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Universal Truckload Services, Inc. Reports Second Quarter 2013 Financial Results

July 25, 2013

WARREN, Mich., July 25, 2013 /PRNewswire/ — Universal Truckload Services, Inc. (NASDAQ: UACL) announced today it earned $0.47 per basic and diluted share in the second quarter ended June 29, 2013 on net income of $14.2 million. This compares to pro forma earnings per share of $0.39 per basic and diluted share on pro forma net income of $11.7 million, and $0.52 per basic and diluted share on reported net income of $15.7 million during the second quarter of 2012.

As reported, our income from operations increased 22.8%, to $23.6 million or 8.9% of operating revenues for the second quarter of 2013, compared to $19.2 million or 7.3% of operating revenues for the second quarter of 2012. However, after excluding certain capital markets cost incurred in the second quarter of 2012, income from operations increased 11.8%, compared to adjusted income from operations totaling $21.1 million or 8.0% of operating revenues for the second quarter of 2012.

Total operating revenues decreased slightly to $264.2 million for the thirteen weeks ended June 29, 2013, compared to $265.0 million in the second quarter of 2012. Demand for our intermodal and value-added services continued to grow in the second quarter of 2013 compared to the second quarter of 2012, however this growth was outpaced by reduced demand for transportation services. In the second quarter of 2013, intermodal services increased 15.5% and value-added services increased 15.0%, while transportation services decreased 6.3% compared to the same period last year.

“We are starting to see some traction in our transportation services in the second quarter of 2013,” stated Universal’s President, Don Cochran. “However, our load count continues to lag behind the levels we saw last year by about 9.5%. Our intermodal and value-added service categories continue to grow, and we are encouraged by the improvements we have made in our operating income. Though we continue to experience slow, tentative demand in certain markets, we remain confident in executing our long-term growth strategy and continually seek ways to improve our profitability.”

Our consolidated financial statements for all periods presented include the results of LINC Logistics Company, which we acquired in the fourth quarter of 2012. Our net income and earnings per share as reported declined. However, this was primarily due to the change in tax status of LINC. LINC was an “S” corporation for federal income tax purposes prior to October 1, 2012. As a result, our effective tax rate increased to 38.0% in the second quarter of 2013, compared to 17.7% in the second quarter of 2012.

We calculate and report selected financial metrics in connection with lending arrangements, or 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.” Our adjusted EBITDA increased 11.8% to $28.6 million for the thirteen weeks ended June 29, 2013, from $25.6 million for the thirteen weeks ended June 30, 2012. Expressed as a percentage of operating revenues, second quarter 2013 adjusted EBITDA was 10.8%, compared to 9.7% for the second quarter of 2012. For the second quarter of 2013, trends in adjusted EBITDA are substantially similar to trends in adjusted income from operations.

As of June 29, 2013, we held cash and cash equivalents totaling $6.2 million and marketable securities totaling $10.2 million. Outstanding debt at the end of the second quarter of 2013 totaled $128.0 million. Due to recent debt market volatility, we have suspended our previously-announced initiative to enhance the flexibility of our capital structure through a private placement of senior secured notes.

Separately, Universal Truckload Services, Inc. announced today that its Board of Directors has approved a new cash dividend policy, which anticipates a total annual dividend of $0.28 per share of common stock, payable in quarterly increments of $0.07 per share of common stock. In connection with the new policy, our Board of Directors declared a quarterly cash dividend of $0.07 per share of common stock, which is payable to shareholders of record at the close of business on August 5, 2013 and is expected to be paid on August 15, 2013. Declaration of future cash dividends, and the establishment of record and payment dates, are subject to final determination by the Board of Directors each quarter after its review of our financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends and other factors the Board of Directors deems relevant.

Conference call:

We invite you to participate in a conference call on Friday, July 26, 2013 at 10:00 a.m. Eastern Time where management will discuss second quarter 2013 financial performance. Hosting the call will be Scott Wolfe, Chief Executive Officer, Don Cochran, President, and David Crittenden, Chief Financial Officer.

