Universal Truckload Services, Inc. Reports Third Quarter 2013 Financial Results PR Newswire WARREN, Mich., Oct. 24, 2013 WARREN, Mich., Oct. 24, 2013 /PRNewswire/ --Universal Truckload Services, Inc. (NASDAQ: UACL) today reported third quarter 2013 net income of $13.7 million, or $0.46 per basic and diluted share, on total operating revenues of $261.7 million. This compares to pro forma net income of $12.0 million, or $0.40 per basic and diluted share, during the third quarter of 2012 on total operating revenues of $256.9 million. Net income as reported for the third quarter of 2012 was $15.1 million, or $0.50 per basic and diluted share. Income from operations increased 19.0% to $22.5 million or 8.6% of operating revenues for the third quarter of 2013. This compares to $18.9 million or 7.4% of operating revenues for the third quarter of 2012. Demand for value-added services continues to expand, growing at a rate of 16.3% compared to the same period last year. Though still soft, we have seen some stabilization in our transportation services, which declined 2.1% compared to the third quarter of 2012. Intermodal services revenue continues to grow, increasing 6.0% compared to the same period last year, although not as quickly as in recent quarters. Universal's Chief Executive Officer, Scott Wolfe commented, "Our third quarter 2013 operating results and financial performance are in line with our expectations. Despite the heightened level of economic uncertainty due to the unsettling federal budget and debt limit debates, which we think may moderate demand from our commercial customers, we remain focused on providing the highest level of services to our customers and on continuing our track record of profitable growth. We do anticipate under performance in our government business and metals, but we are cautiously optimistic that the impact will be modest and short-term in nature." Our consolidated financial statements for all periods presented include the results of LINC Logistics Company, which we acquired one year ago. On an as-reported basis, our net income and earnings per share have declined. However, this is primarily due to the change in LINC's tax status. LINC was an "S" corporation for federal income tax purposes prior to October 1, 2012. After various adjustments related to the acquisition, our effective tax rate was 36.1% in the third quarter of 2013, compared to 22.2% in the third quarter of 2012. For comparative purposes, our effective tax rate through the second quarter of 2013 was 37.9%. 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 EBITDA increased 16.3% to $27.2 million for the thirteen weeks ended September 28, 2013, from $23.3 million for the thirteen weeks ended September 29, 2012. Expressed as a percentage of operating revenues, third quarter 2013 EBITDA was 10.4%, compared to 9.1% for the third quarter of 2012. For the third quarter of 2013, trends in EBITDA are substantially similar to trends in income from operations. As of September 28, 2013, we held cash and cash equivalents totaling $5.5 million and marketable securities totaling $10.6 million. Outstanding debt at the end of the third quarter of 2013 totaled $124.0 million. Universal Truckload Services, Inc. also announced today that our Board of Directors has declared a quarterly cash dividend of $0.07 per share of common stock. The dividend is payable to shareholders of record at the close of business on November 4, 2013 and is expected to be paid on November 14, 2013. Conference call: We invite you to participate in a conference call on Friday, October 25, 2013 at 10:00 a.m. Eastern Time where management will discuss third 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 88327847. To listen to an audio replay: Please call (855) 859-2056 (toll free) or (404) 537-3406 (toll) and enter conference ID 88327847, or locate the link in the investor page at: www.goutsi.com. Audio replay is available through November 25, 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. 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 Thirty-nine Weeks Ended September 28, September September September 29, 28, 29, 2013 2012 2013 2012 Operating revenues: Transportation services $ $ $ $ 180,847 184,658 527,213 561,479 Value-added services 47,936 41,207 146,887 130,959 Intermodal services 32,880 31,033 99,844 85,420 Total operating 261,663 256,898 773,944 777,858 revenues Operating expenses: Purchased transportation and 143,436 148,889 419,590 445,930 equipment rent Direct personnel and 43,898 39,041 132,897 123,965 related benefits Commission expense 10,132 10,660 29,254 31,600 Operating expense (exclusive of items 18,946 17,345 57,821 52,745 shown separately) Occupancy expense 4,661 4,845 14,923 14,753 Selling, general and 7,904 7,639 24,445 24,353 administrative Insurance and claims 5,523 5,133 14,905 15,593 Depreciation and 4,683 4,454 14,749 13,384 amortization Total operating 239,183 238,006 708,584 722,323 expenses Income from operations 22,480 18,892 65,360 55,535 Interest expense, net (1,094) (718) (3,124) (2,307) Other non-operating 105 1,186 366 2,358 income Income before provision 21,491 19,360 62,602 