023 operating losses in the intermodal segment were $(0.9) million which compares to $11.1 million of operating income during the same period last year. As a percentage of revenue, operating margin in the intermodal segment for the fourth quarter 2023 was (1.1)%, compared to 9.0% one year earlier.

Trucking

• Fourth Quarter 2023 Operating Revenues: $75.2 million, 15.5% decrease
• Fourth Quarter 2023 Operating Income: $2.5 million, 3.3% operating margin

In the trucking segment, fourth quarter 2023 operating revenues decreased 15.5% to $75.2 million, compared to $89.0 million for the same period last year. Fourth quarter 2023 trucking segment revenues included $30.0 million of brokerage services, compared to $36.5 million during the same period last year. Also included in our trucking segment revenues were $5.6 million in separately identified fuel surcharges during the fourth quarter 2023, compared to $8.1 million in fuel surcharges one year earlier. On a year-over-year basis, load volumes declined 3.9% and the average operating revenue per load, excluding fuel surcharges, decreased an additional 8.6%. Income from operations in the fourth quarter 2023 was $2.5 million compared to $5.7 million during the same period last year. As a percentage of revenue, operating margin in the trucking segment for the fourth quarter 2023 was 3.3% compared to 6.5% during the same period last year.

Company-managed Brokerage

• Fourth Quarter 2023 Operating Revenues: $28.1 million, 29.1% decrease
• Fourth Quarter 2023 Operating Income: $9 thousand, 0% operating margin

Fourth quarter 2023 operating revenues in the company-managed brokerage segment decreased 29.1% to $28.1 million compared to $39.6 million for the same period last year. Load volumes declined 14.4% in the company-managed brokerage segment and average operating revenue per load, excluding fuel surcharges, decreased 15.7% on a year-over-year basis. Income from operations in the fourth quarter 2023 was $9 thousand compared to $0.9 million during the same period last year. As a percentage of revenue, operating margin for the fourth quarter 2023 was 0% compared to 2.3% one year earlier.

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 4, 2024 and is expected to be paid on April 1, 2024.

Other Matters

As of December 31, 2023, Universal held cash and cash equivalents totaling $12.5 million and $10.8 million in marketable securities. Outstanding debt at the end of the fourth quarter 2023 was $386.4 million and capital expenditures totaled $48.5 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 16, 2024
Call Toll Free:	[phone]
International Dial-in:	[phone]

A replay of the conference call will be available through February 23, 2024, by calling [phone] (toll free) or [phone] (toll) and using encore replay code 9789883. 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								Year Ended
		December 31,								December 31,
		2023				2022				2023				2022
Operating revenues:
Truckload services		$	46,015			$	54,044			$	213,874			$	230,696
Brokerage services			58,132				76,092				244,024				368,880
Intermodal services			85,426				123,077				374,667				591,946
Dedicated services			85,541				83,039				343,543				324,589
Value-added services			115,806				122,470				486,031				499,345
Total operating revenues			390,920				458,722				1,662,139				2,015,456
Operating expenses:
Purchased transportation and equipment rent			127,779				179,197				571,213				847,414
Direct personnel and related benefits			130,775				130,297				542,779				520,263
Operating supplies and expenses			40,643				44,554				170,994				177,440
Commission expense			7,221				8,876				31,370				40,288
Occupancy expense			11,195				10,941				44,301				41,286
General and administrative			12,872				12,542				51,839				48,924
Insurance and claims			6,368				5,825				27,163				22,749
Depreciation and amortization			19,975				18,324				77,036				76,657
Total operating expenses			356,828				410,556				1,516,695				1,775,021
Income from operations			34,092				48,166				145,444				240,435
Interest expense, net			(6,163)				(5,313)				(22,753)				(16,156)
Other non-operating income			722				1,467				1,608				1,143
Income before income taxes			28,651				44,320				124,299				225,422
Provision for income taxes			7,239				10,874				31,398				56,790
Net income		$	21,412			$	33,446			$	92,901			$	168,632
Earnings per common share:
Basic		$	0.81			$	1.27			$	3.53			$	6.37
Diluted		$	0.81			$	1.27			$	3.53			$	6.37
Weighted average number of common shares outstanding:
Basic			26,284				26,278				26,284				26,469
Diluted			26,301				26,311				26,308				26,489
Dividends declared per common share:		$	0.105			$	0.105			$	0.420			$	0.420

