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Universal Truckload Services, Inc. Reports 2012 Financial Results

February 21, 2013

WARREN, Mich., Feb. 21, 2013 /PRNewswire/ — Universal Truckload Services, Inc. (NASDAQ: UACL) today announced financial results for the year ended December 31, 2012. For the year ended December 31, 2012, operating revenues increased 4.7%, or $46.3 million, to $1.04 billion from $990.7 million for the year December 31, 2011. For the thirteen weeks ended December 31, 2012, operating revenues increased 4.5%, or $11.2 million, to $259.1 million from $248.0 million for the thirteen weeks ended December 31, 2011.

Scott Wolfe, who was appointed CEO in December 2012, commented, “2012 was a year of dramatic transformation for Universal. Universal concluded the acquisition of LINC Logistic Company, a leading provider of value-added logistics and dedicated transportation services, while still growing its traditional agent-based transportation services in a slowly growing economy. The combined financial performance of the company positions us for solid growth in the year ahead.”

Under U.S. generally accepted accounting principles, Universal’s acquisition of LINC is accounted for as a transaction between entities under common control. As a result, consolidated financial statements include LINC’s performance for all periods presented. As reported, Universal’s 2012 income from operations increased 4.7%, or $3.1 million, to $69.2 million for the year ended December 31, 2012 from $66.1 million for the year ended December 31, 2011. After excluding transaction fees and other costs associated with the acquisition of LINC and LINC’s previous IPO effort, income from operations increased $13.3 million, or 20.2%, to $79.4 million. These adjustments are described below in the section captioned “Non-GAAP Financial Measures.” Expressed as a percentage of operating revenues, we achieved an adjusted operating margin of 7.7% in 2012, compared to 6.7% in 2011. Our 2012 adjusted EBITDA increased 16.5%, or $13.8 million, to $97.6 million from $83.8 million the prior year. Expressed as a percentage of operating revenues, 2012 adjusted EBITDA was 9.4%, compared to 8.5% one year earlier.

As reported, Universal’s income from operations for the fourth quarter ended December 31, 2012 decreased 8.1%, or $1.2 million, to $13.6 million from $14.8 million for the fourth quarter ended December 31, 2011. However, after excluding transaction fees and other costs associated with the acquisition of LINC and LINC’s previous IPO effort, adjusted income from operations increased $7.2 million, or 48.6%, to $22.0 million. On an adjusted basis, we achieved an operating margin of 8.5% of operating revenues for the quarter ended December 31, 2012, compared to 6.0% for the comparable quarter in 2011. Our 2012 adjusted EBITDA for the quarter ended December 31, 2012 increased 38.9%, or $7.5 million, to $26.8 million, from $19.3 million the quarter ended December 31, 2011. Adjusted EBITDA for the fourth quarter of 2012 was 10.4% of operating revenues, compared to 7.8% of operating revenue for the fourth quarter of 2011. Included in income before the provision for income taxes for the year ended December 31, 2011 is $2.8 million in other non-operating income, which is primarily related to the net gain on our sales of marketable securities.

Net income for the year ended December 31, 2012 decreased $3.7 million, to $47.7 million, or $1.59 per basic and diluted share, from $51.4 million for the year ended December 31, 2011. Net income for the thirteen weeks ended December 31, 2012 decreased $8.2 million, to $2.5 million, or $0.08 per basic and diluted share, from $10.7 million for the thirteen weeks ended December 31, 2011. Included in 2012 net income is a provision for income taxes that is based on taxable income, and further reflects the impact of LINC’s conversion from an S-corporation to ownership by a C-corporation on October 1, 2012, and a related $2.5 million charge reflected in fourth quarter 2012 due to the recognition of deferred tax liabilities. Finally, 2012 operating expenses include $8.4 million in total transaction fees and other costs related to the acquisition of LINC, representing an approximate $7.9 million impact on net income, after tax, or $0.26 per basic and diluted share.

In the aggregate, our 2012 operating revenues increase totaling $46.3 million reflects increases in value-added services, growth in domestic container freight handling, a new transportation services operation in Pennsylvania, and other organic growth increases, which include identifiable increases in fuel surcharges totaling $4.6 million. Operating revenues from our value-added services grew 18.4% year-over-year, followed by the growth of our intermodal services, which were 17.1% higher in 2012 than in 2011. On an adjusted basis, our operating margin and EBITDA margin improvements primarily reflect lower costs for purchase transportation and equipment rent as a percentage of operating revenues. This improvement is partially offset by increases in direct personnel and related benefits.

