Universal Truckload Services, Inc. Reports Second Quarter 2015 Financial Results

Jul 23, 2015, 16:09 ET from Universal Truckload Services, Inc.

WARREN, Mich., July 23, 2015 /PRNewswire/ -- Universal Truckload Services, Inc. (NASDAQ: UACL) today reported second quarter 2015 net income of $13.3 million, or $0.44 per basic and diluted share, on total operating revenues of $295.0 million.  This compares to $13.6 million, or $0.45 per basic and diluted share, during second quarter 2014 on total operating revenues of $307.5 million.

Operating revenues from transportation services decreased $17.4 million, or 8.8%, to $180.1 million in the quarter ended June 27, 2015, due to a 6.8% year-over-year decrease in loads and a 2.8% decrease in average operating revenues per load, excluding fuel surcharges, compared to the quarter ended June 28, 2014.  As previously communicated, second quarter 2015 operating revenues reflect lower demand, particularly in our steel, energy and other heavy haul operations, but a generally more stable volume and pricing environment for truckload transportation services compared to earlier 2015. 

Value-added services revenues decreased $0.9 million in the most recent quarter, due to fewer operating locations compared to the comparable period last year.  Revenues from intermodal services increased 17.1%, to $39.8 million from $34.0 million in the second quarter of 2014.  The $5.8 million net increase in revenues from intermodal services includes a $5.9 million, or 19.2% increase in our intermodal drayage services, which is benefiting from increased import activity, capacity shifted from other businesses, and a 12.6% increase in average operating revenues per loaded mile, excluding fuel surcharges.

Consolidated income from operations decreased 6.1% to $22.9 million, compared to $24.4 million in second quarter 2014.  EBITDA decreased 1.9% to $31.8 million in second quarter 2015, compared to $32.4 million one year earlier.  Our operating margin and EBITDA margin for second quarter 2015 are 7.8% and 10.8% of operating revenues.  These profitability metrics compare to 7.9% and 10.5%, respectively, in second quarter 2014.  Consolidated income from operations in the quarter ended June 27, 2015 also reflects a $1.2 million decrease in selling, general and administrative expenses, which are partially offset by a $0.8 million increase in depreciation and amortization expense.

Income from operations in our transportation segment decreased $0.6 million, or 6.1%, to $9.2 million in  second quarter 2015 from $9.8 million one year ago, due to a $6.7 million decline in transportation segment revenues.  Income from operations in our logistics segment decreased $3.4 million, or 21.1%, to $12.7 million from $16.1 million in the comparable 2014 quarter.  Logistics segment income, which originates from Universal's value-added services and dedicated transportation operations, is lower in second quarter 2015 compared to a year earlier primarily due to changes in the number of operating locations.  Logistics segment revenue in second quarter 2015 declined 5.2% or $5.9 million, reflecting the impact of customer-dedicated facilities we closed in second quarter 2014 among other factors. 

Universal's Chief Executive Officer, Jeff Rogers, observed, "Demand for our transportation and logistics services met our recent expectations, reflecting continuing weakness in truckload volumes, but steady volumes and firm pricing in other businesses.  We are especially pleased with the continuing strength of our intermodal business, which is prospering due to drayage operations benefiting from increased international trade.  Our value-added services also achieved anticipated revenues and margins in the second quarter, as we began the launch of a large value-added project which will positively impact financial results later this year. 

"Universal's recent tender offer reduced the number of Universal shares outstanding by about 5.3%, returning capital not needed to support our asset-light business model to our shareholders and enhancing future EPS.  Our commercial focus remains driver development, extending relationships with existing customers, and new customer acquisition.  These strategies will drive the growth of our intermodal, brokerage and logistics businesses and, we believe, improve the value of our truckload and dedicated transportation services businesses as well."

Universal calculates and reports 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."

As of June 27, 2015, we held cash and cash equivalents totaling $7.7 million and marketable securities totaling $15.1 million.  Outstanding debt totaled $221.6 million and obligations pursuant to capital leases were valued at $2.5 million.  Capital expenditures in second quarter 2015 totaled $7.0 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 August 3, 2015 and is expected to be paid on August 13, 2015.