UNIVERSAL LOGISTICS HOLDINGS, INC. Unaudited Condensed Consolidated Balance Sheets (In thousands)
		December 31, 2023				December 31, 2022
Assets
Cash and cash equivalents		$	12,511			$	47,181
Marketable securities			10,772				10,000
Accounts receivable - net			287,947				350,720
Other current assets			49,851				51,751
Total current assets			361,081				459,652
Property and equipment - net			565,480				391,154
Other long-term assets - net			326,962				352,872
Total assets		$	1,253,523			$	1,203,678
Liabilities and shareholders' equity
Current liabilities, excluding current maturities of debt		$	189,727			$	221,598
Debt - net			381,924				378,500
Other long-term liabilities			149,674				156,650
Total liabilities			721,325				756,748
Total shareholders' equity			532,198				446,930
Total liabilities and shareholders' equity		$	1,253,523			$	1,203,678

UNIVERSAL LOGISTICS HOLDINGS, INC. Unaudited Summary of Operating Data
		Thirteen Weeks Ended								Year Ended
		December 31,								December 31,
		2023				2022				2023				2022
Contract Logistics Segment:
Average number of value-added direct employees			5,582				5,121				5,521				5,079
Average number of value-added full-time equivalents			205				1,153				450				1,323
Number of active value-added programs			71				63				71				63
Intermodal Segment:
Number of loads			118,553				116,475				473,569				552,398
Average operating revenue per load, excluding fuel surcharges		$	549			$	685			$	563			$	702
Average number of tractors			1,830				2,333				2,034				2,223
Number of depots			9				9				9				9
Trucking Segment:
Number of loads			43,468				45,233				178,036				199,712
Average operating revenue per load, excluding fuel surcharges		$	1,673			$	1,831			$	1,738			$	1,807
Average number of tractors			828				898				877				899
Average length of haul			399				422				390				403
Company-Managed Brokerage Segment:
Number of loads (a)			18,805				21,979				75,110				90,432
Average operating revenue per load (a)		$	1,419			$	1,684			$	1,496			$	1,893
Average length of haul (a)			563				613				607				598
(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								Year Ended
		December 31,								December 31,
		2023				2022				2023				2022
Operating Revenues by Segment:
Contract logistics		$	201,347			$	205,509			$	829,574			$	823,934
Intermodal			85,426				123,077				374,667				591,946
Trucking			75,168				88,991				333,211				392,639
Company-managed brokerage			28,088				39,596				119,741				200,536
Other			891				1,549				4,946				6,401
Total		$	390,920			$	458,722			$	1,662,139			$	2,015,456
Income from Operations by Segment:
Contract logistics		$	32,079			$	30,137			$	127,752			$	118,437
Intermodal			(944)				11,114				1,297				83,640
Trucking			2,488				5,743				17,258				27,564
Company-managed brokerage			9				897				(2,221)				9,993
Other			460				275				1,358				801
Total		$	34,092			$	48,166			$	145,444			$	240,435

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,
		2023				2022				2023				2022
		(in thousands)								(in thousands)
EBITDA
Net income		$	21,412			$	33,446			$	92,901			$	168,632
Income tax expense			7,239				10,874				31,398				56,790
Interest expense, net			6,163				5,313				22,753				16,156
Depreciation			16,844				14,617				64,365				62,275
Amortization			3,131				3,707				12,671				14,382
EBITDA		$	54,789			$	67,957			$	224,088			$	318,235
EBITDA margin (a)			14.0	%			14.8	%			13.5	%			15.8	%
(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.

SOURCE Universal Logistics Holdings, Inc.