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Universal Truckload Services, Inc. Reports First Quarter 2014 Financial Results

WARREN, Mich., April 24, 2014 /PRNewswire/ -- Universal Truckload Services, Inc. (NASDAQ: UACL) today reported first quarter 2014 net income of $8.1 million, or $0.27 per basic and diluted share, on total operating revenues of $279.4 million.  This compares to $11.4 million, or $0.38 per basic and diluted share, during the first quarter of 2013 on total operating revenues of $248.1 million.

Included in first quarter 2014 results are $25.3 million of revenues from Westport Axle Corporation, which we acquired on December 19, 2013.  Excluding results from this acquisition, Universal's operating revenues grew a composite 2.4% in the first quarter of 2014 to $254.1 million, compared to $248.1 million in the first quarter of 2013.  Revenues from transportation services increased to $179.8 million in the fiscal quarter ended March 29, 2014, a 7.7% increase from the comparable period last year.  Revenues from value-added services, excluding Westport's results, declined $3.5 million in the first quarter of 2014 compared to the first quarter of 2013.  A general increase in demand for Universal's logistics services and the expansion of services for an automotive OEM was offset by the wind downs of two value-added operations that delivered services to industrial and aerospace customers.  Our revenues from intermodal services declined 10.0%, to $30.1 million from $33.4 million in the first quarter of 2013, primarily due to an anticipated reduction in domestic intermodal services to a single customer, which had a $5.1 million adverse impact.

Income from operations declined 24.0%, to $14.6 million or 5.2% of operating revenues, compared to $19.3 million or 7.8% of operating revenues for the first quarter of 2013.  Income from operations in our transportation segment decreased 7.1% to $5.3 million or 3.0% of segment operating revenues for the first quarter of 2014, which compares to $5.7 million or 3.4% of segment operating revenues for the first quarter of 2013.  Income from operations in our logistics segment, which includes value-added services and dedicated transportation services, decreased 29.6% to $9.7 million or 9.3% of operating revenues for the first quarter of 2014.  This compares to $13.8 million or 17.5% of operating revenues one year earlier.  First quarter 2014 income from operations in our logistics segment includes $3.0 million from Westport. 

Scott Wolfe, Chief Executive Officer, commented, "Universal's first quarter financial results reflect anticipated top line demand across our business units, including from Westport, which is benefiting from solid demand for heavy truck manufacturing.  Our truckload transportation business and intermodal drayage business, in particular, also benefited from good demand in certain markets throughout the first quarter and improved pricing as the quarter proceeded.

"Universal's profitability, though, reflects the cost impact and service performance challenges caused by harsh weather conditions that endured through February, which especially affected our continuing logistics operations.

"Looking ahead, we anticipate stable demand and a good pricing environment for our transportation services, particularly in the energy and steel industries, and a return to normalized margins from the operations that we include and report in our logistics segment.  Revenue growth in value-added services, which moderated in recent quarters, will depend on conversion of opportunities in our sales pipeline." 

We calculate and report selected financial metrics in connection with lending arrangements, and also to isolate and separately identify the impact of corporate development activities, which can include non-operating transaction costs and amortization of intangible assets recognized as the result of prior acquisitions. These statistics are described in more detail below in the section captioned "Non-GAAP Financial Measures."

For the thirteen weeks ended March 29, 2014, our EBITDA decreased 8.4% to $22.3 million, from $24.3 million for the thirteen weeks ended March 30, 2013.  Expressed as a percentage of operating revenues, first quarter 2014 EBITDA was 8.0%, compared to 9.8% for the first quarter of 2013.  Trends in EBITDA expressed as a percentage of operating revenues are substantially similar to trends in income from operations.

As of March 29, 2014, we held cash and cash equivalents totaling $7.3 million and marketable securities totaling $11.8 million.  Outstanding debt totaled $235.4 million and obligations pursuant to capital leases were valued at $4.3 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 May 5, 2014 and is expected to be paid on May 15, 2014. 

Conference call:

We invite analysts and investors to participate in a conference call on Friday, April 25, 2014 at 10:00 AM ET.  During the call, we will discuss Universal's first quarter 2014 financial performance, the current demand outlook in key markets we serve, and trends impacting our business.  Hosting the call will be Scott Wolfe, Chief Executive Officer, Don Cochran, President, and David Crittenden, CFO.

Dial-in details:

Call Toll Free:  (866) 622-0924
International Dial-in:  +1 (660) 422-4956
Conference ID:  18551769

A replay of the conference will be available two hours after the call through May 23, 2014, by calling (855) 859-2056 (toll free) or +1 (800) 585-8367 (toll) and using conference ID 18551769. Additionally, the call will 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, 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. 

