Group 1 - Universal Logistics Holdings, Inc. plans to release its second quarter 2025 financial results after market close on July 24, 2025 [1] - The quarterly earnings conference call is scheduled for July 25, 2025, at 10:00 a.m. Eastern Time [1] - A replay of the conference call will be available until August 1, 2025, with specific dial-in details provided [1] Group 2 - Universal Logistics Holdings, Inc. operates as a holding company with subsidiaries that offer customized transportation and logistics solutions across the United States, Mexico, Canada, and Colombia [2] - The company provides a wide range of supply chain solutions, including value-added, dedicated, intermodal, and trucking services [2]

Financial Data and Key Metrics Changes - Universal reported total operating revenue of $382.4 million for Q1 2025, a decline from $491.9 million in the same period last year [21] - Net income was $6 million or $0.23 per share, down from $52.5 million or $1.99 per share year-over-year [21] - Operating margin for the quarter was 4.1%, compared to 15.3% in Q1 2024 [23] - EBITDA decreased to $51.7 million from $96.9 million year-over-year [22] Business Line Data and Key Metrics Changes - Contract logistics segment generated $255.9 million in revenue with a 9.3% operating margin, down from $313.5 million and 26% respectively in Q1 2024 [24] - Trucking revenues decreased to $55.6 million, down 20.2% from the prior year, with operating income of $2.2 million and a margin of 3.9% [11][26] - Unimodal segment revenues fell to $70.7 million, reporting an operating loss of $10.7 million, compared to a loss of $8.3 million in Q1 2024 [13][26] Market Data and Key Metrics Changes - Auto production volumes improved significantly in February and March, with production up 29% in February and 67.1% in March compared to January [37] - Intermodal volumes increased by 13% in February and 53% in March from January [37] - Inventory levels in the automotive sector decreased from 3.1 million units to 2.6 million units, a reduction of 16% [43] Company Strategy and Development Direction - The company is focused on optimizing its Parsec acquisition and expanding its contract logistics revenue, expecting to book over $1.1 billion in contract logistics revenue in 2025 [8] - Strategic actions are being taken to improve underperforming operations while maintaining disciplined growth [15] - The company is actively engaging customers regarding manufacturing capabilities and storage solutions in response to tariff impacts [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a sluggish freight environment but expressed confidence in the resilience of the business model and long-term strategic direction [4][5] - The company expects the second half of 2025 to show marked improvement compared to the first quarter [16] - Management is closely monitoring the impact of tariffs and is prepared to adapt to changes in customer needs [17] Other Important Information - Capital expenditures for Q1 2025 were $52.6 million, with full-year expectations for equipment between $100 million and $125 million [28] - The Board of Directors declared a regular quarterly dividend of $0.105 per share, payable on July 1, 2025 [29] Q&A Session Summary Question: Trends with auto OEMs and expectations for the rest of the year - Management noted a slow start in January but significant improvement in February and March, with auto production and cross stock tonnage increasing substantially [35][37] Question: Inventory management and wait-and-see approach - Management confirmed a wait-and-see approach among customers regarding tariffs, with no definitive outlook for Q2, Q3, or Q4 yet [47][48] Question: Geographical dispersion of facilities - The company has a national presence with facilities near major ports and rail networks on both coasts, enhancing its logistics capabilities [51][52] Question: Potential reduction in imports - Management is preparing for a potential 15% reduction in imports starting mid to late May, as indicated by the National Retail Federation [55] Question: Impact of flatbed market tightening - Management observed stable pricing in the flatbed market with no significant upward lift, although there has been some expansion in the heavy haul business [59]