As of December 31, 2012, Universal held cash and cash equivalents totaling $2.6 million and marketable securities totaling $10.0 million. Outstanding debt as of December 31, 2012 totaled $146.0 million. The aggregate debt balance reflects $149.1 million of secured borrowings on October 1, 2012 incurred in connection with the acquisition of LINC Logistics Company, net cash provided by operating activities in the fourth quarter of 2012, capital expenditures in the period totaling $9.6 million, proceeds from the sale of marketable securities totaling $1.3 million, and a net working capital purchase price adjustment totaling $10.1 million that we paid to LINC’s shareholders in November 2012 in accordance with the LINC merger agreement.

Conference call:

We invite you to participate in a conference call on Monday, February 25, 2013 at 10:00 a.m. Eastern Time where management will discuss 2012 financial performance. Hosting the call will be Scott Wolfe, Chief Executive Officer and David Crittenden, Chief Financial Officer.

To participate: Please call (877) 866-3199 (toll free US) or (660) 422-4956 (International) and provide conference ID 14880634.

To listen to an audio replay: Please call (855) 859-2056 (toll free) or (404) 537-3406 (toll) and enter conference ID 14880634, or locate the link in the investor page at: www.goutsi.com. Audio replay is available through March 25, 2013.

About Universal:

Universal Truckload Services, Inc. is a leading asset-light provider of transportation, value-added and intermodal services throughout the United States, Canada and Mexico. Our transportation services include dry van, flatbed, heavy haul, dedicated, refrigerated, shuttle and switching operations as well as full service domestic and international freight forwarding, customs brokerage, final mile and ground expedite. We offer our customers brokerage transportation for greater service options and additional capacity. Our custom-developed value-added services include material handling, consolidation, sequencing, sub-assembly, cross-dock services, kitting, repacking, warehousing and returnable container management. Intermodal operations include rail-truck, steamship-truck and support services.

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 TRUCKLOAD SERVICES, INC.
                                                                              Unaudited Condensed Consolidated Statements of Income
                                                                                      (In thousands, except per share data)

                                                                                                                                       Thirteen Weeks Ended                         Year Ended
                                                                                                                                           December 31,              December 31,
                                                                                                                                           ------------              ------------
                                                                                                                                             2012                    2011                     2012                   2011
                                                                                                                                             ----                    ----                     ----                   ----
    Operating revenues:
    Transportation services                                                                                                              $180,171                $183,280                 $741,650               $740,089
    Value-added services                                                                                                                   44,016                  40,508                  174,975                147,814
    Intermodal services                                                                                                                    34,961                  24,198                  120,381                102,769
                                                                                                                                           ------                  ------                  -------                -------
    Total operating revenues                                                                                                             $259,148                $247,986               $1,037,006               $990,672

    Operating expenses:

    Purchased transportation and equipment rent                                                                                           146,563                 143,772                  592,493                581,980
    Direct personnel and related benefits                                                                                                  39,103                  38,926                  163,069                145,841
    Commissions expense                                                                                                                    10,557                  10,518                   42,157                 42,593
    Operating expense (exclusive of items shown                                                                                            18,372                  16,758                   71,117                 66,313
    separately)
    Occupancy expense                                                                                                                       4,523                   5,473                   19,275                 18,438
    Selling, general and administrative                                                                                                    16,806                   7,348                   41,159                 29,865
    Insurance and claims                                                                                                                    4,749                   5,895                   20,342                 21,843
    Depreciation and amortization                                                                                                           4,854                   4,510                   18,237                 17,731
                                                                                                                                            -----                   -----                   ------                 ------
    Total operating expenses                                                                                                              245,527                 233,200                  967,849                924,604
    Income from operations                                                                                                                 13,621                  14,786                   69,157                 66,068
    Interest expense, net                                                                                                                  (1,674)                   (570)                  (3,983)                (2,158)
    Other non-operating income                                                                                                                420                     378                    2,778                  1,743
                                                                                                                                              ---                     ---                    -----                  -----
    Income before provision for income taxes                                                                                               12,367                  14,594                   67,952                 65,653
    Provision for income taxes                                                                                                              9,915                   3,913                   20,264                 14,207
    Net income                                                                                                                             $2,452                 $10,681                  $47,688                $51,446
                                                                                                                                           ======                 =======                  =======                =======

    Earning per common share:
    Basic                                                                                                                                   $0.08                   $0.36                    $1.59                  $1.71
    Diluted                                                                                                                                 $0.08                   $0.36                    $1.59                  $1.71

    Weighted average number of common shares
    outstanding:
    Basic                                                                                                                                  30,023                  30,082                   30,032                 30,121
    Diluted                                                                                                                                30,041                  30,082                   30,036                 30,121

    Dividends paid per common share:                                                                                                $           -             $         -                    $1.00                  $1.00
                                                                                                                                    =============             ===========                    =====                  =====