To participate: Please call (877) 866-3199 (toll free) or (660) 422-4956 (toll) and provide conference ID 22187381.

To listen to an audio replay: Please call (855) 859-2056 (toll free) or (404) 537-3406 (toll) and enter conference ID 22187381, or locate the link in the investor page at: www.goutsi.com. Audio replay is available through August 26, 2013.

About Universal:

Universal Truckload Services, Inc. is a leading asset-light provider of customized transportation and logistics solutions throughout the United States, Mexico and Canada. 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, value-added, and intermodal services. Our customized solutions and flexible business model are designed to provide us with a highly variable cost structure.

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                              Twenty-six Weeks Ended
                                                                                             --------------------                              ----------------------

                                                                                                   June 29,                                           June 30,                June 29,                                           June 30,

                                                                                                                      2013                                              2012                                               2013                                               2012
                                                                                                                      ----                                              ----                                               ----                                               ----

    Operating revenues:

    Transportation services                                                                                       $179,439                                          $191,431                                           $346,366                                           $376,821

    Value-added services                                                                                            51,181                                            44,494                                             98,951                                             89,752

    Intermodal services                                                                                             33,552                                            29,043                                             66,964                                             54,387
                                                                                                                    ------                                            ------                                             ------                                             ------

    Total operating revenues                                                                                       264,172                                           264,968                                            512,281                                            520,960

    Operating expenses:

    Purchased transportation and equipment rent                                                                    141,640                                           151,950                                            276,154                                            297,041

    Direct personnel and related benefits                                                                           45,652                                            41,768                                             88,999                                             84,924

    Commission expense                                                                                               9,787                                            10,699                                             19,122                                             20,940

    Operating expense (exclusive of items shown separately)                                                         19,715                                            17,664                                             38,875                                             35,400

    Occupancy expense                                                                                                5,300                                             4,924                                             10,262                                              9,908

    Selling, general and administrative                                                                              8,739                                             9,276                                             16,541                                             16,714

    Insurance and claims                                                                                             4,704                                             4,962                                              9,382                                             10,460

    Depreciation and amortization                                                                                    5,006                                             4,477                                             10,066                                              8,930
                                                                                                                     -----                                             -----                                             ------                                              -----

    Total operating expenses                                                                                       240,543                                           245,720                                            469,401                                            484,317
                                                                                                                   -------                                           -------                                            -------                                            -------

    Income from operations                                                                                          23,629                                            19,248                                             42,880                                             36,643

    Interest expense, net                                                                                             (928)                                             (793)                                            (2,030)                                            (1,589)

    Other non-operating income                                                                                         127                                               668                                                261                                              1,172
                                                                                                                       ---                                               ---                                                ---                                              -----

    Income before provision for income taxes                                                                        22,828                                            19,123                                             41,111                                             36,226

    Provision for income taxes                                                                                       8,674                                             3,378                                             15,583                                              6,042

    Net income                                                                                                     $14,154                                           $15,745                                            $25,528                                            $30,184
                                                                                                                   =======                                           =======                                            =======                                            =======

    Earnings per common share:

    Basic                                                                                                            $0.47                                             $0.52                                              $0.85                                              $1.00

    Diluted                                                                                                          $0.47                                             $0.52                                              $0.85                                              $1.00

    Weighted average number of common shares outstanding:

    Basic                                                                                                           30,054                                            30,022                                             30,054                                             30,043

    Diluted                                                                                                         30,196                                            30,022                                             30,196                                             30,043

    Pre-merger dividends paid per common share:                                                        $                 -                                 $               -                                $                 -                                              $1.00
                                                                                                       ===================                                 =================                                ===================                                              =====

    Pro Forma earnings per common share - "C" corporation status:

    Pro Forma provision for income taxes due to LINC Logistics Company conversion
     to "C" corporation                                                                               $                  -                                            $4,029                               $                  -                                             $8,032

    Pro Forma net income                                                                                           $14,154                                           $11,716                                            $25,528                                            $22,152

    Earnings per common share:

    Basic                                                                                                            $0.47                                             $0.39                                              $0.85                                              $0.74

    Diluted                                                                                                          $0.47                                             $0.39                                              $0.85                                              $0.74

                                               UNIVERSAL TRUCKLOAD SERVICES, INC.