Financial Data and Key Metrics Changes - Universal reported total operating revenue of $382.4 million for Q1 2025, a decline from $491.9 million in the same period last year [4][14] - Net income was $6 million or $0.23 per share, down from $52.5 million or $1.99 per share year-over-year [13][14] - Operating margin for the quarter was 4.1%, compared to 15.3% in Q1 2024 [14] - EBITDA decreased to $51.7 million from $96.9 million year-over-year, reflecting a significant decline [14] Business Line Data and Key Metrics Changes - **Contract Logistics**: Revenue was $255.9 million with a 9.3% operating margin, down from $313.5 million and 26% margin last year. The decline was attributed to a lack of specialty project revenue and lower auto production volumes [5][15] - **Trucking**: Revenue decreased by 20.2% to $55.6 million, with a 3.9% operating margin, down from 5.3% last year. A 31.3% drop in volumes was noted, although revenue per load excluding fuel surcharges increased by over 24% [7][17] - **Intermodal**: Revenue fell to $70.7 million, resulting in an operating loss of $10.7 million, compared to a loss of $8.3 million last year. The segment faced a 3.4% drop in volumes and an 8.7% decline in rate per load [9][17] Market Data and Key Metrics Changes - The automotive sector showed a sluggish start in January but improved significantly in February and March, with auto production volumes increasing by 29% in February and 67.1% in March compared to January [6][27] - Intermodal volumes also improved, with a 13% increase in February and a 53% increase in March from January [27] Company Strategy and Development Direction - The company is focused on transforming underperforming segments and optimizing operations while maintaining a disciplined growth strategy [10] - There is a commitment to enhancing customer relationships and expanding logistics solutions, particularly in the automotive sector [30][32] - The company is actively monitoring tariff impacts and is prepared to adapt its strategies accordingly [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the transportation and logistics landscape but expressed confidence in the company's resilience and long-term strategic direction [3] - The outlook for the second half of 2025 is expected to improve, driven by increased production and operational adjustments [10][32] - Management noted a significant reduction in automotive inventory levels, which could lead to improved production numbers in the latter half of the year [32] Other Important Information - Capital expenditures for 2025 are projected to be between $100 million and $125 million, with real estate investments between $55 million and $65 million [18] - A quarterly dividend of $1.05 per share was declared, payable on July 1, 2025 [19] Q&A Session Summary Question: Trends with auto OEMs and expectations for the rest of the year - Management noted a slow start in January with a loss, but significant improvements were seen in February and March, indicating a rebound in auto production and logistics volumes [25][27] Question: Inventory management and tariff impacts - A wait-and-see approach is observed among customers regarding inventory and sourcing strategies due to tariff uncertainties [34][35] Question: Geographical dispersion of facilities - The company has a national presence with facilities near major ports and rail networks on both coasts, enhancing its logistics capabilities [37] Question: Potential reduction in imports - Management is aware of a projected 15% reduction in imports starting mid to late May and is monitoring its impact on the intermodal business [39] Question: Impact of flatbed market tightening - The heavy haul business has seen some expansion, but overall pricing in flatbed transportation remains stable without significant upward movement [42]

Core Viewpoint - Universal Logistics (ULH) reported quarterly earnings of $0.23 per share, significantly missing the Zacks Consensus Estimate of $0.48 per share, and down from $1.99 per share a year ago, indicating a substantial earnings surprise of -52.08% [1] Financial Performance - The company posted revenues of $382.39 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.55%, and down from $491.91 million year-over-year [2] - Over the last four quarters, Universal Logistics has surpassed consensus EPS estimates only once [2] Stock Performance - Universal Truckload shares have declined approximately 41.3% since the beginning of the year, compared to a decline of -8.6% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.63 on revenues of $432.3 million, and for the current fiscal year, it is $2.81 on revenues of $1.74 billion [7] Industry Outlook - The Transportation - Services industry, to which Universal Truckload belongs, is currently ranked in the bottom 23% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Universal Truckload's stock performance [5][6]