    Pro Forma earnings per common share - "C"
    corporation status (unaudited):
    Pro Forma provision for income taxes due to                                                                                     $           -                  $2,353                  $11,059                $12,016
    LINC Logistics Company conversion to "C" corporation
    Earnings per common share:
    Basic                                                                                                                                   $0.08                   $0.28                    $1.22                  $1.31
    Diluted                                                                                                                                 $0.08                   $0.28                    $1.22                  $1.31

                          UNIVERSAL TRUCKLOAD SERVICES, INC.
                   Unaudited Condensed Consolidated Balance Sheets
                                    (In thousands)

                                          December                 December
                                                     31, 2012               31, 2011
                                                     --------               --------
    Assets
    Cash
     and
     cash
     equivalents                                       $2,554                 $5,511
     Marketable
     securities                                         9,962                 16,059
     Accounts
     receivable
     -net                                             118,903                112,815
    Other
     current
     assets                                            37,719                 37,643
                                                       ------                 ------
    Total
     current
     assets                                           169,138                172,028
     Property
     and
     equipment
     -net                                             127,791                114,200
    Other
     long-
     term
     assets
     - net                                             30,440                 29,619
                                                       ------                 ------
    Total
     assets                                          $327,369               $315,847
                                                     ========               ========

     Liabilities
     and
     shareholders'
     equity
    Total
     current
     liabilities                                     $103,717               $113,413
    Total
     long-
     term
     liabilities                                      166,280                107,563
                                                      -------                -------
    Total
     liabilities                                      269,997                220,976
    Total
     shareholders'
     equity                                            57,372                 94,871
                                                       ------                 ------
    Total
     liabilities
     and
     shareholders'
     equity                                          $327,369               $315,847
                                                     ========               ========

                                                                                                                                    UNIVERSAL TRUCKLOAD SERVICES, INC.
                                                                                                                                    Unaudited Summary of Operating Data

                                                                                                                                      Thirteen Weeks Ended                           Year Ended
         December 31,                                                December 31,
         ------------                                                ------------
                                                                                                                                                      2012                      2011                               2012                     2011
                                                                                                                                                      ----                      ----                               ----                     ----

    Average Headcount
                            Employees                                                                                                              2,492                     2,496                              2,484                    2,376
                            Full time equivalents                                                                                                  2,273                     1,805                              2,182                    1,605

                                 Total                                                                                                             4,765                     4,301                              4,666                    3,981

    Average number of tractors
                            Provided by owner-operators                                                                                            3,363                     3,431                              3,314                    3,402
                            Owned                                                                                                                    665                       585                                640                      582
                            Third party lease                                                                                                         45                        40                                 45                       40

                                 Total                                                                                                             4,073                     4,056                              3,999                    4,024

    Transportation Revenues:
                             Average operating revenues per loaded
                             mile (a)                                                                                                              $2.88                     $2.64                              $2.79                    $2.62
                             Average operating revenues per loaded
                             mile,
                            excluding fuel surcharges (a) (e)                                                                                      $2.51                     $2.29                              $2.42                    $2.27
                            Average operating revenues per load (a)                                                                               $1,005                      $980                               $995                     $968
                             Average operating revenues per load,
                             excluding
                            fuel surcharges (a) (e)                                                                                                 $873                      $849                               $863                     $839
                            Average length of haul (a) (b)                                                                                           349                       371                                356                      369
                            Number of loads (a)                                                                                                  163,163                   169,585                            678,257                  692,790

    Value Added Services:
                            Number of facilities (d)
                            Customer provided                                                                                                         14                        15                                 13                       14
                            Company leased                                                                                                            27                        29                                 27                       27
                                                                                                                                                     ---                       ---                                ---                      ---
                                 Total                                                                                                                41                        44                                 40                       41

    Intermodal Revenues:
                            Drayage (in thousands)                                                                                               $25,394                   $21,727                            $97,303                  $92,836
                            Domestic Intermodal (in thousands)                                                                                     7,025                         -                             12,347                        -
                            Depot (in thousands)                                                                                                   2,542                     2,471                             10,731                    9,933

                                 Total (in thousands)                                                                                            $34,961                   $24,198                           $120,381                 $102,769

                             Average operating revenues per loaded
                             mile (c)                                                                                                              $4.43                     $4.19                              $4.38                    $4.18
                             Average operating revenues per loaded
                             mile,
                            excluding fuel surcharges (c)                                                                                          $3.52                     $3.36                              $3.52                    $3.42
                            Average operating revenues per load (c)                                                                                 $317                      $290                               $306                     $308
                             Average operating revenues per load,
                             excluding
                            fuel surcharges (c)                                                                                                     $252                      $233                               $246                     $252
                            Number of loads (c)                                                                                                   80,038                    74,830                            317,837                  301,357
                            Number of container yards                                                                                                 10                        10                                 10                       10

              (a)            Excludes operating data from Universal Logistics Solutions, Inc., Universal Logistics Solutions
                             International, Inc., and Central Global Express, 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 operating data from Universal Logistics Solutions, Inc. in order to improve the relevance of
                             the statistical data related to our intermodal services and improve the comparability to our peer
                             companies.
              (d)           Excludes storage yards, terminals and office facilities.
              (e)           Excludes fuel surcharges where separately identified.

