Universal Logistics Holdings, Inc. (NASDAQ:ULH) Q2 2024 Earnings Call July 26, 2024 10:00 AM ET Company Participants Steven Fitzpatrick - Vice President, Finance and Investor Relations Tim Phillips - Chief Executive Officer Jude Beres - Chief Financial Officer Conference Call Participants Bruce Chan - Stifel Operator Hello and welcome to Universal Logistics Holdings Second Quarter 2024 Earnings Conference Call. [Operator Instructions] During the course of this call, management may make forward-looking state ...

Universal Logistics (ULH) came out with quarterly earnings of $1.17 per share, beating the Zacks Consensus Estimate of $1.14 per share. This compares to earnings of $0.90 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 2.63%. A quarter ago, it was expected that this trucking and logistics company would post earnings of $0.73 per share when it actually produced earnings of $1.99, delivering a surprise of 172.60%. Over the last ...

• 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 • 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; Universal Logistics Holdings Reports Second Quarter 2024 Financial ...

Quarterly Earnings Conference Call Dial-in Details: Universal Logistics Holdings, Inc. ("Universal") is a holding company whose subsidiaries provide a variety of customized transportation and logistics solutions throughout the United States and in Mexico, Canada and Colombia. Our operating subsidiaries provide our customers with supply chain solutions that can be scaled to meet their changing demands. We offer our customers a broad array of services across their entire supply chain, including truckload, bro ...

The first quarter 2024, Universal reported 491.9 million of revenue, $1.99 of earnings per share and an operational margin of 15.3%. This was the best earnings per share and operating margin for any quarter in Universal's history. In the contract logistics segment, revenues increased 48.4% to $313.5 million. This was largely due to our recent program award that ramps up in Q1 and will be completed by the end of 2024. At the end of Q1 2024, Universal managed 71 value added programs, compared to 65 at the end ...

[First Quarter 2024 Financial Results](index=1&type=section&id=First%20Quarter%202024%20Financial%20Results) Universal Logistics Holdings reported strong Q1 2024 financial results, driven by significant growth in net income and total operating revenues [Consolidated Financial Highlights](index=1&type=section&id=Consolidated%20Financial%20Highlights) Universal Logistics Holdings reported strong Q1 2024 financial performance, with significant growth in net income, EPS, and operating revenues Q1 2024 Consolidated Financial Performance vs. Q1 2023 (in millions) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenues | $491.9 | $437.4 | +12.5% | | Net Income | $52.5 | $24.9 | +110.8% | | Diluted EPS | $1.99 | $0.95 | +$1.04 | | Operating Income | $75.1 | $38.2 | +$36.9 | | Operating Margin | 15.3% | 8.7% | +6.6 p.p. | | EBITDA | $96.9 | $56.7 | +$40.2 | | EBITDA Margin | 19.7% | 13.0% | +6.7 p.p. | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management praised contract logistics, acknowledged intermodal and brokerage margin pressure, and emphasized cost management efforts - The contract logistics segment is a key differentiator and value driver, significantly contributing to the strong quarterly results[3](index=3&type=chunk) - Intermodal and company-managed brokerage segments are experiencing significant margin pressure from the ongoing freight recession[3](index=3&type=chunk) - The company's strategy involves managing controllable costs, increasing productivity, and restoring profitability to underperforming operations[3](index=3&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Information) The company's Q1 2024 segment performance was mixed, with strong growth in contract logistics offsetting declines in intermodal and trucking [Contract Logistics](index=1&type=section&id=Contract%20Logistics) The Contract Logistics segment achieved exceptional Q1 2024 results, driven by significant revenue and operating income growth from new program awards Contract Logistics Performance (Q1 2024 vs. Q1 2023, in millions) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $313.5 | $211.3 | +48.4% | | Income from Operations | $81.5 | $27.8 | +193.1% | | Operating Margin | 26.0% | 13.1% | +12.9 p.p. | - The number of active value-added