[Q1 2025 Financial and Operational Overview](index=1&type=section&id=Universal%20Logistics%20Holdings%20Reports%20First%20Quarter%202025%20Financial%20Results) [Q1 2025 Financial Highlights](index=1&type=section&id=Q1%202025%20Financial%20Highlights) Universal Logistics experienced a significant decline in Q1 2025 financial performance, marked by substantial drops in net income and operating revenues Q1 2025 vs Q1 2024 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenues | $382.4M | $491.9M | -22.3% | | Net Income | $6.0M | $52.5M | -88.6% | | Diluted EPS | $0.23 | $1.99 | -$1.76 | | Operating Income | $15.7M | $75.1M | -$59.4M | | Operating Margin | 4.1% | 15.3% | -11.2 p.p. | | EBITDA | $51.7M | $96.9M | -$45.2M | | EBITDA Margin | 13.5% | 19.7% | -6.2 p.p. | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Tim Phillips attributed the weak Q1 performance to a sluggish start, lower auto production, and persistent freight market weakness - The CEO identified several factors for the poor Q1 results: - A sluggish start to 2025 - Lower auto production - Sustained weakness in the freight market[3](index=3&type=chunk) - The company is implementing corrective measures, including improving underperforming operations and focusing on strategic customer acquisition to drive profitable growth[3](index=3&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Information) [Contract Logistics](index=1&type=section&id=Contract%20Logistics) The Contract Logistics segment saw an **18.4%** revenue decrease and a sharp decline in operating income, primarily due to a completed high-margin project Contract Logistics Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Revenues | $255.9M | $313.5M | | Income from Operations | $23.9M | $81.5M | | Operating Margin | 9.3% | 26.0% | - The recent acquisition of Parsec contributed **$56.4 million** to Q1 2025 revenues[4](index=4&type=chunk) - The decrease in operating income and margin is primarily attributed to the completion of a high-margin specialty development project in Stanton, TN, which contributed **$95.3 million** in revenue in Q1 2024[4](index=4&type=chunk) [Intermodal](index=2&type=section&id=Intermodal) The Intermodal segment experienced a **9.8%** revenue decline and a wider operating loss, driven by reduced load volumes and lower average revenue per load Intermodal Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Revenues | $70.7M | $78.4M | | Operating (Loss) | $(10.7)M | $(8.3)M | | Operating Margin | (15.1)% | (10.6)% | - Performance was negatively impacted by a **3.4%** decline in load volumes and an **8.7%** decrease in average operating revenue per load (excluding fuel)[7](index=7&type=chunk) [Trucking](index=2&type=section&id=Trucking) The Trucking segment's operating revenues decreased by **20.2%**, largely due to a significant drop in brokerage services revenue and lower load volumes Trucking Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Revenues | $55.6M | $69.7M | | Income from Operations | $2.2M | $3.7M | | Operating Margin | 3.9% | 5.3% | - Brokerage services revenue, included in this segment, decreased to **$18.0 million** from **$28.6 million** in the prior year[8](index=8&type=chunk) - Load volumes declined by **31.3%**, while average operating revenue per load (excluding fuel) increased by **24.3%**[8](index=8&type=chunk) [Shareholder Returns and Financial Position](index=2&type=section&id=Shareholder%20Returns%20and%20Financial%20Position) [Cash Dividend](index=2&type=section&id=Cash%20Dividend) The Board of Directors declared a quarterly cash dividend of **$0.105** per share, consistent with the prior year - A cash dividend of **$0.105** per share was declared[9](index=9&type=chunk) - The dividend is payable on July 1, 2025, to shareholders of record at the close of business on June 2, 2025[9](index=9&type=chunk) [Financial Position](index=2&type=section&id=Other%20Matters) As of March 29, 2025, Universal Logistics maintained **$20.6 million** in cash and **$740.0 million** in outstanding debt Financial Position as of March 29, 2025 | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $20.6M | | Marketable securities | $12.0M | | Outstanding debt | $740.0M | | Capital expenditures (Q1) | $52.6M | [Financial Statements](index=4&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Statements of Income](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) The income statement for Q1 2025 shows a significant drop in total operating revenues and net income compared to the prior year Q1 2025 Condensed Income Statement (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total operating revenues | $382,390 | $491,907 | | Total operating expenses | $366,710 | $416,815 | | Income from operations | $15,680 | $75,092 | | Net income | $6,014 | $52,457 | | Diluted EPS | $0.23 | $1.99 | [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 29, 2025, indicates a slight increase in total assets, with total liabilities rising and shareholders' equity remaining stable Condensed Balance Sheet (in thousands) | Line Item | March 29, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $389,093 | $409,813 | | Total assets | $1,800,205 | $1,786,837 | | Total liabilities | $1,153,803 | $1,139,814 | | Total shareholders' equity | $646,402 | $647,023 | [Unaudited Summary of Operating Data](index=6&type=section&id=Unaudited%20Summary%20of%20Operating%20Data) This section details key operational metrics, including increased active programs in Contract Logistics and decreased load volumes in Intermodal and Trucking Q1 2025 vs Q1 2024 Key Operating Metrics | Segment & Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Contract Logistics** | | | | Number of active value-added programs | 87 | 71 | | **Intermodal** | | | | Number of loads | 101,470 | 105,037 | | Avg. revenue per load (ex-fuel) | $517 | $566 | | **Trucking** | | | | Number of loads | 28,622 | 41,691 | | Avg. revenue per load (ex-fuel) | $1,874 | $1,508 | [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) [EBITDA Reconciliation](index=8&type=section&id=EBITDA%20Reconciliation) The EBITDA reconciliation shows a significant decrease in Q1 2025 EBITDA and margin compared to Q1 2024, reflecting core operational performance EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $6,014 | $52,457 | | Income tax expense | $2,020 | $17,660 | | Interest expense, net | $8,224 | $6,079 | | Depreciation | $29,989 | $15,902 | | Amortization | $5,499 | $4,799 | | **EBITDA** | **$51,746** | **$96,897** | | **EBITDA margin** | **13.5%** | **19.7%** | - The company states that it presents EBITDA because it believes the measure helps investors and analysts compare performance on a consistent basis by excluding items not indicative of core operating performance[26](index=26&type=chunk) [Other Information](index=3&type=section&id=Other%20Information) [Conference Call Information](index=3&type=section&id=Conference%20call) The company will host a conference call on April 25, 2025, to discuss the quarterly results, with dial-in details provided for participation - An earnings conference call is scheduled for 10:00 a.m. ET on Friday, April 25, 2025[13](index=13&type=chunk) [About Universal & Forward-Looking Statements](index=3&type=section&id=About%20Universal%20%26%20Forward%20Looking%20Statements) Universal Logistics Holdings provides customized transportation and logistics solutions, with the report including standard forward-looking statement disclaimers - Universal provides a variety of customized transportation and logistics solutions, including value-added, dedicated, intermodal, and trucking services throughout the United States, Mexico, Canada, and Colombia[14](index=14&type=chunk) - The press release includes forward-looking statements that are subject to risks and uncertainties, and the company assumes no obligation to update them[15](index=15&type=chunk)

Core Insights - Universal Logistics Holdings, Inc. reported a significant decline in net income for the first quarter of 2025, with net income of $6.0 million, down from $52.5 million in the same period last year, reflecting a decrease in operating revenues from $491.9 million to $382.4 million [1][6]. Financial Performance - Total operating revenues for the first quarter of 2025 were $382.4 million, representing a 22.3% decrease compared to the previous year [6]. - Operating income fell by $59.4 million to $15.7 million, with an operating margin of 4.1%, down from 15.3% year-over-year [2][6]. - EBITDA decreased by $45.2 million to $51.7 million, with an EBITDA margin of 13.5%, down from 19.7% in the prior year [2][24]. Segment Performance Contract Logistics - Operating revenues in the contract logistics segment decreased by 18.4% to $255.9 million, with income from operations down $57.6 million to $23.9 million, resulting in an operating margin of 9.3%, down from 26.0% [4][7]. Intermodal - The intermodal segment saw a 9.8% decrease in operating revenues to $70.7 million, with an operating loss of $(10.7) million, compared to a loss of $(8.3) million the previous year [5][8]. Trucking - Trucking segment revenues decreased by 20.2% to $55.6 million, with income from operations falling to $2.2 million and an operating margin of 3.9%, down from 5.3% [10][16]. Strategic Outlook - The CEO of Universal Logistics indicated that the first quarter performance was impacted by lower auto production and a weak freight market, but expressed confidence in the company's business model and ongoing efforts to improve underperforming operations and acquire strategic customers [3]. Dividend Announcement - The Board of Directors declared a cash dividend of $0.105 per share, payable on July 1, 2025, to shareholders of record as of June 2, 2025 [11]. Balance Sheet Highlights - As of March 29, 2025, the company held cash and cash equivalents of $20.6 million and marketable securities of $12.0 million, with total outstanding debt of $740.0 million [12][19].

