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Universal Truckload Services, Inc. Reports 2012 Financial Results

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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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