55,586 for income taxes Provision for income 7,749 4,307 23,332 10,349 taxes Net income $ $ $ $ 13,742 15,053 39,270 45,237 Earnings per common share: Basic $ $ $ $ 0.46 0.50 1.31 1.51 Diluted $ $ $ $ 0.46 0.50 1.30 1.51 Weighted average number of common shares outstanding: Basic 30,065 30,018 30,058 30,034 Diluted 30,118 30,018 30,099 30,034 Dividends paid per $ $ $ $ common share 0.07 - 0.07 - 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 3,027 11,059 conversion to "C" corporation Pro Forma net income $ $ 12,026 34,178 Earnings per common share: Basic $ $ 0.40 1.14 Diluted $ $ 0.40 1.14 UNIVERSAL TRUCKLOAD SERVICES, INC. Unaudited Condensed Consolidated Balance Sheets (In thousands) September 28, December 31, 2013 2012 Assets Cash and cash equivalents $ 5,451 $ 2,554 Marketable securities 10,641 9,962 Accounts receivable - net 131,089 118,903 Other current assets 32,954 37,719 Total current assets 180,135 169,138 Property and equipment - net 124,001 127,791 Other long-term assets - net 28,491 30,440 Total assets $ 332,627 $ 327,369 Liabilities and shareholders' equity Total current liabilities $ 97,381 $ 103,717 Total long-term liabilities 140,025 166,280 Total liabilities 237,406 269,997 Total shareholders' equity 95,221 57,372 Total liabilities and $ 332,627 $ 327,369 shareholders' equity UNIVERSAL TRUCKLOAD SERVICES, INC. Unaudited Summary of Operating Data Thirteen Weeks Ended Thirty-nine Weeks Ended September September September September 28, 29, 28, 29, 2013 2012 2013 2012 Transportation Services: Average operating revenues $ $ $ $ per loaded mile (a) 2.84 2.82 2.76 2.76 Average operating revenues per loaded mile, excluding fuel surcharges, $ $ $ $ where separately 2.47 2.45 2.38 2.40 identifiable (a) Average operating revenues $ $ $ $ per load (a) 1,030 993 1,010 991 Average operating revenues per load, excluding fuel surcharges, $ $ $ $ where separately 894 864 869 860 identifiable (a) Average length of haul (a) 363 352 366 359 (b) Number of loads (a) 154,358 168,976 463,673 515,094 Value Added Services: Number of facilities (d) Customer 17 13 17 13 provided Company 26 27 26 27 leased Total 43 40 43 40 Intermodal Services: $ $ $ $ Drayage (in thousands) 28,647 26,200 81,280 71,910 Domestic Intermodal (in 1,718 1,975 10,886 5,322 thousands) Depot (in thousands) 2,515 2,858 7,678 8,188 Total (in $ $ $ $ thousands) 32,880 31,033 99,844 85,420 Average operating revenues $ $ $ $ per loaded mile (c) 4.78 4.33 4.57 4.37 Average operating revenues per loaded mile, excluding fuel surcharges, $ $ $ $ where separately 3.87 3.49 3.68 3.52 identifiable (c) Average operating revenues $ $ $ $ per load (c) 378 320 345 302 Average operating revenues per load, excluding fuel surcharges, $ $ $ $ where separately 307 258 278 244 identifiable (c) Number of loads (c) 75,715 81,956 235,372 237,799 Number of container yards 11 10 11 10 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. Excludes storage yards, (d) terminals and office facilities. UNIVERSAL TRUCKLOAD SERVICES, INC. Unaudited Summary of Operating Data - Continued Thirteen Weeks Ended Thirty-nine Weeks Ended September 28, September September September 29, 28, 29, 2013 2012 2013 2012 Average Headcount Employees 3,636 2,467 3,354 2,481 Full time equivalents 1,794 2,188 1,829 2,065 Total 5,430 4,655 5,183 4,546 Average number of tractors Provided by 3,324 3,404 3,345 3,340 owner-operators Owned 707 638 694 620 Third party lease 82 40 64 40 Total 4,113 4,082 4,103 4,000 Operating Revenues by Segment: Transportation $ $ $ $ 181,572 188,388 529,375 559,567 Logistics 79,977 68,423 244,244 217,986 Other 114 87 325 305 $ $ $ $ 261,663 256,898 773,944 777,858 Income from Operations by Segment: Transportation $ $ $ $ 8,261 8,245 21,481 22,294 Logistics 15,388 11,240 46,032 34,876 Other (1,169) (593) (2,153) (1,635) $ $ $ $ 22,480 18,892 65,360 55,535 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 third 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 Thirty-nine Weeks Ended September 28, September 29, September 28, September 29, 2013 2012 2013 2012 ( in thousands) ( in thousands) Adjusted income from operations Income from $ $ $ $ operations 22,480 18,892 65,360 55,535 Suspended capital - - - 1,882 markets activity (a) Adjusted income from $ $ $ $ operations 22,480 18,892 65,360 57,417 Operating margin (b) 8.6% 7.4% 8.4% 7.1% Adjusted operating 8.6% 7.4% 8.4% 7.4% margin (b) Adjusted EBITDA Net income $ $ $ $ 13,742 15,053 39,270 45,237 Provision for income 7,749 4,307 23,332 10,349 taxes Interest expense, 1,094 718 3,124 2,307 net Depreciation and 4,683 4,454 14,749 13,384 amortization Other non-operating (105) (1,186) (366) (2,358) income EBITDA 27,163 23,346 80,109 68,919 Suspended capital - - - 1,882 markets activity (a) Adjusted EBITDA $ $ $ $ 27,163 23,346 80,109 70,801 EBITDA margin (b) 10.4% 9.1% 10.4% 8.9% Adjusted EBITDA 10.4% 9.1% 10.4% 9.1% margin (b) (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: 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, (586) 467-1427
Universal Truckload Services, Inc. Reports Third Quarter 2013 Financial Results
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