PART I [Business](index=4&type=section&id=Item%201.%20Business) The company provides customized transportation and logistics solutions across North America and Colombia through its contract logistics, intermodal, and trucking segments - The company operates through three reportable segments: contract logistics, intermodal, and trucking[17](index=17&type=chunk) - As of December 31, 2024, the company operated **52 company-managed terminals** and serviced **90 value-added programs**[16](index=16&type=chunk) - On September 30, 2024, the company acquired Parsec, LLC, a provider of terminal management services to railroads, which is now part of the Contract Logistics segment[20](index=20&type=chunk) - The company's growth strategy includes making strategic acquisitions, capitalizing on outsourcing trends, penetrating the automotive industry, and expanding its agent and owner-operator network[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) Type of Equipment | Type of Equipment | Company owned or Leased | Owner Operator Provided | Total | | :--- | :--- | :--- | :--- | | Tractors | 2,603 | 1,598 | 4,201 | | Yard Tractors | 737 | — | 737 | | Trailers | 5,051 | 709 | 5,760 | | Chassis | 3,354 | — | 3,354 | | Containers | 107 | — | 107 | [Customers](index=8&type=section&id=Customers) The company's revenue is highly concentrated in the automotive industry, with General Motors and Ford as major customers and a growing reliance on its top 10 clients Customer/Industry Concentration | Customer/Industry Concentration | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Automotive Industry Revenue | 47% | 43% | 36% | | General Motors Revenue | 18% | 20% | 16% | | Ford Revenue | 17% | 6% | 6% | | Top 10 Customers Revenue | 56% | 48% | 42% | [Human Capital Resources](index=8&type=section&id=Human%20Capital%20Resources) The company employs over 10,000 people, with a significant unionized portion, and faces intense competition for qualified workers and drivers - As of December 31, 2024, the company employed **10,821 people**, with about **46% being members of unions**[33](index=33&type=chunk) - The company faces **significant competition** in recruiting and retaining qualified workers and drivers, which has led to increased expenses and periodic under-utilization[36](index=36&type=chunk) [Seasonality](index=11&type=section&id=Seasonality) The company's operations are subject to seasonal demand fluctuations tied to the automotive production cycle and post-holiday transportation slowdowns - Demand for value-added services increases in Q2 (automotive spring selling season) and decreases in Q3 (OEM shutdowns) and Q4 (holiday shutdowns)[55](index=55&type=chunk)[56](index=56&type=chunk) - Transportation services activity generally decreases during the post-holiday winter season[57](index=57&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from its heavy reliance on the automotive sector, customer concentration, and a material weakness in its internal financial controls - The business is highly dependent on the North American automotive industry, which accounted for **47% of revenues in 2024**[73](index=73&type=chunk) - The top 10 customers accounted for approximately **56% of operating revenues in 2024**, posing a concentration risk[74](index=74&type=chunk) - As a **'controlled company'** under NASDAQ rules, the company is exempt from certain corporate governance standards, such as having a majority of independent directors[101](index=101&type=chunk) - A **material weakness was identified** in internal control over financial reporting for the year ended December 31, 2024, stemming from errors in financial statement preparation and accounting for non-routine transactions[107](index=107&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) None [Cybersecurity](index=25&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risks through a program based on the NIST framework, overseen by the Audit Committee, with no material impacts identified to date - The cybersecurity program is designed and assessed based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF)[110](index=110&type=chunk) - The Board's Audit Committee oversees the cybersecurity risk management program and receives quarterly updates from management[112](index=112&type=chunk) - The company has not identified any risks from known cybersecurity threats that have materially affected its operations, business strategy, or financial condition[111](index=111&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) The company owns its Michigan headquarters and 24 other properties while leasing 78 facilities and using 54 customer-provided locations for its operations - The company owns its corporate headquarters in Warren, Michigan, and 24 other properties[115](index=115&type=chunk) - As of year-end 2024, the company leased 78 operating facilities and utilized 54 customer-provided facilities[116](index=116&type=chunk) [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course litigation and believes current proceedings will not materially affect its financial position - The company is involved in claims and litigation from the ordinary course of business and accrues for claims within its self-insured retention amounts[117](index=117&type=chunk) - Management does not expect current legal proceedings to have a material effect on the company's financial position[117](index=117&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock (ULH) trades on NASDAQ, with a quarterly dividend policy and an active share repurchase program - The company's common stock is traded on The NASDAQ Global Market under the symbol ULH[121](index=121&type=chunk) - The company has a policy for a regular quarterly dividend of **$0.105 per share**, totaling $0.42 annually; the Board did not declare a special dividend in Q1 2025[123](index=123&type=chunk) - As of December 31, 2024, **513,251 shares remain available for repurchase** under the company's stock purchase authorization[128](index=128&type=chunk) [Reserved](index=29&type=section&id=Item%206.