                                         Unaudited Condensed Consolidated Balance Sheets

                                                         (In thousands)

                                                                  June 29,               December 31,

                                                                              2013                        2012
                                                                              ----                        ----

    Assets

    Cash and cash equivalents                                               $6,177                      $2,554

    Marketable securities                                                   10,249                       9,962

    Accounts receivable - net                                              127,527                     118,903

    Other current assets                                                    39,187                      37,719
                                                                            ------                      ------

    Total current assets                                                   183,140                     169,138

    Property and equipment - net                                           122,814                     127,791

    Other long-term assets - net                                            29,428                      30,440
                                                                            ------                      ------

    Total assets                                                          $335,382                    $327,369
                                                                          ========                    ========

    Liabilities and shareholders' equity

    Total current liabilities                                             $105,929                    $103,717

    Total long-term liabilities                                            146,146                     166,280
                                                                           -------                     -------

    Total liabilities                                                      252,075                     269,997

    Total shareholders' equity                                              83,307                      57,372
                                                                            ------                      ------

    Total liabilities and shareholders'
     equity                                                               $335,382                    $327,369
                                                                          ========                    ========


                                                                                                              UNIVERSAL TRUCKLOAD SERVICES, INC.

                                                                                                              Unaudited Summary of Operating Data

                                                                                                                                                                                                                                                                                Thirteen Weeks Ended                         Twenty-six Weeks Ended
                                                                                                                                                                                                                                                                                --------------------                         ----------------------

                                                                                                                           June 29,                                                                                                                                                   June 30,                                      June 29,            June 30,

                                                                                                                                                                                                                                                                                                                    2013                       2012         2013        2012
                                                                                                                                                                                                                                                                                                                    ----                       ----         ----        ----

    Average Headcount

                                                                                                                                                                                                                                                            Employees                                                                         3,540        2,484       3,208       2,488

                                                                                                                                                                                                                                                            Full time equivalents                                                             1,650        1,983       1,856       1,911

                                                                                                                                                                                                                                                                 Total                                                                        5,190        4,467       5,064       4,399

    Average number of tractors

                                                                                                                                                                                                                                                             Provided by owner-
                                                                                                                                                                                                                                                             operators                                                                        3,338        3,328       3,356       3,308

                                                                                                                                                                                                                                                            Owned                                                                               687          617         685         612

                                                                                                                                                                                                                                                            Third party lease                                                                    65           40          55          40

                                                                                                                                                                                                                                                                 Total                                                                        4,090        3,985       4,096       3,960

    Transportation Revenues:

                                                                                                                                                                                                                                                             Average operating revenues
                                                                                                                                                                                                                                                             per loaded mile (a)                                                              $2.75        $2.77       $2.72       $2.74

                                                                                                                                                                                                                                                             Average operating revenues
                                                                                                                                                                                                                                                             per loaded mile,

                                                                                                                                                                                                                                                            excluding fuel surcharges, where separately identifiable (a)                      $2.36        $2.39       $2.34       $2.37

                                                                                                                                                                                                                                                             Average operating revenues
                                                                                                                                                                                                                                                             per load (a)                                                                    $1,002         $994        $999        $990

                                                                                                                                                                                                                                                             Average operating revenues
                                                                                                                                                                                                                                                             per load, excluding

                                                                                                                                                                                                                                                            fuel surcharges, where separately identifiable (a)                                 $859         $857        $857        $857

                                                                                                                                                                                                                                                             Average length of haul (a)
                                                                                                                                                                                                                                                             (b)                                                                                364          358         367         362