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



March 29,


March 30,



2014


2013


Operating revenues:






Transportation services


$       179,816


$    166,927


Value-added services


69,480


47,770


Intermodal services


30,068


33,412


Total operating revenues


279,364


248,109








Operating expenses:






Purchased transportation and equipment rent


140,425


134,514


Direct personnel and related benefits


52,901


43,347


Commission expense


9,731


9,335


Operating expense (exclusive of items shown separately)


30,490


19,160


Occupancy expense


6,835


4,962


Selling, general and administrative


10,091


7,802


Insurance and claims


6,621


4,678


Depreciation and amortization


7,641


5,060


Total operating expenses


264,735


228,858


Income from operations


14,629


19,251


Interest expense, net


(1,575)


(1,102)


Other non-operating income


89


134


Income before provision for income taxes


13,143


18,283


Provision for income taxes


5,019


6,909


Net income


$           8,124


$      11,374








Earnings per common share:






Basic


$             0.27


$          0.38


Diluted


$             0.27


$          0.38








Weighted average number of common shares outstanding:






Basic


30,112


30,054


Diluted


30,158


30,196








Dividends paid per common share


$             0.07


$             -








 

UNIVERSAL TRUCKLOAD SERVICES, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)











March 29, 2014


December 31, 2013

Assets





Cash and cash equivalents


$           7,333


$            10,223

Marketable securities


11,828


11,626

Accounts receivable - net


154,133


132,001

Other current assets


48,095


49,539

Total current assets


221,389


203,389

Property and equipment - net


147,990


142,656

Other long-term assets - net


141,965


144,091

Total assets


$       511,344


$          490,136






Liabilities and shareholders' equity





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


$       114,420


$            93,896

Capital lease obligations


4,295


4,643

Debt


235,357


237,500

Other long-term liabilities


46,009


48,532

Total liabilities


400,081


384,571

Total shareholders' equity


111,263


105,565

Total liabilities and shareholders' equity


$       511,344


$          490,136






 

UNIVERSAL TRUCKLOAD SERVICES, INC.

 Unaudited Summary of Operating Data




Thirteen Weeks Ended

March 29,


March 30,



2014


2013






Transportation Services:






Average operating revenues per loaded mile (a)


$              2.96


$              2.69


Average operating revenues per loaded mile, 







excluding fuel surcharges, where separately identifiable (a)


$              2.56


$              2.31


Average operating revenues per load (a)


$            1,049


$               997


Average operating revenues per load, excluding







fuel surcharges, where separately identifiable (a)


$               905


$               855


Average length of haul (a) (b)


354


370


Number of loads (a)


150,361


151,041






Value Added Services:






Number of facilities (d)







Customer provided


18


16



Company leased


28


28



     Total


46


44








Intermodal Services:






Drayage (in thousands)


$          26,944


$          24,862


Domestic Intermodal (in thousands)


804


5,948


Depot (in thousands)


2,320


2,602


     Total (in thousands)


$          30,068


$          33,412








Average operating revenues per loaded mile (c)


$              5.10


$              4.44


Average operating revenues per loaded mile,







excluding fuel surcharges, where separately identifiable (c)


$              4.12


$              3.55


Average operating revenues per load (c)


$               398


$               320


Average operating revenues per load, excluding







fuel surcharges, where separately identifiable (c)


$               322


$               256


Number of loads (c) 


67,621


77,657


Number of container yards


11


11










(a)

Excludes operating data from Universal Logistics Solutions, Inc., and 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 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.











UNIVERSAL TRUCKLOAD SERVICES, INC.

 Unaudited Summary of Operating Data - Continued




Thirteen Weeks Ended

March 29,


March 30,



2014


2013










Average Headcount






Employees


4,208


2,876


Full time equivalents


1,619


2,083


     Total


5,827


4,959








Average number of tractors






Provided by owner-operators


3,294


3,372


Owned


757


685


Third party lease


86


45


     Total


4,137


4,102








Operating Revenues by Segment:








Transportation


$        175,349


$        169,542


Logistics


103,906


78,462


Other


109


105





$        279,364


$        248,109










Income from Operations by Segment:








Transportation


$            5,310


$            5,716


Logistics


9,681


13,754


Other


(362)


(219)





$          14,629


$          19,251










 

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


March 29,


March 30,



2014


2013



( in thousands)

EBITDA





Net income


$           8,124


$       11,374

Provision for income taxes


5,019


6,909

Interest expense, net


1,575


1,102

Depreciation and amortization


7,641


5,060

Other non-operating income


(89)


(134)

EBITDA


$         22,270


$       24,311






EBITDA margin (a)


8.0%


9.8%

 

(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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