%20Reserved) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue and net income grew in 2024, driven by the contract logistics segment, despite challenges from inflation, labor shortages, and a material weakness in internal controls [Results of Operations](index=32&type=section&id=Results%20of%20Operations) In 2024, revenue and net income increased significantly due to a specialty project and an acquisition, reversing the declines experienced in 2023 Comparison of 2024 to 2023 | (In millions) | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Operating revenues | $1,846.0 | $1,662.1 | 11.1% | | Income from operations | $203.1 | $145.4 | 39.6% | | Net income | $129.9 | $92.9 | 39.8% | Comparison of 2023 to 2022 | (In millions) | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Operating revenues | $1,662.1 | $2,015.5 | (17.5)% | | Income from operations | $145.4 | $240.4 | (39.5)% | | Net income | $92.9 | $168.6 | (44.9)% | [Segment Financial Results](index=36&type=section&id=Segment%20Financial%20Results) In 2024, strong growth in Contract Logistics offset a significant operating loss in Intermodal and flat performance in Trucking Segment Operating Revenues | Segment Operating Revenues (in thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Contract logistics | $1,129,658 | $829,574 | $823,934 | | Intermodal | $308,744 | $382,610 | $622,615 | | Trucking | $331,982 | $333,211 | $392,639 | Segment Income from Operations | Segment Income from Operations (in thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Contract logistics | $219,084 | $127,752 | $118,437 | | Intermodal | $(27,741) | $1,604 | $85,037 | | Trucking | $20,963 | $17,258 | $27,564 | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The company funded significant acquisitions and capital expenditures in 2024 by increasing its total debt to $762.6 million, relying on cash from operations and its credit facility - Net cash provided by operating activities was **$112.4 million** in 2024[187](index=187&type=chunk)[188](index=188&type=chunk) - Net cash used in investing activities was **$462.9 million**, primarily for **$251.6 million** in capital expenditures and **$215.8 million** for acquisitions (Parsec and East Texas Heavy Haul)[189](index=189&type=chunk) - Net cash provided by financing activities was **$365.0 million**, reflecting a significant increase in borrowings[190](index=190&type=chunk) Financial Position | (In thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $19,351 | $12,511 | | Outstanding debt | $762,641 | $386,445 | [Critical Accounting Policies](index=40&type=section&id=Critical%20Accounting%20Policies) Key accounting judgments include estimating insurance reserves and valuing long-lived assets, which led to a $3.5 million goodwill impairment charge in 2024 - Accruals for estimated insurance claims, net of receivables, were **$13.3 million** at year-end 2024, up from $11.2 million in 2023[197](index=197&type=chunk) - Goodwill is tested for impairment annually in the third quarter; in Q3 2024, the company recorded goodwill impairment charges of **$3.5 million** related to the closure of its company-managed brokerage operations[200](index=200&type=chunk)[265](index=265&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from variable-rate debt, diesel fuel prices, equity investments, and foreign currency fluctuations - As of December 31, 2024, the company had **$484.5 million in variable interest rate debt**; a 100 basis point increase in rates would increase annual interest expense by approximately **$4.8 million**[204](index=204&type=chunk) - A **10% increase** in the average annual price of diesel fuel would increase the company's annual fuel expense by approximately **$5.2 million**[208](index=208&type=chunk) - The company holds a portfolio of marketable equity securities valued at **$11.6 million** as of December 31, 2024[209](index=209&type=chunk) - Foreign operations in Mexico, Canada, and Colombia accounted for **3.0% of revenues in 2024**, exposing the company to foreign currency exchange risk[210](index=210&type=chunk) [Financial Statements and Supplementary Data](index=43&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes audited financial statements, notes, and the auditor's report, which gave an unqualified opinion on financials but an adverse opinion on internal controls [Report of Independent Registered Public Accounting Firm](index=43&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor issued an unqualified opinion on the financial statements but an adverse opinion on internal controls due to a material weakness - The auditor, Grant Thornton LLP, issued an **unqualified opinion** on the consolidated financial statements[214](index=214&type=chunk) - An **adverse opinion** was issued on the effectiveness of the company's internal control over financial reporting as of December 31, 2024[215](index=215&type=chunk) - **Critical Audit Matters** included the goodwill impairment assessment for the Contract Logistics and Intermodal units and the fair value of customer relationships from the Parsec acquisition[219](index=219&type=chunk)[221](index=221&type=chunk) [Consolidated Financial Statements](index=46&type=section&id=Consolidated%20Financial%20Statements) The company's total assets reached $1.79 billion in 2024, with revenues of $1.85 billion and net income of $129.9 million Consolidated Balance Sheet | Consolidated Balance Sheet (In