Universal(ULH) - 2024 Q1 - Quarterly Results

First Quarter 2024 Financial Results Universal Logistics Holdings reported strong Q1 2024 financial results, driven by significant growth in net income and total operating revenues Consolidated Financial Highlights 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 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] - Intermodal and company-managed brokerage segments are experiencing significant margin pressure from the ongoing freight recession[3] - The company's strategy involves managing controllable costs, increasing productivity, and restoring profitability to underperforming operations[3] Segment Performance The company's Q1 2024 segment performance was mixed, with strong growth in contract logistics offsetting declines in intermodal and trucking Contract Logistics 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] 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] 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] Company-managed Brokerage 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] Financial Position and Shareholder Returns The company maintained a solid financial position in Q1 2024, supported by cash reserves and a declared cash dividend for shareholders Financial Position 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 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] - Record date: June 3, 2024. Payment date: July 1, 2024[10] Financial Statements 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 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 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 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 The company provides non-GAAP financial measures, including EBITDA, to offer additional insights into its core operating performance EBITDA Reconciliation 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]