Universal(US:ULH)2023-03-16 20:32Revenue Breakdown - In 2022, operating revenues were approximately $2.0 billion, with intermodal operations contributing $591.9 million, or 29.4% of total revenues[22]. - Truckload services generated $230.7 million, accounting for 11.4% of operating revenues in 2022[20]. - Brokerage services represented $368.9 million, or 18.3% of operating revenues in 2022[21]. - Dedicated services contributed approximately $324.6 million, or 16.1% of operating revenues in 2022[23]. - Value-added services accounted for $499.3 million, or 24.8% of operating revenues in 2022[24]. - The automotive industry comprised approximately 36% of operating revenues in 2022, with General Motors alone accounting for about 16%[39]. - The top 10 customers accounted for approximately 42% of the company's operating revenues during 2022, highlighting the concentration of revenue sources[80]. Operational Metrics - The company operated 51 company-managed terminal locations and had an agent network totaling approximately 240 agents as of December 31, 2022[16]. - As of December 31, 2022, the company had 8,646 employees, with 39% in the U.S., Canada, and Colombia being union members[40]. - The company utilizes a network of agents and owner-operators, with agents soliciting approximately 30% of the freight hauled in 2022[45]. - The company operates 114 logistics locations in the United States, Mexico, Canada, and Colombia, providing a comprehensive suite of transportation and logistics solutions[133]. - The company utilizes a diverse fleet, owning 2,091 tractors and 4,139 trailers, while also engaging owner-operators who provided 2,207 tractors and 1,043 trailers[134]. Financial Performance - Operating revenues for 2022 increased by $264.5 million, or 15.1%, to $2,015.5 million from $1,751.0 million in 2021[156]. - Income from operations for 2022 increased by $137.5 million, or 133.5%, to $240.4 million compared to $103.0 million in 2021[156]. - Net income for 2022 was 8.4% of operating revenues, compared to 4.2% in 2021[155]. - The contract logistics segment saw operating revenues rise by $196.7 million, or 31.4%, to $823.9 million in 2022 compared to $627.2 million in 2021[157]. - The operating margin in the contract logistics segment for 2022 was 14.4%, up from 7.1% in the same period last year[157]. Cost and Expense Management - Diesel fuel represents a significant operating expense, and fluctuations in fuel prices could materially affect operating results if not recouped through increased freight rates[72]. - Direct personnel and related benefits accounted for 25.9% of operating revenues in 2022, slightly down from 26.1% in 2021[155]. - Total operating expenses as a percentage of operating revenues decreased to 88.1% in 2022 from 94.1% in 2021[155]. - Purchased transportation and equipment rent as a percentage of operating revenues decreased to 42.0% in 2022 from 47.1% in 2021[155]. - Operating supplies and expenses increased by $28.0 million, or 18.8%, to $177.4 million in 2022 compared to $149.4 million in 2021[163]. Regulatory and Compliance Issues - The company is subject to various federal, state, and local environmental laws, which could lead to significant costs related to compliance and potential liabilities[58]. - The company operates in a highly regulated industry, and increased compliance costs could have a material adverse effect on its business[76]. - The company believes it is currently in material compliance with applicable laws and regulations, but future changes may result in unforeseen costs[60]. - The company is subject to various environmental laws and regulations, with violations potentially resulting in substantial fines or penalties[94]. Labor and Workforce Challenges - The company faces challenges in attracting and retaining qualified drivers, which could adversely affect growth and profitability[73]. - As of December 31, 2022, approximately 39% of the company's employees in the United States, Canada, and Colombia, and 80% of employees in Mexico were union members subject to collective bargaining agreements[83]. - The company faces potential increases in labor costs due to renegotiation of collective bargaining agreements, which could adversely affect profitability[83]. Strategic Initiatives - The company plans to pursue strategic acquisitions to enhance service capabilities and expand geographic networks[29]. - Current and future indebtedness may limit operational flexibility and adversely affect liquidity position[89]. - Disruptions in credit markets could impact the availability and cost of short-term funds, affecting results of operations and cash flows[90]. Market and Economic Factors - The conflict between Russia and Ukraine could lead to increased inflation and supply chain issues, adversely impacting business operations[104]. - Future downturns in North American automobile production could negatively impact the company's revenues, given the concentration of its customer base in this industry[79]. - Seasonal factors may affect productivity, with potential decreases during winter and scheduled OEM customer plant shutdowns impacting operations[93]. Shareholder and Governance - The company is controlled by Matthew T. Moroun, limiting public shareholders' influence over significant corporate actions[105]. - Matthew T. Moroun holds greater than 50% of the voting power, allowing him to control shareholder actions, which may limit share price attractiveness for some investors[106]. - The company’s articles of incorporation and bylaws contain provisions that could deter or prevent a change of control, potentially limiting shareholder influence[111]. Dividend Policy - The company has a cash dividend policy anticipating a total annual dividend of $0.42 per share, payable in quarterly increments of $0.105[123]. - The company has not declared a special dividend in the first quarter of 2023, indicating potential variability in future dividend payments[123]. Insurance and Claims - Ongoing insurance and claims expenses could exceed historical levels, significantly reducing earnings and cash flows[85]. - The company is self-insured for all cargo and equipment damage claims, with legal expenses related to auto liability claims covered under its policy[209]. - The company recognizes a liability for the estimated cost of all self-insured claims, including an estimate for incurred but not reported claims based on historical experience[210].