thousands) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total current assets | $409,813 | $365,472 | | Total assets | $1,786,837 | $1,253,523 | | Total current liabilities | $304,568 | $260,416 | | Total liabilities | $1,139,814 | $721,325 | | Total shareholders' equity | $647,023 | $532,198 | Consolidated Statement of Income | Consolidated Statement of Income (In thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Total operating revenues | $1,846,035 | $1,662,139 | $2,015,456 | | Income from operations | $203,112 | $145,444 | $240,435 | | Net income | $129,907 | $92,901 | $168,632 | | Diluted EPS | $4.93 | $3.53 | $6.37 | [Notes to Consolidated Financial Statements](index=52&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail the closure of brokerage operations, two major acquisitions, a significant increase in debt, and substantial related-party transactions - In August 2024, the company closed its company-managed brokerage operations, incurring pre-tax losses of approximately **$8.6 million**[245](index=245&type=chunk) - The company acquired Parsec for a cash purchase price of **$208.4 million** and ETHH for **$7.5 million** in 2024[302](index=302&type=chunk)[303](index=303&type=chunk) - Total debt outstanding was **$762.6 million** at December 31, 2024, a significant increase from $386.4 million at year-end 2023[311](index=311&type=chunk) - Transactions with affiliated companies, controlled by the majority shareholder, totaled **$126.8 million** in expenses for services like insurance, rent, and administrative support in 2024[326](index=326&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=80&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) None [Controls and Procedures](index=80&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and the independent auditor concluded that disclosure controls were ineffective due to a material weakness in internal control over financial reporting - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2024, due to a material weakness in internal control over financial reporting[377](index=377&type=chunk) - The material weakness was caused by errors in financial statement preparation and accounting for non-routine transactions, stemming from a **need for additional technical accounting resources**[381](index=381&type=chunk) - The independent registered public accounting firm, Grant Thornton LLP, issued an **adverse opinion** on the effectiveness of the company's internal control over financial reporting[382](index=382&type=chunk)[389](index=389&type=chunk) - Remediation plans include enhancing internal accounting staff with employees having requisite technical knowledge and expanding the use of external consulting firms[384](index=384&type=chunk) [Other Information](index=86&type=section&id=Item%209B.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement in Q4 2024 [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=86&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) None PART III [Directors, Executive Officers and Corporate Governance](index=87&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information is incorporated by reference from the 2025 Proxy Statement; the company has adopted a Code of Business Conduct - The required information is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Shareholders[403](index=403&type=chunk) [Executive Compensation](index=87&type=section&id=Item%2011.%20Executive%20Compensation) Information required by this item is incorporated by reference from the company's 2025 Proxy Statement - The required information will be included in the 2025 Proxy Statement and is incorporated by reference[405](index=405&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=87&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership details are incorporated by reference from the 2025 Proxy Statement, with over 748,000 securities available for future issuance under equity plans Equity Compensation Plan Information | Plan Category | Securities to be issued | Securities available for future issuance | | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 85,538 | 748,455 | | Total | 85,538 | 748,455 | [Certain Relationships and Related Transactions, and Director Independence](index=87&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required by this item is incorporated by reference from the company's 2025 Proxy Statement - The required information will be included in the 2025 Proxy Statement and is incorporated by reference[408](index=408&type=chunk) [Principal Accounting Fees and Services](index=87&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information required by this item is incorporated by reference from the company's 2025 Proxy Statement - The required information will be included in the 2025 Proxy Statement and is incorporated by reference[409](index=409&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=88&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed with the Form 10-K, with schedules omitted as permitted [Form 10-K Summary](index=89&type=section&id=Item%2016.%20Form%2010-K%20Summary) None

Core Viewpoint - Universal Logistics (ULH) has experienced a significant downtrend, with a 16.1% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to analysts' positive earnings outlook [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2]. - ULH's current RSI reading is 20.39, suggesting that the heavy selling pressure may be exhausting, indicating a possible price rebound [5]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts regarding ULH, with a 0.2% increase in the consensus EPS estimate over the last 30 days, indicating a positive trend in earnings estimates [6]. - ULH holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [7].