programs increased to **71** at the end of Q1 2024, up from 65 in Q1 2023, bolstered by a new contract award expected to be fully ramped-up by the end of 2024[4](index=4&type=chunk) [Intermodal](index=2&type=section&id=Intermodal) The Intermodal segment experienced substantial revenue decline and an operating loss in Q1 2024, primarily due to reduced load volumes and accessorial charges Intermodal Performance (Q1 2024 vs. Q1 2023, in millions) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $76.7 | $111.0 | -30.9% | | Operating Income/(Loss) | $(8.0) | $6.8 | -$14.8 | | Operating Margin | (10.5)% | 6.1% | -16.6 p.p. | | Load Volumes | 105,037 | 122,299 | -14.1% | - Accessorial charges (detention, demurrage, storage) fell significantly to **$8.5 million** from **$26.0 million** year-over-year, contributing to the revenue decline[7](index=7&type=chunk) [Trucking](index=2&type=section&id=Trucking) The Trucking segment saw a revenue decrease in Q1 2024 due to lower volumes and rates, yet maintained stable operating income and improved margin Trucking Performance (Q1 2024 vs. Q1 2023, in millions) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $69.7 | $79.7 | -12.6% | | Income from Operations | $3.7 | $3.8 | -2.6% | | Operating Margin | 5.3% | 4.8% | +0.5 p.p. | - The revenue decline was driven by a **7.1% decrease in load volumes** and a **6.2% decrease in average operating revenue per load** (excluding fuel surcharges)[8](index=8&type=chunk) [Company-managed Brokerage](index=2&type=section&id=Company-managed%20Brokerage) The Company-managed Brokerage segment reported decreased revenues and an increased operating loss in Q1 2024, despite higher load volumes Company-managed Brokerage Performance (Q1 2024 vs. Q1 2023, in millions) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $31.0 | $34.0 | -8.7% | | Operating Income/(Loss) | $(2.5) | $(0.4) | -$2.1 | | Operating Margin | (8.0)% | (1.1)% | -6.9 p.p. | - Load volumes increased by **8.0%** year-over-year, but this was offset by a **12.2% decrease in average operating revenue per load**, excluding fuel surcharges[9](index=9&type=chunk) [Financial Position and Shareholder Returns](index=2&type=section&id=Financial%20Position%20and%20Shareholder%20Returns) The company maintained a solid financial position in Q1 2024, supported by cash reserves and a declared cash dividend for shareholders [Financial Position](index=3&type=section&id=Financial%20Position) As of March 30, 2024, the company maintained a stable financial position with sufficient cash, marketable securities, and managed debt Key Balance Sheet and Capex Data (as of March 30, 2024, in millions) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $11.1 | | Marketable securities | $11.8 | | Outstanding debt | $418.4 | | Capital expenditures (Q1 2024) | $68.6 | [Cash Dividend](index=2&type=section&id=Cash%20Dividend) The Board of Directors declared a quarterly cash dividend of $0.105 per share, payable in July 2024 - A cash dividend of **$0.105 per share** has been declared[10](index=10&type=chunk) - Record date: **June 3, 2024**. Payment date: **July 1, 2024**[10](index=10&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) The Q1 2024 financial statements reflect strong revenue growth and improved profitability, alongside an expanded asset base and shareholder equity [Unaudited Condensed Consolidated Statements of Income](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) The Q1 2024 income statement demonstrates significant revenue growth and a substantial increase in operating and net income due to controlled expenses Q1 2024 Income Statement Highlights (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total operating revenues | $491,907 | $437,396 | | Total operating expenses | $416,815 | $399,200 | | Income from operations | $75,092 | $38,196 | | Net income | $52,457 | $24,876 | | Diluted EPS | $1.99 | $0.95 | [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 30, 2024, shows growth in total assets, liabilities, and shareholders' equity, reflecting an expanding financial footprint Balance Sheet Summary (in thousands) | Line Item | March 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total current assets | $367,125 | $365,473 | | Total assets | $1,384,601 | $1,253,523 | | Total liabilities | $800,656 | $721,325 | | Total shareholders' equity | $583,945 | $532,198 | [Summary of Operating Data](index=6&type=section&id=Summary%20of%20Operating%20Data) Q1 