Universal Truckload Services, Inc. Reports 2012 Financial Results PR Newswire WARREN, Mich., Feb. 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 $ 259,148 $247,986 $1,037,006 $990,672 revenues Operating expenses: Purchased transportation and 146,563 143,772 592,493 581,980 equipment rent Direct personnel and 39,103 38,926 163,069 145,841 related benefits 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 16,806 7,348 41,159 29,865 administrative Insurance and claims 4,749 5,895 20,342 21,843 Depreciation and 4,854 4,510 18,237 17,731 amortization Total operating 245,527 233,200 967,849 924,604 expenses Income from operations 13,621 14,786 69,157 66,068 Interest expense, net (1,674) (570) (3,983) (2,158) Other non-operating 420 378 2,778 1,743 income Income before provision 12,367 14,594 67,952 65,653 for income taxes Provision for income 9,915 3,913 20,264 14,207 taxes Net income $ $ 10,681 $ 47,688 $ 51,446 2,452 Earning per common share: Basic $ $ 0.36 $ 1.59 $ 1.71 0.08 Diluted $ $ 0.36 $ 1.59 $ 1.71 0.08 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 $ $ - $ 1.00 $ 1.00 common share: - 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 $ $ 0.28 $ 1.22 $ 1.31 0.08 Diluted $ $ 0.28 $ 1.22 $ 1.31 0.08 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 3,363 3,431 3,314 3,402 owner-operators 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 2.88 2.64 2.79 2.62 (a) 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 349 371 356 369 (a) (b) 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 7,025 - 12,347 - thousands) 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 4.43 4.19 4.38 4.18 (c) 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 10 10 10 10 yards Excludes operating data from Universal Logistics Solutions, Inc., Universal Logistics Solutions International, Inc., and Central Global (a) 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. Excludes operating data from Universal Logistics Solutions, Inc. in order (c) 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 8,369 - 8,369 - costs (a) Suspended capital - - 1,882 - markets activity (b) 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 8.5% 6.0% 7.7% 6.7% margin (c) Adjusted EBITDA Net income $ $ $ $ 2,452 10,681 47,688 51,446 Provision for income 9,915 3,913 20,264 14,207 taxes Interest expense, net 1,674 570 3,983 2,158 Depreciation and 4,854 4,510 18,237 17,731 amortization Other non-operating (420) (378) (2,778) (1,743) income EBITDA 18,475 19,296 87,394 83,799 Merger transaction 8,369 - 8,369 - costs (a) Suspended capital - - 1,882 - markets activity (b) Adjusted EBITDA $ $ $ $ 26,844 19,296 97,645 83,799 EBITDA margin (c) 7.1% 7.8% 8.4% 8.5% Adjusted EBITDA margin 10.4% 7.8% 9.4% 8.5% (c) (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: oAdjusted income from operations and adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; oAdjusted income from operations and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; oAdjusted 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; oalthough 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; oAdjusted 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 oOther 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. Website: http://www.goutsi.com Contact: David A. Crittenden, Chief Financial Officer, DCrittenden@goutsi.com, +1-586-467-1427
Universal Truckload Services, Inc. Reports 2012 Financial Results
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