Financial Data and Key Metrics Changes - In Q4 2024, the company reported consolidated net income of $20.2 million or $0.77 per share on total operating revenues of $465.1 million, compared to net income of $21.4 million or $0.81 per share on total operating revenues of $390.9 million in Q4 2023 [25] - EBITDA increased by $18.7 million to $73.5 million, compared to $54.8 million during the same period last year [26] - Operating margin for Q4 2024 was 8.2%, down from 8.7% in Q4 2023, while EBITDA margin improved to 15.8% from 14% [26] Business Segment Performance - Contract logistics segment revenues increased by 52.7% to $307.4 million, with income from operations rising to $39.1 million from $32.1 million in Q4 2023 [10][27] - The trucking segment saw revenues increase by 11.5% to $83.8 million, with income from operations rising to $5.8 million from $2.5 million in Q4 2023 [16][31] - The intermodal segment experienced a revenue decrease of 15.9% year over year to $73.1 million, with an operating loss of $9.7 million compared to a loss of $1 million in Q4 2023 [20][30] Market Data and Key Metrics Changes - The contract logistics segment remains the most consistent and profitable, achieving double-digit operating margins for twelve consecutive quarters [12] - The intermodal segment faced challenges with a 15.3% decrease in volume and a 2.2% drop in rates, indicating a tough market environment [20] - Specialized revenue in the trucking segment made up 32.1% of total trucking revenue in 2024, up from 18.9% in the previous year [19] Company Strategy and Industry Competition - The company is focused on transforming the intermodal segment into a leaner, more efficient operation, with new leadership and technology initiatives planned for 2025 [54][56] - The acquisition of Parsec is viewed as transformational, bringing the contract logistics segment's annual revenue run rate to over $1.1 billion [14] - The company aims to maintain a customer-centric approach, integrating deeply into customer supply chains to enhance long-term value [78] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, expecting total operating revenues between $1.7 billion to $1.8 billion and operating margins in the 7% to 9% range [33] - The company anticipates that the intermodal segment has reached its bottom and is positioned for a turnaround as market conditions improve [20][62] - Management highlighted a strong sales pipeline of over $800 million, indicating promising opportunities for growth [21] Other Important Information - The board declared a quarterly dividend of $0.105 per share, payable on April 1, 2025 [38] - Capital expenditures for 2024 totaled $148.3 million, with expectations for 2025 to be between $125 million to $150 million [33] Q&A Session Summary Question: Impact of tariffs on Canadian and Mexican operations - Management indicated that Canadian sales are about $10.5 million and Mexican sales are just under $50 million, representing a small portion of total sales, thus limiting exposure to tariffs [43][44] Question: Seasonal margin degradation in contract logistics - Management explained that the margin impact was due to the acquisition of Parsec and operational challenges in dedicated transportation, which affected fixed cost utilization [48][51] Question: Challenges in the intermodal segment - Management discussed new leadership and technology initiatives aimed at improving profitability and efficiency in the intermodal segment, particularly in Southern California [54][56] Question: Demand environment for trucking - Management noted that demand in Q4 was primarily driven by the wind division, with expectations for continued opportunities in the first quarter of 2025 [67][68] Question: Operating expenses related to Parsec - Management confirmed that increased personnel costs were tied to the acquisition of Parsec, which added approximately 2,100 new employees [74]

Core Viewpoint - Universal Logistics (ULH) reported quarterly earnings of $0.77 per share, missing the Zacks Consensus Estimate of $0.93 per share, and showing a decline from $0.81 per share a year ago, resulting in an earnings surprise of -17.20% [1] Financial Performance - The company posted revenues of $465.13 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 8.85%, compared to $390.92 million in the same quarter last year [2] - Over the last four quarters, Universal Logistics has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Universal Truckload shares have declined approximately 5% since the beginning of the year, while the S&P 500 has gained 3.1% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.04 on revenues of $454.1 million, and for the current fiscal year, it is $4.64 on revenues of $1.82 billion [7] - The estimate revisions trend for Universal Truckload is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Transportation - Services industry, to which Universal Truckload belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, suggesting potential challenges ahead [8]