2024 operating data reveals varied segment performance, with growth in contract logistics programs contrasting with declining load volumes in other segments Q1 2024 Key Operating Metrics by Segment | Segment | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | :--- | | Contract Logistics | Active Programs | 71 | 65 | | Intermodal | Number of Loads | 105,037 | 122,299 | | Trucking | Number of Loads | 41,691 | 44,855 | | Co-Managed Brokerage | Number of Loads | 21,556 | 19,956 | Q1 2024 Revenue and Operating Income by Segment (in thousands) | Segment | Revenue | Operating Income | | :--- | :--- | :--- | | Contract logistics | $313,548 | $81,466 | | Intermodal | $76,715 | $(8,046) | | Trucking | $69,655 | $3,669 | | Company-managed brokerage | $31,000 | $(2,488) | [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) The company provides non-GAAP financial measures, including EBITDA, to offer additional insights into its core operating performance [EBITDA Reconciliation](index=8&type=section&id=EBITDA%20Reconciliation) Q1 2024 EBITDA significantly increased to $96.9 million, with the EBITDA margin improving to 19.7%, indicating stronger core operating performance Reconciliation of Net Income to EBITDA (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income | $52,457 | $24,876 | | Income tax expense | $17,660 | $8,360 | | Interest expense, net | $6,079 | $4,975 | | Depreciation | $15,902 | $15,330 | | Amortization | $4,799 | $3,185 | | **EBITDA** | **$96,897** | **$56,726** | | **EBITDA margin** | **19.7%** | **13.0%** | - EBITDA and EBITDA margin are presented to assist investors in comparing performance across reporting periods by excluding items not indicative of core operating performance[29](index=29&type=chunk)

UNIVERSAL LOGISTICS HOLDINGS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-51142 (Exact Name of Registrant as Specified in Its Charter) Michigan 38-3640097 (State or Other Jurisdiction of (I.R.S. Employer Incorp ...

Universal Logistics Holdings, Inc. (NASDAQ:ULH) Q4 2023 Earnings Conference Call February 16, 2024 10:00 AM ET Company Participants Tim Phillips - Chief Executive Officer Jude Beres - Chief Financial Officer Conference Call Participants Bruce Chan - Stifel Operator Hello, and welcome to Universal Logistics Holdings Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] A brief question-and-answer session will follow the formal presenta ...

PART I – FINANCIAL INFORMATION [Item 1: Financial Statements](index=2&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS) The unaudited consolidated financial statements show a decrease in cash and cash equivalents to $16.8 million as of September 30, 2023, from $47.2 million at year-end 2022. Total assets increased to $1.26 billion. For the third quarter of 2023, total operating revenues fell to $421.3 million from $505.7 million year-over-year, leading to a significant drop in net income to $23.0 million from $48.5 million. Year-to-date results show a similar trend, with net income at $71.5 million compared to $135.2 million in the prior year period. The company continues to pay a quarterly dividend of $0.105 per share Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $16,811 | $47,181 | | Total current assets | $389,221 | $459,652 | | Total assets | $1,259,276 | $1,203,678 | | Total current liabilities | $286,947 | $286,901 | | Total liabilities | $749,121 | $756,748 | | Total shareholders' equity | $510,155 | $446,930 | Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $421,251 | $505,692 | $1,271,219 | $1,556,735 | | Income from operations | $36,761 | $69,771 | $111,352 | $192,270 | | Net income | $23,047 | $48,480 | $71,488 | $135,187 | | Diluted EPS | $0.88 | $1.84 | $2.72 | $5.09 | Consolidated Cash Flow Highlights (YTD, in thousands) | Cash Flow Activity | YTD Ended Sep 30, 2023 | YTD Ended Oct 1, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $161,208 | $144,497 | | Net cash used in investing activities | ($188,606) | ($76,369) | | Net cash used in financing activities | ($273) | ($64,603) | | Net (decrease) increase in cash | ($30,370) | $714 | - The company's services are grouped into five categories: truckload, brokerage, intermodal, dedicated, and value-added services. Revenue from transportation services is recognized over the transit period, while value-added services revenue is recognized as services are