Universal Truckload Services, Inc. Reports 2012 Financial Results

21 Feb, 2013, 17:03 ET from Universal Truckload Services, Inc.

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

separately)

18,372

16,758

71,117

66,313

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

LINC Logistics Company conversion to "C" corporation

$           -

$    2,353

$     11,059

$  12,016

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

31, 2012

December

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.



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