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 adjusted income from operations and adjusted EBITDA as supplemental measures of our performance. We define adjusted income from operations as income from operations adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance, including transaction fees and other costs related to the acquisition of LINC and previous costs related to LINC’s capital market activity, which was terminated in the second quarter of 2012. We define adjusted EBITDA as net income plus (i) interest expense, net, (ii) provision for income taxes and (iii) depreciation and amortization, and less other non-operating income, or EBITDA, further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance, including transaction fees and other costs related to the acquisition of LINC and previous costs related to LINC’s capital market activity. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating adjusted income from operations and adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of adjusted income from operations and adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

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 income from operations, the most comparable GAAP measure, to adjusted income from operations; and of net income, the most comparable GAAP measure, to EBITDA and adjusted EBITDA for each of the periods indicated:

                                                                                                          Thirteen Weeks Ended                               Year Ended
                                                                                                              December 31,                  December 31,
                                                                                                              ------------                  ------------
                                                                                                               2012                        2011                         2012                        2011
                                                                                                               ----                        ----                         ----                        ----
                                                                                                                                  ( in thousands)
    Adjusted income from operations
    Income from operations                                                                                  $13,621                     $14,786                      $69,157                     $66,068
    Merger transaction costs (a)                                                                              8,369                           -                        8,369                           -
    Suspended capital markets activity (b)                                                                        -                           -                        1,882                           -
                                                                                                                ---                         ---                        -----                         ---
    Adjusted income from operations                                                                         $21,990                     $14,786                      $79,408                     $66,068
                                                                                                            =======                     =======                      =======                     =======

    Operating margin (c)                                                                                        5.3%                        6.0%                         6.7%                        6.7%
    Adjusted operating margin (c)                                                                               8.5%                        6.0%                         7.7%                        6.7%

    Adjusted EBITDA
    Net income                                                                                               $2,452                     $10,681                      $47,688                     $51,446
    Provision for income taxes                                                                                9,915                       3,913                       20,264                      14,207
    Interest expense, net                                                                                     1,674                         570                        3,983                       2,158
    Depreciation and amortization                                                                             4,854                       4,510                       18,237                      17,731
    Other non-operating income                                                                                 (420)                       (378)                      (2,778)                     (1,743)
                                                                                                               ----                        ----                       ------                      ------
    EBITDA                                                                                                   18,475                      19,296                       87,394                      83,799
    Merger transaction costs (a)                                                                              8,369                           -                        8,369                           -
    Suspended capital markets activity (b)                                                                        -                           -                        1,882                           -
                                                                                                                ---                         ---                        -----                         ---
    Adjusted EBITDA                                                                                         $26,844                     $19,296                      $97,645                     $83,799
                                                                                                            =======                     =======                      =======                     =======

    EBITDA margin (c)                                                                                           7.1%                        7.8%                         8.4%                        8.5%
    Adjusted EBITDA margin (c)                                                                                 10.4%                        7.8%                         9.4%                        8.5%

    (a) Represents transaction fees and other costs incurred that were directly related to the acquisition of LINC.
    (b) Represents expenses incurred as a result of LINC's preparations for an IPO in early 2012. When the IPO efforts were abandoned in May 2012, the costs were then taken as a charge to income.
    (c) Operating margin, adjusted operating margin, EBITDA margin, and Adjusted EBITDA margin are computed by dividing income from operations, adjusted income from operations, EBITDA, and Adjusted EBITDA, respectively, by total operating revenues for each of the
     periods indicated.

We present adjusted income from operations and adjusted 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.

Adjusted income from operations and adjusted EBITDA have limitations as an analytical tool. Some of these limitations are:

  • Adjusted income from operations and adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
  • Adjusted income from operations and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
  • Adjusted income from operations and adjusted EBITDA do 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 adjusted EBITDA does not reflect any cash requirements for such replacements;
  • Adjusted income from operations and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
  • Other companies in our industry may calculate adjusted income from operations and adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, adjusted income from operations and adjusted 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 using adjusted income from operations and Adjusted EBITDA only supplementally.

SOURCE Universal Truckload Services, Inc.


Source: PR Newswire