provided[22](index=22&type=chunk)[26](index=26&type=chunk)[30](index=30&type=chunk) - As of September 30, 2023, the company had total debt of **$387.2 million**, primarily consisting of equipment financing, a real estate facility, and borrowings under its revolving credit facilities. The company was in compliance with all debt covenants[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - On October 26, 2023, the Board of Directors declared a quarterly cash dividend of **$0.105 per share**, payable on January 2, 2024[90](index=90&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202%3A%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes the significant decline in Q3 and YTD 2023 revenue and profitability to decreased rates and volumes in transactional transportation services, particularly intermodal and brokerage. Operating revenues for Q3 2023 fell 16.7% to $421.3 million, and net income dropped 52.5% to $23.0 million year-over-year. The contract logistics segment showed resilience with stable revenues, while other segments faced significant headwinds. The company's liquidity remains sufficient, supported by cash from operations and credit facilities, despite higher-than-usual capital expenditures, including a major terminal purchase in California [Results of Operations](index=21&type=section&id=Results%20of%20Operations) In Q3 2023, operating revenues decreased by 16.7% and net income fell by 52.5% compared to Q3 2022, driven by lower rates and volumes in transactional services. For the first nine months of 2023, revenues were down 18.3% and net income was down 47.1% year-over-year. The decline in revenue was partially offset by a 29.4% decrease in purchased transportation costs in Q3. However, direct personnel costs rose 6.1% due to the conversion of drivers in California to employees, and interest expense increased due to higher rates Q3 2023 vs Q3 2022 Performance (in thousands) | Metric | Q3 2023 | Q3 2022 | % Change | | :--- | :--- | :--- | :--- | | Operating revenues | $421,251 | $505,692 | (16.7)% | | Income from operations | $36,761 | $69,771 | (47.3)% | | Net income | $23,047 | $48,480 | (52.5)% | YTD 2023 vs YTD 2022 Performance (in thousands) | Metric | YTD 2023 | YTD 2022 | % Change | | :--- | :--- | :--- | :--- | | Operating revenues | $1,271,219 | $1,556,735 | (18.3)% | | Income from operations | $111,352 | $192,270 | (42.1)% | | Net income | $71,488 | $135,187 | (47.1)% | - The decrease in operating revenues was primarily due to decreased rates and volumes in transactional transportation-related services. Separately-identified fuel surcharges fell to **$28.2 million** in Q3 2023 from **$46.8 million** in Q3 2022[101](index=101&type=chunk) - Purchased transportation costs decreased **29.4%** in Q3 2023, in line with the **28.0%** decrease in transactional transportation service revenues[102](index=102&type=chunk) - Direct personnel costs increased **6.1%** in Q3 2023, primarily due to an increase in the number of employee drivers in California intermodal operations[103](index=103&type=chunk) [Segment Financial Results](index=24&type=section&id=Segment%20Financial%20Results) Segment performance varied significantly in Q3 2023. Contract Logistics remained stable with a 16.9% operating margin. In contrast, the Intermodal segment's revenue plummeted 43.9% and it posted an operating loss, with its margin falling to -5.0% from 18.2% YoY. The Trucking segment saw a slight revenue dip but improved its operating margin to 6.8%. The Company-managed Brokerage segment's revenue fell 30.8%, resulting in an operating loss and a negative margin of -3.8% Segment Operating Income (Loss) (in thousands) | Segment | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Contract logistics | $35,103 | $35,400 | $95,673 | $88,300 | | Intermodal | ($4,324) | $28,148 | $2,241 | $72,526 | | Trucking | $6,558 | $4,791 | $14,770 | $21,821 | | Company-managed brokerage | ($1,070) | $1,079 | ($2,230) | $9,097 | - Contract Logistics revenue was nearly flat YoY in Q3 2023, decreasing **0.7%**. The number of managed value-added programs increased to **73** from **63** in the prior year[122](index=122&type=chunk) - Intermodal revenue decreased **43.9%** in Q3 2023 due to a **24.7%** decrease in average revenue per load (ex-fuel) and an **11.8%** drop in load volumes. Operating margin was **(5.0)%** compared to **18.2%** in Q3 2022[123](index=123&type=chunk) - Company-managed brokerage revenue decreased **30.8%** in Q3 