                                                                                                                                                                                                                                                            Number of loads (a)                                                             158,274      174,919     309,315     346,118

    Value Added Services:

                                                                                                                                                                                                                                                            Number of facilities (d)

                                                                                                                                                                                                                                                            Customer provided                                                                    17           13          17          13

                                                                                                                                                                                                                                                            Company leased                                                                       27           27          27          27
                                                                                                                                                                                                                                                                                                                                                ---          ---         ---         ---

                                                                                                                                                                                                                                                                 Total                                                                           44           40          44          40

    Intermodal Revenues:

                                                                                                                                                                                                                                                            Drayage (in thousands)                                                          $27,771      $24,476     $52,633     $45,710

                                                                                                                                                                                                                                                             Domestic Intermodal (in
                                                                                                                                                                                                                                                             thousands)                                                                       3,220        1,956       9,168       3,347

                                                                                                                                                                                                                                                            Depot (in thousands)                                                              2,561        2,611       5,163       5,330

                                                                                                                                                                                                                                                                 Total (in thousands)                                                       $33,552      $29,043     $66,964     $54,387

                                                                                                                                                                                                                                                             Average operating revenues
                                                                                                                                                                                                                                                             per loaded mile (c)                                                              $4.49        $4.53       $4.47       $4.39

                                                                                                                                                                                                                                                             Average operating revenues
                                                                                                                                                                                                                                                             per loaded mile,

                                                                                                                                                                                                                                                            excluding fuel surcharges, where separately identifiable (c)                      $3.62        $3.65       $3.59       $3.54

                                                                                                                                                                                                                                                             Average operating revenues
                                                                                                                                                                                                                                                             per load (c)                                                                      $339         $304        $330        $293

                                                                                                                                                                                                                                                             Average operating revenues
                                                                                                                                                                                                                                                             per load, excluding

                                                                                                                                                                                                                                                            fuel surcharges, where separately identifiable (c)                                 $273         $244        $264        $236

                                                                                                                                                                                                                                                            Number of loads (c)                                                              82,000       80,580     159,657     155,843

                                                                                                                                                                                                                                                            Number of container yards                                                            11           10          11          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.

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 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 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            Twenty-six Weeks Ended
                                       --------------------            ----------------------

                              June 29,            June 30,  June 29,             June 30,

                                          2013                   2012                 2013       2012
                                          ----                   ----                 ----       ----

                                          ( in thousands)                  ( in thousands)

    Adjusted income from
     operations

    Income from operations             $23,629                $19,248              $42,880    $36,643

    Suspended capital markets
     activity (a)                            -                  1,882                    -      1,882

    Adjusted income from
     operations                        $23,629                $21,130              $42,880    $38,525
                                       =======                =======              =======    =======

    Operating margin (b)                   8.9%                   7.3%                 8.4%       7.0%

    Adjusted operating margin
     (b)                                   8.9%                   8.0%                 8.4%       7.4%

    Adjusted EBITDA

    Net income                         $14,154                $15,745              $25,528    $30,184

    Provision for income
     taxes                               8,674                  3,378               15,583      6,042

    Interest expense, net                  928                    793                2,030      1,589

    Depreciation and
     amortization                        5,006                  4,477               10,066      8,930

    Other non-operating
     income                               (127)                  (668)                (261)    (1,172)
                                          ----                   ----                 ----     ------

    EBITDA                              28,635                 23,725               52,946     45,573

    Suspended capital markets
     activity (a)                            -                  1,882                    -      1,882
                                           ---                  -----                  ---      -----

    Adjusted EBITDA                    $28,635                $25,607              $52,946    $47,455
                                       =======                =======              =======    =======

    EBITDA margin (b)                     10.8%                   9.0%                10.3%       8.7%

    Adjusted EBITDA margin
     (b)                                  10.8%                   9.7%                10.3%       9.1%

    (a)                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.

    (b)                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