Conference call:

We invite analysts and investors to participate in our quarterly financial performance conference call, during which Jeff Rogers and David Crittenden, CFO, will discuss Universal's second quarter 2015 financial performance, the demand outlook in our key markets, trends impacting our business, and the outcome of our modified "Dutch auction" tender offer, which expired on July 8, 2015. 

Quarterly Earnings Conference Call Dial-in Details:

Time:

10:00 AM EDT

Date:

Friday, July 24, 2015

Call Toll Free:

(866) 622-0924

International Dial-in:

+1 (660) 422-4956

Conference ID:

74274014

A replay of the conference will be available beginning two hours after the call through August 21, 2015, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 74274014. The call will also be available on investors.goutsi.com

About Universal:

Universal Truckload Services, Inc. is a leading asset-light provider of customized transportation and logistics solutions throughout the United States, and in Mexico, Canada and Colombia.  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, intermodal, and value-added services.

Forward Looking Statements

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 27,

June 28,

June 27,

June 28,

2015

2014

2015

2014

Operating revenues:

 Transportation services

$       180,150

$       197,505

$       340,554

$       377,321

 Value-added services

75,105

76,009

145,323

145,489

 Intermodal services

39,752

34,035

72,691

64,103

Total operating revenues

295,007

307,549

558,568

586,913

Operating expenses:

 Purchased transportation and equipment rent

149,085

155,518

281,165

295,943

 Direct personnel and related benefits

53,748

55,783

105,258

109,354

 Commission expense

9,543

11,022

18,361

20,753

 Operating expense (exclusive of items shown separately)

29,096

31,081

56,141

62,099

 Occupancy expense

6,607

6,286

13,434

12,593

 Selling, general and administrative

9,266

10,451

18,272

19,872

 Insurance and claims

5,875

4,973

10,045

11,594

 Depreciation and amortization

8,867

8,022

17,905

15,663

   Total operating expenses

272,087

283,136

520,581

547,871

   Income from operations

22,920

24,413

37,987

39,042

Interest expense, net

(1,901)

(2,463)

(3,743)

(4,038)

Other non-operating income

565

125

672

214

   Income before provision for income taxes

21,584

22,075

34,916

35,218

Provision for income taxes

8,300

8,442

13,468

13,461

   Net income

$         13,284

$         13,633

$         21,448

$         21,757

Earnings per common share:

 Basic

$             0.44

$             0.45

$             0.72

$             0.72

 Diluted

$             0.44

$             0.45

$             0.72

$             0.72

Weighted average number of common shares outstanding:

 Basic

29,979

30,054

29,985

30,082

 Diluted

29,980

30,092

29,990

30,124

Dividends declared per common share:

$             0.07

$             0.07

$             0.14

$             0.14

 

 

UNIVERSAL TRUCKLOAD SERVICES, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

June 27, 2015

December 31, 2014

Assets

 Cash and cash equivalents

$           7,707

$              8,001

 Marketable securities

15,125

14,309

 Accounts receivable - net

161,037

151,107

 Other current assets

52,748

42,863

    Total current assets

236,617

216,280

 Property and equipment - net

173,607

178,069

 Other long-term assets - net

129,191

134,665

    Total assets

$       539,415

$          529,014

Liabilities and shareholders' equity

 Current liabilities, excluding current maturities of capital lease obligations and debt

$       113,966

$          103,389

 Capital lease obligations

2,473

3,031

 Debt

221,643

235,298

 Other long-term liabilities

48,323

50,135

    Total liabilities

386,405

391,853

    Total shareholders' equity

153,010

137,161

    Total liabilities and shareholders' equity

$       539,415

$          529,014

 

 

UNIVERSAL TRUCKLOAD SERVICES, INC.