2023, with operating margin falling to **(3.8)%** from **2.7%** in Q3 2022[125](index=125&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash from operations and credit facilities. Capital expenditures for the first nine months of 2023 were $192.1 million, significantly higher than usual due to strategic investments, including an $80.0 million terminal purchase in California. Full-year 2023 capex is projected to be around $235 million. The company maintains a regular quarterly dividend of $0.105 per share. Management believes existing liquidity is sufficient for the next 12 months - Net cash provided by operating activities was **$161.2 million** for the first nine months of 2023[142](index=142&type=chunk)[143](index=143&type=chunk) - Capital expenditures totaled **$192.1 million** for the first nine months of 2023, including the **$80.0 million** purchase of a terminal in Compton, California. Full-year 2023 capex is expected to be approximately **$235 million**[132](index=132&type=chunk) - The company maintains a regular quarterly dividend of **$0.105 per share**, with the latest declared on October 26, 2023[133](index=133&type=chunk) - As of September 30, 2023, the company had **$378.9 million** available for borrowing on its main Revolving Credit Facility and **$5.0 million** on its UACL Credit Agreement revolver[136](index=136&type=chunk)[137](index=137&type=chunk) [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=ITEM%203%3A%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company reports that there have been no material changes to its market risk during the third quarter of 2023. For further details, it refers to its Annual Report on Form 10-K for the year ended December 31, 2022 - There have not been any material changes to the Company's market risk during the thirteen weeks ended September 30, 2023[151](index=151&type=chunk) [Item 4: Controls and Procedures](index=28&type=section&id=ITEM%204%3A%20CONTROLS%20AND%20PROCEDURES) Based on an evaluation as of September 30, 2023, the company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective. There were no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that as of September 30, 2023, the company's disclosure controls and procedures were effective[152](index=152&type=chunk) - No changes in internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls were identified during the quarter[153](index=153&type=chunk) PART II – OTHER INFORMATION [Item 1A: Risk Factors](index=29&type=section&id=ITEM%201A%3A%20RISK%20FACTORS) The company highlights several key business risks. A significant risk is the potential negative impact from labor disputes involving major customers, such as the UAW strike against Ford, GM, and Stellantis. The company also faces risks from rising labor costs due to its own collective bargaining agreements, with 32% of its workforce unionized. Other noted risks include the potential for global supply chain disruptions from the conflict in the Middle East and the implications of being a "controlled company" due to a majority share ownership by the Moroun family trusts, which limits public shareholder influence and exempts the company from certain NASDAQ governance standards - A significant labor dispute involving a major customer, such as the UAW strike against Ford, General Motors, and Stellantis that began on September 15, 2023, could negatively impact the company's revenue and profitability[157](index=157&type=chunk) - As of September 30, 2023, approximately **32%** of employees were subject to collective bargaining agreements. Renegotiation of these agreements could lead to significant increases in labor costs[89](index=89&type=chunk)[158](index=158&type=chunk) - The conflict in the Middle East is identified as a risk that could lead to increased inflation, supply chain disruption, and higher energy prices, adversely impacting business[159](index=159&type=chunk) - The company is a "controlled company" under NASDAQ rules because the Moroun family trusts own **over 50%** of outstanding shares. This concentration of ownership limits public shareholders' influence and exempts the company from requirements like having a majority of independent directors[160](index=160&type=chunk)[162](index=162&type=chunk) [Item 5: Other Information](index=30&type=section&id=ITEM%205%3A%20OTHER%20INFORMATION) During the third quarter of 2023, the company repurchased 4,221 shares of its common stock at an average price of $31.67 per share. These purchases were not part of a publicly announced program but were made by exercising a right of first refusal under restricted stock agreements with a director and an employee. As of September 30, 2023, 513,251 shares remain available for purchase under the company's open-market repurchase authorization Share Purchases in Q3 2023 | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | | 4,221 | $31.67 | - The share purchases were made by exercising the company's right of first refusal pursuant to restricted stock bonus award agreements with a director and an employee[169](index=169&type=chunk) - As of September 30, 2023, **513,251 shares** remain available for repurchase under the company's **1,000,000 share** authorization announced on July 29, 2021[168](index=168&type=chunk)

Financial Data and Key Metrics Changes - The company reported Q3 2023 earnings of $0.88 per share on total operating revenue of $421.3 million, compared to net income of $48.5 million or $1.84 per share on total operating revenues of $505.7 million in Q3 2022 [49] - Consolidated income from operations was $36.8 million for the quarter, down from $69.8 million a year earlier, with EBITDA decreasing by $27.6 million to $56.7 million [32][49] - Operating margins for Q3 2023 were 8.7%, down from 13.8% in Q3 2022, while EBITDA margins decreased from 16.7% to 13.5% [32] Business Line Data and Key Metrics Changes - In the Contract Logistics segment, income from operations decreased by $300,000 to $35.1 million on $208.1 million of total operating revenues, with operating margins remaining stable at 16.9% [11] - The Company-Managed Brokerage segment saw operating revenues drop by $12.5 million to $28.1 million, resulting in an operating loss of $1.1 million compared to a profit of $1.1 million in the same quarter last year [12] - The Intermodal segment's operating revenues decreased by $67.8 million to $86.6 million, with an operating loss of $4.3 million compared to a profit of $28.1 million in Q3 2022 [50] Market Data and Key Metrics Changes - California operations in the Intermodal segment negatively impacted overall financial results, with load volumes down 13.6% and revenue per load down 35.6% [7] - U.S. import volumes remained muted as shippers continued their inventory destocking cycle, contributing to a decline in overall load volumes by 11.8% [6][45] - Accessorial charges decreased over 68% or $21.4 million, reflecting a competitive market environment [29] Company Strategy and Development Direction - The company is focused on investing in technology and human capital to adapt to the evolving electric vehicle landscape, despite challenges such as the UAW strike [2] - There is a strong emphasis on cross-selling initiatives and maintaining a robust pipeline of new customer prospects [3] - The company is optimistic about future growth opportunities, particularly in Mexico, as nearshoring trends elevate its status as a key trading partner [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the foundation of the intermodal and brokerage segments, despite current market headwinds [3] - The ongoing UAW strike is expected to influence Q4 production, with management hopeful for a resolution [43] - The company anticipates Q4 2023 revenues between $350 million and $375 million, with operating margins in the 7% to 9% range [34] Other Important Information - The Board of Directors declared a quarterly dividend of $0.105 per share, payable on January 2, 2024 [34] - Capital expenditures for the quarter totaled $112.3 million, including $80 million for a strategic terminal acquisition [51] Q&A Session Summary Question: Could you provide your general outlook for the industrial economy moving into next year? - Management indicated that in a normal operating environment, earnings should be around $1 per share per quarter, but current conditions are not normal due to a freight recession and UAW headwinds [16] Question: Can you provide more details on the volume attrition resulting from the UAW strike? - Management noted that disruptions from the strike affected operations, and they expect some of these challenges to carry into Q4 [53] Question: What is the new normalized earnings power for the company at this point? - Management reiterated that the peak earnings power was over $6 per share, but the current baseline in a normal environment is around $1 per share [16]