 Unaudited Summary of Operating Data

Thirteen Weeks Ended

Twenty-six Weeks Ended

June 27,

June 28,

June 27,

June 28,

2015

2014

2015

2014

Transportation Services:

Average operating revenues per loaded mile (a)

$             2.71

$             2.93

$             2.70

$             2.95

Average operating revenues per loaded mile, 

excluding fuel surcharges, where separately identifiable (a)

$             2.47

$             2.54

$             2.45

$             2.55

Average operating revenues per load (a)

$           1,034

$           1,031

$           1,015

$           1,039

Average operating revenues per load, excluding

fuel surcharges, where separately identifiable (a)

$              941

$              892

$              923

$              898

Average length of haul (a) (b)

381

351

376

353

Number of loads (a)

155,874

167,299

302,685

317,660

Value Added Services:

Number of facilities (c)

Customer provided

17

19

17

19

Company leased

31

28

31

28

     Total

48

47

48

47

Intermodal Services:

Drayage (in thousands)

$         36,513

$         30,629

$         66,136

$         57,573

Domestic Intermodal (in thousands)

441

743

1,250

1,547

Depot (in thousands)

2,798

2,663

5,305

4,983

     Total (in thousands)

$         39,752

$         34,035

$         72,691

$         64,103

Average operating revenues per loaded mile

$             5.68

$             5.30

$             5.41

$             5.21

Average operating revenues per loaded mile,

excluding fuel surcharges, where separately identifiable

$             4.82

$             4.28

$             4.51

$             4.20

Average operating revenues per load

$              428

$              395

$              414

$              397

Average operating revenues per load, excluding

fuel surcharges, where separately identifiable

$              363

$              319

$              346

$              320

Number of loads

85,250

77,460

159,566

145,081

Number of container yards

10

11

10

11

(a)

Excludes operating data from Universal Logistics Solutions International, 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 storage yards, terminals and office facilities.

 

 

UNIVERSAL TRUCKLOAD SERVICES, INC.

 Unaudited Summary of Operating Data - Continued

Thirteen Weeks Ended

Twenty-six Weeks Ended

June 27,

June 28,

June 27,

June 28,

2015

2014

2015

2014

Average Headcount:

Employees

4,474

4,251

4,389

4,241

Full time equivalents

1,510

1,539

1,447

1,583

     Total

5,984

5,790

5,836

5,824

Average number of tractors:

Provided by owner-operators

3,303

3,323

3,282

3,309

Owned

839

801

841

779

Third party lease

24

67

30

77

     Total

4,166

4,191

4,152

4,165

Operating Revenues by Segment:

Transportation

$       188,724

$       195,374

$       355,957

$       370,723

Logistics

106,181

112,062

202,412

215,968

Other

102

113

199

222

$       295,007

$       307,549

$       558,568

$       586,913

Income from Operations by Segment:

Transportation

$           9,166

$           9,819

$         15,516

$         15,129

Logistics

12,725

16,081

21,498

25,762

Other

1,029

(1,487)

973

(1,849)

$         22,920

$         24,413

$         37,987

$         39,042

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 EBITDA as supplemental measures of our performance. We define 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. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis.

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 net income, the most comparable GAAP measure, to EBITDA for each of the periods indicated:

Thirteen Weeks Ended

Twenty-six Weeks Ended

June 27,

June 28,

June 27,

June 28,

2015

2014

2015

2014

( in thousands)

( in thousands)

EBITDA

 Net income

$         13,284

$       13,633

$         21,448

$       21,757

 Provision for income taxes

8,300

8,442

13,468

13,461

 Interest expense, net

1,901

2,463

3,743

4,038

 Depreciation and amortization

8,867

8,022

17,905

15,663

 Other non-operating income

(565)

(125)

(672)

(214)

    EBITDA

$         31,787

$       32,435

$         55,892

$       54,705

 EBITDA margin (a)

10.8%

10.5%

10.0%

9.3%

(a) EBITDA margin is computed by dividing EBITDA by total operating revenues for each of the periods indicated.

We present 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.

EBITDA has limitations as an analytical tool. Some of these limitations are:

  • EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
  • EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
  • EBITDA does 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 EBITDA does not reflect any cash requirements for such replacements; and
  • Other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, 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 EBITDA only supplementally.

SOURCE Universal Truckload Services, Inc.



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